Document:

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                                                                     EXHIBIT 4.4

                                 $1,500,000,000

                    STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

                                  $700,000,000
                          7.375% SENIOR NOTES DUE 2007

                                  $800,000,000
                          7.875% SENIOR NOTES DUE 2012

                          REGISTRATION RIGHTS AGREEMENT

            THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of April 19, 2002 by and among Starwood Hotels & Resorts
Worldwide, Inc., a Maryland corporation (the "Company"), each of the Guarantors
listed on the signature pages hereto (subject to Section 16.5 of the Indenture
(defined below), the "Guarantors") and Lehman Brothers Inc., Deutsche Bank
Securities Inc., J.P. Morgan Securities Inc., SG Cowen Securities Corporation ,
Bank of America Securities LLC, Credit Lyonnais Securities (USA) Inc., Fleet
Securities, Inc., BMO Nebittt Burns Corp., Bear, Stearns & Co. Inc., and Scotia
Capital (USA) Inc. (collectively, the "Initial Purchasers").

            This Agreement is made pursuant to the Purchase Agreement dated
April 11, 2002 (the "Purchase Agreement"), by and among the Company, as issuer
of the $1,500,000,000 aggregate principal amount of 7.375% Senior Notes due 2007
(the "5-Year Notes") and 7.875% Senior Notes due 2012 (the "10-Year Notes", and
together with the 5-Year Notes, the "Notes") to be guaranteed (the "Guarantees")
by the Guarantors, the Guarantors and the Initial Purchasers, which provides
for, among other things, the sale by the Company to the Initial Purchasers of
the aggregate principal amount of Notes specified therein. In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Company and the
Guarantors have agreed to provide to the Initial Purchasers and their direct and
indirect transferees the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the closing under the
Purchase Agreement. The Notes will be issued pursuant to an Indenture, dated as
of April 19, 2002 (the "Indenture"), among the Company, the Guarantors and U.S.
Bank National Association, as trustee (the "Trustee"). Unless the context
otherwise requires, any reference herein to the "Notes," "Exchange Notes" or
"Registrable Notes" shall include a reference to the related Guarantees.

            In consideration of the foregoing, the parties hereto agree as
follows:

            1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:

      "Additional Interest" shall have the meaning set forth in Section 2(e)
hereof.
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      "Advice" shall have the meaning set forth in the last paragraph of Section
3 hereof.

      "Affiliate" has the meaning given to that term in Rule 144 under the
Securities Act or any successor rule thereunder.

      "Applicable Period" shall have the meaning set forth in Section 3(u)
hereof.

      "Business Day" shall mean any day other than a Saturday, a Sunday, or a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed.

      "Closing Date" shall mean April 19, 2002 the initial date of delivery of
the Notes from the Company to the Initial Purchasers.

      "Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.

      "Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company; provided, however, that such depositary
must have an address in the Borough of Manhattan, The City of New York.

      "Effectiveness Period" shall have the meaning set forth in Section 2(b)
hereof.

      "Effectiveness Deadline" shall have the meaning set forth in Section 2(e)
hereof.

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.

      "Exchange Notes" shall mean the 7.375 % Senior Notes due 2007 and the
7.875% Senior Notes due 2012 issued by the Company and guaranteed by the
Guarantors under the Indenture containing terms identical in all material
respects to the Notes (except that (i) interest thereon shall accrue from the
last date on which interest was paid or duly provided for on the Notes or, if no
such interest has been paid, from the date of their original issue, (ii) they
will not contain terms with respect to transfer restrictions under the
Securities Act, and (iii) they will not provide for any Additional Interest
thereon.

      "Exchange Offer" shall mean the offer by the Company and the Guarantors to
the Holders to exchange all of the Registrable Notes held by each Holder thereof
for a like amount of Exchange Notes pursuant to Section 2(a) hereof.

      "Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.

      "Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all documents incorporated by reference therein.

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      "Exchange Period" shall have the meaning set forth in Section 2(a) hereof.

      "Guarantors" shall have the meaning set forth in the preamble to this
Agreement.

      "Holder" shall mean any Initial Purchaser, for so long as it owns any
Registrable Notes, and each of its successors, assigns and direct and indirect
transferees who become registered owners of Registrable Notes under the
Indenture.

      "Indenture" shall mean the Indenture, dated as of April 19, 2002, among
the Company, as issuer, the Guarantors and U.S. Bank National Association, as
trustee, as the same may be amended or supplemented from time to time in
accordance with the terms thereof.

      "Initial Purchasers" shall mean the purchasers named in the Purchase
Agreement.

      "Inspectors" shall have the meaning set forth in Section 3(p) hereof.

      "Majority Holders" shall mean the Holders of a majority of the aggregate
principal amount of outstanding Notes or Exchange Notes, as the case may be.

      "Notes" shall have the meaning set forth in the preamble to this
Agreement.

      "Participating Broker-Dealer" shall have the meaning set forth in Section
3(u) hereof.

      "Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof or other legal entity.

      "Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Notes covered by a Shelf Registration Statement, and by all other
amendments and supplements to a prospectus, including post-effective amendments,
and in each case including all documents incorporated by reference therein.

      "Purchase Agreement" shall have the meaning set forth in the preamble to
this Agreement.

      "Records" shall have the meaning set forth in Section 3(p) hereof.

      "Registrable Notes" shall mean the Notes, until the earliest to occur of
(a) the date on which any Note has been exchanged by a Person other than a
Participating Broker-Dealer for Exchange Notes in the Exchange Offer, (b)
following the exchange by a Broker-Dealer in the Exchange Offer of any Note for
one or more Exchange Notes, the date on which such Exchange Notes are sold to a
purchaser in accordance with the Exchange Offer Registration Statement, (c) the
date on which any Note has been registered under the Securities Act and disposed
of in accordance with the Shelf Registration Statement and (d) the date on which
any Note is eligible to be distributed to the public pursuant to Rule 144(k)
under the Securities Act.

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      "Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company and the Guarantors with this
Agreement, including without limitation: (i) all SEC or National Association of
Securities Dealers, Inc. (the "NASD") registration and filing fees, including,
if applicable, the fees and expenses of any "qualified independent underwriter"
(and its counsel) that is required to be retained by any Holder of Registrable
Notes in accordance with the rules and regulations of the NASD, (ii) all fees
and expenses incurred in connection with compliance with state securities or
blue sky laws (including reasonable fees and disbursements of one counsel for
all underwriters and Holders as a group in connection with blue sky
qualification of any of the Exchange Notes or Registrable Notes not exceeding
$5,000 in the aggregate) and compliance with the rules of the NASD, (iii) all
expenses of the Company in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus and any
amendments or supplements thereto, and in preparing or assisting in preparing,
printing and distributing any underwriting agreements, Notes sales agreements
and other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) the fees and disbursements of
counsel for the Company and of the independent certified public accountants of
the Company and its subsidiaries, including the expenses of any "cold comfort"
letters required by or incident to the performance of and compliance with this
Agreement, (vi) the reasonable fees and expenses of the Trustee and its counsel
and any exchange agent or custodian, and (vii) the reasonable fees and expenses
of any special experts retained by the Company in connection with any
Registration Statement.

      "Registration Statement" shall mean any registration statement of the
Company which covers any of the Exchange Notes or Registrable Notes pursuant to
the provisions of this Agreement, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.

      "Rule 144(k) Period" shall mean the period of two years (or such shorter
period as may hereafter be referred to in Rule 144(k) under the Securities Act
(or similar successor rule)) commencing on the Closing Date.

      "SEC" shall mean the Securities and Exchange Commission.

      "Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.

      "Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.

      "Shelf Registration Event" shall have the meaning set forth in Section
2(b) hereof.

      "Shelf Registration Event Date" shall have the meaning set forth in
Section 2(b) hereof.

      "Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 2(b) hereof which covers
all of the Registrable Notes (except Registrable Notes which the Holders have
elected not to include in such Shelf Registration Statement or the Holders of
which have not complied with their obligations under the penultimate paragraph
of Section 3 hereof or under the first paragraph of Section 2(b) hereof) on an
appropriate form under Rule 415 under the Securities Act, or any similar rule
that may be

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adopted by the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all documents
incorporated by reference therein.

      "TIA" shall have the meaning set forth in Section 3(m) hereof.

      "Trustee" shall mean the trustee under the Indenture.

            2. Registration Under the Securities Act.

            (a) Exchange Offer. Except as set forth in Section 2(b) below, the
Company and the Guarantors shall, for the benefit of the Holders, at the
Company's and the Guarantors' cost, (i) file with the SEC within 180 calendar
days after the Closing Date an Exchange Offer Registration Statement on an
appropriate form under the Securities Act relating to the Exchange Offer, (ii)
use their reasonable efforts to cause such Exchange Offer Registration Statement
to be declared effective under the Securities Act by the SEC not later than the
date which is 270 calendar days after the Closing Date, and (iii) provided such
Exchange Offer Registration Statement has been declared effective under the
Securities Act by the SEC, commence the Exchange Offer and keep the Exchange
Offer open for not less than 30 business days, or longer if required by
applicable law, after the date on which such Registration Statement was declared
effective by the SEC (such period referred to herein as the "Exchange Period")
and at the termination thereof issue, Exchange Notes in exchange for all
Registrable Notes tendered prior thereto in the Exchange Offer.

            Each Holder of Registrable Notes to be exchanged in the Exchange
Offer shall be required, as a condition to participating in the Exchange Offer,
to represent that it acquires the Exchange Notes in the ordinary course of such
Holder's business and that it (i) is not an Affiliate of the Company, (ii) does
not hold any Notes to be exchanged for Exchange Notes in the Exchange Offer that
were acquired other than in the ordinary course of business, (iii) is not a
broker-dealer tendering Registrable Notes acquired directly from the Company,
(iv) at the time of the Exchange Offer, has no arrangements or understandings
with any Person to participate in the Exchange Offer for the purpose of
distributing the Exchange Notes.

            In connection with the Exchange Offer, the Company and the
Guarantors shall:

      (i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;

      (ii) utilize the services of the Depositary for the Exchange Offer with
respect to Notes represented by a global certificate;

      (iii) permit Holders to withdraw tendered Registrable Notes at any time
prior to the close of business, New York City time, on the last Business Day of
the Exchange Period, by sending to the institution specified in the notice to
Holders, a telegram, telex, facsimile transmission or letter setting forth the
name of such Holder, the principal amount of Registrable Notes delivered for
exchange, and a statement that such Holder is withdrawing his election to have
such Registrable Notes exchanged;

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      (iv) notify each Holder that any Registrable Security not tendered by such
Holder in the Exchange Offer will remain outstanding and continue to accrue
interest but will not retain any rights under this Agreement (except in the case
of the Initial Purchasers and Participating Broker-Dealers as provided herein);
and

      (v) otherwise comply in all material respects with all applicable laws and
regulations relating to the Exchange Offer.

            As soon as practicable after the close of the Exchange Offer, the
Company and the Guarantors shall:

      (i) accept for exchange all Registrable Notes or portions thereof duly
tendered and not validly withdrawn pursuant to the Exchange Offer in accordance
with the terms of the Exchange Offer Registration Statement and letter of
transmittal;

      (ii) deliver, or cause to be delivered, to the Trustee for cancellation
all Registrable Notes or portions thereof so accepted for exchange by the
Company; and

      (iii) issue, and cause the Trustee under the Indenture to promptly
authenticate and deliver to each Holder, Exchange Notes equal in principal
amount to the principal amount of the Notes as are surrendered by such Holder.

            Interest on each Exchange Note issued pursuant to the Exchange Offer
will accrue from the last date on which interest was paid or duly provided for
on the Note surrendered in exchange therefor or, if no interest has been paid on
such Note, from the date of original issue of such Note. To the extent not
prohibited by any judicial order, judgment, law, regulation or applicable
interpretation of the staff of the SEC, the Company and the Guarantors shall use
reasonable efforts to complete the Exchange Offer as provided above, and shall
comply with the applicable requirements of the Securities Act, the Exchange Act
and other applicable laws and regulations in connection with the Exchange Offer.
The Exchange Offer shall not be subject to any conditions other than the
conditions referred to in Section 2(b)(i) and (ii) below and those conditions
that are customary in similar exchange offers, except as may be required by
applicable law. Each Holder of Registrable Notes who wishes to exchange such
Registrable Notes for Exchange Notes in the Exchange Offer will be required to
make certain customary representations in connection therewith, including, in
the case of any Holder, representations that (i) it is not an Affiliate of the
Company, (ii) it is not a broker-dealer tendering Registrable Notes acquired
directly from the Company, (iii) the Notes being exchanged, and the Exchange
Notes to be received, by it have been or are being acquired in the ordinary
course of its business and (iv) at the time of the Exchange Offer, it has no
arrangements or understandings with any Person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange Notes.
The Company shall inform the Initial Purchasers, after consultation with the
Trustee, of the names and addresses of the Holders to whom the Exchange Offer is
made, and the Initial Purchasers shall have the right to contact such Holders in
order to facilitate the tender of Registrable Notes in the Exchange Offer.

            Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to

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Exchange Notes held by Initial Purchasers and Participating Broker-Dealers, and
the Company and the Guarantors shall have no further obligation to register the
Registrable Notes held by any other Holder pursuant to Section 2(b) of this
Agreement.

            (b) Shelf Registration. If (i) because of any change in law,
regulation or in currently prevailing interpretations thereof by the staff of
the SEC, the Company and the Guarantors are not permitted to effect the Exchange
Offer as contemplated by Section 2(a) hereof, (ii) the Exchange Offer is not
consummated within 300 days after the Closing Date or (iii) any Holder of
Registrable Notes that is a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) shall notify the Company in writing prior to the
20th day following the consummation of the Exchange Offer (A) that such Holder
was prohibited by applicable law or SEC policy from participating in the
Exchange Offer, or (B) that such Holder may not resell the Exchange Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and that the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder, or
(C) that such Holder is a Participating Broker-Dealer and holds Notes acquired
directly from the Company or one of its Affiliates (any of the events specified
in (i), (ii) or (iii) being a "Shelf Registration Event", and the date of
occurrence thereof, the "Shelf Registration Event Date"), then in addition to or
in lieu of conducting the Exchange Offer contemplated by Section 2(a), as the
case may be, the Company shall promptly notify the Holders in writing thereof
and the Company and the Guarantors shall, at their cost, file as promptly as
practicable after such Shelf Registration Event Date and, in any event, within
180 days after such Shelf Registration Event Date, a Shelf Registration
Statement, or amend an existing Shelf Registration Statement providing for the
sale by the Holders of all of the Registrable Notes (other than Registrable
Notes owned by Holders who have elected not to include such Registrable Notes in
such Shelf Registration Statement or who have not complied with their
obligations under the penultimate paragraph of Section 3 hereof or under this
paragraph), and shall use their reasonable efforts to cause such Shelf
Registration Statement to be declared effective by the SEC as soon as
practicable and in any event, on or before the 270th day after the Shelf
Registration Event Date or, if later, the 300th day after the Closing Date. No
Holder of Registrable Notes shall be entitled to include any of its Registrable
Notes in any Shelf Registration pursuant to this Agreement unless and until such
Holder agrees in writing to be bound by all of the provisions of this Agreement
applicable to such Holder and furnishes to the Company in writing, within 15
days after receipt of a request therefor, such information as the Company may,
after conferring with counsel with regard to information relating to Holders
that would be required by the SEC to be included in such Shelf Registration
Statement or Prospectus included therein, reasonably request for inclusion in
any Shelf Registration Statement or Prospectus included therein. Each Holder as
to which any Shelf Registration is being effected agrees to furnish to the
Company, without request and as soon as practicable, all information with
respect to such Holder necessary to make the information previously furnished to
the Company by such Holder not materially misleading.

