LEASE AGREEMENT
                           OFFICE AND INDUSTRIAL SPACE

This Lease  Agreement is made and entered into as of the 21 day of May, 1996, by
and between  LakeCenter Plaza,  Ltd., LLLP  ("Landlord"),  whose address is 4875
Pearl East Circle,  Suite 300, Boulder  Colorado 80301,  and  Granvi1le-Phi11ips
Company  ("Tenant"),  whose address is 5675 Arapahoe Ave. Boulder Colorado 80303
in consideration of the covenants, terms, conditions, agreements and payments as
herein set forth, the Landlord and Tenant hereby enter into the following Lease:

1. Definitions.  Whenever the following words or phrases are used in this Lease,
said words or phrases shall have the following meaning:

     A. "Area"  shall mean the parcel of land  depicted on Exhibit "A"  attached
hereto and commonly known and referred to as LakeCenter Plaza Boulder, Colorado.
The Area includes the Leased  Premises and one or more  buildings.  The Area may
include Common Areas.

     B. "Building" shall mean a building located in the Area.

     C.  "Common  Areas"  shall mean all  entrances,  exits,  driveways,  curbs,
walkways,  hallways,  parking areas,  landscaped areas,  restrooms,  loading and
service  areas,  and like areas or facilities  which are located in the Area and
which are  designated by the Landlord as areas or  facilities  available for the
nonexclusive use in common by persons designated by the Landlord.

     D. "Leased Premises" shall mean the premises herein leased to the Tenant by
the Landlord.

     E.  "Tenant's  Pro rata  Share"  as to the  Building  in which  the  Leased
Premises are located shall mean an amount  (expressed as a percentage)  equal to
the number of square feet included in the Leased  Premises  divided by the total
number of leasable square feet included in said Building.  The Tenant's Pro rata
Share as to Common Areas shall mean an amount  (expressed as a percentage) equal
to the number of square  feet  included  in the Leased  Premises  divided by the
total number of leasable  square feet included in all  Buildings  located in the
Area.  The Tenant's Pro rata Share for Common Areas may change from time to time
as the leasable square footage in all Buildings located in the Area is increased
or decreased.

2. Leased Premises.  The landlord hereby leases unto the Tenant,  and the Tenant
hereby leases from the Landlord, the following described premises:

Space Suite 101 in Building  5665/Building "B" consisting of 12.154 square feet,
all as depicted on Exhibit "B" attached hereto.

3. Base Term.  The term of this Lease  shall  commence at 12:00 noon on July 15.
1996, and,  unless sooner  terminated as herein provided for, shall end at 12:00
noon on August 1, 2001, ("Lease Term").  Except as specifically  provided to the
<PAGE>

contrary herein,  the Leased Premises shall, upon the termination of this Lease,
by virtue of the  expiration of the Lease Term or otherwise,  be returned to the
Landlord by the Tenant in as good or better  condition than when entered upon by
the Tenant, ordinary wear and tear excepted.

4.  Rent.  Tenant shall pay the following rent for the Leased Premises:

     A. Base Month1y  Rent.  Tenant shall pay to  Landlord,  without  notice and
without  setoff,  at the address of Landlord as herein set forth,  the following
Base Monthly Rent ("Base  Monthly  Rent"),  said Base Monthly Rent to be paid in
advance on the first day of each month during the term hereof. In the event that
this Lease  commences  on a date  other than the first day of a month,  the Base
Monthly  Rent for the first month of the Lease Term shall be  prorated  for said
partial  month.  Below is a schedule of Base Monthly  Rental  payments as agreed
upon:


                                During Lease Term
                                -----------------                    

   For Period                       To Period               A Base Monthly
    Starting                          Ending                    Rent of
   ----------                       ---------               --------------

July 15, 1996                       August 1, 1996          $4,810.96

August 1, 1996                      August 1, 1997          $9,621.92

August 1, 1997                      August 1, 2001          $9,621.92 Plus any
                                                            cost of living
                                                            adjustment per
                                                            paragraph 4C below.

     B. Lease Term Adjustment.  If, for any reason,  other than delays caused by
the Tenant, the Leased Premises are not ready for Tenant's occupancy on July 15,
1996 the Tenant's  rental  obligation end other monetary  expenses (i.e.  taxes,
utilities,  etc.) shall be abated in direct  proportion to the number of days of
delay. It is hereby agreed that the premises shall be deemed ready for occupancy
on the day the  Landlord  receives  a T. C .O.  or C. O.  from  the  appropriate
authority,  or on the day the  Landlord  gives  Tenant  the  keys to the  Leased
Premises if a building permit has not been applied for and/or is not required by
the  appropriate  authority and in  accordance  with the terms,  conditions  and
exhibits to this Lease Agreement.

     C.  Cost of  Living  Adjustment.  The  Base  Monthly  Rental  specified  in
paragraph  4A  above  shall  be  recalculated  for each  Lease  Year as  defined
hereinafter  following  the  first  Lease  Year of  this  Lease  Agreement.  The
recalculated  Base  Monthly  Rental  shall  be  hereinafter  referred  to as the
"Adjusted Monthly Rental". The Adjusted Monthly Rental for each Lease Year after
the first Lease Year shall be the greater of: (i) the amount of the Base Monthly
Rental,  or (ii) an amount  calculated by the rent adjustment  formula set forth
below. In applying the rent adjustment formula, the following  definitions shall
apply:
<PAGE>

     (1)  "Lease  Year"  shall  mean a period of twelve  (12)  consecutive  full
calendar  months  with  the  first  Lease  Year  commencing  on the  date of the
commencement of the term of this Lease and each succeeding Lease Year commencing
upon the anniversary date of the first Lease Year;  however,  if this Lease does
not  commence on the first day of a month,  then,  the first Lease Year and each
succeeding  Lease  Year  shall  commence  on the first  day of the  first  month
following each anniversary date of this Lease;

     (2) "Bureau" shall mean the Bureau of Labor Statistics of the United States
Department  of Labor or any  successor  agency  that shall issue the Price Index
referred to in this Lease Agreement.

     (3)  "Price  Index"  shall  mean  the  "Consumer   Price   Index-All  Urban
Consumers-All Items (CPI-U) U.S. City Average (1982-84=100)" issued from time to
time by the Bureau. In the event the Price Index shall hereafter be converted to
a different standard  reference base or otherwise revised,  the determination of
the  increase in the Price  Index shall be made with the use of such  conversion
factor,  formula or table as may be published by Prentice-Hall,  Inc. or failing
such  publication,   by  another  nationally  recognized  publisher  of  similar
statistical  information.  In the  event  the  Price  Index  shall  cease  to be
published,  then,  for  the  purposes  of  this  paragraph  4C  there  shall  be
substituted  for the Price Index such other index as the Landlord and the Tenant
shall agree upon,  and if they are unable to agree  within sixty (60) days after
the Price Index  ceases to be  published,  such matter  shall be  determined  by
arbitration   in  accordance   with  the  Rules  of  the  American   Arbitration
Association.

     (4) "Base Price  Index"  shall mean the Price Index  released to the public
during  the second  calendar  month  preceding  the  commencement  of this Lease
Agreement,

     (5) "Revised Price Index" shall mean the Price Index released to the public
during the second  calendar  month  preceding  the Lease Year for which the Base
Annual Rental is to be adjusted;

     (6) "Base Monthly  Rental" shall mean the Base Monthly  Rental set forth in
subparagraph  4A  above.  The rent  adjustment  formula  used to  calculate  the
Adjusted Monthly Rental is as follows:

          Adjusted Monthly = Revised Price Index X Base Monthly Rental
          Rental             Base Price Index

The Adjusted Monthly Rental as hereinabove provided shall continue to be payable
monthly as required  in  paragraph  4A above  without  necessity  of any further
notice by the Landlord to the Tenant.

     D. Total Net Lease. The Tenant  understands and agrees that this Lease is a
total net lease (a "net, net, net lease"), whereby the Tenant has the obligation
to  reimburse  the  Landlord  for a share  of all  costs  and  expenses  (taxes,
insurance,  trash removal,  Common Area operation and maintenance and like costs
and expenses),  incurred by the Landlord as a result of the Landlord's ownership
and operation of the Area.
<PAGE>

5. N/A

6. Use of Premises.  Tenant shall use the Leased Premises only for manufacturing
and  related  activities  and for no other  purpose  whatsoever  except with the
written consent of Landlord. Tenant shall not allow any accumulation of trash or
debris on the Leased  Premises or within any portion of the Area.  All receiving
and  delivery  of goods and  merchandise  and all  removal of garbage and refuse
shall  be made  only by way of the  rear  and/or  other  service  door  provided
therefore.  In the event the Leased Premises shall have no such door, then these
matters shall be handled in a manner satisfactory to Landlord. No storage of any
material  outside of the Leased  Premises shall be allowed unless first approved
by  Landlord  in  writing,  and then in only  such  areas as are  designated  by
Landlord. Tenant shall not commit or suffer any waste on the Leased Premises nor
shall Tenant  permit any  nuisance to be  maintained  on the Leased  Premises or
permit any disorderly  conduct or other  activity  having a tendency to annoy or
disturb any occupants of any part of the Area and/or any adjoining property.

