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Stock Transfer Restriction Agreement - MICROHELIX INC - 7-26-2001

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Stock Transfer Restriction Agreement - MICROHELIX INC - 7-26-2001 Powered By Docstoc
					EXHIBIT 10.8 EXHIBIT B STOCK TRANSFER RESTRICTION AGREEMENT This Stock Transfer Restriction Agreement (the "Agreement"), effective as of January 5, 2001 is by and between mHL Development Company, an Oregon corporation (the "Company"), and Imperial Bank ("Shareholder) RECITALS A. Shareholder owns, intends to purchase or has the right to purchase shares of the Company's Common Stock. B. The parties wish to enter into an agreement relating to the sale or other disposition of the shares of Common Stock owned or held by Shareholder. AGREEMENT 1. Limitations on Transfer. 1.1 Shares Subject to Restrictions Under This Agreement. For the purposes of this Agreement, the term "Shares" shall mean all of the shares of the Company's Common Stock owned or held by the Shareholder, including any additional shares that may be acquired subsequent to the date of this Agreement and all securities received in replacement of the Common Stock or as stock dividends or splits and all securities received in replacement of the Common Stock in a recapitalization, merger reorganization and the like. 1.2 Restrictions. In addition to any other limitation on transfer created by applicable securities laws or by a separate agreement between the Company and Shareholder, including, if applicable, a Restricted Stock Purchase Agreement, Shareholder shall not sell, or otherwise transfer, including transfers by gift and by operation of law, any interest in any of the Shares except as provided in this Agreement. Any transfer of the Shares in violation of this Agreement shall be void. 2. Company Repurchase Rights. 2.1 Triggering Events. On the occurrence of any of the following events (each a "Triggering Event"): A case or proceeding with respect to the Shareholder is commenced under any applicable bankruptcy, insolvency, reorganization, receivership or readjustment of debt law or other similar law; an order for the appointment of a receiver, liquidator, sequestrator, trustee, custodian, or other officer 1

having similar powers over Shareholder or over a substantial part of Shareholder's property is entered, or an interim receiver, trustee or other custodian of Shareholder or of a substantial part of Shareholder's property is appointed or a warrant of attachment, execution or similar process against any substantial part of Shareholder's property is issued; the Company shall have the option to repurchase any and all Shares owned or held or to be acquired by exercise of an option by Shareholder (the "Optional Redemption") pursuant to the terms of Section 2.2; provided, however, that any unvested shares subject to an option at the time of Triggering Event shall be canceled, and Shareholder shall have no right to exercise any option with respect to those shares. 2.2 Terms and Conditions of an Optional Redemption. An Optional Redemption shall be subject to the following terms and conditions: (a) Upon the exercise by the Company of an Optional

having similar powers over Shareholder or over a substantial part of Shareholder's property is entered, or an interim receiver, trustee or other custodian of Shareholder or of a substantial part of Shareholder's property is appointed or a warrant of attachment, execution or similar process against any substantial part of Shareholder's property is issued; the Company shall have the option to repurchase any and all Shares owned or held or to be acquired by exercise of an option by Shareholder (the "Optional Redemption") pursuant to the terms of Section 2.2; provided, however, that any unvested shares subject to an option at the time of Triggering Event shall be canceled, and Shareholder shall have no right to exercise any option with respect to those shares. 2.2 Terms and Conditions of an Optional Redemption. An Optional Redemption shall be subject to the following terms and conditions: (a) Upon the exercise by the Company of an Optional Redemption, the Shareholder shall be obligated to sell all of the Shares. The Company shall exercise an Optional Redemption by written notice to the Shareholder at any time after the Optional Redemption is exercisable thereby (a "Notice of Exercise"). (b) In the case of any exercise of the Optional Redemption, the purchase price of the Shares shall be the amount that the Company and the Shareholder agree upon or, if they are unable to agree within 15 days following the Notice of Exercise, the amount determined in accordance with the appraisal procedures set forth in Section 2.2(c). (c) The following procedure shall apply in connection with any appraisal in connection with an exercise of the Optional Redemption: (i) The Shareholder and the Company shall attempt to agree upon a single appraiser prior to the expiration of the 30-day period following the Notice of Exercise. If they so agree, such appraiser shall, as promptly as possible, determine the amount that reflects the current value of the Shares by first determining the value of the Company in terms of assets and liabilities, present earnings, future prospects and all other relevant factors, and then determining the proportion of such value represented by the Shares considering the existence of senior securities, if any, and the number of the Shares in relation to all outstanding shares and options, warrants, purchase rights and/or rights convertible to shares of the Company's capital stock, but without applying any minority interest discount or illiquidity or similar discount (the "Fair Market Value of the Shares"). The appraiser's written determination shall be 2

final, conclusive and binding upon all parties to the purchase and sale. The Company and the Shareholder shall share equally the costs and fees of the single appraiser. (ii) If the Shareholder and the Company are unable to agree upon a single appraiser within the 30-day period after the Notice of Exercise, the Shareholder shall appoint one appraiser and the Company shall appoint one appraiser (each party giving notice of the appointment to the other) within 30 days after the expiration of such period, and the two appraisers so appointed shall choose a third appraiser within 30 days after appointment of the second. If either party fails to appoint an appraiser, or if the two appraisers fail to choose a third, the appraiser or appraisers appointed in accordance with the foregoing procedures shall serve as the sole appraiser or appraisers. Any written determination of the Fair Market Value of the Shares signed by at least two appraisers shall be final, conclusive and binding upon all parties to the purchase and sale. If no two appraisers so agree within 60 days following the appointment of the last appraiser, the median of the Fair Market Value of the Shares as determined by each of the three appraisers, or the average of the Fair Market Value of the Shares if there are only two appraisers, shall be final, conclusive and binding upon all parties to the purchase and sale subject to the following modifications:

final, conclusive and binding upon all parties to the purchase and sale. The Company and the Shareholder shall share equally the costs and fees of the single appraiser. (ii) If the Shareholder and the Company are unable to agree upon a single appraiser within the 30-day period after the Notice of Exercise, the Shareholder shall appoint one appraiser and the Company shall appoint one appraiser (each party giving notice of the appointment to the other) within 30 days after the expiration of such period, and the two appraisers so appointed shall choose a third appraiser within 30 days after appointment of the second. If either party fails to appoint an appraiser, or if the two appraisers fail to choose a third, the appraiser or appraisers appointed in accordance with the foregoing procedures shall serve as the sole appraiser or appraisers. Any written determination of the Fair Market Value of the Shares signed by at least two appraisers shall be final, conclusive and binding upon all parties to the purchase and sale. If no two appraisers so agree within 60 days following the appointment of the last appraiser, the median of the Fair Market Value of the Shares as determined by each of the three appraisers, or the average of the Fair Market Value of the Shares if there are only two appraisers, shall be final, conclusive and binding upon all parties to the purchase and sale subject to the following modifications: (A) if there are three appraisers and each arrives at a different determination of the Fair Market Value of the Shares and any such amount is more than 5% different than the average of all three appraisals, the appraisal that is the farthest away from the average (either high or low) shall be discarded and the average of the remaining two appraisals shall be the Fair Market Value of the Shares. (B) if there are only two appraisers and each arrives at a different determination of the Fair Market Value of the Shares and the difference between such amount exceeds 10% of the lower amount, a third appraiser shall be appointed by the two appraisers or, if they fail to appoint a third appraiser within 10 days after the later of the two determinations of the Fair Market Value of the Shares, by the presiding judge in the county seat in which the Company has its principal place of business upon petition thereto by either appraiser or by either of the Shareholder or the Company. The third appraiser shall conduct an appraisal in accordance with this Section 2.2 (c)(ii) as promptly as is practicable and the results of such appraisal and all other 3

appraisals conducted pursuant to this Section 2.2(c)(ii) shall be subject to all applicable provisions of this Section 2.2(c)(ii), including the foregoing clause (A). Except as hereinafter provided in the case of the use of a single appraiser, each party to the appraisal shall pay the compensation and expenses of the appraiser appointed by such party. The compensation and expenses of the third appraiser shall be shared equally by the Shareholder and the Company. If only one appraiser is used pursuant to this Section 2.2(c)(ii), the compensation and expenses of such appraiser shall be paid by the party that appointed such appraiser. (iii) Each party appointing an appraiser hereunder shall use reasonable diligence to select as an appraiser an individual or firm that by training and experience is knowledgeable concerning the methods of ascertaining the fair market value of an interest in a privately-held business engaged in the primary business of the Company. Any appraiser appointed pursuant to Section 2.2(c)(ii) shall be a member of either or both of the American Society of Appraisers and the Institute of Business Appraisers. (d) On a date specified by the Company that is not later than 45 days after the Notice of Exercise in the case of a purchase price determined under Section 2.2(b) other than in accordance with the foregoing appraisal procedures described in Section 2.2(c) or, in the case of a determination of the purchase price of the Shares in accordance with such appraisal procedures, not later than 30 days after the determination of the Fair Market Value of the Shares (the relevant date in any such case being the "Section 2.2 Closing Date"), the Company shall pay to the Shareholder ten percent (10%) of the Fair Market Value of the Shares, and the balance payable in 60 equal monthly installments, including interest on the unpaid balance at the rate of eight percent (8%) per annum from the Section 2.2 Closing Date; installments to commence one month after the Section 2.2 Closing Date with no restrictions on prepayment.

appraisals conducted pursuant to this Section 2.2(c)(ii) shall be subject to all applicable provisions of this Section 2.2(c)(ii), including the foregoing clause (A). Except as hereinafter provided in the case of the use of a single appraiser, each party to the appraisal shall pay the compensation and expenses of the appraiser appointed by such party. The compensation and expenses of the third appraiser shall be shared equally by the Shareholder and the Company. If only one appraiser is used pursuant to this Section 2.2(c)(ii), the compensation and expenses of such appraiser shall be paid by the party that appointed such appraiser. (iii) Each party appointing an appraiser hereunder shall use reasonable diligence to select as an appraiser an individual or firm that by training and experience is knowledgeable concerning the methods of ascertaining the fair market value of an interest in a privately-held business engaged in the primary business of the Company. Any appraiser appointed pursuant to Section 2.2(c)(ii) shall be a member of either or both of the American Society of Appraisers and the Institute of Business Appraisers. (d) On a date specified by the Company that is not later than 45 days after the Notice of Exercise in the case of a purchase price determined under Section 2.2(b) other than in accordance with the foregoing appraisal procedures described in Section 2.2(c) or, in the case of a determination of the purchase price of the Shares in accordance with such appraisal procedures, not later than 30 days after the determination of the Fair Market Value of the Shares (the relevant date in any such case being the "Section 2.2 Closing Date"), the Company shall pay to the Shareholder ten percent (10%) of the Fair Market Value of the Shares, and the balance payable in 60 equal monthly installments, including interest on the unpaid balance at the rate of eight percent (8%) per annum from the Section 2.2 Closing Date; installments to commence one month after the Section 2.2 Closing Date with no restrictions on prepayment. (e) On the Section 2.2 Closing Date, the Shareholder shall deliver to the Company certificates evidencing the Shares and a certificate dated as of the Section 2.2 Closing Date, containing the representation and warranty of the Shareholder as to its unrestricted legal right, power and authority to assign, transfer and deliver its Shares and that at the closing on the Section 2.2 Closing Date the Company will receive good and marketable title to such Shares, free and clear of all liens, claims, equities, encumbrances and restrictions of every kind other than the restrictions set forth in this Agreement. 4

In the event the Company does not elect to exercise the Optional Redemption, the Shares shall remain subject to the terms of this Agreement. The Company's repurchase rights are in addition to the Company's right of first refusal set forth in Section 3 of this Agreement. 2.3 Other Agreements. The repurchase rights contained in this Agreement are in addition to repurchase rights that may be included in a separate agreement between Shareholder and the Company, including, if applicable, a Restricted Stock Purchase Agreement. The repurchase price to be paid by the Company for any Shares after Triggering Event shall be governed by the terms of this Agreement only to the extent that such Shares have been released from the repurchase terms contained in a separate agreement between the Company and Shareholder. 3. Company Right of First Refusal. If Shareholder desires (or is required) to sell or transfer any of the Shares in any manner, Shareholder shall first obtain a firm, unconditional written offer signed by a bona fide prospective purchaser (the "Bona Fide Offer"), stating the number of Shares to be purchased, the total purchase price and the terms of payment of the purchase price. Shareholder shall mail a copy of the Bona Fide Offer to the Company. The Company shall have a right of first refusal to purchase any portion of the Shares covered by the Bona Fide Offer at the same price, and upon the same terms (or terms as similar as reasonably possible) set forth in the Bona Fide Offer. The right of first refusal shall be provided to the Company for a period of 60 days following receipt by the Company of the Bona Fide Offer. If the Shares are not purchased by the Company, the selling Shareholder shall have 60 days following lapse of the period of the right of first refusal provided to the Company to dispose of the Shares to the transferee identified in the Bona Fide Offer on terms no more favorable to the transferee than those offered to the Company. After such 60 day period lapses, the Shares shall once again be subject to the rights of first refusal herein provided. Notwithstanding the foregoing, the Shareholder shall have the

In the event the Company does not elect to exercise the Optional Redemption, the Shares shall remain subject to the terms of this Agreement. The Company's repurchase rights are in addition to the Company's right of first refusal set forth in Section 3 of this Agreement. 2.3 Other Agreements. The repurchase rights contained in this Agreement are in addition to repurchase rights that may be included in a separate agreement between Shareholder and the Company, including, if applicable, a Restricted Stock Purchase Agreement. The repurchase price to be paid by the Company for any Shares after Triggering Event shall be governed by the terms of this Agreement only to the extent that such Shares have been released from the repurchase terms contained in a separate agreement between the Company and Shareholder. 3. Company Right of First Refusal. If Shareholder desires (or is required) to sell or transfer any of the Shares in any manner, Shareholder shall first obtain a firm, unconditional written offer signed by a bona fide prospective purchaser (the "Bona Fide Offer"), stating the number of Shares to be purchased, the total purchase price and the terms of payment of the purchase price. Shareholder shall mail a copy of the Bona Fide Offer to the Company. The Company shall have a right of first refusal to purchase any portion of the Shares covered by the Bona Fide Offer at the same price, and upon the same terms (or terms as similar as reasonably possible) set forth in the Bona Fide Offer. The right of first refusal shall be provided to the Company for a period of 60 days following receipt by the Company of the Bona Fide Offer. If the Shares are not purchased by the Company, the selling Shareholder shall have 60 days following lapse of the period of the right of first refusal provided to the Company to dispose of the Shares to the transferee identified in the Bona Fide Offer on terms no more favorable to the transferee than those offered to the Company. After such 60 day period lapses, the Shares shall once again be subject to the rights of first refusal herein provided. Notwithstanding the foregoing, the Shareholder shall have the right to transfer the Shares, in compliance with applicable federal and state securities laws, to an Affiliate, including, without limitation, Imperial Bancorp, at any time without notice to the Company and without compliance with this Section 3. As used herein, "Affiliate" means the parent company of Holder, a majorityowned subsidiary of Holder, or a majority-owned subsidiary of Holder's parent company; provided, however, that such entity is a "qualified institutional buyer" as defined in Rule 144A as promulgated under the Securities Act of 1933, as amended. 4. Assignment by the Company. The right of the Company to purchase any part of the Shares may be assigned in whole or in part to any person or persons designated by the Board of Directors of the Company. 5. Obligations Binding Upon Transferees. All transferees of Shares or any interest therein will receive and hold such Shares or interests subject to the provisions of this Agreement. Any sale or transfer of the Shares shall be void unless the provisions of this Agreement are met. 5

6. Termination. This Agreement shall terminate on (i) the effective date of a registration statement filed by the Company under the Securities Act of 1933, as amended (the "Act"), with respect to an underwritten public offering of Common Stock of the Company or (ii) the closing date of a sale of assets or merger of the Company pursuant to which shareholders of the Company receive securities of a buyer whose shares are publicly traded. 7. Lock-up Agreement. Shareholder agrees, in connection with an initial public offering of equity securities by the Company, upon request of the Company or the underwriters managing such offering, not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Shares (other than those included in the registration of the offering, if any) without the prior written consent of the Company or such underwriters, as the case may be, for the period of time after the offering requested by the underwriters, which period shall not exceed one year from the effective date of the registration of the offering. Notwithstanding the foregoing, Shareholder shall only be subject to the terms of this Section 7 to the extent that all officers and directors of the Company and all holders of at least one percent (1%) of the Company's stock are subject to substantially similar restrictions. 8. Transfers in Violation. The Company shall not be required to (a) transfer on its books any Shares that have been sold or transferred in violation of any of the provisions set forth in this Agreement, or (b) treat as owner of such Shares, or accord the right to vote as such owner, or pay dividends to any transferee to whom such Shares shall have been so transferred.

6. Termination. This Agreement shall terminate on (i) the effective date of a registration statement filed by the Company under the Securities Act of 1933, as amended (the "Act"), with respect to an underwritten public offering of Common Stock of the Company or (ii) the closing date of a sale of assets or merger of the Company pursuant to which shareholders of the Company receive securities of a buyer whose shares are publicly traded. 7. Lock-up Agreement. Shareholder agrees, in connection with an initial public offering of equity securities by the Company, upon request of the Company or the underwriters managing such offering, not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Shares (other than those included in the registration of the offering, if any) without the prior written consent of the Company or such underwriters, as the case may be, for the period of time after the offering requested by the underwriters, which period shall not exceed one year from the effective date of the registration of the offering. Notwithstanding the foregoing, Shareholder shall only be subject to the terms of this Section 7 to the extent that all officers and directors of the Company and all holders of at least one percent (1%) of the Company's stock are subject to substantially similar restrictions. 8. Transfers in Violation. The Company shall not be required to (a) transfer on its books any Shares that have been sold or transferred in violation of any of the provisions set forth in this Agreement, or (b) treat as owner of such Shares, or accord the right to vote as such owner, or pay dividends to any transferee to whom such Shares shall have been so transferred. 9. Enforcement. The Company and Shareholder acknowledge that the other party will suffer irreparable harm if either party fails to comply with this Agreement, and that monetary damages will be inadequate to compensate the parties for such failure. Accordingly, the parties agree that this Agreement may be enforced by specific performance or other injunctive relief, in addition to any other remedies available at law or in equity. 10. Governing Law. This Agreement shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of Oregon exclusive of choice of law or conflicts of law rules, provisions, and principles. 11. Miscellaneous. 11.1 Shareholder Rights. Subject to the provisions and limitations hereof, Shareholder may, during the term of this Agreement, exercise all rights and privileges of a shareholder of the Company with respect to the Shares. 11.2 Notices. Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed given when delivered personally, or three days after being deposited in the United States mail as certified or registered mail, return receipt requested, with postage prepaid, or the day following facsimile 6

transmission, with confirmed transmission, in either case addressed, if to the Company, to mHL Development Company, 16125 SW 72nd Avenue, Portland, OR 97224; and if to Shareholder at Shareholder's address shown on the stock records of the Company, or at such other address as any party may designate by 10 days' advance written notice to the other party. 11.3 Amendment. This Agreement may be amended only by the written consent of the Company and Shareholder. 11.4 Assignment. The rights and benefits of this Agreement shall inure to the benefit of and be enforceable by the Company and its respective successors and assigns. The rights and obligations of Shareholder under this Agreement may not be assigned without the prior written consent of the Company. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
IMPERIAL BANK MHL DEVELOPMENT COMPANY

transmission, with confirmed transmission, in either case addressed, if to the Company, to mHL Development Company, 16125 SW 72nd Avenue, Portland, OR 97224; and if to Shareholder at Shareholder's address shown on the stock records of the Company, or at such other address as any party may designate by 10 days' advance written notice to the other party. 11.3 Amendment. This Agreement may be amended only by the written consent of the Company and Shareholder. 11.4 Assignment. The rights and benefits of this Agreement shall inure to the benefit of and be enforceable by the Company and its respective successors and assigns. The rights and obligations of Shareholder under this Agreement may not be assigned without the prior written consent of the Company. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
IMPERIAL BANK MHL DEVELOPMENT COMPANY

By:/s/ MIKE PARROTT -----------------------Name: Mike Parrott

By:/s/ RICHARD G. SASS --------------------------Name: Richard G. Sass Title: Chief Executive Officer

Title: Venture Banking Officer

7

EXHIBIT 10.9 UNCONDITIONAL GUARANTY RICHARD G. SASS For and in consideration of the loan by IMPERIAL BANK ("Bank") to MHL DEVELOPMENT COMPANY ("Borrower"), pursuant to a Loan and Security Agreement of even date as amended from time to time (the "Loan Agreement"), and any and all other Obligations owing by Borrower to Bank, the undersigned guarantor ("Guarantor") hereby unconditionally and irrevocably guarantees the prompt and complete payment of all amounts that Borrower owes to Bank and performance by Borrower of the Loan Agreement (collectively, the "Agreements") in strict accordance with their terms. All terms used without definition in this Guaranty shall have the meaning assigned to them in the Agreement. 1. If Borrower does not perform its obligations in strict accordance with the Agreements, Guarantor shall immediately pay all amounts due thereunder (including, without limitation, all principal, interest, and fees) and otherwise to proceed to complete the same and satisfy all of Borrower's obligations under the Agreements. 2. If there is more than one guarantor, the obligations hereunder are joint and several, and whether or not there is more than one Guarantor, the obligations hereunder are independent of the obligations of Borrower, and a separate action or actions may be brought and prosecuted against Guarantor whether action is brought against Borrower or whether Borrower be joined in any such action or actions. Guarantor waives the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof, to the extent permitted by law. Guarantor's liability under this Guaranty is not conditioned or contingent upon the genuineness, validity, regularity or enforceability of the Agreements. 3. Guarantor authorizes Bank, without notice or demand and without affecting its liability hereunder, from time to time to (a) renew, extend, or otherwise change the terms of the Agreements or any part thereof; (b) take and hold security for the payment of this Guaranty or the Agreements, and exchange, enforce, waive and release any such security; and (c) apply such security and direct the order or manner of sale thereof as Bank in its sole discretion may determine.

EXHIBIT 10.9 UNCONDITIONAL GUARANTY RICHARD G. SASS For and in consideration of the loan by IMPERIAL BANK ("Bank") to MHL DEVELOPMENT COMPANY ("Borrower"), pursuant to a Loan and Security Agreement of even date as amended from time to time (the "Loan Agreement"), and any and all other Obligations owing by Borrower to Bank, the undersigned guarantor ("Guarantor") hereby unconditionally and irrevocably guarantees the prompt and complete payment of all amounts that Borrower owes to Bank and performance by Borrower of the Loan Agreement (collectively, the "Agreements") in strict accordance with their terms. All terms used without definition in this Guaranty shall have the meaning assigned to them in the Agreement. 1. If Borrower does not perform its obligations in strict accordance with the Agreements, Guarantor shall immediately pay all amounts due thereunder (including, without limitation, all principal, interest, and fees) and otherwise to proceed to complete the same and satisfy all of Borrower's obligations under the Agreements. 2. If there is more than one guarantor, the obligations hereunder are joint and several, and whether or not there is more than one Guarantor, the obligations hereunder are independent of the obligations of Borrower, and a separate action or actions may be brought and prosecuted against Guarantor whether action is brought against Borrower or whether Borrower be joined in any such action or actions. Guarantor waives the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof, to the extent permitted by law. Guarantor's liability under this Guaranty is not conditioned or contingent upon the genuineness, validity, regularity or enforceability of the Agreements. 3. Guarantor authorizes Bank, without notice or demand and without affecting its liability hereunder, from time to time to (a) renew, extend, or otherwise change the terms of the Agreements or any part thereof; (b) take and hold security for the payment of this Guaranty or the Agreements, and exchange, enforce, waive and release any such security; and (c) apply such security and direct the order or manner of sale thereof as Bank in its sole discretion may determine. 4. Guarantor waives any right to require Bank to (a) proceed against Borrower or any other person; (b) proceed against or exhaust any security held from Borrower; or (c) pursue any other remedy in Bank's power whatsoever. Bank may, at its election, exercise or decline or fail to exercise any right or remedy it may have against Borrower or any security held by Bank, including without limitation the right to foreclose upon any such security by judicial or nonjudicial sale, without affecting or impairing in any way the liability of Guarantor hereunder. Guarantor waives any defense arising by reason of any disability or other defense of Borrower or by reason of the cessation from any cause whatsoever of the liability of Borrower. Guarantor waives any setoff, defense or counterclaim that Borrower may have against Bank. Guarantor waives any defense arising out of the absence, impairment or loss of any right of reimbursement or subrogation or any other rights against Borrower. Until all of the Obligations under the Agreements have been satisfied in full, Guarantor shall have no right 1

of subrogation or reimbursement, contribution or other rights against Borrower, and Guarantor waives any right to enforce any remedy that Bank now has or may hereafter have against Borrower. Guarantor waives all rights to participate in any security now or hereafter held by Bank. Guarantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Guaranty and of the existence, creation, or incurring of new or additional indebtedness. Guarantor assumes the responsibility for being and keeping itself informed of the financial condition of Borrower and of all other circumstances bearing upon the risk of nonpayment of any indebtedness or nonperformance of any obligation of Borrower, warrants to Bank that it will keep so informed, and agrees that absent a request for particular information by Guarantor, Bank shall have no duty to advise Guarantor of information known to Bank regarding such condition or any such circumstances. Guarantor waives the benefits of California Civil Code sections 2809, 2810, 2819, 2845, 2847, 2848, 2849, 2850, 2899 and 3433. 5. Guarantor acknowledges that, to the extent Guarantor has or may have certain rights of subrogation or

of subrogation or reimbursement, contribution or other rights against Borrower, and Guarantor waives any right to enforce any remedy that Bank now has or may hereafter have against Borrower. Guarantor waives all rights to participate in any security now or hereafter held by Bank. Guarantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Guaranty and of the existence, creation, or incurring of new or additional indebtedness. Guarantor assumes the responsibility for being and keeping itself informed of the financial condition of Borrower and of all other circumstances bearing upon the risk of nonpayment of any indebtedness or nonperformance of any obligation of Borrower, warrants to Bank that it will keep so informed, and agrees that absent a request for particular information by Guarantor, Bank shall have no duty to advise Guarantor of information known to Bank regarding such condition or any such circumstances. Guarantor waives the benefits of California Civil Code sections 2809, 2810, 2819, 2845, 2847, 2848, 2849, 2850, 2899 and 3433. 5. Guarantor acknowledges that, to the extent Guarantor has or may have certain rights of subrogation or reimbursement against Borrower, those rights may be impaired or destroyed if Bank elects to proceed against any real property security of Borrower by non-judicial foreclosure. That impairment or destruction could, under certain judicial cases and based on equitable principles of estoppel, give rise to a defense by Guarantor against its obligations under this Guaranty. Guarantor waives that defense and any others arising from Bank's election to pursue non-judicial foreclosure. Without limiting the generality of the foregoing, Guarantor waives any and all benefits and defenses under California Code of Civil Procedure Sections 580a, 580b, 580d and 726, to the extent they are applicable. 6. If Borrower becomes insolvent or is adjudicated bankrupt or files a petition for reorganization, arrangement, composition or similar relief under any present or future provision of the United States Bankruptcy Code, or if such a petition is filed against Borrower, and in any such proceeding some or all of any indebtedness or obligations under the Loan Agreement are terminated or rejected or any obligation of Borrower is modified or abrogated, or if Borrower's obligations are otherwise avoided for any reason, Guarantor agrees that Guarantor's liability hereunder shall not thereby be affected or modified and such liability shall continue in full force and effect as if no such action or proceeding had occurred. This Guaranty shall continue to be effective or be reinstated, as the case may be, if any payment must be returned by Bank upon the insolvency, bankruptcy or reorganization of Borrower, Guarantor, any other guarantor, or otherwise, as though such payment had not been made. 7. This Guaranty shall automatically terminate upon the occurrence of all of the following: (i) Borrower receives cash proceeds, following the date of the Loan Agreement, in an amount of at least $3,000,000 from the sale and issuance of its equity securities to investors satisfactory to Bank in its sole discretion and (ii) Borrower is in compliance with the financial covenants set forth in Sections 6.8 through 6.11 of the Loan Agreement. 8. Guarantor agrees, as so requested by Bank, to complete and sign a personal financial statement on the Bank's form. Guarantor agrees to pay a reasonable attorneys' fee 2

and all other costs and expenses which may be incurred by Bank in the enforcement of this Guaranty. No terms or provisions of this Guaranty may be changed, waived, revoked or amended without Bank's prior written consent. Should any provision of this Guaranty be determined by a court of competent jurisdiction to be unenforceable, all of the other provisions shall remain effective. This Guaranty embodies the entire agreement among the parties hereto with respect to the matters set forth herein, and supersedes all prior agreements among the parties with respect to the matters set forth herein. No course of prior dealing among the parties, no usage of trade, and no parol or extrinsic evidence of any nature shall be used to supplement, modify or vary any of the terms hereof. There are no conditions to the full effectiveness of this Guaranty. Bank may assign this Guaranty without in any way affecting Guarantor's liability under it. This Guaranty shall inure to the benefit of Bank and its successors and assigns. This Guaranty is in addition to the guaranties of any other guarantors and any and all other guaranties of Borrower's indebtedness or liabilities to Bank. 9. This Guaranty shall be governed by the laws of the State of California, without regard to conflicts of laws principles. GUARANTOR WAIVES ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED THEREIN, INCLUDING CLAIMS BASED ON CONTRACT, TORT, BREACH OF

and all other costs and expenses which may be incurred by Bank in the enforcement of this Guaranty. No terms or provisions of this Guaranty may be changed, waived, revoked or amended without Bank's prior written consent. Should any provision of this Guaranty be determined by a court of competent jurisdiction to be unenforceable, all of the other provisions shall remain effective. This Guaranty embodies the entire agreement among the parties hereto with respect to the matters set forth herein, and supersedes all prior agreements among the parties with respect to the matters set forth herein. No course of prior dealing among the parties, no usage of trade, and no parol or extrinsic evidence of any nature shall be used to supplement, modify or vary any of the terms hereof. There are no conditions to the full effectiveness of this Guaranty. Bank may assign this Guaranty without in any way affecting Guarantor's liability under it. This Guaranty shall inure to the benefit of Bank and its successors and assigns. This Guaranty is in addition to the guaranties of any other guarantors and any and all other guaranties of Borrower's indebtedness or liabilities to Bank. 9. This Guaranty shall be governed by the laws of the State of California, without regard to conflicts of laws principles. GUARANTOR WAIVES ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED THEREIN, INCLUDING CLAIMS BASED ON CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER COMMON LAW OR STATUTORY BASES. Guarantor submits to the exclusive jurisdiction of the state and federal courts located in the County of Santa Clara, State of California. 10. (a) Other than (i) nonjudicial foreclosure and all matters in connection therewith regarding security interests in real or personal property; or (ii) the appointment of a receiver, or the exercise of other provisional remedies (any and all of which may be initiated pursuant to applicable law), each controversy, dispute or claim between the parties arising out of or relating to this Agreement, which controversy, dispute or claim is not settled in writing within thirty (30) days after the "Claim Date" (defined as the date on which a party subject to this Agreement gives written notice to all other parties that a controversy, dispute or claim exists), will be settled by a reference proceeding in California in accordance with the provisions of Section 638 et seq. of the California Code of Civil Procedure, or their successor section ("CCP"), which shall constitute the exclusive remedy for the settlement of any controversy, dispute or claim concerning this Agreement, including whether such controversy, dispute or claim is subject to the reference proceeding and except as set forth above, the parties waive their rights to initiate any legal proceedings against each other in any court or jurisdiction other than the Superior Court in the County where the Real Property, if any, is located or Santa Clara County if none (the "Court"). The referee shall be a retired Judge of the Court selected by mutual agreement of the parties, and if they cannot so agree within fortyfive (45) days after the Claim Date, the referee shall be promptly selected by the Presiding Judge of the Court (or his representative). The referee shall be appointed to sit as a temporary judge, with all of the powers for a temporary judge, as authorized by law, and upon selection should take and subscribe to the oath of office as provided for in Rule 244 of the California Rules of the Court (or any subsequently enacted Rule). Bach party shall have one peremptory challenge pursuant to CCP Section 170.6. The referee shall (a) be requested to set the 3

matter for hearing within sixty (60) days after the date of selection of the referee and (b) try any and all issues of law or fact and report a statement of decision upon them, if possible, within ninety (90) days of the Claim Date. Any decision rendered by the referee will be final, binding and conclusive and judgment shall be entered pursuant to CCP Section 644 in any court in the State of California having jurisdiction. Any party may apply for a reference proceeding at any time after thirty (30) days following notice to any other party of the nature of the controversy, dispute or claim, by filing a petition for a hearing and/or trial. All discovery permitted by this Agreement shall be completed no later than fifteen (15) days before the first hearing date established by the referee. The referee may extend such period in the event of a party's refusal to provide requested discovery or unavailability of a witness due to absence or illness. No party shall be entitled to "priority" in conducting discovery. Depositions may be taken by either party upon seven (7) days written notice, and request for production or inspection of documents which cannot be resolved by the parties shall be submitted to the referee as provided herein. The Superior Court is empowered to issue temporary and/or provisional remedies, as appropriate. (b) Except as expressly set forth in this Agreement, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of all hearings, the order of presentation of evidence, and all

matter for hearing within sixty (60) days after the date of selection of the referee and (b) try any and all issues of law or fact and report a statement of decision upon them, if possible, within ninety (90) days of the Claim Date. Any decision rendered by the referee will be final, binding and conclusive and judgment shall be entered pursuant to CCP Section 644 in any court in the State of California having jurisdiction. Any party may apply for a reference proceeding at any time after thirty (30) days following notice to any other party of the nature of the controversy, dispute or claim, by filing a petition for a hearing and/or trial. All discovery permitted by this Agreement shall be completed no later than fifteen (15) days before the first hearing date established by the referee. The referee may extend such period in the event of a party's refusal to provide requested discovery or unavailability of a witness due to absence or illness. No party shall be entitled to "priority" in conducting discovery. Depositions may be taken by either party upon seven (7) days written notice, and request for production or inspection of documents which cannot be resolved by the parties shall be submitted to the referee as provided herein. The Superior Court is empowered to issue temporary and/or provisional remedies, as appropriate. (b) Except as expressly set forth in this Agreement, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of all hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter except that when any party so requests, a court reporter will be used at any hearing conducted before the referee. The party making such a request shall have the obligation to arrange for and pay for the court reporter. The costs of the court reporter at the trial shall be borne equally by the parties. (c) The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, to provide all temporary and/or provisional remedies and to enter equitable orders that will be binding upon the parties. The referee shall issue a single judgment at the close of the reference proceeding which shall dispose of all of the claims of the parties that are the subject of the reference. The parties hereto expressly reserve the right to contest or appeal from the final judgment or any appealable order or appealable judgment entered by the referee. The parties hereto expressly reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this Section 10. (d) In the event that the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by the reference procedure herein described will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge of the Court, in accordance with the California Arbitration Act, Section 1280 through Section 1294.2 of the CCP as amended from time to time. The limitations with respect to discovery as set forth hereinabove shall apply to any such arbitration proceeding. 4

IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty as of January 5, 2001.
/S/ RICHARD G. SASS ----------------------------------------RICHARD G. SASS

5

EXHIBIT 10.10 THIRD PARTY SECURITY AGREEMENT

IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty as of January 5, 2001.
/S/ RICHARD G. SASS ----------------------------------------RICHARD G. SASS

5

EXHIBIT 10.10 THIRD PARTY SECURITY AGREEMENT This Third Party Security Agreement (this "Agreement") is made and entered into as of January 5, 2001 by and between the undersigned ("Grantor"), and IMPERIAL BANK (the "Bank"). RECITALS Bank has made loans to MHL DEVELOPMENT COMPANY ("Borrower"), which is the parent company of Grantor, pursuant to a Loan and Security Agreement of even date herewith, as amended from time to time (the "Loan Agreement"). Grantor expects to derive economic benefit from Bank's doing so and dealing with Borrower in accordance with the Loan Agreement, and has entered into an Unconditional Guaranty of even date herewith with respect to the Loan Agreement (the "Guaranty"). Grantor wishes to secure performance and payment of all obligations under the Guaranty with substantially all of its assets. All terms used without definition in this Agreement shall have the meaning assigned to them in the Loan Agreement. NOW, THEREFORE, Grantor and the Bank agree as follows: 1. Grant of Security Interest. To secure all of Grantor's obligations under the Guaranty, as amended from time to time, Grantor grants to the Bank a security interest in the property described in Exhibit A (the "Collateral"). 2. Grantor's Representations and Warranties. Grantor represents, warrants, and covenants as follows: (a) Authorization. Grantor has authority and has obtained all approvals and consents necessary to enter into this Agreement, and Grantor's execution, delivery and performance of this Agreement will not violate or conflict with the terms of Grantor's Articles of Incorporation or Bylaws or any statute, regulation, ordinance, rule of law, agreement, contract, mortgage, indenture, bond, bill, note, or other instrument or writing binding upon Grantor or to which Grantor is subject. (b) Title. The Collateral is owned by Grantor and is free of all liens, encumbrances and other security interests. (c) Further Representations. Grantor further represents, warrants, and covenants that (i) Grantor is not in default under any agreement under which Grantor owes any money, or any agreement, the violation or termination of which could have a material adverse effect on Grantor; (ii) the information provided to Bank on or prior to the date of this Agreement is true and correct in all material respects; (iii) all financial statements and other 1

information provided to Bank fairly present Grantor's financial condition, and there has not been a material adverse change in the financial condition of Grantor since the date of the most recent of the financial statements submitted to Bank; (iv) Grantor is in compliance with all laws and orders applicable to it; (v) Grantor is not party to any litigation and is not the subject of any government investigation, and Grantor has no knowledge of any pending litigation or investigation or the existence of circumstances that reasonably could be expected to give rise to such litigation or investigation; (vi) Grantor's principal place of business is located at the address specified in Section 11; and (vii) no representation or other statement made by Grantor to Bank contains any untrue

EXHIBIT 10.10 THIRD PARTY SECURITY AGREEMENT This Third Party Security Agreement (this "Agreement") is made and entered into as of January 5, 2001 by and between the undersigned ("Grantor"), and IMPERIAL BANK (the "Bank"). RECITALS Bank has made loans to MHL DEVELOPMENT COMPANY ("Borrower"), which is the parent company of Grantor, pursuant to a Loan and Security Agreement of even date herewith, as amended from time to time (the "Loan Agreement"). Grantor expects to derive economic benefit from Bank's doing so and dealing with Borrower in accordance with the Loan Agreement, and has entered into an Unconditional Guaranty of even date herewith with respect to the Loan Agreement (the "Guaranty"). Grantor wishes to secure performance and payment of all obligations under the Guaranty with substantially all of its assets. All terms used without definition in this Agreement shall have the meaning assigned to them in the Loan Agreement. NOW, THEREFORE, Grantor and the Bank agree as follows: 1. Grant of Security Interest. To secure all of Grantor's obligations under the Guaranty, as amended from time to time, Grantor grants to the Bank a security interest in the property described in Exhibit A (the "Collateral"). 2. Grantor's Representations and Warranties. Grantor represents, warrants, and covenants as follows: (a) Authorization. Grantor has authority and has obtained all approvals and consents necessary to enter into this Agreement, and Grantor's execution, delivery and performance of this Agreement will not violate or conflict with the terms of Grantor's Articles of Incorporation or Bylaws or any statute, regulation, ordinance, rule of law, agreement, contract, mortgage, indenture, bond, bill, note, or other instrument or writing binding upon Grantor or to which Grantor is subject. (b) Title. The Collateral is owned by Grantor and is free of all liens, encumbrances and other security interests. (c) Further Representations. Grantor further represents, warrants, and covenants that (i) Grantor is not in default under any agreement under which Grantor owes any money, or any agreement, the violation or termination of which could have a material adverse effect on Grantor; (ii) the information provided to Bank on or prior to the date of this Agreement is true and correct in all material respects; (iii) all financial statements and other 1

information provided to Bank fairly present Grantor's financial condition, and there has not been a material adverse change in the financial condition of Grantor since the date of the most recent of the financial statements submitted to Bank; (iv) Grantor is in compliance with all laws and orders applicable to it; (v) Grantor is not party to any litigation and is not the subject of any government investigation, and Grantor has no knowledge of any pending litigation or investigation or the existence of circumstances that reasonably could be expected to give rise to such litigation or investigation; (vi) Grantor's principal place of business is located at the address specified in Section 11; and (vii) no representation or other statement made by Grantor to Bank contains any untrue statement of a material fact or omits to state a material fact necessary to make any statements made to Bank not misleading. 3. Covenants. (a) Encumbrances. Grantor shall not grant a security interest in any of the Collateral other than to Bank or execute any financing statements covering any of the Collateral in favor of any person other than Bank. (b) Use of Collateral. The Collateral will not be used for any unlawful purpose or in any way that will void any insurance required to be carried in connection therewith. Grantor will keep the Collateral free and clear of liens

information provided to Bank fairly present Grantor's financial condition, and there has not been a material adverse change in the financial condition of Grantor since the date of the most recent of the financial statements submitted to Bank; (iv) Grantor is in compliance with all laws and orders applicable to it; (v) Grantor is not party to any litigation and is not the subject of any government investigation, and Grantor has no knowledge of any pending litigation or investigation or the existence of circumstances that reasonably could be expected to give rise to such litigation or investigation; (vi) Grantor's principal place of business is located at the address specified in Section 11; and (vii) no representation or other statement made by Grantor to Bank contains any untrue statement of a material fact or omits to state a material fact necessary to make any statements made to Bank not misleading. 3. Covenants. (a) Encumbrances. Grantor shall not grant a security interest in any of the Collateral other than to Bank or execute any financing statements covering any of the Collateral in favor of any person other than Bank. (b) Use of Collateral. The Collateral will not be used for any unlawful purpose or in any way that will void any insurance required to be carried in connection therewith. Grantor will keep the Collateral free and clear of liens and adverse claims and, as appropriate and applicable, will keep it in good condition and repair, and will clean, shelter, and otherwise care for the Collateral in all such ways as are considered good practice by owners of like property. (c) Insurance of Collateral. Grantor will maintain insurance on the Collateral that includes a lender's loss payable endorsement in favor of Bank as an additional loss payee. Grantor will maintain insurance in a form acceptable to Bank relating to the Collateral and Grantor's business in amounts and of a type that are customary to businesses similar to Grantor's. (d) Indemnification. Grantor shall indemnify Bank against all losses, claims, demands and liabilities of any kind caused by the Collateral. (e) Perfection of Security Interest. Grantor shall execute and deliver such documents as Bank reasonably deems necessary to create, perfect and continue the security interest in the Collateral contemplated hereby. (f) Records. Grantor shall prepare and keep, in accordance with generally accepted accounting principles consistently applied, complete and accurate records regarding the Collateral and, if and when requested by Bank, shall prepare and deliver a complete and accurate schedule of all the Collateral in such detail as Bank may reasonably require. 2

(g) Inspection of Grantor's Books. Grantor shall permit Bank or its designee at reasonable times and from time to time to inspect Grantor's books, records and properties and to audit and to make copies of extracts from such books and records. (h) Fees and Costs. Grantor shall pay all expenses, including reasonable attorneys' fees, incurred by Bank in the preservation, realization, enforcement or exercise of any Bank's rights under this Agreement. (i) Corporate Existence. Grantor will maintain its corporate existence and good standing and will maintain in force all licenses and agreements, the loss of which could have a material adverse effect on Grantor's business, except that this Section 3(i) shall not apply to transactions in which the Grantor merges into or consolidates with the Borrower and, after giving effect to which, the Borrower is the surviving entity. Grantor will pay all taxes on or before the date such taxes are due, and will comply with all laws and orders applicable to it. (j) Negative Covenants. Grantor will not (i) make any investments in, or loans or advances to, any person other than in the ordinary course of business as currently conducted, (ii) acquire any assets other than in the ordinary course of business as currently conducted, (iii) make any distributions or pay any dividends to any person except to Borrower on account of Grantor's shares, (iv) borrow any money except in the ordinary course of business as currently conducted, (v) move, dispose of or encumber any portion of its assets, except for dispositions of

(g) Inspection of Grantor's Books. Grantor shall permit Bank or its designee at reasonable times and from time to time to inspect Grantor's books, records and properties and to audit and to make copies of extracts from such books and records. (h) Fees and Costs. Grantor shall pay all expenses, including reasonable attorneys' fees, incurred by Bank in the preservation, realization, enforcement or exercise of any Bank's rights under this Agreement. (i) Corporate Existence. Grantor will maintain its corporate existence and good standing and will maintain in force all licenses and agreements, the loss of which could have a material adverse effect on Grantor's business, except that this Section 3(i) shall not apply to transactions in which the Grantor merges into or consolidates with the Borrower and, after giving effect to which, the Borrower is the surviving entity. Grantor will pay all taxes on or before the date such taxes are due, and will comply with all laws and orders applicable to it. (j) Negative Covenants. Grantor will not (i) make any investments in, or loans or advances to, any person other than in the ordinary course of business as currently conducted, (ii) acquire any assets other than in the ordinary course of business as currently conducted, (iii) make any distributions or pay any dividends to any person except to Borrower on account of Grantor's shares, (iv) borrow any money except in the ordinary course of business as currently conducted, (v) move, dispose of or encumber any portion of its assets, except for dispositions of inventory in the ordinary course of Grantor's business, (vi) merge or consolidate with or into any person or entity, except as otherwise permitted in this Agreement, or (vii) create, incur, assume or suffer to exist any lien with respect to any of its property, or assign or otherwise convey any right to receive income, including the sale of any of Grantor's accounts. 4. Events of Default. The occurrence of any Event of Default under the Loan Agreement, or the failure by Grantor to perform any obligations under the Guaranty, or the breach of any representation under this Agreement, or the failure to perform any obligation under Section 3 of this Agreement, shall constitute an "Event of Default" under this Agreement. 5. Remedies on Default. Upon the occurrence of an Event of Default, Bank shall have all rights, privileges, powers and remedies provided by law, including, but not limited to, exercise of any or all of the following remedies. (a) Bank may declare amounts outstanding under the Loan Agreement and the Guaranty to be immediately due and payable, and thereupon all such amounts shall be and become immediately due and payable to the Bank. (b) Bank may dispose of the Collateral in accordance with applicable law. 3

(c) Bank may use, operate, consume and sell the Collateral in its possession as appropriate for the purpose of performing Grantor's obligations with respect thereto to the extent necessary to satisfy the obligations of Grantor. (d) All payments received and amounts realized by Bank shall be promptly applied and distributed by the Bank in the following order or priority: (i) first, to the payment of all costs and expenses, including reasonable legal expenses and attorneys fees, incurred or made hereunder by Bank, including any such costs and expenses of foreclosure or suit, if any, and of any sale or the exercise of any other remedy under this Section 5, and of all taxes, assessments or liens superior to the lien granted under this Agreement; and (ii) second, to the payment to Bank of the amount then owing under the Loan Agreement. 6. Power of Attorney. Grantor hereby appoints Bank, its attorney-in-fact to prepare, sign and file or record, for Grantor in Grantor's name, any financing statements; applications for registration and like papers and to take any other action deemed by Bank necessary or desirable in order to perfect the security interest of the Bank hereunder, to dispose of any Collateral, and to perform any obligations of Grantor hereunder, at Grantor's expense, but without obligation to do so.

(c) Bank may use, operate, consume and sell the Collateral in its possession as appropriate for the purpose of performing Grantor's obligations with respect thereto to the extent necessary to satisfy the obligations of Grantor. (d) All payments received and amounts realized by Bank shall be promptly applied and distributed by the Bank in the following order or priority: (i) first, to the payment of all costs and expenses, including reasonable legal expenses and attorneys fees, incurred or made hereunder by Bank, including any such costs and expenses of foreclosure or suit, if any, and of any sale or the exercise of any other remedy under this Section 5, and of all taxes, assessments or liens superior to the lien granted under this Agreement; and (ii) second, to the payment to Bank of the amount then owing under the Loan Agreement. 6. Power of Attorney. Grantor hereby appoints Bank, its attorney-in-fact to prepare, sign and file or record, for Grantor in Grantor's name, any financing statements; applications for registration and like papers and to take any other action deemed by Bank necessary or desirable in order to perfect the security interest of the Bank hereunder, to dispose of any Collateral, and to perform any obligations of Grantor hereunder, at Grantor's expense, but without obligation to do so. 7. Remedies Cumulative. Bank's rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative. Bank shall have all other rights and remedies not inconsistent herewith as provided under the California Uniform Commercial Code (the "UCC"), by law, or in equity. No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of Default on Borrower's part shall be deemed a continuing waiver. No delay by Bank shall constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless made in a written document signed on behalf of Bank and then shall be effective only in the specific instance and for the specific purpose for which is was given. 8. Amendment of Loan Documents. Grantor authorizes Bank, without notice or demand and without affecting its liability hereunder, from time to time to (a) renew, extend, or otherwise change the terms of any Loan Document, or any part thereof; (b) take and hold security for the payment of any Loan Document, and exchange, enforce, waive and release any such security; and (c) apply such security and direct the order or manner of sale thereof as Bank in its sole discretion may determine. 9. Grantor Waivers. Grantor waives any right to require Bank to (a) proceed against Borrower, any other guarantor or any other person; (b) proceed against or exhaust any security held from Borrower; (c) marshal any assets of Borrower; or (d) pursue any other 4

remedy in Bank's power whatsoever. Bank may, at its election, exercise or decline or fail to exercise any right or remedy it may have against Borrower or any security held by Bank, including without limitation the right to foreclose upon any such security by judicial or nonjudicial sale, without affecting or impairing in any way the liability of Grantor hereunder. Grantor waives any defense arising by reason of any disability or other defense of Borrower or by reason of the cessation from any cause whatsoever of the liability of Borrower. Grantor waives any setoff, defense or counterclaim that Borrower may have against Bank. Grantor waives any defense arising out of the absence, impairment or loss of any right of reimbursement or subrogation or any other rights against Borrower. Until all obligations under the Guaranty have been satisfied, Grantor shall have no right of subrogation or reimbursement, contribution or other rights against Borrower, and Grantor waives any right to enforce any remedy that Bank now has or may hereafter have against Borrower. Grantor waives all rights to participate in any security now or hereafter held by Bank. Grantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Agreement and of the existence, creation, or incurring of new or additional indebtedness. Grantor assumes the responsibility for being and keeping itself informed of the financial condition of Borrower and of all other circumstances bearing upon the risk of nonpayment of any indebtedness or nonperformance of any obligation of Borrower, warrants to Bank that it will keep so informed, and agrees that absent a request for particular information by Grantor, Bank shall have no duty to advise Grantor of information known to Bank regarding such condition or any such

remedy in Bank's power whatsoever. Bank may, at its election, exercise or decline or fail to exercise any right or remedy it may have against Borrower or any security held by Bank, including without limitation the right to foreclose upon any such security by judicial or nonjudicial sale, without affecting or impairing in any way the liability of Grantor hereunder. Grantor waives any defense arising by reason of any disability or other defense of Borrower or by reason of the cessation from any cause whatsoever of the liability of Borrower. Grantor waives any setoff, defense or counterclaim that Borrower may have against Bank. Grantor waives any defense arising out of the absence, impairment or loss of any right of reimbursement or subrogation or any other rights against Borrower. Until all obligations under the Guaranty have been satisfied, Grantor shall have no right of subrogation or reimbursement, contribution or other rights against Borrower, and Grantor waives any right to enforce any remedy that Bank now has or may hereafter have against Borrower. Grantor waives all rights to participate in any security now or hereafter held by Bank. Grantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Agreement and of the existence, creation, or incurring of new or additional indebtedness. Grantor assumes the responsibility for being and keeping itself informed of the financial condition of Borrower and of all other circumstances bearing upon the risk of nonpayment of any indebtedness or nonperformance of any obligation of Borrower, warrants to Bank that it will keep so informed, and agrees that absent a request for particular information by Grantor, Bank shall have no duty to advise Grantor of information known to Bank regarding such condition or any such circumstances. Grantor waives the benefits of California Civil Code sections 2809, 2810, 2819, 2845, 2847, 2848, 2849, 2850, 2899 and 3433. 10. Borrower Insolvency. If Borrower becomes insolvent or is adjudicated bankrupt or files a petition for reorganization, arrangement, composition or similar relief under any present or future provision of the United States Bankruptcy Code, or if such a petition is filed against Borrower, and in any such proceeding some or all of any indebtedness or obligations under the Loan Documents are terminated or rejected or any obligation of Borrower is modified or abrogated, or if Borrower's obligations are otherwise avoided for insolvency, bankruptcy or any similar reason, Grantor agrees that Grantor's liability hereunder shall not thereby be affected or modified and such liability shall continue in full force and effect as if no such action or proceeding had occurred. This Agreement shall continue to be effective or be reinstated, as the case may be, if any payment must be returned by Bank upon the insolvency, bankruptcy or reorganization of Borrower, Grantor, any other person, or otherwise, as though such payment had not been made. 11. Notices. Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return 5

receipt requested, or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses set forth below:
If to Grantor: BIOELECTRIC CORPORATION 16125 SW 72nd Ave. Portland, OR 97224 Attn: Richard G. Sass Fax: 503-639-0330 IMPERIAL BANK 226 Airport Parkway San Jose, CA 95110-1024 IMPERIAL BANK 1300 SW 5th Ave., Suite 1815 Portland, OR 97201 Attn: Mike Parrott Fax: 503-471-2957

If to Bank:

with a copy to:

The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other.

receipt requested, or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses set forth below:
If to Grantor: BIOELECTRIC CORPORATION 16125 SW 72nd Ave. Portland, OR 97224 Attn: Richard G. Sass Fax: 503-639-0330 IMPERIAL BANK 226 Airport Parkway San Jose, CA 95110-1024 IMPERIAL BANK 1300 SW 5th Ave., Suite 1815 Portland, OR 97201 Attn: Mike Parrott Fax: 503-471-2957

If to Bank:

with a copy to:

The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other. 12. Choice of Law and Venue; Jury Trial Waiver. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of California, without regard to principles of conflicts of law. Each of Grantor and Bank hereby submits to the nonexclusive jurisdiction of the state and Federal courts located in the County of Santa Clara, State of California. GRANTOR AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 6

13. General Provisions. 13.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Grantor without Bank's prior written consent, which consent may be granted or withheld in Bank's sole discretion. Bank shall have the right without the consent of or notice to Grantor to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank's obligations, rights and benefits hereunder. 13.2 Indemnification. Grantor shall defend, indemnify and hold harmless Bank and its officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with Grantor's failure to comply with the terms of this Agreement; and (b) all losses or Bank Expenses (as defined in the Loan Agreement) in any way suffered, incurred, or paid by Bank as a result of or in any way arising out of, following, or consequential to Grantor's failure to comply with the terms of this Agreement (including without limitation reasonable attorneys fees and expenses), except for losses caused by Bank's gross negligence or willful misconduct. 13.3 Time of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement.

