Document:

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                                                                   Exhibit 10.34

NOVELL(R)                                                    CONFIDENTIAL
                                                           Execution Original
================================================================================

         NOVELL INTERNET COMMERCIAL SERVICE PROVIDER (ICSP) AGREEMENT

This Agreement is entered into upon the Effective Date by and between Novell,
Inc. ("Novell"), with offices at 1555 N. Technology Way, Orem, Utah 84097, and
the company set forth below ("Company").

Company:  Insynq, Inc.

Address:  1101 Broadway Plaza, Tacoma, WA 98402

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Contract Managers
-----------------

Novell Contract Manager                  Company Contract Manager

Name:   Jim Parker                       Name:   Art Kunz

Phone:  801 222 4042  Fax: 801 222 4876  Phone:  253 284 2049  Fax: 253 284 2035

Email:  Jim.parker@novell.com            Email:  Artk@insynq.com
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Financial Contacts
------------------

Novell Financial Manager                 Company Financial Manager

Name:   Chad Downey                      Name:   Carroll Benton

Phone:  801 222 4674  Fax: 801 222 2672  Phone:  253 284 2014  Fax: 253 404 3842

Email:  Cdowney@novell.com               Email:  Carroll@insynq.com
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(Contract Managers and Financial Contacts may be changed upon written notice)

1.   GENERAL DESCRIPTION. Company intends to use certain Novell Software to
     provide software usage services, including the leasing of third party
     applications, to its Customers. The Novell Software will allow Customers to
     have use of the third party applications program by connecting to Company's
     servers where the applications programs reside. Except for product
     components that are necessary to enable Company to perform the Services for
     the Customer, at no time will Company download or allow any Novell Software
     to be downloaded onto Customers' workstations or local servers. Company
     will pay Novell monthly per-user fees (based on the highest count of
     subscribers during the month), flat fees, or per transaction fees for the
     Novell Software as provided herein and the ICSP Price List.

2.   DEFINITIONS.

     2.1    Confidential Information means the pricing and specific terms and
            ------------------------
            conditions of this Agreement,
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Novell ICSP Agreement             Version 1-5                      April 4, 2000
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NOVELL(R)                                                  CONFIDENTIAL
                                                        Execution Original
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            amendments or supplements thereto, any collateral documents or
            materials provided in connection with this Agreement, and any other
            materials that the disclosing party designates as confidential in
            accordance with the terms of this Agreement. "Confidential
            Information" does not include information that (i) is already known
            to the receiving party at the time it is disclosed and has not been
            obtained wrongfully, (ii) becomes publicly known without fault of
            the receiving party, (iii) is independently developed by the
            receiving party, (iv) is approved for release in writing by the
            disclosing party, or (v) is disclosed without restriction by the
            disclosing party to a third party.

    2.2     Customer means an end-user entity for which Company will perform
            --------
            the Services.

    2.3     Effective Date means the date the Agreement is executed by an
            --------------
            authorized representative of Novell.

    2.4     End User License Agreement means the end user agreement that
            --------------------------
            accompanies the Novell Software.

    2.5     Internal Use means use for the Customer's internal business on
            ------------
            computers owned or operated by Customer or Company.

    2.6     Master Media means master diskettes, master CD-ROMS, or other forms
            ------------
            of media provided by Novell which media shall contain a serial
            number that is unique to the Company.

    2.7     Mailbox means an account for the storage of electronic messages,
            -------
            regardless of whether such account is attached to a network and/or
            remote.

    2.8     Novell Software(s) means the software products that are identified
            ------------------
            in Exhibit A that are licensed by Novell to Company pursuant to this
            Agreement, and including all Upgrades thereto. Unless otherwise
            specified in the ICSP Price List, Novell Software shall not include
            any version of the Novell Software prior to the most current version
            of such Novell Software.

    2.9     Payments means the Minimum Royalty, Product Royalties, and other
            --------
            payments as such terms are defined in Section 13.

    2.10    ICSP Price List means Novell's monthly publication listing the
            ---------------
            Novell Software available to Company and the associated Product
            Royalties.

    2.11    Royalty Report Format means the format for reporting royalties as
            ---------------------
            attached as Exhibit B hereto which may be revised by Novell in
            accordance with Section 13.5.

    2.12    Services means the Internet hosting services including Internet
            --------
            access, email, and other Internet-related services provided by
            Company to its Customers using Novell Software pursuant to the terms
            and conditions of this Agreement.

    2.13    Term means the term of this Agreement as specified in Section 15.1.
            ----

    2.14    Territory means worldwide.
            ---------

    2.15    Upgrades means any new version of a Novell Software which bears the
            --------
            same product name, including version changes evidenced by a number
            change immediately to either the right or left of the decimal (For
            example GroupWise 4.0 to 5.0 or 5.1 to 5.2). If a question arises as
            to whether a product offering is an Upgrade or a new product,
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Novell ICSP Agreement            Version 1-5                       April 4, 2000
Novell, Inc./Insynq, Inc.

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NOVELL(R)                                                  CONFIDENTIAL
                                                        Execution Original
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            Novell's opinion will prevail, provided that Novell treats the
            product offering the same for its end user customers generally.

    2.16    User(s) means any person or entity who subscribes to or uses the
            -------
            Services of Company. Company will ensure that each User is assigned
            a User ID or user account number. Except for Company, User does not
            include an entity which resells, sells, licenses, rents, transfers,
            or leases the Novell Software to other parties or that otherwise
            derives revenue from the Novell Software.

3.   MASTER MEDIA.    Novell will provide Company with one set of Master Media
     for applicable Novell Software. Novell may update the Master Media and ship
     the updated Master Media to Company from time to time. The Master Media
     contains a serial number that has been registered by Novell to Company.
     Novell may identify portions of the Novell Software that are to be
     downloaded by Company electronically from a web site, in which case the
     version downloaded shall be deemed Master Media. Company agrees to
     faithfully and accurately reproduce any and all ID banners, serial numbers,
     trademark, trade name, copyright, and other notices contained in the Novell
     Software and to use the Master Media in accordance with serialization
     procedures established by Novell and in effect from time to time. Company
     covenants that it will not duplicate the Master Media nor will it
     distribute, sell, give, lend, lease, or otherwise transfer the Master Media
     to any Customer or other party, and Company covenants that it will not make
     unauthorized copies or allow any other party to make unauthorized copies.
     Violation of the provisions of this Section will be deemed to be a material
     breach of this Agreement entitling Novell to terminate this Agreement under
     Section 15.3. Company agrees to be responsible for and indemnify Novell
     against any unauthorized use of the Novell Software by any of its
     Customers.

4.   LICENSE GRANT.   Subject to the terms and conditions of this Agreement and
     conditional upon Company making the applicable Payments, Novell makes
     available to Company a non-exclusive, non-transferable, non-perpetual,
     limited license only during the Term and only in the Territory, to make
     copies of the Novell Software from Master Media and to use and distribute
     such copies of the Novell Software internally within Company solely for the
     purposes of implementing and deploying the Service to Customers but only as
     expressly permitted herein. Any other use by Company (including Company's
     internal business systems) of Novell Software must be by a separate license
     agreement. Company is granted no express or implied right to modify or
     alter the Novell Software in any way. Novell Software shall be used only to
     allow the Customer to access the functionality of the Company's network via
     an Internet browser software or Company client software.

5.   LICENSE RESTRICTIONS.   Company agrees to abide by the terms and conditions
     of any End User License Agreement (EULA) accompanying the Novell Software
     and shall not delete, modify, or amend the terms thereof. Upgrades may be
     subject to additional terms that add to or modify the terms of the
     Services, licenses and restrictions. In addition, each Novell Software will
     be subject to any license rights and restrictions accompanying the Novell
     Software. Company agrees to exercise commercially reasonable efforts to
     ensure that each Customer using the software license through Company
     understands, and agrees to be bound by, the applicable Novell End User
     License Agreement. In the event of any conflict between the license rights
     and restrictions in this Agreement and the license rights and restrictions
     accompanying the Novell Software, this Agreement shall supercede, as
     between Novell and Company, except in the event that the Novell Software
     (i) is accompanied by a license agreement where Novell is not the licensor,
     or (ii) is a pre-release product (e.g.
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Novell ICSP Agreement            Version 1-5                       April 4, 2000
Novell, Inc./Insynq, Inc.

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NOVELL(R)                                                     CONFIDENTIAL
                                                            Execution Original
================================================================================

            early access release or beta), in which case all of the terms and
            conditions accompanying the Novell Software shall supercede the
            terms and conditions of this Agreement. In addition, Novell Software
            may include a component or product of a third party that is subject
            to additional restrictions as specified by Novell to Company. All
            rights not specifically granted in this Agreement are reserved by
            Novell.

6.   SERVICES.

     6.1    No Customer Access to Novell Software. Company may perform the
            -------------------------------------
            Services by placing and using the Novell Software on its own
            servers. Under no conditions may Customer, its employees or
            contractors have physical or administrative access to the Novell
            Software, nor to the server on which the Novell Software resides.
            Violation of the provisions of this Section will be deemed to be a
            material breach of this Agreement entitling Novell to terminate this
            Agreement under Section 15.3.

     6.2    Alternative Client Interface.   The Customer interface/client must
            ----------------------------
            not violate any intellectual property rights of Novell or its
            licensors, and no license is granted to Company under this Agreement
            with respect to development or use of any Customer interface/client.

7.   SUPPORT. Company shall be responsible for providing all support to
     Customers and shall instruct Customers how to obtain support from Company.
     Neither Customer nor Company is entitled to receive technical or other
     support from Novell under the terms of this Agreement. If Company desires
     to receive technical support from Novell, Company may purchase support from
     Novell pursuant to a separate agreement and in accordance with Novell's
     then current support offerings.

8.   UPGRADES. During the term hereof, Novell may release Upgrades to the Novell
     Software Company licenses hereunder in which case Novell may make available
     to Company a license to use the Upgrade subject to the provisions in the
     applicable license terms.