7. Laws and Regulations.  Tenant  Responsibility.  The Tenant shall, at its sole
cost and  expense,  comply  with all laws and  regulations  of any  governmental
entity,  board,  commission  or  agency  having  jurisdiction  over  the  Leased
Premises.  Tenant agrees not to install any electrical  equipment that overloads
any electrical  paneling,  circuitry or wiring and further agrees to comply with
the requirements of the insurance  underwriter or any  governmental  authorities
having jurisdiction thereof.

8. Landlord's  Rules and Regulations.  Landlord  reserves the right to adopt and
promulgate rules and regulations applicable to the Leased Premises and from time
to time amend or supplement said rules or regulations.  Notice of such rules and
regulations and amendments and supplements thereto shall be given to Tenant, and
Tenant  agrees  to comply  with and  observe  such  rules  and  regulations  and
amendments and supplements thereto provided that the same apply uniformly to all
Tenants of the Landlord in the Area. Any additional rules and regulations  shall
be reasonable,  not interfere with Tenant's business operation, and not increase
Tenant's operating costs.

9. Parking.  If the Landlord  provides off street  parking for the common use of
Tenants, employees and customers of the Area, the Tenant shall park all vehicles
of whatever type used by Tenant  and/or  Tenant's  employees  only in such areas
thereof as are  designated by Landlord for this purpose,  and Tenant accepts the
responsibility  of  seeing  that  Tenant's  employees  park only in the areas so
designated.  Tenant  shall,  upon the  request of the  Landlord,  provide to the
Landlord  license numbers of the Tenant's  vehicles and the vehicles of Tenant's
employees.

10. Control of Common Areas.  -- Exclusive  control of the Landlord.  All Common
Areas shall at all times be subject to the exclusive  control and  management of
Landlord, notwithstanding that Tenant and/or Tenant's employees and/or customers
may have a nonexclusive right to the use thereof.  Landlord shall have the right
from time to time to establish,  modify and enforce rules and  regulations  with
respect to the use of said facilities and Common Areas.
<PAGE>

11. Taxes.

     A.  Real  Property  Taxes  and  Assessments.  The  Tenant  shall pay to the
Landlord on the first day of each month,  as additional  rent,  the Tenant's Pro
rata Share of all real estate taxes and special  assessments levied and assessed
against  the  Building in which the Leased  Premises  are located and the Common
Areas. If the first and last years of the Lease Term are not calendar years, the
obligations  of the Tenant  hereunder  shall be prorated  for the number of days
during the calendar year that this Lease is in effect.  The monthly payments for
such taxes and assessments  shall be $1,266.00  until the Landlord  receives the
first tax  statement  for the referred to  properties.  Thereafter,  the monthly
payments  shall be based upon 1/12th of the prior year's taxes and  assessments.
Once each year the Landlord shall  determine the actual  Tenant's Pro rata Share
of taxes and assessments for the prior year and if the Tenant has paid less than
the  Tenant's  Pro rata  Share  for the  prior  year the  Tenant  shall  pay the
deficiency to the Landlord  with the next payment of Base Monthly  Rent,  or, if
the Tenant has paid in excess of the  Tenant's Pro rata Share for the prior year
the Landlord shall forthwith refund said excess to the Tenant.

     B. Personal Property Taxes.  Tenant shall be responsible for, and shall pay
promptly when due, any and all taxes and/or  assessments  levied and/or assessed
against  any  furniture,  fixtures,  equipment  and  items of a  similar  nature
installed and/or located in or about the Leased Premises by Tenant.

     C. N/A

     D. Should Landlord protest and win a reduction in the real estate taxes for
the  Building  and Area,  Tenant shall be obligated to pay its Pro rata Share of
the  cost  of such  protest,  not to  exceed  Tenants  pro  rata  share  of said
reduction, if the protest is handled by a party other than the Landlord.

12. Insurance.

     A. Landlord's Insurance.  The Landlord shall procure and maintain such fire
and casualty,  loss of rents and  liability  insurance as it, from time to time,
deems  proper and  appropriate  in reference to the Building in which the Leased
Premises are located and the Common Areas.  Such insurance shall not be required
to cover any of the  Tenant's  property and the Tenant shall have no interest in
any of the  proceeds of such  insurance.  Landlord  shall show  evidence of said
insurance upon each policy renewal.

     B. Tenant's Insurance.  Tenant shall, at its sole cost and expense,  insure
on a full  replacement  cost  basis,  Tenant's  inventory,  fixtures,  leasehold
improvements  and  betterments  located  on the  Leased  Premises  against  loss
resulting from fire and other all risk perils. Tenant shall procure, pay for and
maintain  comprehensive  public liability  insurance providing coverage from and
against any loss or damage  occasioned  by an accident or casualty on the Leased
Premises.  Said liability policy shall be written on an "occurrence  basis" with
limits of not less than $1,000,000 combined single limit coverage.  Certificates
for such  insurance  shall be delivered to Landlord and shall  provide that said
insurance shall not be changed,  modified,  reduced or cancelled  without thirty
(30) days prior written notice thereof being given to Landlord.
<PAGE>

     C. Tenant's High Pressure  Steam Boiler  Insurance.  If Tenant makes use of
any kind of steam  or  other  high  pressure  boiler  or other  apparatus  which
presents a risk of damage to the Leased  Premises  or to the  Building  or other
improvements  of which the Leased  Premises are a part or to the life or limb of
persons  within such  premises,  Tenant shall  secure and  maintain  appropriate
boiler  insurance in an amount  satisfactory to Landlord.  Certificates for such
insurance  shall be delivered to Landlord and shall provide that said  insurance
shall not be changed,  modified,  reduced or cancelled  without thirty (30) days
prior written notice thereof being given to Landlord.

     D. Tenant's Share of Landlord  Insurance.  Tenant shall pay the Landlord as
additional rent Tenant's Pro rata Share of the insurance secured by the Landlord
pursuant to "12A" above. Payment shall be made on the first day of each month as
additional  rent. The monthly  payments for such insurance shall be $51.00 until
changed by  Landlord  as a result of an increase or decrease in the cost of such
insurance.

     E. Mutual  Subrogation  Waiver.  Landlord  and Tenant  hereby grant to each
other, on behalf of any insurer  providing fire and extended  coverage to either
of them covering the Leased Premises, Buildings or other improvements thereon or
contents  thereof,  a waiver of any right of subrogation any such insurer of one
party may  acquire  against  the other or as against  the  Landlord or Tenant by
virtue of  payments  of any loss under such  insurance.  Such a waiver  shall be
effective so long as the Landlord and Tenant are  empowered to grant such waiver
under the terms of their respective insurance policy or policies and such waiver
shall stand mutually  terminated as of the date either  Landlord or Tenant gives
notice to the other that the power to grant such waiver has been so terminated.

13.  Utilities.  Tenant  shall be solely  responsible  for and  promptly pay all
charges for heat,  water,  gas,  electric,  sewer service arid any other utility
service used or consumed on the Leased Premises. Should Landlord elect to supply
all  or any of the  utility  services  to be  used  or  consumed  on the  Leased
Premises,  Tenant shall, within ten (10) days from presentation of the statement
for such utility  service,  pay to Landlord,  as additional rent under the terms
hereof,  the amount of said statement if it represents utility service furnished
to the  Leased  Premises  only or its Pro  rata  Share of said  statement  if it
includes utility service to an area greater than the Leased  Premises.  Said pro
ration of  utilities  shall be reviewed by Landlord and Tenant at the end of the
first year of occupancy,  at which time Landlord shall  determine if the present
percentage of said total  utilities is equitable in relation to the use of total
services by all the Tenants and will be adjusted by Landlord, if necessary.  The
Tenant  shall  forthwith  upon  taking  occupancy  of the Leased  Premises  make
arrangements  with the Public Service  Company,  U.S. West or other  appropriate
utility company to pay the utilities used on the Leased Premises and to have the
same billed to the Tenant at the address designated by the Tenant.  Should there
be a time where the Landlord remains  responsible for utilities  supplied to the
Leased  Premises,  the Landlord  shall bill the Tenant  therefore and the Tenant
shall promptly reimburse the Landlord  therefore.  In no event shall Landlord be
liable for any  interruption or failure in the supply of any such utility to the
Leased Premises.
<PAGE>

In the event the utility  company  supplying  water  and/or  sewer to the Leased
Premises   determines  that  an  additional  service  fee,  impact  fee,  and/or
assessment, or any other type of payment or penalty is necessary due to Tenant's
use and occupancy of the Building,  nature of operation  and/or  consumption  of
utilities,  said expense shall be borne solely by the Tenant. Said expense shall
be paid  promptly  and any repairs  requested  by the utility  company  shall be
performed by Tenant immediately and without any delay.