13. General Provisions. 13.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Grantor without Bank's prior written consent, which consent may be granted or withheld in Bank's sole discretion. Bank shall have the right without the consent of or notice to Grantor to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank's obligations, rights and benefits hereunder. 13.2 Indemnification. Grantor shall defend, indemnify and hold harmless Bank and its officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with Grantor's failure to comply with the terms of this Agreement; and (b) all losses or Bank Expenses (as defined in the Loan Agreement) in any way suffered, incurred, or paid by Bank as a result of or in any way arising out of, following, or consequential to Grantor's failure to comply with the terms of this Agreement (including without limitation reasonable attorneys fees and expenses), except for losses caused by Bank's gross negligence or willful misconduct. 13.3 Time of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement. 13.4 Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision. 13.5 Amendments in Writing, Integration. This Agreement cannot be amended or terminated orally. All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement, if any, are merged into this Agreement and the Loan Documents. 13.6 Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. 13.7 Survival. All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding. The obligations of Grantor to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in Section 13.2 shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Bank have run. 7

14. Judicial Reference. (a) Other than (i) nonjudicial foreclosure and all matters in connection therewith regarding security interests in real or personal property; or (ii) the appointment of a receiver, or the exercise of other provisional remedies (any and all of which may be initiated pursuant to applicable law), each controversy, dispute or claim between the parties arising out of or relating to this Agreement, which controversy, dispute or claim is not settled in writing within thirty (30) days after the "Claim Date" (defined as the date on which a party subject to this Agreement gives written notice to all other parties that a controversy, dispute or claim exists), will be settled by a reference proceeding in California in accordance with the provisions of Section 638 et seq. of the California Code of Civil Procedure, or their successor section ("CCP"), which shall constitute the exclusive remedy for the settlement of any controversy, dispute or claim concerning this Agreement, including whether such controversy, dispute or claim is subject to the reference proceeding and except as set forth above, the parties waive their rights to initiate any legal proceedings against each other in any court or jurisdiction other than the Superior Court in the County where the Real Property, if any, is located or Santa Clara County if none (the "Court"). The referee shall be a retired Judge of the Court selected by mutual agreement of the parties, and if they cannot so agree within fortyfive (45) days after the Claim Date, the referee shall be promptly selected by the Presiding Judge of the Court (or his representative). The referee shall be appointed to sit as a temporary judge, with all of the powers for a temporary judge, as authorized by law, and upon selection should take and subscribe to the oath of office as provided for in Rule 244 of the California Rules of the Court (or any subsequently enacted Rule). Each party shall have one peremptory challenge pursuant to CCP Section

14. Judicial Reference. (a) Other than (i) nonjudicial foreclosure and all matters in connection therewith regarding security interests in real or personal property; or (ii) the appointment of a receiver, or the exercise of other provisional remedies (any and all of which may be initiated pursuant to applicable law), each controversy, dispute or claim between the parties arising out of or relating to this Agreement, which controversy, dispute or claim is not settled in writing within thirty (30) days after the "Claim Date" (defined as the date on which a party subject to this Agreement gives written notice to all other parties that a controversy, dispute or claim exists), will be settled by a reference proceeding in California in accordance with the provisions of Section 638 et seq. of the California Code of Civil Procedure, or their successor section ("CCP"), which shall constitute the exclusive remedy for the settlement of any controversy, dispute or claim concerning this Agreement, including whether such controversy, dispute or claim is subject to the reference proceeding and except as set forth above, the parties waive their rights to initiate any legal proceedings against each other in any court or jurisdiction other than the Superior Court in the County where the Real Property, if any, is located or Santa Clara County if none (the "Court"). The referee shall be a retired Judge of the Court selected by mutual agreement of the parties, and if they cannot so agree within fortyfive (45) days after the Claim Date, the referee shall be promptly selected by the Presiding Judge of the Court (or his representative). The referee shall be appointed to sit as a temporary judge, with all of the powers for a temporary judge, as authorized by law, and upon selection should take and subscribe to the oath of office as provided for in Rule 244 of the California Rules of the Court (or any subsequently enacted Rule). Each party shall have one peremptory challenge pursuant to CCP Section 170.6. The referee shall (a) be requested to set the matter for hearing within sixty (60) days after the date of selection of the referee and (b) try any and all issues of law or fact and report a statement of decision upon them, if possible, within ninety (90) days of the Claim Date. Any decision rendered by the referee will be final, binding and conclusive and judgment shall be entered pursuant to CCP Section 644 in any court in the State of California having jurisdiction. Any party may apply for a reference proceeding at any time after thirty (30) days following notice to any other party of the nature of the controversy, dispute or claim, by filing a petition for a hearing and/or trial. All discovery permitted by this Agreement shall be completed no later than fifteen (15) days before the first hearing date established by the referee. The referee may extend such period in the event of a party's refusal to provide requested discovery or unavailability of a witness due to absence or illness. No party shall be entitled to "priority" in conducting discovery. Depositions may be taken by either party upon seven (7) days written notice, and request for production or inspection of documents which cannot be resolved by the parties shall be submitted to the referee as provided herein. The Superior Court is empowered to issue temporary and/or provisional remedies, as appropriate. (b) Except as expressly set forth in this Agreement, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of all hearings, the order of presentation of evidence, and all other questions that arise 8

with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter except that when any party so requests, a court reporter will be used at any hearing conducted before the referee. The party making such a request shall have the obligation to arrange for and pay for the court reporter. The costs of the court reporter at the trial shall be borne equally by the parties. (c) The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, to provide all temporary and/or provisional remedies and to enter equitable orders that will be binding upon the parties. The referee shall issue a single judgment at the close of the reference proceeding which shall dispose of all of the claims of the parties that are the subject of the reference. The parties hereto expressly reserve the right to contest or appeal from the final judgment or any appealable order or appealable judgment entered by the referee. The parties hereto expressly reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this Section.

with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter except that when any party so requests, a court reporter will be used at any hearing conducted before the referee. The party making such a request shall have the obligation to arrange for and pay for the court reporter. The costs of the court reporter at the trial shall be borne equally by the parties. (c) The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, to provide all temporary and/or provisional remedies and to enter equitable orders that will be binding upon the parties. The referee shall issue a single judgment at the close of the reference proceeding which shall dispose of all of the claims of the parties that are the subject of the reference. The parties hereto expressly reserve the right to contest or appeal from the final judgment or any appealable order or appealable judgment entered by the referee. The parties hereto expressly reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this Section. (d) In the event that the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by the reference procedure herein described will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge of the Court, in accordance with the California Arbitration Act, Section 1280 through Section 1294.2 of the CCP as amended from time to time. The limitations with respect to discovery as set forth hereinabove shall apply to any such arbitration proceeding. IN WITNESS WHEREOF, the parties have executed this Agreement on the date set forth above.
GRANTOR: BIOELECTRIC CORPORATION BANK: IMPERIAL BANK

By:/s/ RICHARD G. SASS -------------------------------Name: Richard G. Sass Title: Chief Executive Officer

By: /s/ MIKE PARROTT -------------------------------Name: Mike Parrott Title: Venture Banking Officer

9

EXHIBIT A The Collateral shall be all personal property of Grantor (herein referred to as "Grantor" or "Debtor") whether presently existing or hereafter created, written, produced or acquired, including, but not limited to: (i) all accounts receivable, accounts, chattel paper, contract rights (including, without limitation, royalty agreements, license agreements and distribution agreements), documents, instruments, money, deposit accounts and general intangibles, including, without limitation, returns, repossessions, books and records relating thereto, and equipment containing said books and records, all financial assets, all investment property, including securities and securities entitlements; (ii) all software, computer source codes and other computer programs (collectively, the "Software Products"), and all common law and statutory copyrights and copyright registrations, applications for registration, now existing or hereafter arising, United States of America and foreign, obtained or to be obtained on or in connection with the Software Products, or any parts thereof or any underlying or component elements of the Software Products together with the right to copyright and all rights to renew or extend such copyrights and the right (but not the obligation) of Bank (herein referred to as "Bank" or "Secured Party") to sue in its own name and/or the

EXHIBIT A The Collateral shall be all personal property of Grantor (herein referred to as "Grantor" or "Debtor") whether presently existing or hereafter created, written, produced or acquired, including, but not limited to: (i) all accounts receivable, accounts, chattel paper, contract rights (including, without limitation, royalty agreements, license agreements and distribution agreements), documents, instruments, money, deposit accounts and general intangibles, including, without limitation, returns, repossessions, books and records relating thereto, and equipment containing said books and records, all financial assets, all investment property, including securities and securities entitlements; (ii) all software, computer source codes and other computer programs (collectively, the "Software Products"), and all common law and statutory copyrights and copyright registrations, applications for registration, now existing or hereafter arising, United States of America and foreign, obtained or to be obtained on or in connection with the Software Products, or any parts thereof or any underlying or component elements of the Software Products together with the right to copyright and all rights to renew or extend such copyrights and the right (but not the obligation) of Bank (herein referred to as "Bank" or "Secured Party") to sue in its own name and/or the name of the Debtor for past, present and future infringements of copyright; (iii) all goods, including, without limitation, equipment and inventory (including, without limitation, all export inventory); (iv) all guarantees and other security therefor; (v) all trademarks, service marks, trade names and service names and the goodwill associated therewith; (vi) (a) all patents and patent applications filed in the United States Patent and Trademark Office or any similar office of any foreign jurisdiction, and interests under patent license agreements, including, without limitation, the inventions and improvements described and claimed therein, (b) licenses pertaining to any patent whether Debtor is licensor or licensee, (c) all income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or payable under and with respect thereto, including, without limitation, damages and payments for past, present or future infringements thereof, (d) the right (but not the obligation) to sue for past, present and future infringements thereof, (e) all rights corresponding thereto throughout the world in all jurisdictions in which such patents have been issued or applied for, and (f) the reissues, divisions, continuances, renewals, extensions and continuations-in-part with any of the foregoing (all of the foregoing patents and applications and interests under patent license agreements, together with the items described in clauses (a) 1

through (f) in this paragraph are sometimes herein individually and collectively referred to as the "Patents"); and (vii) all products and proceeds, including, without limitation, insurance proceeds, of any of the foregoing. 2

EXHIBIT 10.11 SUBORDINATION AGREEMENT This Subordination Agreement is made as of January 5, 2001 by and among each of the undersigned creditors (individually, a "Creditor" and, collectively, the "Creditors"), and Imperial Bank ("Bank"). Recitals A. MHL DEVELOPMENT COMPANY, an Oregon corporation ("Borrower"), has requested and/or obtained certain loans or other credit accommodations from Bank which are or may be from time to time secured by

through (f) in this paragraph are sometimes herein individually and collectively referred to as the "Patents"); and (vii) all products and proceeds, including, without limitation, insurance proceeds, of any of the foregoing. 2

EXHIBIT 10.11 SUBORDINATION AGREEMENT This Subordination Agreement is made as of January 5, 2001 by and among each of the undersigned creditors (individually, a "Creditor" and, collectively, the "Creditors"), and Imperial Bank ("Bank"). Recitals A. MHL DEVELOPMENT COMPANY, an Oregon corporation ("Borrower"), has requested and/or obtained certain loans or other credit accommodations from Bank which are or may be from time to time secured by assets and property of Borrower. B. Each Creditor has extended loans or other credit accommodations to Borrower, and/or may extend loans or other credit accommodations to Borrower from time to time. C. In order to induce Bank to extend credit to Borrower and, at any time or from time to time, at Bank's option, to make such further loans, extensions of credit, or other accommodations to or for the account of Borrower, or to purchase or extend credit upon any instrument or writing in respect of which Borrower may be liable in any capacity, or to grant such renewals or extension of any such loan, extension of credit, purchase, or other accommodation as Bank may deem advisable, each Creditor is willing to subordinate: (i) all of Borrower's indebtedness and obligations to such Creditor, whether presently existing or arising in the future (the "Subordinated Debt") to all of Borrower's indebtedness and obligations to Bank; and (ii) all of such Creditor's security interests, if any, to all of Bank's security interests in the Borrower's property. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: 1. Each Creditor subordinates to Bank any security interest or lien that such Creditor may have in any property of Borrower. Notwithstanding the respective dates of attachment or perfection of the security interest of a Creditor and the security interest of Bank, the security interest of Bank in the Collateral, as defined in that certain Loan and Security Agreement between Borrower and Bank, dated as of the date hereof, as amended from time to time (the "Loan Agreement"), shall at all times be prior to the security interest of such Creditor. Capitalized terms not otherwise defined herein shall have the same meaning as in the Loan Agreement. 2. All Subordinated Debt is subordinated in right of payment to all obligations of Borrower to Bank now existing or hereafter arising, together with all costs of collecting such obligations (including attorneys' fees), including, without limitation, all interest accruing after the commencement by or against Borrower of any bankruptcy, reorganization or similar proceeding, and all obligations under the Loan Agreement (the "Senior Debt"). 1

3. Each Creditor will not demand or receive from Borrower (and Borrower will not pay to such Creditor) all or any part of the Subordinated Debt, by way of payment, prepayment, setoff, lawsuit or otherwise, nor will such Creditor execute any remedy with respect to the Collateral, nor will such Creditor commence, or cause to commence, prosecute or participate in any administrative, legal or equitable action against Borrower, for so long as any portion of the Senior Debt remains outstanding. 4. Each Creditor shall promptly deliver to Bank in the form received (except for endorsement or assignment by such Creditor where required by Bank) for application to the Senior Debt any payment, distribution, security or proceeds received by such Creditor with respect to the Subordinated

EXHIBIT 10.11 SUBORDINATION AGREEMENT This Subordination Agreement is made as of January 5, 2001 by and among each of the undersigned creditors (individually, a "Creditor" and, collectively, the "Creditors"), and Imperial Bank ("Bank"). Recitals A. MHL DEVELOPMENT COMPANY, an Oregon corporation ("Borrower"), has requested and/or obtained certain loans or other credit accommodations from Bank which are or may be from time to time secured by assets and property of Borrower. B. Each Creditor has extended loans or other credit accommodations to Borrower, and/or may extend loans or other credit accommodations to Borrower from time to time. C. In order to induce Bank to extend credit to Borrower and, at any time or from time to time, at Bank's option, to make such further loans, extensions of credit, or other accommodations to or for the account of Borrower, or to purchase or extend credit upon any instrument or writing in respect of which Borrower may be liable in any capacity, or to grant such renewals or extension of any such loan, extension of credit, purchase, or other accommodation as Bank may deem advisable, each Creditor is willing to subordinate: (i) all of Borrower's indebtedness and obligations to such Creditor, whether presently existing or arising in the future (the "Subordinated Debt") to all of Borrower's indebtedness and obligations to Bank; and (ii) all of such Creditor's security interests, if any, to all of Bank's security interests in the Borrower's property. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: 1. Each Creditor subordinates to Bank any security interest or lien that such Creditor may have in any property of Borrower. Notwithstanding the respective dates of attachment or perfection of the security interest of a Creditor and the security interest of Bank, the security interest of Bank in the Collateral, as defined in that certain Loan and Security Agreement between Borrower and Bank, dated as of the date hereof, as amended from time to time (the "Loan Agreement"), shall at all times be prior to the security interest of such Creditor. Capitalized terms not otherwise defined herein shall have the same meaning as in the Loan Agreement. 2. All Subordinated Debt is subordinated in right of payment to all obligations of Borrower to Bank now existing or hereafter arising, together with all costs of collecting such obligations (including attorneys' fees), including, without limitation, all interest accruing after the commencement by or against Borrower of any bankruptcy, reorganization or similar proceeding, and all obligations under the Loan Agreement (the "Senior Debt"). 1

3. Each Creditor will not demand or receive from Borrower (and Borrower will not pay to such Creditor) all or any part of the Subordinated Debt, by way of payment, prepayment, setoff, lawsuit or otherwise, nor will such Creditor execute any remedy with respect to the Collateral, nor will such Creditor commence, or cause to commence, prosecute or participate in any administrative, legal or equitable action against Borrower, for so long as any portion of the Senior Debt remains outstanding. 4. Each Creditor shall promptly deliver to Bank in the form received (except for endorsement or assignment by such Creditor where required by Bank) for application to the Senior Debt any payment, distribution, security or proceeds received by such Creditor with respect to the Subordinated Debt other than in accordance with this Agreement. 5. In the event of Borrower's insolvency, reorganization or any case or proceeding under any bankruptcy or insolvency law or laws relating to the relief of debtors, these provisions shall remain in full force and effect, and Bank's claims against Borrower and the estate of Borrower shall be paid in full before any payment is made to any Creditor.

3. Each Creditor will not demand or receive from Borrower (and Borrower will not pay to such Creditor) all or any part of the Subordinated Debt, by way of payment, prepayment, setoff, lawsuit or otherwise, nor will such Creditor execute any remedy with respect to the Collateral, nor will such Creditor commence, or cause to commence, prosecute or participate in any administrative, legal or equitable action against Borrower, for so long as any portion of the Senior Debt remains outstanding. 4. Each Creditor shall promptly deliver to Bank in the form received (except for endorsement or assignment by such Creditor where required by Bank) for application to the Senior Debt any payment, distribution, security or proceeds received by such Creditor with respect to the Subordinated Debt other than in accordance with this Agreement. 5. In the event of Borrower's insolvency, reorganization or any case or proceeding under any bankruptcy or insolvency law or laws relating to the relief of debtors, these provisions shall remain in full force and effect, and Bank's claims against Borrower and the estate of Borrower shall be paid in full before any payment is made to any Creditor. 6. For so long as any of the Senior Debt remains unpaid, each Creditor irrevocably appoints Bank as such Creditor's attorney-in-fact, and grants to Bank a power of attorney with full power of substitution, in the name of such Creditor or in the name of Bank, for the use and benefit of Bank, without notice to such Creditor, to perform at Bank's option the following acts in any bankruptcy, insolvency or similar proceeding involving Borrower: (i) To file the appropriate claim or claims in respect of the Subordinated Debt on behalf of Creditor if Creditor does not do so prior to 30 days before the expiration of the time to file claims in such proceeding and if Bank elects, in its sole discretion, to file such claim or claims; and (ii) To accept or reject any plan of reorganization or arrangement on behalf of Creditor and to otherwise vote Creditor's claims in respect of any Subordinated Debt in any manner that Bank deems appropriate for the enforcement of its rights hereunder. 7. Each Creditor shall immediately affix a legend to the instruments evidencing the Subordinated Debt stating that the instruments are subject to the terms of this Agreement. No amendment of the documents evidencing or relating to the Subordinated Debt shall directly or indirectly modify the provisions of this Agreement in any manner which might terminate or impair the subordination of the Subordinated Debt or the subordination of the security interest or lien that such Creditor may have in any property of Borrower. By way of example, such instruments shall not be amended to (i) increase the rate of interest with respect to the Subordinated Debt, or (ii) accelerate the payment of the principal or interest or any other portion of the Subordinated Debt. 2

8. This Agreement shall remain effective for so long as Borrower owes any amounts to Bank under the Loan Agreement or otherwise. If, at any time after payment in full of the Senior Debt any payments of the Senior Debt must be disgorged by Bank for any reason (including, without limitation, the bankruptcy of Borrower), this Agreement and the relative rights and priorities set forth herein shall be reinstated as to all such disgorged payments as though such payments had not been made and each Creditor shall immediately pay over to Bank all payments received with respect to the Subordinated Debt to the extent that such payments would have been prohibited hereunder. At any time and from time to time, without notice to such Creditor, Bank may take such actions with respect to the Senior Debt as Bank, in its sole discretion, may deem appropriate, including, without limitation, terminating advances to Borrower, increasing the principal amount, extending the time of payment, increasing applicable interest rates, renewing, compromising or otherwise amending the terms of any documents affecting the Senior Debt and any collateral securing the Senior Debt, and enforcing or failing to enforce any rights against Borrower or any other person. No such action or inaction shall impair or otherwise affect Bank's right hereunder. Each Creditor waives the benefits, if any, of Civil Code Sections 2809, 2810, 2819, 2845, 2847, 2848, 2849, 2850, 2899 and 3433. 9. This Agreement shall bind any successors or assignees of a Creditor and shall benefit any successors or assigns of Bank. This Agreement is solely for the benefit of each Creditor and Bank and not for the benefit of

8. This Agreement shall remain effective for so long as Borrower owes any amounts to Bank under the Loan Agreement or otherwise. If, at any time after payment in full of the Senior Debt any payments of the Senior Debt must be disgorged by Bank for any reason (including, without limitation, the bankruptcy of Borrower), this Agreement and the relative rights and priorities set forth herein shall be reinstated as to all such disgorged payments as though such payments had not been made and each Creditor shall immediately pay over to Bank all payments received with respect to the Subordinated Debt to the extent that such payments would have been prohibited hereunder. At any time and from time to time, without notice to such Creditor, Bank may take such actions with respect to the Senior Debt as Bank, in its sole discretion, may deem appropriate, including, without limitation, terminating advances to Borrower, increasing the principal amount, extending the time of payment, increasing applicable interest rates, renewing, compromising or otherwise amending the terms of any documents affecting the Senior Debt and any collateral securing the Senior Debt, and enforcing or failing to enforce any rights against Borrower or any other person. No such action or inaction shall impair or otherwise affect Bank's right hereunder. Each Creditor waives the benefits, if any, of Civil Code Sections 2809, 2810, 2819, 2845, 2847, 2848, 2849, 2850, 2899 and 3433. 9. This Agreement shall bind any successors or assignees of a Creditor and shall benefit any successors or assigns of Bank. This Agreement is solely for the benefit of each Creditor and Bank and not for the benefit of Borrower or any other party. Creditor further agrees that if Borrower is in the process of refinancing a portion of the Senior Debt with a new lender, and if Bank makes a request of such Creditor, Creditor shall agree to enter into a new subordination agreement with the new lender on substantially the terms and conditions of this Agreement. 10. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. 11. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to conflicts of laws principles. Creditor and Bank submit to the exclusive jurisdiction of the state and federal courts located in Santa Clara County, California. EACH CREDITOR AND BANK WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN. 12. This Agreement represents the entire agreement with respect to the subject matter hereof, and supersedes all prior negotiations, agreements and commitments. No Creditor is relying on any representations by Bank or Borrower in entering into this Agreement, and each Creditor has kept and will continue to keep itself fully apprised of the financial and other condition of Borrower. This Agreement may be amended only by written instrument signed by each Creditor and Bank. 3

13. In the event of any legal action to enforce the rights of a party under this Agreement, the party prevailing in such action shall be entitled, in addition to such other relief as may be granted, all reasonable costs and expenses, including reasonable attorneys' fees, incurred in such action. 14. JUDICIAL REFERENCE. (a) Other than (i) nonjudicial foreclosure and all matters in connection therewith regarding security interests in real or personal property; or (ii) the appointment of a receiver, or the exercise of other provisional remedies (any and all of which may be initiated pursuant to applicable law), each controversy, dispute or claim between the parties arising out of or relating to this Agreement, which controversy, dispute or claim is not settled in writing within thirty (30) days after the "Claim Date" (defined as the date on which a party subject to this Agreement gives written notice to all other parties that a controversy, dispute or claim exists), will be settled by a reference proceeding in California in accordance with the provisions of Section 638 et seq. of the California Code of Civil Procedure, or their successor section ("CCP"), which shall constitute the exclusive remedy for the settlement of any controversy, dispute or claim concerning this Agreement, including whether such controversy, dispute or claim is subject to the reference proceeding and except as set forth above, the parties waive their rights to initiate any legal proceedings against each other in any court or jurisdiction other than the Superior Court in the County

13. In the event of any legal action to enforce the rights of a party under this Agreement, the party prevailing in such action shall be entitled, in addition to such other relief as may be granted, all reasonable costs and expenses, including reasonable attorneys' fees, incurred in such action. 14. JUDICIAL REFERENCE. (a) Other than (i) nonjudicial foreclosure and all matters in connection therewith regarding security interests in real or personal property; or (ii) the appointment of a receiver, or the exercise of other provisional remedies (any and all of which may be initiated pursuant to applicable law), each controversy, dispute or claim between the parties arising out of or relating to this Agreement, which controversy, dispute or claim is not settled in writing within thirty (30) days after the "Claim Date" (defined as the date on which a party subject to this Agreement gives written notice to all other parties that a controversy, dispute or claim exists), will be settled by a reference proceeding in California in accordance with the provisions of Section 638 et seq. of the California Code of Civil Procedure, or their successor section ("CCP"), which shall constitute the exclusive remedy for the settlement of any controversy, dispute or claim concerning this Agreement, including whether such controversy, dispute or claim is subject to the reference proceeding and except as set forth above, the parties waive their rights to initiate any legal proceedings against each other in any court or jurisdiction other than the Superior Court in the County where the Real Property, if any, is located or Santa Clara County if none (the "Court"). The referee shall be a retired Judge of the Court selected by mutual agreement of the parties, and if they cannot so agree within fortyfive (45) days after the Claim Date, the referee shall be promptly selected by the Presiding Judge of the Court (or his representative). The referee shall be appointed to sit as a temporary judge, with all of the powers for a temporary judge, as authorized by law, and upon selection should take and subscribe to the oath of office as provided for in Rule 244 of the California Rules of the Court (or any subsequently enacted Rule). Each party shall have one peremptory challenge pursuant to CCP Section 170.6. The referee shall (a) be requested to set the matter for hearing within sixty (60) days after the date of selection of the referee and (b) try any and all issues of law or fact and report a statement of decision upon them, if possible, within ninety (90) days of the Claim Date. Any decision rendered by the referee will be final, binding and conclusive and judgment shall be entered pursuant to CCP Section 644 in any court in the State of California having jurisdiction. Any party may apply for a reference proceeding at any time after thirty (30) days following notice to any other party of the nature of the controversy, dispute or claim, by filing a petition for a hearing and/or trial. All discovery permitted by this Agreement shall be completed no later than fifteen (15) days before the first hearing date established by the referee. The referee may extend such period in the event of a party's refusal to provide requested discovery or unavailability of a witness due to absence or illness. No party shall be entitled to "priority" in conducting discovery. Depositions may be taken by either party upon seven (7) days written notice, and request for production or inspection of documents which cannot be resolved by the parties shall be submitted to the referee as 4

provided herein. The Superior Court is empowered to issue temporary and/or provisional remedies, as appropriate. (b) Except as expressly set forth in this Agreement, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of all hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter except that when any party so requests, a court reporter will be used at any hearing conducted before the referee. The party making such a request shall have the obligation to arrange for and pay for the court reporter. The costs of the court reporter at the trial shall be borne equally by the parties. (c) The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, to provide all temporary and/or provisional remedies and to enter equitable orders that will be binding upon the parties. The referee shall issue a single judgment at the close of the reference proceeding which shall dispose of all of the claims of the parties that are the subject of the reference. The parties hereto expressly reserve the right to contest or appeal from the final judgment or any appealable order or appealable judgment entered by the

provided herein. The Superior Court is empowered to issue temporary and/or provisional remedies, as appropriate. (b) Except as expressly set forth in this Agreement, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of all hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter except that when any party so requests, a court reporter will be used at any hearing conducted before the referee. The party making such a request shall have the obligation to arrange for and pay for the court reporter. The costs of the court reporter at the trial shall be borne equally by the parties. (c) The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, to provide all temporary and/or provisional remedies and to enter equitable orders that will be binding upon the parties. The referee shall issue a single judgment at the close of the reference proceeding which shall dispose of all of the claims of the parties that are the subject of the reference. The parties hereto expressly reserve the right to contest or appeal from the final judgment or any appealable order or appealable judgment entered by the referee. The parties hereto expressly reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this provisions. (d) In the event that the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by the reference procedure herein described will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge of the Court, in accordance with the California Arbitration Act, Section 1280 through Section 1294.2 of the CCP as amended from time to time. The limitations with respect to discovery as set forth hereinabove shall apply to any such arbitration proceeding. 5

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. "Bank" IMPERIAL BANK
By: /s/ MIKE PARROTT -----------------------------------Title: Venture Banking Officer

"Creditors"
/s/ RICHARD G. SASS ---------------------------------------RICHARD G. SASS

SASS REVOCABLE TRUST
By: /s/ RICHARD G. SASS -----------------------------------Title: Trustee

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. "Bank" IMPERIAL BANK
By: /s/ MIKE PARROTT -----------------------------------Title: Venture Banking Officer

"Creditors"
/s/ RICHARD G. SASS ---------------------------------------RICHARD G. SASS

SASS REVOCABLE TRUST
By: /s/ RICHARD G. SASS -----------------------------------Title: Trustee

The undersigned approves of the terms of this Agreement. "Borrower" MHL DEVELOPMENT COMPANY
By: /s/ JANE K. CONNER -----------------------------------Title: Chief Financial Officer

6

EXHIBIT 10.12 PROMISSORY NOTE $2,000,000 December 7, 1991 FOR VALUE RECEIVED, the undersigned, PI MEDICAL CORPORATION (the "Company"), hereby promises to pay to the order of RICHARD G. SASS (the "Lender"), the principal sum of $2,000,000 (or such lesser amount as shall equal the aggregate unpaid principal amount of the advances noted on the attached Schedule A), in lawful money of the United States of America on December 7, 2001 (the "Final Payment Date"), along with any remaining unpaid interest. The interest rate on the amounts borrowed shall be equal to the federal long term rate as defined in Internal Revenue Code Section 1274(d). Interest shall be payable annually, on December 1 of each year, but may be deferred and added to principal if certain cash flow requirements are not met, as set forth in a Loan Agreement between Lender and the Company, dated as of the date hereof, the terms of which are incorporated herein. The amount and date of each advance made by Lender to the Company, and each payment or prepayment made

EXHIBIT 10.12 PROMISSORY NOTE $2,000,000 December 7, 1991 FOR VALUE RECEIVED, the undersigned, PI MEDICAL CORPORATION (the "Company"), hereby promises to pay to the order of RICHARD G. SASS (the "Lender"), the principal sum of $2,000,000 (or such lesser amount as shall equal the aggregate unpaid principal amount of the advances noted on the attached Schedule A), in lawful money of the United States of America on December 7, 2001 (the "Final Payment Date"), along with any remaining unpaid interest. The interest rate on the amounts borrowed shall be equal to the federal long term rate as defined in Internal Revenue Code Section 1274(d). Interest shall be payable annually, on December 1 of each year, but may be deferred and added to principal if certain cash flow requirements are not met, as set forth in a Loan Agreement between Lender and the Company, dated as of the date hereof, the terms of which are incorporated herein. The amount and date of each advance made by Lender to the Company, and each payment or prepayment made on account of the principal of this Note, shall be recorded by Lender and endorsed by Lender on the attached Schedule A. The Company may repay any amount of principal at any time prior to the Final Payment Date, without penalty. If the Company fails to pay principal or interest when due, the Company will pay Lender such further amounts as shall be sufficient to cover the costs and expenses of collection, including, without limitation, reasonable attorneys' fees, expenses and disbursements. This Note shall be governed by, and construed and enforced in accordance with, the laws of the State of Oregon, without regard to choice of law rules. The debt evidenced by this Note is secured by a security interest in the Company's assets pursuant to a Security Agreement dated as of the date hereof. Failure to pay principal or interest when due, or the occurrence or existence of an event of default under the Security Agreement or in any other instrument securing and/or evidencing this indebtedness, shall constitute an event of default under this Note and shall entitle Lender, at its option, to accelerate the then outstanding indebtedness hereunder and take such other action as may be provided for in the Loan Agreement or the Security Agreement. Failure to exercise such option on the occurrence of any event of default shall not prevent the exercise of such option upon the reoccurrence of such event of default or upon the occurrence of any other event of default. In the event of default in payment of indebtedness under this Note, Lender shall be entitled to all rights and remedies available to a lender under the Oregon Uniform Commercial Code.

To the extent permitted by applicable law, the Company, for itself and its legal representatives, successors and assigns, expressly waives presentment, demand, protest, notice of dishonor, notice of nonpayment, notice of protest, diligence in collection and the benefit of any exemption or insolvency laws. The Company also waives any rights to any stay of execution as well as all rights to setoff. PI MEDICAL CORPORATION
By: Name: Title: /s/ RICHARD MURIE --------------------------------Vice President and General Manager

To the extent permitted by applicable law, the Company, for itself and its legal representatives, successors and assigns, expressly waives presentment, demand, protest, notice of dishonor, notice of nonpayment, notice of protest, diligence in collection and the benefit of any exemption or insolvency laws. The Company also waives any rights to any stay of execution as well as all rights to setoff. PI MEDICAL CORPORATION
By: Name: Title: /s/ RICHARD MURIE --------------------------------Vice President and General Manager

EXHIBIT 10.13 NOTE EXTENSION AGREEMENT This Agreement is made and entered into this 23rd day of July 1999, by and between MHL DEVELOPMENT CORPORATION (F/K/A MICROHELIX LABS INC.) an Oregon corporation and RICHARD G. SASS, an Oregon resident HEREIN AFTER "MAKERS" and THE CONFEDERATED TRIBES OF THE GRAND RONDE COMMUNITY OF OREGON herein after called "HOLDER." WHEREAS MAKERS did execute a Promissory Note dated July 22, 1998 in the amount of Six Hundred Sixty Seven thousand Five Hundred Dollars ($667,500.00) in favor of MAKER, and; WHEREAS MAKERS desires to renew and extend said Note to January 22, 2000 and HOLDER has agreed, and; WHEREAS MAKERS agree to pay all accrued interest on the Note current by July 23, 1999 and pay future quarterly interest payments on October 22, 1999 and January 22, 2000, and; NOW, THEREFORE, in consideration of the herein stated mutual covenants and promises, and other good and valuable consideration, it is AGREED AS FOLLOWS: 1. The above referenced Promissory Note is hereby extended to January 22, 2000 whereupon all accrued interest and principal shall be due in full. 2. Such extension is granted subject to HOLDER bringing said Note current and paying accrued interest on said Note to July 22, 1999. 3. Such extension is granted subject to HOLDER'S preservation and retention of its security position in the form of the now existing UCC-1 with all rights and remedies as contained therein including, but not limited to, the right to take possession of the therein named property. 4. Nothing in this Agreement shall otherwise impair or modify the herein cited Promissory Note except as to the due date as therein stated and consistent with the terms hereof. Dated this 6th day of Oct., 1999. AGREED TO BY: MHL DEVELOPMENT CORPORATION (F/K/A MICROHELIX LABS, INC.)
/s/ RICHARD G. SASS --------------------------------------by: Richard G. Sass

EXHIBIT 10.13 NOTE EXTENSION AGREEMENT This Agreement is made and entered into this 23rd day of July 1999, by and between MHL DEVELOPMENT CORPORATION (F/K/A MICROHELIX LABS INC.) an Oregon corporation and RICHARD G. SASS, an Oregon resident HEREIN AFTER "MAKERS" and THE CONFEDERATED TRIBES OF THE GRAND RONDE COMMUNITY OF OREGON herein after called "HOLDER." WHEREAS MAKERS did execute a Promissory Note dated July 22, 1998 in the amount of Six Hundred Sixty Seven thousand Five Hundred Dollars ($667,500.00) in favor of MAKER, and; WHEREAS MAKERS desires to renew and extend said Note to January 22, 2000 and HOLDER has agreed, and; WHEREAS MAKERS agree to pay all accrued interest on the Note current by July 23, 1999 and pay future quarterly interest payments on October 22, 1999 and January 22, 2000, and; NOW, THEREFORE, in consideration of the herein stated mutual covenants and promises, and other good and valuable consideration, it is AGREED AS FOLLOWS: 1. The above referenced Promissory Note is hereby extended to January 22, 2000 whereupon all accrued interest and principal shall be due in full. 2. Such extension is granted subject to HOLDER bringing said Note current and paying accrued interest on said Note to July 22, 1999. 3. Such extension is granted subject to HOLDER'S preservation and retention of its security position in the form of the now existing UCC-1 with all rights and remedies as contained therein including, but not limited to, the right to take possession of the therein named property. 4. Nothing in this Agreement shall otherwise impair or modify the herein cited Promissory Note except as to the due date as therein stated and consistent with the terms hereof. Dated this 6th day of Oct., 1999. AGREED TO BY: MHL DEVELOPMENT CORPORATION (F/K/A MICROHELIX LABS, INC.)
/s/ RICHARD G. SASS --------------------------------------by: Richard G. Sass its President /s/ RICHARD G. SASS --------------------------------------Richard G. Sass, Individually

AGREED TO BY: THE CONFEDERATED TRIBES OF THE GRAND RONDE COMMUNITY OF OREGON
/s/ ROBERT SAUNDERS --------------------------------------by: Robert Saunders its: Finance Officer

AGREED TO BY: THE CONFEDERATED TRIBES OF THE GRAND RONDE COMMUNITY OF OREGON
/s/ ROBERT SAUNDERS --------------------------------------by: Robert Saunders its: Finance Officer

2

EXHIBIT 10.14 PROMISSORY NOTE AND SECURITY AGREEMENT $383,885.00 Portland, Oregon December 15, 1999 FOR VALUE RECEIVED, mHL Development Co, Inc. ("mHL") promises to pay to the order of Richard G. Sass ("RGS") in lawful money of the United States of America, the principal amount of Three Hundred Eighty Three Thousand, Eight Hundred Eighty Five Dollars ($383,885.00) together with interest on such amount from December 15, 1999, at the interest rate of twelve percent (12%) per annum (the "Interest Rate"). Interest shall be computed on the outstanding principal amount on the basis of a 365-day year and actual days elapsed. mHL shall pay in full the aggregate unpaid principal amount of this Note, together with all accrued and unpaid interest thereon, on or before December 31, 2002. This Note may be prepaid, at any time and from time to time, in whole or in part, without penalty or premium. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the amount prepaid. All payments shall be made directly to the RGS in immediately available funds. As security for the amounts due under this Note, mHL pledges and grants to RGS a security interest in the Fixed Assets and Inventory purchased by mHL from Alcatel Cable Systems, N.A. Such security is itemized in detail in the Asset Purchase Agreement signed by mHL and Alcatel. In the event that RGS uses his own or an outside attorney to construe, interpret, or enforce any of the provisions of this Note or take any action in any bankruptcy, insolvency or similar proceeding affecting creditors' rights generally (including, without limitation, prosecution of a motion for relief from stay, proposal of a Chapter 11 plan, objection to a disclosure statement or a Chapter 11 or 13 plan, or objection to proposed use, sale or lease of property) or in mediation or arbitration, RGS shall be entitled to recover from mHL its reasonable attorney fees and other costs incurred regardless of whether any legal proceeding is commenced. If any legal action, arbitration or other proceeding is brought, the prevailing party shall be entitled to recover its reasonable attorney fees and other costs incurred in connection therewith, both at trial and on any appeal therefrom or petitions for review thereof. All parties to this Note hereby waive presentment, dishonor, notice of dishonor, and protest. All parties to this Note hereby consent to, and the holder of this Note is hereby expressly authorized to make, without notice, any and all renewals, extensions, modifications or waivers of the time for or the terms of payment of any sum or sums due under this Note, or under any documents or instruments relating to or securing this Note, or the performance of any covenants, conditions or agreements hereof or thereof, or the taking or release of collateral securing this Note. The liability of all parties on this Note shall not be discharged by any action consented to above taken by any holder of this Note.

MHL may not assign or transfer this Note without the prior written consent of RGS. This Note is made with reference to, and is to be construed in accordance with the laws of the State of Oregon, exclusive of choice of law or conflicts of law rules or principles.

EXHIBIT 10.14 PROMISSORY NOTE AND SECURITY AGREEMENT $383,885.00 Portland, Oregon December 15, 1999 FOR VALUE RECEIVED, mHL Development Co, Inc. ("mHL") promises to pay to the order of Richard G. Sass ("RGS") in lawful money of the United States of America, the principal amount of Three Hundred Eighty Three Thousand, Eight Hundred Eighty Five Dollars ($383,885.00) together with interest on such amount from December 15, 1999, at the interest rate of twelve percent (12%) per annum (the "Interest Rate"). Interest shall be computed on the outstanding principal amount on the basis of a 365-day year and actual days elapsed. mHL shall pay in full the aggregate unpaid principal amount of this Note, together with all accrued and unpaid interest thereon, on or before December 31, 2002. This Note may be prepaid, at any time and from time to time, in whole or in part, without penalty or premium. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the amount prepaid. All payments shall be made directly to the RGS in immediately available funds. As security for the amounts due under this Note, mHL pledges and grants to RGS a security interest in the Fixed Assets and Inventory purchased by mHL from Alcatel Cable Systems, N.A. Such security is itemized in detail in the Asset Purchase Agreement signed by mHL and Alcatel. In the event that RGS uses his own or an outside attorney to construe, interpret, or enforce any of the provisions of this Note or take any action in any bankruptcy, insolvency or similar proceeding affecting creditors' rights generally (including, without limitation, prosecution of a motion for relief from stay, proposal of a Chapter 11 plan, objection to a disclosure statement or a Chapter 11 or 13 plan, or objection to proposed use, sale or lease of property) or in mediation or arbitration, RGS shall be entitled to recover from mHL its reasonable attorney fees and other costs incurred regardless of whether any legal proceeding is commenced. If any legal action, arbitration or other proceeding is brought, the prevailing party shall be entitled to recover its reasonable attorney fees and other costs incurred in connection therewith, both at trial and on any appeal therefrom or petitions for review thereof. All parties to this Note hereby waive presentment, dishonor, notice of dishonor, and protest. All parties to this Note hereby consent to, and the holder of this Note is hereby expressly authorized to make, without notice, any and all renewals, extensions, modifications or waivers of the time for or the terms of payment of any sum or sums due under this Note, or under any documents or instruments relating to or securing this Note, or the performance of any covenants, conditions or agreements hereof or thereof, or the taking or release of collateral securing this Note. The liability of all parties on this Note shall not be discharged by any action consented to above taken by any holder of this Note.

MHL may not assign or transfer this Note without the prior written consent of RGS. This Note is made with reference to, and is to be construed in accordance with the laws of the State of Oregon, exclusive of choice of law or conflicts of law rules or principles. MHL executes this Note as of the date first above written and acknowledges receipt of a copy of this Note. mHL Development Co, Inc.
By: /s/ JANE K. CONNER ------------------------------------Name: Jane K. Conner Title: Chief Financial Officer

Richard G. Sass

MHL may not assign or transfer this Note without the prior written consent of RGS. This Note is made with reference to, and is to be construed in accordance with the laws of the State of Oregon, exclusive of choice of law or conflicts of law rules or principles. MHL executes this Note as of the date first above written and acknowledges receipt of a copy of this Note. mHL Development Co, Inc.
By: /s/ JANE K. CONNER ------------------------------------Name: Jane K. Conner Title: Chief Financial Officer

Richard G. Sass
/s/ RICHARD G. SASS ----------------------------------------Name: Richard G. Sass

EXHIBIT 10.15 PROMISSORY NOTE AND SECURITY AGREEMENT $235,000,00 Portland, Oregon January 20, 2000 FOR VALUE RECEIVED, mHL Development Co. ("mHL") promises to pay to the order of the Sass Revocable Trust ("Trust") in lawful money of the United States of America, the principal amount of Two Hundred Thirty-Five Thousand Dollars ($235,000.00) together with interest on such amount from the date of this Note at the interest rate of fifteen percent (15%) per annum (the "Interest Rate"). Interest shall be computed on the outstanding principal amount on the basis of a 365-day year and actual days elapsed. mHL shall pay in full the aggregate unpaid principal amount of this Note, together with all accrued and unpaid interest thereon, on or before January 20, 2002. This Note may be prepaid, at any time and from time to time, in whole or in part, without penalty or premium. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the amount prepaid. All payments shall be made directly to the Trust in immediately available funds. As security for the amounts due under this Note, mHL pledges and grants to the Trust a security interest in certain manufacturing equipment listed on the attached sheet (the "Collateral"). The Trust agrees to subordinate, and does subordinate, its security interest in the Collateral to any perfected security interest of the Confederated Tribes of the Grand Ronde or of Richard G. Sass in the Collateral. In the event that the Trust uses its own or an outside attorney to construe, interpret, or enforce any of the provisions of this Note or take any action in any bankruptcy, insolvency or similar proceeding affecting creditors' rights generally (including, without limitation, prosecution of a motion for relief from stay, proposal of a Chapter 11 plan, objection to a disclosure statement or a Chapter 11 or 13 plan, or objection to proposed use, sale or lease of property) or in mediation or arbitration, the Trust shall be entitled to recover from mHL its reasonable attorney fees and other costs incurred regardless of whether any legal proceeding is commenced. If any legal action, arbitration or other proceeding is brought, the prevailing party shall be entitled to recover its reasonable attorney fees and other costs incurred in connection therewith, both at trial and on any appeal therefrom or petitions for review thereof. All parties to this Note hereby waive presentment, dishonor, notice of dishonor, and protest. All parties to this Note hereby consent to, and the holder of this Note is hereby expressly authorized to make, without notice, any

EXHIBIT 10.15 PROMISSORY NOTE AND SECURITY AGREEMENT $235,000,00 Portland, Oregon January 20, 2000 FOR VALUE RECEIVED, mHL Development Co. ("mHL") promises to pay to the order of the Sass Revocable Trust ("Trust") in lawful money of the United States of America, the principal amount of Two Hundred Thirty-Five Thousand Dollars ($235,000.00) together with interest on such amount from the date of this Note at the interest rate of fifteen percent (15%) per annum (the "Interest Rate"). Interest shall be computed on the outstanding principal amount on the basis of a 365-day year and actual days elapsed. mHL shall pay in full the aggregate unpaid principal amount of this Note, together with all accrued and unpaid interest thereon, on or before January 20, 2002. This Note may be prepaid, at any time and from time to time, in whole or in part, without penalty or premium. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the amount prepaid. All payments shall be made directly to the Trust in immediately available funds. As security for the amounts due under this Note, mHL pledges and grants to the Trust a security interest in certain manufacturing equipment listed on the attached sheet (the "Collateral"). The Trust agrees to subordinate, and does subordinate, its security interest in the Collateral to any perfected security interest of the Confederated Tribes of the Grand Ronde or of Richard G. Sass in the Collateral. In the event that the Trust uses its own or an outside attorney to construe, interpret, or enforce any of the provisions of this Note or take any action in any bankruptcy, insolvency or similar proceeding affecting creditors' rights generally (including, without limitation, prosecution of a motion for relief from stay, proposal of a Chapter 11 plan, objection to a disclosure statement or a Chapter 11 or 13 plan, or objection to proposed use, sale or lease of property) or in mediation or arbitration, the Trust shall be entitled to recover from mHL its reasonable attorney fees and other costs incurred regardless of whether any legal proceeding is commenced. If any legal action, arbitration or other proceeding is brought, the prevailing party shall be entitled to recover its reasonable attorney fees and other costs incurred in connection therewith, both at trial and on any appeal therefrom or petitions for review thereof. All parties to this Note hereby waive presentment, dishonor, notice of dishonor, and protest. All parties to this Note hereby consent to, and the holder of this Note is hereby expressly authorized to make, without notice, any and all renewals, extensions, modifications or waivers of the time for or the terms of payment of any sum or sums due under this Note, or under any documents or instruments relating to or securing this Note, or the performance of any covenants, conditions or agreements hereof or thereof, or the taking or release of collateral securing this Note. The liability of all parties on this Note shall not be discharged by any action consented to above taken by any holder of this Note.

MHL may not assign or transfer this Note without the prior written consent of the Trust. This Note is made with reference to, and is to be construed in accordance with, the laws of the State of Oregon, exclusive of choice of law or conflicts of law rules or principles. MHL executes this Note as of the date first above written and acknowledges receipt of a copy of this Note. mHL Development Co.
By: /s/ JANE K. CONNER -----------------------------------Name: Jane K. Conner Title: Chief Financial Officer

Upon payment in full under this Note, the Trust will execute all UCC Termination Statements and other

MHL may not assign or transfer this Note without the prior written consent of the Trust. This Note is made with reference to, and is to be construed in accordance with, the laws of the State of Oregon, exclusive of choice of law or conflicts of law rules or principles. MHL executes this Note as of the date first above written and acknowledges receipt of a copy of this Note. mHL Development Co.
By: /s/ JANE K. CONNER -----------------------------------Name: Jane K. Conner Title: Chief Financial Officer

Upon payment in full under this Note, the Trust will execute all UCC Termination Statements and other documents necessary to release the security interest in the Collateral granted hereunder. Sass Revocable Trust
By: /s/ RICHARD G. SASS -----------------------------------Name: Richard G. Sass Title: Trustee

EXHIBIT 10.16 PROMISSORY NOTE AND SECURITY AGREEMENT $160,000.00 Portland, Oregon February 1, 2000 FOR VALUE RECEIVED, mHL Development Co, Inc. ("mHL") promises to pay to the order of Richard G. Sass ("RGS") in lawful money of the United States of America, the principal amount of One Hundred Sixty Thousand Dollars ($160,000.00) together with interest on such amount from February 4, 2000 at the interest rate of twelve percent (12%) per annum (the "Interest Rate"). Interest shall be computed on the outstanding principal amount on the basis of a 365-day year and actual days elapsed. mHL shall pay in full the aggregate unpaid principal amount of this Note, together with all accrued and unpaid interest thereon, on or before December 31, 2002. This Note may be prepaid, at any time and from time to time, in whole or in part, without penalty or premium. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the amount prepaid. All payments shall be made directly to the RGS in immediately available funds. As security for the amounts due under this Note, mHL pledges and grants to RGS a security interest in the assets of BioElectric corporation. In the event that RGS uses his own or an outside attorney to construe, interpret, or enforce any of the provisions of this Note or take any action in any bankruptcy, insolvency or similar proceeding affecting creditors' rights generally (including, without limitation, prosecution of a motion for relief from stay, proposal of a Chapter 11 plan, objection to a disclosure statement or a Chapter 11 or 13 plan, or objection to proposed use, sale or lease of property) or in mediation or arbitration, RGS shall be entitled to recover from mHL its reasonable attorney fees and other costs incurred regardless of whether any legal proceeding is commenced. If any legal action, arbitration or other proceeding is brought, the prevailing party shall be entitled to recover its reasonable attorney fees and other costs incurred in connection therewith, both at trial and on any appeal therefrom or petitions for review thereof. All parties to this Note hereby waive presentment, dishonor, notice of dishonor, and protest. All parties to this

EXHIBIT 10.16 PROMISSORY NOTE AND SECURITY AGREEMENT $160,000.00 Portland, Oregon February 1, 2000 FOR VALUE RECEIVED, mHL Development Co, Inc. ("mHL") promises to pay to the order of Richard G. Sass ("RGS") in lawful money of the United States of America, the principal amount of One Hundred Sixty Thousand Dollars ($160,000.00) together with interest on such amount from February 4, 2000 at the interest rate of twelve percent (12%) per annum (the "Interest Rate"). Interest shall be computed on the outstanding principal amount on the basis of a 365-day year and actual days elapsed. mHL shall pay in full the aggregate unpaid principal amount of this Note, together with all accrued and unpaid interest thereon, on or before December 31, 2002. This Note may be prepaid, at any time and from time to time, in whole or in part, without penalty or premium. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the amount prepaid. All payments shall be made directly to the RGS in immediately available funds. As security for the amounts due under this Note, mHL pledges and grants to RGS a security interest in the assets of BioElectric corporation. In the event that RGS uses his own or an outside attorney to construe, interpret, or enforce any of the provisions of this Note or take any action in any bankruptcy, insolvency or similar proceeding affecting creditors' rights generally (including, without limitation, prosecution of a motion for relief from stay, proposal of a Chapter 11 plan, objection to a disclosure statement or a Chapter 11 or 13 plan, or objection to proposed use, sale or lease of property) or in mediation or arbitration, RGS shall be entitled to recover from mHL its reasonable attorney fees and other costs incurred regardless of whether any legal proceeding is commenced. If any legal action, arbitration or other proceeding is brought, the prevailing party shall be entitled to recover its reasonable attorney fees and other costs incurred in connection therewith, both at trial and on any appeal therefrom or petitions for review thereof. All parties to this Note hereby waive presentment, dishonor, notice of dishonor, and protest. All parties to this Note hereby consent to, and the holder of this Note is hereby expressly authorized to make, without notice, any and all renewals, extensions, modifications or waivers of the time for or the terms of payment of any sum or sums due under this Note, or under any documents or instruments relating to or securing this Note, or the performance of any covenants, conditions or agreements hereof or thereof, or the taking or release of collateral securing this Note. The liability of all parties on this Note shall not be discharged by any action consented to above taken by any holder of this Note.