            The Company and the Guarantors agree to use their reasonable efforts
to keep the Shelf Registration Statement continuously effective and the
Prospectus usable for resales for the earlier of: (x) the expiration of the Rule
144(k) Period or (y) such time as all of the Notes covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement or cease to be Registrable Notes (the period from the effective date
of the Shelf Registration Statement until the earlier of the events described in
clauses (x) or (y) being the

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"Effectiveness Period"). The Company will, in the event a Shelf Registration
Statement is declared effective, provide to each Holder of Registrable Notes
covered thereby, a reasonable number of copies of the Prospectus which is a part
of the Shelf Registration Statement, notify each such Holder when the Shelf
Registration has become effective and take any other action required to permit
unrestricted resales of the Registrable Notes. The Company and the Guarantors
further agree to supplement or amend the Shelf Registration Statement, if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or
by the Securities Act or by any other rules and regulations thereunder for shelf
registrations, and the Company agrees to furnish to the Holders of Registrable
Notes covered by such Shelf Registration Statement copies of any such supplement
or amendment promptly after its being used or filed with the SEC.

            Notwithstanding the foregoing, if the Company and the Guarantors
file the Shelf Registration Statement, the Company may from time to time require
Holders of Notes to discontinue the sale or other disposition of Notes pursuant
to the Shelf Registration Statement for a period not to exceed 120 days (whether
or not consecutive) in any period of 12 consecutive months under certain
circumstances relating to possible acquisitions or business combinations or
other transactions, business developments or other events involving the Company,
or because the related prospectus contains an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. If the Company and the
Guarantors effect the Exchange Offer, the Company shall also be entitled to
require any participating broker-dealers to discontinue the sale or other
disposition of Exchange Notes pursuant to the prospectus included in the
Exchange Offer Registration Statement on the same terms and conditions as those
described above.

            (c) Expenses. The Company and the Guarantors shall pay all
Registration Expenses in connection with any Registration Statement filed
pursuant to Section 2(a) and/or 2(b) hereof and will reimburse the Initial
Purchasers for the reasonable fees and disbursements of Latham & Watkins
incurred in connection with the Exchange Offer (not exceeding $25,000 in the
aggregate). Except as provided herein, each Holder shall pay all expenses of its
counsel, underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Notes pursuant
to the Shelf Registration Statement.

            (d) Effective Registration Statement. An Exchange Offer Registration
Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable Notes pursuant
to such Exchange Offer Registration Statement or Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Exchange Offer
Registration Statement or Shelf Registration Statement will be deemed not to
have been effective during the period of such interference, until the offering
of Registrable Notes pursuant to such Registration Statement may legally resume.

            (e) Additional Interest. In the event that any of the following
events shall occur (collectively referred to as "Registration Defaults"),
additional interest ("Additional Interest") shall be payable with respect to the
Notes as follows:

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                  (i) if the Exchange Offer Registration Statement is not
      declared effective within 270 days following the Closing Date, then
      beginning on the 271st day after the Closing Date (the "Effectiveness
      Deadline") or, if the Company and the Guarantors are obligated to file a
      Shelf Registration Statement and the Shelf Registration Statement is not
      declared effective on or prior to 270 days after such obligation arises,
      then beginning on the 271st day after the date such obligation arises, in
      addition to the interest otherwise payable on the Notes, Additional
      Interest will accrue and be payable on the Notes at the rate of 0.50% per
      annum; or

                  (ii) if either:

                        (a) the Company and the Guarantors have not exchanged
            Exchange Notes for all Notes validly tendered and not withdrawn in
            accordance with the terms of the Exchange Offer on or prior to the
            date that is 45 days after the Effectiveness Deadline, or

                        (b) if applicable, the Shelf Registration Statement is
            declared effective but the Shelf Registration Statement ceases to be
            effective at any time prior to the expiration of the holding period
            referred to in Rule 144(k) under the Securities Act or, if earlier,
            such time as all Notes covered by the Shelf Registration Statement
            have been sold pursuant to the Shelf Registration Statement or
            become eligible for sale pursuant to Rule 144(k) under the
            Securities Act or cease to be outstanding.

then, in addition to the interest otherwise payable on the Notes, Additional
Interest shall accrue and be payable on the Notes at the rate of 0.50% per annum
from and including (x) the day (whether or not a Business Day) immediately
following the 45th day after the Effectiveness Deadline, in the case of
subclause (a) above, or (y) the day the Shelf Registration Statement ceases to
be effective, in the case of subclause (b) above.

      Notwithstanding the foregoing, the Additional Interest on the Notes may
never exceed 0.50% per annum. In addition, Additional Interest shall cease to
accrue: (x) upon the effectiveness of the Exchange Offer Registration Statement
or Shelf Registration Statement (in the case of clause (i) above); or (y) upon
the exchange of Exchange Notes for all Notes validly tendered and not withdrawn
in the Exchange Offer or upon the effectiveness of the Shelf Registration
Statement that had ceased to remain effective prior to the expiration of the
holding period referred to in Rule 144(k) or, if earlier, such time as all Notes
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or become eligible for sale pursuant to Rule 144(k) under
the Securities Act or cease to be outstanding (in the case of clause (ii)
above).

      Any amounts of Additional Interest due pursuant to clause (i) or (ii) of
the preceding paragraph shall be payable in cash and shall be payable on the
same dates on which interest is otherwise payable on the Notes and to the same
persons who are entitled to receive those payments of interest on the Notes. The
amount of Additional Interest payable for any period shall be determined by
multiplying the Additional Interest rate, which is 0.50% per annum, by the
principal amount of Notes and then multiplying that product by a fraction, the
numerator of

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which is the number of days that the Additional Interest rate was applicable
during that period (determined on the basis of a 360-day year comprised of
twelve 30-day months), and the denominator of which is 360.

            3. Registration Procedures. In connection with the obligations of
the Company and the Guarantors with respect to the Registration Statements
pursuant to Sections 2(a) and 2(b) hereof, the Company and the Guarantors shall:

            (a) prepare and file with the SEC a Registration Statement,
            Registration Statements or amendments thereto if required by
            Sections 2(a) and 2(b) hereof within the relevant time period
            specified in Section 2 hereof on the appropriate form under the
            Securities Act, which form shall (i) be selected by the Company,
            (ii) in the case of a Shelf Registration, be available for the sale
            of the Registrable Notes by the selling Holders thereof and, in the
            case of an Exchange Offer, be available for the exchange of
            Registrable Notes, and (iii) comply as to form in all material
            respects with the requirements of the applicable form and include
            all financial statements required by the SEC to be filed therewith;
            and use their reasonable efforts to cause such Registration
            Statement to become effective and remain effective (and, in the case
            of a Shelf Registration Statement, the Prospectus to be usable for
            resales) in accordance with Section 2 hereof; provided, however,
            that if (1) such filing is pursuant to Section 2(b), or (2) a
            Prospectus contained in an Exchange Offer Registration Statement
            filed pursuant to Section 2(a) is required to be delivered under the
            Securities Act by any Participating Broker-Dealer who seeks to sell
            Exchange Notes, before filing any Registration Statement or
            Prospectus or any amendments or supplements thereto, the Company
            shall furnish to and afford the Holders of the Registrable Notes and
            each such Participating Broker-Dealer, as the case may be, covered
            by such Registration Statement, their counsel and the managing
            underwriters, if any, a reasonable opportunity to review copies of
            all such documents (including copies of any documents to be
            incorporated by reference therein and all exhibits thereto) proposed
            to be filed; and the Company shall not file any Registration
            Statement or Prospectus or any amendments or supplements thereto in
            respect of which the Holders must be afforded an opportunity to
            review prior to the filing of such document if the Majority Holders
            of the Registrable Notes, depending solely upon which Holders must
            be afforded the opportunity of such review, or such Participating
            Broker-Dealer, as the case may be, their counsel or the managing
            underwriters, if any, shall reasonably object in a timely manner;

            (b) prepare and file with the SEC such amendments and post-effective
            amendments to each Registration Statement as may be necessary to
            keep such Registration Statement effective for the Effectiveness
            Period or the Applicable Period, as the case may be, and cause each
            Prospectus to be supplemented, if so determined by the Company or
            requested by the SEC, by any required prospectus supplement and as
            so supplemented to be filed pursuant to Rule 424 (or any similar
            provision then in force) under the Securities Act, and comply with
            the provisions of the Securities Act, the Exchange Act and the rules
            and regulations promulgated thereunder applicable to it with respect
            to the disposition of all Notes

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            covered by each Registration Statement during the Effectiveness
            Period or the Applicable Period, as the case may be, in accordance
            with the intended method or methods of distribution by the selling
            Holders thereof described in this Agreement (including sales by any
            Participating Broker-Dealer);

            (c) in the case of an Exchange Offer Registration Statement, if in
            the reasonable opinion of counsel to the Company there is a question
            as to whether the Exchange Offer is permitted by applicable law,
            seek a no-action letter or other favorable decision from the SEC
            allowing the Company to consummate an Exchange Offer for such Notes.
            The Company and the Guarantors hereby agree to pursue the issuance
            of such a decision to the SEC staff level but shall not be required
            to take commercially unreasonable action to effect a change of SEC
            policy. The Company and the Guarantors hereby agree, however, to (i)
            participate in telephonic conferences with the SEC, (ii) deliver to
            the SEC staff an analysis prepared by counsel to the Company setting
            forth the legal bases, if any, upon which such counsel has concluded
            that such an Exchange Offer should be permitted and (iii) diligently
            pursue a resolution (which need not be favorable) by the SEC staff
            of such submission;

            (d) in the case of an Exchange Offer Registration Statement, prior
            to the effectiveness of such statement, provide a supplemental
            letter to the SEC (i) stating that the Company and the Guarantors
            are registering the Exchange Offer in reliance on the position of
            the SEC enunciated in Exxon Capital Holdings Corporation (available
            May 13, 1988), Morgan Stanley and Co., Inc. (available June 5,
            1991), Brown & Wood LLP (available February 7, 1997) and, if
            applicable, any no-action letter obtained pursuant to Section 3(c)
            and (ii) including a representation that the Company and the
            Guarantors have not entered into any arrangement or understanding
            with any Person to distribute the Exchange Notes to be received in
            the Exchange Offer and that, to the best of the Company's and the
            Guarantors' information and belief, each Holder participating in the
            Exchange Offer is acquiring the Exchange Notes in its ordinary
            course of business and has no arrangement or understanding with any
            Person to participate in the distribution of the Exchange Notes
            received in the Exchange Offer;

            (e) in the case of a Shelf Registration, (i) notify each Holder of
            Registrable Notes included in the Shelf Registration Statement, at
            least three Business Days prior to filing, that a Shelf Registration
            Statement with respect to the Registrable Notes is being filed and
            advising such Holder that the distribution of Registrable Notes will
            be made in accordance with the method selected by the Majority
            Holders of the Registrable Notes, (ii) furnish to each Holder of
            Registrable Notes included in the Shelf Registration Statement and
            to each underwriter of an underwritten offering of Registrable
            Notes, if any, without charge, as many copies of each Prospectus,
            including each preliminary prospectus, and any amendment or
            supplement thereto, and such other documents as such Holder or
            underwriter may reasonably request, in order to facilitate the
            public sale or other disposition of the Registrable Notes and (iii)
            consent to the use of the Prospectus or any amendment or supplement
            thereto by each of the selling Holders of Registrable Notes

                                       11
<PAGE>
            included in the Shelf Registration Statement in connection with the
            offering and sale of the Registrable Notes covered by the Prospectus
            or any amendment or supplement thereto;

            (f) in the case of a Shelf Registration, register or qualify the
            Registrable Notes under all applicable state securities or "blue
            sky" laws of such jurisdictions by the time the applicable
            Registration Statement is declared effective by the SEC as any
            Holder of Registrable Notes covered by a Registration Statement and
            each underwriter of an underwritten offering of Registrable Notes
            shall reasonably request in writing in advance of such date of
            effectiveness, and do any and all other acts and things which may be
            reasonably necessary or advisable to enable such Holder and
            underwriter to consummate the disposition in each such jurisdiction
            of such Registrable Notes owned by such Holder; provided, however,
            that the Company shall not be required to (i) qualify as a foreign
            corporation or as a dealer in securities in any jurisdiction where
            it would not otherwise be required to qualify but for this Section
            3(f), (ii) file any general consent to service of process in any
            jurisdiction where it would not otherwise be subject to such service
            of process or (iii) subject itself to taxation in any such
            jurisdiction if it is not then so subject;

            (g) (1) in the case of a Shelf Registration or (2) if Participating
            Broker-Dealers from whom the Company has received prior written
            notice that they will be utilizing the Prospectus contained in the
            Exchange Offer Registration Statement as provided in Section 3(u)
            hereof, are seeking to sell Exchange Notes and are required to
            deliver Prospectuses, promptly notify each Holder of Registrable
            Notes, or such Participating Broker-Dealers, as the case may be,
            and, if requested by such Holder or Participating Broker-Dealers,
            confirm such notice in writing (i) when a Registration Statement has
            become effective and when any post-effective amendments thereto
            become effective, (ii) of any request by the SEC or any state
            securities authority for amendments and supplements to a
            Registration Statement or Prospectus or for additional information
            after the Registration Statement has become effective, (iii) of the
            issuance by the SEC or any state securities authority of any stop
            order suspending the effectiveness of a Registration Statement or
            the qualification of the Registrable Notes or the Exchange Notes to
            be offered or sold by any Participating Broker-Dealer in any
            jurisdiction described in Section 3(f) hereof or the initiation of
            any proceedings for that purpose, (iv) in the case of a Shelf
            Registration, if, between the effective date of a Registration
            Statement and the closing of any sale of Registrable Notes covered
            thereby, the representations and warranties of the Company contained
            in any purchase agreement, securities sales agreement or other
            similar agreement cease to be true, correct and complete in all
            material respects, (v) of the happening of any event or the failure
            of any event to occur or the discovery of any facts, during the
            Effectiveness Period, which makes any statement made in such
            Registration Statement or the related Prospectus untrue in any
            material respect or which causes such Registration Statement or
            Prospectus to omit to state a material fact necessary in order to
            make the statements therein, in the light of the circumstances under
            which they were made, not misleading, as well as any other corporate
            developments, public filings

                                       12
<PAGE>
            with the SEC or similar events causing such Registration Statement
            not to be effective or the Prospectus not to be useable for resales
            and (vi) of the reasonable determination of the Company that a
            post-effective amendment to the Registration Statement would be
            appropriate;

            (h) obtain the withdrawal of any order suspending the effectiveness
            of a Registration Statement as soon as practicable;

            (i) in the case of a Shelf Registration, furnish to each Holder of
            Registrable Notes included within the coverage of such Shelf
            Registration Statement, without charge, at least one conformed copy
            of each Registration Statement relating to such Shelf Registration
            and any post-effective amendment thereto (without documents
            incorporated therein by reference or exhibits thereto, unless
            requested);

            (j) in the case of a Shelf Registration, cooperate with the selling
            Holders of Registrable Notes to facilitate the timely preparation
            and delivery of certificates representing Registrable Notes to be
            sold and not bearing any restrictive legends (except any customary
            legend borne by securities held through The Depository Trust Company
            or any similar depository) and in such denominations (consistent
            with the provisions of the Indenture and the officer's certificate
            establishing the forms and the terms of the Notes pursuant to the
            Indenture) and registered in such names as the selling Holders or
            the underwriters may reasonably request (provided such names are
            consistent with the names of the selling securityholders set forth
            in the Shelf Registration Statement) at least two Business Days
            prior to the closing of any sale of Registrable Notes pursuant to
            such Shelf Registration Statement;