9.   ICSP PRICE LIST. The ICSP Price List shall contain all Novell Software
     available for use in support of the Services and their associated prices.
     Novell reserves the right to add or withdraw products from the ICSP Price
     List at any time. Novell also reserves the right to increase or reduce the
     prices or discounts. Price list and/or discount increases or decreases will
     become effective 30 days after being issued. If Novell removes any product
     from the ICSP Price List, (a) it shall so notify Company following which
     Company may not make any additional copies of such Novell Software
     following notification, (b) Company shall discontinue use of such Novell
     Software within ninety (90) days of receipt of such notification unless it
     obtains written permission from Novell not to discontinue use based on
     technical reasons or application requirements of the Customer. The ICSP
     Price List and all pricing terms shall be treated by Company as
     Confidential Information of Novell and shall not be disclosed without
     Novell's prior written consent. Novell may offer Company new products
     related to the Service through updates to or replacement of the ICSP Price
     List. Each updated or new ICSP Price List will describe the new product,
     identify any additional license fees associated with the new product, and
     identify license rights and restrictions for the new product.

10.  THIRD PARTY PRODUCTS. From time to time, Novell Software may include a
     component or product of a third party that is accompanied by a license
     agreement where such third party (rather than Novell) is the licensor of
     such component or product ("Third Party Product"). Notwithstanding anything
     to the contrary herein, Company's and the Customer's use of any Third Party
     Product shall be governed by the terms of
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Novell ICSP Agreement             Version 1-5                      April 4, 2000
Novell, Inc./Insynq, Inc.

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                                                                CONFIDENTIAL
NOVELL(R)                                                    Execution Original

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     the license agreement accompanying the Third Party Product ("Third Party
     License"), which are unmodified by this Agreement. In addition, Company is
     prohibited from using the Third Party Product in connection with providing
     Services except to the extent that such use by Company is permitted under
     the terms and conditions of the Third Party License.

11.  EVALUATION & KEY ACTIVATION PRODUCTS. From time to time, Novell Software
     may include a component or product that is provided for evaluation purposes
     only or that requires purchase of an activation key if continued use is
     desired. Notwithstanding anything to the contrary herein, Company's and the
     Customer's use of the foregoing shall be governed by the terms of the
     accompanying license agreement, which terms are unmodified by this
     Agreement. Purchase of any such activation key shall be outside the scope
     of this Agreement and shall be treated as a separate transaction. In
     addition, Company is prohibited from using the foregoing component or
     product in connection with providing Services except to the extent that
     such use by Company is permitted under the terms and conditions of the
     accompanying license agreement.

12.  IMPLEMENTATION & NON-EXCLUSIVENESS. Company will be responsible for the
     design, implementation, cost, marketing, and day-to-day operation of the
     Services. Novell's only obligations with respect to the Service shall be as
     expressly set forth in this Agreement. The parties agree that this
     Agreement is non-exclusive and Novell shall be free to license similar or
     equivalent services to other parties, including Company's competitors.
     Prior to the commercial availability of any Services to be provided under
     this Agreement, Company will provide the Novell Contract Manager with a
     detailed description of such Services.

13.  PAYMENTS AND REPORTING.  Company shall pay to Novell the specified fees set
     forth in this Section 13 and the ICSP Price List.

     13.1   Program Enrollment Fee. Company agrees to pay Novell upon signature
            -----------------------
            hereof a Program Enrollment Fee of $1,000.00.

     13.2   Monthly Royalty.  Company agrees to pay Novell Monthly Royalties (as
            ---------------
            set forth in the ICSP Price List) for each User of each Novell
            Software shipped to Company hereunder. The Monthly Royalty will be
            calculated using the highest number of Users of a particular product
            during the month.

     13.3   Minimum Royalty.  Company agrees to pay a minimum monthly royalty
            ---------------
            equal to the royalty for 1,000 Users or Accounts for each Novell
            Software shipped to Company hereunder. The Minimum Royalty cannot be
            taken as a credit against future Product Royalties owed or otherwise
            offset.

     13.4   Third-Party Royalties. The use and copying of some Novell Software
            ---------------------
            may require payment of royalties to third-party licensors. If such
            products are made available hereunder, and if Company elects to use
            such products, Company must report (in a form and manner specified
            by Novell) the number of copies of all such products and must pay
            the required royalties, provided that Novell gives Company written
            notice of the royalty obligation at or before the time Company
            begins copying or using such products under this Agreement.

     13.5   Subscription Royalty Report and Payment. Company shall prepare and
            ---------------------------------------
            submit to Novell no later than the 10th day of each calendar month a
            Subscription Royalty Report, the
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Novell ICSP Agreement              Version 1-5                  April 4, 2000
Novell, Inc./Insynq, Inc.

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                                                              CONFIDENTIAL
NOVELL(R)                                                  Execution Original

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          form of which will be provided by Novell and may be modified from time
          to time. Novell will invoice Company based on the Subscription Royalty
          Report received from Company and Company shall pay such invoice within
          30 days of the date of invoice or within 30 days of the date that the
          Subscription Royalty Report was due, whichever was the earlier. All
          payments shall be made payable to Novell, Inc. and sent to Novell at
          the address provided by Novell from time to time. Payments made later
          than the due date will accrue interest from the date due to the date
          paid at the greater of 12% or the highest rate allowed by applicable
          law. Company agrees to pay reasonable costs and attorney's fees if
          Novell is required to undertake collection against Company.

    13.6  Invoice Disputes.  Company agrees to give Novell written notice of any
          ----------------
          dispute Company may have concerning any invoice issued by Novell to
          Company within 60 days from the date of the invoice. If company fails
          to do so, Company agrees that Novell may conclusively presume the
          invoice to be accurate.

    13.7  Tax.  All Payments required under this Agreement shall be non-
          ---
          refundable and non-cancelable. All Payments shall be in U.S. dollars,
          and shall be exclusive of any federal, state, municipal or other
          government taxes, duties, excises or tariffs now or hereinafter
          imposed on the production, storage, sale, transportation, import or
          export, or use of Novell Software, including sales, use, excise, goods
          and services, and value added taxes, but excluding any taxes or fees
          based on Novell's net income. Any taxes, duties, excises, tariffs,
          fees, or levies imposed on license fees paid hereunder or against this
          Agreement, except for taxes or fees based on Novell's net income,
          shall be the responsibility of Company, and if rightfully paid or
          incurred by Novell, shall be promptly reimbursed to Novell by Company
          upon receipt of an invoice from Novell.

    13.8  Tax Exemption.  In the event that Company is required to withhold and
          -------------
          pay any taxes, duties, excises, tariffs, fees, or levies imposed on
          license fees paid hereunder to a governmental entity other than the
          United States and Novell is, or would be, entitled to a credit for
          those taxes, duties, excises, tariffs, fees, or levies under a treaty
          between the United States and that governmental entity, Company shall
          (i) withhold the amount imposed from amounts otherwise due Novell and
          shall without undue delay, pay the amount imposed to the governmental
          entity and (ii) shall, as promptly as possible, send to Novell an
          official tax receipt or other evidence issued by the governmental
          entity in a form complying with the treaty.

    13.9  Formal Audit. During the Term and for a period of two years
          ------------
          thereafter, Company agrees to keep and maintain, in a true and
          accurate manner, all usual and proper records and books of account and
          all usual and proper entries relating to each unit of Novell Software
          licensed or distributed including without limitation records of Users
          and monthly use. In order to verify statements issued by Company and
          Company's compliance with the terms of this Agreement, Novell may
          cause (i) an audit to be made of the relevant Company books, records
          and networks and/or (ii) an inspection to be made of the relevant
          Company facilities, networks and procedures. Any audit or inspection
          shall be made by
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Novell ICSP Agreement                   Version 1-5              April 4, 2000
Novell, Inc./Insynq, Inc.

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NOVELL(R)                                                  CONFIDENTIAL
                                                        Execution Original
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           Novell or its agents.  Any audit and/or inspection shall be
           conducted during regular business hours at Company's facilities, upon
           three (3) days prior written notice, and shall be conducted so as not
           to interfere with Company's normal business activities.  Novell shall
           give Company a summary report containing only the information
           necessary to indicate compliance or non-compliance with this
           Agreement.  Company agrees to provide the auditor or inspection team
           access to the relevant Company records and facilities.  Prompt
           adjustment shall be made to compensate Novell for any errors or
           omissions disclosed by such audit.  Any such audit shall be paid for
           by Novell unless material discrepancies are disclosed.  "Material"
           means that the difference between what was reported to Novell and the
           actual royalty due Novell was at least 5% of the amount reported to
           Novell.  If material discrepancies are disclosed, Company agrees to
           pay Novell for the costs associated with the audit in addition to the
           material discrepancy.

14.  OWNERSHIP & RESTRICTIONS.

     14.1  No title to or ownership of any Novell Software is transferred to
           Company or to Customer, whether by implication, estoppel or
           otherwise.  All right, title, and interest in and to the Novell
           Software shall remain in Novell or Novell's licensors.  No Novell or
           Novell Software trademarks are licensed to Company hereunder.  If
           Company becomes aware of any actual or potential unauthorized copying
           or other unauthorized use of the Novell Software provided through
           Company hereunder by any Customer or any third party, Company agrees
           to promptly report such activity or potential activity to Novell.
           In such event, or in the case that Novell becomes aware of such
           activity, Company agrees to provide reasonable assistance to Novell
           as requested by Novell in investigating such activity or potential
           activity and in enforcing Novell's rights against such Customer or
           third party, provided Novell reimburses Company its reasonable out-
           of-pocket expenses in doing so, which expenses will not include
           attorney's fees or reimbursement of employee time in reasonable
           cooperation with Novell or its counsel.  Any damages or other
           compensation awarded or received as a result of such investigation
           or the bringing of any related claims, or by way of settlement of
           such claims, will belong solely to Novell.  This section will survive
           for a period of two (2) years after the expiration or termination
           hereof.

     14.2  Company shall not decompile, reverse compile, reverse assemble,
           modify in any way, or perform any similar type of operation on Novell
           Software.  Company agrees that any such resulting works are the sole
           and exclusive property of Novell.  Nevertheless, Company shall be
           free of the foregoing restriction to the extent such restrictions are
           not allowed by law.

15.  TERM AND TERMINATION.

     15.1  Term.  This Agreement shall be effective upon the Effective Date and
           ----
           shall remain in force for a period of one year unless earlier
           terminated as provided in this Section 15 and will automatically
           renew for additional one year periods unless either party provides
           to the other, no less than 30 days prior to the expiration date,
           written notice of its intent to allow the Agreement to expire.

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Novell ICSP Agreement            Version 1-5                       April 4, 2000
Novell, Inc./Insynq, Inc.