MHL may not assign or transfer this Note without the prior written consent of RGS. This Note is made with reference to, and is to be construed in accordance with, the laws of the State of Oregon, exclusive of choice of law or conflicts of law rules or principles. MHL executes this Note as of the date first above written and acknowledges receipt of a copy of this Note. mHL Development Co, Inc.
By: /s/ JANE K. CONNER ------------------------------------Name: Jane K. Conner Title: Chief Financial Officer

Richard G. Sass
/s/ RICHARD G. SASS -----------------------------------------

MHL may not assign or transfer this Note without the prior written consent of RGS. This Note is made with reference to, and is to be construed in accordance with, the laws of the State of Oregon, exclusive of choice of law or conflicts of law rules or principles. MHL executes this Note as of the date first above written and acknowledges receipt of a copy of this Note. mHL Development Co, Inc.
By: /s/ JANE K. CONNER ------------------------------------Name: Jane K. Conner Title: Chief Financial Officer

Richard G. Sass
/s/ RICHARD G. SASS ----------------------------------------Name: Richard G. Sass

EXHIBIT 10.17 PROMISSORY NOTE AND SECURITY AGREEMENT $675,000.00 Portland, Oregon August 1, 2000 FOR VALUE RECEIVED, mHL Development Co. ("mHL") promises to pay to the order of Richard G. Sass ("RGS") in lawful money of the United States of America, the principal amount of Six Hundred Seventy-Five Thousand Dollars ($675,000.00) together with interest on such amount from the date of principal advances under the note at the interest rate of twelve percent (12%) per annum (the "Interest Rate"). Interest shall be computed on the outstanding principal amount on the basis of a 365-day year and actual days elapsed. mHL shall pay in full the aggregate unpaid principal amount of this Note, together with all accrued and unpaid interest thereon, on or before December 31, 2001. This Note may be prepaid, at any time and from time to time, in whole or in part, without penalty or premium. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the amount prepaid. All payments shall be made directly to the RGS in immediately available funds. As security for the amounts due under this Note, mHL pledges and grants to RGS a security interest in the trade accounts receivable and raw materials inventory of its subsidiaries, BioElectric Corporation, microHelix Labs, Inc., Grayscale, Inc. and Key Tech, Inc. In the event that RGS uses his own or an outside attorney to construe, interpret, or enforce any of the provisions of this Note or take any action in any bankruptcy, insolvency or similar proceeding affecting creditors' rights generally (including, without limitation, prosecution of a motion for relief from stay, proposal of a Chapter 11 plan, objection to a disclosure statement or a Chapter 11 or 13 plan, or objection to proposed use, sale or lease of property) or in mediation or arbitration, RGS shall be entitled to recover from mHL its reasonable attorney fees and other costs incurred regardless of whether any legal proceeding is commenced. If any legal action, arbitration or other proceeding is brought, the prevailing party shall be entitled to recover its reasonable attorney fees and other costs incurred in connection therewith, both at trial and on any appeal therefrom or petitions for review thereof. All parties to this Note hereby waive presentment, dishonor, notice of dishonor, and protest. All parties to this Note hereby consent to, and the holder of this Note is hereby expressly authorized to make, without notice, any and all renewals, extensions, modifications or waivers of the time for or the terms of payment of any sum or sums

EXHIBIT 10.17 PROMISSORY NOTE AND SECURITY AGREEMENT $675,000.00 Portland, Oregon August 1, 2000 FOR VALUE RECEIVED, mHL Development Co. ("mHL") promises to pay to the order of Richard G. Sass ("RGS") in lawful money of the United States of America, the principal amount of Six Hundred Seventy-Five Thousand Dollars ($675,000.00) together with interest on such amount from the date of principal advances under the note at the interest rate of twelve percent (12%) per annum (the "Interest Rate"). Interest shall be computed on the outstanding principal amount on the basis of a 365-day year and actual days elapsed. mHL shall pay in full the aggregate unpaid principal amount of this Note, together with all accrued and unpaid interest thereon, on or before December 31, 2001. This Note may be prepaid, at any time and from time to time, in whole or in part, without penalty or premium. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the amount prepaid. All payments shall be made directly to the RGS in immediately available funds. As security for the amounts due under this Note, mHL pledges and grants to RGS a security interest in the trade accounts receivable and raw materials inventory of its subsidiaries, BioElectric Corporation, microHelix Labs, Inc., Grayscale, Inc. and Key Tech, Inc. In the event that RGS uses his own or an outside attorney to construe, interpret, or enforce any of the provisions of this Note or take any action in any bankruptcy, insolvency or similar proceeding affecting creditors' rights generally (including, without limitation, prosecution of a motion for relief from stay, proposal of a Chapter 11 plan, objection to a disclosure statement or a Chapter 11 or 13 plan, or objection to proposed use, sale or lease of property) or in mediation or arbitration, RGS shall be entitled to recover from mHL its reasonable attorney fees and other costs incurred regardless of whether any legal proceeding is commenced. If any legal action, arbitration or other proceeding is brought, the prevailing party shall be entitled to recover its reasonable attorney fees and other costs incurred in connection therewith, both at trial and on any appeal therefrom or petitions for review thereof. All parties to this Note hereby waive presentment, dishonor, notice of dishonor, and protest. All parties to this Note hereby consent to, and the holder of this Note is hereby expressly authorized to make, without notice, any and all renewals, extensions, modifications or waivers of the time for or the terms of payment of any sum or sums due under this Note, or under any documents or instruments relating to or securing this Note, or the performance of any covenants, conditions or agreements hereof or thereof, or the taking or release of collateral securing this Note. The liability of all parties on this Note shall not be discharged by any action consented to above taken by any holder of this Note.

MHL may not assign or transfer this Note without the prior written consent of RGS. This Note is made with reference to, and is to be construed in accordance with, the laws of the State of Oregon, exclusive of choice of law or conflicts of law rules or principles. MHL executes this Note as of the date first above written and acknowledges receipt of a copy of this Note. mHL Development Co.
By: /s/ JANE K. CONNER -----------------------------------Name: Jane K. Conner Title: Chief Financial Officer

Upon payment in full under this Note, RGS will execute all UCC Termination Statements and other documents necessary to release the security interest in the Collateral granted hereunder.

MHL may not assign or transfer this Note without the prior written consent of RGS. This Note is made with reference to, and is to be construed in accordance with, the laws of the State of Oregon, exclusive of choice of law or conflicts of law rules or principles. MHL executes this Note as of the date first above written and acknowledges receipt of a copy of this Note. mHL Development Co.
By: /s/ JANE K. CONNER -----------------------------------Name: Jane K. Conner Title: Chief Financial Officer

Upon payment in full under this Note, RGS will execute all UCC Termination Statements and other documents necessary to release the security interest in the Collateral granted hereunder. Richard G. Sass
/s/ RICHARD G. SASS ----------------------------------------Name: Richard G. Sass

2

EXHIBIT 10.18 SECURITY AND PLEDGE AGREEMENT AND COMMERCIAL GUARANTY

BORROWER: mHL Development Company 16125 SW 72nd Avenue Portland, OR 97224

LENDER: The Confederated Tribes of the Grand Ronde Community of Oregon 9615 Grand Ronde Road Grand Ronde, OR 97347

GUARANTOR:

Richard G. Sass Jennifer B. Sass 02000 SW Palatine Hill Road Portland, OR 97219

AMOUNT OF GUARANTY. The amount of this Guaranty is the Indebtedness. CONTINUING GUARANTY. For good and valuable consideration, Richard G. Sass and Jennifer B. Sass (collectively referred to as "Guarantor"), jointly and severally, absolutely and unconditionally guarantee and promise to pay to The Confederated Tribes of the Grand Ronde Community of Oregon ("Lender") or its order, in legal tender of the United States of America, all the Indebtedness (as that term is defined below) of mHL Development Company ("Borrower") to Lender on the terms and conditions set forth in this Security and Pledge Agreement and Commercial Guaranty. DEFINITIONS. The following wards shall have the following meanings when used in this Guaranty: BORROWER. The word "Borrower" means mHL Development Company. COMMERCIAL DEED OF TRUST. The words "Commercial Deed of Trust" mean a Trust Deed and Assignment of Rents executed by Guarantor in a form acceptable to Lender for the real property commonly

EXHIBIT 10.18 SECURITY AND PLEDGE AGREEMENT AND COMMERCIAL GUARANTY

BORROWER: mHL Development Company 16125 SW 72nd Avenue Portland, OR 97224

LENDER: The Confederated Tribes of the Grand Ronde Community of Oregon 9615 Grand Ronde Road Grand Ronde, OR 97347

GUARANTOR:

Richard G. Sass Jennifer B. Sass 02000 SW Palatine Hill Road Portland, OR 97219

AMOUNT OF GUARANTY. The amount of this Guaranty is the Indebtedness. CONTINUING GUARANTY. For good and valuable consideration, Richard G. Sass and Jennifer B. Sass (collectively referred to as "Guarantor"), jointly and severally, absolutely and unconditionally guarantee and promise to pay to The Confederated Tribes of the Grand Ronde Community of Oregon ("Lender") or its order, in legal tender of the United States of America, all the Indebtedness (as that term is defined below) of mHL Development Company ("Borrower") to Lender on the terms and conditions set forth in this Security and Pledge Agreement and Commercial Guaranty. DEFINITIONS. The following wards shall have the following meanings when used in this Guaranty: BORROWER. The word "Borrower" means mHL Development Company. COMMERCIAL DEED OF TRUST. The words "Commercial Deed of Trust" mean a Trust Deed and Assignment of Rents executed by Guarantor in a form acceptable to Lender for the real property commonly known as 02000 SW Palatine Hill Road, Portland, Oregon 97219, as security for Guarantor's obligations under this Guaranty. GUARANTOR. The word "Guarantor" means Richard G. Sass and Jennifer B. Sass, jointly and severally. GUARANTY. The word "Guaranty" means this Security and Pledge Agreement and Commercial Guaranty between Guarantor and Lender dated April 14, 2000. INDEBTEDNESS. The word "Indebtedness" means the Note, including (a) all principal, (b) all interest, (c) all late charges, (d) all loan fees and loan charges, (e) all costs advanced to protect Lender's security interests in any and all collateral for the Note, (f) all collection costs and expenses relating to the Note or to any collateral for the Note, and (g) any extensions or renewals of the Note. Collection costs and expenses include without limitation all of Lender's attorneys' fees and legal expenses, whether or not suit is instituted, and attorneys' fees and legal expenses for bankruptcy proceedings Commercial Guaranty Page 1 of 9

(including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated postjudgment collection services. LENDER. The word "Lender" means The Confederated Tribes of the Grand Ronde Community of Oregon, its successors and assigns. NOTE. The word "Note" means the note or credit agreement dated April 14, 2000, in the principal amount of

(including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated postjudgment collection services. LENDER. The word "Lender" means The Confederated Tribes of the Grand Ronde Community of Oregon, its successors and assigns. NOTE. The word "Note" means the note or credit agreement dated April 14, 2000, in the principal amount of Two Million Five Hundred Thousand and no/100 Dollars ($2,500,000.00) from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the Note or credit agreement. PLEDGED SHARES. The words "Pledged Shares" mean all of the shares of capital stock of National Applied Science, Inc., that are owned or held by Guarantor (the "Pledged Shares"). RELATED DOCUMENTS. The words "Related Documents" mean and include without limitation all promissory notes, credit agreements, loan agreements, guaranties, security agreements, mortgages, deeds of trust, and all other instruments, agreements, and documents, whether now or hereafter existing, executed in connection with the Indebtedness. MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall not exceed at any one time the amount of the Indebtedness described above, plus all costs and expenses of (a) enforcement of this Guaranty, and (b) collection and sale of any collateral securing this Guaranty. The above limitation on liability is not a restriction on the amount of the Indebtedness of Borrower to Lender either in the aggregate or at any one time. If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, the right of Lender under all guaranties shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. The liability of Guarantor will be the aggregate liability of Guarantor under the terms of this Guaranty and any other unterminated guaranties. NATURE OF GUARANTY. Guarantor's liability under this Guaranty shall be open and continuous for so long as this Guaranty remains in force. Guarantor intends to guarantee at all times the performance and prompt payment when due whether at maturity or earlier by reason of acceleration or otherwise all Indebtedness. Accordingly, no payments made upon the Indebtedness will discharge or diminish the continuing liability of Guarantor in connection with any remaining portions of the Indebtedness or any of the Indebtedness which subsequently arises or is thereafter incurred or contracted. Any married person who signs this Guaranty as the Guarantor hereby expressly agrees that recourse may be had by Lender against both his or her separate property and community property, whether now owned or hereafter acquired. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all Indebtedness incurred or contracted shall have been fully and finally paid and satisfied and all other obligations of Guarantor under this Guaranty shall have been performed in full. This Guaranty is Irrevocable and is binding upon Guarantor and Guarantor's heirs, successors and assigns so long as any of the guaranteed Indebtedness remains unpaid. Commercial Guaranty Page 2 of 9

GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender without lessening Guarantor's liability under this Guaranty, from time to time: (a) to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (b) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (c) to take and hold security for the payment of this Guaranty or the Indebtedness, and

GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender without lessening Guarantor's liability under this Guaranty, from time to time: (a) to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (b) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (c) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (d) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (e) to determine how, when, and what application of payments and credits shall be made on the Indebtedness; (f) to apply such security and direct the order or manner of sale thereof, including without limitation any non-judicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (g) to sell, transfer, assign, or grant participations in all or any part of the Indebtedness; and (h) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (a) no representations or agreements of any kind have been a made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (b) Guarantor has a financial interest in the Borrower and this Guaranty is executed at Borrower's request and for its benefit; (c) Guarantor has not and will not, without prior consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein; (d) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; (e) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information provided to Lender is true and correct in all material respects and fairly presents the financial condition of Guarantor as of the dates thereof, and no material adverse change has occurred in the financial condition of Guarantor since the date of the financial statements; (f) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition; (g) this Guaranty does not require or result in the creation or imposition of any sale, transfer, assignment, lien, encumbrance, pledge, hypothecation, granting of a security interest, or any other disposition ("Lien") on all or part of any of the Pledged Shares, except for the Liens in favor of Lender created by this Guaranty; (h) neither the execution of this Guaranty, the delivery of the Pledged Shares as security, nor the foreclosure of the Guarantor's interest in the Pledged Shares will result in violation of the Stock Transfer Restriction Agreement, dated as of ____________________________, by and among National Applied Science, Inc. and Guarantor; and (i) Guarantor will not enter into any agreement (whether with any other future shareholder or interest holder of Borrower or any other person) restricting or otherwise affecting Guarantors' right to vote, receive dividends with respect to, or transfer any of the Pledged Shares, or any of Lender's rights under this Guaranty. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GRANT OF SECURITY INTEREST; PLEDGE OF SHARES. .As security for the full, prompt, and complete payment when due, whether at maturity or earlier by reason of acceleration or otherwise, and at all times thereafter, of all Indebtedness and all obligations of Guarantor under this Guaranty, Guarantor grants to Commercial Guaranty Page 3 of 9

Lender a security interest in all of Guarantor's interest in the shares of National Applied Science, Inc. Pursuant to Guarantor's grant of such security interest, Guarantor hereby (i) assigns, delivers anal pledges to Lender all of the shares of capital stock of National Applied Science, Inc., that are owned or held by Guarantor (the "Pledged Shares"), duly endorsed for transfer or accompanied by a duly executed stock power, (ii) covenants to assign, deliver, and pledge to lender any shares of the capital stock of National Applied Science, Inc., that are owned or held by Guarantor after the date of this Guaranty, duly endorsed for transfer or accompanied by a duly executed stock power, and (iii) grants to Lender a security interest in (A) the Pledged Shares owned by Guarantor, (B)

Lender a security interest in all of Guarantor's interest in the shares of National Applied Science, Inc. Pursuant to Guarantor's grant of such security interest, Guarantor hereby (i) assigns, delivers anal pledges to Lender all of the shares of capital stock of National Applied Science, Inc., that are owned or held by Guarantor (the "Pledged Shares"), duly endorsed for transfer or accompanied by a duly executed stock power, (ii) covenants to assign, deliver, and pledge to lender any shares of the capital stock of National Applied Science, Inc., that are owned or held by Guarantor after the date of this Guaranty, duly endorsed for transfer or accompanied by a duly executed stock power, and (iii) grants to Lender a security interest in (A) the Pledged Shares owned by Guarantor, (B) any shares of the capital stock of National Applied Science, Inc., that are issued to Guarantor after the date of this Guaranty, and (C) all amounts payable to Guarantor with respect to or by reason of the Pledged Shares or any shares of the capital stock of National Applied Science, Inc., that are issued to Guarantor after the date of this Guaranty, and any proceeds from the sale or other disposition thereof, subject to the provisions set forth in this Guaranty. Any shares of the capital stock of National Applied Science, Inc., that are owned or held by Guarantor after the date of this Guaranty will, as of the date of issuance, become Pledged Shares. IRREVOCABLE PROXIES. Notwithstanding any provision in this Guaranty to the contrary, unless and until a default under this Guaranty shall have occurred, Guarantor shall be entitled to exercise any and all rights relating to or pertaining to the Pledged Shares, including, without limitation, the right to: (a) receive all dividends paid and distributions and other payments (including redemption or repurchase payments) so made in any way with respect to the Pledged Shares, other than those paid in shares of capital stock, provided, however, that all such dividends and distributions so paid and made shall be held in trust for the benefit of the Lender and shall be paid over to Lender and applied against the Indebtedness to the extent thereof; (b) vote the Pledged Shares; and (c) give consent, waivers, and ratifications with respect to the Pledged Shares. Effective upon the occurrence of a default under this Guaranty and for so long as any default is continuing, Guarantor hereby appoints Lender to be Guarantor's proxy agent, with full power of substitution, to vote all of the Pledged Shares owned by Guarantor, and hereby covenants to appoint Lender to be Guarantor's proxy agent, with full power of substitution to vote any of the Pledged Shares, at all meetings of shareholders of National Applied Science, Inc. or any adjournment or adjournments thereof, and in all unanimous, written consents of shareholders of National Applied Science, Inc., with respect to all matters submitted to the shareholders of National Applied Science, Inc., for approval. For so long as a default hereunder is continuing, Lender will have all of the power Guarantor would possess with respect to the matters set forth in this section. Guarantor hereby ratifies and confirms all acts Lender may do or cause to be done by virtue of and within the limitations of this irrevocable proxy. Guarantor hereby revokes all previous proxies given by Guarantor with respect to the Pledged Shares. GUARANTOR HEREBY WAIVES ALL RIGHT TO CANCEL OR REVOKE THIS IRREVOCABLE PROXY UNTIL ALL OF THE INDEBTEDNESS AND ALL OBLIGATIONS UNDER THIS GUARANTY HAVE BEEN PAID AND PERFORMED IN THEIR ENTIRETY, AND ACKNOWLEDGES THAT THIS PROXY IS IRREVOCABLE AND COUPLED WITH AN INTEREST. TITLE; NO LIENS. Guarantor is the sole record and beneficial owner of the Pledged Shares, free and clear of all liens, rights, claims and encumbrances of every kind and nature whatsoever, Guarantor will keep the Pledged Shares free from any Liens except for the Liens in favor of Lender created by this Guaranty. Guarantor agrees that it will defend, at its sole expense, the Pledged Shares against all claims and demands of all Persons at any time claiming the same or any interest therein. Commercial Guaranty Page 4 of 9

TAXES AND ASSESSMENTS. Guarantor will pay or cause to be paid promptly when due all taxes and assessments on the Pledged Shares, unless the same are being contested in good faith by appropriate proceedings and as to which such reserves or other appropriate provisions as may be required by GAAP are being maintained. ADDITIONAL SECURITY. As additional security for the repayment of all Indebtedness and the full performance of all of Guarantor's obligations under this Guaranty, Guarantor shall execute and deliver to Lender a Commercial Deed of Trust in a form acceptable to Lender for the real property commonly known as 02000

TAXES AND ASSESSMENTS. Guarantor will pay or cause to be paid promptly when due all taxes and assessments on the Pledged Shares, unless the same are being contested in good faith by appropriate proceedings and as to which such reserves or other appropriate provisions as may be required by GAAP are being maintained. ADDITIONAL SECURITY. As additional security for the repayment of all Indebtedness and the full performance of all of Guarantor's obligations under this Guaranty, Guarantor shall execute and deliver to Lender a Commercial Deed of Trust in a form acceptable to Lender for the real property commonly known as 02000 SW Palatine Hill Road, Portland, Oregon 97219. WAIVER. Guarantor hereby waives (i) diligence, presentment, demand of payment, filing of claims with a court in the event of receivership or bankruptcy of National Applied Science, Inc., protest or notice with respect to the Indebtedness and all of the obligations of Guarantor and all other demands whatsoever, (ii) all setoffs and counterclaims (except compulsory counterclaims) and all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Guaranty, (iii) all notices that the principal amount, or any portion thereof, or any interest on any instrument or document evidencing all or any part of the Indebtedness is due, (iv) to the extent permitted by law, notices of exchange, sale, surrender, or other handling of the Pledged Shares, (v) all defenses based on lack of consideration, breach of warranty, and usury, and (vi) all rights to notice and a hearing or Lender's posting any bond or security which might otherwise be required prior to Lender's exercising any of Lender's remedies. PERFECTION. Guarantor agrees to execute and deliver to Lender, at Guarantor's expense, such further documents and assurances and take such further action promptly upon the request of Lender from time to time reasonably requested in order more effectively to carry out the intent and purpose of this Guaranty, to perfect all security interests and pledges in favor of Lender described in this Guaranty, and to establish and protect the rights and remedies created or intended to be created in favor of Lender under this Guaranty. Without limiting the generality of the foregoing, Guarantor agrees to execute and deliver to Lender, upon Lender's reasonable request, such documents, filing statements or supplements or amendments thereof, each in recordable form, and to record or file counterparts thereof in accordance with the laws of the applicable jurisdiction. Guarantor further authorizes and empowers Lender to execute and file, on Guarantor's behalf and expense, any such filing statements or supplements or amendments thereof. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (a) to continue lending money or to extend other credit to Borrower; (b) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor; (d) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (e) to give notice of the terms, time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (f) to pursue any other remedy within Lender's power; or (g) to commit any act or omission of any kind, or at any time, with respect to any matter whatsoever. Commercial Guaranty Page 5 of 9

Guarantor also waives any and all rights or defenses arising by reason of (a) any "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (b) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (c) any disability or other defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (d) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (e) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced there is outstanding Indebtedness of

Guarantor also waives any and all rights or defenses arising by reason of (a) any "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (b) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (c) any disability or other defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (d) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (e) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced there is outstanding Indebtedness of Borrower to Lender which is not barred by any applicable statute of limitations; or (f) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment, or similar right, whether such claim, demand, or right may be asserted by the Borrower, the Guarantor, of both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. EVENTS OF DEFAULT. Any of the following events and occurrences will constitute an event of default under this Guaranty: Borrower defaults on any of the Indebtedness; Lender declares Borrower in default under the Note; Guarantor fails to make any payment to Lender on the Indebtedness; Guarantor fails to perform any obligation due to Lender under this Guaranty or any other agreement with Lender, including without limitation the Commercial Deed of Trust; any representation or warranty of Guarantor under this Guaranty or document delivered to Lender by Guarantor becomes or is found to have been materially untrue, materially incorrect, or materially misleading as of the time it was made or confirmed; there is any transfer or attempted transfer by Guarantor of any portion of the Pledged Shares; or any Lien that is not permitted by this Guaranty attaches to the Pledged Shares, or any interest therein. REMEDIES. Upon the occurrence and during the continuance of any default, Lender may exercise all remedies at law or in equity, all of which are cumulative and nonexclusive, and all of which may be exercised without notice to or consent by Guarantor and may realize on all collateral for this Guaranty to the fullest extent the law allows. Without limiting the foregoing, Lender may immediately accelerate all Indebtedness and foreclose upon all of Lender's collateral, including foreclosure of the Commercial Deed of Trust. With respect to the Pledged Shares, Lender may exercise any rights and remedies available to Lender under the Commercial Guaranty Page 6 of 9

Uniform Commercial Code or exercise any other remedy available to Lender under any document at any time or times hereafter executed by Guarantor or Borrower and delivered to Lender. Lender may in its own name or that of Guarantor (and Guarantor hereby appoints Lender as its irrevocable attorney-in-fact, with full power of substitution, as to each of the following acts, which appointment is coupled with an interest and will not be affected by the subsequent disability or incompetency of Guarantor), transfer to the name of Lender or the name of its nominee or nominees any or all of the Pledged Shares; transfer the whole or, from time to time, any part of the Pledged Shares, or any interest therein, at any private sale or public auction, with or without demand, advertisement, or notice of the time or place of sale or adjournment thereof or otherwise, for cash or on credit or

Uniform Commercial Code or exercise any other remedy available to Lender under any document at any time or times hereafter executed by Guarantor or Borrower and delivered to Lender. Lender may in its own name or that of Guarantor (and Guarantor hereby appoints Lender as its irrevocable attorney-in-fact, with full power of substitution, as to each of the following acts, which appointment is coupled with an interest and will not be affected by the subsequent disability or incompetency of Guarantor), transfer to the name of Lender or the name of its nominee or nominees any or all of the Pledged Shares; transfer the whole or, from time to time, any part of the Pledged Shares, or any interest therein, at any private sale or public auction, with or without demand, advertisement, or notice of the time or place of sale or adjournment thereof or otherwise, for cash or on credit or for other property, for immediate or future delivery, and for such price and on such other terms as Lender may deem commercially reasonable. At any such sale Lender may bid for and purchase all or any of the Pledged Shares free from any right or equity of redemption. Lender will be entitled to accept the first offer received at any sale and to offer such Pledged Shares to only one offeree. Guarantor hereby waives, to the fullest extent permitted under applicable laws, any claim it may otherwise have that the price at which such Pledged Shares were sold at any private sale or sales is less than the price which would have been obtained at a public sale or sales, or that the proceeds realized upon any sale, public or private, are less than the amount which could have been realized under other circumstances. Lender will be entitled to deduct all expenses of every kind incurred in connection with such sale or auction prior to applying the balance of the payments or proceeds of such sale or auction, as the case may be, to the payment and performance of all of Guarantor's obligations under this Guaranty. Lender shall, to the extent, and only to the extent, of any surplus remaining after payment in full of all of the Indebtedness, transfer and assign to Guarantor such Pledged Shares and proceeds held by Lender after the payment in full of all of the Indebtedness. LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff against the moneys, securities or other property of Guarantor given to Lender by law, Lender shall have, with respect to Guarantor's obligations to Lender under this Guaranty and to the extent permitted by law, a contractual possessory security interest in and a right of setoff against all moneys, securities and other property of Guarantor now or hereafter in the possession of Lender. No security interest or right of setoff shall be deemed to have been waived by any act or conduct on the part of Lender or by any neglect to exercise such right of setoff or to enforce such security interest or by any delay in so doing. Every right of setoff and security interest shall continue in full force and effect until such right of setoff or security interest is specifically waived or released by an instrument in writing executed by tender. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now or hereafter created, shall be prior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of, the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; Commercial Guaranty Page 7 of 9

provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor, from time to time to execute and file financing statements and continuation statements and to execute such other documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. FINANCIAL STATEMENTS. If requested by Lender, Guarantor shall furnish Lender with, as soon as

provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor, from time to time to execute and file financing statements and continuation statements and to execute such other documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. FINANCIAL STATEMENTS. If requested by Lender, Guarantor shall furnish Lender with, as soon as available, but in no event later then 90 days after the end of each fiscal quarter, Guarantor's balance sheet anal income statement for the year ended, reviewed by a certified public accountant reasonably satisfactory to Lender. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: AMENDMENTS. This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. APPLICABLE LAW. LENDER AND GUARANTOR HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR GUARANTOR AGAINST THE OTHER. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OREGON. ATTORNEY'S FEES; EXPENSES. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including attorneys' fees and legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for arbitration and bankruptcy proceedings (and including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. NOTICES. All notices required to be given by either party to the other under this Guaranty shall be in writing and shall be effective when actually delivered or when deposited in the United States mail, first class postage prepaid, addressed to the party to whom the notice is to be given at, the address shown above or to such other addresses as either party may designate to the other in writing. If there is more than one Guarantor, notice to the Guarantor will constitute notice to all Guarantors. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. INTERPRETATION. In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when Commercial Guaranty Page 8 of 9

this Guaranty is executed by more than one Guarantor, the words "Borrower" and Guarantor" respectively shall mean all and any one or more of them. Each Guarantor hereunder is jointly and severally liable with each and every other Guarantor hereunder. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of each of them. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. If a court of competent jurisdiction finds any provision invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances, and all provision of this Guaranty in all other respects shall remain valid and enforceable. If any one or more of Borrower or Guarantor are corporations or partnerships, it is not necessary for Lender to inquire into the powers of Borrower

this Guaranty is executed by more than one Guarantor, the words "Borrower" and Guarantor" respectively shall mean all and any one or more of them. Each Guarantor hereunder is jointly and severally liable with each and every other Guarantor hereunder. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of each of them. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. If a court of competent jurisdiction finds any provision invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances, and all provision of this Guaranty in all other respects shall remain valid and enforceable. If any one or more of Borrower or Guarantor are corporations or partnerships, it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, partners, or agents acting or purporting to act on their behalf, and any Indebtedness made or created in reliance upon the professed exercise of such powers shall he guaranteed under this Guaranty. WAIVER. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender. nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withhold in the, sole discretion of Lender. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER. NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED APRIL 17, 2000. GRANTOR
/s/ RICHARD G. SASS ----------------------------Richard G. Sass /s/ JENNIFER B. SASS ----------------------------Jennifer B. Sass

Commercial Guaranty Page 9 of 9

EXHIBIT 10.19 FORBEARANCE AGREEMENT THIS AGREEMENT, entered into this 20th day of January, 2000 by and between THE CONFEDERATED TRIBES OF THE GRAND RONDE COMMUNITY OF OREGON (hereinafter "CTGR") and MHL DEVELOPMENT CORPORATION (F/K/A MICROHELIX LABS, INC.)., an Oregon corporation, and RICHARD G. SASS, an Oregon resident ("Obligors"). RECITALS A. Obligors borrowed Six Hundred Sixty Seven Thousand Five Hundred and 00/100 dollars ($667,500.00) from CTGR on or about July 22, 1998, as evidenced by a Promissory Note executed by Obligors and dated

EXHIBIT 10.19 FORBEARANCE AGREEMENT THIS AGREEMENT, entered into this 20th day of January, 2000 by and between THE CONFEDERATED TRIBES OF THE GRAND RONDE COMMUNITY OF OREGON (hereinafter "CTGR") and MHL DEVELOPMENT CORPORATION (F/K/A MICROHELIX LABS, INC.)., an Oregon corporation, and RICHARD G. SASS, an Oregon resident ("Obligors"). RECITALS A. Obligors borrowed Six Hundred Sixty Seven Thousand Five Hundred and 00/100 dollars ($667,500.00) from CTGR on or about July 22, 1998, as evidenced by a Promissory Note executed by Obligors and dated July 22, 1998. Repayment of the Promissory Note is secured by a Security Agreement and UCC-1 Financing Statement filed July 28, 1998, Filing No. 433145, with the Secretary of State of the State of Oregon. B. The above-referenced Promissory Note, in conjunction with an extension dated July 23, 1999, calls for payment of the entire principal amount of the Note, $667,500.00, on or before January 22, 2000 together with all accrued interest, to be paid in full. C. On January 20, 2000, a principal payment of $200,000 was received reducing the principal balance owed to Four Hundred Sixty Seven Thousand Five Hundred and 00/100 Dollars ($467,500.00). The interest shall accrue on the new principal balance of Four Hundred Sixty Seven Thousand Five Hundred and 00/100 Dollars ($467,500.00), until maturity. In consideration of the foregoing and the covenants set forth below, the parties agree as follows: AGREEMENT 1. INCORPORATION OF RECITALS. All the foregoing recitals are hereby incorporated into this Agreement as if fully set forth herein. 2. FORBEARANCE BY CTGR. Subject to the conditions set forth in this Agreement and subject to termination as provided in Paragraph 4 below, CTGR agrees to forebear from taking any action to foreclose on the Security Agreement and UCC-1, to bring any action to collect on the Note or to take any other action to realize on any security for the subject Promissory Note and Security Agreement and UCC-1 or to otherwise effect remedies permitted under Oregon law. 3. CONDITIONS OF FORBEARANCE. Each of the following shall be condition to the obligations of CTGR to forebear in accordance with paragraph 2 above.

a. On or before January 22, 2000 obligors shall pay to CTGR the sum of Two Hundred Twenty Five Thousand Five Hundred Eighty Seven and 50/100 Dollars ($225,587.50), of which $200,000 shall be applied towards principal reduction and $25,587.50 shall be applied to the quarterly interest payment due on January 22, 2000. b. Obligors shall pay quarterly interest payment in the sum of $17,827.25, with the next quarterly interest payment due April 22, 2000 and thereafter on July 22, 2000, October 22, 2000, and January 22, 2001. Obligors shall not in any other respect be in default under the Security Agreement, including payment of equipment securing the debt. c. Obligors will permit no lien or other encumbrance, whether voluntary or involuntary, to arise or affect the title of the property. Obligors shall make no lease or other arrangement for the use or enjoyment of the property other than those approved by CTGR in writing. e. No bankruptcy proceeding or other federal or state proceeding is commenced by Obligors.

a. On or before January 22, 2000 obligors shall pay to CTGR the sum of Two Hundred Twenty Five Thousand Five Hundred Eighty Seven and 50/100 Dollars ($225,587.50), of which $200,000 shall be applied towards principal reduction and $25,587.50 shall be applied to the quarterly interest payment due on January 22, 2000. b. Obligors shall pay quarterly interest payment in the sum of $17,827.25, with the next quarterly interest payment due April 22, 2000 and thereafter on July 22, 2000, October 22, 2000, and January 22, 2001. Obligors shall not in any other respect be in default under the Security Agreement, including payment of equipment securing the debt. c. Obligors will permit no lien or other encumbrance, whether voluntary or involuntary, to arise or affect the title of the property. Obligors shall make no lease or other arrangement for the use or enjoyment of the property other than those approved by CTGR in writing. e. No bankruptcy proceeding or other federal or state proceeding is commenced by Obligors. f. There is no breach by Obligors of this Agreement. If any one or more of the foregoing conditions fails to occur at any time, CTGR may, without notice to Obligors, proceed with all remedies at law or equity and shall have no further obligation pursuant to paragraph 2 above. 4. TERMINATION OF FORBEARANCE. The obligations of CTGR, pursuant to paragraph 2 of this Agreement, shall terminate on January 22, 2001, or breach of any of the conditions described in Paragraph 3. Termination shall not release or relieve Obligors from any obligations to CTGR arising prior to termination, including without limitation, any and all loss, damage, costs or expense to CTGR, under the Note and Security Agreement and UCC-1. 5. DEFAULT BY OBLIGORS. The breach of any obligation of Obligors under this Agreement shall also be a breach of the subject Promissory Note and Security Agreement and UCC-1. In the event of a default by Obligors under this Agreement or the failure of any of the conditions set forth above, in addition to the remedies under this Agreement, CTGR shall have all remedies provided in the Note and the Security Agreement and UCC-1 as well as any other remedies provided at law or in equity. 6. NO NOVATION OR RELEASE. This Agreement is not intended to be nor shall it be deemed to be construed to be a reinstatement, novation or release of the subject Promissory Note or Security Agreement, or UCC-1 or other security interest. This Agreement is not intended to be nor shall it be deemed or construed to be a modification, amendment or waiver of the loan or the Loan documents, or any of them. Neither this Agreement nor any payments or other actions taken pursuant to this Agreement shall be deemed to cure the existing defaults under the Note, Security Agreement or UCC-1 nor the maturity date of the Note, Security Agreement or UCC1 it being the intention of the parties hereto that the Promissory Note and Security Agreement and UCC-1 shall remain in default and immediately due and payable in 2

full notwithstanding this Agreement and, except as otherwise expressly provided, CTGR reserves all of its rights and remedies in connection with such defaults under the loan documents at law and in equity. Notwithstanding the foregoing, CTGR agrees that during the one-year period of this Agreement and so long as there is no breach or default of the terms of this Agreement, the default interest rate set forth in paragraph 5 of the Promissory Note shall not be charged to Obligor; it being the intent of the parties that the interest rate for this one-year forbearance period be Fifteen percent (15%) per annum, up to and through January 22, 2001. Nothing herein is to be construed or intended by the parties to be a waiver of the default interest rate should Obligors fail to make the principal payment due on January 22, 2001 upon termination of the Agreement, or otherwise breach this Agreement. 7. BANKRUPTCY. Each of the Obligors hereby covenants and agrees that in the event the property of any portion thereof securing the subject Promissory Note becomes property of any bankruptcy estate or the subject of any state, local, federal or other bankruptcy dissolution liquidation or receivership proceeding, then CTGR

full notwithstanding this Agreement and, except as otherwise expressly provided, CTGR reserves all of its rights and remedies in connection with such defaults under the loan documents at law and in equity. Notwithstanding the foregoing, CTGR agrees that during the one-year period of this Agreement and so long as there is no breach or default of the terms of this Agreement, the default interest rate set forth in paragraph 5 of the Promissory Note shall not be charged to Obligor; it being the intent of the parties that the interest rate for this one-year forbearance period be Fifteen percent (15%) per annum, up to and through January 22, 2001. Nothing herein is to be construed or intended by the parties to be a waiver of the default interest rate should Obligors fail to make the principal payment due on January 22, 2001 upon termination of the Agreement, or otherwise breach this Agreement. 7. BANKRUPTCY. Each of the Obligors hereby covenants and agrees that in the event the property of any portion thereof securing the subject Promissory Note becomes property of any bankruptcy estate or the subject of any state, local, federal or other bankruptcy dissolution liquidation or receivership proceeding, then CTGR shall immediately become entitled, in addition to other relief to which CTGR may be entitled under this Agreement, to an order from the Bankruptcy court granting immediately relief from automatic stay pursuant to Section 362 of the Bankruptcy Code so as to permit CTGR to foreclose upon the property and exercise all other rights and remedies under the Note and Security Agreement. 8. CONFIRMATION OF INDEBTEDNESS. The subject Promissory Note and Security Agreement and UCC-1 to CTGR are hereby confirmed by Obligors as being in full force and effect. Obligors acknowledge that they are liable under the Note, Security Agreement and UCC-1 in accordance with the terms and conditions of such instruments. As of the date of this Agreement, Obligors are not aware of any defense or offsets to their obligations under the Note, Security Agreement and UCC-1. Obligors, as a material inducement to cause CTGR to enter into this Agreement, hereby waive any and all defenses they may now have relating to the Note, Security Agreement and UCC-1, past or present, known or unknown, liquidated or unliquidated. The foregoing waiver shall survive termination of this Agreement. 9. MISCELLANEOUS. a. Obligors acknowledge that they have had the opportunity to seek legal counsel of their own choosing before executing this Agreement and that they fully understand that this Agreement and all its provisions, including without limitation, the waiver set forth in this Agreement, are freely and voluntarily executed and intend to be bound thereby. b. Any notice that the parties require or may desire to give to the other shall be in writing and may be sent by personal delivery, by prepaid U.S. Mail, or by overnight courier, addressed as follows. 3
If to CTGR: c/o Patrick L. Sizemore, President STRATEGIC WEALTH MANAGEMENT, INC. 401 Parkplace, Suite 100 Kirkland, WA 98033 c/o Richard G. Sass MHL Development Corporation 16125 SW 72nd Avenue Portland, OR 97224

If to Obligor:

10. MODIFICATIONS. This Agreement may be modified or amended only by an agreement in writing signed by both parties. This Agreement shall be governed by Washington Law. 11. ATTORNEYS' FEES. If any party hereto shall bring any action or suit against another for relief, declaratory or otherwise arising out of this Agreement, the prevailing party shall have and recover against the defaulting party in addition to court costs and disbursement such sums as the court may adjudge to be reasonable attorneys' fees. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, TO EXTEND CREDIT, OR TO FOR-

If to CTGR:

c/o Patrick L. Sizemore, President STRATEGIC WEALTH MANAGEMENT, INC. 401 Parkplace, Suite 100 Kirkland, WA 98033 c/o Richard G. Sass MHL Development Corporation 16125 SW 72nd Avenue Portland, OR 97224

If to Obligor:

10. MODIFICATIONS. This Agreement may be modified or amended only by an agreement in writing signed by both parties. This Agreement shall be governed by Washington Law. 11. ATTORNEYS' FEES. If any party hereto shall bring any action or suit against another for relief, declaratory or otherwise arising out of this Agreement, the prevailing party shall have and recover against the defaulting party in addition to court costs and disbursement such sums as the court may adjudge to be reasonable attorneys' fees. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, TO EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER OREGON LAW. MHL DEVELOPMENT CORPORATION (f/k/a microHelix Labs, Inc.)
DATED: January 20, 2000 -----------------------------By: /S/ RICHARD G. SASS ----------------------------------Richard G. Sass CEO ----------------------------------/S/ RICHARD G. SASS ----------------------------------Richard G. Sass, Personal Guarantee

Its:

DATED:

January 20, 2000 ------------------------------

By:

THE CONFEDERATED TRIBES OF THE GRAND RONDE COMMUNITY OF OREGON
DATED: -----------------------------Its: By: /S/ ROBERT F. SAUNDERS ----------------------------------Robert F. Saunders Chief Financial Officer

4

EXHIBIT 10.20 FORBEARANCE AGREEMENT THIS AGREEMENT, entered into this 3rd day of April, 2001 by and between THE CONFEDERATED TRIBES OF THE GRAND RONDE COMMUNITY OF OREGON (hereinafter "CTGR") and MHL DEVELOPMENT COMPANY, an Oregon corporation, and RICHARD G. SASS AND JENNIFER B. SASS, collectively (hereinafter "Obligors"). RECITALS A. Obligors borrowed Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00) from CTGR

EXHIBIT 10.20 FORBEARANCE AGREEMENT THIS AGREEMENT, entered into this 3rd day of April, 2001 by and between THE CONFEDERATED TRIBES OF THE GRAND RONDE COMMUNITY OF OREGON (hereinafter "CTGR") and MHL DEVELOPMENT COMPANY, an Oregon corporation, and RICHARD G. SASS AND JENNIFER B. SASS, collectively (hereinafter "Obligors"). RECITALS A. Obligors borrowed Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00) from CTGR on or about April 17, 2000, as evidenced by a Promissory Note executed by Obligors and dated April 17, 2000. Repayment of the Promissory Note is secured by, among other things; a certain Trust Deed and Assignment of Rents dated April 17, 2000 and recorded April 18, 2000 in Multnomah County, Oregon, under Multnomah County Auditor's Recording Fee No. 2000-053229; and a Security and Pledge Agreement and Commercial Guaranty dated April 17, 2000. B. The above-referenced Promissory Note calls for payment of the entire principal amount of the Note, $2,500,000.00 on or before April 17, 2001, together with all accrued interest, to be paid in full. In consideration of the foregoing and the covenants set forth below, the parties agree as follows: AGREEMENT 1. INCORPORATION OF RECITALS. All the foregoing recitals are hereby incorporated into this Agreement as if fully set forth herein. 2. FORBEARANCE BY CTGR. Subject to the conditions set forth in this Agreement and subject to termination as provided in Paragraph 4 below, CTGR agrees to forebear from taking any action to foreclose on the Trust Deed and Assignment of Rents, to bring any action to collect on the Note or to take any other action to realize on any security for the subject Promissory Note, Trust Deed and Assignment of Rents, and Security and Pledge Agreement and Commercial Guaranty, and any other security named or not named herein, or to otherwise effect remedies permitted under Oregon law. 3. CONDITIONS OF FORBEARANCE. Each of the following shall be a condition to the obligation of CTGR to forebear in accordance with paragraph 2 above. a. Obligors shall pay to Strategic Wealth Management, Inc., on or before April 17, 2001 the sum of Two Hundred Fifty and 00/100 Dollars ($250.00), for preparation and implementation of this forbearance agreement. Forbearance Agreement Page 1 of 5

b. On or before April 17, 2001 Obligors shall pay to CTGR the sum of Seventy Six Thousand Forty One and 67/100 Dollars ($76,041.67), which sum shall be applied to the quarterly interest payment due on April 17, 2001. c. On April 17, 2001, Obligors agree to pay CTGR the sum of Fifty Thousand and 00/100 Dollars ($50,000.00), for the forbearance fee. d. Obligors shall continue to pay the quarterly interest as it accrues under the Note, with the next quarterly interest payment due July 17, 2001, and thereafter on October 17, 2001, January 17, 2002 and April 17, 2002. Obligors shall not in any other respect be in default under the Note or Trust Deed and Assignment of Rents, including payment of real property taxes, and assessments on the real property securing the debt.

b. On or before April 17, 2001 Obligors shall pay to CTGR the sum of Seventy Six Thousand Forty One and 67/100 Dollars ($76,041.67), which sum shall be applied to the quarterly interest payment due on April 17, 2001. c. On April 17, 2001, Obligors agree to pay CTGR the sum of Fifty Thousand and 00/100 Dollars ($50,000.00), for the forbearance fee. d. Obligors shall continue to pay the quarterly interest as it accrues under the Note, with the next quarterly interest payment due July 17, 2001, and thereafter on October 17, 2001, January 17, 2002 and April 17, 2002. Obligors shall not in any other respect be in default under the Note or Trust Deed and Assignment of Rents, including payment of real property taxes, and assessments on the real property securing the debt. e. Obligors will permit no lien or other encumbrance, whether voluntary or involuntary, to arise or affect the title of the property. Obligors shall make no lease or other arrangement for the use or enjoyment of the property that is subject of the Trust Deed and Assignment of Rents and Security and Pledge Agreement and Commercial Guaranty other than those approved by CTGR in writing. f. No bankruptcy proceeding or other federal or state proceeding is commenced by Obligors. g. There is no breach by Obligors of this Agreement. If any one or more of the foregoing conditions fails to occur at any time, CTGR may, without notice to Obligors, proceed with all remedies at law or equity and shall have no further obligation pursuant to paragraph 2 above. 4. TERMINATION OF FORBEARANCE. The obligations of CTGR pursuant to paragraph 2 of this Agreement shall terminate on April 17, 2002 or breach of any of the conditions described in Paragraph 3. Termination shall not release or relieve Obligors from any obligations to CTGR arising prior to termination, including without limitation, any and all loss, damage, costs or expense to CTGR, under the Note, Trust Deed and Assignment of Rents and Security and Pledge Agreement and Commercial Guaranty. 5. DEFAULT BY OBLIGORS. The breach of any obligation of Obligors under this Agreement shall also be a breach of the subject Promissory Note, Trust Deed and Assignment of Rents, and Security and Pledge Agreement and Commercial Guaranty. In the event of a default by Obligors under this Agreement or the failure of any of the conditions set forth above, in addition to the remedies under this Agreement, CTGR shall have all remedies provided in the Note and the Trust Deed and Assignment of Rents and Security and Pledge Agreement and Commercial Guaranty as well as any other remedies provided at law or in equity. 6. NO NOVATION OR RELEASE. This Agreement is not intended to be nor shall it be deemed to be construed to be a reinstatement, novation or release of the subject Promissory Forbearance Agreement Page 2 of 5

Note or Trust Deed and Assignment of Rents or other security interest. This Agreement is not intended to be nor shall it be deemed or construed to be a modification, amendment or waiver of the loan or the loan documents, or any of them. Neither this Agreement nor any payments or other actions taken pursuant to this Agreement shall be deemed to cure the existing defaults under the Note or Trust Deed and Assignment of Rents nor the maturity date of the Note or Trust Deed and Assignment of Rents it being the intention of the parties hereto that the Promissory Note and Trust Deed and Assignment of Rents shall remain in default and immediately due and payable in full notwithstanding this Agreement and, except as otherwise expressly provided, CTGR reserves all of its rights and remedies in connection with such defaults under the loan documents at law and in equity. Notwithstanding the foregoing, CTGR agrees that during the one-year period of this Agreement and so long as there is no breach or default of the terms of this Agreement, the default interest rate set forth in paragraph 5 of the Promissory Note shall not be charged to Obligors; it being the intent of the parties that the interest rate for this one-year forbearance period be twelve percent (12%) per annum, up to and through April 17, 2002. Nothing

Note or Trust Deed and Assignment of Rents or other security interest. This Agreement is not intended to be nor shall it be deemed or construed to be a modification, amendment or waiver of the loan or the loan documents, or any of them. Neither this Agreement nor any payments or other actions taken pursuant to this Agreement shall be deemed to cure the existing defaults under the Note or Trust Deed and Assignment of Rents nor the maturity date of the Note or Trust Deed and Assignment of Rents it being the intention of the parties hereto that the Promissory Note and Trust Deed and Assignment of Rents shall remain in default and immediately due and payable in full notwithstanding this Agreement and, except as otherwise expressly provided, CTGR reserves all of its rights and remedies in connection with such defaults under the loan documents at law and in equity. Notwithstanding the foregoing, CTGR agrees that during the one-year period of this Agreement and so long as there is no breach or default of the terms of this Agreement, the default interest rate set forth in paragraph 5 of the Promissory Note shall not be charged to Obligors; it being the intent of the parties that the interest rate for this one-year forbearance period be twelve percent (12%) per annum, up to and through April 17, 2002. Nothing herein is to be construed or intended by the parties to be a waiver of the default interest rate should Obligors fail to make the principal payment due on April 17, 2002, upon termination of the Agreement, or otherwise breach this Agreement. 7. BANKRUPTCY. Each of the Obligors hereby covenants and agrees that in the event the property of any portion thereof securing the subject Promissory Note becomes property of any bankruptcy estate or the subject of any state, local, federal or other bankruptcy dissolution liquidation or receivership proceeding, then CTGR shall immediately become entitled, in addition to other relief to which CTGR may be entitled under this Agreement, to an order from the Bankruptcy court granting immediate relief from automatic stay pursuant to Section 362 of the Bankruptcy Code so as to permit CTGR to foreclose upon the property and exercise all other rights and remedies under the Note, Trust Deed and Assignment of Rents and Security and Pledge Agreement and Commercial Guaranty and any other security named or not named herein. Forbearance Agreement Page 3 of 5

8. CONFIRMATION OF INDEBTEDNESS. The subject Promissory Note, Trust Deed and Assignment of Rents, and Security and Pledge Agreement and Commercial Guaranty, and any other security named or not named herein, to CTGR are hereby confirmed by Obligors as being in full force and effect. Obligors acknowledge that they are liable under the Note, Trust Deed and Assignment of Rents, and Security and Pledge Agreement and Commercial Guaranty, and any other security named or not named herein, in accordance with the terms and conditions of such instruments. As of the date of this Agreement, Obligors are not aware of any defense or offsets to their obligations under the Note, Trust Deed and Assignment of Rents, and Security and Pledge Agreement and Commercial Guaranty, and any other security named or not named herein. Obligors, as a material inducement to cause CTGR to enter into this Agreement, hereby waive any and all defenses they may now have relating to the Note, Trust Deed and Assignment of Rents and Security and Pledge Agreement and Commercial Guaranty, and any other security named or not named herein, past or present, known or unknown, liquidated or unliquidated. The foregoing waiver shall survive termination of this Agreement. 9. MISCELLANEOUS. a. Obligors acknowledge that they have had the opportunity to seek legal counsel of their own choosing before executing this Agreement and that they fully understand that this Agreement and all its provisions, including without limitation, the waiver set forth in this Agreement, are freely and voluntarily executed and intend to be bound thereby. b. Any notice that the parties require or may desire to give to the other shall be in writing and may be sent by personal delivery, by prepaid U.S. Mail, or by overnight courier, addressed as follows.
If to CTGR: c/o Patrick L. Sizemore, President STRATEGIC WEALTH MANAGEMENT, INC.