            (k) in the case of a Shelf Registration or an Exchange Offer
            Registration, promptly after the occurrence of any event specified
            in Section 3(g)(ii), 3(g)(iii), 3(g)(v) (subject to the 60-day
            cumulative grace period within any twelve-month period provided for
            in Section 2(e)(iv)(B)) or 3(g)(vi) hereof, prepare a supplement or
            post-effective amendment to such Registration Statement or the
            related Prospectus or any document incorporated therein by reference
            or file any other required document so that, as thereafter delivered
            to the purchasers of the Registrable Notes, such Prospectus will not
            include any untrue statement of a material fact or omit to state a
            material fact necessary to make the statements therein, in the light
            of the circumstances under which they were made, not misleading; and
            the Company shall notify each Holder to suspend use of the
            Prospectus as promptly as practicable after the occurrence of such
            an event, and each Holder hereby agrees to suspend use of the
            Prospectus until the Company has amended or supplemented the
            Prospectus to correct such misstatement or omission;

            (l) obtain a CUSIP number, and any other appropriate security
            identification number, for the Exchange Notes or the Registrable
            Notes, as the case may be, not later than the effective date of a
            Registration Statement, and provide the Trustee

                                       13
<PAGE>
            with certificates for the Exchange Notes or the Registrable Notes,
            as the case may be, in a form eligible for deposit with the
            Depositary;

            (m) cause the Indenture to be qualified under the Trust Indenture
            Act of 1939, as amended (the "TIA"), in connection with the
            registration of the Exchange Notes or Registrable Notes, as the case
            may be, and effect such changes to such documents as may be required
            for them to be so qualified in accordance with the terms of the TIA
            and execute, and cause the Trustee to execute, all documents as may
            be required to effect such changes, and all other forms and
            documents required to be filed with the SEC to enable such documents
            to be so qualified in a timely manner;

            (n) in the case of a Shelf Registration, enter into such agreements
            (including underwriting agreements) as are customary in underwritten
            offerings and take all such other appropriate actions in connection
            therewith as are reasonably requested by the Holders of at least 25%
            in aggregate principal amount of the Registrable Notes in order to
            expedite or facilitate the registration or the disposition of the
            Registrable Notes;

            (o) in the case of a Shelf Registration, in connection with any
            underwriters offering: (i) make representations and warranties to
            the underwriters, with respect to the business of the Company as
            then conducted and the Registration Statement, Prospectus and
            documents, if any, incorporated or deemed to be incorporated by
            reference therein, in each case, as are customarily made by issuers
            to underwriters in underwritten offerings, and confirm the same if
            and when requested; (ii) obtain opinions of counsel to the Company
            and updates thereof (which may be in the form of a reliance letter)
            in form and substance reasonably satisfactory to the managing
            underwriters addressed to the underwriters covering the matters
            customarily covered in opinions requested in underwritten offerings
            and such other matters as may be reasonably requested by such
            underwriters (it being agreed that the matters to be covered by such
            opinion may be subject to customary qualifications and exceptions);
            (iii) obtain "cold comfort" letters and updates thereof in form and
            substance reasonably satisfactory to the managing underwriters from
            the independent certified public accountants of the Company,
            addressed to each of the underwriters, such letters to be in
            customary form and covering matters of the type customarily covered
            in "cold comfort" letters in connection with underwritten offerings
            and such other matters as reasonably requested by such underwriters
            in accordance with Statement on Auditing Standards No. 72; and (iv)
            if an underwriting agreement is entered into, the same shall contain
            indemnification provisions and procedures no less favorable than
            those set forth in Section 4 hereof (or such other provisions and
            procedures acceptable to the managing underwriters) customary for
            such agreements with respect to all parties to be indemnified
            pursuant to said Section and in the case of an underwritten
            registration, the above requirements shall be satisfied at each
            closing under the related underwriting agreement or as and to the
            extent required thereunder;

                                       14
<PAGE>
            (p) if (1) a Shelf Registration is filed pursuant to Section 2(b) or
            (2) a Prospectus contained in an Exchange Offer Registration
            Statement filed pursuant to Section 2(a) is required to be delivered
            under the Securities Act by any Participating Broker-Dealer who
            seeks to sell Exchange Notes during the Applicable Period, make
            reasonably available for inspection by any selling Holder of
            Registrable Notes or Participating Broker-Dealer, as applicable, who
            certifies to the Company that it has a current intention to sell
            Registrable Notes pursuant to the Shelf Registration, any
            underwriter participating in any such disposition of Registrable
            Notes, if any, and any attorney, accountant or other agent retained
            by any such selling Holder, Participating Broker-Dealer, as the case
            may be, or underwriter (collectively, the "Inspectors"), at the
            offices where normally kept, during the Company's normal business
            hours, all financial and other records, pertinent organizational and
            operational documents and properties of the Company (collectively,
            the "Records") as shall be reasonably necessary to enable them to
            conduct due diligence activities, and cause the officers, trustees
            and employees of the Company to supply all relevant information in
            each case reasonably requested by any such Inspector in connection
            with such Registration Statement; Records and information which the
            Company determines, in good faith, to be confidential and any
            Records and information which it notifies the Inspectors are
            confidential shall not be disclosed to any Inspector except where
            (i) the disclosure of such Records or information is necessary to
            avoid or correct a material misstatement or omission in such
            Registration Statement, (ii) the release of such Records or
            information is ordered pursuant to a subpoena or other order from a
            court of competent jurisdiction or is necessary in connection with
            any action, suit or proceeding or (iii) such Records or information
            previously has been made generally available to the public; each
            selling Holder of such Registrable Notes and each such Participating
            Broker-Dealer will be required to agree in writing that Records and
            information obtained by it as a result of such inspections shall be
            deemed confidential and shall not be used by it as the basis for any
            market transactions in the securities of the Company unless and
            until such is made generally available to the public through no
            fault of an Inspector or a selling Holder; and each selling Holder
            of such Registrable Notes and each such Participating Broker-Dealer
            will be required to further agree in writing that it will, upon
            learning that disclosure of such Records or information is sought in
            a court of competent jurisdiction, or in connection with any action,
            suit or proceeding, give notice to the Company and allow the Company
            at its expense to undertake appropriate action to prevent disclosure
            of the Records and information deemed confidential;

            (q) comply with all applicable rules and regulations of the SEC so
            long as any provision of this Agreement shall be applicable and make
            generally available to its security holders earning statements
            satisfying the provisions of Section 11(a) of the Securities Act and
            Rule 158 thereunder (or any similar rule promulgated under the
            Securities Act) no later than 45 days after the end of any 12-month
            period (or 90 days after the end of any 12-month period if such
            period is a fiscal year) (i) commencing at the end of any fiscal
            quarter in which Registrable Notes are sold to underwriters in a
            firm commitment or best efforts underwritten

                                       15
<PAGE>
            offering and (ii) if not sold to underwriters in such an offering,
            commencing on the first day of the first fiscal quarter of the
            Company after the effective date of a Registration Statement, which
            statements shall cover said 12-month periods, provided that the
            obligations under this paragraph (q) shall be satisfied by the
            timely filing of quarterly and annual reports on Forms 10-Q and 10-K
            under the Exchange Act;

            (r) if an Exchange Offer is to be consummated, upon delivery of the
            Registrable Notes by Holders to the Company (or to such other Person
            as directed by the Company), in exchange for the Exchange Notes, the
            Company shall mark, or cause to be marked, on such Notes delivered
            by such Holders that such Notes are being cancelled in exchange for
            the Exchange Notes; it being understood that in no event shall such
            Notes be marked as paid or otherwise satisfied;

            (s) cooperate with each seller of Registrable Notes covered by any
            Registration Statement and each underwriter, if any, participating
            in the disposition of such Registrable Notes and their respective
            counsel in connection with any filings required to be made with the
            NASD;

            (t) take all other commercially reasonable steps necessary to effect
            the registration of the Registrable Notes covered by a Registration
            Statement contemplated hereby;

            (u) (A) in the case of the Exchange Offer Registration Statement (i)
            include in the Exchange Offer Registration Statement a section
            entitled "Plan of Distribution," which section shall be reasonably
            acceptable to the Initial Purchasers or another representative of
            the Participating Broker-Dealers, and which shall contain a summary
            statement of the positions taken or policies made by the staff of
            the SEC with respect to the potential "underwriter" status of any
            broker-dealer that holds Registrable Notes acquired for its own
            account as a result of market-making activities or other trading
            activities (a "Participating Broker-Dealer") and that will be the
            beneficial owner (as defined in Rule 13d-3 under the Exchange Act)
            of Exchange Notes to be received by such broker-dealer in the
            Exchange Offer, whether such positions or policies have been
            publicly disseminated by the staff of the SEC or such positions or
            policies, in the reasonable judgment of any of the Initial
            Purchasers or such other representative, represent the prevailing
            views of the staff of the SEC, including a statement that any such
            broker-dealer who receives Exchange Notes for Registrable Notes
            pursuant to the Exchange Offer may be deemed a statutory underwriter
            and must deliver a prospectus meeting the requirements of the
            Securities Act in connection with any resale of such Exchange Notes,
            (ii) furnish to each Participating Broker-Dealer who has delivered
            to the Company the notice referred to in Section 3(g), without
            charge, as many copies of each Prospectus included in the Exchange
            Offer Registration Statement, including any preliminary Prospectus,
            and any amendment or supplement thereto, as such Participating
            Broker-Dealer may reasonably request (the Company hereby consents to
            the use of the Prospectus forming part of the Exchange Offer
            Registration Statement or any amendment or

                                       16
<PAGE>
            supplement thereto by any Person subject to the prospectus delivery
            requirements of the Securities Act, including all Participating
            Broker-Dealers, in connection with the sale or transfer of the
            Exchange Notes covered by the Prospectus or any amendment or
            supplement thereto), (iii) use their reasonable efforts to keep the
            Exchange Offer Registration Statement effective and to amend and
            supplement the Prospectus contained therein in order to permit such
            Prospectus to be lawfully delivered by all Persons subject to the
            prospectus delivery requirements of the Securities Act for such
            period of time as such Persons must comply with such requirements
            under the Securities Act and applicable rules and regulations in
            order to resell the Exchange Notes; provided, however, that such
            period shall not be required to exceed 210 days (or such longer
            period if extended pursuant to the last sentence of Section 3
            hereof) (the "Applicable Period"), and (iv) include in the
            transmittal letter or similar documentation to be executed by an
            exchange offeree in order to participate in the Exchange Offer (x)
            the following provision:

            "If the exchange offeree is a broker-dealer holding Registrable
            Notes acquired for its own account as a result of market-making
            activities or other trading activities, it will deliver a prospectus
            meeting the requirements of the Securities Act in connection with
            any resale of Exchange Notes received in respect of such Registrable
            Notes pursuant to the Exchange Offer";

            and (y) a statement to the effect that by a Participating
            Broker-Dealer making the acknowledgment described in clause (x) and
            by delivering a Prospectus in connection with the exchange of
            Registrable Notes, the Participating Broker-Dealer will not be
            deemed to admit that it is an underwriter within the meaning of the
            Securities Act; and

            (B) in the case of any Exchange Offer Registration Statement, the
            Company agrees to deliver to the Initial Purchasers or to another
            representative of the Participating Broker-Dealers, if reasonably
            requested by an Initial Purchaser or such other representative of
            Participating Broker-Dealers, on behalf of the Participating
            Broker-Dealers upon consummation of the Exchange Offer (i) an
            opinion of counsel in form and substance reasonably satisfactory to
            such Initial Purchaser or such other representative of the
            Participating Broker-Dealers, covering the matters customarily
            covered in opinions requested in connection with Exchange Offer
            Registration Statements and such other matters as may be reasonably
            requested (it being agreed that the matters to be covered by such
            opinion may be subject to customary qualifications and exceptions),
            (ii) an officer's certificate substantially similar to that
            specified in Section 7(i) of the Purchase Agreement and such
            additional certifications as are customarily delivered in a public
            offering of debt Notes and (iii) upon the effectiveness of the
            Exchange Offer Registration Statement, comfort letters, in each
            case, in customary form if permitted by Statement on Auditing
            Standards No. 72.

            The Company may require each seller of Registrable Notes as to which
any registration is being effected to furnish to the Company such information
regarding such seller as

                                       17
<PAGE>
may be required by the staff of the SEC to be included in a Registration
Statement. The Company may exclude from such registration the Registrable Notes
of any seller who unreasonably fails to furnish such information within a
reasonable time after receiving such request. The Company shall have no
obligation to register under the Securities Act the Registrable Notes of a
seller who so fails to furnish such information.

            In the case of a Shelf Registration Statement, or if Participating
Broker-Dealers who have notified the Company that they will be utilizing the
Prospectus contained in the Exchange Offer Registration Statement as provided in
this Section 3(u) are seeking to sell Exchange Notes and are required to deliver
Prospectuses, each Holder agrees that, upon receipt of any notice from the
Company of the occurrence of any event specified in Section 3(g)(ii), 3(g)(iii),
3(g)(v) or 3(g)(vi) hereof, such Holder will forthwith discontinue disposition
of Registrable Notes pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(k) hereof or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed, and, if so
directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies in such Holder's possession, other than permanent
file copies then in such Holder's possession, of the Prospectus covering such
Registrable Notes or Exchange Notes, as the case may be, current at the time of
receipt of such notice. If the Company shall give any such notice to suspend the
disposition of Registrable Notes or Exchangeable Notes, as the case may be,
pursuant to a Registration Statement, the Company and the Guarantors shall use
their reasonable efforts to file and have declared effective (if an amendment),
as soon as practicable after the resolution of the related matters, an amendment
or supplement to the Registration Statement and shall extend the period during
which such Registration Statement is required to be maintained effective and the
Prospectus usable for resales pursuant to this Agreement by the number of days
in the period from and including the date of the giving of such notice to and
including the date when the Company shall have made available to the Holders (x)
copies of the supplemented or amended Prospectus necessary to resume such
dispositions or (y) the Advice.

            4. Indemnification and Contribution. (a) In connection with a Shelf
Registration Statement or in connection with any delivery of a Prospectus
contained in an Exchange Offer Registration Statement by any Participating
Broker-Dealer or Initial Purchaser, as applicable, who seeks to sell Exchange
Notes, the Company and the Guarantors shall indemnify and hold harmless each
Holder of Registrable Notes included within any such Shelf Registration
Statement and each Participating Broker-Dealer or Initial Purchaser selling
Exchange Notes, and each Person, if any, who controls any such Person within the
meaning of Section 15 of the Securities Act against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, arising out of, or based
upon, any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment or supplement
thereto), covering Registrable Notes or Exchange Notes, as applicable, or the
omission or alleged omission therefrom of a material fact required to be stated
or necessary in order to make the statements therein not misleading or arising
out of any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus, or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading and shall reimburse
such Holder and each such officer, employee or controlling person promptly upon

                                       18
<PAGE>
demand for any legal or other expenses reasonably incurred by that Holder,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred (except to the extent expressly provided
in Section 4(c) hereof);

provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of (i) an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished in writing to the Company by the
Initial Purchasers or any Holder, underwriter or Participating Broker-Dealer for
use in a Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto) or (ii) the failure of any Holder to comply
with the provisions of the last paragraph of Section 3.