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     15.2  Termination for Convenience.  Notwithstanding the terms of Section
           ---------------------------
           15.1, either party may terminate this Agreement at any time without
           cause upon not less than 90 days written notice to the other party.
           The termination date must be the last day of a calendar month.  If
           Company terminates for convenience under this paragraph prior to six
           months following the commencement hereof, it agrees to pay Novell a
           royalty equivalent to three months' minimum royalty for each Novell
           Software licensed under this Agreement.

     15.3  Termination for Breach.  In addition to any other rights or remedies
           ----------------------
           available at law or in equity, either party may terminate this
           agreement upon any of the following:

           i.    The other party is in breach of any material obligation
                 hereunder and such breach is not cured within thirty (30) days
                 following receipt of written notice specifying the breach and
                 requiring its remedy.  Failure to make timely Payments shall be
                 considered a breach of a material obligation.

           ii.   The other party is dissolved, is involved in a financial
                 restructuring or reorganization, or attempts to assign this
                 Agreement or any of its rights thereunder in violation of this
                 Agreement.

           iii.  The other party is not paying its debts as the debts become
                 due, becomes insolvent, files or has filed against it a
                 petition under any bankruptcy law, proposes any dissolution,
                 liquidation, composition, financial reorganization or
                 recapitalization with creditors, makes an assignment or trust
                 mortgage for the benefit of creditors, or if a receiver
                 trustee, custodian or similar agent is appointed or takes
                 possession of any property or business.

     15.4  Effect of Termination or Expiration.  Upon expiration or any
           -----------------------------------
           termination of this Agreement, all rights and licenses granted to
           Company shall immediately terminate; provided, however, that in the
           event Company terminates the Agreement for Novell's breach under
           Section 15.3, or Novell terminates for convenience under Section
           15.2, for a period not to exceed 90 days after termination, all
           rights, licenses and obligations of Company shall continue to the
           minimum extent necessary to allow Company to continue providing the
           Service (including but not limited to the obligation to make Payments
           and submit royalty reports to Novell).  Upon expiration or
           termination of this Agreement (or the end of the 90 day period
           allowed in the event of termination by Company for Novell's breach
           or Novell's termination for convenience), Company shall immediately
           cease use of Novell Software (including Master Media), and shall
           discontinue providing the Service and ensure that all Novell Software
           (including Master Media) are returned to Novell within five (5) days
           and certify in writing to Novell that it has returned all Novell
           Software (including Master Media) to Novell.  Breach of this
           provision shall be regarded as a material breach of this Agreement
           and will entitle Novell to seek any remedy or damages provided
           hereunder or by law including, without limitation, specific
           performance and damages including, among other damages, the retail
           value of the Novell Software used in the Services for said Customer.
           Prior to returning any software to Novell, Company

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Novell ICSP Agreement            Version 1-5                       April 4, 2000
Novell, Inc./Insynq, Inc.

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           must first obtain an RMA (returned merchandise authorization) number
           from Novell.

16.  CONFIDENTIALITY.  The parties agree that any Confidential Information
     provided under the Agreement shall be held and maintained in strict
     confidence.  Each party agrees to protect the confidentiality of such
     information in a manner consistent with the way a reasonable person would
     protect similar Confidential Information.  "Confidential Information" means
     the information and materials marked by a party as confidential and
     proprietary.  "Confidential Information" does not include information that
     (i) is already known to the receiving party at the time it is disclosed and
     has not been obtained wrongfully, (ii) becomes publicly known without fault
     of the receiving party, (iii) is independently developed by the receiving
     party, (iv) is approved for release in writing by the disclosing party,
     (v) is disclosed without restriction by the disclosing party to a third
     party, or (vi) is disclosed pursuant to legal obligations beyond the
     control of the disclosing and receiving parties.

17.  WARRANTY.  Novell warrants any Master Media against physical defects for a
     period of 90 days after receipt by Company.  Company's sole remedy for
     defective Master Media is replacement of such Master Media.  EXCEPT AS
     OTHERWISE SPECIFIED IN THIS SECTION 17, THE NOVELL SOFTWARE IS PROVIDED
     "AS IS" AND NOVELL EXPRESSLY DISCLAIMS ALL WARRANTIES INCLUDING, BUT NOT
     LIMITED TO, WARRANTIES OF NON-INFRINGEMENT, THE IMPLIED WARRANTIES OF
     MERCHANTABILITY, TITLE, AND FITNESS FOR A PARTICULAR PURPOSE.  COMPANY IS
     CAUTIONED TO DETERMINE FOR ITSELF THE SCALABILITY AND SUITABILITY OF THE
     NOVELL SOFTWARE FOR THE SERVICES COMPANY DESIRES TO PROVIDE TO CUSTOMERS
     UNDER THIS AGREEMENT AND ASSUMES ALL RISK WITH RESPECT THERETO.

     17.1  Warranty Representations.  Company is not authorized to make any
           ------------------------
           warranty commitment on Novell's behalf, whether written or oral,
           other than those contained in the applicable Novell End User License
           Agreement.

18.  INDEMNIFICATION.

     18.1  Indemnification by Novell
           -------------------------

           i.    Novell shall, at its expense and Company's request, defend any
                 claim or action brought against Company that arises from or is
                 related to any claim that the Novell Software as delivered to
                 Company infringes any patent, copyright or trademark of any
                 third party in the country in which the Customer is provided
                 the Service and Novell will indemnify and hold Company harmless
                 from and against any costs, damages and fees reasonably
                 incurred by Company.  The foregoing rights to defense and
                 indemnity shall exclude all claims for which Novell has a right
                 to indemnification by Company pursuant to Section 18.2 and are
                 subject to the following: (i) Company shall promptly notify
                 Novell in writing of the claim; and (ii) Novell shall have the
                 sole control of the defense of the action and all negotiations
                 for its settlement and compromise.  Novell's indemnification
                 obligations in aggregate shall not in any event exceed the
                 total amounts paid by Company to Novell during the preceding
                 twelve months under this Agreement.

           ii.   Should Novell Software, or the operation, marketing or
                 distribution thereof in accordance with the rights

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Novell ICSP Agreement            Version 1-5                       April 4, 2000
Novell, Inc./Insynq, Inc.

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NOVELL(R)                                                    CONFIDENTIAL
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                 granted in this Agreement, become, or in Novell's opinion be
                 likely to become, the subject of infringement or otherwise
                 violative of a third party's right, Company shall permit
                 Novell, at its option and expense, to either (i) procure for
                 Company the right to continue using Novell Software, or (ii)
                 replace or modify Novell Software so that they become non-
                 infringing, provided such replaced or modified Novell Software
                 retains comparable functionality, or if neither (i) nor (ii) is
                 commercially and reasonably available, (iii) terminate this
                 Agreement. Novell shall have no liability to Company under any
                 provision of this Agreement with respect to any claim of
                 infringement which is based on the combination or utilization
                 of software, equipment or devices not provided by Novell or the
                 modification of Novell Software furnished under this Agreement
                 where the claim could not have been based on the use of Novell
                 Software as provided by Novell.

    18.2  Indemnification by Company
          --------------------------

          i.     Company agrees to indemnify, defend and hold Novell harmless
                 from any and all damages, liabilities, costs and expenses
                 incurred by Novell as a result of any claims, judgments or
                 adjudication against Novell arising from or related to the
                 Service or use or distribution of Novell Software by or for
                 Company, including but not limited to claims, judgments or
                 adjudication regarding data that is lost, stolen or damaged and
                 materials that are defamatory, libelous, illegal, pornographic,
                 infringing on other parties' intellectual property rights, or
                 otherwise subject to legal action (such as "spam") being
                 carried over the Service by Company or users of the Service,
                 provided: (i) Novell shall promptly notify Company in writing
                 of the claim; and (ii) Company shall have the sole control of
                 the defense of the action and Novell uses reasonable efforts to
                 provide Company, at Company's expense, with information and
                 assistance for its defense, settlement and/or compromise.

19.  LIMITATION OF LIABILITY. NOVELL'S ENTIRE LIABILITY AND COMPANY'S EXCLUSIVE
     REMEDY FOR ANY CLAIMS CONCERNING THIS AGREEMENT AND NOVELL SOFTWARE OR
     UPGRADES ARE SET FORTH IN THIS SECTION AND SECTION 19.1. NOTWITHSTANDING
     ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE
     TO THE OTHER (WHETHER IN CONTRACT, TORT, OR UNDER ANY OTHER THEORY OF
     LIABILITY) FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES
     (INCLUDING LOST PROFITS) SUSTAINED OR INCURRED IN CONNECTION WITH THIS
     AGREEMENT AND THE NOVELL SOFTWARE OR UPGRADES THAT ARE SUBJECT TO THIS
     AGREEMENT, WHETHER OR NOT SUCH DAMAGES ARE FORESEEABLE.

    19.1  Aggregate Liability. Save for death or personal injury caused by the
          negligence of Novell or its employees, Novell's liability for direct
          damages to Company for any cause whatsoever, except as otherwise
          stated in this Section or in Section 19.2, and regardless of the form
          of action, will be limited to the greater of 1) US$100,000 or 2) the
          total amount of royalties paid by Company, less any applicable
          discount, for the Novell Software that caused the damage or gave
--------------------------------------------------------------------------------
Novell ICSP Agreement             Version 1-5                      April 4, 2000
Novell, Inc./Insynq, Inc.

                                    Page 10
<PAGE>

NOVELL(R)                                                  CONFIDENTIAL
                                                        Execution Original
================================================================================
           rise to the cause of action calculated from the period of six months
           prior to the date that the cause of action arose. This limitation
           does not apply to the payment of the costs, damages, and attorney's
           fees or to claims by Company for death, personal injury, or damage to
           real property or tangible personal property caused by Novell's
           negligence.

     19.2  Third Party Claims. Save for death or personal injury caused by
           ------------------
           Novell or its employees, Novell shall not be liable for any claim by
           the Company based on any third party claim.