8. CONFIRMATION OF INDEBTEDNESS. The subject Promissory Note, Trust Deed and Assignment of Rents, and Security and Pledge Agreement and Commercial Guaranty, and any other security named or not named herein, to CTGR are hereby confirmed by Obligors as being in full force and effect. Obligors acknowledge that they are liable under the Note, Trust Deed and Assignment of Rents, and Security and Pledge Agreement and Commercial Guaranty, and any other security named or not named herein, in accordance with the terms and conditions of such instruments. As of the date of this Agreement, Obligors are not aware of any defense or offsets to their obligations under the Note, Trust Deed and Assignment of Rents, and Security and Pledge Agreement and Commercial Guaranty, and any other security named or not named herein. Obligors, as a material inducement to cause CTGR to enter into this Agreement, hereby waive any and all defenses they may now have relating to the Note, Trust Deed and Assignment of Rents and Security and Pledge Agreement and Commercial Guaranty, and any other security named or not named herein, past or present, known or unknown, liquidated or unliquidated. The foregoing waiver shall survive termination of this Agreement. 9. MISCELLANEOUS. a. Obligors acknowledge that they have had the opportunity to seek legal counsel of their own choosing before executing this Agreement and that they fully understand that this Agreement and all its provisions, including without limitation, the waiver set forth in this Agreement, are freely and voluntarily executed and intend to be bound thereby. b. Any notice that the parties require or may desire to give to the other shall be in writing and may be sent by personal delivery, by prepaid U.S. Mail, or by overnight courier, addressed as follows.
If to CTGR: c/o Patrick L. Sizemore, President STRATEGIC WEALTH MANAGEMENT, INC. 7900 SE 28th Street, 5th Floor Mercer Island, WA 98040 c/o Richard Sass mHL Development Company 16125 SW 72nd Ave. Portland, OR 97224 Richard G. Sass Jennifer B. Sass 02000 SW Palantine Hill Road Portland, OR 97219 Forbearance Agreement Page 4 of 5

If to Obligors:

10. Modifications. This Agreement may be modified or amended only by an agreement in writing signed by both parties. This Agreement shall be governed by Oregon Law. 11. Attorneys' Fees. If any party hereto shall bring any action or suit against another for relief, declaratory or otherwise arising out of this Agreement, the prevailing party shall have and recover against the defaulting party in addition to court costs and disbursement such sums as the court may adjudge to be reasonable attorneys' fees. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, TO EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER OREGON LAW. MHL DEVELOPMENT COMPANY, an Oregon corporation

10. Modifications. This Agreement may be modified or amended only by an agreement in writing signed by both parties. This Agreement shall be governed by Oregon Law. 11. Attorneys' Fees. If any party hereto shall bring any action or suit against another for relief, declaratory or otherwise arising out of this Agreement, the prevailing party shall have and recover against the defaulting party in addition to court costs and disbursement such sums as the court may adjudge to be reasonable attorneys' fees. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, TO EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER OREGON LAW. MHL DEVELOPMENT COMPANY, an Oregon corporation
DATED: April 9, 2001 ---------------------------By: /S/ RICHARD G. SASS ------------------------------------Richard G. Sass Its: President/CEO

DATED:

April 9, 2001 ----------------------------

By: /S/ RICHARD G. SASS ------------------------------------Richard G. Sass

DATED:

April 9, 2001 ----------------------------

By: /S/ JENNIFER B. SASS ------------------------------------Jennifer B. Sass

THE CONFEDERATED TRIBES OF THE GRAND RONDE COMMUNITY OF OREGON DATED: ---------------------------By: ------------------------------------Larry Kovach Its: Finance Officer

Forbearance Agreement Page 5 of 5

EXHIBIT 10.21 PROMISSORY NOTE AND SECURITY AGREEMENT $100,000.00 Tigard, Oregon April 12, 2001 FOR VALUE RECEIVED, microHelix, Inc. ("mHL") promises to pay to the order of Richard G. Sass ("RGS") in lawful money of the United States of America, the principal amount of One Hundred Thousand Dollars ($100,000.00) together with interest on such amount from the date of this note at the interest rate of twelve percent (12%) per annum (the "Interest Rate"). Interest shall be computed on the outstanding principal amount on the basis of a 365-day year and actual days elapsed. mHL shall pay in full the aggregate unpaid principal amount of this Note, together with all accrued and unpaid interest thereon, on or before September 30, 2001. This Note may be prepaid, at any time and from time to time, in whole or in part, without penalty or premium. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the amount prepaid. All payments shall be made directly to the RGS in immediately available funds.

EXHIBIT 10.21 PROMISSORY NOTE AND SECURITY AGREEMENT $100,000.00 Tigard, Oregon April 12, 2001 FOR VALUE RECEIVED, microHelix, Inc. ("mHL") promises to pay to the order of Richard G. Sass ("RGS") in lawful money of the United States of America, the principal amount of One Hundred Thousand Dollars ($100,000.00) together with interest on such amount from the date of this note at the interest rate of twelve percent (12%) per annum (the "Interest Rate"). Interest shall be computed on the outstanding principal amount on the basis of a 365-day year and actual days elapsed. mHL shall pay in full the aggregate unpaid principal amount of this Note, together with all accrued and unpaid interest thereon, on or before September 30, 2001. This Note may be prepaid, at any time and from time to time, in whole or in part, without penalty or premium. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the amount prepaid. All payments shall be made directly to the RGS in immediately available funds. As security for the amounts due under this Note, mHL pledges and grants to RGS a security interest in the Materials Authorization provided by Agilent Technologies, dated as of March 8, 2001, up to the amount of the note. In the event that RGS uses his own or an outside attorney to construe, interpret, or enforce any of the provisions of this Note or take any action in any bankruptcy, insolvency or similar proceeding affecting creditors' rights generally (including, without limitation, prosecution of a motion for relief from stay, proposal of a Chapter 11 plan, objection to a disclosure statement or a Chapter 11 or 13 plan, or objection to proposed use, sale or lease of property) or in mediation or arbitration, RGS shall be entitled to recover from mHL its reasonable attorney fees and other costs incurred regardless of whether any legal proceeding is commenced. If any legal action, arbitration or other proceeding is brought, the prevailing party shall be entitled to recover its reasonable attorney fees and other costs incurred in connection therewith, both at trial and on any appeal therefrom or petitions for review thereof. All parties to this Note hereby waive presentment, dishonor, notice of dishonor, and protest. All parties to this Note hereby consent to, and the holder of this Note is hereby expressly authorized to make, without notice, any and all renewals, extensions, modifications or waivers of the time for or the terms of payment of any sum or sums due under this Note, or under any documents or instruments relating to or securing this Note, or the performance of any covenants, conditions or agreements hereof or thereof, or the taking or release of collateral securing this Note. The liability of all parties on this Note shall not be discharged by any action consented to above taken by any holder of this Note.

MHL may not assign or transfer this Note without the prior written consent of RGS. This Note is made with reference to, and is to be construed in accordance with the laws of the State of Oregon, exclusive of choice of law or conflicts of law rules or principles. MHL executes this Note as of the date first above written and acknowledges receipt of a copy of this Note. microHelix, Inc.
By: /S/ JANE K. CONNER ------------------------------------Name: Jane K. Conner Title: Chief Financial Officer

Richard G. Sass
/S/ RICHARD G. SASS -----------------------------------------

MHL may not assign or transfer this Note without the prior written consent of RGS. This Note is made with reference to, and is to be construed in accordance with the laws of the State of Oregon, exclusive of choice of law or conflicts of law rules or principles. MHL executes this Note as of the date first above written and acknowledges receipt of a copy of this Note. microHelix, Inc.
By: /S/ JANE K. CONNER ------------------------------------Name: Jane K. Conner Title: Chief Financial Officer

Richard G. Sass
/S/ RICHARD G. SASS ----------------------------------------Name: Richard G. Sass

EXHIBIT 10.22 AFTER RECORDING, RETURN TO: Jennifer Watson First American Title Insurance Company 1700 S.W. Fourth Avenue, Suite 102 Portland OR 97201-5512 TRUST DEED AND ASSIGNMENT OF RENTS THIS TRUST DEED AND ASSIGNMENT OF RENTS ("Trust Deed") is made as of the 17th day of April, 2000, by RICHARD G. SASS and JENNIFER B. SASS (collectively, "Grantor"), to FIRST AMERICAN TITLE INSURANCE COMPANY OF OREGON ("Trustee"), for the benefit of THE CONFEDERATED TRIBES OF THE GRAND RONDE COMMUNITY OF OREG0N ("Beneficiary"). WHEREAS, Grantor is a principal of mHL Development Company, an Oregon corporation ("Debtor"). Debtor is a closely held corporation in which Grantor has a financial interest. Beneficiary has offered to make a loan to Debtor in the sum of $2,500,000, which loan is to be evidenced by a Promissory Note of even date herewith. The loan, if not sooner paid, is due and payable in full on April 17, 2001. (The Promissory Note as modified, supplemented, extended, renewed, or replaced from time to time is referred to below as the "Note"); and WHEREAS, as a condition to the making of the loan to Debtor, Beneficiary has required, and Grantor has agreed to execute and deliver, a Security and Pledge Agreement and Commercial Guaranty of even date herewith (the "Guaranty") secured by this Trust Deed. This Trust Deed is executed at Debtor's request. It is in Grantor's interest that Beneficiary makes the loan to Debtor. Now, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and for the purpose of securing the Obligations described in Section l.1 below, Grantor irrevocably grants, bargains, sells, conveys, assigns, and transfers to Trustee in trust for the benefit and security of the Beneficiary, with power of sale and right of entry and possession, all of Grantor's right, title, and interest in and to the real property located in Multnomah County, Oregon, and more particularly described in Exhibit "A" attached hereto and incorporated herein (the "Property"); TOGETHER WITH all interests, estates, and rights that Grantor now has or may acquire in (1) the Property; (2)

EXHIBIT 10.22 AFTER RECORDING, RETURN TO: Jennifer Watson First American Title Insurance Company 1700 S.W. Fourth Avenue, Suite 102 Portland OR 97201-5512 TRUST DEED AND ASSIGNMENT OF RENTS THIS TRUST DEED AND ASSIGNMENT OF RENTS ("Trust Deed") is made as of the 17th day of April, 2000, by RICHARD G. SASS and JENNIFER B. SASS (collectively, "Grantor"), to FIRST AMERICAN TITLE INSURANCE COMPANY OF OREGON ("Trustee"), for the benefit of THE CONFEDERATED TRIBES OF THE GRAND RONDE COMMUNITY OF OREG0N ("Beneficiary"). WHEREAS, Grantor is a principal of mHL Development Company, an Oregon corporation ("Debtor"). Debtor is a closely held corporation in which Grantor has a financial interest. Beneficiary has offered to make a loan to Debtor in the sum of $2,500,000, which loan is to be evidenced by a Promissory Note of even date herewith. The loan, if not sooner paid, is due and payable in full on April 17, 2001. (The Promissory Note as modified, supplemented, extended, renewed, or replaced from time to time is referred to below as the "Note"); and WHEREAS, as a condition to the making of the loan to Debtor, Beneficiary has required, and Grantor has agreed to execute and deliver, a Security and Pledge Agreement and Commercial Guaranty of even date herewith (the "Guaranty") secured by this Trust Deed. This Trust Deed is executed at Debtor's request. It is in Grantor's interest that Beneficiary makes the loan to Debtor. Now, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and for the purpose of securing the Obligations described in Section l.1 below, Grantor irrevocably grants, bargains, sells, conveys, assigns, and transfers to Trustee in trust for the benefit and security of the Beneficiary, with power of sale and right of entry and possession, all of Grantor's right, title, and interest in and to the real property located in Multnomah County, Oregon, and more particularly described in Exhibit "A" attached hereto and incorporated herein (the "Property"); TOGETHER WITH all interests, estates, and rights that Grantor now has or may acquire in (1) the Property; (2) any and all options, agreements, and contrasts for the purchase or sale of all or any part or parts of the Property or interests in the Property; (3) all easements, rights-of-way, and rights used is connection with the Property or as a means of access to the Property; and (4) all tenements, hereditaments, and appurtenances in any manner belonging, relating, or appertaining to the Property; and 1

TOGETHER WITH all interests, estates, and rights of Grantor, now owned or hereafter acquired, in and to any land lying within any streets, sidewalks, alleys, strips, and gores adjacent to or used in connection therewith; and TOGETHER WITH all rights, titles, and interests of Grantor, now owned or hereafter acquired, in and to any and all buildings and other improvements of every nature now or hereafter located on the Property and all fixtures, machinery, equipment, and other personal property located on the Property or attached to, contained in, or used in any such buildings and other improvements, and all appurtenances and additions to and substitutions and replacements of the Property (all of the foregoing being collectively referred to below as the "Improvements"); and TOGETHER WITH any and all mineral, oil and gas rights, air rights, development rights, water rights, water stock, and water service contracts, drainage rights, zoning rights, and other similar rights or interests that benefit or are appurtenant to the Property or the Improvements or both, and any of their proceeds; and TOGETHER WITH all present and future rights in and to the trade name by which all or any portion of the

TOGETHER WITH all interests, estates, and rights of Grantor, now owned or hereafter acquired, in and to any land lying within any streets, sidewalks, alleys, strips, and gores adjacent to or used in connection therewith; and TOGETHER WITH all rights, titles, and interests of Grantor, now owned or hereafter acquired, in and to any and all buildings and other improvements of every nature now or hereafter located on the Property and all fixtures, machinery, equipment, and other personal property located on the Property or attached to, contained in, or used in any such buildings and other improvements, and all appurtenances and additions to and substitutions and replacements of the Property (all of the foregoing being collectively referred to below as the "Improvements"); and TOGETHER WITH any and all mineral, oil and gas rights, air rights, development rights, water rights, water stock, and water service contracts, drainage rights, zoning rights, and other similar rights or interests that benefit or are appurtenant to the Property or the Improvements or both, and any of their proceeds; and TOGETHER WITH all present and future rights in and to the trade name by which all or any portion of the Property and the Improvements are known; all books and records relating to the use and operation of all or any portion of the Property and Improvements; all right, title, and interest of Grantor in, to, and under all present and future plans, specifications, and contracts relating to the design, construction, management, or inspection of any Improvements; all rights, titles, and interests of Grantor in and to all present and future licenses, permits, approvals, and agreements with or from any municipal corporation, county, state, or other governmental or quasigovernmental entity or agency relating to the development, improvement, division, or use, of all or any portion of the Property to the extent such trade names, licenses, permits, approvals, and agreements are assignable by law; and all other general intangibles relating to the Property, the Improvements, or their use and operation; and TOGETHER WITH all rights of Grantor in and to any escrow or withhold agreements, title insurance, surety bonds, warranties, management contracts, leasing and sales agreements, and service contracts that are in any way relevant to the ownership, development, improvement, management, sale, or use of all or any portion of the Property or any of the Improvements; and TOGETHER WITH Grantor's rights under any payment, performance, or other bond in connection with construction of any Improvements, and all construction materials, supplies, and equipment delivered to the Property or intended to be used in connection with the construction of any Improvements; and TOGETHER WITH all rights, interests, and claims that Grantor now has or may acquire with respect to any damage to or taking of all or any part of the Property or the Improvements, including without limitation any and all proceeds of insurance in effect with 2

respect to the Improvements, any and all awards made for taking by eminent domain or by any proceeding or purchase in lieu thereof, of the whole or any part of the Property or the Improvements, and any and all awards resulting from any other damage to the Property or the Improvements, all of which are assigned to Beneficiary, and, subject to the terms of this Trust Deed, Beneficiary is authorized to collect and receive such proceeds, to give proper receipts and acquittances for the proceeds, and to apply them to the Obligations secured by this Trust Deed. All of the about is sometimes referred to below as the "Trust Property." TO HAVE AND TO HOLD the Trust Property to Trustee and its successors and assigns for the benefit of Beneficiary and its successors and assigns forever. PROVIDED ALWAYS, that if all the Obligations (as defined in Section 1.1 below, shall be paid, performed, and satisfied in full, then the lien and estate granted by this Trust Dead shall be reconveyed. This Trust Deed, the Guaranty, and all other agreements or instruments executed at any time in connection therewith as they may be amended or supplemented from time to time, are sometimes collectively referred to below as the "Loan Documents."

respect to the Improvements, any and all awards made for taking by eminent domain or by any proceeding or purchase in lieu thereof, of the whole or any part of the Property or the Improvements, and any and all awards resulting from any other damage to the Property or the Improvements, all of which are assigned to Beneficiary, and, subject to the terms of this Trust Deed, Beneficiary is authorized to collect and receive such proceeds, to give proper receipts and acquittances for the proceeds, and to apply them to the Obligations secured by this Trust Deed. All of the about is sometimes referred to below as the "Trust Property." TO HAVE AND TO HOLD the Trust Property to Trustee and its successors and assigns for the benefit of Beneficiary and its successors and assigns forever. PROVIDED ALWAYS, that if all the Obligations (as defined in Section 1.1 below, shall be paid, performed, and satisfied in full, then the lien and estate granted by this Trust Dead shall be reconveyed. This Trust Deed, the Guaranty, and all other agreements or instruments executed at any time in connection therewith as they may be amended or supplemented from time to time, are sometimes collectively referred to below as the "Loan Documents." TO PROTECT THE SECURITY OF THIS TRUST DEED, GRANTOR HEREBY COVENANTS AND AGREES AS FOLLOWS: ARTICLE 1 PARTICULAR COVENANTS AND WARRANTIES OF GRANTOR 1.1 OBLIGATIONS SECURED. This Trust Deed secures the following, collectively referred to as the "Obligations": 1.1.1 The payment of all indebtedness, including but not limited to principal and interest, and the performance of all covenants and obligations of Grantor to Beneficiary under the Guaranty and under any other agreement between Grantor and Beneficiary, whether such payment and performance is now due or becomes due in the future; 1.1.2 The payment and performance of all covenants and obligations in this Trust Deed, in the other Loan Documents, and in all other security agreements, notes, agreements, and undertakings now existing or hereafter executed by Grantor with or for the benefit of Beneficiary; and 1.1.3 The payment and performance of any and all other indebtedness and obligations of Grantor to Beneficiary of any nature whatsoever, whether direct or indirect, primary or secondary, joint or several, liquidated or unliquidated, whenever and however arising, and whether or not reflected in a written agreement or instrument. 3

1.2 PAYMENT OF INDEBTEDNESS; PERFORMANCE OF COVENANTS. Grantor shall duly and punctually pay and perform all of the Obligations. 1.3 PROPERTY. Grantor warrants that it holds good and merchantable title to the Property and the Improvements, free and clear of all liens, encumbrances, reservations, restrictions, easements, and adverse claims except those specifically listed in Exhibit "B." Grantor covenants that it shall forever defend Beneficiary and Trustee's rights under this Trust Deed against the adverse claims and demands of all persons. 1.4 FURTHER ASSURANCES; FILING; REFILING; ETC. 1.4.1 Grantor shall execute, acknowledge, and deliver, from time to time, such further instruments as Beneficiary or Trustee may require to accomplish the purposes of this Trust Deed.

1.2 PAYMENT OF INDEBTEDNESS; PERFORMANCE OF COVENANTS. Grantor shall duly and punctually pay and perform all of the Obligations. 1.3 PROPERTY. Grantor warrants that it holds good and merchantable title to the Property and the Improvements, free and clear of all liens, encumbrances, reservations, restrictions, easements, and adverse claims except those specifically listed in Exhibit "B." Grantor covenants that it shall forever defend Beneficiary and Trustee's rights under this Trust Deed against the adverse claims and demands of all persons. 1.4 FURTHER ASSURANCES; FILING; REFILING; ETC. 1.4.1 Grantor shall execute, acknowledge, and deliver, from time to time, such further instruments as Beneficiary or Trustee may require to accomplish the purposes of this Trust Deed. 1.4.2 Grantor, immediately upon the execution and delivery of this Trust Deed, and thereafter from time to time, shall cause this Trust Deed, any supplemental security agreement, mortgage, or deed of trust and each instrument of further assurance, to he recorded and rerecorded in such manner and in such places as may be required by any present or future law in order to perfect, and continue perfected, the lien and estate of this Trust Deed. 1.4.3 Grantor shall pay all filing and recording fees, and all expenses incident to the execution, filing, recording, and acknowledgment of this Trust Deed; any security agreement, mortgage, or deed of trust supplemental hereto and any instrument of further assurance; and all federal, state, county, and municipal taxes, assessments and charges arising out of or in connection with the execution, delivery, filing, and recording of this Trust Deed, any supplemental security agreement, mortgage, or deed of trust and any instrument of further assurance. 1.5 COMPLIANCE WITH LAWS. Grantor further represents, warrants, and covenants that: 1.5.1 The Property, if developed, has been developed, and all Improvements, if any, have been constructed and maintained, in full compliance with all applicable laws, statutes, ordinances, regulations, and codes of all federal, state, and local governments (collectively "Laws"), and all covenants, conditions, easements, and restrictions affecting the Property (collectively "Covenants"); and 1.5.2 Grantor and its operations upon the Property currently comply, and will hereafter comply in all material respects with all applicable Laws and Covenants. 1.6 DEFINITIONS; ENVIRONMENTAL COVENANTS; WARRANTIES AND COMPLIANCE. 1.6.1 For purposes of this section, "Environmental Law" means any federal, state, or local law, statute, ordinance, or regulation pertaining to Hazardous Substances, health, industrial hygiene, or environmental conditions, including without limitation the 4

Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), as amended, 42 USC Sections 9601-9675, and the Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, 42 USC Sections 6901-6992. 1.6.2 For the purposes of this section, "Hazardous Substance" includes, without limitation, any material, substance, or waste that is or becomes regulated or that is or becomes classified as hazardous, dangerous, or toxic under any federal, state, or local statute, ordinance, rule, regulation, or law. 1.6.3 Grantor will not use, generate, manufacture, produce, store, release, discharge, or dispose of on, under or about the Property or the Property's groundwater, or transport to or from the Property, any Hazardous Substance and will not permit any other person to do so, except for such Hazardous Substances that may be used in the ordinary course of Grantor's business and in compliance with all Environmental Laws, including but not limited to those relating to licensure, notice, and recordkeeping. 1.6.4 Grantor will keep and maintain the Property in compliance with, and shall not cause or permit all or any

Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), as amended, 42 USC Sections 9601-9675, and the Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, 42 USC Sections 6901-6992. 1.6.2 For the purposes of this section, "Hazardous Substance" includes, without limitation, any material, substance, or waste that is or becomes regulated or that is or becomes classified as hazardous, dangerous, or toxic under any federal, state, or local statute, ordinance, rule, regulation, or law. 1.6.3 Grantor will not use, generate, manufacture, produce, store, release, discharge, or dispose of on, under or about the Property or the Property's groundwater, or transport to or from the Property, any Hazardous Substance and will not permit any other person to do so, except for such Hazardous Substances that may be used in the ordinary course of Grantor's business and in compliance with all Environmental Laws, including but not limited to those relating to licensure, notice, and recordkeeping. 1.6.4 Grantor will keep and maintain the Property in compliance with, and shall not cause or permit all or any portion of the Property, including groundwater, to be in violation of any Environmental Law.
1.6.5 of: 1.6.5.1 Any proceeding, inquiry, or notice by or from Grantor shall give prompt written notice to Beneficiary

any governmental authority with respect to any alleged violation of any Environmental Law or the presence of any Hazardous Substance on the Property or the migration of any Hazardous Substance front or to other premises; 1.6.5.2 All known claims made or threatened by any person against Grantor or with respect to the Property or Improvements relating to any loss or injury resulting from any Hazardous Substance or the violation of any Environmental Law; 1.6.5.3 The existence of any Hazardous Substance on or about all or any portion of the Property; or 1.6.5.4 Grantor's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could in Grantor's judgment cause any restrictions on the ownership, occupancy, transferability, or use of the Property under any Environmental Law. 1.6.6 Grantor shall promptly provide to Beneficiary copies of all reports, documents, and notices provided to or received from any agency administering any Environmental Laws. Beneficiary shall have the right to join and participate, in its own name if it so elects, in any legal proceeding or action initiated with respect to the Property or Improvements in connection with any Environmental Law and have its attorney fees in connection with such an action paid by Grantor, if Beneficiary determines that such participation is reasonably necessary to protect its interest in the Trust Property. 5

1.6.7 If, at any time, Beneficiary has reason to believe that any release, discharge, or disposal of any Hazardous Substance affecting the Property or Improvements has occurred or is threatened, or if Beneficiary has reason to believe that a violation of an Environmental Law has occurred or may occur with respect to the Property or Improvements, Beneficiary may require Grantor to obtain or may itself obtain, at Grantor's expense, an environmental assessment of such condition or threatened condition by a qualified environmental consultant. Grantor shall promptly provide to Beneficiary a complete copy of any environmental assessment obtained by Grantor. 1.6.8 In the event that any investigation, site monitoring, containment, cleanup, removal, restoration, or other remedial work of any kind or nature (the "Remedial Work") is required under any applicable Environmental Law, any judicial order, or by any governmental agency or person because of, or in connection with, the current or future presence, suspected presence, release or suspected release of a Hazardous Substance on, under, or about

1.6.7 If, at any time, Beneficiary has reason to believe that any release, discharge, or disposal of any Hazardous Substance affecting the Property or Improvements has occurred or is threatened, or if Beneficiary has reason to believe that a violation of an Environmental Law has occurred or may occur with respect to the Property or Improvements, Beneficiary may require Grantor to obtain or may itself obtain, at Grantor's expense, an environmental assessment of such condition or threatened condition by a qualified environmental consultant. Grantor shall promptly provide to Beneficiary a complete copy of any environmental assessment obtained by Grantor. 1.6.8 In the event that any investigation, site monitoring, containment, cleanup, removal, restoration, or other remedial work of any kind or nature (the "Remedial Work") is required under any applicable Environmental Law, any judicial order, or by any governmental agency or person because of, or in connection with, the current or future presence, suspected presence, release or suspected release of a Hazardous Substance on, under, or about all or any portion of the Property, or the contamination (whether presently existing or occurring after the date of this Trust Deed) of the buildings, facilities, soil, groundwater, surface water, air, or other elements on or under any other property as a result of Hazardous Substances emanating from the Property, Grantor shall, within 30 days after written demand by Beneficiary for Grantor's performance under this provision (or such shorter period of time as may be required under any applicable law, regulation, order, or agreement), commence and thereafter diligently prosecute to completion, all such Remedial Work. All costs and expenses of such Remedial Work shall be paid by Grantor including, without limitation, Beneficiary's reasonable attorney fees and costs incurred in connection with monitoring or review of the legal aspects of such Remedial Work. In the event Grantor shall fail to timely commence, or cause to be commenced, such Remedial Work, Beneficiary may, but shall not be required to, cause such Remedial Work to be performed. In that event, all costs and expenses incurred in connection with the Remedial Work shall become part of the Obligations secured by this Trust Deed and shall bear interest until paid at the rate provided in the Note. 1.6.9 Grantor shall hold Beneficiary, its directors, officers, employees, agents, successors, and assigns, harmless from, indemnify them for, and defend them against any and all losses, damages, liens, costs, expenses, and liabilities directly or indirectly arising out of or attributable to any violation of any Environmental Law, any breach of Grantor's warranties in this section, or the use, generation, manufacture, production, storage, release, threatened release, discharge, disposal, or presence of a Hazardous Substance on, under, or about the Property, including without limitation the costs of any required repair, cleanup, containment, or detoxification of the Property, the preparation and implementation of any closure, remedial or other required plans, attorney fees and costs (including but not limited to those incurred in any proceeding and in any review or appeal), fees, penalties, and fines. 6

1.6.10 Grantor represents and warrants to Beneficiary that: 1.6.10.1 Neither the Property nor Grantor is in violation of or subject to any existing, pending, or threatened investigation by any governmental authority under any Environmental Law. 1.6.10.2 Grantor has not and is not required by any Environmental Law to obtain any permit or license other than those it has obtained to construct or use the Improvements. 1.6.10.3 To the best of Grantor's knowledge, no Hazardous Substance has ever been used, generated, manufactured, produced, stored, released, discharged, or disposed of on, under, or about the Property in violation of any Environmental Law. 1.6.11 All representations, warranties, and covenants in this section shall survive the satisfaction of the Obligations, the reconveyance of the Trust Property, or the foreclosure of this Trust Deed by any means. 1.7 MAINTENANCE AND IMPROVEMENTS. Grantor shall not permit all or any part of the Improvements to be removed, demolished, or materially altered without Beneficiary's prior written consent; provided, however, that Grantor may remove, demolish, or materially alter such Improvements as become obsolete in the usual conduct of Grantor's business, if the removal or material alteration does not materially detract from the operation of the Grantor's business and if all Improvements that are demolished or removed are promptly replaced with

1.6.10 Grantor represents and warrants to Beneficiary that: 1.6.10.1 Neither the Property nor Grantor is in violation of or subject to any existing, pending, or threatened investigation by any governmental authority under any Environmental Law. 1.6.10.2 Grantor has not and is not required by any Environmental Law to obtain any permit or license other than those it has obtained to construct or use the Improvements. 1.6.10.3 To the best of Grantor's knowledge, no Hazardous Substance has ever been used, generated, manufactured, produced, stored, released, discharged, or disposed of on, under, or about the Property in violation of any Environmental Law. 1.6.11 All representations, warranties, and covenants in this section shall survive the satisfaction of the Obligations, the reconveyance of the Trust Property, or the foreclosure of this Trust Deed by any means. 1.7 MAINTENANCE AND IMPROVEMENTS. Grantor shall not permit all or any part of the Improvements to be removed, demolished, or materially altered without Beneficiary's prior written consent; provided, however, that Grantor may remove, demolish, or materially alter such Improvements as become obsolete in the usual conduct of Grantor's business, if the removal or material alteration does not materially detract from the operation of the Grantor's business and if all Improvements that are demolished or removed are promptly replaced with Improvements of like value and quality. Grantor shall maintain every portion of the Property and Improvements in good repair, working order, and condition, except for reasonable wear and tear, and shall at Beneficiary's election restore, replace, or rebuild all or any part of the Improvements now or hereafter damaged or destroyed by any casualty (whether or not insured against or insurable) or affected by any Condemnation (as defined in Section 2.1 below). Grantor shall not commit, permit, or suffer any waste, strip, or deterioration of the Trust Property. 1.8 LIENS. Grantor shall pay when due all claims for labor, materials, or supplies that if unpaid might become a lien on all or any portion of the Trust Property. Grantor shall not create, or suffer, or permit to be created, any mortgage, deed of trust, lien, security interest, charge, or encumbrance upon the Trust Property prior to, on a parity with, or subordinate to the lien of this Trust Deed, except as specifically provided in Exhibit "B." 1.9 TALES AND IMPOSITIONS. 1.9.1 Grantor shall pay or cause to be paid, when due and before any fine, penalty, interest, or cost attaches, all taxes, assessments, fees, levies, and all other governmental and nongovernmental charges of every nature now or hereafter assessed or levied against any part of the Trust Property (including, without limitation, levies or charges resulting from Covenants), or on the lien or estate of Beneficiary or Trustee (collectively, the "Impositions"); provided, however, that if by law any such Imposition may be paid in 7

installments, whether or not interest shall accrue on the unpaid balance, Grantor may pay the same in installments, together with accrued interest on the unpaid balance, as the same become due, before any fine, penalty, or coat attaches. 1.9.2 Grantor may, at its expense and after prior notice to Beneficiary, contest by appropriate legal, administrative, or other proceedings conducted in good faith and with due diligence, the amount, validity, or application, in whole or in part, of any Imposition or lien on the Trust Property or any claim of any laborer, materialman, supplier, or vendor or lien, and may withhold payment of the same pending completion of such proceedings if permitted by law, provided that (a) such proceedings shall suspend collection from the Trust Property; (b) no part of or interest in the Trust Property will be sold, forfeited, or lost if Grantor pays the amount or satisfies the condition being contested, and Grantor would have the opportunity to do so in the event of Grantor's failure to prevail in the contest; (c) neither Beneficiary nor Trustee shall, by virtue of such permitted contest, be exposed to any risk of liability for which Grantor has not furnished additional security as provided in clause (d) below; and (d) Grantor shall have furnished to Beneficiary cash, corporate surety bond, or other additional security in respect of the claim being contested or the loss or damage that may result from Grantor's

installments, whether or not interest shall accrue on the unpaid balance, Grantor may pay the same in installments, together with accrued interest on the unpaid balance, as the same become due, before any fine, penalty, or coat attaches. 1.9.2 Grantor may, at its expense and after prior notice to Beneficiary, contest by appropriate legal, administrative, or other proceedings conducted in good faith and with due diligence, the amount, validity, or application, in whole or in part, of any Imposition or lien on the Trust Property or any claim of any laborer, materialman, supplier, or vendor or lien, and may withhold payment of the same pending completion of such proceedings if permitted by law, provided that (a) such proceedings shall suspend collection from the Trust Property; (b) no part of or interest in the Trust Property will be sold, forfeited, or lost if Grantor pays the amount or satisfies the condition being contested, and Grantor would have the opportunity to do so in the event of Grantor's failure to prevail in the contest; (c) neither Beneficiary nor Trustee shall, by virtue of such permitted contest, be exposed to any risk of liability for which Grantor has not furnished additional security as provided in clause (d) below; and (d) Grantor shall have furnished to Beneficiary cash, corporate surety bond, or other additional security in respect of the claim being contested or the loss or damage that may result from Grantor's failure to prevail in such contest in an amount sufficient to discharge the Imposition and all interest, costs, attorney fees, and other charges that may accrue in connection with the Imposition. Grantor shall promptly satisfy any final judgment. 1.9.3 Grantor shall furnish to Beneficiary, promptly upon request, satisfactory evidence of the payment of all impositions. Beneficiary is hereby authorized to request and receive from the responsible governmental and nongovernmental personnel written statements with respect to the accrual and payment of all Impositions. 1.10 BOOKS AND RECORDS; INSPECTION OF THE PROPERTY. Grantor shall keep complete and accurate records and books of account with respect to the Trust Property and its operation in accordance with generally accepted accounting principles consistently applied. Grantor shall permit Trustee, Beneficiary, and their authorized representatives to enter and inspect the Property and the Improvements, and to examine and make copies or extracts of the records and books of account of the Grantor with respect to the Property and the Improvements, all at each reasonable times as Beneficiary or Trustee may choose. 1.11 LIMITATIONS OF USE. Grantor shall not initiate, join in, or consent to any rezoning of the Property or any change in any Covenant or other public or private restrictions limiting or defining the uses that may be made of all or any part of the Property and the Improvements without the prior written consent of Beneficiary. 1.12 INSURANCE. 1.12.1 PROPERTY AND OTHER INSURANCE. Grantor shall obtain and maintain in full force and effect during the term of this Trust Deed: (a) a conventional homeowner's policy of insurance (containing a provision for comprehensive general liability coverage for no less than $1,000,000 combined single limit coverage) for at least the full replacement cost of 8

all Improvements, without reduction for co-insurance; (b) such other insurance coverages, which at the time are commonly carried for similar property, in such amounts as Beneficiary may require. 1.12.2 INSURANCE COMPANIES AND POLICIES. All insurance shall be written by a company or companies reasonably acceptable to Beneficiary with a rating of A VIII or better as provided in Best's Rating Guide; shall contain a long form mortgagee clause in favor of Beneficiary with loss proceeds under any policy payable to Beneficiary, subject to the terms of this Trust Deed; shall require 30 days' prior written notice to Beneficiary of cancellation or reduction in coverage; shall contain waivers of subrogation and endorsements that no act or negligence of Grantor or any occupant, and no occupancy or use of the Property for purposes more hazardous than permitted by the terms of the policy will affect the validity or enforceability of such insurance as against Beneficiary; shall be in full force and effect on the date of this Trust Deed; and shall be accompanied by proof of premiums paid for the current policy year. Beneficiary shall be named as additional insured on all liability policies. Grantor shall forward to Beneficiary, upon request, certificates evidencing the coverages required under this Trust Deed and copies of all policies.

all Improvements, without reduction for co-insurance; (b) such other insurance coverages, which at the time are commonly carried for similar property, in such amounts as Beneficiary may require. 1.12.2 INSURANCE COMPANIES AND POLICIES. All insurance shall be written by a company or companies reasonably acceptable to Beneficiary with a rating of A VIII or better as provided in Best's Rating Guide; shall contain a long form mortgagee clause in favor of Beneficiary with loss proceeds under any policy payable to Beneficiary, subject to the terms of this Trust Deed; shall require 30 days' prior written notice to Beneficiary of cancellation or reduction in coverage; shall contain waivers of subrogation and endorsements that no act or negligence of Grantor or any occupant, and no occupancy or use of the Property for purposes more hazardous than permitted by the terms of the policy will affect the validity or enforceability of such insurance as against Beneficiary; shall be in full force and effect on the date of this Trust Deed; and shall be accompanied by proof of premiums paid for the current policy year. Beneficiary shall be named as additional insured on all liability policies. Grantor shall forward to Beneficiary, upon request, certificates evidencing the coverages required under this Trust Deed and copies of all policies. 1.12.3 BLANKET POLICY. If a blanket policy is issued, a certified copy of such policy shall be furnished together with a certificate indicating that the Trust Property and Beneficiary are insured under such policy in the proper designated amount. 1.12.4 INSURANCE PROCEEDS. All proceeds from any insurance on the Trust Property shall be used in accordance with the provisions of Section 1.14. 1.13 ASSIGNMENTS OF POLICIES UPON FORECLOSURE. In the event of foreclosure of the lien of this Trust Deed or other transfer of title, or assignment of the Trust Property in whole or in part, all right, title, and interest of Grantor in and to all policies of insurance shall inure to the benefit of and pass to the successors in interest of Grantor or the purchaser or grantee of all or any part of the Trust Property. 1.14 CASUALTY/LOSS RESTORATION. 1.14.1 After the occurrence of any casualty to the Property, whether or not required to be insured against as provided in this Treat Deed, Grantor shall give prompt written notice of the casualty to Beneficiary, specifically describing the nature and cause of such casualty and the extent of the damage or destruction to the Trust Property. Beneficiary may make proof of loss if it is not made promptly and to Beneficiary's satisfaction by Grantor. 1.14.2 Subject to the rights of any superior mortgagee or trust deed, Grantor assigns to Beneficiary all insurance proceeds that Grantor may be entitled to receive with respect to any casualty. Beneficiary may, at its sole option, apply the insurance proceeds to the reduction of the Obligations in such order as Beneficiary may determine, whether or not such obligations are then due, or apply all or any portion of the insurance proceeds to the cost of restoring and rebuilding the portion of the Trust Property that was damaged or destroyed. In the event that Beneficiary elects to apply the insurance proceeds to rebuilding and 9

restoration, Beneficiary shall be entitled to hold the proceeds, and the proceeds shall be released only on such terms and conditions as Beneficiary shall require in its sole discretion, including but not limited to prior approval of plans and release of liens. No proceeds shall be released if Grantor is in default under this Trust Deed. 1.15 ACTIONS TO PROTECT TRUST PROPERTY; RESERVES. 1.15.1 If Grantor shall fail to obtain the insurance required, make; the payments required by Section 1.9 (other than payments that Grantor is contesting in accordance with Section 1.9(2)), or perform or observe any of its other covenants or agreements under this Trust Deed, Beneficiary may, without obligation to do so, obtain or pay the same or take other action that it deems appropriate to remedy such failure. All sums, including reasonable attorney fees, so expended or expended to maintain the lien or estate of this Trust Deed or its priority, or to protect or enforce any of Beneficiary's rights, or to recover any indebtedness secured by this Trust Deed, shall be a lien on the Trust Property, shall be secured by this Trust Deed, and shall be paid by Grantor upon demand,

restoration, Beneficiary shall be entitled to hold the proceeds, and the proceeds shall be released only on such terms and conditions as Beneficiary shall require in its sole discretion, including but not limited to prior approval of plans and release of liens. No proceeds shall be released if Grantor is in default under this Trust Deed. 1.15 ACTIONS TO PROTECT TRUST PROPERTY; RESERVES. 1.15.1 If Grantor shall fail to obtain the insurance required, make; the payments required by Section 1.9 (other than payments that Grantor is contesting in accordance with Section 1.9(2)), or perform or observe any of its other covenants or agreements under this Trust Deed, Beneficiary may, without obligation to do so, obtain or pay the same or take other action that it deems appropriate to remedy such failure. All sums, including reasonable attorney fees, so expended or expended to maintain the lien or estate of this Trust Deed or its priority, or to protect or enforce any of Beneficiary's rights, or to recover any indebtedness secured by this Trust Deed, shall be a lien on the Trust Property, shall be secured by this Trust Deed, and shall be paid by Grantor upon demand, together with interest at the rate provided in the Note. No payment or other action by Beneficiary under this section shall impair any other right or remedy available to Beneficiary or constitute a waiver of any default. 1.15.2 If Grantor fails to promptly perform any of its obligations under Section 1.9 or 1.12 of this Trust Deed, Beneficiary may require Grantor thereafter to pay and maintain with Beneficiary reserves for payment of such obligations. In that event, Grantor shell pay to Beneficiary each month a sum estimated by Beneficiary to be sufficient to produce, at least 20 days before due, an amount equal to the Impositions and/or insurance premiums. If the sums so paid are insufficient to satisfy any Imposition or insurance premium when due, Grantor shall pay any deficiency to Beneficiary upon demand. The reserves may be commingled with Beneficiary's other funds, and Beneficiary shall not be required to pay interest to Grantor on such reserves. Beneficiary shall not hold the reserve in trust for Grantor, and Beneficiary shall not be the agent of Grantor for payment of the taxes and assessments required to be paid by Grantor. 1.16 INTENTIONALLY OMITTED. 1.17 INTENTIONALLY OMITTED. ARTICLE 2 CONDEMNATION 2.1 CONDEMNATION. 2.1.1 Should any part of or interest in the Trust Property be taken or damaged by reason of any public improvement, eminent domain, condemnation proceeding, or in any similar manner (a "Condemnation"), or should Grantor receive any notice or other information regarding such action, Grantor shall give immediate notice of such action to Beneficiary. 10

2.1.2 Subject to the rights of any superior mortgagee or trust deed beneficiary as provided below, Beneficiary shall be entitled to all compensation, awards, and other payments or relief ("Condemnation Proceeds") up to the full amount of the Obligations, and shall be entitled, at its option, to commence, appear in, and prosecute any Condemnation proceeding in its own or Grantor's name and make any compromise or settlement in connection with such Condemnation. In the event the Trust property is taken in its entirety by condemnation, all Obligations secured by this Trust Deed, at Beneficiary's election, shall become immediately due and collectible. 2.1.3 Beneficiary may, at its sole option, apply the Condemnation Proceeds to the reduction of the Obligations in such order as Beneficiary may determine, or apply all or any portion of the Condemnation Proceeds to the cost of restoring and improving the remaining Trust Property. In the event that Beneficiary elects to apply the Condemnation Proceeds to restoration and improvement, the proceeds shall be held by Beneficiary and shall be released only upon such terms and conditions as Beneficiary shall require in its sole discretion, including but not limited to prior approval of plans and release of liens. No Condemnation Proceeds shall be released if Grantor is in default under this Trust Deed.

2.1.2 Subject to the rights of any superior mortgagee or trust deed beneficiary as provided below, Beneficiary shall be entitled to all compensation, awards, and other payments or relief ("Condemnation Proceeds") up to the full amount of the Obligations, and shall be entitled, at its option, to commence, appear in, and prosecute any Condemnation proceeding in its own or Grantor's name and make any compromise or settlement in connection with such Condemnation. In the event the Trust property is taken in its entirety by condemnation, all Obligations secured by this Trust Deed, at Beneficiary's election, shall become immediately due and collectible. 2.1.3 Beneficiary may, at its sole option, apply the Condemnation Proceeds to the reduction of the Obligations in such order as Beneficiary may determine, or apply all or any portion of the Condemnation Proceeds to the cost of restoring and improving the remaining Trust Property. In the event that Beneficiary elects to apply the Condemnation Proceeds to restoration and improvement, the proceeds shall be held by Beneficiary and shall be released only upon such terms and conditions as Beneficiary shall require in its sole discretion, including but not limited to prior approval of plans and release of liens. No Condemnation Proceeds shall be released if Grantor is in default under this Trust Deed. ARTICLE 3 ASSIGNMENT OF LEASES, RENTS, ISSUES, AND PROFITS 3.1 ASSIGNMENT. Grantor assigns and transfers to Beneficiary (1) all leases, subleases, licenses, rental contracts, and other agreements, whether now existing or hereafter arising, and relating to the occupancy or use of all or any portion of the Trust Property, including all modifications, extensions, and renewals thereof (the "Leases"), and (2) all rents, revenues, issues, profits, income, proceeds, and benefits derived from the Trust Property and the lease, rental, or license of all or any portion thereof, including but not limited to lease and security deposits (collectively, the "Rents"). This assignment is intended by Grantor and Beneficiary to create a present and unconditional assignment to Beneficiary, subject only to the license sot forth in Section 3.4 below. 3.2 RIGHTS OF BENEFICIARY. Subject to the provisions of Section 3.4 below giving Grantor a revocable, limited license, Beneficiary shall have the right, power, and authority to: 3.2.1 Notify any and all tenants, renters, licensees, and other obligors under any of the Leases that the same have been assigned to Beneficiary and that all Rents are to be paid directly to Beneficiary, whether or not Beneficiary shall have foreclosed or commenced foreclosure proceedings against the Trust Property, and whether or not Beneficiary has taken possession of the Trust Property; 3.2.2 Discount, settle, compromise, release, or extend the time for payment of, any amounts owing under any of the Leases and any Rents, in whole or in part, on terms acceptable to Beneficiary; 11

3.2.3 Collect and enforce payment of Rents and all provisions of the Leases, and to prosecute any action or proceeding, in the name of Grantor or Beneficiary, with respect to any and all Lenses and Rents; and 3.2.4 Exercise any and all other rights and remedies of the lessor in connection with any of the Leases and Rents. 3.3 APPLICATION OF RECEIPTS. Beneficiary shall have the right, power, and authority to use and apply any Rents received under this Trust Deed (1) for the payment of any and all costs and expenses incurred in connection with enforcing or defending the terms of this assignment or the rights of Beneficiary, and in collecting any Rents; and (2) for the operation and maintenance of the Trust Property and the payment of all costs and expenses in connection therewith, including but not limited to the payment of utilities, taxes, assessments, governmental charges, and insurance. After the payment of all such costs and expenses, and after Beneficiary shall have set up such reserves as it shall deem necessary in its sole discretion for the proper management of the Trust Property, Beneficiary shall apply all remaining Rents collected and received by it to the reduction of the Obligations in such order as Beneficiary shall determine. The exercise or failure by Beneficiary to exercise any of the rights or powers granted in this assignment shall not constitute a waiver of default by Grantor under this Trust Deed, the Note, the Guaranty, or any of the other Loan Documents.

3.2.3 Collect and enforce payment of Rents and all provisions of the Leases, and to prosecute any action or proceeding, in the name of Grantor or Beneficiary, with respect to any and all Lenses and Rents; and 3.2.4 Exercise any and all other rights and remedies of the lessor in connection with any of the Leases and Rents. 3.3 APPLICATION OF RECEIPTS. Beneficiary shall have the right, power, and authority to use and apply any Rents received under this Trust Deed (1) for the payment of any and all costs and expenses incurred in connection with enforcing or defending the terms of this assignment or the rights of Beneficiary, and in collecting any Rents; and (2) for the operation and maintenance of the Trust Property and the payment of all costs and expenses in connection therewith, including but not limited to the payment of utilities, taxes, assessments, governmental charges, and insurance. After the payment of all such costs and expenses, and after Beneficiary shall have set up such reserves as it shall deem necessary in its sole discretion for the proper management of the Trust Property, Beneficiary shall apply all remaining Rents collected and received by it to the reduction of the Obligations in such order as Beneficiary shall determine. The exercise or failure by Beneficiary to exercise any of the rights or powers granted in this assignment shall not constitute a waiver of default by Grantor under this Trust Deed, the Note, the Guaranty, or any of the other Loan Documents. 3.4 LICENSE. Beneficiary hereby grants to Grantor a revocable license to collect and receive the Rents. Such license may be revoked by Beneficiary, without notice to Grantor, upon the occurrence of any event of default under this Trust Deed, including any default by Grantor of its covenants in this Article 3. Unless and until such license is revoked, Grantor agrees to apply the proceeds of Rents to the payment of the Obligations and to the payment of taxes, assessments, governmental charges, insurance premiums, and other obligations in connection with the Trust Property, and to the maintenance of the Trust Property, before using such proceeds for any other purpose. Grantor agrees to (1) observe and perform every obligation of Grantor under the Leases; (2) enforce or secure at its expense the performance of every obligation to be performed by any lessee or other party under the Leases; (3) promptly give notice to Beneficiary of any default by any such lessee or other party under any of the Leases, and promptly provide Beneficiary a copy of any notice of default given to any such lessee or other party; (4) not collect any Rents more than 30 days in advance of the time when the same shall become due, or anticipate any other payments under the Leases, except for bona fide security deposits not in excess of an amount equal to two months' rent; (5) not further assign or hypothecate any of the Leases or Rents; (6) except with Beneficiary's prior written consent, not waive, release, or in any other manner discharge any lessee or other party from any of its obligations under any of the Leases; (7) except with Beneficiary's prior written consent, not modify or amend any of the Leases; (8) except with Beneficiary's prior written consent, not cancel, terminate, or accept surrender of any of the Leases unless Grantor shall have entered into a Lease for the space to be vacated on terms at least as favorable to Grantor, commencing within 30 days after such cancellation, termination, or surrender; (9) obtain Beneficiary's prior written approval as to the form and content of all future leases and any modifications of any present or future leases; (10) deliver copies of all present and future 12

leases to Beneficiary promptly; and (11) appear in and defend, at Grantor's sole cost and expense, any action or proceeding arising out of or in connection with the Leases or the Rents. 3.5 LIMITATION OF BENEFICIARY'S OBLIGATIONS. Notwithstanding the assignment provided for in this Article 3, Beneficiary shall not be obligated to perform or discharge, and Beneficiary does not undertake to perform or discharge, any obligation or liability with respect to the Leases or the Rents. This assignment shall not operate to place responsibility for the control, care, maintenance, or repair of the Trust Property upon Beneficiary, or to make Beneficiary responsible for any condition of the Property. Beneficiary shall be accountable to Grantor only for the sums actually collected and received by Beneficiary pursuant to this assignment. Grantor shall hold Beneficiary fully harmless from, indemnify Beneficiary for, and defend Beneficiary against any and all claims, demands, liabilities, losses, damages, and expenses, including attorney fees, arising out of any of the Leases, with respect to any of the Rents, or in connection with any claim that may be asserted against Beneficiary on account of this assignment or any obligation or undertaking alleged to arise therefrom. 3.6 TERMINATION. The assignment provided for in this Article 3 shall continue in full force and effect until all

leases to Beneficiary promptly; and (11) appear in and defend, at Grantor's sole cost and expense, any action or proceeding arising out of or in connection with the Leases or the Rents. 3.5 LIMITATION OF BENEFICIARY'S OBLIGATIONS. Notwithstanding the assignment provided for in this Article 3, Beneficiary shall not be obligated to perform or discharge, and Beneficiary does not undertake to perform or discharge, any obligation or liability with respect to the Leases or the Rents. This assignment shall not operate to place responsibility for the control, care, maintenance, or repair of the Trust Property upon Beneficiary, or to make Beneficiary responsible for any condition of the Property. Beneficiary shall be accountable to Grantor only for the sums actually collected and received by Beneficiary pursuant to this assignment. Grantor shall hold Beneficiary fully harmless from, indemnify Beneficiary for, and defend Beneficiary against any and all claims, demands, liabilities, losses, damages, and expenses, including attorney fees, arising out of any of the Leases, with respect to any of the Rents, or in connection with any claim that may be asserted against Beneficiary on account of this assignment or any obligation or undertaking alleged to arise therefrom. 3.6 TERMINATION. The assignment provided for in this Article 3 shall continue in full force and effect until all the Obligations have been fully paid and satisfied. At such time, this assignment and the authority and powers herein granted by Grantor to Beneficiary shall cease and terminate. 3.7 ATTORNEY-IN-FACT. Grantor irrevocably constitutes and appoints Beneficiary, and each of its officers, as its true and lawfully attorney-in-fact, with power of substitution, to undertake and execute any and all of the rights, powers, and authorities described in this Article 3 with the same force and effect as if undertaken or performed by Grantor, and Grantor ratifies and confirms any and all such actions that may be taken or omitted to be taken by Beneficiary, its employees, agents, and attorneys. ARTICLE 4 EVENTS OF DEFAULT; REMEDIES 4.1 EVENTS OF DEFAULT. Each of the following shall constitute an event of default under this Trust Deed and under each of the other Loan Documents: 4.1.1 NONPAYMENT. Failure of Grantor to pay any of the Obligations before the due date. 4.1.2 BREACH OF OTHER COVENANTS. Failure of Grantor to perform or abide by any other covenant included in the Obligations, including without limitation those covenants in the Guaranty, in this Trust Deed, or in any other Loan Document. 4.1.3 MISINFORMATION. Falsity when made in any material respect of any representation, warranty, or information furnished by Grantor or its agents to Beneficiary in or in connection with any of the Obligations. 13

4.1.4 OTHER DEFAULT; NOTE. The occurrence of any other event of default under the Guaranty or any of the other Obligations or a default by Debtor of any of its obligations to Beneficiary, including without limitation a default under the Note. 4.1.5 OTHER INDEBTEDNESS, SECONDARY FINANCING. Grantor's default beyond the applicable grace periods in the payment of any other indebtedness owed by Grantor to any person, if such indebtedness is secured by all or any portion of the Trust Property. 4.1.6 BANKRUPTCY. The occurrence of any of the following with respect to Grantor, any guarantor of the Obligations, or the then-owner of the Trust Property: (a) appointment of a receiver, liquidator, or trustee for any such party or any of its properties; (b) adjudication as a bankrupt or insolvent; (c) filing of any petition by or against any such party under any state or federal bankruptcy, reorganization, moratorium or insolvency law; (d) institution of any proceeding for dissolution or liquidation; (e) inability to pay debts when due; (f) any general assignment for the benefit of creditors; or (g) abandonment of the Trust Property.