14. Maintenance Obligations of Landlord. Except as herein otherwise specifically
provided  for,  Landlord  shall keep and  maintain  the roof and exterior of the
Building of which the Leased  Premises are a part in good repair and  condition.
Tenant  shall  repair and pay for any damage to roof,  foundation  and  external
walls caused by Tenant's action, negligence or fault.

15.  Maintenance  Obligations  of the Tenant.  Subject  only to the  maintenance
obligations of the Landlord as herein provided for, the Tenant shall, during the
entire Lease Term,  including all extensions  thereof, at the Tenant's sole cost
and expense, keep and maintain the Leased Premises in good condition and repair,
including specifically the following:

     A. Electrical Systems.  Tenant agrees to maintain in good working order and
to make all required repairs and replacements to the electrical  systems for the
Leased Premises.

     B. Plumbing Systems. Tenant agrees to maintain in good working order and to
make all required repairs or replacements to the plumbing systems for the Leased
Premises.

     C. N/A

     D. Tenant's  Responsibility for Building and Area Repairs.  Tenant shall be
responsible  for any repairs  required  for any part of the  Building or Area of
which the Leased  Premises  are a part if such repairs are  necessitated  by the
actions or inactions of Tenant.

     E.  Cutting  Roof.  Tenant must obtain in writing the  Landlord's  approval
prior to making  any roof  penetrations.  Failure  by  Tenant to obtain  written
permission  to  penetrate  a roof  shall  relieve  Landlord  of any roof  repair
obligations  as set forth in Paragraph  "14" hereof.  Tenant  further  agrees to
repair,  at its sole cost and expense,  all roof penetrations made by the Tenant
and to use, if so requested by Landlord,  a licensed  contractor selected by the
Landlord to make such penetrations and repairs.

     F. Glass and Doors.  The repair and  replacement  of all glass and doors on
the  Leased  Premises  shall  be the  responsibility  of the  Tenant.  Any  such
replacements  or  repairs  shall be  promptly  completed  at the  expense of the
Tenant.

     G. Liability for Overload.  Tenant shell be  responsible  for the repair or
replacement of any damage to the Leased Premises, the Building or the Area which
result from the Tenant's  movement of heavy articles therein or thereon.  Tenant
shall not overload the floors of any part of the Leased Premises.
<PAGE>

     H. Liability for Overuse and Overload of Operating Systems. Tenant shall be
responsible for the repair,  upgrade,  modification,  and/or  replacement of any
operating  systems  servicing  the  Leased  Premises  and/or  all or part of the
Building  which is  necessitated  by  Tenant's  change or  increase in use of or
non-disclosed  use of all or a part of the Leased  Premises.  Operating  systems
include,  but are not limited to,  electrical  systems;  plumbing  systems (both
water and natural gas);  heating,  ventilating,  and air  conditioning  systems;
telecommunications systems; computer and network systems; lighting systems, fire
sprinkler systems; security systems; and building control systems, if any.

     I. N/A

     J. Failure of Tenant to Maintain  Premises.  Should Tenant  neglect to keep
and maintain the Leased Premises as required herein, the Landlord shall have the
right,  but not the obligation,  to have the work done and any reasonable  costs
plus a five percent (5%) overhead charge therefore shall be charged to Tenant as
additional  rental and shall  become  payable by Tenant  with the payment of the
rental next due.

     K. Said approvals from landlord shall not be unreasonably withheld.

16. Common Area  Maintenance.  Tenant shall be responsible for Tenant's Pro rata
Share of the total costs incurred for the operation,  maintenance  and repair of
the Common Areas, including, but not limited to, the costs and expenses incurred
for the operation, maintenance and repair of parking areas (including restriping
and repaving);  removal of snow; utilities for common lighting and signs; normal
HVAC  maintenance  and elevator  maintenance  (if  applicable);  trash  removal;
security to protect and secure the Area; common entrances, exits, and lobbies of
the Building;  all common  utilities,  including water to maintain  landscaping;
replanting in order to maintain a smart appearance of landscape areas; supplies;
depreciation on the machinery and equipment used in such operation,  maintenance
and repair;  the cost of  personnel  to  implement  such  services;  the cost of
maintaining  in good  working  condition  the  HVAC  system(s)  for  the  Leased
premises;  the cost of maintaining in good working condition the elevator(s) for
the  Leased  Premises,  if  applicable;  and  ten  percent  (10%)  of  all  such
operational, maintenance and repair costs to cover Landlord's administrative and
overhead  costs.  These  costs  shall be  estimated  on an  annual  basis by the
Landlord  and shall be adjusted  upwards or  downwards  depending  on the actual
costs for the preceding twelve months. Tenant shall pay monthly, commencing with
the  first  month of the  Lease  Term,  as  additional  rent due under the terms
hereof,  a sum equal to Tenant's Pro rata Share of the estimated  costs for said
twelve (12) month period, divided by 12. The estimated initial monthly costs are
$760.00.  Once each year the Landlord  shall  determine  the actual costs of the
foregoing  expenses  for the prior year and if the actual costs are greater than
the  estimated  costs,  the Tenant  shall pay its Tenant's Pro rata Share of the
difference between the estimated costs and the actual costs to the Landlord with
the next payment of Base Monthly Rent, or, if the actual costs are less than the
estimated  costs, the Landlord shall forthwith refund the amount of the Tenant's
excess payment to the Tenant.

17.  Inspection  of and Right of Entry to Leased  Premises--Regu1ar,  Emergency,
Reletting. Landlord and/or Landlord's agents and employees, shall have the right
to enter the Leased Premises at all times during regular  business hours and, at
all times  during  emergencies,  to examine  the Leased  Premises,  to make such
<PAGE>

repairs, alterations, improvements or additions as Landlord deems necessary, and
Landlord  shall be  allowed  to take all  materials  into and upon  said  Leased
Premises  that  may be  required  therefore  without  the same  constituting  an
eviction of Tenant in whole or in part,  and the rent  reserved  shall in no way
abate while such repairs, alterations, improvements or additions are being made,
by reason of loss or interruption of business of Tenant or otherwise. During the
six months  prior to the  expiration  of the term of this  Lease or any  renewal
thereof,  Landlord may exhibit the Leased Premises to prospective tenants and/or
purchasers and may place upon the Leased  Premises the usual notices  indicating
that the Leased Premises are for lease and/or sale.

Prior to entering the Leased  Premises  for any reason other than an  emergency,
the Landlord must give the Tenant  reasonable  notice and be  accompanied by the
Tenant. The Landlord may not exhibit the Leased Premises to prospective  tenants
and/or purchasers without being accompanied by the Tenant.

In the event of an  emergency  and prior to entering  the Leased  Premises,  the
Landlord must make every  available  effort to first contact the Tenant.  Should
the Landlord enter the Leased  Premises  after working hours,  he is responsible
for securing the areas against intruders and rearming the Premises.

18.  A1teration-Changes  and  Additions-Responsibi1iy.   Unless  the  Landlord's
approval  is first  secured in  writing,  the Tenant  shall not install or erect
inside  partitions,  add to  existing  electric  power  service,  add  telephone
outlets, add light fixtures,  install additional heating and/or air conditioning
or make any other  changes or  alterations  to the  interior  or exterior of the
Leased Premises that exceed five thousand dollars ($5,000.00) in total cost. Any
such  changes or  alterations  shall be made at the sole cost and expense of the
Tenant.  At the end of this  Lease,  all such  fixtures,  equipment,  additions,
changes and/or  alterations  (except trade fixtures,  portable wall  partitions,
signs,  and  security  systems  installed  by  Tenant)  shall be and  remain the
property  of  Landlord;  provided,  however,  Landlord  shall have the option to
require Tenant to remove any or all such fixtures,  equipment,  additions and/or
alterations  and  restore  the  Leased   Premises  to  the  condition   existing
immediately  prior to such  change  and/or  installation,  normal  wear and tear
excepted,  all at Tenant's  cost and  expense.  All such work shall be done in a
good and workmanlike  manner and shall consist of new materials unless agreed to
otherwise by Landlord. Any and all repairs, changes and/or modifications thereto
shall be the  responsibility  of, and at the cost of, Tenant.  Landlord may post
the Leased  Premises,  or take such other action as is then permitted by law, to
protect the Landlord and the Leased Premises against mechanics' liens.  Landlord
may also require  adequate  security to assure Landlord that the Leased Premises
will be restored to their  original  condition  upon  termination of this Lease.
Landlord approval shall not be unreasonably withheld.