            (b) Each of the Initial Purchasers and each Holder, underwriter or
Participating Broker-Dealer agrees, severally and not jointly, to indemnify and
hold harmless the Company and the Guarantors and each Person, if any, who
controls the Company or such Guarantors within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any and all loss,
liability, claim, damage and expense whatsoever described in the indemnity
contained in Section 4(a) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in a
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Initial Purchaser, Holder,
underwriter or Participating Broker-Dealer expressly for use in such
Registration Statement (or any amendment thereto), or any such Prospectus (or
any amendment or supplement thereto); provided, however, that in the case of a
Shelf Registration Statement, no such Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Holder from
the sale of Registrable Notes pursuant to such Shelf Registration Statement.

            (c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have under this Section 4 to the extent that it is
not materially prejudiced by such failure as a result thereof, and in any event
shall not relieve it from liability which it may have otherwise on account of
this Agreement. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 4 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the indemnified party shall have
the right to employ one counsel to represent jointly all the indemnified parties
and their respective officers, employees and controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by such indemnified parties against the indemnifying parties under
this Section 4

                                       19
<PAGE>
if the indemnified parties have been advised by such counsel that there may be
one or more legal defenses available to it that are different from or additional
to those available to the indemnifying party, and in that event the fees and
expenses of such separate counsel shall be paid by the indemnifying party. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.

            (d) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unenforceable by an indemnified party
although applicable in accordance with its terms, the Company, the Guarantors
and the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, the Guarantors and the Holders, as incurred, provided,
however, that no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person that was not guilty of such fraudulent
misrepresentation. As between the Company, the Guarantors and the Holders, such
parties shall contribute to such aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by this Agreement in such proportion as
shall be appropriate to reflect the relative fault of the Company and the
Guarantors, on the one hand, and the Holders, on the other hand, with respect to
the statements or omissions which resulted in such loss, liability, claim,
damage or expense, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault of the Company and the Guarantors,
on the one hand, and of the Holders, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Guarantors, on the one
hand, or by or on behalf of the Holders, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Guarantors and the Holders agree
that it would not be just and equitable if contribution pursuant to this Section
4 were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 4, each Affiliate of a Holder, and
each director, officer and employee and Person, if any, who controls a Holder or
such Affiliate within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act shall have the same rights to contribution as such Holder
and each Person, if any, who controls the Company or any of the Guarantors
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Company and such
Guarantor. The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 4(d) shall be deemed to include, for purposes of this
Section

                                       20
<PAGE>
4(d), any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4(d), no Holder shall be required
to contribute any amount in excess of the amount by which the total price at
which the Notes purchased by it and distributed to the purchasers was offered to
the purchasers exceeds the amount of any damages which such Initial Purchaser
has otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission.

            5. Participation in an Underwritten Registration. No Holder may
participate in an underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Notes on the basis provided in the
underwriting arrangement approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents reasonably required under the terms of such underwriting
arrangements.

            6. Selection of Underwriters. The Holders of Registrable Notes
covered by the Shelf Registration Statement who desire to do so may sell the
Notes covered by such Shelf Registration in an underwritten offering, subject to
the provisions of Section 3(l) hereof. In any such underwritten offering, the
underwriter or underwriters and manager or managers that will administer the
offering will be selected by the Holders of a majority in aggregate principal
amount of the Registrable Notes included in such offering; provided, however,
that such underwriters and managers must be reasonably satisfactory to the
Company.

            7. Miscellaneous.

            (a) Rule 144 and Rule 144A. For so long as the Company is subject to
the reporting requirements of Section 13 or 15 of the Exchange Act and any
Registrable Notes remain outstanding, the Company will file the reports required
to be filed by it under the Securities Act and Section 13(a) or 15(d) of the
Exchange Act and the rules and regulations adopted by the SEC thereunder;
provided, however, that if the Company ceases to be so required to file such
reports, it will, upon the request of any Holder of Registrable Notes, (a) make
publicly available such information as is necessary to permit sales of its
securities pursuant to Rule 144 under the Securities Act, (b) deliver such
information to a prospective purchaser as is necessary to permit sales of its
securities pursuant to Rule 144A under the Securities Act, and (c) take such
further action that is reasonable in the circumstances, in each case, to the
extent required from time to time to enable such Holder to sell its Registrable
Notes without registration under the Securities Act within the limitation of the
exemptions provided by (i) Rule 144 under the Securities Act, as such rule may
be amended from time to time, (ii) Rule 144A under the Securities Act, as such
rule may be amended from time to time, or (iii) any similar rules or regulations
hereafter adopted by the SEC. Upon the request of any Holder of Registrable
Notes, the Company will deliver to such Holder a written statement as to whether
it has complied with such requirements.

            (b) No Inconsistent Agreements. The Company and the Guarantors have
not entered into, nor will the Company or the Guarantors on or after the date of
this Agreement enter into, any agreement which is inconsistent with the rights
granted to the Holders of Registrable

                                       21
<PAGE>
Notes in this Agreement or otherwise conflicts with the provisions hereof
without the written consent of Holders of a majority in aggregate principal
amount of the outstanding Registrable Notes. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's and the Guarantors' other issued
and outstanding securities under any such agreements.

            (c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of a majority in aggregate principal amount of the outstanding Registrable Notes
affected by such amendment, modification, supplement, waiver or departure;
provided that no amendment, modification or supplement or waiver or consent to
the departure with respect to the provisions of Section 4 hereof shall be
effective as against any Holder of Registrable Notes unless consented to in
writing by such Holder of Registrable Notes. Notwithstanding the foregoing
sentence, (i) this Agreement may be amended, without the consent of any Holder
of Registrable Notes, by written agreement signed by the Company, the Guarantors
and the Initial Purchasers, to cure any ambiguity, correct or supplement any
provision of this Agreement that may be inconsistent with any other provision of
this Agreement or to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be inconsistent with
other provisions of this Agreement, (ii) this Agreement may be amended, modified
or supplemented, and waivers and consents to departures from the provisions
hereof may be given, by written agreement signed by the Company, the Guarantors
and the Initial Purchasers to the extent that any such amendment, modification,
supplement, waiver or consent is, in their reasonable judgment, necessary or
appropriate to comply with applicable law and regulation (including any
interpretation of the Staff of the SEC) or any change therein and (iii) to the
extent any provision of this Agreement relates to an Initial Purchaser, such
provision may be amended, modified or supplemented, and waivers or consents to
departures from such provisions may be given, by written agreement signed by
such Initial Purchasers, the Company and the Guarantors.

            (d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 7(d), which address initially is, with respect to the Initial
Purchasers:

            c/o Lehman Brothers Inc.
            745 Seventh Avenue
            New York, NY 10019
            Attention:  Debt Capital Markets, Industrial/Real Estate Group

and (ii) if to the Company or the Guarantors, initially at the Company's
address:

            Starwood Hotels & Resorts Worldwide, Inc.
            1111 Westchester Avenue
            White Plains, New York  10604

                                       22
<PAGE>
            Fax No.:  (914) 640-8260
            Attention:  General Counsel

and thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 7(d).

            All such notices and communications shall be deemed to have been
duly given at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.

            Copies of all such notices, demands, or other communications shall
be concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.

            (e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchasers, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Notes in violation of the terms of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Registrable Notes in
any manner, whether by operation of law or otherwise, such Registrable Notes
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Notes, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof.

            (f) Third Party Beneficiaries. Each Holder and any Participating
Broker-Dealer shall be third party beneficiaries of the agreements made
hereunder among the Initial Purchasers and the Company and the Guarantors, and
the Initial Purchasers shall have the right to enforce such agreements directly
to the extent it deems such enforcement necessary or advisable to protect its
rights or the rights of Holders hereunder.

            (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

            (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

            (i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE
IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND
THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                                       23
<PAGE>
            (j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

            (k) Notes Held by the Company or its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Company or its Affiliates
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.

                                       24
<PAGE>
            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.

                                  STARWOOD HOTELS & RESORTS
                                  WORLDWIDE, INC., a Maryland corporation

                                  By: /s/ RONALD C. BROWN
                                     --------------------
                                     Ronald C. Brown
                                     Executive Vice President & Chief Financial
                                     Officer

                                  STARWOOD HOTELS & RESORTS,
                                  a Maryland real estate investment trust

                                  By: /s/ RONALD C. BROWN
                                     --------------------
                                     Ronald C. Brown
                                     Vice President & Chief Financial Officer

                                       25
<PAGE>
                             SLT REALTY LIMITED PARTNERSHIP,
                             a Delaware limited partnership

                             By:   Starwood Hotels & Resorts,
                                   Maryland real estate investment trust,
                                   its general partner

                                   By: /s/ RONALD C. BROWN
                                      --------------------
                                      Ronald C. Brown
                                      Vice President & Chief Financial Officer

                             SHERATON HOLDING CORPORATION
                             (f/k/a ITT Corporation), a Nevada corporation

                             By: /s/ JARED T. FINKELSTEIN
                                -------------------------
                                Jared T. Finkelstein
                                Vice President & Assistant Secretary

                             STARWOOD HOTELS & RESORTS
                             HOLDINGS, INC., an Arizona corporation

                             By: /s/ ALAN M. SCHNAID
                                 -------------------
                                 Alan M. Schnaid
                                 Senior Vice President & Corporate Controller

                             CHARLESTON HOTEL ASSOCIATES, LLC,
                             a New Jersey limited liability company,

                             CRYSTAL CITY HOTEL ASSOCIATES, LLC,
                             a New Jersey limited liability company,

                             LONG BEACH HOTEL ASSOCIATES, LLC,
                             a New Jersey limited liability company,

                             SANTA ROSA HOTEL ASSOCIATES, LLC,
                             a New Jersey limited liability company,

                             SLT ALLENTOWN LLC,
                             a Delaware limited liability company,

                             SLT ARLINGTON LLC,
                             a Delaware limited liability company,

                             SLT ASPEN DEAN STREET, LLC,
                             a Delaware limited liability company,

                             SLT BLOOMINGTON LLC,
                             a Delaware limited liability company,

                                       26
<PAGE>
                             SLT DANIA LLC,
                             a Delaware limited liability company,

                             SLT DC MASSACHUSETTS AVENUE, LLC,
                             a Delaware limited liability company,

                             SLT INDIANAPOLIS LLC,
                             a Delaware limited liability company,

                             SLT KANSAS CITY LLC,
                             a Delaware limited liability company,

                             SLT LOS ANGELES LLC,
                             a Delaware limited liability company,

                             SLT MINNEAPOLIS LLC,
                             a Delaware limited liability company,

                             SLT PALM DESERT LLC,
                             a Delaware limited liability company,

                             SLT PHILADELPHIA LLC,
                             a Delaware limited liability company,

                             SLT REALTY COMPANY, LLC,
                             a Delaware limited liability company,

                             SLT SAN DIEGO LLC,
                             a Delaware limited liability company,

                             SLT SOUTHFIELD LLC,
                             a Delaware limited liability company,

                             SLT ST. LOUIS LLC,
                             a Delaware limited liability company,

                             SLT TUCSON LLC,
                             a Delaware limited liability company,

                             STARLEX LLC,
                             a New York limited liability company,

                             STARWOOD ATLANTA II LLC,
                             a Delaware limited liability company,

                             STARWOOD ATLANTA LLC,
                             a Delaware limited liability company,

                                       27
<PAGE>
                             STARWOOD MISSION HILLS, L.L.C.,
                             a Delaware limited liability company,

                             STARWOOD NEEDHAM LLC,
                             a Delaware limited liability company,

                             STARWOOD WALTHAM LLC,
                             a Delaware limited liability company,

                             By:  SLT Realty Limited Partnership, a Delaware
                                  limited partnership, the managing member
                                  of each of the above listed entities

                             By:  Starwood Hotels & Resorts, a Maryland real
                                  estate investment trust, its general partner

                                  By: /s/ RONALD C. BROWN
                                      -------------------
                                      Ronald C. Brown
                                      Vice President & Chief Financial Officer

                             BW HOTEL REALTY, LP,
                             a Maryland limited partnership,

                             CP HOTEL REALTY, LP,
                             a Maryland limited partnership,

                             EDISON HOTEL ASSOCIATES, LP,
                             a New Jersey limited partnership,

                             NOVI HOTEL ASSOCIATES, LP,
                             a Delaware limited partnership,

                             PARK RIDGE HOTEL ASSOCIATES LP,
                             a Delaware limited partnership,

                             SLT FINANCING PARTNERSHIP,
                             a Delaware general partnership,

                             SLT HOUSTON BRIAR OAKS, LP,
                             a Delaware limited partnership,

                             VIRGINIA HOTEL ASSOCIATES, LP,
                             a Delaware limited partnership,

                                       28
<PAGE>
                             PRUDENTIAL HEI JOINT VENTURE,
                             a Georgia general partnership,

                             By:  SLT Realty Limited Partnership, a Delaware
                                  limited partnership, the general partner of
                                  each of the above listed entities

                             By:  Starwood Hotels & Resorts, a Maryland real
                                  estate investment trust, its general partner

                                  By: /s/ RONALD C. BROWN
                                      -------------------
                                      Ronald C. Brown
                                      Vice President & Chief Financial Officer

                             HEI HOTELS, L.L.C.,
                             a Delaware limited liability company,

                             SLC CENTRAL PARK SOUTH, LLC,
                             a Delaware limited liability company,

                             SLC INDIANAPOLIS LLC,
                             a Delaware limited liability company,

                             STARWOOD MANAGEMENT COMPANY,
                             LLC, a Delaware limited liability company,

                             By:  SLC Operating Limited Partnership, a
                                  Delaware limited partnership, the managing
                                  member of each of the above listed entities

                             By:  Starwood Hotels & Resorts Worldwide, Inc., a
                                  Maryland corporation, its general partner

                                  By: /s/ RONALD C. BROWN
                                      -------------------
                                      Ronald C. Brown
                                      Executive Vice President & Chief
                                      Financial Officer

                             SLC OPERATING LIMITED PARTNERSHIP,
                             a Delaware limited partnership,

                             By:  Starwood Hotels & Resorts Worldwide, Inc.,  a
                                  Maryland corporation, its general partner

                                  By: /s/ RONALD C. BROWN
                                      --------------------
                                      Ronald C. Brown
                                      Executive Vice President & Chief
                                      Financial Officer

                             MILWAUKEE BROOKFIELD LP,
                             a Wisconsin limited partnership,

                             By:  SLC Operating Limited Partnership, a Delaware
                                  limited partnership, the general partner of
                                  each of the above listed entities

                             By:  Starwood Hotels & Resorts Worldwide, Inc., a
                                  Maryland corporation, its general partner

                                  By: /s/ RONALD C. BROWN
                                      -------------------
                                      Ronald C. Brown
                                      Executive Vice President & Chief
                                      Financial Officer

                                       29
<PAGE>
                             HEI HOTELS, L.L.C.,
                             a Delaware limited liability company,

                             SLC CENTRAL PARK SOUTH, LLC,
                             a Delaware limited liability company,

                             SLC INDIANAPOLIS LLC,
                             a Delaware limited liability company,

                             STARWOOD MANAGEMENT COMPANY,
                             LLC, a Delaware limited liability company,

                             By:  SLC Operating Limited Partnership, a
                                  Delaware limited partnership, the managing
                                  member of each of the above listed entities

                             By:  Starwood Hotels & Resorts Worldwide, Inc., a
                                  Maryland corporation, its general partner

                                  By: /s/ RONALD C. BROWN
                                      -------------------
                                      Ronald C. Brown
                                      Executive Vice President & Chief
                                      Financial Officer

                             SLC OPERATING LIMITED PARTNERSHIP,
                             a Delaware limited partnership,

                             By:  Starwood Hotels & Resorts Worldwide, Inc.,  a
                                  Maryland corporation, its general partner