4.1.4 OTHER DEFAULT; NOTE. The occurrence of any other event of default under the Guaranty or any of the other Obligations or a default by Debtor of any of its obligations to Beneficiary, including without limitation a default under the Note. 4.1.5 OTHER INDEBTEDNESS, SECONDARY FINANCING. Grantor's default beyond the applicable grace periods in the payment of any other indebtedness owed by Grantor to any person, if such indebtedness is secured by all or any portion of the Trust Property. 4.1.6 BANKRUPTCY. The occurrence of any of the following with respect to Grantor, any guarantor of the Obligations, or the then-owner of the Trust Property: (a) appointment of a receiver, liquidator, or trustee for any such party or any of its properties; (b) adjudication as a bankrupt or insolvent; (c) filing of any petition by or against any such party under any state or federal bankruptcy, reorganization, moratorium or insolvency law; (d) institution of any proceeding for dissolution or liquidation; (e) inability to pay debts when due; (f) any general assignment for the benefit of creditors; or (g) abandonment of the Trust Property. 4.1.7 TRANSFER; DUE-ON-SALE; DATE-ON-ENCUMBRANCE. Any sale, gift, conveyance, contract for conveyance, transfer, assignment, encumbrance, pledges, or grant of a security interest in all or any part of the Trust Property, or any interest therein, either voluntarily, involuntarily, or by the operation of law (a "Transfer"), without Beneficiary's prior written consent, shall constitute an event of default. For the purpose of clarification, and without limiting the generality of the foregoing, the occurrence at any time of any sale, conveyance, assignment, or other transfer of, or the grant of a pledge of or security interest in, any shares of the capital stock of Grantor shall be deemed to be a Transfer in violation of this paragraph. The provisions of this subsection shall apply to each and every Transfer, regardless of whether or not Beneficiary has consented or waived its rights in connection with any previous Transfer. Beneficiary may attach such conditions to its consent as Beneficiary may determine in its sole discretion, including without limitation an increase in the interest rate or the payment of transfer or assumption fees, and the payment of administrative and legal fees and costs incurred by Beneficiary. 4.1.7.1 LIENS; TAXES. There is placed upon the Property any lien not disclosed on Exhibit B (other than the lien of this Trust Deed); Grantor fails to pay when due any tax or Imposition of any kind due upon the Property. 4.2 REMEDIES IN CASE OF DEFAULT. If an Event of Default shall occur, Beneficiary or Trustee may exercise any one or more of the following rights and remedies, in addition to any other remedies that may be available by law, in equity, or otherwise: 4.2.1 ACCELERATION. Beneficiary may declare all or any portion of the Obligations immediately due and payable. 4.2.2 RECEIVER. Beneficiary may have a receiver appointed for the Trust Property. Beneficiary shall he entitled to the appointment of a receiver as a matter of right whether or not the apparent value of the Trust Property exceeds the amount of the indebtedness 14

secured by this Trust Deed. Employment by Trustee or Beneficiary shall not disqualify a person from serving as receiver. Grantor consents to the appointment of a receiver at Beneficiary's option and waives any and all defenses to such an appointment. 4.2.3 POSSESSION. Beneficiary may, either through a receiver or as lender-in-possession, enter and take possession of all or any part of the Trust Property and use, operate, manage, and control it as Beneficiary shall deem appropriate in its sole discretion. Upon request after an Event of Default, Grantor shall peacefully relinquish possession and control of the Trust Property to Beneficiary or any receiver appointed under this Trust Deed. 4.2.4 RENTS. Beneficiary may revoke Grantor's right to collect the Rents, and may, either itself or through a receiver, collect the same. Beneficiary shall not be deemed to be in possession of the Property solely by reason of exercise of the rights contained in this subsection 4.2.4. It Rents are collected by Beneficiary tinder this subsection 4.2.4, Grantor hereby irrevocably appoints Beneficiary as Grantor's attorney-in-fact, with power of

secured by this Trust Deed. Employment by Trustee or Beneficiary shall not disqualify a person from serving as receiver. Grantor consents to the appointment of a receiver at Beneficiary's option and waives any and all defenses to such an appointment. 4.2.3 POSSESSION. Beneficiary may, either through a receiver or as lender-in-possession, enter and take possession of all or any part of the Trust Property and use, operate, manage, and control it as Beneficiary shall deem appropriate in its sole discretion. Upon request after an Event of Default, Grantor shall peacefully relinquish possession and control of the Trust Property to Beneficiary or any receiver appointed under this Trust Deed. 4.2.4 RENTS. Beneficiary may revoke Grantor's right to collect the Rents, and may, either itself or through a receiver, collect the same. Beneficiary shall not be deemed to be in possession of the Property solely by reason of exercise of the rights contained in this subsection 4.2.4. It Rents are collected by Beneficiary tinder this subsection 4.2.4, Grantor hereby irrevocably appoints Beneficiary as Grantor's attorney-in-fact, with power of substitution, to endorse instruments received in payment thereof in the name of Grantor and to negotiate such instruments and collect their proceeds. After payment of all Obligations, any remaining amounts shall be paid to Grantor and this power shall terminate. 4.2.5 POWER OF SALE. Beneficiary may direct Trustee, and Trustee shall be empowered, to foreclose the Property by advertisement and sale under applicable law. 4.2.6 FORECLOSURE. Beneficiary may judicially foreclose this Trust Deed and obtain a judgment foreclosing Grantor's interest in all or any part of the Property and giving Beneficiary the right to collect any deficiency remaining due after disposition of the Trust Property. 4.2.7 ABANDONMENT. Beneficiary may abandon all or any portion of the Trust Property by written notice to Grantor. 4.3 SALE. In any sale under this Trust Deed or pursuant to any judgment, the Trust Property, to the extent permitted by law, may be sold as an entirety or in one or more parcels and in such order as Beneficiary may elect, without regard to the right of Grantor, any person claiming under Grantor, or any guarantor or surety to the marshaling of assets. The purchaser at any such sale shall take title to the Trust Property or the part thereof so sold, free and clear of the estate of Grantor, the purchaser being hereby discharged from all liability to see to the application of the purchase money. Any person, including Beneficiary, its officers, agents, and employees, may purchase at any such sale. Beneficiary and each of its officers are irrevocably appointed Grantor's attorney-infact, with power of substitution, to make all appropriate transfers and deliveries of the Trust Property or any portions thereof so sold and, for that purpose, Beneficiary and its officers may execute all appropriate instruments of transfer. Nevertheless, Grantor shall ratify and confirm, or cause to be ratified and confirmed, any such sale or sales by executing and delivering, or by causing to be executed and delivered, to Beneficiary or to such purchaser or purchasers all such instruments as may be advisable, in the judgment of Beneficiary, for such purpose. 15

4.4 CUMULATIVE REMEDIES. All remedies under this Trust Dead are cumulative and not exclusive. Any election to pursue one remedy shall not preclude the exercise of any other remedy. An election by Beneficiary to cure shall not constitute a waiver of the default or of any of the remedies provided in this Trust Deed. No delay or omission in exercising any right or remedy shall impair the full exercise of that or any other right or remedy or constitute a waiver of the default. 4.5 RECEIVER OR TRUSTEE-IN-POSSESSION. Upon taking possession of all or any part of the Trust Property, Trustee, Beneficiary, or a receiver may: 4.5.1 MANAGEMENT. Use, operate, manage, control, and conduct business with the Trust Property and make expenditures for such purposes and for such maintenance and improvements as are deemed reasonably necessary. 4.5.2 RENTS AND REVENUES. Collect all rents, revenues, income, issues, and profits from the Trust Property and apply such sums to the reasonable expenses of use, operation, management, maintenance, and

4.4 CUMULATIVE REMEDIES. All remedies under this Trust Dead are cumulative and not exclusive. Any election to pursue one remedy shall not preclude the exercise of any other remedy. An election by Beneficiary to cure shall not constitute a waiver of the default or of any of the remedies provided in this Trust Deed. No delay or omission in exercising any right or remedy shall impair the full exercise of that or any other right or remedy or constitute a waiver of the default. 4.5 RECEIVER OR TRUSTEE-IN-POSSESSION. Upon taking possession of all or any part of the Trust Property, Trustee, Beneficiary, or a receiver may: 4.5.1 MANAGEMENT. Use, operate, manage, control, and conduct business with the Trust Property and make expenditures for such purposes and for such maintenance and improvements as are deemed reasonably necessary. 4.5.2 RENTS AND REVENUES. Collect all rents, revenues, income, issues, and profits from the Trust Property and apply such sums to the reasonable expenses of use, operation, management, maintenance, and improvements. 4.5.3 CONSTRUCTION. At its option, complete any construction in progress on the Property, and in that connection pay bills, borrow funds, employ contractors, and make any changes in plans and specifications as it deems appropriate. 4.5.4 ADDITIONAL INDEBTEDNESS. If the revenues produced by the Trust Property are insufficient to pay expenses, Beneficiary, Trustee, or the receiver may borrow or advance such sums upon such terms as it deems reasonably necessary for the purposes stated in this section. All advances shall bear interest, unless otherwise provided, at the rate set forth in the Note, and repayment of such sums shall be secured by this Trust Deed. 4.6 APPLICATION OF PROCEEDS. All proceeds realized from the exercise of the rights and remedies under this section shall be applied as follows: 4.6.1 COSTS AND EXPENSES. To pay all costs of exercising such rights and remedies, including the costs of maintaining and preserving the Trust Property, the costs and expenses of any receiver or lender-in-possession, the costs of any sale, and the costs and expenses provided for below. 4.6.2 INDEBTEDNESS. To pay all Obligations, in such order as Beneficiary shall determine in its sole discretion. 4.6.3 SURPLUS. The surplus, if any, remaining after satisfaction of all the Obligations shall be paid to the clerk of the court in the case of a judicial foreclosure proceeding, otherwise to the person or persons legally entitled to the surplus. 4.7 DEFICIENCY. No sale or other disposition of all or any part of the Trust Property pursuant to this section shall be deemed to relieve Grantor of any of the Obligations, except to the extent that the proceeds are applied to the payment of such Obligations. If the proceeds of 16

a sale, a collection, or other realization of or upon the Trust Property are insufficient to cover the costs and expenses of such realization and the payment in full of the Obligations, Grantor shall remain liable for any deficiency to the fullest extent permitted by law. 4.8 WAIVER OF STAY, EXTENSION, MORATORIUM, AND VALUATION LAWS. To the fullest extent permitted by law, Grantor waives the benefit of any existing or future stay, extension, or moratorium law that may affect observance or performance of the provisions of this Trust Deed and any existing or future law providing for the valuation or appraisal of the Trust Property prior to any sale. ARTICLE 5

a sale, a collection, or other realization of or upon the Trust Property are insufficient to cover the costs and expenses of such realization and the payment in full of the Obligations, Grantor shall remain liable for any deficiency to the fullest extent permitted by law. 4.8 WAIVER OF STAY, EXTENSION, MORATORIUM, AND VALUATION LAWS. To the fullest extent permitted by law, Grantor waives the benefit of any existing or future stay, extension, or moratorium law that may affect observance or performance of the provisions of this Trust Deed and any existing or future law providing for the valuation or appraisal of the Trust Property prior to any sale. ARTICLE 5 GENERAL PROVISIONS 5.1 TIME IS OF THE ESSENCE. Time is of the essence with respect to all covenants and obligations of Grantor under this Trust Deed. 5.2 RECONVEYANCE BY TRUSTEE. At any time upon the request of Beneficiary, payment of Trustee's fees, if any, and presentation of this Trust Deed, without affecting liability of any persons for the payment of the Obligations, Trustee may reconvey, without warranty, all or any part of the Trust Property. The grantee in any reconveyance may be described as the "person or persons legally entitled thereto," and the recitals therein of any facts shall be conclusive proof of the truthfulness thereof. 5.3 NOTICE. Except as otherwise provided in this Trust Deed, all notices pertaining to this Trust Deed shall be in writing and may be delivered by hand, or mailed by first class, registered, or certified mail, return-receipt requested, postage prepaid, and addressed to the appropriate party at its address set forth at the outset of this Trust Deed. Any party may change its address for such notices from time to time by notice to the other parties. Notices given by mail in accordance with this paragraph shall be deemed to have been given upon the date of mailing; notices given by hand shall be deemed to have been given when actually received. 5.4 SUBSTITUTE TRUSTEE. In the event of dissolution or resignation of Trustee, Beneficiary may substitute one or more trustees to execute the trust hereby created, and the new trustee(s) shall succeed to all the powers and duties of the prior trustee(s). 5.5 TRUST DEED BINDING ON SUCCESSORS AND ASSIGNS. This Trust Deed shall be binding upon and inure to the benefit of the successors arid assigns of Grantor, Trustee, and Beneficiary. If the Trust Property or any portion thereof shall at any time be vested in any person other than Grantor, Beneficiary shall have the right to deal with such successor regarding this Trust Deed, the Trust Properly, and the Obligations in such manner as Beneficiary deems appropriate in its sole discretion, without notice to or approval by Grantor and without impairing Grantor's liability for the Obligations. 5.6 INDEMNITY. Grantor shall hold Beneficiary and Trustee and their respective directors, officers, employees, agents, and attorneys, harmless from and indemnify them for 17

any and all claims, demands, damages, liabilities, and expenses, including but not limited to attorney fees and court costs, arising out of or in connection with Trustee's or Beneficiary's interest under this Trust Deed, except Grantor shall not be liable for acts performed by Beneficiary or Trustee in violation of applicable law. 5.7 EXPENSES AND ATTORNEY FEES. If Beneficiary refers any of the Obligations to an attorney for collection or seeks legal advice following a default; if Beneficiary is the prevailing party in any litigation instituted in connection with any of the Obligations; or if Beneficiary or any other person initiates any judicial or nonjudicial action, suit, or proceeding in connection with any of the Obligations or the Trust Property (including but not limited so proceedings under federal bankruptcy law, eminent domain, under probate proceedings, or in connection with any state or federal tax lien), and an attorney is employed by Beneficiary to (1) appear in any such action, suit, or proceeding, or (2) reclaim, seek relief from a judicial or statutory stay, sequester, protect, preserve, or enforce Beneficiary's interests, then in any such event Grantor shall pay reasonable attorney fees,

any and all claims, demands, damages, liabilities, and expenses, including but not limited to attorney fees and court costs, arising out of or in connection with Trustee's or Beneficiary's interest under this Trust Deed, except Grantor shall not be liable for acts performed by Beneficiary or Trustee in violation of applicable law. 5.7 EXPENSES AND ATTORNEY FEES. If Beneficiary refers any of the Obligations to an attorney for collection or seeks legal advice following a default; if Beneficiary is the prevailing party in any litigation instituted in connection with any of the Obligations; or if Beneficiary or any other person initiates any judicial or nonjudicial action, suit, or proceeding in connection with any of the Obligations or the Trust Property (including but not limited so proceedings under federal bankruptcy law, eminent domain, under probate proceedings, or in connection with any state or federal tax lien), and an attorney is employed by Beneficiary to (1) appear in any such action, suit, or proceeding, or (2) reclaim, seek relief from a judicial or statutory stay, sequester, protect, preserve, or enforce Beneficiary's interests, then in any such event Grantor shall pay reasonable attorney fees, costs, and expenses incurred by Beneficiary or its attorney in connection with the above-mentioned events or any appeals related to such events, including but not limited to costs incurred in searching records, the cost of title reports, and the cost of surveyors' reports. Such amounts shall be secured by this Trust Deed and, if not paid upon demand, shall bear interest at the rate specified in the Note. 5.8 APPLICABLE LAW. The Trust Deed and the validity, interpretation, performance, and enforcement of the Trust Deed shall be governed by the laws of the state of Oregon. 5.9 CAPTIONS. The captions to the sections and paragraphs of this Trust Deed are included only for the convenience of the parties and shall not have the effect of defining, diminishing, or enlarging the rights of the parties or affecting the construction or interpretation of any portion of this Trust Deed. 5.10 INTENTIONALLY OMITTED. 5.11 PERSON DEFINED. As used in this Trust Deed, the word person shall mean any natural person, partnership, trust, corporation, or other legal entity, of any nature. 5.12 SEVERABILITY. If any provision of this Trust Deed shall be held to be invalid, illegal, or unenforceable, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Trust Deed, and such other provisions shall be construed as if the invalid, illegal, or unenforceable provision had never been contained in the Trust Deed. 5.13 ENTIRE AGREEMENT. This Trust Deed contains the entire agreement of the parties with respect to the Trust Property. No prior agreement, statement, or promise made by any party to this Trust Deed that is not contained herein shall be binding or valid. 5.14 INTENTIONALLY OMITTED. 5.15 INTENTIONALLY OMITTED. 18

5.16 ORS 93.040 WARNING. THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930. GRANTOR
/s/ RICHARD G. SASS ------------------------------------------RICHARD G. SASS

5.16 ORS 93.040 WARNING. THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930. GRANTOR
/s/ RICHARD G. SASS ------------------------------------------RICHARD G. SASS

/s/ JENNIFER B. SASS ------------------------------------------JENNIFER B. SASS

STATE OF OREGON County of Multnomah

) ) ss. )

On this 17 day of April, 2000, before me personally appeared Richard G. Sass, who being duly sworn, acknowledged the foregoing instrument to be his voluntary act and deed.
/s/ JANE. K. CONNER ------------------------------------------Notary Public for Oregon My commission expires: 1-20-01

STATE OF OREGON County of Multnomah

) ) ss. )

On this 17 day of April, 2000, before me personally appeared Jennifer B. Sass, who being duly sworn, acknowledged the foregoing instrument to be her voluntary act and deed.
/s/ JANE K. CONNER ------------------------------------------Notary Public for Oregon My commission expires: 1-20-01

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EXHIBIT "A" LEGAL DESCRIPTION A portion of Lot 9, Corrected Plat of PALATINE HILL, and a triangular strip of land lying between the East line of said Lot 9, the Easterly extension of the South line of said Lot 9, and the Westerly line of SW Palatine Hill Road, in the County of Multnomah and State of Oregon, described as follows: Beginning in the Northeast corner of said Lot 9; thence South 13 degrees21' East along the Easterly line of said

EXHIBIT "A" LEGAL DESCRIPTION A portion of Lot 9, Corrected Plat of PALATINE HILL, and a triangular strip of land lying between the East line of said Lot 9, the Easterly extension of the South line of said Lot 9, and the Westerly line of SW Palatine Hill Road, in the County of Multnomah and State of Oregon, described as follows: Beginning in the Northeast corner of said Lot 9; thence South 13 degrees21' East along the Easterly line of said Lot 9, a distance of 298.82 feet; thence South 55 degrees17' East along the Westerly line of SW Palatine Hill Road, 89.72 feet to the Southerly line of said Plat; thence South 81 degrees30' West along said South line, a distance of 317.75 feet; thence North 43 degrees01'30" West 111.06 feet; thence North 41 degrees04'10" East 142.46 feet; thence North 3 degrees27'30" West 56.98 feet; thence North 18 degrees53' West 150.62 feet to a point on the North line of said Lot 9; thence North 89 degrees45' East along the North line of said Lot 9, a distance of 205.94 feet to the point of beginning. 20

EXHIBIT "B" TITLE EXCEPTIONS 1. Easement created by instrument recorded August 25, 1916 in Book 711, Page 267 of the real property records of Multnomah County, Oregon. 2. Covenant, Conditions and Restrictions created by instrument recorded December 29, 1922 in Book 910, Page 207 of the real property records of Multnomah County, Oregon. 21

EXHIBIT 10.23 STANDARD COMMERCIAL-INDUSTRIAL LEASE 1. PARTIES. This Lease, dated August 1, 2000, for reference purposes only, is made by and between La Bajada Land Company L.L.C., (herein called "Lessor") and MicroHelix Labs (herein called "Lessee"). 2. PREMISES. Lessor hereby leases to Lessee and Lessee leases from Lessor for the term, at the rental, and upon all the conditions set forth herein, that certain real property situated in the County of Pima, State of Arizona, commonly known as 4581 S. Butterfield Dr., attached hereto and made a part hereof. Said real property including the land and all improvements thereon, is herein called "The Premises." All dimensions and areas quoted herein are approximate. 3. TERM. 3.1 TERM. The term of this Lease shall be for three years, commencing on September 1, 2000, and ending on August 31, 2003, unless sooner terminated pursuant to any provision hereof. The term may be extended two (2) years upon mutual agreement of landlord and tenant. 3.2 DELAY IN COMMENCEMENT. Notwithstanding said commencement data, if for any reason Lessor cannot deliver possession of the Premises to Lessee on said date, Lessor shall not be subject to any liability therefore, nor shall failure affect the validity of this Lease or the obligations of Lessee hereunder or extend the term hereof, but in such case Lessee shall not be obligated to pay rent until possession of the Premises is tendered to Lessee; provided, however, that if Lessor, by reason outside the reasonable control of Lessor shall not have delivered possession of the Premises within thirty (30) days from said commencement date, Lessee may, at Lessee's option, by notice in writing to Lessor within ten (10) days thereafter, cancel this Lease, in which

EXHIBIT "B" TITLE EXCEPTIONS 1. Easement created by instrument recorded August 25, 1916 in Book 711, Page 267 of the real property records of Multnomah County, Oregon. 2. Covenant, Conditions and Restrictions created by instrument recorded December 29, 1922 in Book 910, Page 207 of the real property records of Multnomah County, Oregon. 21

EXHIBIT 10.23 STANDARD COMMERCIAL-INDUSTRIAL LEASE 1. PARTIES. This Lease, dated August 1, 2000, for reference purposes only, is made by and between La Bajada Land Company L.L.C., (herein called "Lessor") and MicroHelix Labs (herein called "Lessee"). 2. PREMISES. Lessor hereby leases to Lessee and Lessee leases from Lessor for the term, at the rental, and upon all the conditions set forth herein, that certain real property situated in the County of Pima, State of Arizona, commonly known as 4581 S. Butterfield Dr., attached hereto and made a part hereof. Said real property including the land and all improvements thereon, is herein called "The Premises." All dimensions and areas quoted herein are approximate. 3. TERM. 3.1 TERM. The term of this Lease shall be for three years, commencing on September 1, 2000, and ending on August 31, 2003, unless sooner terminated pursuant to any provision hereof. The term may be extended two (2) years upon mutual agreement of landlord and tenant. 3.2 DELAY IN COMMENCEMENT. Notwithstanding said commencement data, if for any reason Lessor cannot deliver possession of the Premises to Lessee on said date, Lessor shall not be subject to any liability therefore, nor shall failure affect the validity of this Lease or the obligations of Lessee hereunder or extend the term hereof, but in such case Lessee shall not be obligated to pay rent until possession of the Premises is tendered to Lessee; provided, however, that if Lessor, by reason outside the reasonable control of Lessor shall not have delivered possession of the Premises within thirty (30) days from said commencement date, Lessee may, at Lessee's option, by notice in writing to Lessor within ten (10) days thereafter, cancel this Lease, in which event the parties shall be discharged from all obligations hereunder. If Lessee occupies the Premises prior to said commencement date, such occupancy shall be subject to all provisions hereof; such occupancy shall not advance the termination date, and Lessee shall pay rent for such period at the initial monthly rates set forth below, prorated for any partial month of occupancy. 4. RENT. Lessee shall pay, by the first day of each month to Lessor a monthly rental of:
Months Months Months Months Months 1-12 13-24 25-36 37-48 49-60 $3,525 $3,665 $3,810 $4,000 $4,200 per per per per per month month month month month 2000-2001 2001-2002 2002-2003 (optional) (optional)

In lawful money of the United States of America for each and every month of the Lease. The Lessee further agrees to pay in addition to the rent as provided herein, all privilege, sales, excise, and other taxes (except income taxes) imposed by any State, Federal, or municipal agency upon the rentals herein provided to be paid by the Lessee to the Lessor. Said payment shall be in addition to and accompanying each rental payment made by

EXHIBIT 10.23 STANDARD COMMERCIAL-INDUSTRIAL LEASE 1. PARTIES. This Lease, dated August 1, 2000, for reference purposes only, is made by and between La Bajada Land Company L.L.C., (herein called "Lessor") and MicroHelix Labs (herein called "Lessee"). 2. PREMISES. Lessor hereby leases to Lessee and Lessee leases from Lessor for the term, at the rental, and upon all the conditions set forth herein, that certain real property situated in the County of Pima, State of Arizona, commonly known as 4581 S. Butterfield Dr., attached hereto and made a part hereof. Said real property including the land and all improvements thereon, is herein called "The Premises." All dimensions and areas quoted herein are approximate. 3. TERM. 3.1 TERM. The term of this Lease shall be for three years, commencing on September 1, 2000, and ending on August 31, 2003, unless sooner terminated pursuant to any provision hereof. The term may be extended two (2) years upon mutual agreement of landlord and tenant. 3.2 DELAY IN COMMENCEMENT. Notwithstanding said commencement data, if for any reason Lessor cannot deliver possession of the Premises to Lessee on said date, Lessor shall not be subject to any liability therefore, nor shall failure affect the validity of this Lease or the obligations of Lessee hereunder or extend the term hereof, but in such case Lessee shall not be obligated to pay rent until possession of the Premises is tendered to Lessee; provided, however, that if Lessor, by reason outside the reasonable control of Lessor shall not have delivered possession of the Premises within thirty (30) days from said commencement date, Lessee may, at Lessee's option, by notice in writing to Lessor within ten (10) days thereafter, cancel this Lease, in which event the parties shall be discharged from all obligations hereunder. If Lessee occupies the Premises prior to said commencement date, such occupancy shall be subject to all provisions hereof; such occupancy shall not advance the termination date, and Lessee shall pay rent for such period at the initial monthly rates set forth below, prorated for any partial month of occupancy. 4. RENT. Lessee shall pay, by the first day of each month to Lessor a monthly rental of:
Months Months Months Months Months 1-12 13-24 25-36 37-48 49-60 $3,525 $3,665 $3,810 $4,000 $4,200 per per per per per month month month month month 2000-2001 2001-2002 2002-2003 (optional) (optional)

In lawful money of the United States of America for each and every month of the Lease. The Lessee further agrees to pay in addition to the rent as provided herein, all privilege, sales, excise, and other taxes (except income taxes) imposed by any State, Federal, or municipal agency upon the rentals herein provided to be paid by the Lessee to the Lessor. Said payment shall be in addition to and accompanying each rental payment made by Lessee to Lessor. The total rent due under this Lease shall be One Hundred Thirty-Two Thousand Dollars ($132,000), not including applicable rent tax (currently 1% in the City of Tucson). Rent for any period during the term hereof which is for less than one month shall be a pro rata portion of the monthly installment. Rent shall be payable in lawful money of the United States to Lessor at the address stated herein or to such other persons or at such other places as Lessor may designate in writing. 5. SECURITY DEPOSIT. [Lessee shall deposit with Lessor upon execution] hereof Three Thousand Dollars ($3,000) as security [for] Lessee's faithful performance of Lessee's faithful performance of Lessee's obligations hereunder. If Lessee fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of the Lease, Lessor may use, apply, or retain all or any portion of said deposit for the payment of any rent or other charge in default or for the payment of any other sum to which Lessor may become obligated by

In lawful money of the United States of America for each and every month of the Lease. The Lessee further agrees to pay in addition to the rent as provided herein, all privilege, sales, excise, and other taxes (except income taxes) imposed by any State, Federal, or municipal agency upon the rentals herein provided to be paid by the Lessee to the Lessor. Said payment shall be in addition to and accompanying each rental payment made by Lessee to Lessor. The total rent due under this Lease shall be One Hundred Thirty-Two Thousand Dollars ($132,000), not including applicable rent tax (currently 1% in the City of Tucson). Rent for any period during the term hereof which is for less than one month shall be a pro rata portion of the monthly installment. Rent shall be payable in lawful money of the United States to Lessor at the address stated herein or to such other persons or at such other places as Lessor may designate in writing. 5. SECURITY DEPOSIT. [Lessee shall deposit with Lessor upon execution] hereof Three Thousand Dollars ($3,000) as security [for] Lessee's faithful performance of Lessee's faithful performance of Lessee's obligations hereunder. If Lessee fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of the Lease, Lessor may use, apply, or retain all or any portion of said deposit for the payment of any rent or other charge in default or for the payment of any other sum to which Lessor may become obligated by reason of Lessee's default, or to compensate Lessor for any loss or damage which Lessor may suffer thereby. If Lessor so uses or applies all or any portion of said deposit, Lessee shall within ten (10) days after written demand thereof deposit cash with Lessor in an amount sufficient to restore said deposit to the full amount hereinabove stated, and Lessee's failure to do so shall be a materials breach of this Lease. Lessor shall not be required to keep said deposit separate from its general accounts. If Lessee performs all of the Lessee's obligations hereunder, said deposit, or so much thereof as has not theretofore been applied by Lessor, shall be returned, without payment of interest or other increment for its use, to Lessee (or, at Lessor's option, to the last assignee, if any, of Lessee's interest hereunder) at the expiration of the term hereof, and after Lessee has vacated the Premises. 6. USE. 6.1 USE. The Premises shall be used and occupied only for office, warehouse, repackaging of cables and microelectronic components and related uses. 6.2 COMPLIANCE WITH LAW. Lessee shall at Lessee's expense, comply promptly with all applicable statutes, ordinances, rules, regulations, orders, and requirements in effect during the term or any part of the term hereof regulating the use by Lessee of the Premises. Lessee shall not use or permit the use of the Premises in any manner that will tend to create waste or a nuisance or, if there shall be more than one Tenant of the building containing the Premises, which shall tend to disturb such other Tenants. 2

6.3 CONDITION OF PREMISES. Lessee hereby accepts the Premises in their condition existing as of the date of the execution hereof, subject to Lessor's representation and warranty that as of the Commencement Date of Premises will comply with all applicable zoning, municipal, county and state laws, ordinances, and regulations governing and regulating the use of the Premises. Lessee acknowledges that neither Lessor nor Lessor's agent has made any representation or warranty as to the suitability of the Premises for the conduct of Lessee's business (see Provision 23). 7. MAINTENANCE, REPAIRS AND ALTERATIONS. 7.1 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraph 9, Lessor, at Lessor's expense shall keep in good order, condition, and repair the foundations, exterior walls, and exterior roof of the Premises. The Lessee shall give the Lessor prompt notice of any defects or breakage in the structure, equipment, fixtures, or of any unsafe conditions upon or within the Leased Premises. Lessee expressly waives the benefits of any statute now or hereafter in effect which would otherwise afford Lessee the right to make repairs at Lessor's expense. 7.2 LESSEE'S OBLIGATIONS.

6.3 CONDITION OF PREMISES. Lessee hereby accepts the Premises in their condition existing as of the date of the execution hereof, subject to Lessor's representation and warranty that as of the Commencement Date of Premises will comply with all applicable zoning, municipal, county and state laws, ordinances, and regulations governing and regulating the use of the Premises. Lessee acknowledges that neither Lessor nor Lessor's agent has made any representation or warranty as to the suitability of the Premises for the conduct of Lessee's business (see Provision 23). 7. MAINTENANCE, REPAIRS AND ALTERATIONS. 7.1 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraph 9, Lessor, at Lessor's expense shall keep in good order, condition, and repair the foundations, exterior walls, and exterior roof of the Premises. The Lessee shall give the Lessor prompt notice of any defects or breakage in the structure, equipment, fixtures, or of any unsafe conditions upon or within the Leased Premises. Lessee expressly waives the benefits of any statute now or hereafter in effect which would otherwise afford Lessee the right to make repairs at Lessor's expense. 7.2 LESSEE'S OBLIGATIONS. (a) Lessee shall, at the expense throughout the terms of the Lease, maintain, service, replace, and keep in good repair the interior structures and mechanical equipment, including such items as floors, ceilings, walls, doors, glass, plumbing, painting, heating and cooling equipment, air conditioning, partitions electrical and electrical fixtures, and surrender same upon the expiration of the term herein or renewal thereof in the same condition as received, ordinary wear and use excepted. Lessor hereby warrants that the heating and cooling equipment and air conditioning will be in good working order at the time of occupancy by the Lessee, and Lessor hereby agrees to repair or replace the heating and cooling equipment and air conditioning at its sole cost and expense in the event there is a malfunction within the first six (6) months of Lessee's occupancy. (b) On the last day of the term hereof, or on any sooner termination, Lessee shall surrender the Premises to Lessor in the same condition as received, broom clean, ordinary wear and tear excepted. Lessee shall repair any damage to the Premises occasioned by the removal of its trade fixtures, furnishings and equipment pursuant to Paragraph 7.3 which repair shall include the patching and filling of holes and repair of structural damage. Lessee shall not be required to remove any approved leasehold improvement made by it or for its benefit. 7.3 ALTERATIONS AND ADDITIONS. (a) Alterations may not be made to the premises without the prior written consent of the Lessor, and any alterations of the Premises, excepting movable furniture and machinery, and trade fixtures, shall become part of the realty and belong to the Lessor upon termination of this Lease. However, this shall not prevent the Lessee from installing trade 3

fixtures, machinery, or other trade equipment in conformance with the ordinance of the City of Tucson and Pima County, Arizona and provided the Premises are not damaged by such removal. The Lessee shall keep the Premises, the building, and the property in which the Lease Premises are situated free from any liens arising out of any work performed for, materials furnished to, or obligations incurred by the Lessee. It is further understood and agreed that under no circumstances is the Lessee to be deemed the agent of the Lessor for any alteration, repair, or operation of the building upon the Premises, the same being done at the sole expense of the Lessee and all contractors, materialmen, mechanics, and laborers are hereby charged with notice that they must look to the Lessee only for the payment of any charge for work done and materials furnished upon the Premises during the term of this Lease. (b) Lessee shall be under no obligation to remove any approved alterations, additions, improvements, additions, and utility installations. 8. INSURANCE; INDEMNITY. 8.1 LIABILITY INSURANCE. Lessee shall at Lessee's expense, obtain and keep in force during the term of

fixtures, machinery, or other trade equipment in conformance with the ordinance of the City of Tucson and Pima County, Arizona and provided the Premises are not damaged by such removal. The Lessee shall keep the Premises, the building, and the property in which the Lease Premises are situated free from any liens arising out of any work performed for, materials furnished to, or obligations incurred by the Lessee. It is further understood and agreed that under no circumstances is the Lessee to be deemed the agent of the Lessor for any alteration, repair, or operation of the building upon the Premises, the same being done at the sole expense of the Lessee and all contractors, materialmen, mechanics, and laborers are hereby charged with notice that they must look to the Lessee only for the payment of any charge for work done and materials furnished upon the Premises during the term of this Lease. (b) Lessee shall be under no obligation to remove any approved alterations, additions, improvements, additions, and utility installations. 8. INSURANCE; INDEMNITY. 8.1 LIABILITY INSURANCE. Lessee shall at Lessee's expense, obtain and keep in force during the term of this Lease a policy of comprehensive public liability insurance insuring Lessor and Lessee against any liability arising out of the ownership, use, occupancy, or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be in an amount of not less than $200,000 for injury to or death of one person in any one accident or occurrence and in an amount of not less than $1,000,000 for injury to or death of more than one person in any one accident or occurrence. Such insurance shall further insure Lessee against liability for property damage of at least $100,000. The limits of said insurance shall not, however, limit the liability of Lessee hereunder. If Lessee shall fail to procure and maintain said insurance, Lessor may, but shall not be required to, procure and maintain the same, but at the expense of Lessee. 8.2 PROPERTY INSURANCE. Lessor shall obtain and keep in force during the term of the Lease a policy or policies of insurance covering loss or damage to the Premises, in the amounts of the full replacement value thereof, providing protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk). Lessee shall pay during the term hereof, in addition to rent, the amount of any increase in premiums for the insurance required under this Paragraph 8.2 over and above such premiums paid by Lessor during the first full year of the term of this Lease in which Lessor shall have maintained [ ] insurance required under this Paragraph 8.2 whether such premium increase shall be the result of the nature of Lessee's occupancy, any act or omission of Lessee, requirements of the holder of a mortgage or deed of trust covering the Premises, or increased valuation of the Premises. Lessee shall pay any such premium increases to Lessor within thirty (30) days after receipt by Lessee of a copy of the premium statement or other satisfactory evidence of the amount due. If the term of this Lessee shall not expire concurrently with the expiration of the period covered by such insurance, Lessee's liability for premium increases shall be prorated on an annual basis. Lessee shall not do or permit to be done anything which shall invalidate the insurance policies referred to in Paragraph 8.2. 4

8.3 INSURANCE POLICIES. Insurance required hereunder shall be in companies rated AAA or better in "Best's Insurance Guide." Lessee shall deliver to Lessor a certificate of insurance evidencing the insurance coverage required under Paragraph 8.1 8.4 WAIVER OF SUBROGATION. Lessee and Lessor each hereby waives any and all rights of recovery against the other, or against the officers, employees, agents, and representatives of the other, for loss of or damage to such waiving party or its property or the property of others under its control, where such loss or damage is insured against under any insurance policy in force at the time of such loss or damage. Lessee and Lessor shall, upon obtaining the policies of insurance required hereunder, give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in the Lease. 8.5 INDEMNITY. Lessee shall indemnify and hold harmless Lessor from and against any and all claims of third parties arising form Lessee's use of the Premises, or from the conduct of Lessee's business or from any activity, work, or things done, permitted, or suffered by Lessee in or about the Premises or elsewhere, or by any of the Lessee's agents, contractors, or employees, and from and against all costs, attorneys' fees, expenses, and

8.3 INSURANCE POLICIES. Insurance required hereunder shall be in companies rated AAA or better in "Best's Insurance Guide." Lessee shall deliver to Lessor a certificate of insurance evidencing the insurance coverage required under Paragraph 8.1 8.4 WAIVER OF SUBROGATION. Lessee and Lessor each hereby waives any and all rights of recovery against the other, or against the officers, employees, agents, and representatives of the other, for loss of or damage to such waiving party or its property or the property of others under its control, where such loss or damage is insured against under any insurance policy in force at the time of such loss or damage. Lessee and Lessor shall, upon obtaining the policies of insurance required hereunder, give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in the Lease. 8.5 INDEMNITY. Lessee shall indemnify and hold harmless Lessor from and against any and all claims of third parties arising form Lessee's use of the Premises, or from the conduct of Lessee's business or from any activity, work, or things done, permitted, or suffered by Lessee in or about the Premises or elsewhere, or by any of the Lessee's agents, contractors, or employees, and from and against all costs, attorneys' fees, expenses, and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; and in case any action or proceeding be brought against Lessor by reason of any such claim. Lessee upon written notice from Lessor shall defend the same at Lessee's expense by counsel satisfactory to Lessor. Lessee, as a material part of the consideration to Lessor, hereby assumes all risk of damage to property or injury to claims in respect thereof against Lessor. Likewise, Lessor, to the extent covered by its insurance policies, hereby waiver all claims in respect thereof against Lessee, Lessee's employees, invitees, customers and any other person in or about the Premises. 8.6 EXEMPTION OF LESSOR FROM LIABILITY. Lessee hereby agrees that Lessor shall not be liable for injury to Lessee's business or any loss of income therefrom or for damage to the goods, wares, merchandise, or other property of Lessee, Lessee's employees, invitees, customers, or any other person in or about the Premises, nor shall Lessor be liable for injury to the person of Lessee, Lessee's employees, agents or contractors, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water, or rain, or from the breakage, leakage, obstruction, or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning, or light fixtures or from any other cause whether the said damage or injury results from conditions arising upon the Premises or upon other portions of the building of which the damage or injury to the means of repairing the same is inaccessible to Lessee. Lessor shall not be liable for any damages arising from any act or neglect of any other Tenant, if any, of the building in which the Premises are located. Further, no individual, or member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be the Lessor or any successor in interest, shall be subject to personal liability with respect to any of the covenants or conditions of this lease. The Lessee shall look solely to the equity of the Lessor in the property, and the rents, issues and profits derived there from for the satisfaction of the remedies of the Lessee in the event of _____ breach by the Lessor. It is mutually [agreed] that this clause is and shall be con[sidered] an integral part of the aforesaid lease. 5

9. DAMAGE OR DESTRUCTION. 9.1 DAMAGE OR DESTRUCTION. If during the term of this Lease or extension thereof all or part of the building or structures now and hereafter located upon the Premises should be destroyed partially or totally by fire or other casualty, this Lease shall continue thereafter in full force and effect except as hereinafter provided, and the Lessor may cause the reconstruction of said building within the one hundred eighty (180) days following such destruction to substantially the same condition in which it did exist at the time immediately preceding such destruction. The Lessee's obligation to pay rental to the Lessor hereunder shall abate from the date of such destruction until completion of such reconstruction and the terms hereof shall be automatically extended for a period of time equivalent to that during which rent is abated as aforesaid. In the event the Lessor does not commence reconstruction, repair, or replacement of the improvements after loss or damage, this Lease shall be deemed terminated and of no further force or effect. In addition to the insurance requirements hereinbefore set forth in the Lease, the Lessor shall be obligated to obtain and keep continually in force during the primary term of this Lease and during any extension and renewal thereof, fire and extended coverage insurance in an amount of not less than 80% of the full insurable value of the building containing the Premises. Said fire and extended coverage insurance shall be written by a responsible and reputable insurance company and shall be issued with

9. DAMAGE OR DESTRUCTION. 9.1 DAMAGE OR DESTRUCTION. If during the term of this Lease or extension thereof all or part of the building or structures now and hereafter located upon the Premises should be destroyed partially or totally by fire or other casualty, this Lease shall continue thereafter in full force and effect except as hereinafter provided, and the Lessor may cause the reconstruction of said building within the one hundred eighty (180) days following such destruction to substantially the same condition in which it did exist at the time immediately preceding such destruction. The Lessee's obligation to pay rental to the Lessor hereunder shall abate from the date of such destruction until completion of such reconstruction and the terms hereof shall be automatically extended for a period of time equivalent to that during which rent is abated as aforesaid. In the event the Lessor does not commence reconstruction, repair, or replacement of the improvements after loss or damage, this Lease shall be deemed terminated and of no further force or effect. In addition to the insurance requirements hereinbefore set forth in the Lease, the Lessor shall be obligated to obtain and keep continually in force during the primary term of this Lease and during any extension and renewal thereof, fire and extended coverage insurance in an amount of not less than 80% of the full insurable value of the building containing the Premises. Said fire and extended coverage insurance shall be written by a responsible and reputable insurance company and shall be issued with Lessor as named insured. Each party hereto should give evidence of its continuing compliance with the insurance requirements of this Lease by supplying copies of the respective policies and certificates of compliance from the insurers to the other party hereto. 9.2 ABATEMENT OF RENT: LESSEE'S REMEDIES. (a) Except for abatement of rent, if any, Lessee shall have no claim against Lessor for any damage suffered by reason of any such damage, destruction, repair, or restoration. 10. REAL PROPERTY TAXES. 10.1 PAYMENT OF TAX INCREASES. Lessor shall pay all real property taxes applicable to the Premises; provided, however, that Lessee shall pay, in addition to rent, the amount, if any, by which real property taxes applicable to the Premises increase over the Base Year 2000. Such payment shall be made by Lessee within thirty (30) days after receipt of Lessor's written statement setting forth the amount of such increase and the reasonable computation thereof. If the term of this Lease shall not expire concurrently with the expiration of the tax fiscal year, Lessee's liability for increased taxes for the last partial Lease year shall be prorated on an annual basis. 10.2 DEFINITION OF "REAL PROPERTY TAX." As used herein, the term "real property tax" shall include any form of assessment, license fee, commercial rental tax, levy, penalty, or tax (other than inheritance or estate taxes), imposed by any authority having the 6

direct or indirect power to tax, including any city, county, state, or federal government, or any school, agricultural, lighting, drainage, or other improvement district thereof, as against any legal or equitable interest of Lessor in the Premises or in the real property of which the Premises are a part, as against Lessor's right to rent or other income therefrom, or as against Lessor's business of leasing the Premises. 10.3 PERSONAL PROPERTY TAXES. (a) Lessee shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipment, and all other personal property of Lessee contained in the Premises or elsewhere. When possible, Lessee shall [ ] use said trade fixtures, furnishings, equipment, and all other personal property to be assessed and billed separately [ ] the real property of Lessor. (b) If any Lessee's said personal property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee within ten (10) days after receipt of a written statement setting forth the taxes applicable to Lessee's property.

direct or indirect power to tax, including any city, county, state, or federal government, or any school, agricultural, lighting, drainage, or other improvement district thereof, as against any legal or equitable interest of Lessor in the Premises or in the real property of which the Premises are a part, as against Lessor's right to rent or other income therefrom, or as against Lessor's business of leasing the Premises. 10.3 PERSONAL PROPERTY TAXES. (a) Lessee shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipment, and all other personal property of Lessee contained in the Premises or elsewhere. When possible, Lessee shall [ ] use said trade fixtures, furnishings, equipment, and all other personal property to be assessed and billed separately [ ] the real property of Lessor. (b) If any Lessee's said personal property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee within ten (10) days after receipt of a written statement setting forth the taxes applicable to Lessee's property. 11. COMMON AREA CHARGES. In addition to the rental herein provided to be paid by Lessee to Lessor, Lessee shall pay to Lessor as additional rent Lessee's Share of the cost of maintaining and repairing the parking area and common areas, a proportionate sum of the increase only of the Total Common Area Charges as hereinafter defined. Said proportionate sum shall be based on the relationship of the square footage of the demised Premises to that of all of the buildings in the Business Center. Total Common Area Charges shall further include all charges for dumpster service, and semi-annual service of mechanical equipment which are attributable to the Business Center, and the cost of lighting maintenance, and repair to the Business Center identification sign. 12. UTILITIES. Lessee shall pay for all gas, heat, light, power, telephone, and other utilities and services supplied to the Premises, together with any taxes thereon. 13. ASSIGNMENT AND SUBLETTING. 13.1 LESSOR'S CONSENT REQUIRED. Lessee shall not voluntarily or by operation of law, assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any part of Lessee's interest in this Lease or in the Premises, without Lessor's prior written consent, which Lessor shall not unreasonably withhold. Any attempted assignment, transfer, mortgage, encumbrance, or subletting without such consent shall be void, and shall constitute a breach of this Lease. 13.2 NO RELEASE OF LESSEE. Regardless of Lessor's consent, no subletting, or assignment shall release Lessee or Lessee's obligation or alter the primary liability of Lessee to pay the rent and to perform all other obligations to be performed by Lessee hereunder. The 7

acceptance of rent by Lessor from any other person shall not be deemed to be a waiver by Lessor of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. 14. DEFAULTS; REMEDIES. 14.1 DEFAULTS. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee: (a) The vacating or abandonment of the Premises by Lessee. (b) The failure by Lessee to make nay payment of rent or any other payment required to be made by Lessee hereunder, as and when due. (c) The failure by Lessee to observe or perform any of the covenants, conditions, or provisions of the Lease to be observed or performed by Lessee, other than described in Paragraph (b) above, where such failure shall

acceptance of rent by Lessor from any other person shall not be deemed to be a waiver by Lessor of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. 14. DEFAULTS; REMEDIES. 14.1 DEFAULTS. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee: (a) The vacating or abandonment of the Premises by Lessee. (b) The failure by Lessee to make nay payment of rent or any other payment required to be made by Lessee hereunder, as and when due. (c) The failure by Lessee to observe or perform any of the covenants, conditions, or provisions of the Lease to be observed or performed by Lessee, other than described in Paragraph (b) above, where such failure shall continue for a period of thirty (30) days after written notice hereof from Lessor to Lessee; provided, however, that is the nature, of Lessee's default is such that ore than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said 30-day period and thereafter diligently prosecutes such cure to completion. (d) (i) The making by Lessee of any general [assignment], or general arrangement for the benefit of creditors; (ii) the filing by or against Lessee of a petition to have Lessee adjudged a bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where possession is not restored to Lessee within thirty (30) days; or (iv) the attachment, execution, or other judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within thirty (30) days. 14.2 REMEDIES. In the event of any such material default or breach by Lessee, Lessor may at any time thereafter, with or without notice or demand and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such default or breach: (a) Terminate Lessee's right to possession of the Premises by any lawful means in which case this Lease shall terminate and Lessee shall terminate and Lessee shall immediately surrender possession of the Premises to Lessor. In such event Lessor shall be entitled to recover from Lessee all damages incurred by Lessor by reason of Lessee's default including but not limited to, the cost of recovering possession of the Premises; expenses of 8

reletting, including necessary renovation and alteration of the Premises, reasonable attorney's fees, and any real estate commission actually paid; the worth at the time of award by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessee provides could be reasonably avoided; that portion of the leasing commission paid by Lessor applicable to the unexpired term of this Lease. Unpaid installments of rent or other sums shall bear interest from the date due at the rate of 10% per annum. In the event Lessee shall have abandoned the Premises, Lessor shall have the option of (i) retaking possession of the Premises and recovering from Lessee the amount specified in this Paragraph 14.2(a), or (ii) proceeding under Paragraph 14.2(b). (b) Maintain Lessee's right to possession in which case this Lease shall continue in effect whether or not Lessee shall have abandoned the Premises. In such event Lessor shall be entitled to enforce all of Lessor's rights and remedies under this Lease, including the right to recover the rent as it becomes due hereunder, subject to its duty to mitigate its damages. (c) Pursue any other remedy now or hereafter available to Lessor under the laws or judicial decisions of the State of Arizona, and where Lessee has violated Paragraph 14.1(b), declare a Landlord's lien on Lessee's personal

reletting, including necessary renovation and alteration of the Premises, reasonable attorney's fees, and any real estate commission actually paid; the worth at the time of award by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessee provides could be reasonably avoided; that portion of the leasing commission paid by Lessor applicable to the unexpired term of this Lease. Unpaid installments of rent or other sums shall bear interest from the date due at the rate of 10% per annum. In the event Lessee shall have abandoned the Premises, Lessor shall have the option of (i) retaking possession of the Premises and recovering from Lessee the amount specified in this Paragraph 14.2(a), or (ii) proceeding under Paragraph 14.2(b). (b) Maintain Lessee's right to possession in which case this Lease shall continue in effect whether or not Lessee shall have abandoned the Premises. In such event Lessor shall be entitled to enforce all of Lessor's rights and remedies under this Lease, including the right to recover the rent as it becomes due hereunder, subject to its duty to mitigate its damages. (c) Pursue any other remedy now or hereafter available to Lessor under the laws or judicial decisions of the State of Arizona, and where Lessee has violated Paragraph 14.1(b), declare a Landlord's lien on Lessee's personal property located on the Leased Premises. Where a Landlord's lien is declared by Lessor, Lessor may, without notice or demand to Lessee, terminate Lessee's right to possession of the premises until Lessor has secured sufficient personal property or full payment of rent to satisfy the amount of rent owed. Should Lessor declare a Landlord's lien on the Lease Premises pursuant to this provision, this Lease shall not be considered terminated, and Lessor shall have a right to recover rent as it becomes due. 14.3 DEFAULT BY LESSOR. Lessor shall not be in default unless Lessor fails to perform obligations required of Lessor within a reasonable time, but in no event later than thirty (30) days after written notice by Lessee to Lessor specifying wherein Lessor has failed to perform such obligations; provided, however, that if the nature of Lessor's obligation is such that more than thirty (30) days are required for performance, then Lessor shall not be in default if Lessor commences performance within such 30-day period and thereafter diligently prosecutes the same to completion. If Lessor does not perform, mortgagee may perform in Lessor's place and Lessee must accept such performance. 14.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee to Lessor of rent and other sums due hereunder will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed on Lessor by the terms of any mortgage or trust deed covering the Premises. Accordingly, if any installment of rent or any other sum due from Lessee shall not be received by Lessor or Lessor's designee within ten (10) days after such amount shall be due, Lessee 9

shall pay to Lessor a late charge equal to ten percent (10%) of such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of late payment by Lessee. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's default with respect to such overdue amount nor prevent Lessor from exercising any of the other rights and remedies granted hereunder. 15. CONDEMNATION. If the Premises or any portion thereof are taken under the power of eminent domain, or sold under the threat of the exercise of said power (all of which are herein called "condemnation"), this Lease shall terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than 35% of the floor area of the improvements on the premises or more than 35% of the land area of the Premises which is not occupied by any improvements, is taken by condemnation, Lessee may, at Lessee's option, to be exercised in writing only within ten (10) days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within ten (10) days after the condemning authority shall have taken possession), terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the rent shall be reduced in the proportion that the floor area taken bears to the total floor area of the building situated on the Premises. Any award for the taking of all or any part of the Premises under the power of eminent domain or any payment made under threat of the

shall pay to Lessor a late charge equal to ten percent (10%) of such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of late payment by Lessee. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's default with respect to such overdue amount nor prevent Lessor from exercising any of the other rights and remedies granted hereunder. 15. CONDEMNATION. If the Premises or any portion thereof are taken under the power of eminent domain, or sold under the threat of the exercise of said power (all of which are herein called "condemnation"), this Lease shall terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than 35% of the floor area of the improvements on the premises or more than 35% of the land area of the Premises which is not occupied by any improvements, is taken by condemnation, Lessee may, at Lessee's option, to be exercised in writing only within ten (10) days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within ten (10) days after the condemning authority shall have taken possession), terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the rent shall be reduced in the proportion that the floor area taken bears to the total floor area of the building situated on the Premises. Any award for the taking of all or any part of the Premises under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold or for the taking of the fee or as severance damages; provided, however, that Lessee shall be entitled to any award for loss or damage to Lessee's trade fixtures and removable property. In the event that this Lease is not terminated by reasons of such condemnation, Lessor shall, to the extent of severance damages received by Lessor in connection with such condemnation, repair any damage to Premises caused by such condemnation except to the extent that Lessee has been reimbursed therefore by the condemning authority. Lessee shall pay any amount in excess of such severance damages required to complete such repair. 16. GENERAL PROVISIONS. 16.1 ESTOPPEL CERTIFICATE. (a) Lessee shall at any time upon not less than ten (10) days prior written notice from Lessor execute, acknowledge, and deliver to Lessor a statement in writing (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect) and the date to which the rent and other charges are paid in advance, if any, and (ii) acknowledging that there are not, to Lessee's knowledge, any uncured defaults on the part of Lessor hereunder, or specifying such defaults if any are claimed. Any such statement may be conclusively relied upon by an prospective purchaser or encumbrance of the Premises. 10

(b) Lessee's failure to deliver such statement within such time shall be conclusive upon Lessee (i) that this Lease is full force and effect, without modification except as may be represented by Lessor, (ii) that there are no uncured defaults in Lessor's performance, and (iii) that not more than one month's rent has been paid in advance. (c) If Lessor desires to finance or refinance the Premises, or any part thereof, Lessee hereby agrees to deliver to any lender designated by Lessor such financial statements of Lessee as may be reasonably required by such lender. Such statements shall include the past three years' financial statements of Lessee. All such financial statements shall be received by Lessor in confidence and shall be used only for the purposes herein set forth. 16.2 LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only the owner or owners at the time in question of the fee title or a Lessee's interest in a ground lease of the Premises, in the event of any transfer of such title or interest, Lessor herein named (and in case of any subsequent transfers the then grantor) shall be relieved from and after the date of such transfer of all liability as respects Lessor's obligations thereafter to be performed, provided that any funds in the hands of Lessor or the then grantor at the time of such transfer, in which Lessee has an interest, shall be delivered to the grantee. The obligations contained on Lessor's successors and assigns, only during their respective periods of ownership.