19.  Sign  Approval.  Except for signs  which are  located  inside of the Leased
Premises  and which are not  attached  to any part of the Leased  Premises,  the
Landlord  must approve in writing any sign to be placed in or on the interior or
exterior  of the Leased  Premises,  regardless  of size or value.  Specifically,
<PAGE>

signs  attached  to windows of the Leased  Premises  must be so  approved by the
Landlord.  As a condition to the granting of such approval,  Landlord shall have
the right to require  Tenant to furnish a bond or other  security  acceptable to
Landlord  sufficient to insure  completion of and payment for any such sign work
to be so  performed.  Tenant  shall,  during the  entire  Lease  Term,  maintain
Tenant's  signs in good  condition and repair at Tenant's sole cost and expense.
Tenant shall,  remove all signs at the  termination  of this Lease,  at Tenant's
sole risk and  expense and shall in a  workmanlike  manner  properly  repair any
damage and close any holes caused by the installation and/or removal of Tenant's
signs.  Tenant  shall  give  Landlord  prior  notice of such  removal  so that a
representative  of Landlord shall have the opportunity of being present when the
signage is removed, or shall pre-approve the manner and materials used to repair
damage and close the holes caused by removal. Approval shall not be unreasonably
withheld.

20. Right of Landlord Make Changes and Additions. Landlord reserves the right at
any time to make  alterations  or additions to the Building or Area of which the
Leased Premises are a part.  Landlord also reserves the right to construct other
buildings  and/or  improvements in the Area and to make alterations or additions
thereto,  all as Landlord shall  determine.  Easements for light and air are not
included  in the  leasing of the Leased  Premises  to Tenant.  Landlord  further
reserves  the  exclusive  right to the roof of the  Building of which the Leased
Premises are a part.  Landlord  also reserves the right at any time to relocate,
vary and adjust the size of any of the  improvements  or Common Areas located in
the Area, provided,  however,  that all such changes shall be in compliance with
the requirements of governmental  authorities having jurisdiction over the Area.
Said  changes  shall not  interfere  with  Tenants use and  operations  or incur
Tenant's fees.

21. Damage or Destruction of Leased  Premises.  In the event the Leased Premises
and/or the  Building  of which the Leased  Premises  are a part shall be totally
destroyed by fire or other  casualty or so badly damaged that, in the opinion of
Landlord,  it is not feasible to repair or rebuild same. Landlord shall have the
right to  terminate  this Lease  upon  written  notice to Tenant.  If the Leased
Premises are partially  damaged by fire or other  casualty,  except if caused by
Tenant's  negligence,  and said Leased  Premises are not  rendered  untenantable
<PAGE>

thereby, as determined by Landlord,  an appropriate  reduction of the rent shall
be  allowed  for the  unoccupied  portion of the Leased  Premises  until  repair
thereof shall be substantially completed. If the Landlord elects to exercise the
right herein  vested in it to  terminate  this Lease as a result of damage to or
destruction of the Leased  Premises or the Building in which the Leased Premises
are located,  said election shall be made by giving notice thereof to the Tenant
within thirty (30) days after the date of said damage or destruction.

22. Governmental  Acquisition of Property. The parties agree that Landlord shall
have complete freedom of negotiation and settlement of all matters pertaining to
the  acquisition  of the Leased  Premises,  the Building,  the Area, or any part
thereof,  by any governmental body or other person or entity via the exercise of
the power of eminent domain,  it being  understood and agreed that any financial
settlement made or compensation  paid respecting said land or improvements to be
so taken, whether resulting from negotiation and agreement or legal proceedings,
shall be the exclusive  property of Landlord,  there being no sharing whatsoever
between Landlord and Tenant of any sum so paid. In the event of any such taking,
Landlord shall have the right to terminate this Lease on the date  possession is
delivered to the  condemning  person or  authority.  Such taking of the property
shall not be a breach of this Lease by  Landlord  nor give rise to any claims in
Tenant for damages or compensation from Landlord. Nothing herein contained shall
be construed as depriving the Tenant of the right to retain as its sole property
any  compensation  paid for any tangible  personal  property owned by the Tenant
which is taken in any such condemnation proceeding.

23.  Assignment or Subletting.  Tenant may not assign this Lease,  or sublet the
Leased  Premises or any part thereof,  without the written  consent of Landlord,
such consent not to be unreasonably  withheld.  No such assignment or subletting
if approved  by the  Landlord  shall  relieve  Tenant of any of its  obligations
hereunder, and, the performance or nonperformance of any of the covenants herein
contained  by  subtenants   shall  be  considered  as  the  performance  or  the
nonperformance by the Tenant.

24.  Warranty of Title.  Subject to the  provisions of the  following  three (3)
paragraphs  hereof,  Landlord  covenants  it has good  right to lease the Leased
Premises in the manner  described  herein and that Tenant  shall  peaceably  and
quietly have, hold,  occupy and enjoy the Leased Premises during the term of the
Lease.

25.  Access.  Landlord shall provide  Tenant  nonexclusive  access to the Leased
Premises  through and across land and/or other  improvements  owned by Landlord.
Landlord shall have the right, during the term of this Lease, to designate,  and
to change, such nonexclusive access.

26.  Subordination.  Tenant agrees that this Lease shall be  subordinate  to any
mortgages,  trust  deeds  or  ground  leases  that may now  exist  or which  may
hereafter be placed upon said Leased  Premises and to any and all advances to be
made thereunder, and to the interest thereon, and all renewals, replacements and
extensions thereof. Tenant shall execute and deliver whatever instruments may be
required for the above purposes, and failing to do so within ten (10) days after
demand in writing, does hereby make, constitute and irrevocably appoint Landlord
as its  attorney-in-fact and in its name, place and stead so to do. Tenant shall
in the event of the sale or assignment of Landlord's  interest in the Area or in
the Building of which the Leased  Premises  form a part,  or in the event of any
proceedings  brought for the  foreclosure  of or in the event of exercise of the
power of sale under any mortgage made by Landlord  covering the Leased Premises,
attorn to the  purchaser  and recognize  such  purchaser as Landlord  under this
Lease.
<PAGE>

27. Easements. The Landlord shall have the right to grant any easement on, over,
under and above the Area for such purposes as Landlord determines, provided that
such  easements do not materially  interfere with Tenant's  occupancy and use of
the Leased Premises.

28. Landlord/Tenant's Hold Harmless and Indemnification Agreement.  Tenant shall
indemnify  and hold  Landlord  harmless  from and  against  any and all  claims,
losses, expenses,  costs, judgments,  and/or demands,  including court costs and
attorney's fees,  suffered or incurred by the Landlord,  arising from activities
of Tenant on the Leased  Premises  or in the  Building  or in the Area and/or on
account of any  operation or action by Tenant and/or from and against all claims
arising  from  any  breach  or  default  on the  part  of  Tenant  or any act of
negligence of Tenant, its agents, contractors,  servants, employees,  licensees,
or  invitees;  or any  accident,  injury or death of any person or damage to any
property in or about the Leased Premises, the Building or the Area.

Landlord shall  indemnify and hold Tenant  harmless from and against any and all
claims, losses,  expenses,  costs,  judgments,  and/or demands,  including court
costs and  attorney's  fees,  suffered or incurred by the Tenant,  arising  from
activities of Landlord on the Leased  Premises or in the Building or in the Area
and/or on account of any operation or action by Landlord and/or from and against
all claims arising from any breach or default on the part of Landlord or any act
of  negligence  of  Landlord,  its  agents,  contractors,  servants,  employees,
licensees, or invitees; or any accident, injury or death of any person or damage
to any property in or about the Leased Premises, the Building or the Area.

29. Acts or Omission of Others. The Landlord, or its employees or agents, or any
of them,  shall not be  responsible  or liable to the Tenant or to the  Tenant's
guests, invitees,  employees, agents or any other person or entity, for any loss
or damage that may be caused by the acts or  omissions of other  tenants,  their
guests or invitees,  occupying  any other part of the Area or by persons who are
trespassers  on or in the Area,  or for any loss or damage  caused or  resulting
from the bursting, stoppage, backing up or leaking of water, gas, electricity or
sewers or caused in any other manner  whatsoever,  unless such loss or damage is
caused by or results  from the  negligent  acts of the  Landlord,  its agents or
contractors.