                                  By: /s/ RONALD C. BROWN
                                      --------------------
                                      Ronald C. Brown
                                      Executive Vice President & Chief
                                      Financial Officer

                             MILWAUKEE BROOKFIELD LP,
                             a Wisconsin limited partnership,

                             By:  SLC Operating Limited Partnership, a Delaware
                                  limited partnership, the general partner of
                                  each of the above listed entities

                             By:  Starwood Hotels & Resorts Worldwide, Inc., a
                                  Maryland corporation, its general partner

                                  By: /s/ RONALD C. BROWN
                                      -------------------
                                      Ronald C. Brown

                                       30
<PAGE>
                                      Executive Vice President & Chief
                                      Financial Officer

                             ITT BROADCASTING CORP.,
                             a Delaware corporation

                             By: /s/ JARED T. FINKELSTEIN
                                 ------------------------
                                 Jared T. Finkelstein
                                 Vice President & Assistant Secretary

                                       31
<PAGE>
                             THE SHERATON CORPORATION
                             (f/k/a ITT Sheraton Corporation), a Delaware
                             corporation,

                             DESTINATION SERVICES OF SCOTTSDALE,
                             INC., a Delaware corporation,

                             GENERAL FIDUCIARY CORPORATION,
                             a Massachusetts corporation,

                             GLOBAL CONNEXTIONS INC.,
                             a Delaware corporation,

                             STARWOOD RESERVATIONS CORPORATION
                             (f/k/a ITT Sheraton
                             Reservations Corporation),
                             a Delaware corporation,

                             MANHATTAN SHERATON CORPORATION,
                             a New York corporation,

                             SAN DIEGO SHERATON CORPORATION,
                             a Delaware corporation,

                             SAN FERNANDO SHERATON CORPORATION,
                             a Delaware corporation,

                             SHERATON 45 PARK CORPORATION,
                             a Delaware corporation,

                             SHERATON ASIA-PACIFIC CORPORATION,
                             a Delaware corporation,

                             SHERATON BOSTON CORPORATION
                             a Massachusetts corporation,

                             SHERATON CALIFORNIA CORPORATION,
                             a Delaware corporation,

                                       32
<PAGE>
                             SHERATON FLORIDA CORPORATION,
                             a Delaware corporation,

                             SHERATON HARBOR ISLAND CORPORATION,
                             a Delaware corporation,

                             SHERATON HAWAII HOTELS CORPORATION,
                             a Hawaii corporation,

                             SHERATON INTERNATIONAL, INC.,
                             a Delaware corporation,

                             SHERATON INTERNATIONAL DE MEXICO, INC.,
                             a Delaware corporation,

                             SHERATON MANAGEMENT LLC (f/k/a
                             Sheraton Management Corporation),
                             a Delaware corporation,

                             SHERATON OVERSEAS MANAGEMENT CORPORATION,
                             a Delaware corporation,

                             SHERATON WARSAW CORPORATION,
                             a Delaware corporation,

                             SHERATON MIAMI CORPORATION,
                             a Delaware corporation,

                             SHERATON MIDDLE EAST MANAGEMENT CORPORATION,
                             a Delaware corporation,

                             SHERATON NEW YORK CORPORATION,
                             a New York corporation,

                             SHERATON OVERSEAS TECHNICAL SERVICES CORPORATION,
                             a Delaware corporation,

                             SHERATON PEACHTREE CORPORATION,
                             a Delaware corporation,

                             SHERATON PHOENICIAN CORPORATION,
                             a Delaware corporation,

                                       33
<PAGE>
                             SHERATON SAVANNAH CORPORATION,
                             a Delaware corporation,

                             ST. REGIS SHERATON CORPORATION,
                             a New York corporation,

                             WORLDWIDE FRANCHISE SYSTEMS, INC.,
                             a Delaware corporation,

                             SHERATON VERMONT CORPORATION,
                             a Vermont corporation

                             By: /s/ JARED T. FINKELSTEIN
                                 ------------------------
                                 Jared T. Finkelstein
                                 Vice President & Assistant Secretary

                             HUDSON SHERATON CORPORATION LLC,
                             a Delaware limited liability company

                             By:  The Sheraton Corporation (f/k/a ITT Sheraton
                                  Corporation), a Delaware corporation,
                                  its managing member

                                  By: /s/ JARED T. FINKELSTEIN
                                      ------------------------
                                      Jared T. Finkelstein
                                      Vice President & Assistant Secretary

                             ITT MSG, INC.,
                             a Delaware corporation

                             By: /s/ JARED T. FINKELSTEIN
                                 ------------------------
                                 Jared T. Finkelstein
                                 Vice President & Assistant Secretary

                             W&S DENVER CORP.,
                             a Delaware corporation,

                             W&S REALTY CORPORATION OF DELAWARE,
                             a Delaware corporation,

                             BENJAMIN FRANKLIN HOTEL, INC.,
                             a Washington corporation,

                             LAUDERDALE HOTEL COMPANY,
                             a Delaware corporation,

                                       34
<PAGE>
                             WESTIN BAY HOTEL COMPANY,
                             a Delaware corporation,

                             CINCINNATI PLAZA COMPANY,
                             a Delaware corporation,

                             SOUTH COAST WESTIN HOTEL COMPANY,
                             a Delaware corporation,

                             TOWNHOUSE MANAGEMENT INC.,
                             a Delaware corporation,

                             WVC RANCHO MIRAGE, INC.,
                             a Delaware corporation,

                             WESTIN ASSET MANAGEMENT COMPANY,
                             a Delaware corporation,

                             W&S ATLANTA CORP.,
                             a Delaware corporation,

                             By: /s/ JARED T. FINKELSTEIN
                                 ------------------------
                                 Jared T. Finkelstein
                                 Vice President & Assistant Secretary

                             WESTIN SEATTLE HOTEL COMPANY,
                             a Washington general partnership,

                             By:   Benjamin Franklin Hotel, Inc.,
                                   its general partner

                                   By: /s/ JARED T. FINKELSTEIN
                                       ------------------------
                                       Jared T. Finkelstein
                                       Vice President & Assistant Secretary

                             By:   W&S Realty Corporation of Delaware,
                                   its general partner

                                   By: /s/ JARED T. FINKELSTEIN
                                       ------------------------
                                       Jared T. Finkelstein
                                       Vice President & Assistant Secretary

                             WESTIN PREMIER, INC.,
                             a Delaware corporation,

                             WESTIN VACATION MANAGEMENT CORPORATION,
                             a Delaware corporation,

                                       35
<PAGE>
                             STARWOOD VACATION EXCHANGE
                             COMPANY (f/k/a Westin Vacation
                             Exchange Company), a Delaware corporation

                             By:  Starwood Hotels & Resorts Worldwide, Inc.,
                                  a Maryland corporation, the sole stockholder
                                  of each of the above listed entities

                                  By: /s/ RONALD C. BROWN
                                      --------------------
                                      Ronald C. Brown
                                      Executive Vice President & Chief
                                      Financial Officer

                             W&S LAUDERDALE CORP.,
                             a Delaware corporation,

                             W&S SEATTLE CORP.,
                             a Delaware corporation,

                             By:  SLT Realty Limited Partnership, a Delaware
                                  limited partnership, the sole stockholder of
                                  each of the above listed entities

                             By:  Starwood Hotels & Resorts, a Maryland real
                                  estate investment trust, its general partner

                                  By: /s/ RONALD C. BROWN
                                      -------------------
                                      Ronald C. Brown
                                      Vice President & Chief Financial Officer

                             DATA MARKETING ASSOCIATES EAST, INC.,
                             a Florida corporation,

                             P.O.C. REALTY, INC.,
                             a Colorado corporation,

                             STARWOOD VACATION SERVICES, INC. (f/k/a
                             Vacation Marketing Services, Inc.),
                             a Florida corporation,

                             VACATION TITLE SERVICES, INC.,
                             a Florida corporation,

                             VACATIONWORKS, INC.,
                             a Florida corporation,

                             VCH COMMUNICATIONS, INC.,
                             a Florida corporation,

                             VCH CONSULTING, INC.,
                             a Florida corporation,

                             VCH PORTFOLIO SERVICES, INC.,
                             a Florida corporation,

                             VCH SALES, INC.,
                             a Florida corporation,

                             VCH SYSTEMS, INC.,
                             a Florida corporation,

                             VCH TRADEMARK, INC.,
                             a Florida corporation,

                             VCM OAKS, INC.,
                             a Florida corporation,

                             SVO VISTANA VILLAGES, INC.
                             (f/k/a VDI2, Inc.),
                             a Florida corporation,

                             VISTANA ACCEPTANCE CORP.,
                             a Florida corporation,

                             VISTANA CAVE CREEK, INC.
                             an Arizona corporation,

                             VISTANA DEVELOPMENT, INC.,
                             a Florida corporation d/b/a
                             Vistana Development, Ltd.,

                             SVO EAST, INC. (f/k/a Vistana East, Inc.),
                             a Florida corporation,

                             SVO INTERNATIONAL, INC.
                             (f/k/a Vistana International, Inc.),
                             a Florida corporation,

<PAGE>
                             SVO MANAGEMENT, INC.
                             (f/k/a Vistana Management, Inc.),
                             a Florida corporation d/b/a
                             Vistana Management, Ltd.,

                             SVO MB MANAGEMENT, INC.,
                             a South Carolina corporation,

                             VISTANA NJ, INC.,
                             a New Jersey corporation,

                             VISTANA OP INVESTMENT, INC.,
                             a Florida corporation,

                             VISTANA PSL, INC.,
                             a Florida corporation,

                             VISTANA SCOTTSDALE MANAGEMENT, INC.,
                             an Arizona corporation,

                             SVO WEST, INC. (f/k/a Vistana West, Inc.),
                             a Florida corporation,

                             POINTS OF COLORADO, INC.,
                             a Colorado corporation,

                             STARWOOD VACATION OWNERSHIP, INC.
                             (f/k/a Vistana, Inc.), a Florida corporation

                             By: /s/ RONALD C. BROWN
                                 --------------------
                                 Ronald C. Brown
                                 Vice President

                             SVO PACIFIC, INC.
                             (f/k/a Vistana Pacific, Inc.),
                             a Florida corporation

                             By: /s/ RONALD C. BROWN
                                 -------------------
                                 Ronald C. Brown
                                 Vice President

                             SVO ARIZONA, INC.,
                             an Arizona corporation

                             By: /s/ RONALD C. BROWN
                                 -------------------
                                 Ronald C. Brown
                                 Vice President

                             SVO CALIFORNIA, INC.,
                             an California corporation

                             By: /s/ RONALD C. BROWN
                                 -------------------
                                 Ronald C. Brown
                                 Vice President

                             SVO CALIFORNIA MANAGEMENT, INC.,
                             a California corporation

                             By: /s/ RONALD C. BROWN
                                 -------------------
                                 Ronald C. Brown
                                 Vice President

                             SUCCESS OF ARIZONA, L.L.C.,
                             an Arizona limited liability company,

                             SUCCESS OF COLORADO, L.L.C.,
                             a Nevada limited liability company,

<PAGE>
                             FIESTA VACATIONS, L.L.C.,
                             an Arizona limited liability company,

                             By:  SVO West, Inc. (f/k/a Vistana West, Inc.),
                                  a Florida corporation, its Manager

                                  By: /s/ RONALD C. BROWN
                                      -------------------
                                      Ronald C. Brown
                                      Vice President

                             SUCCESS DEVELOPMENTS, L.L.C.,
                             an Arizona limited liability company

                             By:  Points of Colorado, Inc., a Colorado
                                  corporation, its Manager

                                  By: /s/ RONALD C. BROWN
                                      -------------------
                                      Ronald C. Brown
                                      Vice President

                             SUCCESS OF COLORADO REALTY, L.L.C.,
                             a Nevada limited liability company

                             By:  Success of Colorado, L.L.C., a Nevada limited
                                  liability company, a member

                             By:  SVO West, Inc. (f/k/a Vistana West, Inc.), a
                                  Florida corporation, its Manager

                                  By: /s/ RONALD C. BROWN
                                      -------------------
                                      Ronald C. Brown
                                      Vice President

                                       42
<PAGE>
Accepted:

LEHMAN BROTHERS INC.

For itself and as Representative
of the Initial Purchasers

By: /s/ MARTIN GOLDBERG
    -------------------
    Martin Goldberg
    Senior Vice President

                                       43<PAGE>
                                                                    EXHIBIT 10.1

                                                                [Ohio Net Lease]

                                 LEASE AGREEMENT

         THIS LEASE AGREEMENT is made this 23rd day of April, 2002, between
ProLogis Development Services Incorporated ("Landlord"), and the Tenant named
below.

TENANT:                             Innotrac Corporation

TENANT'S REPRESENTATIVE,
ADDRESS, AND PHONE NO.:             David L. Gamsey
                                    6655 Sugarloaf Parkway
                                    Duluth, GA 30097
                                    678 584-4020

PREMISES:                           That portion of the Building, containing
                                    approximately 286,000 rentable square feet,
                                    as determined by Landlord, as shown on
                                    Exhibit A.

PROJECT:                            Airpark International Distribution
                                    Center #5 (396,000 sq. ft. building)

BUILDING:                           Airpark International Distribution Center
                                    #5 (396,000 sq. ft. building)

TENANT'S PROPORTIONATE
SHARE OF PROJECT:                   72.000%

TENANT'S PROPORTIONATE SHARE
OF BUILDING:                        72.000%

LEASE TERM:                         Beginning on the Commencement Date and
                                    ending on the last day of the 60th full
                                    calendar month thereafter.

COMMENCEMENT DATE:                  August 1, 2002 (Tenant shall be provided
                                    access to the Premises on April 15, 2002 to
                                    install equipment and fixtures)

INITIAL MONTHLY BASE RENT:                                            $66,733.33

INITIAL ESTIMATED MONTHLY           1. Utilities
OPERATING EXPENSE PAYMENTS:
(estimates only and subject to      2. Common Area Charges: $4,052.00
adjustment to actual costs and
expenses according to the           3. Taxes:               $7,150.00
provisions of this Lease)
                                    4. Insurance            $1,430.00

                                    5. Others

INITIAL ESTIMATED MONTHLY
OPERATING EXPENSE PAYMENTS:                                           $12,632.00

INITIAL MONTHLY BASE RENT AND
OPERATING EXPENSE PAYMENTS:                                           $79,365.33

SECURITY DEPOSIT:                   $25,000.00

BROKER:                             Huff Commercial Group

ADDENDA:                            1. Right of First Refusal 2. Two Renewal
                                    Options (Baseball Arbitration)
                                    3. Construction (Turnkey) 4. Miscellaneous
                                    Provisions; 5. Cancellation Option;
                                    6. Assignment & Subletting Consent

EXHIBITS:                           A. Site Plan B. Leasehold Improvements

         1.       GRANTING CLAUSE. In consideration of the obligation of Tenant
to pay rent as herein provided and in consideration of the other terms,
covenants, and conditions hereof, Landlord leases to Tenant, and Tenant takes
from Landlord, the Premises, to have and to hold for the Lease Term, subject to
the terms, covenants and conditions of this Lease.