(b) Lessee's failure to deliver such statement within such time shall be conclusive upon Lessee (i) that this Lease is full force and effect, without modification except as may be represented by Lessor, (ii) that there are no uncured defaults in Lessor's performance, and (iii) that not more than one month's rent has been paid in advance. (c) If Lessor desires to finance or refinance the Premises, or any part thereof, Lessee hereby agrees to deliver to any lender designated by Lessor such financial statements of Lessee as may be reasonably required by such lender. Such statements shall include the past three years' financial statements of Lessee. All such financial statements shall be received by Lessor in confidence and shall be used only for the purposes herein set forth. 16.2 LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only the owner or owners at the time in question of the fee title or a Lessee's interest in a ground lease of the Premises, in the event of any transfer of such title or interest, Lessor herein named (and in case of any subsequent transfers the then grantor) shall be relieved from and after the date of such transfer of all liability as respects Lessor's obligations thereafter to be performed, provided that any funds in the hands of Lessor or the then grantor at the time of such transfer, in which Lessee has an interest, shall be delivered to the grantee. The obligations contained on Lessor's successors and assigns, only during their respective periods of ownership. 16.3 SEVERABILITY. The invalidity of any provision of this Lease as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof. 16.4 INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided, any amount due to Lessor not paid when due shall bear interest at the rate of 10% per annum from the date due. Payment of such interest shall not excuse or cure any default by Lessee under this Lease. 16.5 TIME OF ESSENCE. Time is of the essence. 16.6 CAPTIONS. Article and Paragraph captions are not a part hereof. 16.7 INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all agreement of the parties with respect to any matter mentioned herein. No prior agreement or understanding pertaining to any such matter shall be effective. This Lease may be modified in writing only, signed by the parties in interest at the time of the modification. 16.8 NOTICES. Any notice required or permitted to be given hereunder shall be in writing and may be served personally or by regular mail, addressed to Lessor and Lessee respectively at the addresses set forth after their signatures at the end of this Lease. 16.9 WAIVERS. No waiver by Lessor of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Lessee of the same or any other provision. Lessor's consent to or approval of any act shall not be deemed to render 11

unnecessary the obtaining of Lessor's consent to or approval of any preceding breach by Lessee of any provision hereof, other than the failure of Lessee to pay the particular rent so accepted, regardless of Lessor's knowledge of such preceding breach at the time of acceptance of such rent. 16.10 RECORDING. Lessee shall not record this Lease without Lessor's prior written consent, and such recordation shall, at the option of Lessor, constitute a non-curable default of Lessee hereunder. Either party shall upon request of the other, execute, acknowledge, and deliver to the other a "short form" memorandum of this Lease for recording purposes. 16.11 HOLDING OVER. If Lessee remains in possession of the Premises or any part thereof after the expiration of the term hereof without the express written consent of Lessor, such occupancy shall be a tenancy from month-to-month at a rental in the amount of the last monthly rental plus all other charges payable hereunder, and upon all the terms hereof applicable to a month-to-month tenancy.

unnecessary the obtaining of Lessor's consent to or approval of any preceding breach by Lessee of any provision hereof, other than the failure of Lessee to pay the particular rent so accepted, regardless of Lessor's knowledge of such preceding breach at the time of acceptance of such rent. 16.10 RECORDING. Lessee shall not record this Lease without Lessor's prior written consent, and such recordation shall, at the option of Lessor, constitute a non-curable default of Lessee hereunder. Either party shall upon request of the other, execute, acknowledge, and deliver to the other a "short form" memorandum of this Lease for recording purposes. 16.11 HOLDING OVER. If Lessee remains in possession of the Premises or any part thereof after the expiration of the term hereof without the express written consent of Lessor, such occupancy shall be a tenancy from month-to-month at a rental in the amount of the last monthly rental plus all other charges payable hereunder, and upon all the terms hereof applicable to a month-to-month tenancy. 16.12 CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. 16.13 COVENANTS AND CONDITIONS. Each provision of this Lease performable by Lessee shall be deemed both a covenant and a condition. 16.14 BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof restricting assignment or subletting by Leases and subject to the provisions of Paragraph 16.2, this Lease shall bind the parties, their personal representatives, successors, and assigns. This Lease shall be governed by the laws of the State of Arizona. 16.15 SUBORDINATION. (a) The Lease, at Lessor's option, shall be subordinate to any ground lease, mortgage, deed of trust, or any other hypothecation for security now or hereunder placed upon the property of which the Premises are a part and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements, and extensions thereof. If any mortgagee, trustee, or ground Lessor shall elect to have this Lease prior to the lien of its mortgage, deed of trust, or ground lease, whether this Lease is dated prior or subsequent to the date of said mortgage, deed of trust, or ground lease or the date of recording thereof. (b) The Lessee agrees to execute any documents required to effectuate such subordination or to make this Lease prior to the lien of any mortgage, deed of trust, or ground lease, as the case may be, and failing to do so within ten (10) days after written demand, does hereby make, constitute, and irrevocably appoint Lessor as Lessee's attorney in fact and in Lessee's name, place and stead, to do so. 12

16.16 ATTORNEY'S FEES. If either party brings an action to enforce the terms hereof or declare rights hereunder, the prevailing party shall be entitled to his reasonable attorney's fees in any such action, or trial or appeal, to be paid by the losing party as fixed by the court. 16.17 LESSOR'S ACCESS. Lessor and Lessor's agents shall have the right to enter the Premises at reasonable times between 8 a.m. and 5 p.m. weekdays for the purpose of inspecting the same, showing the same to prospective purchasers or lenders, and making such alterations, repairs, improvements, or additions to the Premises or to the building of which they are a part as Lessor may deem necessary or desirable. Lessor may at any time place on or about the Premises any ordinary "For Sale" and "For Lease" signs. 16.18 SIGNS AND AUCTIONS. Lessee shall not place any sign upon the Premises or conduct any auction thereon without Lessor's prior written consent. 16.19 MERGER. The voluntary or other surrender of this Lease by Lessee or a mutual cancellation thereof, shall not work a merger, and shall at the option of Lessor, terminate all or any existing subtenancies or may, at the option of Lessor, operate as an assignment to Lessor of any or all of such subtenancies.

16.16 ATTORNEY'S FEES. If either party brings an action to enforce the terms hereof or declare rights hereunder, the prevailing party shall be entitled to his reasonable attorney's fees in any such action, or trial or appeal, to be paid by the losing party as fixed by the court. 16.17 LESSOR'S ACCESS. Lessor and Lessor's agents shall have the right to enter the Premises at reasonable times between 8 a.m. and 5 p.m. weekdays for the purpose of inspecting the same, showing the same to prospective purchasers or lenders, and making such alterations, repairs, improvements, or additions to the Premises or to the building of which they are a part as Lessor may deem necessary or desirable. Lessor may at any time place on or about the Premises any ordinary "For Sale" and "For Lease" signs. 16.18 SIGNS AND AUCTIONS. Lessee shall not place any sign upon the Premises or conduct any auction thereon without Lessor's prior written consent. 16.19 MERGER. The voluntary or other surrender of this Lease by Lessee or a mutual cancellation thereof, shall not work a merger, and shall at the option of Lessor, terminate all or any existing subtenancies or may, at the option of Lessor, operate as an assignment to Lessor of any or all of such subtenancies. 16.20 CORPORATE AUTHORITY. If Lessee is a corporation, each individual executing this Lease on behalf of said corporation, represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of said corporation, in accordance with a duly adopted resolution of the Board of Directors of said corporation or in accordance with the Bylaws of said corporation, and that this Lease is binding upon said corporation in accordance with its terms. If Lessee is a corporation, Lessee shall within thirty (30) days after execution of this Lease, deliver to Lessor a certified copy of a resolution of the Board of Directors of said corporation authorizing or ratifying the execution of this Lease, otherwise the individual executing this Lease guarantees payment. 17. PARKING AND COMMON AREAS. The Lessee, its agents, employees and invitees shall be entitled to park in common with other tenants of Lessor providing that it agrees not to overburden the parking facilities and agrees to cooperate with the lessor and other Tenants in the use of the parking facilities. The Lessor specifically reserves the right, in its absolute discretion, to determine whether parking facilities are becoming overburdened and in such event to allocate the parking spaces among the Lessee to other Tenants, their agent, employees and business invitees using the parking facilities. All loading operations for receipt or shipment of goods, wares, and merchandise by the Lessee shall be done in the rear of the Leased Premises or in such area therein which is specifically designated in writing by the Lessor. 18. SAFETY. Lessee will maintain on Leased Premises at all times during the terms hereof adequate number, size, and type of fire extinguisher as is appropriate to Lessee's business. Lessee will at all times adhere to good safety practices or as may be required by safety inspectors. No goods, merchandise or materials, except flux, solder base, alcohol, 13

normal office products, and such other items as Lessor may reasonable approve shall be kept, stored or sold by Tenant on or about the premises which are in any way hazardous, and Tenant shall not suffer or permit any acts of commission or commission to be done on or about the premises which will increase the existing rate of fire insurance on the building of which the premises are a part shall be paid by Tenant to Landlord with the next succeeding installment of rental. Tenant, at its sole expense, shall comply with any and all requirements of any insurance organizations or company necessary for the maintenance of reasonable fire and public liability insurance covering the premises or the building of which the premises are a part. 19. ATTORNMENT. In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor covering the Premises, the Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease, provided such purchaser covenants not to disturb Lessee's occupancy hereunder. 20. RENTAL PAYMENTS. All rental payments should be made payable to La Balada Land Company, L.L.C. and mailed directly to 5343 E. Pima, Suite 201, Tucson, AZ 85712.

normal office products, and such other items as Lessor may reasonable approve shall be kept, stored or sold by Tenant on or about the premises which are in any way hazardous, and Tenant shall not suffer or permit any acts of commission or commission to be done on or about the premises which will increase the existing rate of fire insurance on the building of which the premises are a part shall be paid by Tenant to Landlord with the next succeeding installment of rental. Tenant, at its sole expense, shall comply with any and all requirements of any insurance organizations or company necessary for the maintenance of reasonable fire and public liability insurance covering the premises or the building of which the premises are a part. 19. ATTORNMENT. In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Lessor covering the Premises, the Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease, provided such purchaser covenants not to disturb Lessee's occupancy hereunder. 20. RENTAL PAYMENTS. All rental payments should be made payable to La Balada Land Company, L.L.C. and mailed directly to 5343 E. Pima, Suite 201, Tucson, AZ 85712. 21. LESSEE'S OPERATIONS. Lessee warrants that the operation of its business shall be conducted in strict compliance with all applicable environmental and safety laws, rules, regulations and ordinances. Lessee warrants that there is no unreasonable risk to tenants, visitors and others using the Premises arising from Lessee's operations. Lessee shall indemnify, defend and hold harmless Lessor from and against any claim, liability, expense, lawsuit and other damage arising from or relating to Lessee's use of the premises not in conformance with applicable environmental and safety laws, rules regulations and ordinances. 22. JOINT AND SEVERAL LIABILITY. Each person signing this Lease shall be jointly and severally liable for all amounts due hereunder. 23. LESSOR IMPROVEMENTS. Lessor agrees to clean the subject premises, including the carpet and paint the walls of the office. 24. HAZARDOUS SUBSTANCES. Lessee shall be responsible for any damage, contamination, liability, clean up, legal cost, fine, or other result of improper handling, use or storage by Lessee or those for whom in law it is responsible, of any toxic or hazardous materials in the Premises or in transporting such materials by Lessee, or its employees, agents, or contractors, on the real property of Lessor. In the event any agency of any governmental jurisdiction orders Lessee to discontinue the transporting, handling, storage or use of any toxic or hazardous materials in the Premises or on the real property of Lessor, or orders any clean up work resulting from Lessee's handling, use, or storage or such materials, Lessee shall immediately comply with such order. Lessee shall indemnify and defend Lessor from any claim of damage or liability by any person, or entity, arising out of such transportation, handling, use or storage of toxic or hazardous materials by Lessee, or its employees, agents, or contractors. 14

The parties hereto have executed this Lease on the dates specified immediately adjacent to their respective signatures. If this Lease has been filled in it has been prepared for submission to your attorney for his approval. No representation or recommendation is made by the Lessor or its agents or employees as to the legal sufficiency, legal effect, or tax consequences of this Lease or the transaction relating thereto.
LESSOR: LESSEE: Gray Scale, Inc. dba MicroHelix Labs

By: --------------------------------Its: --------------------------------

By: /s/ Jane K. Conner ------------------------------------Its: Chief Financial Officer ------------------------------------

Date:

Date: 8-10-00

The parties hereto have executed this Lease on the dates specified immediately adjacent to their respective signatures. If this Lease has been filled in it has been prepared for submission to your attorney for his approval. No representation or recommendation is made by the Lessor or its agents or employees as to the legal sufficiency, legal effect, or tax consequences of this Lease or the transaction relating thereto.
LESSOR: LESSEE: Gray Scale, Inc. dba MicroHelix Labs

By: --------------------------------Its: --------------------------------

By: /s/ Jane K. Conner ------------------------------------Its: Chief Financial Officer ------------------------------------

Date: -------------------------------

Date: 8-10-00 ----------------------------------

15

EXHIBIT 10.24 ADDENDUM FOR MANUFACTURING SPACE This agreement entered into on 11/1/00, by and between Javid LLC, a corporation chartered under the laws of the state of AZ, and having its principal offices located at 2755 N. Grand Ave. [_____ ] AZ., herein referred to as SELLER, and ___________________________, a corporation chartered under the laws of the state of ___________________ and having it's principal offices located at _____________________ herein referred to as PURCHASER. Whereas, Seller has contractual relationships with one or more Mexican corporations organized under the General Corporation Law of Mexico qualified and registered to do business under the maquiladora assembly or manufacturing programs prescribed by the Law for the furnishing of manufacturing assembly space (hereinafter referred to as "space"), and, Whereas, Seller upon agreement, can furnish space at the following selected location in Nogales, Sonora, Mexico, pursuant to it's aforementioned existing established contractual relationships in accordance with the terms and conditions set forth below; and, Whereas, Purchaser is desirous of using the space offered by Seller. Therefore, it is agreed as follows: 1. The Seller has entered into a lease agreement for manufacturing space located at Calle San Jose Fraccionamiento Los Alamos in the city of Nogales, Sonora, Mexico on the sole behalf of the Purchaser. This lease agreement has been executed between Roberto Klosek representing CAMEX de Nogales, S.A. de C.V.) and Sr. Alberto Sanchez Gayou (representing himself and Ruby Yamil Osuna Delgadillo, Ariadna Rebecca Osuna Delgadillo). Purchaser assumes full responsibility for said lease terms and conditions. 2. The space is 30,760 square feet in size and is being leased at a rate of US$4.25 per square foot, per year for a total of US$130,730 per year, payable in monthly installments on the first day of each month. 3. The term of the lease is for three (3) years and fifteen (15) days from January 15, 2000 allowing for a prorated lease rate for the month of January. 4. The building shall be fit for occupancy at 12:01 a.m. on January 15, 2000, per the terms and conditions of the lease agreement.

EXHIBIT 10.24 ADDENDUM FOR MANUFACTURING SPACE This agreement entered into on 11/1/00, by and between Javid LLC, a corporation chartered under the laws of the state of AZ, and having its principal offices located at 2755 N. Grand Ave. [_____ ] AZ., herein referred to as SELLER, and ___________________________, a corporation chartered under the laws of the state of ___________________ and having it's principal offices located at _____________________ herein referred to as PURCHASER. Whereas, Seller has contractual relationships with one or more Mexican corporations organized under the General Corporation Law of Mexico qualified and registered to do business under the maquiladora assembly or manufacturing programs prescribed by the Law for the furnishing of manufacturing assembly space (hereinafter referred to as "space"), and, Whereas, Seller upon agreement, can furnish space at the following selected location in Nogales, Sonora, Mexico, pursuant to it's aforementioned existing established contractual relationships in accordance with the terms and conditions set forth below; and, Whereas, Purchaser is desirous of using the space offered by Seller. Therefore, it is agreed as follows: 1. The Seller has entered into a lease agreement for manufacturing space located at Calle San Jose Fraccionamiento Los Alamos in the city of Nogales, Sonora, Mexico on the sole behalf of the Purchaser. This lease agreement has been executed between Roberto Klosek representing CAMEX de Nogales, S.A. de C.V.) and Sr. Alberto Sanchez Gayou (representing himself and Ruby Yamil Osuna Delgadillo, Ariadna Rebecca Osuna Delgadillo). Purchaser assumes full responsibility for said lease terms and conditions. 2. The space is 30,760 square feet in size and is being leased at a rate of US$4.25 per square foot, per year for a total of US$130,730 per year, payable in monthly installments on the first day of each month. 3. The term of the lease is for three (3) years and fifteen (15) days from January 15, 2000 allowing for a prorated lease rate for the month of January. 4. The building shall be fit for occupancy at 12:01 a.m. on January 15, 2000, per the terms and conditions of the lease agreement. 5. Purchaser is responsible for needed leasehold improvements to support their manufacturing operation as detailed in Articles I and II of the Contractual Guideline for Shelter Program Relationships. 6. Seller shall use its best effort to assist in the facilitation of the manufacturing space to meet the Purchaser's requirements. 7. Purchaser shall indemnify and hold Seller harmless of any liabilities associated with the terms and conditions of the lease contract that has been executed on the Purchaser's behalf. IN WITNESS WHEREOF the parties hereto have executed this addendum, or caused this addendum to be executed, as of this day and year written below:

PURCHASER: BY /s/ Jane K Conner -------------------------------------TITLE Chief Financial Officer -----------------------------------

SELLER: BY /s/ Roberto Klosek -----------------------------TITLE President & CEO ---------------------------

PURCHASER: BY /s/ Jane K Conner -------------------------------------TITLE Chief Financial Officer ----------------------------------DATE January 11, 2000 -----------------------------------AGREEMENT START DATE Dec. 28, 1999 --------------------

SELLER: BY /s/ Roberto Klosek -----------------------------TITLE President & CEO --------------------------DATE 11/1/00 ----------------------------

EXHIBIT 10.25 ADDENDUM FOR MANUFACTURING SPACE This agreement entered into on 6/23/00, by and between Grayscale, Inc. DBA microHelix Labs, Inc., a corporation chartered under the laws of the state of Oregon and having it's principal offices located at 4581 S Butterfield Dr. Tucson, AZ 85714 herein referred to as SELLER, and Agave Wire, a corporation chartered under the laws of the state of Texas and having its principal offices located at 10355 Sanders Dr Dallas, TX 75238 herein referred to as PURCHASER. Whereas, Seller has contractual relationships with one or more Mexican corporations organized under the General Corporation Law of Mexico qualified and registered to do business under the maquiladora assembly or manufacturing programs prescribed by the Law for the furnishing of manufacturing assembly space (hereinafter referred to as "space"), and, Whereas, Seller upon agreement, can furnish space the following selected location in Nogales, Sonora, Mexico, pursuant to it's aforementioned existing established contractual relationships in accordance with the terms and conditions set forth below; and, Whereas, Purchaser is desirous of using the space offered by Seller. Therefore, it is agreed as follows: 1. The Seller has entered into a lease agreement for manufacturing space located at Calle San Jose Fraccionamiento in the city of Nogales, Sonora, Mexico on the sole behalf of the Purchaser. This lease agreement has been executed between David R. Martell (representing Grayscale Inc.) and Harvey Featherly (representing Agave Wire). Purchaser assumes full responsibility for said lease terms and conditions. 2. The space is 18464.4 Sq. Ft. (including shared common space) and is being leased at a rate of US $4.82 per square foot, per year for a total of US $89973.81 per year, payable in monthly installments on the first of each month. (a) 3. The term of the lease is for 29 months and 15 days from 8/1/00 allowing for a prorated lease rate if applicable. 4. The building shall be fit for occupancy at 12:01 AM on 8/1/00, per the terms and conditions of the lease agreement. 5. Purchaser is responsible for all needed leasehold improvements and maintenance to support their manufacturing operation as detailed in Articles I and II of the Contractual Guideline for Shelter Program Relationships. 6. Seller shall use its best effort to assist in the facilitation of the manufacturing space to meet the Purchaser's requirements.

EXHIBIT 10.25 ADDENDUM FOR MANUFACTURING SPACE This agreement entered into on 6/23/00, by and between Grayscale, Inc. DBA microHelix Labs, Inc., a corporation chartered under the laws of the state of Oregon and having it's principal offices located at 4581 S Butterfield Dr. Tucson, AZ 85714 herein referred to as SELLER, and Agave Wire, a corporation chartered under the laws of the state of Texas and having its principal offices located at 10355 Sanders Dr Dallas, TX 75238 herein referred to as PURCHASER. Whereas, Seller has contractual relationships with one or more Mexican corporations organized under the General Corporation Law of Mexico qualified and registered to do business under the maquiladora assembly or manufacturing programs prescribed by the Law for the furnishing of manufacturing assembly space (hereinafter referred to as "space"), and, Whereas, Seller upon agreement, can furnish space the following selected location in Nogales, Sonora, Mexico, pursuant to it's aforementioned existing established contractual relationships in accordance with the terms and conditions set forth below; and, Whereas, Purchaser is desirous of using the space offered by Seller. Therefore, it is agreed as follows: 1. The Seller has entered into a lease agreement for manufacturing space located at Calle San Jose Fraccionamiento in the city of Nogales, Sonora, Mexico on the sole behalf of the Purchaser. This lease agreement has been executed between David R. Martell (representing Grayscale Inc.) and Harvey Featherly (representing Agave Wire). Purchaser assumes full responsibility for said lease terms and conditions. 2. The space is 18464.4 Sq. Ft. (including shared common space) and is being leased at a rate of US $4.82 per square foot, per year for a total of US $89973.81 per year, payable in monthly installments on the first of each month. (a) 3. The term of the lease is for 29 months and 15 days from 8/1/00 allowing for a prorated lease rate if applicable. 4. The building shall be fit for occupancy at 12:01 AM on 8/1/00, per the terms and conditions of the lease agreement. 5. Purchaser is responsible for all needed leasehold improvements and maintenance to support their manufacturing operation as detailed in Articles I and II of the Contractual Guideline for Shelter Program Relationships. 6. Seller shall use its best effort to assist in the facilitation of the manufacturing space to meet the Purchaser's requirements. 7. Purchases shall hold Seller harmless of any liabilities associated with the terms and conditions of the lease contract that has been executed on the Purchaser's behalf. IN WITNESS WHEREOF the parties hereto have executed this Agreement, and its associated addendum, or caused this Agreement to be executed, as of this day and year written below:

PURCHASER: SELLER:
BY /s/ Harvey Featherly -----------------------------------By /s/ David Martell ---------------------------

TITLE President -----------------------------------

TITLE General Manager ---------------------------

PURCHASER: SELLER:
BY /s/ Harvey Featherly -----------------------------------By /s/ David Martell ---------------------------

TITLE President ----------------------------------DATE 6-23-00 ------------------------------------

TITLE General Manager --------------------------DATE 6/23/00 ---------------------------

AGREEMENT START DATE 8-1-00 monthly sublease amount (a) 89,973.81 (divided by) 12 = 7,497.82 NOGALES PLANT SUBLEASE

EXHIBIT 10.26 LEASE AND AMENDMENTS
DATED: APRIL 20, 1992

BETWEEN: PACIFIC REALTY ASSOCIATES, L.P. A DELAWARE LIMITED PARTNERSHIP AND: PI (MEDICAL) AN OREGON CORPORATION

LANDLORD

TENANT

Tenant wishes to lease from Landlord the following described property, hereinafter referred to as "the Premises": Approximately 5,000 square feet of office space located in Building B, PacTrust Business Center, 16125 S.W. 72nd Avenue, Portland, Oregon 97224 and as further described on the attached Exhibits A, B and C. If the Premises consist of a portion but not all of a building, the building housing the Premises is hereinafter referred to as "the Building." Landlord leases the Premises to Tenant for a term of 38 months commencing May 1, 1992 and continuing through June 30, 1995. No base rent shall be due for the first two months of the lease term, but Tenant shall be obligated to pay for all other charges, taxes and expenses to be paid to Landlord specified in paragraphs 3 and 4 of this lease. Base rent shall be according to the following schedule:
Base Rent Per Month --------$ 0.00 $2,800.00 $3,000.00 $3,500.00 8/12/92 Amendment --------$3,159.00 $3,359.00 $3,859.00

Period -----May 1, 1992 through June 30, 1992 July 1, 1992 through June 30, 1993 July 1, 1993 through June 30, 1994 July 1, 1994 through June 30, 1995

Rent for the third month of the lease term has been paid upon execution of this lease. All rent, including base rent together with the charges, taxes and expenses to be paid to Landlord specified in paragraphs 3 and 4 of this lease, is payable in advance on the first day of each calendar month. If Landlord consents, Tenant may occupy the Premises prior to such commencement date upon payment of rent on a prorated basis and compliance with all terms of this lease.

EXHIBIT 10.26 LEASE AND AMENDMENTS
DATED: APRIL 20, 1992

BETWEEN: PACIFIC REALTY ASSOCIATES, L.P. A DELAWARE LIMITED PARTNERSHIP AND: PI (MEDICAL) AN OREGON CORPORATION

LANDLORD

TENANT

Tenant wishes to lease from Landlord the following described property, hereinafter referred to as "the Premises": Approximately 5,000 square feet of office space located in Building B, PacTrust Business Center, 16125 S.W. 72nd Avenue, Portland, Oregon 97224 and as further described on the attached Exhibits A, B and C. If the Premises consist of a portion but not all of a building, the building housing the Premises is hereinafter referred to as "the Building." Landlord leases the Premises to Tenant for a term of 38 months commencing May 1, 1992 and continuing through June 30, 1995. No base rent shall be due for the first two months of the lease term, but Tenant shall be obligated to pay for all other charges, taxes and expenses to be paid to Landlord specified in paragraphs 3 and 4 of this lease. Base rent shall be according to the following schedule:
Base Rent Per Month --------$ 0.00 $2,800.00 $3,000.00 $3,500.00 8/12/92 Amendment --------$3,159.00 $3,359.00 $3,859.00

Period -----May 1, 1992 through June 30, 1992 July 1, 1992 through June 30, 1993 July 1, 1993 through June 30, 1994 July 1, 1994 through June 30, 1995

Rent for the third month of the lease term has been paid upon execution of this lease. All rent, including base rent together with the charges, taxes and expenses to be paid to Landlord specified in paragraphs 3 and 4 of this lease, is payable in advance on the first day of each calendar month. If Landlord consents, Tenant may occupy the Premises prior to such commencement date upon payment of rent on a prorated basis and compliance with all terms of this lease. Delivery of possession shall occur when the Premises are occupied by Tenant or are ready to be occupied by Tenant with all work to be performed by Landlord substantially completed. No notice shall be required from Landlord if the Premises are ready on the date 1

set for commencement of the term or on the first business day thereafter. If Landlord is unable to deliver possession of the Premises to Tenant because of strikes, acts of God, or any other cause beyond Landlord's control, then Tenant may take possession when Landlord notifies Tenant that the Premises are ready for possession, and the term of this lease shall commence on the first day of the first month following such date and continue for the specified number of months thereafter, notwithstanding the commencement and termination dates stated above. Tenant shall owe no rent until the Premises are ready for possession. Landlord shall have no liability for such delays in delivery of possession, and neither party shall have the right to terminate except that Landlord may cancel this lease without liability if permission to construct, use, or furnish necessary utilities to the Premises is denied or revoked by any governmental agency or public utility with such authority. This lease is subject to the following additional terms to which the parties agree:

set for commencement of the term or on the first business day thereafter. If Landlord is unable to deliver possession of the Premises to Tenant because of strikes, acts of God, or any other cause beyond Landlord's control, then Tenant may take possession when Landlord notifies Tenant that the Premises are ready for possession, and the term of this lease shall commence on the first day of the first month following such date and continue for the specified number of months thereafter, notwithstanding the commencement and termination dates stated above. Tenant shall owe no rent until the Premises are ready for possession. Landlord shall have no liability for such delays in delivery of possession, and neither party shall have the right to terminate except that Landlord may cancel this lease without liability if permission to construct, use, or furnish necessary utilities to the Premises is denied or revoked by any governmental agency or public utility with such authority. This lease is subject to the following additional terms to which the parties agree: 1. USE OF THE PREMISES. (a) Tenant shall use the Premises only for the purpose of conducting the following business: Development of processes and products for use invasively (in vivo) in medical applications and related uses. If such use is prevented by any law or governmental regulation, Tenant may use the Premises for other reasonable uses. (b) In connection with its use, Tenant shall at its expense comply with all applicable laws, ordinances, and regulations of any public authority, including those requiring alteration of the Premises because of Tenant's specific use; shall create no nuisance nor allow any objectionable liquid, odor, or noise to be emitted from the Premises; shall store no gasoline or other highly combustible materials on the Premises which would violate any applicable fire code or regulation nor conduct any operation that will increase Landlord's fire insurance rates for the Premises; and shall not overload the floors or electrical circuits of the Premises. Landlord shall have the right to approve the installation of any power-driven machinery by Tenant and may select a qualified electrician whose opinion will control regarding electrical circuits and a qualified engineer or architect whose opinion will control regarding floor loads. Allowable ground floor load shall be 300 pounds per square foot. (c) Tenant may erect a sign stating its name, business, and product after first securing Landlord's written approval of the size, color, design, wording, and location, and all necessary governmental approvals. No signs shall be painted on the Building or exceed the height of the Building. All signs installed by Tenant shall be removed upon termination of this lease with the sign location restored to its former state. (d) Tenant shall make no alterations, additions, or improvements to the Premises or change the color of the exterior without Landlord's prior written consent and 2

without a valid building permit issued by the appropriate governmental agency. Upon termination of this lease, any such alternations, additions, or improvements (including without limitation all electrical, lighting, plumbing, heating and air-conditioning equipment, doors, windows, partitions, drapery, carpeting, shelving, counters, and physically attached fixtures) shall at once become part of the realty and belong to Landlord unless the terms of the applicable consent provide otherwise, or Landlord requests that part or all of the additions, alterations, or improvements be removed. In such case, Tenant shall at its sole cost and expense promptly remove the specified additions, alterations, or improvements and repair and restore the Premises to its original condition. 2. SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of $3,500.00, hereinafter referred to as "the Security Deposit," to secure the faithful performance by Tenant of each term, covenant, and condition of this lease. If Tenant shall at any time fail to make any payment or fail to keep or perform any term, covenant, and condition on its part to be made or performed or kept under this lease, Landlord may, but shall not be obligated to and without waiving or releasing Tenant from any obligation under this lease, use, apply or retain the whole or any part of the Security Deposit (i) to the extent of any sum due to Landlord; or (ii) to make any required payment on Tenant's behalf; or (iii) to compensate Landlord for any loss, damage, attorneys' fees, or expense sustained by Landlord due to

without a valid building permit issued by the appropriate governmental agency. Upon termination of this lease, any such alternations, additions, or improvements (including without limitation all electrical, lighting, plumbing, heating and air-conditioning equipment, doors, windows, partitions, drapery, carpeting, shelving, counters, and physically attached fixtures) shall at once become part of the realty and belong to Landlord unless the terms of the applicable consent provide otherwise, or Landlord requests that part or all of the additions, alterations, or improvements be removed. In such case, Tenant shall at its sole cost and expense promptly remove the specified additions, alterations, or improvements and repair and restore the Premises to its original condition. 2. SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of $3,500.00, hereinafter referred to as "the Security Deposit," to secure the faithful performance by Tenant of each term, covenant, and condition of this lease. If Tenant shall at any time fail to make any payment or fail to keep or perform any term, covenant, and condition on its part to be made or performed or kept under this lease, Landlord may, but shall not be obligated to and without waiving or releasing Tenant from any obligation under this lease, use, apply or retain the whole or any part of the Security Deposit (i) to the extent of any sum due to Landlord; or (ii) to make any required payment on Tenant's behalf; or (iii) to compensate Landlord for any loss, damage, attorneys' fees, or expense sustained by Landlord due to Tenant's default. In such event, Tenant shall, within 5 days of written demand by Landlord, remit to Landlord sufficient funds to restore the Security Deposit to its original sum; Tenant's failure to do so shall be a material breach of this lease. Landlord shall not be required to keep the Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on such deposit. Should Tenant comply with all of the terms, covenants, and conditions of this lease and at the end of the term of this lease leave the Premises in the condition required by this lease, then the Security Deposit, less any sums owing to Landlord, shall be returned to Tenant (or, at Landlord's option, to the last assignee of Tenant's interests hereunder) within 30 days after the termination of this lease and vacancy of the Premises by Tenant. 3. UTILITY CHARGES; MAINTENANCE. (a) Tenant shall pay when due all charges for electricity, natural gas, water, garbage collection, janitorial service, sewer, and all other utilities of any kind furnished to the Premises during the lease term. If charges are not separately metered or stated, Landlord shall apportion the utility charges on an equitable basis. Landlord shall have no liability resulting from any interruption of utility services caused by fire or other casualty, strike, riot, vandalism, the making of necessary repairs or improvements, or any other cause beyond Landlord's reasonable control. Tenant shall control the temperature in the Premises to prevent freezing of any sprinkler system. (b) Landlord shall repair and maintain the roof, gutters, downspouts, exterior walls, building structure, foundation, exterior paved areas, and curbs of the Premises in good condition. Except for such obligations of Landlord, Tenant shall keep the Premises 3

neatly maintained and in good order and repair. Tenant's responsibility shall include maintenance and repair of the electrical system, plumbing, air-conditioning and heating systems, overhead and personnel doors, and the replacement of all broken or cracked glass with glass of the same quality. Tenant shall refrain from any discharge that will damage the septic tank or sewers serving the Premises. (c) If the Premises have a separate entrance, Tenant shall keep the sidewalks abutting the Premises or the separate entrance free and clear of snow, ice, debris, and obstructions of every kind. 4. TAXES, ASSESSMENTS, AND OPERATING EXPENSES. (a) In conjunction with monthly rent payments, Tenant shall each month pay a sum representing Tenant's proportionate share of real property taxes and operating expenses for the Premises. Such amount shall annually be estimated by Landlord in good faith to reflect actual or anticipated costs. Upon termination of this lease or at periodic intervals during the term hereof, Landlord shall compute its actual costs for such expenses during such period. Any overpayment by Tenant shall be credited to Tenant, and any deficiency shall be paid by Tenant within 15 days after receipt of Landlord's statement. Landlord's records of expenses for taxes and operating

neatly maintained and in good order and repair. Tenant's responsibility shall include maintenance and repair of the electrical system, plumbing, air-conditioning and heating systems, overhead and personnel doors, and the replacement of all broken or cracked glass with glass of the same quality. Tenant shall refrain from any discharge that will damage the septic tank or sewers serving the Premises. (c) If the Premises have a separate entrance, Tenant shall keep the sidewalks abutting the Premises or the separate entrance free and clear of snow, ice, debris, and obstructions of every kind. 4. TAXES, ASSESSMENTS, AND OPERATING EXPENSES. (a) In conjunction with monthly rent payments, Tenant shall each month pay a sum representing Tenant's proportionate share of real property taxes and operating expenses for the Premises. Such amount shall annually be estimated by Landlord in good faith to reflect actual or anticipated costs. Upon termination of this lease or at periodic intervals during the term hereof, Landlord shall compute its actual costs for such expenses during such period. Any overpayment by Tenant shall be credited to Tenant, and any deficiency shall be paid by Tenant within 15 days after receipt of Landlord's statement. Landlord's records of expenses for taxes and operating expenses may be inspected by Tenant at reasonable times and intervals. (b) Tenant's proportionate share of real property taxes shall mean that percentage of the total assessment affecting the Premises which is the same as the percentage which the rentable area of the Premises bears to the total rentable area of all buildings covered by the tax statement. Tenant's proportionate share of operating expenses for the Building shall be computed by dividing the rentable area of the Premises by the total rentable area of the Building. If in Landlord's reasonable judgment either of these methods of allocation results in an inappropriate allocation to Tenant, Landlord shall select some other reasonable method of determining Tenant's proportionate share. (c) Real property taxes charged to Tenant hereunder shall include all general real property taxes assessed against the Premises or payable during the lease term, installment payments on Bancrofted special assessments, and any rent tax, tax on Landlord's interest under this lease, or any tax in lieu of the foregoing, whether or not any such tax is now in effect. Tenant shall not, however, be obligated to pay any tax based upon Landlord's net income. (d) Operating expenses charged to Tenant hereunder shall include all usual and necessary costs of operating and maintaining the Premises, Building, and any surrounding common areas including, but not limited to, the cost of all utilities or services not paid directly by Tenant, property insurance, property management, maintenance and repair of landscaping, parking areas, and any other common facilities. Operating expenses shall not include roof replacement or correction of structural deficiencies of the Building. 4

5. PARKING AND STORAGE AREAS. (a) Tenant, its employees, and customers shall have the exclusive right to use any private parking spaces immediately adjacent to the Premises. Tenant shall control the use of such parking spaces so that there will be no unreasonable interference with the normal traffic flow, and shall permit no parking on any landscaped or unpaved surface. Under no circumstances shall trucks serving the Premises be permitted to block streets. (b) Tenant shall not store any materials, supplies, or equipment outside in any unapproved or unscreened area. If Tenant erects any visual barriers for storage areas, Landlord shall have the right to approve the design and location. Trash and garbage receptacles shall be kept covered at all times. 6. TENANT'S INDEMNIFICATION; LIABILITY INSURANCE. (a) Tenant shall not allow any liens to attach to the Premises as a result of its activities. Tenant shall indemnify and defend Landlord from any claim, liability, damage, or loss arising out of any activity on the Premises by Tenant, its agents, or invitees or resulting from Tenant's failure to comply with any term of this lease. (b) Tenant shall carry general liability insurance on an occurrence basis with combined single limits of not less than

5. PARKING AND STORAGE AREAS. (a) Tenant, its employees, and customers shall have the exclusive right to use any private parking spaces immediately adjacent to the Premises. Tenant shall control the use of such parking spaces so that there will be no unreasonable interference with the normal traffic flow, and shall permit no parking on any landscaped or unpaved surface. Under no circumstances shall trucks serving the Premises be permitted to block streets. (b) Tenant shall not store any materials, supplies, or equipment outside in any unapproved or unscreened area. If Tenant erects any visual barriers for storage areas, Landlord shall have the right to approve the design and location. Trash and garbage receptacles shall be kept covered at all times. 6. TENANT'S INDEMNIFICATION; LIABILITY INSURANCE. (a) Tenant shall not allow any liens to attach to the Premises as a result of its activities. Tenant shall indemnify and defend Landlord from any claim, liability, damage, or loss arising out of any activity on the Premises by Tenant, its agents, or invitees or resulting from Tenant's failure to comply with any term of this lease. (b) Tenant shall carry general liability insurance on an occurrence basis with combined single limits of not less than $1,000,000. Such insurance shall be provided by an insurance carrier reasonably acceptable to Landlord and shall be evidenced by a certificate delivered to Landlord stating that the coverage will not be canceled or materially altered without 10 days' advance written notice to Landlord. Landlord shall be named as an additional insured on such policy. 7. PROPERTY DAMAGE; SUBROGATION WAIVER. (a) If fire or other casualty causes damage to the Building or the Premises in an amount exceeding 30 percent of the full construction-replacement cost of the Building or Premises, respectively, Landlord may elect to terminate this lease as of the date of the damage by notice in writing to Tenant within 30 days after such date. Otherwise, Landlord shall promptly repair the damage and restore the Premises to their former condition as soon as practicable. Rent shall be reduced during the period to the extent the Premises are not reasonably usable for the use permitted by this lease because of such damage and required repairs. (b) Landlord shall be responsible for insuring the Building, and Tenant shall be responsible for insuring its personal property and trade fixtures located on the Premises. (c) Neither party shall be liable to the other for any loss or damage caused by water damage, sprinkler leakage, or any of the risks covered by a standard fire insurance policy with extended coverage and sprinkler leakage endorsements, and there shall be no subrogated claim by one party's insurance carrier against the other party arising out of any such loss. 5

8. CONDEMNATION. If a condemning party takes the entire Premises or a portion sufficient to render the remainder unsuitable for Tenant's use, then either party may elect to terminate this lease effective on the date that little passes to the condemning authority. Otherwise, Landlord shall proceed as soon as practicable to restore the remaining Premises to a condition comparable to that existing at the time of the taking. Rent shall be abated during the period of restoration to the extent the Premises are not reasonably usable by Tenant, and rent shall be reduced for the remainder of the term in an amount equal to the reduction in rental value of the Premises caused by the taking. All condemnation proceeds shall belong to Landlord. 9. ASSIGNMENT AND SUBLETTING. (a) Tenant shall not assign its interest under this lease nor sublet the Premises without first obtaining Landlord's consent in writing. This provision shall apply to all transfers by operation of law or through mergers and changes in control of Tenant. No assignment shall relieve Tenant of its obligation to pay rent or perform other obligations

8. CONDEMNATION. If a condemning party takes the entire Premises or a portion sufficient to render the remainder unsuitable for Tenant's use, then either party may elect to terminate this lease effective on the date that little passes to the condemning authority. Otherwise, Landlord shall proceed as soon as practicable to restore the remaining Premises to a condition comparable to that existing at the time of the taking. Rent shall be abated during the period of restoration to the extent the Premises are not reasonably usable by Tenant, and rent shall be reduced for the remainder of the term in an amount equal to the reduction in rental value of the Premises caused by the taking. All condemnation proceeds shall belong to Landlord. 9. ASSIGNMENT AND SUBLETTING. (a) Tenant shall not assign its interest under this lease nor sublet the Premises without first obtaining Landlord's consent in writing. This provision shall apply to all transfers by operation of law or through mergers and changes in control of Tenant. No assignment shall relieve Tenant of its obligation to pay rent or perform other obligations required by this lease and no one assignment or subletting shall be a consent to any further assignment or subletting. (b) Subject to the above limitations on transfers of Tenant's interest, this lease shall bind and inure to the benefit of the parties, their respective heirs, successors, and assigns. 10. DEFAULT. Any of the following shall constitute a default by Tenant under this lease: (a) Tenant's failure to pay rent or any other charge under this lease within 10 days after it is due, or failure to comply with any other term or condition within 30 days following written notice from Landlord specifying the noncompliance. If such noncompliance cannot be cured within the 30-day period, this provision shall be satisfied if Tenant commences correction within such period and thereafter proceeds in good faith and with reasonable diligence to effect compliance as soon as possible. (b) Tenant's insolvency; assignment for the benefit of its credits; Tenant's voluntary petition in bankruptcy or adjudication as bankrupt, or the appointment of a receiver for Tenant's properties. 11. REMEDIES FOR DEFAULT. In case of default as described in paragraph 10 above, Landlord shall have the right to the following remedies which are intended to be cumulative and in addition to any other remedies provided under applicable law: 6

(a) Terminate this lease without relieving Tenant from its obligation to pay damages. (b) Retake possession of the Premises by summary proceedings or otherwise, in which case Tenant's liability to Landlord for damages shall survive the tenancy. Landlord may, after such retaking of possession, relet the Premises upon any reasonable terms. No such reletting shall be construed as an acceptance of a surrender of Tenant's leasehold interest. (c) Recover damages caused by Tenant's default which shall include reasonable attorneys' fees at trial and on any appeal therefrom. Landlord may sue periodically to recover damages as they occur throughout the lease term, and no action for accrued damages shall bar a later action for damages subsequently accruing. Landlord may elect in any one action to recover accrued damages plus damages attributable to the remaining term of the lease equal to the difference between the rent under this lease and the reasonable rental value of the Premises for the remainder of the term, discounted to the time of judgment at the rate of 6 percent per annum. (d) Make any payment or perform any obligation required of Tenant so as to cure Tenant's default, in which case Landlord shall be entitled to recover all amounts so expended from Tenant, plus interest at the rate of 10 percent

(a) Terminate this lease without relieving Tenant from its obligation to pay damages. (b) Retake possession of the Premises by summary proceedings or otherwise, in which case Tenant's liability to Landlord for damages shall survive the tenancy. Landlord may, after such retaking of possession, relet the Premises upon any reasonable terms. No such reletting shall be construed as an acceptance of a surrender of Tenant's leasehold interest. (c) Recover damages caused by Tenant's default which shall include reasonable attorneys' fees at trial and on any appeal therefrom. Landlord may sue periodically to recover damages as they occur throughout the lease term, and no action for accrued damages shall bar a later action for damages subsequently accruing. Landlord may elect in any one action to recover accrued damages plus damages attributable to the remaining term of the lease equal to the difference between the rent under this lease and the reasonable rental value of the Premises for the remainder of the term, discounted to the time of judgment at the rate of 6 percent per annum. (d) Make any payment or perform any obligation required of Tenant so as to cure Tenant's default, in which case Landlord shall be entitled to recover all amounts so expended from Tenant, plus interest at the rate of 10 percent per annum from the date of the expenditure. 12. SURRENDER OR TERMINATION. (a) On expiration or early termination of this lease, Tenant shall deliver all keys to Landlord, have final utility readings made on the date of move out, and surrender the Premises clean and free of debris inside and out, with all mechanical, electrical, and plumbing systems in good operating condition, all signing removed and defacement corrected, and all repairs called for under this lease completed. The Premises shall be delivered in the same condition as at the commencement of the term, subject only to depreciation and wear from ordinary use. Tenant shall remove all of its furnishings and trade fixtures that remain its property and restore all damage resulting from such removal. Failure to remove said property shall be an abandonment of same, and Landlord may dispose of it in any manner without liability. (b) If Tenant fails to vacate the Premises when required, Landlord may elect either to treat Tenant as a tenant from month to month, subject to all provisions of this lease except the provision for term, or to eject Tenant from the Premises and recover damages caused by wrongful holdover. 13. LANDLORD'S LIABILITY. (a) Landlord warrants that so long as Tenant complies with all terms of this lease it shall be entitled to peaceable and undisturbed possession of the Premises free from any eviction or disturbance by Landlord or persons claiming through Landlord. 7

(b) All persons dealing with Pacific Realty Associates, L.P. ("Partnership") must look solely to the property and assets of Partnership for the payment of any claim against Partnership or for the performance of any obligation of Partnership as neither the general partner, limited partners, employees, nor agents of Partnership assume any personal liability for obligations entered into on behalf of Partnership (or its predecessors in interest) and their respective properties shall not be subject to the claims of any person in respect of any such liability or obligation. As used herein, the words "property and assets of partnership" exclude any rights of Partnership for the payment of capital contributions or other obligations to it by the general partner or any limited partner in such capacity. 14. MORTGAGE OR SALE BY LANDLORD; ESTOPPEL CERTIFICATES. (a) This lease is and shall be prior to any mortgage or deed of trust ("Encumbrance") recorded after the date of this lease and affecting the Building and the land upon which the Building is located. However, if any lender holding an Encumbrance secured by the Building and the land underlying the Building requires that this lease be subordinate to the Encumbrance, then Tenant agrees that this lease shall be subordinate to the Encumbrance if the holder thereof agrees in writing with Tenant that so long as Tenant performs its obligations under this lease no foreclosure, deed given in lieu of the foreclosure, or sale pursuant to the terms of the Encumbrance, or other steps

(b) All persons dealing with Pacific Realty Associates, L.P. ("Partnership") must look solely to the property and assets of Partnership for the payment of any claim against Partnership or for the performance of any obligation of Partnership as neither the general partner, limited partners, employees, nor agents of Partnership assume any personal liability for obligations entered into on behalf of Partnership (or its predecessors in interest) and their respective properties shall not be subject to the claims of any person in respect of any such liability or obligation. As used herein, the words "property and assets of partnership" exclude any rights of Partnership for the payment of capital contributions or other obligations to it by the general partner or any limited partner in such capacity. 14. MORTGAGE OR SALE BY LANDLORD; ESTOPPEL CERTIFICATES. (a) This lease is and shall be prior to any mortgage or deed of trust ("Encumbrance") recorded after the date of this lease and affecting the Building and the land upon which the Building is located. However, if any lender holding an Encumbrance secured by the Building and the land underlying the Building requires that this lease be subordinate to the Encumbrance, then Tenant agrees that this lease shall be subordinate to the Encumbrance if the holder thereof agrees in writing with Tenant that so long as Tenant performs its obligations under this lease no foreclosure, deed given in lieu of the foreclosure, or sale pursuant to the terms of the Encumbrance, or other steps or procedures taken under the Encumbrance shall affect Tenant's rights under this lease. If the foregoing condition is met, Tenant shall execute the written agreement and any other documents required by the holder of the Encumbrance to accomplish the purposes of this paragraph. (b) If the Building is sold as a result of foreclosure of any Encumbrance thereon or otherwise transferred by Landlord or any successor, Tenant shall attorn to the purchaser or transferee, and the transferor shall have no further liability hereunder. (c) Either party shall within 20 days after notice from the other execute and deliver to the other party a certificate stating whether or not this lease has been modified and is in full force and effect and specifying any modifications or alleged breaches by the other party. The certificate shall also state the amount of monthly base rent, the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent. Failure to deliver the certificate within the specified time shall be conclusive upon the party to whom the certificate was requested that the lease is in full force and effect and has not been modified except as may be represented by the party requesting the certificate. 15. DISPUTES - ATTORNEYS' FEES. In the event of any litigation arising out of this lease, the prevailing party shall be entitled to recover from the other party, in addition to all other relief provided by law or judgement, its reasonable costs and attorneys' fees incurred both at and in preparation for trial and any appeal or review, such amount to be as determined by the court(s) before which the matter is heard. Disputes between the parties which are to be litigated shall be tried before a judge without a jury. 8

16. SEVERABILITY. If any provision of this lease is held to be invalid, unenforceable or illegal the remaining provisions shall not be affected and shall be enforced to the fullest extent permitted by law. 17. INTEREST AND LATE CHARGES. Rent not paid within 10 days of when due shall bear interest from the date due until paid at the rate of 10 percent per annum. Landlord may at its option impose a late charge of $.05 for each $1.00 of rent for rent payments made more than 10 days late in addition to interest and other remedies available for default. 18. GENERAL PROVISIONS. (a) Waiver by either party of strict performance of any provision of this lease shall not be a waiver of nor prejudice the party's right otherwise to require performance of the same provision or any other provision.