30. Interest on Past Due  Obligations.  Any amount due to Landlord not paid when
due shall bear  interest at one and one half  (1.5%)  percent per month from due
date until paid.  Payment of such interest  shall not excuse or cure any default
by Tenant under this Lease.
<PAGE>

31.  Holding Over One and One Half Last Month's  Rent. If Tenant shall remain in
     possession  of the Leased  Premises  after the  termination  of this Lease,
     whether by  expiration  of the Lease Term or  otherwise,  without a written
     agreement   as  to  such   possession,   then  Tenant  shall  be  deemed  a
     month-to-month  Tenant. The rent rate during such holdover tenancy shall be
     equivalent  to one and one half  (1.5) the  monthly  rent paid for the last
     full month of tenancy under this Lease, excluding any free rent concessions
     which may have been made for the last full month of the  Lease.  No holding
     over by Tenant  shall  operate to renew or extend  this Lease  without  the
     written consent of Landlord to such renewal or extension  having been first
     obtained.  Tenant  shall  indemnify  Landlord  against  loss  or  liability
     resulting from the delay by Tenant in surrendering possession of the Leased
     Premises including,  without limitation, any claims made with regard to any
     succeeding occupancy bounded by such holdover period.

32.  Modifications  or Extensions.  No  modification  or extension of this Lease
shall be binding upon the parties  hereto unless in writing and unless signed by
the parties hereto.

33.  Notice  Procedure.  All notices,  demands and requests  which may be or are
required  to be given by either  party to the other shall be in writing and such
that are to be given to Tenant  shall be deemed to have been  properly  given if
served  on Tenant or an  employee  of Tenant or sent to Tenant by United  States
registered or certified mail, return receipt requested, properly sealed, stamped
and  addressed to Tenant at see page 1 or at such other place as Tenant may from
time to time designate in a written  notice to Landlord;  and, such as are to be
given to  Landlord  shall be deemed to have been  properly  given if  personally
served on Landlord or if sent to Landlord, United States registered or certified
mail,  return  receipt  requested,  properly  sealed,  stamped and  addressed to
Landlord at see page 1 or at such other place as Landlord  may from time to time
designate in a written  notice to Tenant.  Any notice given by mailing  shall be
effective as of the date of mailing.

34.  Memorandum of Lease-Notice to Mortgagee.  The Landlord and Tenant agree not
to place this Lease of record,  but upon the request of either  party to execute
and  acknowledge  so the same may be recorded a short form lease  indicating the
names and respective  addresses of the Landlord and Tenant, the Leased Premises,
the Lease Term, the dates of the  commencement and termination of the Lease Term
and options  for  renewal,  if any,  but  omitting  rent and other terms of this
Lease. Tenant agrees to an assignment by Landlord of rents and of the Landlord's
interest in this Lease to a mortgagee,  if the same be made by Landlord.  Tenant
further  agrees if requested to do so by the Landlord  that it will give to said
mortgagee a copy of any request for performance by Landlord or notice of default
by Landlord;  and in the event Landlord  fails to cure such default,  the Tenant
will give said mortgagee a sixty (60) day period in which to cure the same. Said
period shall begin with the last day on which  Landlord  could cure such default
before  Tenant has the right to exercise  any remedy by reason of such  default.
All  notices  to the  mortgagee  shall be sent by United  States  registered  or
certified mail, postage prepaid, return receipt requested.
<PAGE>

35.  Controlling  Law.  The  Lease and all terms  hereunder  shall be  construed
consistent  with the laws of the State of  Colorado.  Any dispute  resulting  in
litigation  hereunder  shall be  resolved  in court  proceedings  instituted  in
Boulder County and in no other jurisdiction.

36.  Landlord  Not a Partner  With the Tenant.  Nothing  contained in this Lease
shall be deemed,  held or  construed as creating  Landlord as a partner,  agent,
associate  of or in  joint  venture  with  Tenant  in the  conduct  of  Tenant's
business, it being expressly understood and agreed that the relationship between
the parties hereto is and shall at all times remain that of Landlord and Tenant.

37. Partial Invalidity.  If any term, covenant or condition of this Lease or the
application  thereof to any person or  circumstance  shall,  to any  extent,  be
invalid or unenforceable, the remainder of this Lease or the application of such
term,  covenant or  condition to persons and  circumstances  other then those to
which it has been held invalid or unenforceable,  shall not be affected thereby,
and each term,  covenant and condition of this Lease shall be valid and shall be
enforced to the fullest extent permitted by law.

38. Defau1t-Remedies of Landlord

     A. If Tenant shall  default in the payment of rent or in the keeping of any
of the terms,  covenants or conditions of this Lease to be kept and/or performed
by Tenant,  Landlord may  immediately,  or at any time  thereafter,  reenter the
Leased Premises, remove all persons and property therefrom, without being liable
to  indictment,  prosecution  for damage  therefore,  or for forcible  entry and
detainer  and  repossess  and  enjoy  the  Leased  Premises,  together  with all
additions thereto or alterations and improvements thereof.  Landlord may, at its
option, at any time and from time to time thereafter,  relet the Leased Premises
or any part  thereof  for the  account of Tenant or  otherwise,  and receive and
collect  the rents  therefore  and apply the same  first to the  payment of such
expenses as Landlord may have incurred in recovering  possession and for putting
the same in good order and condition for rerental, and expense,  commissions and
charges paid by Landlord in reletting the Leased  Premises.  Any such  reletting
may be for the  remainder  of the term of this  Lease or for a longer or shorter
period. In lieu of reletting such Leased Premises,  Landlord may occupy the same
or cause the same to be occupied by others.  Whether or not the Leased  Premises
or any part  thereof be relet,  Tenant  shall pay the  Landlord the rent and all
other charges  required to be paid by Tenant up to the time of the expiration of
this  Lease or such  recovered  possession,  as the case may be and  thereafter,
Tenant, if required by Landlord, shall pay to Landlord until the end of the term
of this Lease,  the equivalent of the amount of all rent reserved herein and all
other  charges  required to be paid by Tenant,  less the net amount  received by
Landlord  for such  reletting,  if any,  unless  waived by written  notice  from
Landlord to Tenant.  No action by Landlord  to obtain  possession  of the Leased
<PAGE>

Premises  and/or to recover any amount due to Landlord  hereunder shall be taken
as a waiver of  Landlord's  right to require  full and complete  performance  by
Tenant of all terms hereof, including payment of all amounts due hereunder or as
an election on the part of Landlord to terminate  this Lease  Agreement.  If the
Leased  Premises shall be reoccupied by Landlord,  then, from and after the date
of repossession, Tenant shall be discharged of any obligations to Landlord under
the  provisions  hereof for the  payment of rent.  If the  Leased  Premises  are
reoccupied by the Landlord pursuant hereto, and regardless of whether the Leased
Premises  shall be relet or  possessed  by Landlord,  all  fixtures,  additions,
furniture,  and the  like  then on the  Leased  Premises  which  were  initially
installed or  constructed  by the  Landlord may be retained by Landlord.  In the
event Tenant is in default under the terms hereof and, by the sole determination
of Landlord, has abandoned the Leased Premises, Landlord shall have the right to
remove all the Tenant's  property  from the Leased  Premises and dispose of said
property in such a manner as determined  best by Landlord,  at the sole cost and
expense of Tenant and without liability of Landlord for the actions so taken.

     B. In the event an  assignment  of Tenant's  business or property  shall be
made for the benefit of creditors,  or, if the Tenant's leasehold interest under
the terms of this Lease Agreement shall be levied upon by execution or seized by
virtue  of any writ of any  court of law,  or,  if  application  be made for the
appointment  of a receiver  for the  business or  property  of Tenant,  or, if a
petition in bankruptcy shall be filed by or against Tenant, then and in any such
case, at Landlord's option, with or without notice,  Landlord may terminate this
Lease and immediately  retake possession of the Leased Premises without the same
working any forfeiture of the obligations of Tenant hereunder

     C. N/A

     D. In  addition  to any remedy  granted to  Landlord  by the terms  hereof,
Landlord  shall have available any and all rights and remedies  available  under
the statutes of the State of Colorado.  No remedy herein or otherwise  conferred
upon or reserved to Landlord  shall be considered  exclusive of any other remedy
but shall be  cumulative  and shall be in addition to every other  remedy  given
hereunder  or now or  hereafter  existing  at law or in  equity  or by  statute.
Further,  all  powers  and  remedies  given  by this  Lease to  Landlord  may be
exercised,  from time to time,  and as often as occasion  may arise or as may be
deemed  expedient.  No delay or omission  of  Landlord to exercise  any right or
power  arising from any default shall impair any such right or power or shall be
considered  to be a waiver of any such  default  or  acquiescence  thereof.  The
acceptance of rent by Landlord  shall not be deemed to be a waiver of any breach
of any of the covenants  herein contained or of any of the rights of Landlord to
any remedies herein given.