         2.       ACCEPTANCE OF PREMISES. Tenant shall accept the Premises in
its condition as of the Commencement Date, subject to all applicable laws,
ordinances, regulations, covenants and restrictions, and subject to Substantial
Completion of the Initial Improvements as set forth in Addendum 3 attached
hereto. Landlord has made no representation or warranty as to the suitability of
the Premises for the conduct of Tenant's business, and Tenant waives any implied
warranty that the Premises are suitable for Tenant's intended purposes. Except
as provided in Paragraph 10, in no event shall Landlord have any obligation for
any defects (except for latent defects) in the Premises or any limitation on its
use. The taking of possession of the Premises shall be conclusive evidence that
Tenant accepts the Premises and that the Premises were in good condition at the
time possession was taken except for items that are Landlord's responsibility
under Paragraph 10, latent defects, and any punchlist items agreed to in writing
by Landlord and Tenant. Landlord represents and warrants that as of the
Commencement Date, the Building's HVAC, electrical, plumbing and other
mechanical systems are in good working order and Landlord represents and
warrants, to its knowledge, that as of the Commencement Date, the Premises shall
be in compliance with all Legal Requirements, as hereinafter defined,
(including, without limitation, the Americans With Disabilities Act) in effect
as of the Commencement Date of this Lease and that no written notice has been
received by Landlord as of the date hereof of non-compliance with any Legal
Requirements.

                                      -1-

<PAGE>

         3.       USE. The Premises shall be used only for the purpose of
receiving, storing, shipping and selling products, materials and merchandise
made and/or distributed by Tenant and for such other lawful purposes as may be
incidental thereto; provided, however, with Landlord's prior written consent,
Tenant may also use the Premises for light manufacturing. Tenant shall not
conduct or give notice of any auction, liquidation, or going out of business
sale on the Premises. Tenant will use the Premises in a careful, safe and proper
manner and will not commit waste, overload the floor or structure of the
Premises or subject the Premises to use that would damage the Premises. Tenant
shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise,
or vibrations to emanate from the Premises, or take any other action that would
constitute a nuisance or would disturb, unreasonably interfere with, or endanger
Landlord or any tenants of the Project. Outside storage, including without
limitation, storage of trucks and other vehicles, is prohibited without
Landlord's prior written consent; provided, however, that subject to applicable
Legal Requirements, Tenant shall be permitted to park trucks and trailers used
in Tenant's business operations on and from the Premises overnight at the truck
docks of the Premises, provided such trucks and trailers are at all times in
operable condition and there is no interference with the access of other tenants
to the Building parking lots and truck courts. Tenant, at its sole expense,
shall use and occupy the Premises in compliance with all laws, including,
without limitation, the Americans With Disabilities Act, orders, judgments,
ordinances, regulations, codes, directives, permits, licenses, covenants and
restrictions now or hereafter applicable to the Premises (collectively, "Legal
Requirements"). Tenant shall, at its expense, make any alterations or
modifications, within or without the Premises, that are required by Legal
Requirements related to Tenant's use or occupation of the Premises. Tenant will
not use or permit the Premises to be used for any purpose or in any manner that
would void Tenant's or Landlord's insurance, increase the insurance risk, or
cause the disallowance of any sprinkler credits. If any increase in the cost of
any insurance on the Premises or the Project is caused by Tenant's use or
occupation of the Premises, or because Tenant vacates the Premises, then Tenant
shall pay the amount of such increase to Landlord. Any occupation of the
Premises by Tenant prior to the Commencement Date shall be subject to all
obligations of Tenant under this Lease.

                  Notwithstanding anything contained herein to the contrary,
Tenant's obligations hereunder shall relate only to the interior of the Premises
and any changes to the Project that relate solely to the specific manner of use
of the Premises by Tenant; and Landlord shall make all other additions to or
modifications of the Project required from time to time by Legal Requirements.
The cost of such additions or modifications made by Landlord shall be included
in Operating Expenses pursuant to Paragraph 6 of this Lease, except for those
additions or modifications which are Landlord's sole responsibility pursuant to
Paragraph 10 of this Lease.

         4.       BASE RENT. Tenant shall pay Base Rent in the amount set forth
above. The first month's Base Rent, the Security Deposit, and the first monthly
installment of estimated Operating Expenses (as hereafter defined) shall be due
and payable on the date hereof, and Tenant promises to pay to Landlord in
advance, without demand, deduction or set-off, monthly installments of Base
Rent on or before the first day of each calendar month succeeding the
Commencement Date. Payments of Base Rent for any fractional calendar month shall
be prorated. All payments required to be made by Tenant to Landlord hereunder
shall be payable at such address as Landlord may specify from time to time by
written notice delivered in accordance herewith. The obligation of Tenant to pay
Base Rent and other sums to Landlord and the obligations of Landlord under this
Lease are independent obligations. Tenant shall have no right at any time to
abate, reduce, or set-off any rent due hereunder except as may be expressly
provided in this Lease. If Tenant is delinquent in any monthly installment of
Base Rent or of estimated Operating Expenses for more than 5 days, Tenant shall
pay to Landlord on demand a late charge equal to 5 percent of such delinquent
sum. The provision for such late charge shall be in addition to all of
Landlord's other rights and remedies hereunder or at law and shall not be
construed as a penalty.

         5.       SECURITY DEPOSIT. The Security Deposit shall be held
by Landlord as security for the performance of Tenant's obligations under this
Lease. The Security Deposit is not an advance rental deposit or a measure of
Landlord's damages in case of Tenant's default. Upon each occurrence of an Event
of Default (hereinafter defined), Landlord may use all or part of the Security
Deposit to pay delinquent payments due under this Lease, and the cost of any
damage, injury, expense or liability caused by such Event of Default, without
prejudice to any other remedy provided herein or provided by law. Tenant shall
pay Landlord on demand the amount that will restore the Security Deposit to its
original amount. Landlord's obligation respecting the Security Deposit is that
of a debtor, not a trustee; no interest shall accrue thereon. The Security
Deposit shall be the property of Landlord, but shall be paid to Tenant when
Tenant's obligations under this Lease have been completely fulfilled. Landlord
shall be released from any obligation with respect to the Security Deposit upon
transfer of this Lease and the Premises to a person or entity assuming
Landlord's obligations under this Paragraph 5.

         6.       OPERATING EXPENSE PAYMENTS. During each month of the Lease
Term, on the same date that Base Rent is due, Tenant shall pay Landlord an
amount equal to 1/12 of the annual cost, as reasonably estimated in good faith
by Landlord from time to time, of Tenant's Proportionate Share (hereinafter
defined) of Operating Expenses for the Project. Payments thereof for any
fractional calendar month shall be prorated. The term "Operating Expenses" means
all costs and expenses incurred by Landlord with respect to the ownership,
maintenance, and operation of the Project including, but not limited to costs
of: Taxes (hereinafter defined) and reasonable fees payable to tax consultants
and attorneys for consultation and contesting taxes to the extent of any savings
realized, not to exceed the amount of such savings; insurance; utilities;
maintenance, repair and replacement of all portions of the Project, including
without limitation, paving and parking areas, roads roofs, alleys, and
driveways, mowing, landscaping, exterior painting, utility lines, heating,
ventilation and air conditioning systems, lighting, electrical systems and other
mechanical and building systems; amounts paid to contractors and subcontractors
for work or services performed in connection with any of the

                                      -2-

<PAGE>

foregoing; charges or assessments of any association to which the Project is
subject; market-rate property management fees payable to a property manager,
including any affiliate of Landlord; security services, if any; trash
collection, sweeping and removal; and additions or alterations made by Landlord
to the Project or the Building in order to comply with Legal Requirements (other
than those expressly required herein to be made by Tenant) or that are
appropriate to the continued operation of the Project or the Building as a bulk
warehouse facility in the market area, provided that the cost of additions or
alterations that are required to be capitalized for federal income tax purposes
shall be amortized on a straight line basis over a period equal to the useful
life thereof for federal income tax purposes. Operating Expenses do not include
costs, expenses, depreciation or amortization for capital repairs and capital
replacements required to be made by Landlord under Paragraph 10 of this Lease,
debt service under mortgages or ground rent under ground leases, costs of
restoration to the extent of net insurance proceeds received by Landlord with
respect thereto, leasing commissions, or the costs of renovating space for
tenants. Further, Operating Expenses shall not mean or include: (i) costs
incurred in connection with the construction or remodeling of the Project or any
other improvements now or hereafter located thereon, or correction of defects in
design or construction; (ii) interest, principal, or other payments on account
of any indebtedness, or rental or other payments under any ground lease, or any
payments in the nature of returns on or of equity of any kind; (iii) costs of
selling, syndicating, financing, mortgaging or hypothecating any part of or
interest in the Project; (iv) taxes on the income of Landlord or Landlord's
franchise taxes (unless any of said taxes are hereafter instituted by applicable
taxing authorities in substitution for ad valorem real property taxes); (v)
depreciation; (vi) Landlord's overhead costs, including equipment, supplies,
accounting and legal fees, rent and other occupancy costs or any other costs
associated with the operation or internal organization and function of Landlord
as a business entity (but this provision does not prevent the payment of a
management fee to Landlord as provided in this Paragraph 6); (vii) fees or other
costs for professional services provided by space planners, architects,
engineers, and other similar professional consultants, real estate commissions,
and marketing and advertising expenses; (viii) costs of defending or prosecuting
litigation with any party, unless a favorable judgment would be for the general
benefit of the tenants in the Project; (ix) costs incurred as a result of
Landlord's violation of any lease, contract, law or ordinance, including fines
and penalties; (x) late charges, interest or penalties of any kind for late or
other improper payment of any public or private obligation, including ad valorem
taxes; (xi) costs of removing Hazardous Materials or of correcting any other
conditions in order to comply with any environmental law or ordinance (but this
exclusion shall not constitute a release by Landlord of Tenant for any such
costs for which Tenant is liable pursuant to Paragraph 30 of this Lease); (xii)
costs for which Landlord is reimbursed from any other source; (xiii) costs
related to any building or land not included in the Project, including any
allocation of costs incurred on a shared basis, such as centralized accounting
costs, unless the allocation is made on a reasonable and consistent basis that
fairly reflects the share of costs actually attributable to the Project; and
(xiv) the part of any costs or other sum paid to any affiliate of Landlord that
may exceed the fair market price or cost generally payable for substantially
similar goods or services in the area of the Project.

                  If Tenant's total payments of Operating Expenses for any year
are less than Tenant's Proportionate Share of actual Operating Expenses for such
year, then Tenant shall pay the difference to Landlord within 30 days after
demand, and if more, then Landlord shall retain such excess and credit it
against Tenant's next payments, except that during the last calendar year of the
Lease Term or any extension terms thereof, Landlord shall refund any such excess
within 30 days following the termination of the Lease Term or any extension
terms thereof. For purposes of calculating Tenant's Proportionate Share of
Operating Expenses, a year shall mean a calendar year except the first year,
which shall begin on the Commencement Date, and the last year, which shall end
on the expiration of this Lease. With respect to Operating Expenses which
Landlord allocates to the entire Project, Tenant's "Proportionate Share" shall
be the percentage set forth on the first page of this Lease as Tenant's
Proportionate Share of the Project as reasonably adjusted by Landlord in the
future for changes in the physical size of the Premises or the Project; and,
with respect to Operating Expenses which Landlord allocates only to the
Building, Tenant's "Proportionate Share" shall be the percentage set forth on
the first page of this Lease as Tenant's Proportionate Share of the Building as
reasonably adjusted by Landlord in the future for changes in the physical size
of the Premises or the Building. Landlord may equitably increase Tenant's
Proportionate Share for any item of expense or cost reimbursable by Tenant that
relates to a repair, replacement, or service that benefits only the Premises or
only a portion of the Project or Building that includes the Premises or that
varies with occupancy or use. The estimated Operating Expenses for the Premises
set forth on the first page of this Lease are only estimates, and Landlord makes
no guaranty or warranty that such estimates will be accurate.

         7.       UTILITIES. Tenant shall pay for all water, gas, electricity,
heat, light, power, telephone, sewer, sprinkler services, refuse and trash
collection, and other utilities and services used on the Premises, all
maintenance charges for utilities, and any storm sewer charges or other similar
charges for utilities imposed by any governmental entity or utility provider,
together with any taxes, penalties, surcharges or the like pertaining to
Tenant's use of the Premises. All utilities shall be separately metered or
charged directly to Tenant by the provider, except for water and sewer, which
shall be jointly metered. Tenant shall pay its share of all charges for jointly
metered utilities based upon consumption, as reasonably determined by Landlord.
No interruption or failure of utilities shall result in the termination of this
Lease or the abatement of rent. Tenant agrees to limit use of water and sewer
for normal restroom use.

                  Notwithstanding anything to the contrary contained in
Paragraph 7 of this Lease, if an interruption or cessation of utilities results
from a cause within the Landlord's reasonable control and the Premises are not
usable by Tenant for the conduct of Tenant's business as a result thereof, Base
Rent and applicable Operating Expenses not actually incurred by Tenant shall be
abated for the period which commences five (5) business days after the date
Tenant gives to Landlord notice of such interruption until such utilities are
restored.

         8.       TAXES. Landlord shall pay all real estate taxes, assessments
and governmental charges (collectively referred to as "Taxes") that accrue
against the Project during the Lease Term, which shall be included as part of
the Operating Expenses charged to Tenant. Landlord may contest by appropriate
legal proceedings the amount, validity, or

                                      -3-

<PAGE>

application of any Taxes or liens thereof. All capital levies or other taxes
assessed or imposed on Landlord upon the rents payable to Landlord under this
Lease and any franchise tax, any excise, transaction, sales or privilege tax,
assessment, levy or charge measured by or based, in whole or in part, upon such
rents from the Premises and/or the Project or any portion thereof shall be paid
by Tenant to Landlord monthly in estimated installments as part of Operating
Expenses; provided, however, in no event shall Tenant be liable for any capital
gains taxes associated with the sale of the Building or any net income taxes
imposed on Landlord unless such net income taxes are in substitution for any
Taxes payable hereunder. If any such tax or excise is levied or assessed
directly against Tenant, then Tenant shall be responsible for and shall pay the
same at such times and in such manner as the taxing authority shall require.
Tenant shall be liable for all taxes levied or assessed against any personal
property or fixtures placed in the Premises, whether levied or assessed against
Landlord or Tenant.

         9.       INSURANCE. Landlord shall maintain all risk property insurance
covering the full replacement cost of the Building. Landlord may, but is not
obligated to, maintain such other insurance and additional coverages as it may
deem necessary, including, but not limited to, commercial liability insurance
and rent loss insurance. All such insurance shall be included as part of the
Operating Expenses charged to Tenant. The Project or Building may be included in
a blanket policy (in which case the cost of such insurance allocable to the
Project or Building will be determined by Landlord based upon the insurer's cost
calculations). Tenant shall also reimburse Landlord for any increased premiums
or additional insurance which Landlord reasonably deems necessary as a result of
Tenant's use of the Premises. Landlord covenants to obtain and maintain property
and liability insurance on the Project in forms and amounts customary for
properties substantially similar to the Project, subject to customary
deductibles.

                  Tenant, at its expense, shall maintain during the Lease Term:
all risk property insurance covering the full replacement cost of all property
and improvements installed or placed in the Premises by Tenant at Tenant's
expense; worker's compensation insurance with no less than the minimum limits
required by law; employer's liability insurance with such limits as required by
law; and commercial liability insurance, with a minimum limit of $1,000,000 per
occurrence and a minimum umbrella limit of $1,000,000, for a total minimum
combined general liability and umbrella limit of $2,000,000 (together with such
additional umbrella coverage as Landlord may reasonably require) for property
damage, personal injuries, or deaths of persons occurring in or about the
Premises. Landlord may from time to time require reasonable increases in any
such limits. The commercial liability policies shall name Landlord as an
additional insured, insure on an occurrence and not a claims-made basis, be
issued by insurance companies which are reasonably acceptable to Landlord, not
be cancelable unless 30 days' prior written notice shall have been given to
Landlord, contain a hostile fire endorsement and a contractual liability
endorsement and provide primary coverage to Landlord (any policy issued to
Landlord providing duplicate or similar coverage shall be deemed excess over
Tenant's policies). Such policies or certificates thereof shall be delivered to
Landlord by Tenant upon commencement of the Lease Term and upon each renewal of
said insurance.