16. SEVERABILITY. If any provision of this lease is held to be invalid, unenforceable or illegal the remaining provisions shall not be affected and shall be enforced to the fullest extent permitted by law. 17. INTEREST AND LATE CHARGES. Rent not paid within 10 days of when due shall bear interest from the date due until paid at the rate of 10 percent per annum. Landlord may at its option impose a late charge of $.05 for each $1.00 of rent for rent payments made more than 10 days late in addition to interest and other remedies available for default. 18. GENERAL PROVISIONS. (a) Waiver by either party of strict performance of any provision of this lease shall not be a waiver of nor prejudice the party's right otherwise to require performance of the same provision or any other provision. (b) Subject to the limitations on transfer of Tenant's interest, this lease shall bind and inure to the benefit of the parties, their respective heirs, successors, and assigns. (c) Landlord shall have the right to enter upon the Premises at any time to determine Tenant's compliance with this lease, to make necessary repairs to the Building or the Premises, or to show the Premises do any prospective tenant or purchasers. During the last two months of the term, Landlord may place and maintain upon the Premises notices for leasing or sale of the Premises. (d) If this lease commences or terminates at a time other than the beginning or end of one of the specified rental periods, then the rent (including Tenant's share of real property taxes, if any) shall be prorated as of such date, and in the event of termination for reasons other than default all prepaid rent shall be refunded to Tenant or paid on its account. (e) Tenant shall within 10 days following Landlord's written request deliver to Landlord a written statement specifying the dates to which the rent and other charges have been paid, whether the lease is unmodified and in full force and effect, and any other matters that may reasonably be requested by Landlord. (f) Notices between the parties relating to this lease shall be in writing, effective when delivered, or if mailed, effective on the second day following mailing, postage prepaid, to the address for the party stated in this lease or to such other address as either party may specify by notice to the other. Rent shall be payable to Landlord at the same address and in the same manner. 9

19. REPAYMENT OF FREE RENT. This lease provides for a period of "free" rent (hereinafter referred to as "the Abated Rent"). Tenant shall be credited with having paid all of the Abated Rent on the expiration of the lease term only if Tenant has fully, faithfully, and punctually performed all of Tenant's obligations hereunder, including the payment of all rent (other than the Abated Rent) and all other monetary obligations and the surrender of the Property in the physical condition required by this lease. Tenant acknowledges that Tenant's right to receive credit for the Abated Rent is absolutely conditioned upon Tenant's full, faithful and punctual performance of its obligations under this lease. The Abated Rent shall immediately become due and payable in full and this lease shall be enforced as if there were no such rent abatement or other rent concessions, in the event of default by Tenant under this lease and such default is not cured within any applicable grace period. 20. OPTION TO RENEW. If not then in default, Tenant shall have the option to renew this lease for an additional 13 months immediately following expiration of the initial lease term by giving Landlord 120 days' advance written notice of its intent to extend. All provisions of this lease shall apply during the extended term, with base rent for the renewal period

19. REPAYMENT OF FREE RENT. This lease provides for a period of "free" rent (hereinafter referred to as "the Abated Rent"). Tenant shall be credited with having paid all of the Abated Rent on the expiration of the lease term only if Tenant has fully, faithfully, and punctually performed all of Tenant's obligations hereunder, including the payment of all rent (other than the Abated Rent) and all other monetary obligations and the surrender of the Property in the physical condition required by this lease. Tenant acknowledges that Tenant's right to receive credit for the Abated Rent is absolutely conditioned upon Tenant's full, faithful and punctual performance of its obligations under this lease. The Abated Rent shall immediately become due and payable in full and this lease shall be enforced as if there were no such rent abatement or other rent concessions, in the event of default by Tenant under this lease and such default is not cured within any applicable grace period. 20. OPTION TO RENEW. If not then in default, Tenant shall have the option to renew this lease for an additional 13 months immediately following expiration of the initial lease term by giving Landlord 120 days' advance written notice of its intent to extend. All provisions of this lease shall apply during the extended term, with base rent for the renewal period remaining at $3,500.00 per month. No base rent shall be due for the first month of the renewal period, but Tenant shall be obligated to pay for all other charges, taxes and expenses to be paid to Landlord as specified in paragraphs 3 and 4 of this lease. 21. OPTION TO RELOCATE. If during the term of this lease Tenant notifies Landlord that it is desirous of leasing additional square footage in an alternative space, Landlord shall, providing Tenant is not then in default, use its best efforts to relocate Tenant to an alternate location of at least 7.500 square feet within one of its properties which is mutually acceptable to both parties. 22. TENANT IMPROVEMENTS. Tenant Improvements within the Premises shall be constructed generally as shown on the attached Exhibits C and D. Tenant improvement costs shall be divided into the following categories: (a) Part A: Tenant improvements to be constructed at Landlord's expense. (b) Part B: Tenant improvements to be constructed at Tenant's expense. Part B tenant improvement costs shall be amortized over the 36 months of this lease term during which base rent is to be paid. Such amount shall be amortized at a rate of 12 10

percent per annum and the resulting monthly rent will be reflected in a Lease Summary Agreement, which shall be executed by the parties prior to June 1, 1992. 23. ENVIRONMENTAL. (a) Definitions. The term "Environmental Law" shall mean any federal, state or local statute, regulation or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term "Hazardous Substance" shall mean any hazardous, toxic, infectious or radioactive substance, waste and material as defined or listed by any Environmental Law and shall include, without limitation, petroleum oil and its fractions. (b) Use of Hazardous Substances. Tenant shall not cause or permit any Hazardous Substance to be spilled, leaked, disposed of or otherwise released on or under the Premises. Tenant may use and sell on the Premises only those Hazardous Substances typically used and sold in the prudent and safe operation of the business permitted by Section 1. Tenant may store such Hazardous Substances on the Premises, but only in quantities

percent per annum and the resulting monthly rent will be reflected in a Lease Summary Agreement, which shall be executed by the parties prior to June 1, 1992. 23. ENVIRONMENTAL. (a) Definitions. The term "Environmental Law" shall mean any federal, state or local statute, regulation or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term "Hazardous Substance" shall mean any hazardous, toxic, infectious or radioactive substance, waste and material as defined or listed by any Environmental Law and shall include, without limitation, petroleum oil and its fractions. (b) Use of Hazardous Substances. Tenant shall not cause or permit any Hazardous Substance to be spilled, leaked, disposed of or otherwise released on or under the Premises. Tenant may use and sell on the Premises only those Hazardous Substances typically used and sold in the prudent and safe operation of the business permitted by Section 1. Tenant may store such Hazardous Substances on the Premises, but only in quantities necessary to satisfy Tenant's reasonably anticipated needs. Tenant shall comply with all Environmental Laws and exercise the highest degree of care in the use, handling and storage of Hazardous Substances and shall take all practicable measures to minimize the quantity and toxicity of Hazardous Substances used, handled or stored on the Premises. (c) Notices. Tenant shall immediately notify Landlord upon receiving notice of the following: (a) any spill, leak, disposal or other release of a Hazardous Substance on, under or adjacent to the Premises; (b) any notice or communication from a governmental agency or any other parson rotating to any Hazardous Substance on, under or adjacent to the Promises, or (c) any violation of any Environmental Law with respect to the Premises or Tenant's activities on or in connection with the Premises. (d) Spills and Releases. In the event Tenant becomes aware of a spill, leak, disposal or other release of a Hazardous Substance caused by Tenant on or under the Premises, or the suspicion or threat of the same, Tenant shall (a) immediately undertake all emergency response necessary to contain, cleanup and remove the released Hazardous Substance, (b) promptly undertake all investigatory, remedial, removal and other response action necessary to ensure that any Hazardous Substance contamination is eliminated to Landlord's satisfaction, and (c) provide Landlord copies of all correspondence with any governmental agency regarding the release (or threatened or suspected release) or the response action, a detailed report documenting all such response action, and a certification that any contamination has been eliminated to the degree required by such authorities. All such response action shall be performed, all such reports shall be prepared and all such certifications shall be made by an environmental consultant reasonably acceptable to Landlord. This section 23(d) shall not apply to any release caused by Landlord, other tenants of Landlord, previous tenants of the Premises, their respective agents or contractors, or any person other than Tenant or its respective agents or contractors. 11

(e) Investigations. Landlord reserves its right to inspect the Tenant's use of Hazardous Substances on the Premises at any time upon reasonable notice to Tenant. Tenant shall provide Landlord reasonable access to all records relating to the management, use, storage or other handling of Hazardous Substances on the Premises. If Landlord at any time during the term of this Lease has reason to believe that Tenant is not complying with any of the requirements of this Section 23, Landlord may require Tenant to furnish to landlord, at Tenant's sole expense, an environmental audit with respect to the matters Landlord reasonably believes to be out of compliance. Such environmental audit shall be conducted by an environmental consultant acceptable to Landlord. (f) Condition Upon Termination. (i) Upon termination expiration of this Lease for any reason, Tenant shall remove all Hazardous Substances introduced by Tenant from the Premises and, at Landlord's request, shall properly remove in compliance with all applicable laws all tank systems and other facilities installed by Tenant and used for the storage or handling of Hazardous Substances and restore the affected areas by repairing any damage caused by the installation or removal of the facilities. Following such removal, Tenant shall certify in writing to Landlord that all such removal is

(e) Investigations. Landlord reserves its right to inspect the Tenant's use of Hazardous Substances on the Premises at any time upon reasonable notice to Tenant. Tenant shall provide Landlord reasonable access to all records relating to the management, use, storage or other handling of Hazardous Substances on the Premises. If Landlord at any time during the term of this Lease has reason to believe that Tenant is not complying with any of the requirements of this Section 23, Landlord may require Tenant to furnish to landlord, at Tenant's sole expense, an environmental audit with respect to the matters Landlord reasonably believes to be out of compliance. Such environmental audit shall be conducted by an environmental consultant acceptable to Landlord. (f) Condition Upon Termination. (i) Upon termination expiration of this Lease for any reason, Tenant shall remove all Hazardous Substances introduced by Tenant from the Premises and, at Landlord's request, shall properly remove in compliance with all applicable laws all tank systems and other facilities installed by Tenant and used for the storage or handling of Hazardous Substances and restore the affected areas by repairing any damage caused by the installation or removal of the facilities. Following such removal, Tenant shall certify in writing to Landlord that all such removal is complete. If any Hazardous Substances have been released on or under the Premises during the term of this Lease, Tenant shall cause all Hazardous Substances contamination to be eliminated to Landlord's reasonable satisfaction and shall provide Landlord a certification from an environmental consultant reasonably acceptable to Landlord that all Hazardous Substances contamination on the Premises has been so eliminated. (ii) Until such time as Tenant has fulfilled all the requirements of subsection (i) above, Landlord may regard Tenant as a hold-over tenant at will, and all rents under this Lease shall continue, provided, however, that the continuation of this Lease shall not relieve Tenant of its obligations under subsection (i). (g) Assignment and Subletting. Notwithstanding the provisions of Section 9, it shall not be unreasonable for Landlord to withhold its consent to any assignment, sublease or other transfer of the Tenant's interest in this Lease if a proposed transferee's anticipated use of the premises involves the generation, storage, use, sale, treatment, release or disposal of any Hazardous Substance. (h) Indemnity. (i) By Tenant. Tenant shall indemnify, defend and hold harmless Landlord, its employees and agents, any persons holding a security interest in the Premises, and the respective successors and assigns of each of them from and against any and all claims, demands, liabilities, damages, fines, losses, costs (including without limitation the cost of any investigation, remedial, removal or other response action required by Environmental Law) and expenses (including without limitation attorneys' fees end expert fees in connection with any trial, appeal, petition for review or administrative proceeding) arising out of or in any way 12

relating to the actual or alleged use, treatment, storage, generation, transport, release, leak, spill, disposal or other handling of Hazardous Substances on the Premises by Tenant or any of its contractors or agents, employees or invitees. Tenant's obligations under this section shall survive the expiration or termination of this Lease for any reason. Landlord's rights under this section are in addition to and not in lieu of any other rights or remedies to which Landlord may be entitled under this Agreement or otherwise. (ii) By Landlord. Landlord shall indemnify, defend and hold harmless Tenant and its employees and agents and the respective successors and assigns of each of them from and against any and all claims, demands, liabilities, damages, fines, losses, costs (including without limitation the cost of any investigation, remedial, removal or other response action required by Environmental Law) and expenses (including without limitation attorneys' fees and expert fees in connection with any trial, appeal, petition for review or administrative proceeding) arising out of or in any way relating to the actual or alleged use, treatment, storage, generation, transport, release, leak, spill, disposal or other handling of Hazardous Substances on the Premises by Landlord, other tenants of Landlord, previous tenants of the Premises, their respective agents or contractors, employees or invitees. Landlord's obligations under this section shall survive the expiration or termination of this Lease for any reason. Tenant's rights under this section are in addition to and not in lieu of any other rights or remedies to which Tenant may be entitled under this Agreement or otherwise.

relating to the actual or alleged use, treatment, storage, generation, transport, release, leak, spill, disposal or other handling of Hazardous Substances on the Premises by Tenant or any of its contractors or agents, employees or invitees. Tenant's obligations under this section shall survive the expiration or termination of this Lease for any reason. Landlord's rights under this section are in addition to and not in lieu of any other rights or remedies to which Landlord may be entitled under this Agreement or otherwise. (ii) By Landlord. Landlord shall indemnify, defend and hold harmless Tenant and its employees and agents and the respective successors and assigns of each of them from and against any and all claims, demands, liabilities, damages, fines, losses, costs (including without limitation the cost of any investigation, remedial, removal or other response action required by Environmental Law) and expenses (including without limitation attorneys' fees and expert fees in connection with any trial, appeal, petition for review or administrative proceeding) arising out of or in any way relating to the actual or alleged use, treatment, storage, generation, transport, release, leak, spill, disposal or other handling of Hazardous Substances on the Premises by Landlord, other tenants of Landlord, previous tenants of the Premises, their respective agents or contractors, employees or invitees. Landlord's obligations under this section shall survive the expiration or termination of this Lease for any reason. Tenant's rights under this section are in addition to and not in lieu of any other rights or remedies to which Tenant may be entitled under this Agreement or otherwise. IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this lease as of the day and year first written above.
PACIFIC REALTY ASSOCIATES, LP. BY PACTRUST REALTY, INC., ITS GENERAL PARTNER PI (MEDICAL)

By /s/ DAVID G. HICKS ---------------------------David G. Hicks Vice President

By: /s/ R.A. MURIE -------------------------------------Name R.A. MURIE ------------------------------------Title VP and Gen. Mgr. -----------------------------------By --------------------------------------Name ------------------------------------Title ------------------------------------

ADDRESS FOR NOTICES/RENT PAYMENTS TO LANDLORD: 15115 S.W. Sequoia Parkway, Suite 200 Portland, Oregon 97224

ADDRESS FOR LEGAL NOTICES TO TENANT:

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

13

ADDRESS FOR INVOICES TO TENANT:

14
LEASE AMENDMENT DATED: AUGUST 12, 1992

ADDRESS FOR INVOICES TO TENANT:

14
LEASE AMENDMENT DATED: BETWEEN: AUGUST 12, 1992 PACIFIC REALTY ASSOCIATES, L.P., A DELAWARE LIMITED PARTNERSHIP PI (MEDICAL) AN OREGON CORPORATION

LANDLORD

AND:

TENANT

By written lease dated April 20, 1992, Tenant leased from Landlord approximately 5,000 square feet of office space located in Building B, PacTrust Business Center, 16125 S.W. 72nd Avenue, Portland, Oregon 97224 (hereinafter referred to as "the Premises"). Such document is hereinafter referred to as "the Lease." The Lease expires June 30, 1995. Landlord has completed Part B tenant improvements set forth in paragraph 22 of the lease, and costs for such improvements shall be amortized over the remaining term of the Lease. NOW, THEREFORE, the parties agree as follows: 1. Costs for Part B tenant improvements total $10,297.00. 2. Commencing September 1, 1992 and continuing through June 30, 1995, base rent shall increase by $359.00 per month according to the following schedule:
Base Rent per Month --------$3,159.00 $3,359.00 $3,859.00

Period -----September 1, 1992 through June 30, 1993 July 1, 1993 through June 30, 1994 July 1, 1994 through June 30, 1995

3. Except as expressly modified hereby, all terms of the Lease shall remain in full force and effect and shall continue through the existing term. 1

IN WITNESS WHEREOF, the parties have executed this agreement as of the date and year first written above. PACIFIC REALTY ASSOCIATES, L.P. PI (MEDICAL) BY PACTRUST REALTY, INC., ITS GENERAL PARTNER
By /s/ DAVID G. HICKS ---------------------------David G. Hicks By Name /s/ RICHARD MURIE ----------------------------------Richard Murie

Vice President Title Vice President

LEASE AMENDMENT DATED: BETWEEN: AUGUST 12, 1992 PACIFIC REALTY ASSOCIATES, L.P., A DELAWARE LIMITED PARTNERSHIP PI (MEDICAL) AN OREGON CORPORATION

LANDLORD

AND:

TENANT

By written lease dated April 20, 1992, Tenant leased from Landlord approximately 5,000 square feet of office space located in Building B, PacTrust Business Center, 16125 S.W. 72nd Avenue, Portland, Oregon 97224 (hereinafter referred to as "the Premises"). Such document is hereinafter referred to as "the Lease." The Lease expires June 30, 1995. Landlord has completed Part B tenant improvements set forth in paragraph 22 of the lease, and costs for such improvements shall be amortized over the remaining term of the Lease. NOW, THEREFORE, the parties agree as follows: 1. Costs for Part B tenant improvements total $10,297.00. 2. Commencing September 1, 1992 and continuing through June 30, 1995, base rent shall increase by $359.00 per month according to the following schedule:
Base Rent per Month --------$3,159.00 $3,359.00 $3,859.00

Period -----September 1, 1992 through June 30, 1993 July 1, 1993 through June 30, 1994 July 1, 1994 through June 30, 1995

3. Except as expressly modified hereby, all terms of the Lease shall remain in full force and effect and shall continue through the existing term. 1

IN WITNESS WHEREOF, the parties have executed this agreement as of the date and year first written above. PACIFIC REALTY ASSOCIATES, L.P. PI (MEDICAL) BY PACTRUST REALTY, INC., ITS GENERAL PARTNER
By /s/ DAVID G. HICKS ---------------------------David G. Hicks By Name /s/ RICHARD MURIE ----------------------------------Richard Murie

Vice President Title Vice President 2

LEASE AMENDMENT
DATED: FEBRUARY 16, 1995

BETWEEN: PACIFIC REALTY ASSOCIATES, L.P.,

IN WITNESS WHEREOF, the parties have executed this agreement as of the date and year first written above. PACIFIC REALTY ASSOCIATES, L.P. PI (MEDICAL) BY PACTRUST REALTY, INC., ITS GENERAL PARTNER
By /s/ DAVID G. HICKS ---------------------------David G. Hicks By Name /s/ RICHARD MURIE ----------------------------------Richard Murie

Vice President Title Vice President 2

LEASE AMENDMENT
DATED: FEBRUARY 16, 1995

BETWEEN: PACIFIC REALTY ASSOCIATES, L.P., A DELAWARE LIMITED PARTNERSHIP AND: PI (MEDICAL) AN OREGON CORPORATION

LANDLORD

TENANT

By written lease dated April 20, 1992, Tenant leased from Landlord approximately 5,000 square feet of office space located in Building B, PacTrust Business Center, 16125 S.W. 72nd Avenue, Portland, Oregon 97224 (hereinafter referred to as the "Premises"). By Lease Amendment dated August 12, 1992, the lease was amended. By Lease Amendment dated February 16, 1995, the term of the lease was extended. Such documents are hereinafter jointly referred to as the "Lease." The Lease expires July 31, 1996. Tenant now wishes to extend the term of the Lease. NOW, THEREFORE, the parties agree as follows: 1. The Lease shall be extended for an additional 12 months commencing August 1, 1996 and continuing through July 31, 1997. 2. Base rent shall increase from $3,500.00 to $3,750.00 per month commencing August 1, 1996 and continuing through the extended term. 3. Except as expressly modified hereby, all terms of the Lease shall remain in full force and effect and shall continue through the extended term. IN WITNESS WHEREOF, the parties have executed this agreement as of the date and year first written above.
PACIFIC REALTY ASSOCIATES, L.P. AN OREGON CORPORATION BY PACTRUST REALTY, INC., ITS GENERAL PARTNER PI (MEDICAL), AN OREGON CORPORATION

By

/s/ DAVID G. HICKS ---------------------------David G. Hicks Vice President

By Name Title

/s/ RICHARD G. SASS ---------------------------------Richard G. Sass

LEASE AMENDMENT
DATED: FEBRUARY 16, 1995

BETWEEN: PACIFIC REALTY ASSOCIATES, L.P., A DELAWARE LIMITED PARTNERSHIP AND: PI (MEDICAL) AN OREGON CORPORATION

LANDLORD

TENANT

By written lease dated April 20, 1992, Tenant leased from Landlord approximately 5,000 square feet of office space located in Building B, PacTrust Business Center, 16125 S.W. 72nd Avenue, Portland, Oregon 97224 (hereinafter referred to as the "Premises"). By Lease Amendment dated August 12, 1992, the lease was amended. By Lease Amendment dated February 16, 1995, the term of the lease was extended. Such documents are hereinafter jointly referred to as the "Lease." The Lease expires July 31, 1996. Tenant now wishes to extend the term of the Lease. NOW, THEREFORE, the parties agree as follows: 1. The Lease shall be extended for an additional 12 months commencing August 1, 1996 and continuing through July 31, 1997. 2. Base rent shall increase from $3,500.00 to $3,750.00 per month commencing August 1, 1996 and continuing through the extended term. 3. Except as expressly modified hereby, all terms of the Lease shall remain in full force and effect and shall continue through the extended term. IN WITNESS WHEREOF, the parties have executed this agreement as of the date and year first written above.
PACIFIC REALTY ASSOCIATES, L.P. AN OREGON CORPORATION BY PACTRUST REALTY, INC., ITS GENERAL PARTNER PI (MEDICAL), AN OREGON CORPORATION

By

/s/ DAVID G. HICKS ---------------------------David G. Hicks Vice President

By Name Title

/s/ RICHARD G. SASS ---------------------------------Richard G. Sass

LEASE AMENDMENT
DATED: BETWEEN: APRIL 26, 1996 PACIFIC REALTY ASSOCIATES, L.P., A DELAWARE LIMITED PARTNERSHIP EVERGREEN ISLAND ENTERPRISES, INC., AN OREGON CORPORATION

LANDLORD

AND:

TENANT

By written lease dated February 16, 1993, Tenant leased from Landlord approximately 8,875 square feet of office and warehouse space located in Building B, PacTrust Business Center, 16135 S.W. 72nd Avenue, Portland, Oregon 97224 (hereinafter referred to as the "Premises"). By Lease Amendment dated February 16, 1995, the term of the lease was extended. Such documents are hereinafter jointly referred to as the "Lease." The

LEASE AMENDMENT
DATED: BETWEEN: APRIL 26, 1996 PACIFIC REALTY ASSOCIATES, L.P., A DELAWARE LIMITED PARTNERSHIP EVERGREEN ISLAND ENTERPRISES, INC., AN OREGON CORPORATION

LANDLORD

AND:

TENANT

By written lease dated February 16, 1993, Tenant leased from Landlord approximately 8,875 square feet of office and warehouse space located in Building B, PacTrust Business Center, 16135 S.W. 72nd Avenue, Portland, Oregon 97224 (hereinafter referred to as the "Premises"). By Lease Amendment dated February 16, 1995, the term of the lease was extended. Such documents are hereinafter jointly referred to as the "Lease." The Lease expires July 31, 1990. Tenant now wishes to extend the term of the Lease. NOW, THEREFORE, the parties agree as follows: 1. The Lease shall be extended for an additional 12 months commencing August 1, 1996 and continuing through July 31, 1997. 2. Base rent shall increase from $4,125.00 to $4,469.00 per month commencing August 1, 1996 and continuing through the extended term. 3. Except as expressly modified hereby, all terms of the Lease shall remain in full force and effect and shall continue through the extended term. IN WITNESS WHEREOF, the parties have executed this agreement as of the date and year first written above.
PACIFIC REALTY ASSOCIATES, L.P., A DELAWARE LIMITED PARTNERSHIP EVERGREEN ISLAND ENTERPRISES, INC. AN OREGON CORPORATION

BY PACTRUST REALTY, INC., A DELAWARE CORPORATION, ITS GENERAL PARTNER

By

/s/ DAVID G. HICKS ---------------------------David G. Hicks Vice President

By Name Title

/s/ RICHARD G. SASS ---------------------------------Richard G. Sass

LEASE AMENDMENT
DATED: BETWEEN: JULY 3, 1997 PACIFIC REALTY ASSOCIATES, L.P., A DELAWARE LIMITED PARTNERSHIP PI (MEDICAL), AN OREGON CORPORATION

LANDLORD

AND:

TENANT

By written lease dated April 20, 1992, Tenant leased from Landlord approximately 5,000 square feet of office space located in Building B, PacTrust Business Center, 16125 S.W. 72nd Avenue, Portland, Oregon 97224 (hereinafter referred to as the "Premises"). By Lease Amendment dated August 12, 1992, the Lease was

LEASE AMENDMENT
DATED: BETWEEN: JULY 3, 1997 PACIFIC REALTY ASSOCIATES, L.P., A DELAWARE LIMITED PARTNERSHIP PI (MEDICAL), AN OREGON CORPORATION

LANDLORD

AND:

TENANT

By written lease dated April 20, 1992, Tenant leased from Landlord approximately 5,000 square feet of office space located in Building B, PacTrust Business Center, 16125 S.W. 72nd Avenue, Portland, Oregon 97224 (hereinafter referred to as the "Premises"). By Lease Amendment dated August 12, 1992, the Lease was amended. By Lease Amendments dated February 16, 1995 and April 26, 1996, the term of the Lease was extended. Such documents are hereinafter jointly referred to as the "Lease." The Lease expires July 31, 1997. Tenant now wishes to extend the term of the Lease and to lease an additional approximately 15,000 square feet of warehouse and office space adjacent to and immediately south of the Premises (hereinafter referred to as the "First Additional Space") and as further described on the attached Exhibit A NOW, THEREFORE, the parties agree as follows: 1. The Lease shall be extended for an additional 60 months commencing August 1, 1997 and continuing through July 31, 2002. 2. The First Additional Space shall become subject to the terms of the Lease upon occupancy by Tenant, which is estimated to be August 1, 1997. Tenant's total leased area shall increase from approximately 5,000 to 20,000 square feet of warehouse and office space. 3. Base rent shall be according to the following schedule:
BASE RENT PER MONTH --------$ 8,219.00 $15,000.00

PERIOD -----August 1, 1997 through September 30, 1997 October 1, 1997 through July 31, 2002

4. If, after January 31, 2000, Tenant notifies Landlord in writing that it is desirous of leasing additional space, Landlord shall, providing Tenant is not then in default, use its best efforts to provide additional space of not less than 10,000 square feet within one of its properties which is mutually acceptable to both parties. If Landlord cannot provide such additional space within 180 days of Landlord's receipt of Tenant's written notice of its desire to lease additional space, then Tenant shall have the right to terminate the Lease providing Landlord 30 days' advance written notice of its intent to terminate. 5. A tenant improvement allowance of $40,000.00 (hereinafter referred to as "the Allowance") has been provided. A final space plan will be completed upon which Landlord and Tenant agree. If Landlord cannot construct the required improvements within the $40,000.00 allowance, Tenant agrees to pay to Landlord the amount by which this cost exceeds the Allowance, adjusted by any reductions or increases in cost initiated by Tenant after a final plan and specifications have been signed off by both parties with such amount to be paid upon occupancy. If the tenant improvements, including tenant-initiated adjustments, are less than the Allowance, Landlord shall credit Tenant by providing Tenant with a like amount in the form of free base rent.

6. Landlord shall grant Tenant a one year warranty for the heating, ventilating, and air conditioning system, provided that Tenant contracts with a reputable service contractor to provide proper maintenance for the system. Such warranty shall be in effect for one year beginning August 1, 1997 and continuing through October 31, 1998.

6. Landlord shall grant Tenant a one year warranty for the heating, ventilating, and air conditioning system, provided that Tenant contracts with a reputable service contractor to provide proper maintenance for the system. Such warranty shall be in effect for one year beginning August 1, 1997 and continuing through October 31, 1998. 7. Except as expressly modified hereby, all terms of the Lease shall remain in full force and effect and shall continue through the extended term. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the respective dates set opposite their signatures below, but this Agreement on behalf of such party shall be deemed to have been dated as of the date first above written. LANDLORD: PACIFIC REALTY ASSOCIATES, L.P., a Delaware limited partnership By: PacTrust Realty, Inc., a Delaware corporation, its General Partner
Date: July 3, 1997 By: /s/ SAM K. BRIGGS ------------------------------------Sam K. Briggs Marketing Director

TENANT: PI (MEDICAL), an Oregon corporation
Date: July 3, 1997 By: /s/ RICHARD G. SASS -------------------------------------Name: Richard G. Sass -----------------------------------Title: CEO -----------------------------------

EXHIBIT 10.27 MHL DEVELOPMENT COMPANY 1998 STOCK INCENTIVE PLAN 1. PURPOSE. The purpose of this Stock Incentive Plan (the "Plan") is to enable mHL Development Company, an Oregon corporation (the "Company") to attract and retain the services of (1) selected employees, officers and directors of the Company or of any subsidiary of the Company and (2) selected nonemployee agents, consultants, advisors, persons involved in the sale or distribution of the Company's products and independent contractors of the Company or any subsidiary. 2. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided below and in Section 13, the shares to be offered under the Plan shall consist of Common Stock of the Company, and the total number of shares of Common Stock that may be issued under the Plan shall not exceed 2,000,000 shares. The shares issued under the Plan may be authorized and unissued shares or reacquired shares, and they may be shares of the Company's Voting Common Stock or Nonvoting Common Stock. If an option, stock appreciation right or performance unit granted under the Plan expires, terminates or is canceled, the unissued shares subject to such option, stock

EXHIBIT 10.27 MHL DEVELOPMENT COMPANY 1998 STOCK INCENTIVE PLAN 1. PURPOSE. The purpose of this Stock Incentive Plan (the "Plan") is to enable mHL Development Company, an Oregon corporation (the "Company") to attract and retain the services of (1) selected employees, officers and directors of the Company or of any subsidiary of the Company and (2) selected nonemployee agents, consultants, advisors, persons involved in the sale or distribution of the Company's products and independent contractors of the Company or any subsidiary. 2. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided below and in Section 13, the shares to be offered under the Plan shall consist of Common Stock of the Company, and the total number of shares of Common Stock that may be issued under the Plan shall not exceed 2,000,000 shares. The shares issued under the Plan may be authorized and unissued shares or reacquired shares, and they may be shares of the Company's Voting Common Stock or Nonvoting Common Stock. If an option, stock appreciation right or performance unit granted under the Plan expires, terminates or is canceled, the unissued shares subject to such option, stock appreciation right or performance unit shall again be available under the Plan. If shares sold or awarded as a bonus under the Plan are forfeited to the Company or repurchased by the Company, the number of shares forfeited or repurchased shall again be available under the Plan. 3. EFFECTIVE DATE AND DURATION OF PLAN. a. EFFECTIVE DATE. The Plan shall become effective as of February 27, 1998. No option, stock appreciation right or performance unit granted under the Plan shall become exercisable, however, until the Plan is approved by the affirmative vote of the holders of a majority of the shares of Common Stock represented at a shareholders meeting at which a quorum is present and any such awards under the Plan prior to such approval shall be conditioned on and subject to such approval. Subject to this limitation, options, stock appreciation rights and performance units may be granted and shares may be awarded as bonuses or sold under the Plan at any time after the effective date and before termination of the Plan. b. DURATION. The Plan shall continue in effect until all shares available for issuance under the Plan have been issued and all restrictions on such shares have lapsed. The Board of Directors may suspend or terminate the Plan at any time except with respect to options, performance units and shares subject to restrictions then outstanding under the Plan. Termination shall not affect any outstanding options, any right of the Company to repurchase shares or the forfeitability of shares issued under the Plan.

4. ADMINISTRATION. a. BOARD OF DIRECTORS. The Plan shall be administered by the Board of Directors of the Company, which shall determine and designate from time to time the individuals to whom awards shall be made, the amount of the awards and the other terms and conditions of the awards. Subject to the provisions of the Plan, the Board of Directors may from time to time adopt and amend rules and regulations relating to administration of the Plan, advance the lapse of any waiting period, accelerate any exercise date, waive or modify any restriction applicable to shares (except those restrictions imposed by law) and make all other determinations in the judgment of the Board of Directors necessary or desirable for the administration of the Plan. The interpretation and construction of the provisions of the Plan and related agreements by the Board of Directors shall be final and conclusive. The Board of Directors may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any related agreement in the manner and to the extent it shall deem expedient to carry the Plan into effect, and it shall be the sole and final judge of such expediency. b. COMMITTEE. The Board of Directors may delegate to a committee of the Board of Directors or specified officers of the Company, or both (the "Committee") any or all authority for administration of the Plan. If authority is delegated to a Committee, all references to the Board of Directors in the Plan shall mean and relate to the Committee except (i) as otherwise provided by the Board of Directors and (ii) that only the Board of Directors

4. ADMINISTRATION. a. BOARD OF DIRECTORS. The Plan shall be administered by the Board of Directors of the Company, which shall determine and designate from time to time the individuals to whom awards shall be made, the amount of the awards and the other terms and conditions of the awards. Subject to the provisions of the Plan, the Board of Directors may from time to time adopt and amend rules and regulations relating to administration of the Plan, advance the lapse of any waiting period, accelerate any exercise date, waive or modify any restriction applicable to shares (except those restrictions imposed by law) and make all other determinations in the judgment of the Board of Directors necessary or desirable for the administration of the Plan. The interpretation and construction of the provisions of the Plan and related agreements by the Board of Directors shall be final and conclusive. The Board of Directors may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any related agreement in the manner and to the extent it shall deem expedient to carry the Plan into effect, and it shall be the sole and final judge of such expediency. b. COMMITTEE. The Board of Directors may delegate to a committee of the Board of Directors or specified officers of the Company, or both (the "Committee") any or all authority for administration of the Plan. If authority is delegated to a Committee, all references to the Board of Directors in the Plan shall mean and relate to the Committee except (i) as otherwise provided by the Board of Directors and (ii) that only the Board of Directors may amend or terminate the Plan as provided in Sections 3 and 15. 5. TYPES OF AWARDS; ELIGIBILITY. The Board of Directors may, from time to time, take the following actions, separately or in combination, under the Plan: (i) grant Incentive Stock Options, as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), as provided in Sections 6(a) and 6(b); (ii) grant options other than Incentive Stock Options ("Non-Statutory Stock Options") as provided in Sections 6(a) and 6(c); (iii) award stock bonuses as provided in Section 7; (iv) sell shares subject to restrictions as provided in Section 8; (v) grant stock appreciation rights as provided in Section 9; (vi) grant cash bonus rights as provided in Section 10; (vii) grant performance units as provided in Section 11 and (viii) grant foreign qualified awards as provided in Section 12. Any such awards may be made to employees, including employees who are officers or directors, and to other individuals described in Section 1 who the Board of Directors believes have made or will make an important contribution to the Company or any subsidiary of the Company; provided, however, that only employees of the Company shall be eligible to receive Incentive Stock Options under the Plan. The Board of Directors shall select the individuals to whom awards shall be made and shall specify the action taken with respect to each individual to whom an award is made. At the discretion of the Board of Directors, an individual may be given an election to surrender an award in exchange for the grant of a new award. No employee may be granted options or stock appreciation rights under the Plan for more than an aggregate of

200,000 shares of Common Stock in connection with the hiring of the employee or 50,000 shares of Common Stock in any calendar year otherwise. 6. OPTION GRANTS. a. GENERAL RULES RELATING TO OPTIONS. i. Terms of Grant. The Board of Directors may grant options under the Plan. With respect to each option grant, the Board of Directors shall determine the number of shares subject to the option, the option price, the period of the option, the time or times at which the option may be exercised, whether the option shall be for Voting Common Stock or Nonvoting Common Stock or a combination of both, and whether the option is an Incentive Stock Option or a Non-Statutory Stock Option. At the time of the grant of an option or at any time thereafter, the Board of Directors may provide that an optionee who exercised an option with Common Stock of the Company shall automatically receive a new option to purchase additional shares equal to the number of shares surrendered and may specify the terms and conditions of such new options. ii. Exercise of Options. Except as provided in Section 6(a)(iv) or as determined by the Board of Directors, no option granted under the Plan may be exercised unless at the time of such exercise the optionee is employed by or in the service of the Company or any subsidiary of the Company and shall have been so employed or provided

200,000 shares of Common Stock in connection with the hiring of the employee or 50,000 shares of Common Stock in any calendar year otherwise. 6. OPTION GRANTS. a. GENERAL RULES RELATING TO OPTIONS. i. Terms of Grant. The Board of Directors may grant options under the Plan. With respect to each option grant, the Board of Directors shall determine the number of shares subject to the option, the option price, the period of the option, the time or times at which the option may be exercised, whether the option shall be for Voting Common Stock or Nonvoting Common Stock or a combination of both, and whether the option is an Incentive Stock Option or a Non-Statutory Stock Option. At the time of the grant of an option or at any time thereafter, the Board of Directors may provide that an optionee who exercised an option with Common Stock of the Company shall automatically receive a new option to purchase additional shares equal to the number of shares surrendered and may specify the terms and conditions of such new options. ii. Exercise of Options. Except as provided in Section 6(a)(iv) or as determined by the Board of Directors, no option granted under the Plan may be exercised unless at the time of such exercise the optionee is employed by or in the service of the Company or any subsidiary of the Company and shall have been so employed or provided such service continuously since the date such option was granted. Absence on leave or on account of illness or disability, as described in 6(a)(iv)(A), shall not, however, be deemed an interruption of employment or service for this purpose, provided the optionee was employed or in the service of the Company or any subsidiary of the Company on the day one year before the date on which the option is exercised. Unless otherwise determined by the Board of Directors, vesting of options shall not continue during an absence on leave (including an extended illness) or on account of disability. Except as provided in Sections 6(a)(iv) and 13, options granted under the Plan may be exercised from time to time over the period stated in each option in such amounts and at such times as shall be prescribed by the Board of Directors, provided that options shall not be exercised for fractional shares. Unless otherwise determined by the Board of Directors, if the optionee does not exercise an option in any one year with respect to the full number of shares to which the optionee is entitled in that year, the optionee's rights shall be cumulative and the optionee may purchase those shares in any subsequent year during the term of the option. iii. Nontransferability. Each Incentive Stock Option and, unless otherwise determined by the Board of Directors, each other option granted under the Plan by its terms shall be nonassignable and nontransferable by the optionee, either

voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the optionee's domicile at the time of death. iv. Termination of Employment or Service. (1) General Rule. Unless otherwise determined by the Board of Directors, in the event the employment or service of the optionee with the Company or a subsidiary terminates for any reason other than because of physical disability or death as provided in subsections 6(a)(iv)(B) and (C), the option may be exercised at any time prior to the expiration date of the option or the expiration of 30 days after the date of such termination, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option at the date of such termination. (2) Termination Because of Total Disability. Unless otherwise determined by the Board of Directors, in the event of the termination of employment or service because of total disability, the option may be exercised at any time prior to the expiration date of the option or the expiration of 12 months after the date of such termination, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option at the date of such termination. The term "total disability" means a medically determinable mental or physical impairment which is expected to result in death or which has lasted or is expected to last for a continuous period of 12 months or more and which causes the optionee to be unable, in the opinion of the Company and two independent physicians, to perform his or her duties as an employee, director, officer or consultant of the Company and to be

voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the optionee's domicile at the time of death. iv. Termination of Employment or Service. (1) General Rule. Unless otherwise determined by the Board of Directors, in the event the employment or service of the optionee with the Company or a subsidiary terminates for any reason other than because of physical disability or death as provided in subsections 6(a)(iv)(B) and (C), the option may be exercised at any time prior to the expiration date of the option or the expiration of 30 days after the date of such termination, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option at the date of such termination. (2) Termination Because of Total Disability. Unless otherwise determined by the Board of Directors, in the event of the termination of employment or service because of total disability, the option may be exercised at any time prior to the expiration date of the option or the expiration of 12 months after the date of such termination, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option at the date of such termination. The term "total disability" means a medically determinable mental or physical impairment which is expected to result in death or which has lasted or is expected to last for a continuous period of 12 months or more and which causes the optionee to be unable, in the opinion of the Company and two independent physicians, to perform his or her duties as an employee, director, officer or consultant of the Company and to be engaged in any substantial gainful activity. Total disability shall be deemed to have occurred on the first day after the Company and the two independent physicians have furnished their opinion of total disability to the Company. (3) Termination Because of Death. Unless otherwise determined by the Board of Directors, in the event of the death of an optionee while employed by or providing service to the Company or a subsidiary, the option may be exercised at any time prior to the expiration date of the option or the expiration of 12 months after the date of death, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option at the date of death and only by the person or persons to whom such optionee's rights under the option shall pass by the optionee's will or by the laws of descent and distribution of the state or country of domicile at the time of death.

(4) Amendment of Exercise Period Applicable to Termination. The Board of Directors, at the time of grant or, with respect to an option that is not an Incentive Stock Option, at any time thereafter, may extend the 30-day and 12-month exercise periods any length of time not longer than the original expiration date of the option, and may increase the portion of an option that is exercisable, subject to such terms and conditions as the Board of Directors may determine. (5) Failure to Exercise Option. To the extent that the option of any deceased optionee or of any optionee whose employment or service terminates is not exercised within the applicable period, all further rights to purchase shares pursuant to such option shall cease and terminate. v. Purchase of Shares. Unless the Board of Directors determines otherwise, shares may be acquired pursuant to an option granted under the Plan only upon receipt by the Company of notice in writing from the optionee of the optionee's intention to exercise, specifying the number of shares as to which the optionee desires to exercise the option and the date on which the optionee desires to complete the transaction, and if required in order to comply with the Securities Act of 1933, as amended, containing a representation that it is the optionee's present intention to acquire the shares for investment and not with a view to distribution. Unless the Board of Directors determines otherwise, on or before the date specified for completion of the purchase of shares pursuant to an option, the optionee must have paid the Company the full purchase price of such shares in cash (including, with the consent of the Board of Directors, cash that may be the proceeds of a loan from the Company (provided that, with respect to an Incentive Stock Option, such loan is approved at the time of option grant)) or, with the consent of the Board of Directors, in whole or in part, in Common Stock of the Company valued at fair market value, restricted stock, performance units or other contingent awards denominated in either stock or cash, promissory notes and other forms of consideration. The Board of Directors shall make a good faith determination of the fair market value of Common Stock provided in payment of the purchase price. If the Common Stock of the Company is not publicly traded on the date the option is exercised, the Board of Directors may consider any

(4) Amendment of Exercise Period Applicable to Termination. The Board of Directors, at the time of grant or, with respect to an option that is not an Incentive Stock Option, at any time thereafter, may extend the 30-day and 12-month exercise periods any length of time not longer than the original expiration date of the option, and may increase the portion of an option that is exercisable, subject to such terms and conditions as the Board of Directors may determine. (5) Failure to Exercise Option. To the extent that the option of any deceased optionee or of any optionee whose employment or service terminates is not exercised within the applicable period, all further rights to purchase shares pursuant to such option shall cease and terminate. v. Purchase of Shares. Unless the Board of Directors determines otherwise, shares may be acquired pursuant to an option granted under the Plan only upon receipt by the Company of notice in writing from the optionee of the optionee's intention to exercise, specifying the number of shares as to which the optionee desires to exercise the option and the date on which the optionee desires to complete the transaction, and if required in order to comply with the Securities Act of 1933, as amended, containing a representation that it is the optionee's present intention to acquire the shares for investment and not with a view to distribution. Unless the Board of Directors determines otherwise, on or before the date specified for completion of the purchase of shares pursuant to an option, the optionee must have paid the Company the full purchase price of such shares in cash (including, with the consent of the Board of Directors, cash that may be the proceeds of a loan from the Company (provided that, with respect to an Incentive Stock Option, such loan is approved at the time of option grant)) or, with the consent of the Board of Directors, in whole or in part, in Common Stock of the Company valued at fair market value, restricted stock, performance units or other contingent awards denominated in either stock or cash, promissory notes and other forms of consideration. The Board of Directors shall make a good faith determination of the fair market value of Common Stock provided in payment of the purchase price. If the Common Stock of the Company is not publicly traded on the date the option is exercised, the Board of Directors may consider any valuation methods it deems appropriate and may, but is not required to, obtain one or more independent appraisals of the Company. If the Common Stock of the Company is publicly traded on the date the option is exercised, the fair market value of Common Stock provided in payment of the purchase price shall be the closing price of the Common Stock as reported in The Wall Street Journal on the last trading day preceding the date the option is exercised, or such other reported value of the Common Stock as shall be specified by the Board of Directors. No shares shall be issued until full payment for the shares has been made. With the consent of the Board of Directors (which, in the case of an Incentive Stock Option, shall be given only at the time of option grant), an optionee

may request the Company to apply automatically the shares to be received upon the exercise of a portion of a stock option (even though stock certificates have not yet been issued) to satisfy the purchase price for additional portions of the option. Each optionee who has exercised an option shall immediately upon notification of the amount due, if any, pay to the Company in cash amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If additional withholding is or becomes required beyond any amount deposited before delivery of the certificates, the optionee shall pay such amount to the Company on demand. If the optionee fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the optionee, including salary, subject to applicable law. With the consent of the Board of Directors an optionee may satisfy this obligation, in whole or in part, by having the Company withhold from the shares to be issued upon the exercise that number of shares that would satisfy the withholding amount due or by delivering to the Company Common Stock to satisfy the withholding amount. Upon the exercise of an option, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued upon exercise of the option. b. INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be subject to the following additional terms and conditions: i. Limitation on Amount of Grants. No employee may be granted Incentive Stock Options under the Plan if the aggregate fair market value, on the date of grant, of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by that employee during any calendar year under the Plan and under all incentive stock option plans (within the meaning of Section 422 of the Code) of the Company or any parent or subsidiary of the Company exceeds $100,000.

may request the Company to apply automatically the shares to be received upon the exercise of a portion of a stock option (even though stock certificates have not yet been issued) to satisfy the purchase price for additional portions of the option. Each optionee who has exercised an option shall immediately upon notification of the amount due, if any, pay to the Company in cash amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If additional withholding is or becomes required beyond any amount deposited before delivery of the certificates, the optionee shall pay such amount to the Company on demand. If the optionee fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the optionee, including salary, subject to applicable law. With the consent of the Board of Directors an optionee may satisfy this obligation, in whole or in part, by having the Company withhold from the shares to be issued upon the exercise that number of shares that would satisfy the withholding amount due or by delivering to the Company Common Stock to satisfy the withholding amount. Upon the exercise of an option, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued upon exercise of the option. b. INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be subject to the following additional terms and conditions: i. Limitation on Amount of Grants. No employee may be granted Incentive Stock Options under the Plan if the aggregate fair market value, on the date of grant, of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by that employee during any calendar year under the Plan and under all incentive stock option plans (within the meaning of Section 422 of the Code) of the Company or any parent or subsidiary of the Company exceeds $100,000. ii. Limitations on Grants to 10 Percent Shareholders. An Incentive Stock Option may be granted under the Plan to an employee possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or of any parent or subsidiary of the Company only if the option price is at least 110 percent of the fair market value, as described in Section 6(b)(iv), of the Common Stock subject to the option on the date it is granted and the option by its terms is not exercisable after the expiration of five years from the date it is granted. iii. Duration of Options. Subject to Sections 6(a)(ii) and 6(b)(ii), Incentive Stock Options granted under the Plan shall continue in effect for the period fixed by the Board of Directors, except that no Incentive Stock Option shall be exercisable after the expiration of 10 years from the date it is granted. iv. Option Price. The option price per share shall be determined by the Board of Directors at the time of grant. Except as provided in Section 6(b)(ii), the

option price shall not be less than 100 percent of the fair market value of the Common Stock covered by the Incentive Stock Option at the date the option is granted. The Board of Directors shall make a good faith determination of the fair market value. If the Common Stock of the Company is not publicly traded on the date the option is granted, the Board of Directors may consider any valuation methods it deems appropriate and may, but is not required to, obtain one or more independent appraisals of the Company. If the Common Stock of the Company is publicly traded on the date the option is exercised, the fair market value shall be deemed to be the closing price of the Common Stock as reported in The Wall Street Journal on the day preceding the date the option is granted, or, if there has been no sale on that date, on the last preceding date on which a sale occurred or such other value of the Common Stock as shall be specified by the Board of Directors. v. Limitation on Time of Grant. No Incentive Stock Option shall be granted on or after the tenth anniversary of the date of the last action by the Board of Directors approving an increase in the number of shares available for issuance under the Plan, which action was subsequently approved within 12 months by the shareholders. vi. Conversion of Incentive Stock Options. The Board of Directors may at any time without the consent of the optionee convert an Incentive Stock Option to a Non-Statutory Stock Option. c. NON-STATUTORY STOCK OPTIONS. Non-Statutory Stock Options shall be subject to the following

option price shall not be less than 100 percent of the fair market value of the Common Stock covered by the Incentive Stock Option at the date the option is granted. The Board of Directors shall make a good faith determination of the fair market value. If the Common Stock of the Company is not publicly traded on the date the option is granted, the Board of Directors may consider any valuation methods it deems appropriate and may, but is not required to, obtain one or more independent appraisals of the Company. If the Common Stock of the Company is publicly traded on the date the option is exercised, the fair market value shall be deemed to be the closing price of the Common Stock as reported in The Wall Street Journal on the day preceding the date the option is granted, or, if there has been no sale on that date, on the last preceding date on which a sale occurred or such other value of the Common Stock as shall be specified by the Board of Directors. v. Limitation on Time of Grant. No Incentive Stock Option shall be granted on or after the tenth anniversary of the date of the last action by the Board of Directors approving an increase in the number of shares available for issuance under the Plan, which action was subsequently approved within 12 months by the shareholders. vi. Conversion of Incentive Stock Options. The Board of Directors may at any time without the consent of the optionee convert an Incentive Stock Option to a Non-Statutory Stock Option. c. NON-STATUTORY STOCK OPTIONS. Non-Statutory Stock Options shall be subject to the following terms and conditions in addition to those set forth in Section 6(a) above: i. Option Price. The option price for Non-Statutory Stock Options shall be determined by the Board of Directors at the time of grant and may be any amount determined by the Board of Directors. ii. Duration of Options. Non-Statutory Stock Options granted under the Plan shall continue in effect for the period fixed by the Board of Directors.

7. STOCK BONUSES. The Board of Directors may award shares under the Plan as stock bonuses. Shares awarded as a bonus shall be subject to the terms, conditions, and restrictions determined by the Board of Directors. The restrictions may include restrictions concerning transferability and forfeiture of the shares awarded, together with such other restrictions as may be determined by the Board of Directors. The Board of Directors may require the recipient to sign an agreement as a condition of the award, but may not require the recipient to pay any monetary consideration other than amounts necessary to satisfy tax withholding requirements. The agreement may contain any terms, conditions, restrictions, representations and warranties required by the Board of Directors. The certificates representing the shares awarded shall bear any legends required by the Board of Directors. The Company may require any recipient of a stock bonus to pay to the Company in cash upon demand amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the recipient fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the recipient, including salary or fees for services, subject to applicable law. With the consent of the Board of Directors, a recipient may deliver Common Stock to the Company to satisfy this withholding obligation. Upon the issuance of a stock bonus, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued. 8. RESTRICTED STOCK. The Board of Directors may issue shares under the Plan for such consideration (including promissory notes and services) as determined by the Board of Directors. Shares issued under the Plan shall be subject to the terms, conditions and restrictions determined by the Board of Directors. The restrictions may include restrictions concerning transferability, repurchase by the Company and forfeiture of the shares issued, together with such other restrictions as may be determined by the Board of Directors. All Common Stock issued pursuant to this Section 8 shall be subject to a purchase agreement, which shall be executed by the Company and the prospective recipient of the shares prior to the delivery of certificates representing such shares to the recipient. The purchase agreement may contain any terms, conditions, restrictions, representations and warranties required by the Board of Directors. The certificates representing the shares shall bear any legends required by the Board of Directors. The Company may require any purchaser of restricted stock to pay to the Company in cash upon demand amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the purchaser fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the purchaser, including salary, subject to applicable law. With the consent of the Board of Directors, a purchaser may deliver Common Stock to the Company to satisfy this withholding

7. STOCK BONUSES. The Board of Directors may award shares under the Plan as stock bonuses. Shares awarded as a bonus shall be subject to the terms, conditions, and restrictions determined by the Board of Directors. The restrictions may include restrictions concerning transferability and forfeiture of the shares awarded, together with such other restrictions as may be determined by the Board of Directors. The Board of Directors may require the recipient to sign an agreement as a condition of the award, but may not require the recipient to pay any monetary consideration other than amounts necessary to satisfy tax withholding requirements. The agreement may contain any terms, conditions, restrictions, representations and warranties required by the Board of Directors. The certificates representing the shares awarded shall bear any legends required by the Board of Directors. The Company may require any recipient of a stock bonus to pay to the Company in cash upon demand amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the recipient fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the recipient, including salary or fees for services, subject to applicable law. With the consent of the Board of Directors, a recipient may deliver Common Stock to the Company to satisfy this withholding obligation. Upon the issuance of a stock bonus, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued. 8. RESTRICTED STOCK. The Board of Directors may issue shares under the Plan for such consideration (including promissory notes and services) as determined by the Board of Directors. Shares issued under the Plan shall be subject to the terms, conditions and restrictions determined by the Board of Directors. The restrictions may include restrictions concerning transferability, repurchase by the Company and forfeiture of the shares issued, together with such other restrictions as may be determined by the Board of Directors. All Common Stock issued pursuant to this Section 8 shall be subject to a purchase agreement, which shall be executed by the Company and the prospective recipient of the shares prior to the delivery of certificates representing such shares to the recipient. The purchase agreement may contain any terms, conditions, restrictions, representations and warranties required by the Board of Directors. The certificates representing the shares shall bear any legends required by the Board of Directors. The Company may require any purchaser of restricted stock to pay to the Company in cash upon demand amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the purchaser fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the purchaser, including salary, subject to applicable law. With the consent of the Board of Directors, a purchaser may deliver Common Stock to the Company to satisfy this withholding obligation. Upon the issuance of restricted stock, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued.