     E. N/A

<PAGE>

39. Legal Proceedings-Responsibilities.  In the event of proceeding at law or in
equity by either  party  hereto,  the  defaulting  party shall pay all costs and
expenses,   including   all   reasonable   attorney's   fees   incurred  by  the
non-defaulting  party in pursuing such remedy, if such  non-defaulting  party is
awarded substantially the relief requested.

40.  Administrative  Charges.  In the event any check,  bank draft or negotiable
instrument given for any money payment hereunder shall be dishonored at any time
and from time to time, for any reason  whatsoever not  attributable to Landlord,
Landlord  shall  be  entitled,  in  addition  to any  other  remedy  that may be
available,  (1) to make an  administrative  charge of $100.00 or three times the
face  value of the check,  bank draft or  negotiable  instrument,  whichever  is
smaller, and (2) at Landlord's sole option, to require Tenant to make all future
rental payments in cash or cashiers check.

41. Hazardous Materials and Environmental Considerations.

     A. Tenant  covenants  and agrees  that  Tenant and its  agents,  employees,
contractors  and Invitees  shall comply with all  Hazardous  Materials  Laws (as
hereinafter  defined).  Without  limiting the  foregoing,  Tenant  covenants and
agrees that it will not use, generate,  store or dispose of, nor permit the use,
generation,  storage or disposal of Hazardous Materials (as hereinafter defined)
on,  under or about the Leased  Premises,  nor will it  transport  or permit the
transportation of Hazardous Materials to or from the Leased Premises,  except in
full  compliance  with any applicable  Hazardous  Materials  Laws. Any Hazardous
Materials  located on the Leased  Premises shall be handled in an  appropriately
controlled  environment  which  shall  include  the  use of such  equipment  (at
Tenant's  expense) as is  necessary to meet or exceed  standards  imposed by any
Hazardous  Materials  Laws and in such a way as not to interfere  with any other
tenant's  use of its  premises.  Upon breach of any covenant  contained  herein,
Tenant shall,  at Tenant's  sole expense,  cure such breach by taking all action
prescribed by any applicable  Hazardous  Materials  Laws or by any  governmental
authority with jurisdiction over such matters.

     B. Tenant shall inform Landlord at any time of (i) any Hazardous  Materials
it  intends  to use,  generate,  handle,  store or  dispose  of,  on or about or
transport from, the Leased Premises and (ii) of Tenant's  discovery of any event
or condition which constitutes a violation of any applicable Hazardous Materials
Laws.  Tenant shall provide to Landlord copies of all  communications to or from
any  governmental  authority or any other party relating to Hazardous  Materials
affecting the Leased Premises.
<PAGE>

     C. Tenant  shall  indemnify  and hold  Landlord  harmless  from any and all
claims, judgments,  damages, penalties,  fines, costs, liabilities,  expenses or
losses  (including,  without  limitation,  diminution  on  value  of the  Leased
Premises,  damages for loss or  restriction  on use of all or part of the Leased
Premises,  sums paid in settlement of claims,  investigation of site conditions,
or any cleanup,  removal or restoration  work required by any federal,  state or
local governmental  agency,  attorney's fees,  consultant fees, and expert fees)
which  arise as a result of or in  connection  with any breach of the  foregoing
covenants or any other violation of any Hazardous  Materials laws by Tenant. The
indemnification  contained  herein  shall  also  accrue  to the  benefit  of the
employees, agents, officers, directors and/or partners of Landlord.

     D. Upon  termination of this Lease and/or vacation of the Leased  Premises,
Tenant shall properly  remove all Hazardous  Materials and shall then provide to
Landlord an environmental  audit report,  prepared by a professional  consultant
satisfactory  to Landlord  and at Tenant's  sole  expense,  certifying  that the
Leased Premises have not been subjected to environmental harm caused by Tenant's
use and occupancy of the Leased Premises. Landlord shall grant to Tenant and its
agents or  contractors  such access to the Leased  Premises as is  necessary  to
accomplish such removal and prepare such report.

     E. "Hazardous Materials" shall mean (a) any chemical,  material,  substance
or  pollutant  which  poses a hazard to the Leased  Premises or to persons on or
about the Leased  Premises or would cause a violation  of or is regulated by any
Hazardous Materials Laws, and (b) any chemical, material or substance defined as
or included in the definitions of "hazardous  substances",  "hazardous  wastes",
"extremely hazardous waste",  "restricted  hazardous waste", "toxic substances",
"regulated substance",  or words of similar import under any applicable federal,
state or local law or under the regulations adopted or publications  promulgated
pursuant thereto, including, but not limited to, the Comprehensive Environmental
Response,  Compensation  and Liability Act of 1980, as amended,  42 U.S.C.  Sec.
9601, et seg.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
Sec. 1801, et seg.; the Resource  Conservation  and Recovery Act as amended,  42
U.S.C.  Sec 6901, et seg.; the Solid Waste Disposal Act, 42 U.S.C.  Sec. 6991 et
seg.; the Federal Water Pollution Control Act, as amended,  33 U.S.C. Sec. 1251,
et seg. and Sections 25-15-101, et seg. , 25-16-101, et seg., 25-7-101, et seg.,
and 25-8-101,  et seg., of the Colorado Revised Statutes.  "Hazardous  Materials
Laws"  shall  mean  any  federal  state  or  local  laws,   ordinances,   rules,
regulations,  or policies  (including,  but not limited to, those laws specified
above)  relating  to the  environment,  health and safety or the use,  handling,
transportation,   production,   disposal,  discharge  or  storage  of  Hazardous
Materials, or to industrial hygiene or the environmental conditions on, under or
about the Leased Premises. Said term shall be deemed to include all such laws as
are now in  effect  or as  hereafter  amended  and all  other  such  laws as may
hereafter be enacted or adopted during the term of this Lease.

     F. All obligations of Tenant hereunder shall survive and continue after the
expiration of this Lease or its earlier termination for any reason.
<PAGE>

     G.  Tenant  further  covenants  and agrees  that it shall not  install  any
storage tank (whether above or below the ground) on the Leased Premises  without
obtaining  the prior  written  consent of the  Landlord,  which  consent  may be
conditioned upon further requirements imposed by Landlord with respect to, among
other things,  compliance by Tenant with any applicable laws, rules, regulations
or ordinances and safety measures or financial responsibility requirements.

     H. Should any local governmental entity having jurisdiction over the Leased
Premises  require any type of  environmental  audit or report prior to or during
the  occupancy of the Leased  Premises by the Tenant,  such cost of the audit or
report shall be the sole responsibility of the Tenant.

42. Entire Agreement.  It is expressly  understood and agreed by and between the
parties  hereto  that  this  Lease  sets  forth  all the  promises,  agreements,
conditions,  and  understandings  between  Landlord and/or its agents and Tenant
relative  to the Leased  Premises  and that there are no  promises,  agreements,
conditions,  or understandings  either oral or written,  between them other than
that are herein set forth.

43. N/A

44. Estoppel Certificates.  Within no more than 10 days after receipt of written
request, the Tenant shall furnish to the owner a certificate, duly acknowledged,
certifying, to the extent true:

     A. That this Lease is in full force and effect.
     B. That the Tenant knows of no default  hereunder on the part of the owner,
or if it has reason to believe that such a default exists, the nature thereof in
reasonable detail.
     C. The  amount of the rent  being  paid and the last date to which rent has
been paid.
     D. That this Lease has not been modified,  or if it has been modified,  the
terms and dates of such modifications.
     E. That the term of this Lease has commenced.
     F. The commencement and expiration dates.
     G. Whether all work to be performed by the owner has been completed.
     H. Whether the renewal term option has been exercised if applicable.
     I. Whether there exist any claims or  deductions  from, or defenses to, the
payment of rent.
     J. Such other matters as may be reasonably requested by owner.
<PAGE>

If the Tenant fails to execute and deliver to the owner a completed  certificate
as required  under this  section,  the Tenant  hereby  appoints the owner as its
Attorney-In-Fact  to execute and deliver such  certificate  for and on behalf of
the Tenant.

45.  Financial  Statements.  As requested by the Landlord,  Tenant shall provide
copies of its most recent  financial  statements and shall also provide Landlord
with up to three (3) prior years of financial statements, if so requested.