                  The all risk property insurance obtained by Landlord and
Tenant shall include a waiver of subrogation by the insurers and all rights
based upon an assignment from its insured, against Landlord or Tenant, their
officers, directors, employees, managers, agents, invitees and contractors, in
connection with any loss or damage thereby insured against. Neither party nor
its officers, directors, employees, managers, agents, invitees or contractors
shall be liable to the other for loss or damage caused by any risk coverable by
all risk property insurance, and each party waives any claims against the other
party, and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage. The failure of a party to insure its
property shall not void this waiver. Landlord and its agents, employees and
contractors shall not be liable for, and Tenant hereby waives all claims against
such parties for, business interruption and losses occasioned thereby sustained
by Tenant or any person claiming through Tenant resulting from any accident or
occurrence in or upon the Premises or the Project from any cause whatsoever,
including without limitation, damage caused in whole or in part, directly or
indirectly, by the negligence of Landlord or its agents, employees or
contractors.

                  Tenant and its subtenants, assignees, invitees, employees,
contractors and agents shall not be liable for, and Landlord hereby waives all
claims against Tenant and its subtenants, assignees, invitees, employees,
contractors and agents for damage to property sustained by Landlord or any
person claiming through Landlord resulting from any insurable accident or
occurrence in or upon the Premises or in or about the Project from any cause
whatsoever, including, without limitation, damage caused in whole or in part,
directly or indirectly, by the negligence of Tenant or its subtenants,
assignees, invitees, employees, contractors or agents; provided, however, such
waiver shall only apply to claims in excess of the commercially reasonable
deductible under Landlord's insurance policy.

          10.     LANDLORD'S REPAIRS. Landlord shall maintain, repair and
replace, at its expense, latent defects, the structural soundness of the roof,
foundation, and exterior walls of the Building in good repair, reasonable wear
and tear and damages caused by Tenant, its agents and contractors excluded. The
term "walls" as used in this Paragraph 10 shall not include windows, glass or
plate glass, doors or overhead doors, special store fronts, dock bumpers, dock
plats or levelers, or office entries. Tenant shall promptly give Landlord
written notice of any repair required by Landlord pursuant to this Paragraph 10,
after which Landlord shall have a reasonable opportunity to repair.

          11.     TENANT'S REPAIRS. Landlord, at Tenant's expense as provided in
Paragraph 6, shall maintain in good repair and condition the parking areas
(including exterior lighting in the parking areas) and other common areas of the
Building, including, but not limited to driveways, alleys, landscape and grounds
surrounding the Premises. Subject to Landlord's obligations in Paragraph 10 and
subject to Paragraphs 9 and 15, Tenant, at its expense, shall repair, replace
and maintain in good condition all portions of the Premises and all areas,
improvements and systems exclusively serving the Premises including, without
limitation, dock and loading areas, truck doors, plumbing, water and sewer lines
up to points of common connection, fire sprinklers and fire protection systems,
entries, doors, ceilings and room membrane, windows, interior walls, and the
interior side of demising walls, and heating, ventilation and air conditioning
systems. Such repair

                                      -4-

<PAGE>

and replacements include capital expenditures and repairs whose benefit may
extend beyond the Term. Heating, ventilation and air conditioning systems and
other mechanical and building systems serving the Premises shall be maintained
at Tenant's expense pursuant to maintenance service contracts entered into by
Tenant or, at Landlord's election, by Landlord. The scope of services and
contractors under such maintenance contracts shall be reasonably approved by
Landlord. If Tenant fails to perform any repair or replacement for which it is
responsible, Landlord may perform such work and be reimbursed by Tenant within
10 days after demand therefor. Subject to Paragraphs 9 and 15, Tenant shall bear
the full cost of any repair or replacement to any part of the Building or
Project that results from damage caused by Tenant, its agents, contractors, or
invitees and any repair that benefits only the Premises.

          12.     TENANT-MADE ALTERATIONS AND TRADE FIXTURES. Any alterations,
additions, or improvements made by or on behalf of Tenant to the Premises
("Tenant-Made Alterations") shall be subject to Landlord's prior written
consent. Tenant shall cause, at its expense, all Tenant-Made Alterations to
comply with insurance requirements and with Legal Requirements and shall
construct at its expense any alteration or modification required by Legal
Requirements as a result of any Tenant-Made Alterations. All Tenant-Made
Alterations shall be constructed in a good and workmanlike manner by contractors
reasonably acceptable to Landlord and only good grades of materials shall be
used. All plans and specifications for any Tenant-Made Alterations shall be
submitted to Landlord for its approval. Landlord may monitor construction of the
Tenant-Made Alterations. Tenant shall reimburse Landlord for its costs in
reviewing plans and specifications and in monitoring construction. Landlord's
right to review plans and specifications and to monitor construction shall be
solely for its own benefit, and Landlord shall have no duty to see that such
plans and specifications or construction comply with applicable laws, codes,
rules and regulations. Tenant shall provide Landlord with the identities and
mailing addresses of all persons performing work or supplying materials, prior
to beginning such construction, and Landlord may post on and about the Premises
notices of non-responsibility pursuant to applicable law. Tenant shall furnish
security or make other arrangements satisfactory to Landlord to assure payment
for the completion of all work free and clear of liens and shall provide
certificates of insurance for worker's compensation and other coverage in
amounts and from an insurance company satisfactory to Landlord protecting
Landlord against liability for personal injury or property damage during
construction. Upon completion of any Tenant-Made Alterations, Tenant shall
deliver to Landlord sworn statements setting forth the names of all contractors
and subcontractors who did work on the Tenant-Made Alterations and final lien
waivers from all such contractors and subcontractors. Upon surrender of the
Premises, all Tenant-Made Alterations and any leasehold improvements constructed
by Landlord or Tenant shall remain on the Premises as Landlord's property,
except to the extent Landlord requires removal at Tenant's expense of any such
items or Landlord and Tenant have otherwise agreed in writing in connection
with Landlord's consent to any Tenant-Made Alterations. Upon Tenant's written
request, Landlord shall provide Tenant, at the time of Tenant's request for
approval of Tenant-Made Alterations, a list of which Tenant-Made Alterations
Landlord will require Tenant to remove upon surrender of the Premises. Tenant
shall repair any damage caused by such removal.

                  Tenant, at its own cost and expense and without Landlord's
prior approval, may erect such shelves, bins, machinery and trade fixtures
(collectively "Trade Fixtures") in the ordinary course of its business provided
that such items do not alter the basic character of the Premises, do not
overload or damage the Premises, and may be removed without injury to the
Premises, and the construction, erection, and installation thereof complies with
all Legal Requirements and with Landlord's requirements set forth above. Tenant
shall remove its Trade Fixtures and shall repair any damage caused by such
removal.

         13.      SIGNS. Tenant shall not make any changes to the exterior of
the Premises, install any exterior lights, decorations, balloons, flags,
pennants, banners, or painting, or erect or install any signs, windows or door
lettering, placards, decorations, or advertising media of any type which can be
viewed from the exterior of the Premises, without Landlord's prior written
consent, which consent shall not be unreasonably withheld. Upon surrender or
vacation of the Premises, Tenant shall have removed all signs and shall repair
any damage to the building facia surface to which its signs are attached. Tenant
shall obtain all applicable governmental permits and approvals for sign and
exterior treatments. All signs, decorations, advertising media, blinds,
draperies and other window treatment or bars or other security installations
visible from outside the Premises shall be subject to Landlord's approval, which
approval shall not be unreasonably withheld, and conform in all respects to
Landlord's requirements.

         14.      PARKING. Tenant shall be entitled to park in common with other
tenants of the Project in those areas designated for nonreserved parking.
Landlord may allocate parking spaces among Tenant and other tenants in the
Project if Landlord determines that such parking facilities are becoming
crowded. Landlord shall not be responsible for enforcing Tenant's parking rights
against any third parties.

         15.      RESTORATION. If at any time during the Lease Term the Premises
are damaged by a fire or other casualty, Landlord shall notify Tenant within 15
days after such damage as to the amount of time Landlord reasonably estimates
will take to restore the Premises. If the restoration time is estimated to
exceed 4 months, either Landlord or Tenant may elect to terminate this Lease
upon notice to the other party given no later than 30 days after Landlord's
notice. If neither party elects to terminate this Lease or if Landlord estimates
that restoration will take 4 months or less, then, Landlord shall promptly
restore the Premises (including the Initial Improvements as defined in Addendum
3 attached hereto) excluding Tenant's Tenant-Made Alterations, Trade Fixtures
and personal property, subject to delays arising from Force Majeure events.
Tenant at Tenant's expense shall promptly perform, subject to delays arising
from Force Majeure events, all repairs or restoration to Tenant's Tenant-Made
Alterations, Trade Fixtures and personal property and shall promptly re-inter
the Premises and commence doing business in accordance with this Lease.
Notwithstanding the foregoing, either party may terminate this Lease if the
Premises are damaged during the last year of the Lease Term and Landlord
reasonably estimates that it will take more than one month to repair such
damage. Base Rent and Operating Expenses shall be abated for the period of
repair and restoration in the proportion which the area of the Premises, if any,

                                      -5-

<PAGE>

which is not usable by Tenant bears to the total area of the Premises. Such
abatement shall be the sole remedy of Tenant, and except as provided herein,
Tenant waives any right to terminate the Lease by reason of damage or casualty
loss.

         16.      CONDEMNATION. If any part of the Premises or the Project
should be taken for any public or quasi-public use under governmental law,
ordinance, or regulation, or by right of eminent domain, or by private purchase
in lieu thereof (a "Taking" or "Taken"), and in Tenant's reasonable judgment the
Taking would prevent or materially interfere with Tenant's use of the Premises
or in Landlord's reasonable judgment would materially interfere with or impair
its ownership or operation of the Project, then upon written notice by Landlord
or Tenant this Lease shall terminate and Base Rent shall be apportioned as of
said date. If part of the Premises shall be Taken, and this Lease is not
terminated as provided above, the Base Rent payable hereunder during the
unexpired Lease Term shall be reduced to such extent as may be fair and
reasonable under the circumstances. In the event of any such Taking, Landlord
shall be entitled to receive the entire price or award from any such Taking
without any payment to Tenant, and Tenant hereby assigns to Landlord Tenant's
interest, if any, in such award. Tenant shall have the right, to the extent that
same shall not diminish Landlord's award, to make a separate claim against the
condemning authority (but not Landlord) for such compensation as maybe
separately awarded or recoverable by Tenant for moving expenses and damage to
Tenant's Trade Fixtures, if a separate award for such items is made to Tenant.

         17.      ASSIGNMENT AND SUBLETTING. Without Landlord's prior written
consent, which shall not be unreasonably withheld pursuant to the provisions of
Addendum 6 attached hereto, Tenant shall not assign this Lease or sublease the
Premises or any part thereof or mortgage, pledge, or hypothecate its leasehold
interest or grant any concession or license within the Premises and any attempt
to do any of the foregoing shall be void and of no effect. For purposes of this
paragraph, a transfer of the ownership interests controlling Tenant shall be
deemed an assignment of this Lease unless such ownership interests are publicly
traded. Notwithstanding the above, Tenant may assign or sublet the Premises, or
any part thereof, to any entity controlling Tenant, controlled by Tenant or
under common control with Tenant (a "Tenant Affiliate"), without the prior
written consent of Landlord. Tenant shall reimburse Landlord for all of
Landlord's reasonable out-of-pocket expenses in connection with any assignment
or sublease. Upon Landlord's receipt of Tenant's written notice of a desire to
assign or sublet the Premises, or any part thereof (other than to a Tenant
Affiliate), Landlord may, by giving written notice to Tenant within 30 days
after receipt of Tenant's notice, terminate this Lease with respect to the space
described in Tenant's notice, as of the date specified in Tenant's notice for
the commencement of the proposed assignment or sublease.

                  Notwithstanding anything contained herein to the contrary,
provided no default has occurred and is continuing under this Lease, upon 10
days prior written notice to Landlord, Tenant may, without Landlord's prior
written consent, sublease a portion of the Premises consisting of approximately
3,000 square feet to Tenant's customer, Smith & Hawkins for purposes of retail
outlet space ("Smith & Hawkins Sublease"), upon the express understandings and
conditions that (a) Landlord neither approves nor disapproves the terms,
conditions and agreements contained in the Smith & Hawkins Sublease (all of
which shall be subordinate and subject at all times to the terms, covenants and
conditions of the Lease) and assumes no liability or obligation of any kind
whatsoever on account of anything contained in the Smith & Hawkins Sublease; (b)
Landlord shall not be deemed to have waived any rights under the Lease nor shall
Landlord be deemed to have waived Tenant's obligations to obtain any required
consents under the Lease (other than consent to the Smith & Hawkins Sublease
itself); (c) notwithstanding anything in the Smith & Hawkins Sublease to the
contrary, Tenant shall be and continue to remain liable for the payment of rent
and the full and prompt performance of all of the obligations of Tenant under
and as set forth in the Lease; (d) nothing contained in the Smith & Hawkins
Sublease shall be taken or construed to in any way modify, alter, waive or
affect any of the terms, covenants or conditions contained in the Lease, or be
deemed to grant Smith & Hawkins any privity of contract with Landlord, or
require Landlord to accept any payments from Smith & Hawkins on behalf of
Tenant; (e) the Smith & Hawkins Sublease shall be deemed and agreed to be a
sublease only and not an assignment and there shall be no further subletting or
assignment of all or any portion of the Premises (including the premises demised
by the Smith & Hawkins Sublease) except in accordance with the terms and
conditions of the Lease; and (f) if Landlord terminates the Lease as a result of
a default by Tenant as set forth in the Lease, the Smith & Hawkins Sublease
shall automatically terminate concurrently therewith unless Landlord elects in
writing to keep the Smith & Hawkins Sublease in full force and effect in which
case the Smith & Hawkins Sublease shall become and be deemed to be a direct
indenture of lease between Landlord and Smith & Hawkins.

                  Notwithstanding any assignment or subletting, Tenant and any
guarantor or surety of Tenant's obligations under this Lease shall at all times
remain fully responsible and liable for the payment of the rent and for
compliance with all of Tenant's other obligations under this Lease (regardless
of whether Landlord's approval has been obtained for any such assignments or
sublettings). In the event that the rent due and payable by a sublessee or
assignee (or a combination of the rental payable under such sublease or
assignment plus any bonus or other consideration therefor or incident thereto)
exceeds the rental payable under this Lease (excepting the Smith & Hawkins
Sublease), then Tenant shall he bound and obligated to pay Landlord as
additional rent hereunder 50% of all such excess rental and other excess
consideration within 10 days following receipt thereof by Tenant (after
deducting standard tenant improvements, reasonable brokerage fees, and
reasonable attorney's fees).

                  If this Lease be assigned or if the Premises be subleased
(whether in whole or in part) or in the event of the mortgage, pledge, or
hypothecation of Tenant's leasehold interest or grant of any concession or
license within the Premises or if the Premises be occupied in whole or in part
by anyone other than Tenant, then upon a default by Tenant hereunder Landlord
may collect rent from the assignee, subleasee, mortgagee, pledgee, party to whom
the leasehold interest was hypothecated, concessionee or licensee or other
occupant and, except to the extent set forth in the preceding paragraph, apply
the amount collected to the next rent payable hereunder; and all such rentals
collected by Tenant shall be held in trust for Landlord and immediately
forwarded to Landlord. No such transaction or collection of rent or application
thereof by Landlord, however, shall be deemed a waiver of these provisions or a
release of Tenant from the further performance by Tenant of its covenants,
duties, or obligations hereunder.