20.  GENERAL PROVISIONS.

     20.1  Notice.  Unless otherwise agreed to by the parties, all notices
           ------
           required under this Agreement shall be deemed effective when received
           and made in writing by either (i) registered mail, (ii) certified
           mail, return receipt requested, (iii) overnight mail, addressed and
           sent to the attention, or (iv) by telephone facsimile transfer with
           confirmation:

           Novell, Inc.
           1555 North Technology Way
           MS ORM-H-211
           Orem, Utah 84097
           Attn:: ICSP Contracts Manager

           Insynq, Inc.
           1101 Broadway Plaza
           Tacoma, WA 98402
           Attn: Art Kunz

           with a copy of legal notices to:

           Novell, Inc
           1555 North Technology Way
           MS ORM-H-211
           Orem, Utah 84097
           Attn: General Counsel

           Insynq, Inc.
           1101 Broadway Plaza
           Tacoma, WA 98402
           Attn: Art Kunz

           The above addresses may be changed by providing written notice to the
           other party.

     20.2  Construction. The headings of this Agreement are provided for
           ------------
           reference only and shall not be used as a guide to interpretation.

     20.3  Governing Law. This Agreement shall in all respects be governed by
           -------------
           and construed in accordance with the laws of the State of Utah,
           excluding those laws governing conflicts of law. In addition, the
           parties agree that any action relating to or arising under this
           Agreement shall be instituted and prosecuted exclusively in the
           courts of competent jurisdiction of the State of Utah.

     20.4  Force Majeure. If either party shall be prevented from performing any
           -------------
           portion of this Agreement (except the payment of money) by causes
           beyond its control, including labor disputes, civil commotion, war,
           governmental regulations or controls, casualty, inability to obtain
           materials or services or acts of God, the defaulting party shall be
           excused from performance for the period of the delay and for a
           reasonable time thereafter.

     20.5  Survival of Terms. The provisions of this Agreement which by their
           -----------------
           nature extend beyond the expiration or termination of this Agreement
           will survive and remain in effect until all obligations are
           satisfied.

     20.6  Waiver. No waiver of any right or remedy on one occasion by either
           ------
           party shall be deemed a waiver of the right or remedy on any other
           occasion.

--------------------------------------------------------------------------------
Novell ICSP Agreement            Version 1-5                       April 4, 2000
Novell, Inc./Insynq, Inc.

                                    Page 11

<PAGE>

NOVELL(R)                                                  CONFIDENTIAL
                                                        Execution Original
================================================================================
     20.7  Complete Understanding. This Agreement expresses the final, complete
           ----------------------
           and exclusive agreement and understanding between the parties with
           respect to their subject matter and supersede all previous
           communications, representations or agreements, whether, written or
           oral, with respect to the subject matter hereof. Neither of the
           parties shall be bound by any conditions, definitions, warranties
           understandings or representations with respect to the subject matter
           other than as expressly provided under this Agreement. This Agreement
           may not be modified by usage of trade, course of dealing or
           otherwise. This Agreement is subject to amendment or modification
           only by a writing duly signed by both parties.

     20.8  Assignment. This Agreement is not assignable by Company, in whole or
           ----------
           in part, including assignments by operation of law, without Novell's
           prior written consent. However, Novell shall not unreasonably
           withhold consent to assignment of this Agreement by Company in
           connection with a sale or transfer of substantially all of Company's
           assets related to this Agreement. Any attempted assignment without
           Novell's written consent will be null and void. Novell may, without
           Company's consent, assign this Agreement without consent in the event
           Novell sells or transfers substantially all of the related assets or
           technology.

     20.9  Severability. If any provision of this Agreement is held invalid,
           ------------
           illegal, or unenforceable, the validity, legality and enforceability
           of the remaining provisions shall not in any way be affected or
           impaired thereby, and shall be interpreted, to the extent possible,
           to achieve the purpose of this Agreement as originally expressed with
           the invalid, illegal or unenforceable provision.

    20.10  Independent Contractors. Both parties to this Agreement are
           -----------------------
           independent contractors and each agrees not to represent itself as an
           agent or legal representative of the other party.

    20.11  Compliance with Laws. Company shall comply, at Company's own expense,
           --------------------
           with all statutes, regulations, rules, ordinances, and orders of any
           government body, department or agency which apply to or result from
           Company's obligations under this Agreement.

    20.12  Export of Technical Data. Company agrees to comply with all
           ------------------------
           applicable US and foreign export/import laws and regulations. Company
           agrees not to export any Custom Software directly or indirectly,
           separately or as part of a system, without first obtaining proper
           authority to do so from the appropriate governmental agencies or
           entities, as may be required by law. Company acknowledges that U.S.
           export control laws and regulations apply to technology and software
           supplied by Novell. If Novell's shipping documents indicate that
           technology and/or software has been exported to Company under License
           Exception TSR (Technical Software Restricted), Company agrees Clause
           20.12.1 below applies. If Novell's shipping documents indicate that
           software has been exported to Company under License Exception TMP
           (Temporary), Company agrees Clause 20.12.2 below applies.

           1.  Company will not knowingly export or re-export the technology
               and/or software supplied by Novell to any country or entity or
               for any use

--------------------------------------------------------------------------------
Novell ICSP Agreement            Version 1-5                       April 4, 2000
Novell, Inc./Insynq, Inc.

                                    Page 12

<PAGE>

NOVELL(R)                                                  CONFIDENTIAL
                                                        Execution Original
================================================================================

               prohibited by the U.S. Export Administration Regulations ("EAR")
               unless authorized by the U.S. Gov't.

           2.  Company certifies that this beta test software will only be used
               for beta testing purposes, and will not be leased, sub-licensed,
               assigned or otherwise transferred, or export any product, process
               or services that is the direct product of the beta test software.

IN WITNESS WHEREOF the parties have entered into this Agreement to take effect
on the Effective Date specified in the title to this Agreement.

Accepted by:

NOVELL, INC.                                 Insynq, Inc.

/s/ Mike Bready                              /s/ M. Carroll Benton
-------------------------------              ----------------------------------
Authorized Signature                         Authorized Signature

    Mike Bready                                  M. Carroll Benton
-------------------------------              ----------------------------------
Name Printed                                 Name Printed

    Director of Contracts                        CAO/Controller
-------------------------------              ----------------------------------
Title                                        Title

        7/24/00                                      4/20/00
-------------------------------              ----------------------------------
Date                                         Date

--------------------------------------------------------------------------------
Novell ICSP Agreement            Version 1-5                       April 4, 2000
Novell, Inc./Insynq, Inc.

                                    Page 13

<PAGE>

NOVELL(R)                                                  CONFIDENTIAL
                                                        Execution Original
================================================================================

                                   Exhibit A
                Licensed Products, Prices, and Volume Discounts

The following products are licensed to Company pursuant to Section 2.8 of the
Agreement:

--------------------------------------------------------------------------------
Product name                                    Monthly Royalty per User (USD)
--------------------------------------------------------------------------------
Novell Directory Services eDirectory (NDS)      0.10
--------------------------------------------------------------------------------
GroupWise Web Access (GW)                       0.05
--------------------------------------------------------------------------------
Novell Internet Messaging System (NIMS)         0.05
--------------------------------------------------------------------------------
BorderManager Enterprise Edition (BM)           0.80
--------------------------------------------------------------------------------
BorderManager VPN Services (BMVPN)              0.38
--------------------------------------------------------------------------------
BorderManager Firewall Services (BMF)           0.55
--------------------------------------------------------------------------------
BorderManager BMAS Services (BMAS)              0.20
--------------------------------------------------------------------------------
Novell Software On-Demand (OD)                  1.10
--------------------------------------------------------------------------------
ZENworks for Desktops                           1.00
--------------------------------------------------------------------------------
Net Publisher                                   0.34
--------------------------------------------------------------------------------

Company may apply the following volume discounts on a per product basis. The
User count calculation resets to zero each month.

--------------------------------------------------------------------------------
Highest User count during month                               Discount
--------------------------------------------------------------------------------
1 - 25,000                                                      None
--------------------------------------------------------------------------------
25,001 - 100,000                                                 10%
--------------------------------------------------------------------------------
100,001 - 175,000                                                20%
--------------------------------------------------------------------------------
175,001 - 250,000                                                30%
--------------------------------------------------------------------------------
250,001 - 500,000                                                40%
--------------------------------------------------------------------------------
500,001 - 1,000,000                                              50%
--------------------------------------------------------------------------------
1,000,000+                                                    Negotiable
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Novell ICSP Agreement            Version 1-5                       April 4, 2000
Novell, Inc./Insynq, Inc.

                                    Page 14

<PAGE>

NOVELL(R)                                                      CONFIDENTIAL
                                                            Execution Original
================================================================================

                                   Exhibit B
                             Royalty Report Format

Company Information

 Reporting period (month and year): ______________________________

 Company name:                      ______________________________

 Address:                           ______________________________

 Phone:                             ______________________________

 Fax:                               ______________________________

 E-mail address:                    ______________________________

<TABLE>
<CAPTION>
Royalty Calculation
<S>                                                     <C>     <C>     <C>     <C>     <C>     <C>
---------------------------------------------------------------------------------------------
Product                                                 NDS     NIMS    BMAS    BMF     OD
---------------------------------------------------------------------------------------------
a. Monthly per User royalty                             0.10    0.05    0.08    0.08    1.10
---------------------------------------------------------------------------------------------
b. Highest User count during month
---------------------------------------------------------------------------------------------
c. Product royalty before volume discount (a x b)
---------------------------------------------------------------------------------------------
d. Applicable volume discount                                                                        GRAND TOTAL
-------------------------------------------------------------------------------------------------------------------
e. Total product royalty (c - d)                                                                $
-------------------------------------------------------------------------------------------------------------------
</TABLE>

Royalty reports should be submitted via E-mail to royalty@novell.com, or via fax
                                                  ------------------
to 801-222-2672 Attn:  Theresa Skinner or Chad Downey, or via mail to:

Novell Contract Compliance
Attn:  Theresa Skinner or Chad Downey
1555 N. Technology Way
ORM-H-212
Orem, UT  84097

Payments must be submitted by check in USD to one of the following addresses:

Novell, Inc.
P.O. Box 641025
Pittsburgh, PA
15264-1025

or

Novell, Inc.
P.O. Box 31001-0024
Pasadena, CA
91110-0024

-------------------------------------------------------------------------------
Novell ICSP Agreement                   Version 1-5               April 4, 2000
Novell, Inc./Insynq, Inc.