46. Lease Exhibits  Attached.  This Lease includes the following Lease Exhibits,
which are incorporated herein and made a part of this Lease Agreement:

Exhibit "A" - Site Plan Depicting Area (Drawing)
Exhibit "B" - Interior Space Plan (Drawing)
Exhibit "C" - Landlord and Tenant's Construction Obligations
Exhibit "D"- Sign Code Obligations
Exhibit "K" - Additional Terms and Conditions
Exhibit "F" - Option to Extend

47.  Miscellaneous.  All  marginal  notations  and  paragraph  headings  are for
purposes of  reference  and shall not affect the true  meaning and intent of the
terms hereof.  Throughout this Lease, wherever the words "Landlord" and "Tenant"
are used they shall include and imply to the singular, plural, persons both male
and female, companies, partnerships and corporations, end in reading said Lease,
the necessary  grammatical  changes required to make the provisions  hereof mean
and apply as  aforesaid  shall be made in the same  manner as though  originally
included in said Lease.
<PAGE>

IN WITNESS WHEREOF, the parties have executed this Lease as of the date hereof.




LANDLORD:  LakeCenter Plaza., LLLP


By:  /s/   William W. Reynolds
     -------------------------
           William W. Reynolds



TENANT:    Granville-Phillips Company


By:  /s/   Kristie K. Skiles, Treasurer
     ----------------------------------
           Kristie K. Skiles, Treasurer

<PAGE>

                                  Exhibit "A"
                       Site Plan Depicting Area (Drawing)
<PAGE>


                                  Exhibit "B"
                       Interior Space Plan (Drawing)

<PAGE>


                                   Exhibit "C"
                  Landlord and Tenant Construction Obligations

1. LANDORD

A.  Landlord  shall  complete  the Leased  Premises  per Exhibit "B" and per the
attached set of "Standard Lease Space Specifications" for Office Buildings.

B. Landlord agrees to install  approximately 4,000 square feet of VPI Conductile
in the leased  premises as depicted in Exhibit  "B". Any  additional  conductive
tile installed in the lease premises will be at the sole cost and expense of the
Tenant.

C. Landlord agrees to install all electrical  systems in the amount of $3.25 per
square feet in the leased premises.  Any additional  electrical  installation in
excess of $3.25 per  square  foot  will be at the sole cost and  expense  of the
Tenant.

D. Landlord  agrees to install  electronic  ballast for all florescent  fixtures
installed  in the Lease  Premises.  Said  electronic  ballasts  are not standard
fixtures  installed  by Landlord  and may  increase  electrical  systems cost to
exceed the $3.25 per square feet as  described  in  paragraph C of this  Exhibit
"C". Any additional  electrical  installation in excess of $3.25 per square foot
will be at the sole cost and expense of the Tenant.

E. Landlord agrees to install 3/4 inch conduits  conduit for  computer/telephone
outlets installed in the Lease Premises. Said 3/4 inch conduits are not standard
installations by Landlord and may increase electrical systems cost to exceed the
$3.25 per square feet as  described  in  paragraph C of this  Exhibit  "C".  Any
additional electrical installation in excess of $3.25 per square foot will be at
the sole cost and expense of the Tenant.

F. The leased premises is currently independently serviced by two (2) twelve and
one half (12.5) ton HVAC units. If additional HVAC service is deemed  necessary,
additional  service can be provided  from a shared HVAC unit or Tenant may elect
to install an additional HVAC unit at its sole cost and expense.

2 . TENANT

Tenant shall be responsible for the cost of any change order which increases the
cost of the  work  shown  on  Exhibit  "B" or  which  increases  the cost of the
Landlords Standard Lease Space Specifications. If Tenant should make any changes
which increase such cost it shall pay to the Landlord such sum within 15 days of
occupancy of the Leased  Premises.  Landlord shall have the obligation to notify
Tenant in writing of any  changes  which  will  obligate  the Tenant to any such
additional  costs prior to any changes being made and Tenant being  obligated to
any such costs.
<PAGE>

                      STANDARD LEASE SPACE SPECIFICATIONS
                           OFFICE/INDUSTRIAL BUILDINGS

The  following  are  standard  specifications  for the  Leased  Premises  herein
defined.

GENERAL

A. The leased space design/layout will conform to the Architectural drawings.

B. All work performed to complete the Leased Premises will be in accordance with
all applicable codes and regulations as well as currant A.D.A requirements.

C.  Demising,  corridor and partition  walls  separating  offices from warehouse
space to be 3-5/8"  metal studs at 24" o.c.  with 5/8" gypsum  wallboard on each
side.  Partitions  to  extend  from  floor  to  underside  of  structure  above.
Partitions to have acoustical  sealant at joints and sound  attenuation  batting
between  studs from floor to  structure  above.  Partitions  to receive  typical
partition finish.

D. 1) Building interior space may be divided into fire containment  areas. It is
the  responsibility  of the Tenant to conform to all applicable  regulations and
fire  codes,  including,  but not limited to,  maintaining  egress  requirements
during the term of occupancy.

2) Fire containment  walls to be 3-5/8" metal studs at 24" o.c. with 5/8" gypsum
wallboard  on each side.  Walls to extend from floor to  underside  of structure
above.  Doors in fire  containment  walls to be twenty minute fire rated,  solid
core oak veneer with closer and metal jams.

E. Tenant will be responsible  for  identifying any equipment or areas requiring
additional or special ventilation, lighting or electrical service prior to space
planning.


OFFICE AREAS

A. INTERIOR PARTITIONS

1. 3-5/8"  metal studs at 24" o.c.  from floor to underside of ceiling with 5/8"
gypsum wallboard on each side.
2. All  concrete  block walls in Leased  Premises  to be furred and  sheathed as
interior partitions above unless otherwise noted on Architectural drawings.

B. PARTITION FINISH

All  interior  partitions,  not  prefinished,  will receive  paint.  Paint to be
Landlord's standard. Two finish coats over one primer coat. Color to be selected
by Tenant from among choices preselected by Landlord.

C. CEILING

To be suspended acoustical 2X4 ceiling tile. Tile and metal grid to be white.
<PAGE>

D. FLOOR COVERING

1. Carpet to be Landlord's  standard  (Cambridge--Oxford  28 oz. nylon  textured
loop and/or  Cambridge---Park  Lane 30 oz. nylon cut pile).  Installation  to be
glue down.  Color to be selected by Tenant from among  choices  pre-selected  by
Landlord. Base at carpet to be 2-1/2" high solid oak finish to match doors.
2.  Resilient  flooring to be  Landlord's  standard.  12"x12"xl/8".  Color to be
selected  by  Tenant  from  among  choices  pre-selected  by  Landlord.  Base at
resilient flooring to be Roppe 2-1/2" rubber cove.

E. INTERIOR DOORS

All interior  doors to be solid core flush panel oak veneer with 3 coats natural
color lacquer finish. Frames to be Timely Metal Frames. Door sizes to be 3'-0" x
7'-0" x 1-3/4" unless otherwise noted on architectural drawings.

F. DOOR HARDWARE

To be sargent 6 line  Orbital  series,  26D brushed  chrome or equal.  All entry
doors to have keyed cylinder lock sets. All office, conference, and storage room
doors to have passage lock set.  Restrooms  to have privacy  lock.  All doors to
have  1-1/2  pair 4" hinges  and 1 Ives  concave  wall stop #407 1/2,  or equal,
stainless steel finish.

G. LIGHTING

To be 2'x4' 4 lamp, recessed, fluorescent with prismatic lens light fixtures.


H. ELECTRICAL/PHONE

Outlet locations as shown or Architectural drawings. All outlets, outlet covers,
switches and switch plate covers to be white.

I. COMPUTER/TELEPHONE OUTLETS

Outlets  to  consist  of empty  junction  box with 1/2"  conduit  stubbed  above
ceiling.

J. TELEPHONE/COMPUTER LINES AND CABLING

Wiring and installation to be provided by Tenant. 3/4" plywood phone board to be
provided and Installed by Landlord for telephone installation.


RESTROOMS/ IF INSIDE THE TENANT 'S SPACE

A. CONSTRUCTION AND FINISHES

To be as per office area specifications except as follows:

1) Partitions and ceiling to receive 5/8" water resistant gypsum wallboard.
2) Walls  to have 2 coats  of epoxy  paint  from  floor  to 4'-0"  above  floor.
Remaining wall surface and ceiling to have 2 finish coats of semi-gloss  acrylic
over one primer coat. Color to be white.
<PAGE>

3) Ceiling structure to be metal stud joists bearing on partition wall.  Ceiling
structure  to support  unit  water  heater for  restroom.  Ceiling  height to be
maximum allowable.
4) Counter  tops to have  plastic  laminate  finish with color to be selected by
Tenant from among choices pre-selected by Landlord.