9. STOCK APPRECIATION RIGHTS. a. GRANT. Stock appreciation rights may be granted under the Plan by the Board of Directors, subject to such rules, terms, and conditions as the Board of Directors prescribes. b. EXERCISE. i. Each stock appreciation right shall entitle the holder, upon exercise, to receive from the Company in exchange therefor an amount equal in value to the excess of the fair market value on the date of exercise of one share of Common Stock of the Company over its fair market value on the date of grant (or, in the case of a stock appreciation right granted in connection with an option, the excess of the fair market value of one share of Common Stock of the Company over the option price per share under the option to which the stock appreciation right relates), multiplied by the number of shares covered by the stock appreciation right or the option, or portion thereof, that is surrendered. Payment by the Company upon exercise of a stock appreciation right may be made in Common Stock valued at fair market value, in cash, or partly in Common Stock and partly in cash, all as determined by the Board of Directors. ii. A stock appreciation right shall be exercisable only at the time or times established by the Board of Directors. If a stock appreciation right is granted in connection with an option, the following rules shall apply: (1) the stock appreciation right shall be exercisable only to the extent and on the same conditions that the related option could be exercised; (2) the stock appreciation rights shall be exercisable only when the fair market value of the stock exceeds the option price of the related option; (3) the stock appreciation right shall be for no more than 100 percent of the excess of the fair market value of the stock at the time of exercise over the option price; (4) the

9. STOCK APPRECIATION RIGHTS. a. GRANT. Stock appreciation rights may be granted under the Plan by the Board of Directors, subject to such rules, terms, and conditions as the Board of Directors prescribes. b. EXERCISE. i. Each stock appreciation right shall entitle the holder, upon exercise, to receive from the Company in exchange therefor an amount equal in value to the excess of the fair market value on the date of exercise of one share of Common Stock of the Company over its fair market value on the date of grant (or, in the case of a stock appreciation right granted in connection with an option, the excess of the fair market value of one share of Common Stock of the Company over the option price per share under the option to which the stock appreciation right relates), multiplied by the number of shares covered by the stock appreciation right or the option, or portion thereof, that is surrendered. Payment by the Company upon exercise of a stock appreciation right may be made in Common Stock valued at fair market value, in cash, or partly in Common Stock and partly in cash, all as determined by the Board of Directors. ii. A stock appreciation right shall be exercisable only at the time or times established by the Board of Directors. If a stock appreciation right is granted in connection with an option, the following rules shall apply: (1) the stock appreciation right shall be exercisable only to the extent and on the same conditions that the related option could be exercised; (2) the stock appreciation rights shall be exercisable only when the fair market value of the stock exceeds the option price of the related option; (3) the stock appreciation right shall be for no more than 100 percent of the excess of the fair market value of the stock at the time of exercise over the option price; (4) the stock appreciation right expires no later than expiration of the underlying option; (5) upon exercise of the stock appreciation right, the option or portion thereof to which the stock appreciation right relates terminates; and (6) upon exercise of the option, the related stock appreciation right or portion thereof terminates. iii. The Board of Directors may withdraw any stock appreciation right granted under the Plan at any time and may impose any conditions upon the exercise of a stock appreciation right or adopt rules and regulations from time to time affecting the rights of holders of stock appreciation rights. If the stock appreciation right is granted in conjunction with an incentive stock option, no change to the stock appreciation right shall give the optionee additional benefits under the incentive stock option. Such rules and regulations may govern the right to exercise stock appreciation

rights granted prior to adoption or amendment of such rules and regulations as well as stock appreciation rights granted thereafter. iv. For purposes of this Section 9, the fair market value of the Common Stock shall be determined as of the date the stock appreciation right is exercised, under the methods set forth in Section 6(b)(iv). v. No fractional shares shall be issued upon exercise of a stock appreciation right. In lieu thereof, cash may be paid in an amount equal to the value of the fraction or, if the Board of Directors shall determine, the number of shares may be rounded downward to the next whole share. vi. Each stock appreciation right granted in connection with an Incentive Stock Option, and unless otherwise determined by the Board of Directors, each other stock appreciation right granted under the Plan by its terms shall be nonassignable and nontransferable by the holder, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the holder's domicile at the time of death. Each stock appreciation right by its terms shall be exercisable during the holder's lifetime only by the holder. However, if the holder is disabled as described in 6(a)(iv)(B), a legal representative may exercise the option on the holder's behalf. vii. Each participant who has exercised a stock appreciation right shall, upon notification of the amount due, pay to the Company in cash amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If the participant fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the participant including salary, subject to applicable law. With the

rights granted prior to adoption or amendment of such rules and regulations as well as stock appreciation rights granted thereafter. iv. For purposes of this Section 9, the fair market value of the Common Stock shall be determined as of the date the stock appreciation right is exercised, under the methods set forth in Section 6(b)(iv). v. No fractional shares shall be issued upon exercise of a stock appreciation right. In lieu thereof, cash may be paid in an amount equal to the value of the fraction or, if the Board of Directors shall determine, the number of shares may be rounded downward to the next whole share. vi. Each stock appreciation right granted in connection with an Incentive Stock Option, and unless otherwise determined by the Board of Directors, each other stock appreciation right granted under the Plan by its terms shall be nonassignable and nontransferable by the holder, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the holder's domicile at the time of death. Each stock appreciation right by its terms shall be exercisable during the holder's lifetime only by the holder. However, if the holder is disabled as described in 6(a)(iv)(B), a legal representative may exercise the option on the holder's behalf. vii. Each participant who has exercised a stock appreciation right shall, upon notification of the amount due, pay to the Company in cash amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If the participant fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the participant including salary, subject to applicable law. With the consent of the Board of Directors a participant may satisfy this obligation, in whole or in part, by having the Company withhold from any shares to be issued upon the exercise that number of shares that would satisfy the withholding amount due or by delivering Common Stock to the Company to satisfy the withholding amount. viii. Upon the exercise of a stock appreciation right for shares, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued. Cash payments of stock appreciation rights shall not reduce the number of shares of Common Stock reserved for issuance under the Plan. 10. CASH BONUS RIGHTS. a. GRANT. The Board of Directors may grant cash bonus rights under the Plan in connection with (i) options granted or previously granted, (ii) stock appreciation rights

granted or previously granted, (iii) stock bonuses awarded or previously awarded and (iv) shares sold or previously sold under the Plan. Cash bonus rights will be subject to rules, terms and conditions as the Board of Directors may prescribe. Unless otherwise determined by the Board of Directors, each cash bonus right granted under the Plan by its terms shall be nonassignable and nontransferable by the holder, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the holder's domicile at the time of death. The payment of a cash bonus shall not reduce the number of shares of Common Stock reserved for issuance under the Plan. b. CASH BONUS RIGHTS IN CONNECTION WITH OPTIONS. A cash bonus right granted in connection with an option will entitle an optionee to a cash bonus when the related option is exercised (or terminates in connection with the exercise of a stock appreciation right related to the option) in whole or in part if, in the sole discretion of the Board of Directors, the bonus right will result in a tax deduction that the Company has sufficient taxable income to use. If an optionee purchases shares upon exercise of an option and does not exercise a related stock appreciation right, the amount of the bonus, if any, shall be determined by multiplying the excess of the total fair market value of the shares to be acquired upon the exercise over the total option price for the shares by the applicable bonus percentage. If the optionee exercises a related stock appreciation right in connection with

granted or previously granted, (iii) stock bonuses awarded or previously awarded and (iv) shares sold or previously sold under the Plan. Cash bonus rights will be subject to rules, terms and conditions as the Board of Directors may prescribe. Unless otherwise determined by the Board of Directors, each cash bonus right granted under the Plan by its terms shall be nonassignable and nontransferable by the holder, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the holder's domicile at the time of death. The payment of a cash bonus shall not reduce the number of shares of Common Stock reserved for issuance under the Plan. b. CASH BONUS RIGHTS IN CONNECTION WITH OPTIONS. A cash bonus right granted in connection with an option will entitle an optionee to a cash bonus when the related option is exercised (or terminates in connection with the exercise of a stock appreciation right related to the option) in whole or in part if, in the sole discretion of the Board of Directors, the bonus right will result in a tax deduction that the Company has sufficient taxable income to use. If an optionee purchases shares upon exercise of an option and does not exercise a related stock appreciation right, the amount of the bonus, if any, shall be determined by multiplying the excess of the total fair market value of the shares to be acquired upon the exercise over the total option price for the shares by the applicable bonus percentage. If the optionee exercises a related stock appreciation right in connection with the termination of an option, the amount of the bonus, if any, shall be determined by multiplying the total fair market value of the shares and cash received pursuant to the exercise of the stock appreciation right by the applicable bonus percentage. The bonus percentage applicable to a bonus right, including a previously granted bonus right, may be changed from time to time at the sole discretion of the Board of Directors but shall in no event exceed 75 percent. c. CASH BONUS RIGHTS IN CONNECTION WITH STOCK BONUS. A cash bonus right granted in connection with a stock bonus will entitle the recipient to a cash bonus payable when the stock bonus is awarded or restrictions, if any, to which the stock is subject lapse. If bonus stock awarded is subject to restrictions and is repurchased by the Company or forfeited by the holder, the cash bonus right granted in connection with the stock bonus shall terminate and may not be exercised. The amount and timing of payment of a cash bonus shall be determined by the Board of Directors. d. CASH BONUS RIGHTS IN CONNECTION WITH STOCK PURCHASES. A cash bonus right granted in connection with the purchase of stock pursuant to Section 8 will entitle the recipient to a cash bonus when the shares are purchased or restrictions, if any, to which the stock is subject lapse. Any cash bonus right granted in connection with shares purchased pursuant to Section 8 shall terminate and may not be exercised in the event the shares are repurchased by the Company or forfeited by the holder pursuant to applicable restrictions. The amount of any cash bonus to be awarded and timing of payment of a cash bonus shall be determined by the Board of Directors.

e. TAXES. The Company shall withhold from any cash bonus paid pursuant to Section 10 the amount necessary to satisfy any applicable federal, state and local withholding requirements. 11. PERFORMANCE UNITS. The Board of Directors may grant performance units consisting of monetary units which may be earned in whole or in part if the Company achieves certain goals established by the Board of Directors over a designated period of time, but not in any event more than 10 years. The goals established by the Board of Directors may include earnings per share, return on shareholders' equity, return on invested capital, and such other goals as may be established by the Board of Directors. In the event that the minimum performance goal established by the Board of Directors is not achieved at the conclusion of a period, no payment shall be made to the participants. In the event the maximum corporate goal is achieved, 100 percent of the monetary value of the performance units shall be paid to or vested in the participants. Partial achievement of the maximum goal may result in a payment or vesting corresponding to the degree of achievement as determined by the Board of Directors. Payment of an award earned may be in cash or in Common Stock or in a combination of both, and may be made when earned, or vested and deferred, as the Board of Directors determines. Deferred awards shall earn interest on the terms and at a rate determined by the Board of Directors; however, such rate shall be no less than the long-term federal rate in effect under Section 1274(d) of the Internal Revenue Code of 1986, as amended (as of the date the award is made), compounded semi-annually. Unless otherwise determined by the Board of Directors, each performance unit granted under the Plan by its terms shall be nonassignable and nontransferable by the holder, either voluntarily or by operation of law, except by will or by the laws of descent

e. TAXES. The Company shall withhold from any cash bonus paid pursuant to Section 10 the amount necessary to satisfy any applicable federal, state and local withholding requirements. 11. PERFORMANCE UNITS. The Board of Directors may grant performance units consisting of monetary units which may be earned in whole or in part if the Company achieves certain goals established by the Board of Directors over a designated period of time, but not in any event more than 10 years. The goals established by the Board of Directors may include earnings per share, return on shareholders' equity, return on invested capital, and such other goals as may be established by the Board of Directors. In the event that the minimum performance goal established by the Board of Directors is not achieved at the conclusion of a period, no payment shall be made to the participants. In the event the maximum corporate goal is achieved, 100 percent of the monetary value of the performance units shall be paid to or vested in the participants. Partial achievement of the maximum goal may result in a payment or vesting corresponding to the degree of achievement as determined by the Board of Directors. Payment of an award earned may be in cash or in Common Stock or in a combination of both, and may be made when earned, or vested and deferred, as the Board of Directors determines. Deferred awards shall earn interest on the terms and at a rate determined by the Board of Directors; however, such rate shall be no less than the long-term federal rate in effect under Section 1274(d) of the Internal Revenue Code of 1986, as amended (as of the date the award is made), compounded semi-annually. Unless otherwise determined by the Board of Directors, each performance unit granted under the Plan by its terms shall be nonassignable and nontransferable by the holder, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the holder's domicile at the time of death. Each participant who has been awarded a performance unit shall, upon notification of the amount due, pay to the Company in cash amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If the participant fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the participant, including salary or fees for services, subject to applicable law. With the consent of the Board of Directors a participant may satisfy this obligation, in whole or in part, by having the Company withhold from any shares to be issued that number of shares that would satisfy the withholding amount due or by delivering Common Stock to the Company to satisfy the withholding amount. The payment of a performance unit in cash shall not reduce the number of shares of Common Stock reserved for issuance under the Plan. The number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued upon payment of an award. 12. FOREIGN QUALIFIED GRANTS. Awards under the Plan may be granted to such officers and employees of the Company and its subsidiaries and such other persons described in Section 1 residing in foreign jurisdictions as the Board of Directors may determine from time to time. The Board of Directors may adopt such supplements to the Plan as may be necessary to comply with the applicable laws of such foreign jurisdictions and to afford

participants favorable treatment under such laws; provided, however, that no award shall be granted under any such supplement with terms which are more beneficial to the participants than the terms permitted by the Plan. 13. CHANGES IN CAPITAL STRUCTURE. a. STOCK SPLITS; STOCK DIVIDENDS. If the outstanding Common Stock of the Company is hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any stock split, combination of shares or dividend payable in shares, recapitalization or reclassification appropriate adjustment shall be made by the Board of Directors in the number and kind of shares available for grants under the Plan. In addition, the Board of Directors shall make appropriate adjustment in the number and kind of shares as to which outstanding options, or portions thereof then unexercised, shall be exercisable, so that the optionee's proportionate interest before and after the occurrence of the event is maintained. Notwithstanding the foregoing, the Board of Directors shall have no obligation to effect any adjustment that would or might result in the issuance of fractional shares, and any fractional shares resulting from any adjustment may be disregarded or provided for in any manner determined by the Board of Directors. Any such adjustments made by the Board of Directors shall be conclusive. b. MERGERS, REORGANIZATIONS, ETC. In the event of a merger, consolidation, plan of exchange, acquisition of property or stock, separation, reorganization or liquidation to which the Company or a subsidiary is a party or a sale of all or substantially all of the Company's assets (each, a "Transaction"), the Board of Directors

participants favorable treatment under such laws; provided, however, that no award shall be granted under any such supplement with terms which are more beneficial to the participants than the terms permitted by the Plan. 13. CHANGES IN CAPITAL STRUCTURE. a. STOCK SPLITS; STOCK DIVIDENDS. If the outstanding Common Stock of the Company is hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any stock split, combination of shares or dividend payable in shares, recapitalization or reclassification appropriate adjustment shall be made by the Board of Directors in the number and kind of shares available for grants under the Plan. In addition, the Board of Directors shall make appropriate adjustment in the number and kind of shares as to which outstanding options, or portions thereof then unexercised, shall be exercisable, so that the optionee's proportionate interest before and after the occurrence of the event is maintained. Notwithstanding the foregoing, the Board of Directors shall have no obligation to effect any adjustment that would or might result in the issuance of fractional shares, and any fractional shares resulting from any adjustment may be disregarded or provided for in any manner determined by the Board of Directors. Any such adjustments made by the Board of Directors shall be conclusive. b. MERGERS, REORGANIZATIONS, ETC. In the event of a merger, consolidation, plan of exchange, acquisition of property or stock, separation, reorganization or liquidation to which the Company or a subsidiary is a party or a sale of all or substantially all of the Company's assets (each, a "Transaction"), the Board of Directors shall, in its sole discretion and to the extent possible under the structure of the Transaction, select one of the following alternatives for treating outstanding options under the Plan: i. Outstanding options shall remain in effect in accordance with their terms. ii. Outstanding options ("old options") shall be converted into options ("new options") to purchase stock in the corporation that is the surviving or acquiring corporation in the Transaction. The amount, type of securities subject thereto and exercise price of the old options shall be determined by the Board of Directors of the Company, taking into account the relative values of the companies involved in the Transaction and the exchange rate, if any, used in determining shares of the surviving corporation to be issued to holders of shares of the Company. However, with respect to an incentive stock option, the excess of the fair market value of the stock subject to the option over the option price before the conversion shall equal or exceed such excess after the conversion, and the new option shall not give the holder additional benefits that were not available under the old option. The Board of Directors shall make a good faith determination of the fair market value of the stock subject to the old option and the stock subject to the new option. Unless otherwise determined by the Board of

Directors, the old options shall be vested only to the extent that the vesting requirements relating to options granted hereunder have been satisfied. iii. The Board of Directors shall provide a 30-day period prior to the consummation of the Transaction during which outstanding options may be exercised to the extent then exercisable, and upon the expiration of such 30day period, all unexercised options shall immediately terminate. The Board of Directors may, in its sole discretion, accelerate the exercisability of options so that they are exercisable in full during such 30-day period. c. DISSOLUTION OF THE COMPANY. In the event of the dissolution of the Company, options shall be treated in accordance with Section 13(b)(iii). d. RIGHTS ISSUED BY ANOTHER CORPORATION. The Board of Directors may also grant options, stock appreciation rights, performance units, stock bonuses and cash bonuses and issue restricted stock under the Plan having terms, conditions and provisions that vary from those specified in this Plan provided that any such awards are granted in substitution for, or in connection with the assumption of, existing options, stock appreciation rights, stock bonuses, cash bonuses, restricted stock and performance units granted, awarded or issued by another corporation and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a Transaction. 14. AMENDMENT OF PLAN. The Board of Directors may at any time, and from time to time, modify or

Directors, the old options shall be vested only to the extent that the vesting requirements relating to options granted hereunder have been satisfied. iii. The Board of Directors shall provide a 30-day period prior to the consummation of the Transaction during which outstanding options may be exercised to the extent then exercisable, and upon the expiration of such 30day period, all unexercised options shall immediately terminate. The Board of Directors may, in its sole discretion, accelerate the exercisability of options so that they are exercisable in full during such 30-day period. c. DISSOLUTION OF THE COMPANY. In the event of the dissolution of the Company, options shall be treated in accordance with Section 13(b)(iii). d. RIGHTS ISSUED BY ANOTHER CORPORATION. The Board of Directors may also grant options, stock appreciation rights, performance units, stock bonuses and cash bonuses and issue restricted stock under the Plan having terms, conditions and provisions that vary from those specified in this Plan provided that any such awards are granted in substitution for, or in connection with the assumption of, existing options, stock appreciation rights, stock bonuses, cash bonuses, restricted stock and performance units granted, awarded or issued by another corporation and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a Transaction. 14. AMENDMENT OF PLAN. The Board of Directors may at any time, and from time to time, modify or amend the Plan in such respects as it shall deem advisable because of changes in the law while the Plan is in effect or for any other reason. Except as provided in Sections 6(a)(iv), 9, 10 and 13, however, no change in an award already granted shall be made without the written consent of the holder of such award. 15. APPROVALS. The obligations of the Company under the Plan are subject to the approval of state and federal authorities or agencies with jurisdiction in the matter. The Company will use its best efforts to take steps required by state or federal law or applicable regulations, including rules and regulations of the Securities and Exchange Commission and any stock exchange on which the Company's shares may then be listed, in connection with the grants under the Plan. The foregoing notwithstanding, the Company shall not be obligated to issue or deliver Common Stock under the Plan if such issuance or delivery would violate applicable state or federal securities laws. 16. EMPLOYMENT AND SERVICE RIGHTS. Nothing in the Plan or any award pursuant to the Plan shall (i) confer upon any employee any right to be continued in the employment of the Company or any subsidiary or interfere in any way with the right of the Company or any subsidiary by whom such employee is employed to terminate such employee's employment at any time, for any reason, with or without cause, or to decrease such employee's compensation

or benefits, or (ii) confer upon any person engaged by the Company any right to be retained or employed by the Company or to the continuation, extension, renewal, or modification of any compensation, contract, or arrangement with or by the Company. 17. RIGHTS AS A SHAREHOLDER. The recipient of any award under the Plan shall have no rights as a shareholder with respect to any Common Stock until the date of issue to the recipient of a stock certificate for such shares. Except as otherwise expressly provided in the Plan, no adjustment shall be made for dividends or other rights for which the record date occurs prior to the date such stock certificate is issued. Adopted: February 27, 1998.

EXHIBIT 10.28 MHL DEVELOPMENT COMPANY INCENTIVE STOCK OPTION AGREEMENT

or benefits, or (ii) confer upon any person engaged by the Company any right to be retained or employed by the Company or to the continuation, extension, renewal, or modification of any compensation, contract, or arrangement with or by the Company. 17. RIGHTS AS A SHAREHOLDER. The recipient of any award under the Plan shall have no rights as a shareholder with respect to any Common Stock until the date of issue to the recipient of a stock certificate for such shares. Except as otherwise expressly provided in the Plan, no adjustment shall be made for dividends or other rights for which the record date occurs prior to the date such stock certificate is issued. Adopted: February 27, 1998.

EXHIBIT 10.28 MHL DEVELOPMENT COMPANY INCENTIVE STOCK OPTION AGREEMENT THIS AGREEMENT is made as of __________________ (the "Grant Date") between mHL Development Company (the "Company"), and ________________________ (the "Optionee"). 1. Option Grant. Pursuant to the Company's Stock Incentive Plan (the "Plan"), a copy of which is attached as Exhibit A, the Company hereby grants to the Optionee the right and option (the "Option") to purchase all or any part of an aggregate of__________ shares of the Company's authorized but unissued or reacquired Common Stock at a purchase price of $________ per share. The Option is an Incentive Stock Option, as defined in the Plan. This Agreement contains the entire understanding of, and supersedes any prior or contemporaneous agreements between the Optionee and the Company regarding rights to receive the Company's stock. 2. Terms of Option. The Option is granted on the following terms and the Optionee acknowledges that the following terms summarize certain provisions of the Plan, and that the terms of the Plan, as interpreted by the Board of Directors, will govern any matter described in the Plan: 2.1 Duration of Option. The Option shall continue in effect for a period of ten years from the Grant Date. 2.2 Right to Exercise. The Option is not exercisable, in whole or in part, until the first anniversary of the Grant Date. On the first anniversary, the Option may be exercised for up to one-fifth of the total number of shares covered by the Option. On each of the second, third, fourth and fifth anniversaries of the Grant Date, the Option may be exercised for an additional one-fifth of the total number of shares covered by the Option. Subject to paragraph 2.5, the Option may be exercised from time to time over the period provided in paragraph 2.1 in accordance with this paragraph 2.2, provided that the Option shall not be exercised for any fractional shares. If the Optionee does not exercise the Option in any one period with respect to the full number of shares to which the Optionee is entitled in that period, the Optionee's rights shall be cumulative and the Optionee may purchase those shares in any subsequent period during the term of the Option. 2.3 Nontransferability. The Option may not be assigned or transferred by the Optionee, either voluntarily or by operation of law, and may be exercised only by the Optionee.

2.4 Purchase of Shares. Unless the Board of Directors determines otherwise, the Option may be exercised only upon receipt by the Company of the Option Exercise Form, in the form attached as Exhibit B, from the Optionee stating the Optionee's intention to exercise, specifying the number of shares as to which the Optionee desires to exercise the Option and the date on which the Optionee desires to complete the transaction. Unless the Board of Directors determines otherwise, on or before the date specified for completion of the purchase of the shares, the Optionee must pay the Company the full purchase price of such shares in cash (which may be the proceeds of a loan from the Company). No shares shall be issued until full payment has been made and the Optionee has executed any applicable stock transfer restriction agreement as in effect at that time. The Optionee shall have

EXHIBIT 10.28 MHL DEVELOPMENT COMPANY INCENTIVE STOCK OPTION AGREEMENT THIS AGREEMENT is made as of __________________ (the "Grant Date") between mHL Development Company (the "Company"), and ________________________ (the "Optionee"). 1. Option Grant. Pursuant to the Company's Stock Incentive Plan (the "Plan"), a copy of which is attached as Exhibit A, the Company hereby grants to the Optionee the right and option (the "Option") to purchase all or any part of an aggregate of__________ shares of the Company's authorized but unissued or reacquired Common Stock at a purchase price of $________ per share. The Option is an Incentive Stock Option, as defined in the Plan. This Agreement contains the entire understanding of, and supersedes any prior or contemporaneous agreements between the Optionee and the Company regarding rights to receive the Company's stock. 2. Terms of Option. The Option is granted on the following terms and the Optionee acknowledges that the following terms summarize certain provisions of the Plan, and that the terms of the Plan, as interpreted by the Board of Directors, will govern any matter described in the Plan: 2.1 Duration of Option. The Option shall continue in effect for a period of ten years from the Grant Date. 2.2 Right to Exercise. The Option is not exercisable, in whole or in part, until the first anniversary of the Grant Date. On the first anniversary, the Option may be exercised for up to one-fifth of the total number of shares covered by the Option. On each of the second, third, fourth and fifth anniversaries of the Grant Date, the Option may be exercised for an additional one-fifth of the total number of shares covered by the Option. Subject to paragraph 2.5, the Option may be exercised from time to time over the period provided in paragraph 2.1 in accordance with this paragraph 2.2, provided that the Option shall not be exercised for any fractional shares. If the Optionee does not exercise the Option in any one period with respect to the full number of shares to which the Optionee is entitled in that period, the Optionee's rights shall be cumulative and the Optionee may purchase those shares in any subsequent period during the term of the Option. 2.3 Nontransferability. The Option may not be assigned or transferred by the Optionee, either voluntarily or by operation of law, and may be exercised only by the Optionee.

2.4 Purchase of Shares. Unless the Board of Directors determines otherwise, the Option may be exercised only upon receipt by the Company of the Option Exercise Form, in the form attached as Exhibit B, from the Optionee stating the Optionee's intention to exercise, specifying the number of shares as to which the Optionee desires to exercise the Option and the date on which the Optionee desires to complete the transaction. Unless the Board of Directors determines otherwise, on or before the date specified for completion of the purchase of the shares, the Optionee must pay the Company the full purchase price of such shares in cash (which may be the proceeds of a loan from the Company). No shares shall be issued until full payment has been made and the Optionee has executed any applicable stock transfer restriction agreement as in effect at that time. The Optionee shall have none of the rights of a shareholder until a certificate for the shares is issued to the Optionee. Upon notification of the amount due (if any), the Optionee shall pay to the Company in cash amounts necessary to satisfy applicable federal, state and local withholding tax requirements. If additional withholding becomes required beyond any amount deposited before delivery of the certificates, the Optionee shall pay such amount to the Company on demand. If the Optionee fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the Optionee, including salary, subject to applicable law. 2.5 Termination of Employment. (a) Except as provided below, the Option may not be exercised unless at the time of such exercise the Optionee is employed by the Company or any subsidiary of the Company and shall have been so employed continuously since the date such option was granted. Absence on leave or on account of illness or disability under rules established by the Board of Directors shall not, however, be deemed an interruption of employment for this

2.4 Purchase of Shares. Unless the Board of Directors determines otherwise, the Option may be exercised only upon receipt by the Company of the Option Exercise Form, in the form attached as Exhibit B, from the Optionee stating the Optionee's intention to exercise, specifying the number of shares as to which the Optionee desires to exercise the Option and the date on which the Optionee desires to complete the transaction. Unless the Board of Directors determines otherwise, on or before the date specified for completion of the purchase of the shares, the Optionee must pay the Company the full purchase price of such shares in cash (which may be the proceeds of a loan from the Company). No shares shall be issued until full payment has been made and the Optionee has executed any applicable stock transfer restriction agreement as in effect at that time. The Optionee shall have none of the rights of a shareholder until a certificate for the shares is issued to the Optionee. Upon notification of the amount due (if any), the Optionee shall pay to the Company in cash amounts necessary to satisfy applicable federal, state and local withholding tax requirements. If additional withholding becomes required beyond any amount deposited before delivery of the certificates, the Optionee shall pay such amount to the Company on demand. If the Optionee fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the Optionee, including salary, subject to applicable law. 2.5 Termination of Employment. (a) Except as provided below, the Option may not be exercised unless at the time of such exercise the Optionee is employed by the Company or any subsidiary of the Company and shall have been so employed continuously since the date such option was granted. Absence on leave or on account of illness or disability under rules established by the Board of Directors shall not, however, be deemed an interruption of employment for this purpose. (b) If the Optionee's employment by the Company or by any parent or subsidiary of the Company is terminated by retirement or for any reason, voluntarily or involuntarily, with or without cause, other than in the circumstances specified in subsection (c) below, the Option held by the Optionee may be exercised at any time prior to its expiration date or the expiration of 30 days after the date of such termination of employment, whichever is the shorter period, but only if and to the extent the Optionee was entitled to exercise the Option on the date of such termination. (c) If the Optionee's employment by the Company or by any parent or subsidiary of the Company is terminated because of death or total disability (within the meaning of IRC Section 22(e)(3)), the Option may be exercised at any time prior to its expiration date or the expiration of one year after the date of such death or termination, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option at the date of such death or termination. If the Optionee's employment is terminated by death, 2

the Option shall be exercisable only by the person or persons to whom the Optionee's rights under the Option shall pass by the Optionee's will or by the laws of descent and distribution of the state or country of the Optionee's domicile at the time of death. (d) In the event of the death or termination of employment of the Optionee, to the extent the Option shall not have been exercised within the limited periods provided above, all further rights to purchase shares pursuant to the Option shall cease and terminate at the expiration of such periods. 3. Stock Restriction Agreement. The Optionee agrees that any shares acquired upon exercise of the Option shall be subject to a Stock Transfer Restriction Agreement, a copy of which will be provided at the time the Option is exercised. 4. Approvals. The obligations of the Company under this Agreement are subject to the approval of state and federal authorities or agencies with jurisdiction in the matter. The Company will use its best efforts to take steps required by state or federal law or applicable regulations, including rules and regulations of the Securities and Exchange Commission and any stock exchange on which the Company's shares may then be listed, in connection with issuance or sale of any shares purchased upon exercise of the Option. The foregoing notwithstanding, the Company shall not be obligated to issue or deliver Common Stock under this Agreement if such issuance or delivery would violate applicable state or federal securities laws.

the Option shall be exercisable only by the person or persons to whom the Optionee's rights under the Option shall pass by the Optionee's will or by the laws of descent and distribution of the state or country of the Optionee's domicile at the time of death. (d) In the event of the death or termination of employment of the Optionee, to the extent the Option shall not have been exercised within the limited periods provided above, all further rights to purchase shares pursuant to the Option shall cease and terminate at the expiration of such periods. 3. Stock Restriction Agreement. The Optionee agrees that any shares acquired upon exercise of the Option shall be subject to a Stock Transfer Restriction Agreement, a copy of which will be provided at the time the Option is exercised. 4. Approvals. The obligations of the Company under this Agreement are subject to the approval of state and federal authorities or agencies with jurisdiction in the matter. The Company will use its best efforts to take steps required by state or federal law or applicable regulations, including rules and regulations of the Securities and Exchange Commission and any stock exchange on which the Company's shares may then be listed, in connection with issuance or sale of any shares purchased upon exercise of the Option. The foregoing notwithstanding, the Company shall not be obligated to issue or deliver Common Stock under this Agreement if such issuance or delivery would violate applicable state or federal securities laws. 5. No Other Rights. Nothing in the Plan or this Agreement shall confer upon the Optionee any right to be continued in the employment of the Company or any subsidiary or interfere in any way with the right of the Company or any subsidiary by whom the Optionee is employed to terminate the Optionee's employment at any time, for any reason, with or without cause, or to adjust the Optionee's compensation or benefits. 6. Successors. This Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company. 7. Notices. Any notices required or permitted to be given to the Optionee pursuant to the Plan or the Agreement shall be in writing, addressed to the most recent address on the Company's records, and shall be deemed to be effectively given when (a) mailed by registered or certified mail with postage and fees prepaid, (b) sent by overnight delivery service, (c) personally delivered, or (d) sent by facsimile with confirmed transmission. [SIGNATURE PAGE FOLLOWS] 3
MHL DEVELOPMENT COMPANY By: --------------------------------Print Name: -----------------------------------------------------------(Name, Title) OPTIONEE

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

Address: -------------------------------------------------------------------------------------------------Social Security No.: ----------------

4

EXHIBIT 10.29 NON-STATUTORY STOCK OPTION AGREEMENT

MHL DEVELOPMENT COMPANY By: --------------------------------Print Name: -----------------------------------------------------------(Name, Title)

OPTIONEE

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

Address: -------------------------------------------------------------------------------------------------Social Security No.: ----------------

4

EXHIBIT 10.29 NON-STATUTORY STOCK OPTION AGREEMENT MHL DEVELOPMENT COMPANY THIS AGREEMENT is made as of _____ ___, 2000 (the "Grant Date") between mHL Development Company, an Oregon corporation (the "Company"), and ________________________ (the "Optionee"). 1. Option Grant. Pursuant to the Company's 1998 Stock Incentive Plan (the "Plan"), a copy of which is attached as Exhibit A, the Company hereby grants to the Optionee the right and option (the "Option") to purchase all or any part of an aggregate of________ shares of the Company's authorized but unissued or reacquired Common Stock at a purchase price of _______ per share. The Option is a Non-Statutory Stock Option, as defined in the Plan. This Agreement contains the entire understanding of, and supersedes any prior or contemporaneous agreements between the Optionee and the Company regarding rights to receive the Company's stock. 2. Terms of Option. The Option is granted on the following terms and the Optionee acknowledges that the following terms summarize certain provisions of the Plan, and that the terms of the Plan, as interpreted by the Board of Directors, will govern any matter described in the Plan: 2.1 Duration of Option. The Option shall continue in effect for a period of ten years from the Grant Date (the "Option Period"). 2.2 Right to Exercise. Subject to Section 2.3 of this Agreement, the Option may be exercised from time to time in the following amounts: (a) none before the first anniversary of the Grant Date; (b) one-fifth of the total number of shares covered by the Option shall become exercisable after the first anniversary of the Grant Date; (c) an additional one-fifth of the total number of shares covered by the Option shall become exercisable after the second anniversary of the Grant Date; (d) an additional one-fifth of the total number of shares covered by the Option shall become exercisable after the third anniversary of the Grant Date; (e) an additional one-fifth of the total number of shares covered by the Option shall become exercisable after the fourth anniversary of the Grant Date; (f) the remaining one-fifth of the total number of shares covered by the Option shall become exercisable after the fifth anniversary of the Grant Date. The Option shall not be exercised for any fractional shares. If the Optionee does not exercise the Option in any one year with respect to the full number of shares to which the Optionee is entitled in that year, the Optionee's rights shall be cumulative and the Optionee may purchase those shares in any subsequent year during the term of the Option.

2.3 Limitations on Right to Exercise. The Option may not be exercised unless at the time of such exercise the Optionee is either employed by or serving as a director or consultant to, the Company or any subsidiary of the Company and has been so employed or has so served continuously since the date the Option was granted.

EXHIBIT 10.29 NON-STATUTORY STOCK OPTION AGREEMENT MHL DEVELOPMENT COMPANY THIS AGREEMENT is made as of _____ ___, 2000 (the "Grant Date") between mHL Development Company, an Oregon corporation (the "Company"), and ________________________ (the "Optionee"). 1. Option Grant. Pursuant to the Company's 1998 Stock Incentive Plan (the "Plan"), a copy of which is attached as Exhibit A, the Company hereby grants to the Optionee the right and option (the "Option") to purchase all or any part of an aggregate of________ shares of the Company's authorized but unissued or reacquired Common Stock at a purchase price of _______ per share. The Option is a Non-Statutory Stock Option, as defined in the Plan. This Agreement contains the entire understanding of, and supersedes any prior or contemporaneous agreements between the Optionee and the Company regarding rights to receive the Company's stock. 2. Terms of Option. The Option is granted on the following terms and the Optionee acknowledges that the following terms summarize certain provisions of the Plan, and that the terms of the Plan, as interpreted by the Board of Directors, will govern any matter described in the Plan: 2.1 Duration of Option. The Option shall continue in effect for a period of ten years from the Grant Date (the "Option Period"). 2.2 Right to Exercise. Subject to Section 2.3 of this Agreement, the Option may be exercised from time to time in the following amounts: (a) none before the first anniversary of the Grant Date; (b) one-fifth of the total number of shares covered by the Option shall become exercisable after the first anniversary of the Grant Date; (c) an additional one-fifth of the total number of shares covered by the Option shall become exercisable after the second anniversary of the Grant Date; (d) an additional one-fifth of the total number of shares covered by the Option shall become exercisable after the third anniversary of the Grant Date; (e) an additional one-fifth of the total number of shares covered by the Option shall become exercisable after the fourth anniversary of the Grant Date; (f) the remaining one-fifth of the total number of shares covered by the Option shall become exercisable after the fifth anniversary of the Grant Date. The Option shall not be exercised for any fractional shares. If the Optionee does not exercise the Option in any one year with respect to the full number of shares to which the Optionee is entitled in that year, the Optionee's rights shall be cumulative and the Optionee may purchase those shares in any subsequent year during the term of the Option.

2.3 Limitations on Right to Exercise. The Option may not be exercised unless at the time of such exercise the Optionee is either employed by or serving as a director or consultant to, the Company or any subsidiary of the Company and has been so employed or has so served continuously since the date the Option was granted. 2.4 Nontransferability. The Option may not be assigned or transferred by the Optionee, either voluntarily or by operation of law, and may be exercised only by the Optionee. 2.5 Purchase of Shares. Unless the Board of Directors determines otherwise, the Option may be exercised only upon receipt by the Company of the Option Exercise Form, in the form attached as Exhibit B, from the Optionee stating the Optionee's intention to exercise, specifying the number of shares as to which the Optionee desires to exercise the Option and the date on which the Optionee desires to complete the transaction, and, unless in the opinion of counsel for the Company such a representation is not required in order to comply with the Securities Act of 1933, as amended, containing a representation that it is the Optionee's intention to acquire the shares for investment and not with a view to distribution. Unless the Board of Directors determines otherwise, on or before the date specified for completion of the purchase of the shares, the Optionee must pay the Company the full purchase price of such shares in cash. No shares shall be issued until full payment has been made and the Optionee has executed and delivered to the Company either the Stock Transfer Restriction Agreement substantially in the form attached to this Agreement as Exhibit C (the "Restriction Agreement") or at the Company's discretion any applicable shareholders or stock transfer restriction agreement as in effect at that time (which agreement may at the Company's discretion contain provisions similar to the Restriction Agreement.) The

2.3 Limitations on Right to Exercise. The Option may not be exercised unless at the time of such exercise the Optionee is either employed by or serving as a director or consultant to, the Company or any subsidiary of the Company and has been so employed or has so served continuously since the date the Option was granted. 2.4 Nontransferability. The Option may not be assigned or transferred by the Optionee, either voluntarily or by operation of law, and may be exercised only by the Optionee. 2.5 Purchase of Shares. Unless the Board of Directors determines otherwise, the Option may be exercised only upon receipt by the Company of the Option Exercise Form, in the form attached as Exhibit B, from the Optionee stating the Optionee's intention to exercise, specifying the number of shares as to which the Optionee desires to exercise the Option and the date on which the Optionee desires to complete the transaction, and, unless in the opinion of counsel for the Company such a representation is not required in order to comply with the Securities Act of 1933, as amended, containing a representation that it is the Optionee's intention to acquire the shares for investment and not with a view to distribution. Unless the Board of Directors determines otherwise, on or before the date specified for completion of the purchase of the shares, the Optionee must pay the Company the full purchase price of such shares in cash. No shares shall be issued until full payment has been made and the Optionee has executed and delivered to the Company either the Stock Transfer Restriction Agreement substantially in the form attached to this Agreement as Exhibit C (the "Restriction Agreement") or at the Company's discretion any applicable shareholders or stock transfer restriction agreement as in effect at that time (which agreement may at the Company's discretion contain provisions similar to the Restriction Agreement.) The Optionee shall have none of the rights of a shareholder until a certificate for the shares is issued to the Optionee. Upon notification of the amount due (if any), the Optionee shall pay to the Company in cash amounts necessary to satisfy applicable federal, state and local withholding tax requirements. If additional withholding becomes required beyond any amount deposited before delivery of the certificates, the Optionee shall pay such amount to the Company on demand. If the Optionee fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the Optionee, including salary, subject to applicable law. 2.6 Stock Splits; Combinations; Dividends. If, during the term of the Option, the outstanding Common Stock of the Company is hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any stock split, combination of shares, reclassification, or dividend payable in shares, appropriate adjustment shall be made by the Board of Directors in the number and kind of shares subject to the Option, or the unexercised portion thereof, so that the Optionee's proportionate interest before and after the occurrence of the event is maintained. 2

Notwithstanding the foregoing, the Board of Directors shall have no obligation to effect any adjustment that would or might result in the issuance of fractional shares, and any fractional shares resulting from any adjustment may be disregarded or provided for in any manner determined by the Board of Directors. Any such adjustments made by the Board of Directors shall be conclusive. 2.7 Mergers, Reorganizations, Etc. In the event of a merger, consolidation, plan of exchange, acquisition of property or stock, separation, reorganization or liquidation to which the Company or a subsidiary is a party, or a sale of all or substantially all of the Company's assets (each, a "Transaction"), the Company, in its sole discretion and to the extent possible under the structure of the Transaction, may provide a 30-day period prior to the consummation of the Transaction during which the Optionee shall have the right to exercise the Option to the extent shares subject to the Option are or would be vested as of the date of consummation of the Transaction. Upon expiration of such 30-day period all further rights to purchase shares pursuant to the Option shall terminate. 3. Stock Transfer Restriction Agreement. The Optionee agrees that any shares acquired upon exercise of the Option shall be subject to a shareholder's or stock transfer restriction agreement, a copy of which will be provided to the Optionee at the time the Option is exercised. The exercise of the Option shall not be effective until the Optionee has signed and delivered to the Company such stock transfer restriction agreement. 4. Approvals. The obligations of the Company under this Agreement are subject to the approval of state and federal authorities or agencies with jurisdiction in the matter. The Company will use its best efforts to take steps required by state or federal law or applicable regulations, including rules and regulations of the Securities and

Notwithstanding the foregoing, the Board of Directors shall have no obligation to effect any adjustment that would or might result in the issuance of fractional shares, and any fractional shares resulting from any adjustment may be disregarded or provided for in any manner determined by the Board of Directors. Any such adjustments made by the Board of Directors shall be conclusive. 2.7 Mergers, Reorganizations, Etc. In the event of a merger, consolidation, plan of exchange, acquisition of property or stock, separation, reorganization or liquidation to which the Company or a subsidiary is a party, or a sale of all or substantially all of the Company's assets (each, a "Transaction"), the Company, in its sole discretion and to the extent possible under the structure of the Transaction, may provide a 30-day period prior to the consummation of the Transaction during which the Optionee shall have the right to exercise the Option to the extent shares subject to the Option are or would be vested as of the date of consummation of the Transaction. Upon expiration of such 30-day period all further rights to purchase shares pursuant to the Option shall terminate. 3. Stock Transfer Restriction Agreement. The Optionee agrees that any shares acquired upon exercise of the Option shall be subject to a shareholder's or stock transfer restriction agreement, a copy of which will be provided to the Optionee at the time the Option is exercised. The exercise of the Option shall not be effective until the Optionee has signed and delivered to the Company such stock transfer restriction agreement. 4. Approvals. The obligations of the Company under this Agreement are subject to the approval of state and federal authorities or agencies with jurisdiction in the matter. The Company will use its best efforts to take steps required by state or federal law or applicable regulations, including rules and regulations of the Securities and Exchange Commission and any stock exchange on which the Company's shares may then be listed, in connection with issuance or sale of any shares purchased upon exercise of the Option. The foregoing notwithstanding, the Company shall not be obligated to issue or deliver Common Stock under this Agreement if such issuance or delivery would violate applicable state or federal securities laws. 5. No Contract Rights. Nothing in the Plan or this Agreement shall confer upon the Optionee any right to be retained by the Company or any subsidiary or to the continuation, extension, renewal, or modification of any compensation, contract, agreement, or arrangement with or by the Company or any subsidiary, or alter, modify, change or terminate any right of the Company or any subsidiary under any contract, agreement or arrangement with the Optionee. 6. Successors. This Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company. 3

7. Notices. Any notices required or permitted to be given to the Optionee pursuant to the Plan or the Agreement shall be in writing, addressed to the most recent address on the Company's records, and shall be deemed to be effectively given when (a) mailed by registered or certified mail with postage and fees prepaid, (b) sent by overnight delivery service, (c) personally delivered, or (d) sent by facsimile with confirmed transmission. IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate as of the day and year first hereinabove written. MHL DEVELOPMENT COMPANY
By: ---------------------------------Name: Title:

----------------------------------------Optionee Print Name: ------------------------Address: -------------------------------------------------------------------------------------------------Social Security No.:

7. Notices. Any notices required or permitted to be given to the Optionee pursuant to the Plan or the Agreement shall be in writing, addressed to the most recent address on the Company's records, and shall be deemed to be effectively given when (a) mailed by registered or certified mail with postage and fees prepaid, (b) sent by overnight delivery service, (c) personally delivered, or (d) sent by facsimile with confirmed transmission. IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate as of the day and year first hereinabove written. MHL DEVELOPMENT COMPANY
By: ---------------------------------Name: Title:

----------------------------------------Optionee Print Name: ------------------------Address: -------------------------------------------------------------------------------------------------Social Security No.: ----------------

4

EXHIBIT 10.33 CONVERTIBLE PROMISSORY NOTE June __, 2001 For value received, microHelix, Inc., an Oregon corporation, ("Borrower") promises to pay __________________ (such person or its permitted transferee or transferees being herein referred to as the "Lender") the sum of ____________ dollars ($______) plus interest thereon at the rate of 9% per annum from the date written above until paid, all in accordance with the following terms and conditions: 1. TERM. The term of this Note shall expire at the close of business, Eastern Time, on June 30, 2003 (the "Due Date"), at which time, except as otherwise provided herein, the principal amount written above and all interest accrued thereon shall become due and payable. 2. PAYMENTS DURING THE TERM. No payments of principal or interest shall be due until December 31, 2001. On December 31, 2001, March 31, 2002 and June 30, 2002, Borrower shall pay all accrued and unpaid interest as of such date. The principal hereof and additional interest hereon shall be payable in four equal quarterly installments of $______ payable on each of September 30, 2002, December 31, 2002, March 31, 2003 and June 30, 2003. 3. CONVERSION. If, on or before December 31, 2001, Borrower shall consummate a firmly underwritten public offering of equity securities that shall cause such securities to be listed on the NASDAQ National or SmallCap Markets or the American Stock Exchange (an "IPO"), the principal of, and accrued interest on, this Note shall be automatically converted into the securities sold to the public in the IPO at the rate of one such security (or unit consisting of more than one security) for each amount of such principal and accrued interest equal to the initial public offering price for such security or unit in the IPO. 4. PREPAYMENT. This Note may be prepaid, in whole or in part, at any time after December 31, 2001 at the option of the Borrower. Any partial prepayment shall be applied first to interest and the balance, if any, shall be applied to a reduction of principal. In the event of any partial prepayment, the quarterly installment payments shall continue to become due in the amount set forth in Section 2 provided that no such payments shall be required

EXHIBIT 10.33 CONVERTIBLE PROMISSORY NOTE June __, 2001 For value received, microHelix, Inc., an Oregon corporation, ("Borrower") promises to pay __________________ (such person or its permitted transferee or transferees being herein referred to as the "Lender") the sum of ____________ dollars ($______) plus interest thereon at the rate of 9% per annum from the date written above until paid, all in accordance with the following terms and conditions: 1. TERM. The term of this Note shall expire at the close of business, Eastern Time, on June 30, 2003 (the "Due Date"), at which time, except as otherwise provided herein, the principal amount written above and all interest accrued thereon shall become due and payable. 2. PAYMENTS DURING THE TERM. No payments of principal or interest shall be due until December 31, 2001. On December 31, 2001, March 31, 2002 and June 30, 2002, Borrower shall pay all accrued and unpaid interest as of such date. The principal hereof and additional interest hereon shall be payable in four equal quarterly installments of $______ payable on each of September 30, 2002, December 31, 2002, March 31, 2003 and June 30, 2003. 3. CONVERSION. If, on or before December 31, 2001, Borrower shall consummate a firmly underwritten public offering of equity securities that shall cause such securities to be listed on the NASDAQ National or SmallCap Markets or the American Stock Exchange (an "IPO"), the principal of, and accrued interest on, this Note shall be automatically converted into the securities sold to the public in the IPO at the rate of one such security (or unit consisting of more than one security) for each amount of such principal and accrued interest equal to the initial public offering price for such security or unit in the IPO. 4. PREPAYMENT. This Note may be prepaid, in whole or in part, at any time after December 31, 2001 at the option of the Borrower. Any partial prepayment shall be applied first to interest and the balance, if any, shall be applied to a reduction of principal. In the event of any partial prepayment, the quarterly installment payments shall continue to become due in the amount set forth in Section 2 provided that no such payments shall be required after all principal and accrued interest have been paid. All principal and accrued interest on this note shall be prepaid in full within 10 business days following any equity financing by Borrower in which Borrower receives net proceeds of $5 million or more. 5. PERMITTED TRANSFEREES. The rights of Lender under this Note are not transferable except as specifically provided in this Section 4. This Note is transferable: (a) in whole, but not in part, to an entity that controls, is controlled by or is under common control with the transferor; 1

(b) in a prorata distribution to the owners of the transferor; (c) by will or pursuant to the laws of descent and distribution; or (d) in connection with a bona fide pledge or hypothecation of this Note as security for indebtedness of the Lender, or any foreclosure pursuant to the terms of such pledge or hypothecation. 6. NOTICE. Any notice permitted or required hereby shall be deemed validly given if (i) sent by registered mail, return receipt requested, or by a recognized package delivery company that maintains a record of deliveries, or (ii) received at the address of the person to whom such notice is directed by any physical or electronic means. Any notice to Borrower shall be addressed to Borrower at 16125 SW 72nd Ave.

(b) in a prorata distribution to the owners of the transferor; (c) by will or pursuant to the laws of descent and distribution; or (d) in connection with a bona fide pledge or hypothecation of this Note as security for indebtedness of the Lender, or any foreclosure pursuant to the terms of such pledge or hypothecation. 6. NOTICE. Any notice permitted or required hereby shall be deemed validly given if (i) sent by registered mail, return receipt requested, or by a recognized package delivery company that maintains a record of deliveries, or (ii) received at the address of the person to whom such notice is directed by any physical or electronic means. Any notice to Borrower shall be addressed to Borrower at 16125 SW 72nd Ave. Portland, OR 97224 Telephone (503) 968-1600 or at any fax or email address maintained by Borrower for general corporate purposes. Any notice to Lender shall be addressed to Lender at

Tel: (___) ___-_____ Fax: (___) ___-_____ or at any fax or email address maintained by Lender for general corporate purposes. with a copy to

Tel: (___) ___-_____ Fax: (___) ___-_____ Any party may change addresses at which it wishes to receive notice by valid notice to the other parties setting forth the new address. 7. GOVERNING LAW. This Note shall be governed by and interpreted under the laws of the State of Oregon, excluding provisions thereof relating to conflict of laws. 8. COLLECTION COSTS. If any due and unpaid principal of or interest on this Note is referred for collection, or if legal action is instituted to collect any such amount, 2

EXHIBIT 10.34 THESE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND ARE NOT TRANSFERABLE EXCEPT AS PROVIDED HEREIN MICROHELIX, INC.

EXHIBIT 10.34 THESE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND ARE NOT TRANSFERABLE EXCEPT AS PROVIDED HEREIN MICROHELIX, INC. PURCHASE WARRANTS Issued to:

Exercisable to Purchase __________ Units of MICROHELIX, INC.

This is to certify that, for value received and subject to the terms and conditions set forth below, the Warrantholder (hereinafter defined) is entitled to purchase, and the Company promises and agrees to sell and issue to the Warrantholder, at any time during the Term(hereinafter defined), the number of Units (hereinafter defined) of the Company at the Exercise Price provided below. This Warrant Certificate is issued subject to the following terms and conditions: 1. DEFINITIONS OF CERTAIN TERMS. Except as may be otherwise clearly required by the context, the following terms have the following meanings: "ACT" means the Securities Act of 1933, as amended. "CASHLESS EXERCISE" means an exercise of the Warrants in which, in lieu of payment of the Exercise Price, the Holder elects to receive a lesser number of Securities such that the value of the Securities that such Holder would otherwise have been entitled to receive but has agreed not to receive, as determined by the average high closing bid price for such Securities on the 20 trading days immediately preceding the date of exercise, is equal to the Exercise Price with respect to such exercise. A Holder may only elect a Cashless Exercise if the Securities issuable by the Company on such exercise are publicly traded securities. "COMMISSION" means the Securities and Exchange Commission. "COMMON STOCK" means the common stock of the Company. "COMPANY" means microHelix, Inc., an Oregon corporation. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "EXERCISE PRICE" means the price at which the Warrantholder may purchase one Unit upon exercise of a Warrant and shall be equal to 90% of the initial public offering price of the Units in the Public Offering, subject to adjustment as provided herein. "PUBLIC OFFERING" means a registered public offering of equity securities of the Company following which the Company will be obligated to file reports under

This is to certify that, for value received and subject to the terms and conditions set forth below, the Warrantholder (hereinafter defined) is entitled to purchase, and the Company promises and agrees to sell and issue to the Warrantholder, at any time during the Term(hereinafter defined), the number of Units (hereinafter defined) of the Company at the Exercise Price provided below. This Warrant Certificate is issued subject to the following terms and conditions: 1. DEFINITIONS OF CERTAIN TERMS. Except as may be otherwise clearly required by the context, the following terms have the following meanings: "ACT" means the Securities Act of 1933, as amended. "CASHLESS EXERCISE" means an exercise of the Warrants in which, in lieu of payment of the Exercise Price, the Holder elects to receive a lesser number of Securities such that the value of the Securities that such Holder would otherwise have been entitled to receive but has agreed not to receive, as determined by the average high closing bid price for such Securities on the 20 trading days immediately preceding the date of exercise, is equal to the Exercise Price with respect to such exercise. A Holder may only elect a Cashless Exercise if the Securities issuable by the Company on such exercise are publicly traded securities. "COMMISSION" means the Securities and Exchange Commission. "COMMON STOCK" means the common stock of the Company. "COMPANY" means microHelix, Inc., an Oregon corporation. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "EXERCISE PRICE" means the price at which the Warrantholder may purchase one Unit upon exercise of a Warrant and shall be equal to 90% of the initial public offering price of the Units in the Public Offering, subject to adjustment as provided herein. "PUBLIC OFFERING" means a registered public offering of equity securities of the Company following which the Company will be obligated to file reports under Section 12 of the Exchange Act. "RULES AND REGULATIONS" means the rules and regulations of the Commission adopted under the Act. "SECURITIES" means the securities obtained or obtainable upon exercise of the Warrants or securities obtained or obtainable upon exercise, exchange, or conversion of such securities.

Exhibit 21.1 LIST OF SUBSIDIARIES
Jurisdiction of Incorporation --------------Oregon

Name ---BioElectric Corporation

EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT

Exhibit 21.1 LIST OF SUBSIDIARIES
Jurisdiction of Incorporation --------------Oregon

Name ---BioElectric Corporation

EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the use in this Registration Statement of microHelix, Inc. on Form SB-2 of our report dated July 6, 2001, appearing in the Prospectus, which is part of this Registration Statement and to the reference to us under the heading "Experts" in such Prospectus.
/s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP Portland, Oregon

July 25, 2001

EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the use in this Registration Statement of microHelix, Inc. on Form SB-2 of our report dated July 6, 2001, appearing in the Prospectus, which is part of this Registration Statement and to the reference to us under the heading "Experts" in such Prospectus.
/s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP Portland, Oregon

July 25, 2001