                                   Page 15
<PAGE>

Novell(R)                                                       CONFIDENTIAL
                                                             Execution Original
===============================================================================
         NOVELL INTERNET COMMERCIAL SERVICE PROVIDER (ICSP) AGREEMENT
                                CREDIT ADDENDUM

This Credit Addendum ("Addendum") amends and supplements the Novell Internet
Commercial Service Provider (ICSP) Agreement ("Agreement") between Novell, Inc.
and Insynq, Inc. ("Company").  Company desires to establish credit terms with
Novell for payments due under the Agreement.  Novell is willing to grant Company
credit terms provided Company agrees in return to grant Novell certain rights as
safeguards in the collection of money owed under the Agreement.

Therefore, Novell and the Company agree as follows:

1.  Credit Terms.  In the Agreement, Novell grants Company certain credit terms
    ------------
for the payment of invoices.  The Agreement states in paragraph 13.5, "Company
shall pay such invoice within 30 days of the date of invoice or within 30 days
of the date that the Subscription Royalty Report was due, whichever was the
earlier."  Novell and Company hereby agree that ten (10) days following the
expiration of said 30-day credit period ("Credit Period"), if any invoice
amounts remain outstanding, Company expressly grants to Novell the right to take
the measures outlined below to collect said outstanding amounts. Company further
agrees to provide Novell with the proper Credit Card Access information or Bank
Account Access information as requested below, and to send Novell in writing any
updates to the information immediately following any changes to the information.

2.  Credit Card Access.  Company agrees to provide Novell with sufficient credit
    -------------------
card information to permit Novell to charge Company's credit card amounts owned
at the expiration of the Credit Period.  Such information shall include the
credit card number, expiration date, credit limit, type of card, and name and
contact information of the card issuer.  Only VISA, MasterCard, and American
Express cards will be accepted.  Company hereby grants Novell the right to
charge to the card any amounts owed ten days following the end of the Credit
Period.

Credit Card Number:             4802099 2900 38318
                                ------------------------

Expiration Date:                02/03
                                ------------------------

Credit Limit:
                                ------------------------

Type of Credit Card:            VISA
                                ------------------------

Card Holder Name:               INSYNQ  John Gorst
                                ------------------------

Card Holder Address:            1101 Broadway Plaza  Tacoma, WA  98402
                                -------------------------

Card Holder Telephone Number:   253-284-2000
                                -------------------------

3. Bank Account Access.  Company agrees to provide Novell with sufficient bank
   -------------------
account information to permit Novell to withdraw from Company's bank account
amounts owed at the expiration of the Credit Period. Such information shall
include the bank account number, routing number, name and contact information of
the bank, and written proof from the bank that Novell has been authorized to
make withdrawals.  Company hereby grants Novell the right to withdraw from said
bank account any amounts owed ten days following the end of the Credit Period.

--------------------------------------------------------------------------------
 Credit Addendum to ICSP Agreement                              11 July, 2000
 Novell, Inc./Insynq, Inc.

                                    Page 1
<PAGE>

NOVELL(R)                                                  CONFIDENTIAL
                                                        Execution Original
================================================================================

Bank Account Number:
                                ---------------------------
Routing Number:
                                ---------------------------
Name of Person on the Account:
                                ---------------------------
Bank's Name:
                                ---------------------------
Bank's Telephone Number:
                                ---------------------------
Bank's Address:
                                ---------------------------

*Written Proof from the bank that Novell has been authorized to make withdrawals
must also be provided.

4.  Other Information. Company agrees to provide Novell with any additional
    -----------------
information or authorization that is necessary or that may become necessary to
accomplish the purposes of paragraphs 2 and 3 hereof.  All information and
authorizations hereunder must be submitted and verified before Novell will
accept any orders or authorize the exercise of any rights under the ICSP.

In witness whereof parties have entered into this Addendum by signature of their
authorized representatives.

Accepted by:

NOVEL, INC.                                  Insynq, Inc.

/s/ Mike Bready                              /s/ M. Carroll Benton
-------------------------------              ----------------------------------
Authorized Signature                         Authorized Signature

    Mike Bready                                  M. Carroll Benton
-------------------------------              ----------------------------------
Name Printed                                 Name Printed

    Director of Contracts                        Sec/Treas.
-------------------------------              ----------------------------------
Title                                        Title

        7/24/00                                      7/17/00
-------------------------------              ----------------------------------
Date                                         Date

--------------------------------------------------------------------------------
Credit Addendum to ICSP Agreement                                  11 July, 2000
Novell, Inc./Insynq, Inc.

                                    Page 2

<PAGE>

NOVELL(R)                                                  CONFIDENTIAL
                                                        Execution Original
================================================================================

                                Amendment No. 1
      To the Novell Internet Commercial Service Provider (ICSP) Agreement

The Novell Internet Commercial Service Provider (ICSP) Agreement and Exhibit A
(Licensed Products, Prices, and Volume Discounts), (collectively, the
"Agreement") by and between Novell, Inc. ("Novell") and Insync, Inc.
("Company"), effective 24 July 2000, is hereby amended as set forth below. This
Amendment No. 1 ("Amendment") is effective when executed by an authorized Novell
signatory ("Effective Date").

WHEREAS, the parties wish to modify Exhibit A of the Agreement in order to more
easily manage product availability under the ICSP Program; and

NOW THEREFORE IT IS AGREED.

1.   Novell Software. Exhibit A of the Agreement is hereby replaced with
     Exhibit A1, included as part of this Amendment.

2.   Term. The term of this Amendment shall be coterminous with the
     Agreement.

3.   Signature. This Agreement may be signed in one or more counterparts,
     each of which shall be deemed an original, but all of which together
     shall constitute one and the same instrument.

EXCEPT AS SPECIFICALLY PROVIDED FOR IN THIS AMENDMENT NO. 1, THE TERMS AND
CONDITIONS OF THE AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT.

Accepted by:

NOVEL, INC.                                  INSYNQ, INC.

/s/ Mike Bready                              /s/ Carroll Benton
-------------------------------              ----------------------------------
Authorized Signature                         Authorized Signature

    Mike Bready                                  Carroll Benton
-------------------------------              ----------------------------------
Name Printed                                 Name Printed

    Director of Contracts                        CAO
-------------------------------              ----------------------------------
Title                                        Title

        7/27/00                                      7/26/2000
-------------------------------              ----------------------------------
Date                                         Date

--------------------------------------------------------------------------------
Amendment No. 1 to Novell ICSP Agreement                           24 July, 2000
Novell, Inc./Insynq, Inc.

                                    Page 1

<PAGE>

NOVELL(R)                                                  CONFIDENTIAL
                                                        Execution Original
================================================================================
                                  Exhibit A1
                    Products, Prices, and Volume Discounts

Eligible Products:

All products in the then current ICSP Price List.

Monthly Royalty per User (USD):

Price as listed in the then current ICSP Price List.

Volume Discounts:

Company may apply the following volume discounts on a per product basis.  The
User count calculation resets to zero each month.

<TABLE>
<CAPTION>
---------------------------------------------------------------------
    Highest User count during month                Discount
---------------------------------------------------------------------
<S>                                        <C>
  1 - 25,000                                         None
---------------------------------------------------------------------
  25,001 - 100,000                                    10%
---------------------------------------------------------------------
  100,001 - 175,000                                   20%
---------------------------------------------------------------------
  175,001 - 250,000                                   30%
---------------------------------------------------------------------
  250,001 - 500,000                                   40%
---------------------------------------------------------------------
  500,001 - 1,000,000                                 50%
---------------------------------------------------------------------
  1,000,000 +                                     Negotiable
---------------------------------------------------------------------
</TABLE>

--------------------------------------------------------------------------------
Amendment No. 1 to Novell ICSP Agreement                           24 July, 2000
Novell, Inc./Insynq, Inc.

                                    Page 2<PAGE>

                                                                   EXHIBIT 10.35

                              Agreement to Provide
                       Collaborative Management Services
                                    Between
                                  InsynQ Inc.
                                      And
                            Horizon Holdings I, LLC

     This Agreement is made herein by and between InsynQ Inc., a Washington
corporation ("Facilities Manager"), whose primary place of business is 705 South
9/th/ Street, Suite 305, Tacoma, Washington 98405 and Horizon Holdings I, LLC, a
Washington State limited liability company ("Owner") whose primary place of
business is 201 Third Street, Loft I, Oakland, California 94607 (collectively
the "Parties," or individually a "Party").

     WHEREAS, InsynQ, agrees to provide facilities management services to
Horizon Holdings I, LLC at its facilities located at the Tacoma Technology
Center, Second Floor, which is accessed through 1423 Pacific Avenue (also known
as TRC Tower) and located at 1441 Court A, City of Tacoma, State of Washington.

     WHEREAS, Horizon Holdings I, LLC hereby retains InsynQ to perform such
services, pursuant to the terms and conditions as described herein.

     WHEREAS, InsynQ will consult with Horizon Holdings I, LLC to clarify tasks
and define the scope of assignments. Horizon Holdings I, LLC recognizes that
timely completion of assignments by InsynQ may depend upon the cooperation of
Horizon Holdings I, LLC personnel. Professional property management services
will be provided by Collier's International or a successor property management
company to be chosen at the sole discretion of Horizon Holdings I, LLC.

1  Definitions.

     Unless the context otherwise specifies or requires, the terms set forth in
this Agreement, shall have the meanings herein specified. The definitions herein
shall apply equally to both the singular and plural forms of any of the terms as
herein defined.

     In this Agreement, unless the context otherwise requires:

     "Acceptance" shall mean acceptance by the Facilities Manager that the
System is capable of providing the Services to the agreed Service Levels and
acceptance by the Owner that at the end of the Transition Period, the Services
conform to the agreed Service Levels.

     "Change Request" means a request by either Party in writing to the other
Party for any changes to the Service or Service Levels.

                                 Page 1 of 11
<PAGE>

     "Computer Equipment" means the computer hardware belonging to or licensed
to the Owner (including any operating systems or networking hardware) that is
part of the System and is required to be managed under this Agreement. A general
description of the Computer Equipment and its configuration will be included in
Schedule B.

     "Location" means the location described herein as the Tacoma Technology
Center and; includes the access area through 1423 Pacific Avenue.

     "Schedule" means the schedules identified in this Agreement and
incorporated in this Agreement.

     "Service Levels" means the standards and measures for the Services as
agreed by both parties and to be more particularly described in the Schedules.

     "Services" means the facilities management and any optional services to be
provided by the Facilities Manager to be subsequently agreed to between both
Parties.

     "Software" means all system software, application software, software tools
and software utilities operating on the Computer Equipment, required to be
managed under this Agreement. A list of the software to be managed and the
responsibilities of the Facilities Manager under this Agreement for each item to
be provided by the Facilities Manager subsequent to execution of this Agreement.