B. PLUMBING FIXTURES

1) Toilet -- Armitage Shanks, white, model #109 or equal.
2)  Lavatory --  Armitage  Shanks  model #308,  white,  19" self  rimming  china
lavatory with Price Pfister #H43-121 faucet or equal.
3)  Lavatory  --  American  Standard  wall hung  Royalyn  Vitreous  China 3 hole
#1024.131 (20" x 18") with Delta handle faucet #2520 or equal.
4) Urinal -- Kohler model #402, white with Zorn flush valve or equal.

C. ACCESSORIES

1)  Mirror  -- Full  HGT and  with  mirror  with  metal  edge  trim as  shown on
Architectural Drawings.
2) Mirror -- Bobrick  stainless  steel channel frame mirror  #B-165-1830  (18" x
30") or equal.
 

3) Paper Towel  Dispenser/Disposal  -- Bobrick B-369  recessed,  stainless steel
satin finish or equal.
4) Toilet Tissue  Dispenser -- Bobrick  B-388  recessed,  stainless  steel satin
finish or equal.
5) Utility Hook -- Bobrick  #B-670  polished  stainless  steel or equal  mounted
interior  side of  toilet  and  shower  stall  doors (if  applicable)  66" above
finished floor.
6) Grab Bars -- Bobrick #b-490, stainless steel satin finish or equal.

D. LIGHTING

One surface  mounted 2 tube  fluorescent  fixture  with  acrylic lens in drywall
light valance over lavatory.  Ceiling  fixture,  if called for in  Architectural
drawings, to be 2 tube fluorescent with acrylic wrap lens.

E. ELECTRICAL

One GFI  electric  Outlet  adjacent to  lavatory.  One exhaust fan in any toilet
room.


MECHANICAL/ELECTRICAL

A. HEATING AND COOLING

The  interior  premises  are  heated  and  cooled  by one or  more  roof-mounted
mechanical units. The sizing of the mechanical units are designed to provide one
(1) ton of cooling  for every four  hundred  (400)  square  feet of floor  area;
provided that the internal load does not exceed three (3) watts per square foot.
Individual  thermostat  control  shall  be  centrally  controlled  allowing  for
automatic setback capabilities with external dial-in monitoring provided for the
interior premises,  with control areas not to exceed two thousand (2,000) square


<PAGE>

feet in size.  Based  upon the  above,  the  system  shall  maintain  a  minimum
temperature  of 65 degrees  Fahrenheit  and a maximum  temperature of 75 degrees
Fahrenheit  in the  separate  rooms within the Leased  Premises,  so long as the
minimum exterior  temperature shall not be below zero degrees Fahrenheit and the
maximum exterior temperature shall not be in excess of 100 degrees Fahrenheit.

B. ELECTRICAL

Standard  electrical  advice provided to the building to be 120/208 volt,  three
phase,  four wire.  No  additional  service to be provided for Tenant  equipment
unless otherwise  noted. One (1) light switch per office is provided.  Circuitry
design  is  normally  laid  out to  allocate  6 to 8 duplex  outlets  per 20 amp
circuit.

C. ELECTRICAL OUTLETS

Restrooms to have one duplex electrical outlet.  See Architectural  drawings for
outlet locations in other areas.

D. LIGHTING

Finished  rooms,  other than  restrooms  and storage  areas will be lighted with
2'x4' recessed, 4 lamp, fluorescent fixtures.

All fixtures to be provided  initially with lamps.  Lights and switch  locations
will be as shown on Architectural drawings.


SUPPLEMENTAL ITEMS

See Architectural drawings for additional notes and locations if the items below
are included in the tenant finish

A. COFFEE BAR

1) Base and upper  cabinets  to be  Merrillat  brand  with style to be chosen by
Landlord.
2) Countertop and splash to be plastic laminate finish with color to be selected
by Tenant from among choices pre-selected by Landlord.
3) Kitchen sink,  Dayton Kingsford  #K-11515 single  compartment sink with Delta
#2171 faucet or equal.
4) Dishwasher
5) Garbage disposal in sink
<PAGE>

                                  Exhibit "D"
                              Sign Code Obligations


Current sign code specifications for the property depicted in Exhibit "A" do not
allow  Tenant to erect any  signage  on or about  their  Leased  Premises.  Only
tenants occupying an entire building are permitted any building signage.  Tenant
may  install  any signage on  windows,  doors  and/or  interior of space that is
permissible under City of Boulder sign code regulations.
 
<PAGE>

                                   Exhibit "E"
                         Additional Terms and Conditions

1. Tenant  shall be given the right to cancel this Lease  Agreement  after three
years of occupancy  with six (6) months  written  notification  in addition to a
prepayment  penalty  equaling  three  (3)  months  rent.  This  right  to  early
termination  will be applicable  only after Tenant has been  occupying the lease
premises  for three (3) full years (36  months) of this  lease  term.  After the
first three (3) years, the Tenant may give written notification to terminate the
lease after an additional  six (6) months of occupancy from the date the written
request to  terminate  the Lease has been  received by the landlord and Landlord
has received the above described payment of an additional sum equaling three (3)
months rent.  Said right to  terminate  the Lease shall be valid only during the
initial base lease term. Any termination  rights granted beyond the initial base
lease term must be mutually  agreed upon by both Tenant and Landlord and must be
in writing.
 
<PAGE>

                                  Exhibit "F"
                                Option to Extend

Tenant shall have the option to extend the Lease  Agreement  (as Amended  above)
from  12:00  noon on August 1, 2001 to 12:00 noon on August 1, 2006 In the event
the Tenant desires to exercise said option,  Tenant shall give written notice of
interest in such  exercise  to  Landlord no later than  October 1, 2000 in order
that the Landlord and Tenant may proceed with  determination  of the Fair Market
Value as  provided  herein.  In the event the Tenant  desires to  exercise  said
option,  Tenant shall give written notice of such exercise to Landlord not later
than  February  1, 2001.  See below for Option  Term Rent.  In the event of such
exercise, the Lease Agreement,  including all amendments, shall be automatically
extended for the additional  term.  Notwithstanding  the foregoing,  this option
shall be void and of no force or effect if the  Tenant is in  default  hereunder
either as of the date of the Tenant's  exercise of said option or as of the date
of the commencement of the option or additional term.

Option Term Rent: Tenant shall pay the following rent for the Leased Premises:

Landlord and Tenant will attempt to agree upon a Fair Market Rental Value of the
Leased Premises satisfactory to both parties not later than November 1, 2000. If
no agreement  can be reached by the parties  during that  period,  then the Base
Monthly Rental for the Option Term shall he determined by the Fair Market Rental
Value of the Leased  Premises as determined by comparison to premises of similar
size  located  in or near  the  City of  Boulder,  Colorado,  having  comparable
development, use and density capability and such other characteristics as may be
deemed relevant by a subject appraiser whose selection is outlined herein.

Not Later than November 10, 2000,  Landlord shall select an independent MAI real
estate  appraiser  with  at  least  ten  (10)  years  experience  in  appraising
commercial  real  property  in the  City  of  Boulder,  Colorado  (a  "Qualified
Appraiser").  The Qualified Appraiser selected by the Landlord shall be referred
to as the  "Landlord's  Appraiser".  Not  later  than  December  10,  2000,  the
Landlord's  Appraiser shall determine the Fair Market Rental Value of the Leased
Premises in accordance  with the  appraisal  standards set forth above and shall
immediately  give  the  Landlord  and the  Tenant  written  notification  of his
determination.

If the Tenant agrees with the Landlord's  Appraiser's  determination of the Fair
Market  Rental  Value,  the new  Base  Monthly  Rental  shall  become  effective
beginning  with the first month of the Option Term. If the Tenant does not agree
with the Landlord's  Appraiser's  determination of Fair Market Rental Value, the
Tenant shall have the right to select its own  Qualified  Appraiser to determine
the Fair Market  Rental  Value.  If the Tenant does elect to appoint a Qualified
Appraiser  (the  "Tenant's  Appraiser"),  the Tenant  shall  select the Tenant's
Appraiser not later than December 20, 2000.  The Tenant's  Appraiser  shall make
his own  determination  of the Fair Market Rental Value in  accordance  with the
provisions  set  forth  above,  Not  later  than  January  20,  2001  and  shall
immediately   give  the   Landlord  and  the  Tenant   written   notice  of  his
determination.

On or before  January 30, 2001,  the Landlord and Tenant shall again  attempt to
agree upon a Fair Market  Rental Value of the Lease  Premises.  In the event the
Tenant  desires to exercise said option,  the Tenant will give written notice of
such exercise to the Landlord not later than February 1, 2000.

All appraisal  fees required  hereunder  shall be shared equally by the Landlord
and the Tenant.