     "System" means the combination of Computer Equipment and Software operating
in conjunction with each other that is required to operate the facility on a
day-to-day basis, including, but not limited to, entry and key code access to
the facility and in accordance with the Schedules identified in this Agreement
and incorporated herein.

2  Service Specifications.

     2.1  Facilities Management Services.

     InsynQ will provide Facilities Management Services ("Services") for Horizon
Holdings I, LLC, by providing an on-call/on-site facility management presence as
well as arranging prospect tours, maintaining video surveillance equipment,
performing card security auditing and verifications, UPS room monitoring, and
scheduling generator maintenance; client startup services and consultations
involving Internet and private digital connectivity provisioning, rack design
and purchasing, physical wiring setup, connection to carriers, and training on
the facility and rules of conduct; and on-going client support services
including basic site maintenance and providing a point of contact for electrical
and telecommunications room access.

     2.2  Schedules.

     InsynQ will perform services for Horizon Holdings I, LLC as described in
Section 2.1 herein and pursuant to schedules to be agreed upon and executed from
time to time by the parties

                                 Page 2 of 11
<PAGE>

("Schedules"). Said Schedules will be consecutively numbered and will contain
detail as applicable. Definition and levels of services to be provided by
InsynQ, as defined herein, may be modified or amended by the Parties upon
execution of said Schedules, in which event the provisions of the Schedule will
govern. All Schedules must be in writing, approved by both parties and signed by
an authorized representative of both InsynQ and Horizon Holdings I, LLC.

     2.3  Completion Dates.

          2.3.1  InsynQ will use its best efforts to complete or deliver the
work product by deadlines as stated in the applicable Schedules. Estimated
completion dates are not promised completion dates, and InsynQ will not be
liable for reasonable delays in completion of any project under this Agreement
by such estimated completion dates.

3  Charges and Payments.

          3.1.1  InsynQ will charge Horizon Holdings I, LLC a base service fee
of Three Thousand Dollars ($3000.00) per month for the performance of management
services as outlined in Section 1.3 above.

          3.1.2  Horizon Holdings I, LLC will pay InsynQ in accordance with
applicable terms established herein or to be determined on subsequent Schedules.
InsynQ will submit monthly detailed billings for services provided; Horizon
Holdings I, LLC will provide InsynQ with immediate payment.

          3.1.3  A late charge of 1.5% per month, or any part thereof, will be
added for any amounts not paid when due. InsynQ may at any time suspend its
services if payments are overdue.

4  Terms.

     4.1  Term of Agreement.

          4.1.1  This agreement shall commence on July 1, 1999, and continue
for a period of eighteen (18) months to and including December 31, 2000. The
Agreement will automatically renew for a period of twelve (12) months unless
specifically terminated by Horizon Holdings I, LLC no later than thirty (30)
days prior to the renewal date, or unless provisions in any Schedules apply.
Automatic renewal at the end of each twelve (12) month period will continue
unless otherwise provided for in subsequent Schedules.

          4.1.2  Unless this Agreement is terminated pursuant to the provisions
of Section 5.1.1 (a)-(b) and 5.2.1 (a)-(b) herein, this Agreement will continue
in full force and effect until the completion of said services, payments, and
other obligations provided for herein.

                                 Page 3 of 11
<PAGE>

5  Termination.

     5.1  Immediate Termination.

          5.1.1  Either party may terminate this Agreement forthwith under
the following conditions:

                 a.  The other party assigns its rights or obligations under the
                     Agreement except as provided in Section 15 herein.

                 b.  The other party enters into a arrangement with its
                     creditors, is declared bankrupt, goes into liquidation, or
                     a receiver, or a receiver and manager, or statutory
                     receiver is appointed in respect of it.

     5.2  Termination By Either Party On Notice.

          5.2.1  In the event of any material default in the performance of any
of its obligations under this Agreement the non-defaulting party may immediately
terminate, or temporarily suspend the operation of this Agreement, at its sole
discretion if:

                 a.  if the default is capable of being remedied, and within ten
                     (10) working days of written notice by the non-defaulting
                     party specifying the default, said default is not remedied;
                     or

                 b.  if the default is not capable of being remedied.

          5.2.2  Horizon Holdings I, LLC may terminate this Agreement prior to
the completion of said services, payments and other obligations, by paying as
liquidated damages to InsynQ, any amount that would be due upon completion of
any then unfinished Schedule.

6  Service Transfer Assistance.

          6.1.1  Upon termination of this Agreement, for any reason, the
Facilities Manager will return to the Owner, the following:

                 a.  all computer equipment and software;
                 b.  all of the Owner's data;
                 C.  all supporting Documentation;
                 d.  all security and access keys or codes that apply to the
                     System;
                 e.  any and all third-party service agreements and software
                     licenses provided in relation to the System.

          6.1.2  The Facilities Manager will within four (4) days of termination
of this Agreement, certify in writing to the Owner that is has erased or
returned any copies of the Owner's Software or data that were held off-site for
back-up purposes.

                                 Page 4 of 11
<PAGE>

          6.1.3  Each Party agrees to return to the other Party any and all
other property belonging to the other Party acquired during the period of this
Agreement.

          6.1.4  The Facilities Manager will fully co-operate with the Owner,
making available the Facilities Manager's staff as reasonably required to
facilitate the hand-over of the System to the Owner or the Owner's agent.

7  Venue, Disputes and Remedies.

     7.1  Venue.

          7.1.1  This Agreement shall be governed under the laws of the State of
Washington, United States of America.

     7.2  Mediation.

     Disputes where the claim exceeds Two Thousand Five Hundred Dollars
($2,500.00) will be submitted at the request of either party to Washington
Mediation and Arbitration Services, Inc. for binding arbitration in Seattle, and
enforced in any court with jurisdiction. Claims of Two Thousand Five Hundred
Dollars ($2,500.00) or less may be submitted to arbitration by Agreement of both
parties.

     The Parties agree to use their best efforts to resolve any dispute that may
arise under the Agreement through good faith negotiations.

          7.2.1  Any dispute arising under this Agreement that cannot be settled
by good faith negotiation between the Parties or their respective
representatives shall be mediated before resorting to arbitration or court
action. Each Party may initiate mediation by giving written notice to the other
Party.

          7.2.2  The Parties shall continue to perform their obligations under
this Agreement as far as possible as if no dispute had arisen pending the final
settlement of any matter referred to mediation.

          7.2.3  Nothing in this clause shall preclude either Party from taking
immediate steps to seek urgent equitable relief before a Washington Court.

     7.3  Actions.

     In the event a suit arises between the parties to enforce any of the terms
of this Agreement the prevailing party will be entitled to reasonable attorneys
fees' and costs of suit therein.

                                 Page 5 of 11
<PAGE>

8  Confidentiality.

          8.1.1  Both Parties agree that it will keep confidential, protect
against disclosure or discovery, and refrain from making use of confidential
information revealed by the other. Confidential information includes nonpublic
information regarding identities of customers and sources, billing rates for
services, and the contents of any document marked "confidential."

          8.1.2  Both Parties agree that, unless they have prior written consent
of the other, they will not use or disclose to any third party (other than for
the purpose of performing this Agreement) the terms and conditions of this
Agreement or any other information confidential to the other party. The
obligations of this Section 8 shall survive termination or cancellation of this
Agreement.

9  Indemnity.

     9.1  Intellectual Property Rights Indemnity.

     Each Party agrees to indemnify the other Party from and against any claim,
suit, action or proceeding (collectively called "Action") brought against the
other Party to the extent that such Action is based upon a claim that any
products or services provided by the other party infringes any patent,
copyright, trade secret or other proprietary rights provided that:

          9.1.1  The Party claiming an indemnity fully cooperates with the
indemnifying party in defending or settling the Action and makes its employees
available to give statements, advice and evidence as the indemnifying party may
reasonably request;

          9.1.2  The indemnifying Party is notified promptly in writing of any
Action by the Party claiming indemnity and is given complete authority and
information required for the conduct of the defense or settlement of the Action;

     The indemnifying Party shall have the sole control of the conduct of any
Action and all negotiations for its settlement, compromise or resolution.

     9.2  Hold Harmless.

     The Parties shall each hold the other harmless, except for the negligence
and/or breach of express warranties as implied herein. The Parties shall each
indemnify, protect, defend and hold harmless, the other Party and its agents,
partners, Lenders, heirs or assigns from and against any and all claims, loss of
rents and/or damages, costs, liens, judgments, penalties, loss of permits,
attorneys' and consultants' fees, expenses and/or liabilities arising out of,
involving, or in connection with the services as stated herein, the conduct of
business, any act, omission or negligence, its agents, contractors, employees or
invitees, and out of any Default or Breach by the Party in the performance of
services to performed under this Agreement.

                                 Page 6 of 11
<PAGE>

          9.2.1  The foregoing shall include, but not be limited to, the defense
or pursuit of any claim or any action or proceeding involved therein, and
whether or not litigated and/or reduced to judgment. In case any action or
proceeding be brought against Horizon Holdings I, LLC by reason of any of the
foregoing matters' InsynQ upon notice from Horizon Holdings I, LLC shall defend
the same at InsynQ's expense by counsel reasonably satisfactory to Horizon
Holdings I, LLC and Horizon Holdings I, LLC shall cooperate with InsynQ in such
defense. Horizon Holdings I, LLC need not have first paid any such claim in
order to be so indemnified.

10 Warranties.

     InsynQ hereby warrants that:

          10.1.1 The System will at all times be kept safe and secure and will
operate in accordance with the relevant criteria and specifications set out in
this Agreement;

          10.1.2 The Services will comply with the Service Levels pursuant
Section 2.2 herein;

          10.1.3 InsynQ will carry out its obligations with care, skill and
diligence and shall employ techniques, methods and procedures of a quality and
standard in accordance with currently accepted computing practice;

          10.1.4 InsynQ warrants that, in the creation of any work product for
Horizon Holdings I, LLC, it will not knowingly infringe any copyright, trade
secret, patent or other intellectual property right held by a third party.

          10.1.5 InsynQ further warrants that it has the full power and
authority to enter into and perform this Agreement in accordance with its terms
and that performance of its obligations hereunder will not conflict with any
obligation or duty owed to any third party or infringe the rights of any third
party.

          10.1.6 InsynQ will, at its own election, perform repairs or
replacement of any work performed by InsynQ that fails to meet the agreed upon
specifications or in the alternative InsynQ will refund such amounts paid by
Horizon Holdings I, LLC for such services, provided that Horizon Holdings I, LLC
notifies InsynQ in writing within thirty (30) days of any such failure.

11 Limitations of Warranties.

          11.1.1 The warranties stated in Section 11 of this Agreement shall
replace all other representations and warranties (statutory, express or implied)
and all such representations and warranties are expressly excluded, including,
without limitation, the implied warranties of merchantability and fitness for
any particular purpose stated herein.

                                 Page 7 of 11
<PAGE>

          11.1.2 InsynQ will not be liable, except for any fraudulent or
negligent acts, under the law of tort, contract or otherwise for any loss of
profits or savings or for any indirect or consequential loss or damage, however
caused, arising out of or in connection with the performance or non-performance
of this Agreement.

12 Force Majeure.

     Neither party will be liable for any act, omission, or failure which arises
from any cause reasonably beyond its control, including acts of God, strikes,
lockouts, riots, acts of war, epidemics, governmental action after the date
of this Agreement, fire, communication line failures, power failures,
earthquakes or other disasters (called "Force Majeure").

     The party unable to fulfil its obligations due to Force Majeure will
immediately:

          12.1.1 Notify the other in writing of the reasons for its failure to
fulfil its obligations and the effect of such failure; and

          12.1.2 Take all reasonable steps to avoid or remove the cause and
perform its obligations.

13 Use of Work Product.

          13.1.1 Owner will own all copyright, trade secret and patent rights in
any programs, deliverables, or other materials or work-product prepared for or
delivered by InsynQ in the performance of its duties pursuant to this Agreement.

14 Staff.

          14.1.1 InsynQ is an independent contractor, and neither it nor its
staff, subcontractors or associates will be deemed to be employees of Horizon
Holdings I, LLC for any purpose.

          14.1.2 During the term of this Agreement, and for a period of two
years following termination of this Agreement, neither party shall solicit the
services directly or indirectly, of the other Party's personnel without the
express written consent and approval of said Party.

          14.1.3 InsynQ's employees, subcontractors and associates are obligated
under their contracts with InsynQ not to provide services independently to
InsynQ's clients during their work for InsynQ and for two years thereafter. If
Owner recruits, employs or retains the services of any known InsynQ employee,
subcontractor or associate who has been hired to perform services for or on
behalf of Owner and in violation of such Agreement, Owner will pay InsynQ a
training/finders fee of Forty-five Thousand Dollars ($45,000.00) or, if greater,
one-third the amount that Owner pays to such employee, subcontractor, or
associate during the first year of their employment by or performance of
services to Owner.

                                 Page 8 of 11
<PAGE>

     The obligations of this Section 14 shall survive termination or
cancellation of this Agreement.

15 Assignment.

     This Agreement binds the parties' respective successors and permitted
assigns. Neither party may assign this Agreement or any of its rights or
obligations hereunder without the prior written consent of the other party which
consent may not unreasonably be withheld.

16 Waiver.

     A failure of either party to exercise any of its rights provided for herein
shall not be deemed a waiver of any right.

17 Severability.

     If any provision of this Agreement is held to be invalid, illegal or
unenforceable, such provision will be severed and the remainder of this
Agreement will remain in full force and effect.

18 Notices.

     Notices under this Agreement should be sent to the address set forth below
or to such subsequent address as the Party may designate in writing:

     If to Horizon Holdings I, LLC:      If to InsynQ:

     Horizon Holdings I, LLC             InsynQ
     201 Third Street, Loft 1            705 South 9/th/ Street, Suite 305
     Oakland, California 94607           Tacoma, Washington 98405

     Telephone: (510) 465-4248           Telephone: (206) 627-7674
     Facsimile: (510) 465-3560           Facsimile: (206) 404-3854

19 Amendments.

     Any modification to or variation of this Agreement must be in writing and
signed by the authorized representatives of the Facilities Manager and the
Owner.

20 Entire Agreement.

     This Agreement, including the Schedules, constitutes the entire agreement
between Horizon Holdings I, LLC and InsynQ. There are not other understandings
affecting the arrangements between the Parties other than those set out herein
and this Agreement replaces all prior agreements and understandings, if any,
with respect to the subject matter of this Agreement.

                                 Page 9 of 11
<PAGE>

21 Titles and Headings.

     The titles and headings used herein are for the convenience of the reader
and shall not be construed for any other purpose or intent.

22 Attorney Consultation.

     The parties shall rely solely upon the advice of their own legal counsel as
to the legal consequences of entering into this Agreement.

23 Acknowledgement.

     THE PARTIES HAVE CAREFULLY READ AND REVIEWED THIS AGREEMENT AND EACH TERM
AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTiON HEREOF ACKNOWLEDGE THAT
THIS AGREEMENT HAS BEEN FULLY NEGOTiATED, AND SHOW THEIR INFORMED AND VOLUNTARY
CONSENT THERETO.

        [THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]

                                 Page 10 of 11
<PAGE>

Dated: 7-15-99                       HORIZON HOLDINGS I, LLC
                                     By Its Manager HORIZON PARTNERS
                                     NORTHWEST, INC.

                                     By /s/ Michael R. Bartlett
                                       --------------------------------------
                                     Michael R. Bartlett, President

Dated: 7-15-99                       InsynQ

                                     By /s/ John P. Gorst
                                       --------------------------------------

                                     (Name) John P. Gorst
                                     ----------------------------------------

                                     Its  CEO
                                        -------------------------------------

                                 Page 11 of 11
<PAGE>

                                                               EXECUTIVE SUMMARY
--------------------------------------------------------------------------------

Owner of Record:               Horizon Holdings I, LLC.

Property Name:                 Tacoma Technology Center.

Location:                      1441 Court A, Tacoma, Washington 98402

Property Type:                 Technological telecommunications and co-location
                               facility.

Assessor's Parcel Number:      201402 003 0.

Property Taxes:                $6,002.10/1999 ("As Is").
                               $1,120.93 (BIA Tax for 1999-2000).
                               $1,794.70 (Delinquent BIA Tax for 1998-99).

Zoning:                        B-Business, City of Tacoma.

Flood Insurance Zone:          Zone C per Community Panel Map 530148, Panel
                               0025 B, effective date 12/1/83.

Total Site Area:               8,515 square feet per county records.

Improvements:                  The subject site is currently improved with a 1
                               920s vintage, three story commercial building
                               with a basement, formerly utilized as the Lyons
                               Building, a furniture storage warehouse. The
                               solid poured concrete structure has a gross
                               building area of 23,001 sq.ft. and a rentable
                               area of 13,447 sq.ft. As converted, the existing
                               improvements are utilized as a state-of-the-art
                               telecommunications and co-location facility. Of
                               the three levels plus the basement, a 2,700
                               sq.ft. computer room on the second floor has been
                               finished to date. This co-location facility is
                               currently furnished with 27 equipment racks,
                               three of which are currently utilized, which will
                               be leased on a per rack basis to

________________________________________________________________________________
                                                                          Page 1
<PAGE>

                                                               EXECUTIVE SUMMARY
--------------------------------------------------------------------------------

                                 high-technology users such as Internet service
                                 providers (ISPs) and to others who require a
                                 secure environment with interconnectivity for
                                 their equipment. The building provides high
                                 speed bandwidth, multiple carrier alternatives,
                                 24-hour security and on-site management, and
                                 redundant power through on-site back-up
                                 systems, fire suppression, and climate control.
                                 Other than the 2,700 sq.ft. co-location room,
                                 10,747 sq.ft. of rentable area in the remainder
                                 of the building is currently vacant and
                                 unfinished, although the redundant power
                                 systems occupy a portion of the basement and
                                 the exterior loading dock.

Highest and Best Use:            The current use represents a highest and best
                                 use.

Date of Appraisal:               October 5, 1999

Forecast Date of Stabilization:  October 2002

________________________________________________________________________________
                                                                          Page 2
<PAGE>

                                                               EXECUTIVE SUMMARY
--------------------------------------------------------------------------------

  =========================================================================

                               VALUE INDICATIONS

     Prospective Value Estimate "At Completion/Stabilization"
     --------------------------------------------------------------------
     Income Approach:                                          $4,050,000
     Cost Approach:                                                   N/A
     Sales Comparison Approach:                                $4,050,000

     Prospective Going-Concern Value Estimate
     --------------------------------------------------------------------
     Income Approach:                                          $6,900,000

     Market Value Estimate "As Is"
     --------------------------------------------------------------------
     Income Approach:                                          $2,025,000
     Cost Approach:                                                   N/A
     Sales Comparison Approach:                                $2,025,000

  =========================================================================

INTENDED USE AND USER OF THE APPRAISAL

     This is a Complete Self-Contained Appraisal Report which is intended to be
used by the client, U.S. Bancorp, for evaluating a potential mortgage relevant
to the subject property.

     Intended Use is defined as: "The use or uses of an appraiser's reported
appraisal, consulting, or review assignment opinions and conclusions, as
identified by the appraiser based on communication with the client at the time
of the assignment."/1/

     Intended User(s) is defined as: "The client and any other party as
identified, by the name or type, as users of the appraisal, consulting, or
review report, by the appraiser based on communication with the client at the
time of assignment."/2/

     A Client is defined as: "The party or parties who engages an appraiser (by
employment or contract) in a specific assignment."/3/

____________________

/1/ Uniform Standards of Professional Appraisal Practice, Appraisal Standards
Board, The Appraisal Foundation, 1998 Edition, Definitions, Page 9.

/2/ Ibid.

/3/ Ibid.

________________________________________________________________________________
                                                                          Page 3
<PAGE>

                                                               EXECUTIVE SUMMARY
--------------------------------------------------------------------------------

     This report is intended for use only by U.S. Bancorp, (the client), and any
other users as authorized by the client. Use of this report by others is not
intended by the appraisers.

PROPERTY RIGHTS APPRAISED

     The property rights appraised for the subject property "as is" as of the
date of appraisal, is the fee simple estate, defined in the Appraisal
Institute's Dictionary of Real Estate Appraisal, 3rd Edition as: "Absolute
ownership unencumbered by any other interest or estate, subject only to the
limitations imposed by the governmental powers of taxation, eminent domain,
police power, and escheat."

     With regard to our prospective value estimates "as stabilized," the
property will be subject to lease agreements. Thus, the property rights
appraised for the prospective value estimates herein are those of the leased fee
estate, defined in the Appraisal Institute's Dictionary of Real Estate
Appraisal, 3rd Edition as: "An ownership interest held by a landlord with the
right of use and occupancy conveyed by lease to others. The rights of the lessor
(the leased fee owner) and the leased fee are specified by contract terms
contained within the lease."

APPRAISAL DEVELOPMENT AND REPORTING PROCESS

     The development and reporting process for this appraisal encompasses
necessary research and analysis to prepare a report in accordance with the
Standards of Professional Appraisal Practice of the Appraisal Institute and the
Uniform Standards of Professional Appraisal Practice (USPAP) of The Appraisal
Foundation, as well as the report writing requirements of U.S. Bancorp.

     Several steps were taken in this process. First was inspecting and
photographing the property on October 5, 1999. Information regarding the
improvements, the marketing plan, and prospective occupants were provided during
a meeting with the owner's agent, Andrea S.H. Peterson of Colliers International
(253-926-5334). Forecast pro forma income and expense information and general
background material were provided by the owner. Next, regional, county and
neighborhood data were gathered from the latest information available from
various authoritative sources. More particularly, the neighborhood and the
marketability analysis were based upon physical inspection and observation,
interviews with market participants, as well as surveys of the Tacoma office

________________________________________________________________________________

                                                                          Page 4
<PAGE>

     market by various local real estate brokerages, and our survey of
     prospective co-location users. The regional "carrier hotel" facility, the
     Westin Building in downtown Seattle, and additional regional co-location
     facilities in Seattle were also surveyed and inspected.

          In estimating the highest and best use for the property, an analysis
     was made of the data compiled in the steps above. The approaches to value
     were developed through the market data collected by the appraisers from
     building and property managers for the comparable rental data and
     additionally from county records and COMPS, Inc. for the comparable sales
     data. Use of this data also included interviews with the managers, buyers
     and/or sellers or brokers of such properties. After assembling and
     analyzing the data, as defined within this appraisal development process,
     the final estimates of value were made.

     LEGAL DESCRIPTION

          The brief legal description for the subject property, as provided by
     the building plans, is as follows:

          The south 19 1/2 feet of Lot 2 and all of Lots 3 and 4, Block 1402,
          Map of New Tacoma, Washington Territory, according to plat recorded
          February 3, 1897, in Pierce County, WA.

          Except that portion of said Lot 2 conveyed to the City of Tacoma for
          "A" Street, by deed recorded in Book 91 of Deeds, page 376.

          Together with that portion of Jefferson Avenue westerly of said
          premises, south of the north boundary line of said premises extended
          westerly, east of the westerly line of Block 1402 1/2 extended south
          and north of the south line of Lot 4 extended westerly, vacated by
          Ordinance No. 619, City of Tacoma.

     SALES HISTORY

          Ownership of the subject property is currently vested in Horizon
     Holdings, LLC (Michael R. Bartlett, 510-465-4248). The current owners
     acquired the subject property and the adjacent former Schoenfelds Building
     (now Total Renal Care -- the TRC Tower) in a multiple parcel acquisition.
     The date of sale was September 10, 1998 and the total consideration was
     $2,300,000. The subject property consists of the former Lyons

     ---------------------------------------------------------------------------
                                                                          Page 5
<PAGE>

     Building, which includes an individual tax parcel located southerly of the
     TRC Tower across Court A. The acquisition price of the subject property was
     not segregated within the overall sale price.

          The subject's owner renovated the TRC Tower and leased the majority of
     the building to Total Renal Care. The owner converted the subject portion
     of the acquisition into a speculative telecommunications and co-location
     facility. According to the owner, the subject property is not under any
     pending contract of sale, nor is it currently listed for sale.

     EXPOSURE TIME / MARKETING PERIOD

          Exposure time is defined as "The estimated length of time the property
     interest being appraised would have been offered on the market prior to the
     hypothetical consummation of a sale at market value on the effective date
     of appraisal; a retrospective estimate based upon an analysis of past
     events assuming a competitive and open market."/4/

          A reasonable marketing time or period is "an estimate of the amount of
     time that it might take to sell a property interest in the real estate at
     the estimated market value level during the period immediately after the
     effective date of the appraisal. The estimate of marketing time uses some
     of the data analyzed in the process of estimating reasonable exposure time
     as part of the appraisal process and is not intended to be a prediction of
     a date of sale or a one-line statement. It is an integral part of the
     analyses conducted during the appraisal assignment." The estimate of
     "reasonable marketing time is a function of price, time, use and
     anticipated market conditions such as changes in the cost and availability
     of funds; not an isolated estimate of time alone." The estimate of
     reasonable marketing time can be based on "statistical information about
     days on the market; information gathered through sales verification;
     interviews of market participants; and anticipated changes in market
     conditions."/5/

          In order to estimate reasonable exposure and marketing periods for the
     subject property "as stabilized," we researched numerous sales of office
     properties in the subject area, AS this property type is the most similar
     in terms of use and CBD location. Further, buyers, sellers and/or brokers
     were contacted relevant to the sales utilized herein to

     --------------
     /4/ Ibid., SMT-6, p 77.
     /5/ Ibid., Advisory Opinion AO-7, p 109.

     ---------------------------------------------------------------------------
                                                                          Page 6
<PAGE>

                                                               EXECUTIVE SUMMARY
     ===========================================================================

     estimate market value and an appropriate marketing time for the subject. In
     addition, statistics on average marketing time a national scope were
     provided by Korpacz./6/ National CBD Offices in the current quarter
     reported an average marketing time of 8.36 months, compared with 8.64
     months reported one year ago.

          The exposure period for the subject property as proposed is estimated
     at less than one year. This estimate is based on the strength in the
     subject's market area as discussed in the Area and Neighborhood Description
     and in the Highest and Best Use section of the report, along with the
     actual exposure time exhibited by recent sales of somewhat similar
     competing properties, and is supported by national statistics.

          In estimating the marketing time for the subject as stabilized, we
     have relied on the same information as for the exposure time. We have
     considered the specific location and economic trends currently impacting
     the subject location. Also considered in an historical context were the
     marketing periods exhibited by the comparable sales delineated in the Sales
     Comparison Approach.

          Based on observations in the immediate market area, and sales
     of properties in the area not necessarily utilized directly in the analysis
     herein, as well as on the empirical evidence exhibited by the improved
     sales utilized directly in this appraisal, we conclude that if the property
     were to be marketed, it seems probable that a purchaser could be found
     within a reasonable marketing time of less than twelve months. This topic
     was discussed with several agents active in the Tacoma Central Business
     District, all of which believed a marketing period of less than twelve
     months is realistic. The value conclusion herein is arrived at with
     reference to this estimated marketing time.

     UNAVAILABILITY OF INFORMATION

          The appraisers received adequate information to complete the
     appraisal.

     -------------------
     /6/ Korpacz Real Estate Investor Survey, PriceWaterhouseCoopers, Third
     Quarter 1999, Volume 12, No. 3.

     ---------------------------------------------------------------------------
                                                                          Page 7
<PAGE>

                                                               EXECUTIVE SUMMARY
     ===========================================================================

     FIRREA REQUIREMENTS

          The Financial Institution Reform, Recovery and Enforcement Act
     (FIRREA) was enacted by Congress in 1989. The federal regulatory agencies
     (Federal Deposit Insurance Corporation, Office of Thrift Supervision,
     Office of the Comptroller of the Currency and the Federal Reserve) have all
     issued final appraisal regulations in response to FIRREA. There are a
     number of specific issues that must be addressed in every appraisal report
     in order to comply fully with FIRREA requirements as they have been
     amended. The following information may or may not be discussed further in
     the body of this report, depending on the complexity of each issue as it
     relates to a specific appraisal assignment. The appraisers have, however,
     summarized the conclusions relevant to several of the FIRREA requirements
     below, as an aide to the reader. Each category references the relevant
     section in the FIRREA regulations as noted in 12 CFR Chapter 1 for the
     Office of the Comptroller of the Currency appraisal requirements which it
     addresses.

     SECTION 34.44 (a)
     CONFORMANCE WITH USPAP

          It is the intention of the appraisers that this report does not depart
     from USPAP requirements and conforms to generally accepted appraisal
     standards.

     SECTION 34.44 (b)
     WRITTEN APPRAISALS

          It is the intent of the appraisers that this report be sufficiently
     descriptive to enable a reviewer to readily ascertain the estimated value
     reported and the rationale for that estimate.

     SECTION 34.44 (c)
     DEDUCTIONS AND DISCOUNTS

          The appraisal reports the estimated value of the specified interests
     in the subject property "as is" as of the date of appraisal and the
     prospective value "at stabilization/completion." No unusual deductions were
     considered appropriate for the completion of the appraisal. Therefore, no
     additional discounting of market value cash

     ---------------------------------------------------------------------------
                                                                          Page 8
<PAGE>

                                                               EXECUTIVE SUMMARY
     ===========================================================================

     flows beyond that typically applied was deemed necessary to achieve a
     market value estimate.

     SECTION 34.44 (d)
     MARKET VALUE

          "Market Value" is defined as the most probable price which a property
     should bring in a competitive and open market under all conditions
     requisite to a fair sale, the buyer and seller, each acting prudently,
     knowledgeably and assuming the price is not affected by undue stimulus.
     Implicit in this definition is the consummation of a sale as of a specified
     date and the passing of title from seller to buyer under conditions
     whereby:

               Buyer and seller are typically motivated.

               Both parties are well informed or well advised, and acting in
               what they consider their own best interests.

               A reasonable time is allowed for exposure in the open
               market.

               Payment is made in terms of cash in U.S. dollars or in terms
               of financial arrangements comparable thereto.

               The price represents the normal consideration for the
               property sold, unaffected by special/creative financing or sales
               concessions granted by anyone associated with the sale./7/

     SECTION 34.44 (e)
     STATE LICENSED APPRAISERS

          Each of the appraisers signing this report are certified by the State
     of Washington as Certified General Real Estate Appraisers.

     -------------
     /7/ Office of the Comptroller of the Currency under 12 CFR, Part 34,
     Subpart C - Appraisals, 34.42 Definitions (f).)

     ---------------------------------------------------------------------------
                                                                          Page 9

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