                                      -6-

<PAGE>

         18.      INDEMNIFICATION. Except for the negligence of Landlord, its
agents, employees or contractors, and to the extent permitted by law, Tenant
agrees to indemnify, defend and hold harmless Landlord, and Landlord's agents,
employees and contractors, from and against any and all losses, liabilities,
damages, costs and expenses (including attorneys' fees) resulting from claims by
third parties for injuries to any person and damage to or theft or
misappropriation or loss of property occurring in or about the Project and
arising from the use and occupancy of the Premises or from any activity, work,
or thing done, permitted or suffered by Tenant in or about the Premises or due
to any other act or omission of Tenant, its subtenants, assignees, invitees,
employees, contractors and agents. The furnishing of insurance required
hereunder shall not be deemed to limit Tenant's obligations under this Paragraph
18.

         19.      INSPECTION AND ACCESS. Landlord and its agents,
representatives, and contractors may enter the Premises at any reasonable time
to inspect the Premises and to make such repairs as may be required or permitted
pursuant to this Lease and for any other business purpose. Landlord and
Landlord's representatives may enter the Premises during business hours for the
purpose of showing the Premises to prospective purchasers and, during the last
year of the Lease Term, to prospective tenants. Landlord may erect a suitable
sign on the Premises stating the Premises are available to let or that the
Project is available for sale. Landlord may grant easements, make public
dedications, designate common areas and create restrictions on or about the
Premises, provided that no such easement, dedication, designation or restriction
materially interferes with Tenant's use or occupancy of the Premises. At
Landlord's request, Tenant shall execute such instruments as may be necessary
for such easements, dedications or restrictions.

         20.      QUIET ENJOYMENT. If Tenant shall perform all of the covenants
and agreements herein required to be performed by Tenant, Tenant shall, subject
to the terms of this Lease, at all times during the Lease Term, have peaceful
and quiet enjoyment of the Premises against any person claiming by, through or
under Landlord.

         21.      SURRENDER. Upon termination of the Lease Term or earlier
termination of Tenant's right of possession, Tenant shall surrender the Premises
to Landlord in the same condition as received, broom clean, ordinary wear and
tear and casualty loss and condemnation covered by Paragraphs 15 and 16
excepted. Any Trade Fixtures, Tenant-Made Alterations and property not so
removed by Tenant as permitted or required herein shall be deemed abandoned and
may be stored, removed, and disposed of by Landlord at Tenant's expense, and
Tenant waives all claims against Landlord for any damages resulting from
Landlord's retention and disposition of such property. All obligations of Tenant
hereunder not fully performed as of the termination of the Lease Term shall
survive the termination of the Lease Term, including without limitation,
indemnity obligations, payment obligations with respect to Operating Expenses
and obligations concerning the condition and repair of the Premises.

         22.      HOLDING OVER. If Tenant retains possession of the Premises
after the termination of the Lease Term, unless otherwise agreed in writing,
such possession shall be subject to immediate termination by Landlord at any
time, and all of the other terms and provisions of this Lease (excluding any
expansion or renewal option or other similar right or option) shall be
applicable during such holdover period, except that Tenant shall pay Landlord
from time to time, upon demand, as Base Rent for the holdover period, an amount
equal to 100% of the Base Rent in effect on the termination date during the
first 30 days of such holdover period and an amount equal to 150% of the Base
Rent in effect on the termination date for any holdover period thereafter,
computed on a monthly basis for each month or part thereof during such holding
over. All other payments shall continue under the terms of this Lease. In
addition, Tenant shall be liable for all damages incurred by Landlord as a
result of such holding over. No holding over by Tenant, whether with or without
consent of Landlord, shall operate to extend this Lease except as otherwise
expressly provided, and this Paragraph 22 shall not be construed as consent for
Tenant to retain possession of the Premises.

         23.      EVENTS OF DEFAULT. Each of the following events shall be an
event of default ("Event of Default") by Tenant under this Lease:

                   (i)     Tenant shall fail to pay any installment of Base Rent
         or any other payment required herein when due, and such failure shall
         continue for a period of 5 days after written notice from Landlord to
         Tenant that such payment was due; provided, however, that Landlord
         shall not be obligated to provide written notice of such failure more
         than 2 times in any consecutive 12-month period, and the failure of
         Tenant to pay any third or subsequent installment of Base Rent or any
         other payment required herein when due in any consecutive 12-month
         period shall constitute an Event of Default by Tenant under this Lease
         without the requirement of notice or opportunity to cure.

                   (ii)    Tenant or any guarantor or surety of Tenant's
         obligations hereunder shall (A) make a general assignment for the
         benefit of creditors; (B) commence any case, proceeding or other action
         seeking to have an order for relief entered on its behalf as a debtor
         or to adjudicate it a bankrupt or insolvent, or seeking reorganization,
         arrangement, adjustment, liquidation, dissolution or composition of it
         or its debts or seeking appointment of a receiver, trustee, custodian
         or other similar official for it or for all or of any substantial part
         of its property (collectively a "proceeding for relief"); (C) become
         the subject of any proceeding for relieve which is not dismissed
         within 60 days of its filing or entry; or (D) die or suffer a legal
         disability (if Tenant, guarantor, or surety is an individual) or be
         dissolved or otherwise fail to maintain its legal existence (if Tenant,
         guarantor or surety is a corporation, partnership or other entity).

                  (iii)    Any insurance required to be maintained by Tenant
         pursuant to this Lease shall be cancelled or terminated or shall expire
         or shall be reduced or materially changed, except, in each case, as
         permitted in this Lease.

                  (iv)     Tenant shall not occupy or shall vacate the Premises
         or shall fail to continuously operate its business at the Premises for
         the permitted use set forth herein, whether or not Tenant is in
         monetary or other

                                      -7-

<PAGE>

          default under this Lease. Tenant's vacating of the Premises shall not
          constitute an Event of Default if, prior to vacating the Premises,
          Tenant has made arrangements reasonably acceptable to Landlord to (a)
          insure that Tenant's insurance for the Premises will not be voided or
          cancelled with respect to the Premises as a result of such vacancy,
          (b) insure that the Premises are secured and not subject to vandalism,
          and (c) insure that the Premises will be properly maintained after
          such vacation. Tenant shall inspect the Premises at least once each
          month and report monthly in writing to Landlord on the condition of
          the Premises.

                   (v)     Tenant shall attempt or there shall occur any
         assignment, subleasing or other transfer of Tenant's interest in or
         with respect to this Lease except as otherwise permitted in this Lease.

                   (vi)    Tenant shall fail to discharge any lien placed upon
         the Premises in violation of this Lease within 30 days after any such
         lien or encumbrance is filed against the Premises.

                   (vii)   Tenant shall fail to comply with any provision of
         this Lease other than those specifically referred to in this Paragraph
         23, and except as otherwise expressly provided herein, such default
         shall continue for more than 30 days after Landlord shall have given
         Tenant written notice of such default, unless curing such default will,
         due to the nature of such default, require a period of time in excess
         of 30 days, then, after such period of time as is reasonably necessary,
         but in no event shall curing such default exceed 90 days.

          24.     LANDLORD'S REMEDIES. Upon each occurrence of an Event of
Default and so long as such Event of Default shall be continuing, Landlord may
at any time thereafter at its election: terminate this Lease or Tenant's right
of possession, (but Tenant shall remain liable as hereinafter provided) and/or
pursue any other remedies at law or in equity. Upon the termination of this
Lease or termination of Tenant's right of possession, it shall be lawful for
Landlord, without formal demand or notice of any kind, to re-enter the Premises
by summary dispossession proceedings or any other action or proceeding
authorized by law and to remove Tenant and all persons and property therefrom.
If Landlord re-enters the Premises, Landlord shall have the right to keep in
place and use, or remove and store, all of the furniture, fixtures and equipment
at the Premises.

                   If Landlord terminates this Lease, Landlord may recover from
Tenant the sum of: all Base Rent and all other amounts accrued hereunder to the
date of such termination; the cost of reletting the whole or any part of the
Premises, including without limitation brokerage fees and/or leasing commissions
incurred by Landlord, and costs of removing and storing Tenant's or any other
occupant's property, repairing, altering, remodeling, or otherwise putting the
Premises into condition acceptable to a new tenant or tenants, and all
reasonable expenses incurred by Landlord in pursuing its remedies, including
reasonable attorneys' fees and court costs; and the excess of the then present
value of the Base Rent and other amounts payable by Tenant under this Lease as
would otherwise have been required to be paid by Tenant to Landlord during the
period following the termination of this Lease measured from the date of such
termination to the expiration date stated in this Lease, over the present value
of any net amounts which Tenant establishes Landlord can reasonably expect to
recover by reletting the Premises for such period, taking into consideration the
availability of acceptable tenants and other market conditions affecting
leasing. Such present values shall be calculated at a discount rate equal to the
90-day U.S. Treasury bill rate at the date of such termination.

                  If Landlord terminates Tenant's right to possession without
terminating the Lease after an Event of Default, Landlord shall use commercially
reasonable efforts to relet the Premises; provided, however, (a) Landlord shall
not be obligated to accept any tenant proposed by Tenant, (b) Landlord shall
have the right to lease any other space controlled by Landlord first, and (c)
any proposed tenant shall meet all of Landlord's leasing criteria. For the
purpose of such reletting Landlord is authorized to make any repairs, changes,
alterations, or additions in or to the Premises as Landlord deems reasonably
necessary or desirable. If the Premises are not relet, then Tenant shall pay to
Landlord as damages a sum equal to the amount of the rental reserved in this
Lease for such period or periods, plus the cost of recovering possession of the
Premises (including attorneys' fees and costs of suit), the unpaid Base Rent and
other amounts accrued hereunder at the time of repossession, and the costs
incurred in any attempt by Landlord to relet the Premises. If the Premises are
relet and a sufficient sum shall not be realized from such reletting [after
first deducting therefrom, for retention by Landlord, the unpaid Base Rent and
other amounts accrued hereunder at the time of reletting, the cost of recovering
possession (including attorneys' fees and costs of suit), all of the costs and
expense of repairs, changes, alterations, and additions, the expense of such
reletting (including without limitation brokerage fees and leasing commissions)
and the cost of collection of the rent accruing therefrom to satisfy the rent
provided for in this Lease to be paid, then Tenant shall immediately satisfy and
pay any such deficiency. Any such payments due Landlord shall be made upon
demand therefor from time to time and Tenant agrees that Landlord may file suit
to recover any sums falling due from time to time. Notwithstanding any such
reletting without termination, Landlord may at any time thereafter elect in
writing to terminate this Lease for such previous breach.

         Exercise by Landlord of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises and/or a termination of this Lease by Landlord, whether by agreement or
by operation of Law, it being understood that such surrender and/or
termination can be effected only by the written agreement of Landlord and
Tenant. Any law, usage, or custom to the contrary notwithstanding, Landlord
shall have the right at all times to enforce the provisions of this Lease in
strict accordance with the terms hereof; and the failure of Landlord at any time
to enforce its rights under this Lease strictly in accordance with same shall
not be construed as having created a custom in any way or manner contrary to the
specific terms, provisions, and covenants of this Lease or as having modified
the same. Tenant and Landlord further agree that forbearance or waiver by
Landlord to enforce its rights pursuant to this Lease or at law or in equity,
shall not be a waiver of Landlord's right to enforce one or more of its rights
in connection with any subsequent default. A receipt by Landlord of rent or
other payment with knowledge of the breach of any covenant hereof shall not be
deemed a waiver of such breach, and no waiver by Landlord of any provision of
this Lease shall be deemed to have been made unless expressed in writing and
signed by Landlord. To the greatest extent permitted by law, Tenant waives the
service of notice of Landlord's intention to re-enter as provided for in any

                                      -8-

<PAGE>

statute, or to institute legal proceedings to that end, and also waives all
right of redemption in case Tenant shall be dispossessed by a judgment or by
warrant of any court or judge. The terms "enter," "re-enter," "entry" or
"re-entry," as used in this Lease, are not restricted to their technical legal
meanings. Any reletting of the Premises shall be on such terms and conditions as
Landlord in its sole discretion may determine (including without limitation a
term different than the remaining Lease Term, rental concessions, alterations
and repair of the Premises, lease of less than the entire Premises to any tenant
and leasing any or all other portions of the Project before reletting the
Premises). Landlord shall not be liable, nor shall Tenant's obligations
hereunder be diminished because of, Landlord's failure to relet the Premises or
collect rent due in respect of such reletting, provided that Landlord has used
commercially reasonable efforts to mitigate its damages as provided for above.

         25.      TENANT'S REMEDIES/LIMITATION OF LIABILITY. Landlord shall not
be in default hereunder unless Landlord fails to perform any of its obligations
hereunder within 30 days after written notice from Tenant specifying such
failure (unless such performance will, due to the nature of the obligation,
require a period of time in excess of 30 days, then after such period of time as
is reasonably necessary). All obligations of Landlord hereunder shall be
construed as covenants, not conditions. If such default by Landlord shall occur,
Tenant may pursue any legal or equitable remedy for which it is entitled. All
obligations of Landlord under this Lease will be binding upon Landlord only
during the period of its ownership of the Premises and not thereafter. The term
"Landlord" in this Lease shall mean only the owner, for the time being of the
Premises, and in the event of the transfer by such owner of its interest in the
Premises, such owner shall thereupon be released and discharged from all
obligations of Landlord thereafter accruing, but such obligations shall be
binding during the Lease Term upon each new owner for the duration of such
owner's ownership. Any liability of Landlord under this Lease shall be limited
solely to its interest in the Project, and in no event shall any personal
liability be asserted against Landlord in connection with this Lease nor shall
any recourse be had to any other property or assets of Landlord.

         26.      WAIVER OF JURY TRIAL. TENANT AND LANDLORD WAIVE ANY RIGHT TO
TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING
OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

         27.      SUBORDINATION. This Lease and Tenant's interest and rights
hereunder are and shall be subject and subordinate at all times to the lien of
any first mortgage, now existing or hereafter created on or against the Project
or the Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant. Tenant agrees,
at the election of the holder of any such mortgage, to attorn to any such
holder. Tenant agrees upon demand to execute, acknowledge and deliver such
instruments, confirming such subordination and such instruments of attornment as
shall be requested by any such holder. Notwithstanding the foregoing, any such
holder may at any time subordinate its mortgage to this Lease, without Tenant's
consent, by notice in writing to Tenant, and thereupon this Lease shall be
deemed prior to such mortgage without regard to their respective dates of
execution, delivery or recording and in that event such holder shall have the
same rights with respect to this Lease as though this Lease had been executed
prior to the execution, delivery and recording of such mortgage and had been
assigned to such holder. The term "mortgage" whenever used in this Lease shall
be deemed to include deeds of trust, security assignments and any other
encumbrances, and any reference to the "holder" of a mortgage shall be deemed to
include the beneficiary under a deed of trust.

                  Tenant shall not be obligated to subordinate the Lease or its
interest therein to any future mortgage, deed of trust or ground lease on the
Project unless concurrently with such subordination the holder of such mortgage
or deed of trust or the ground lessor under such ground lease agrees not to
disturb Tenant's possession of the Premises under the terms of the Lease in the
event such holder or ground lessor acquires title to the Premises through
foreclosure, deed in lieu of foreclosure or otherwise.

         28.      MECHANIC'S LIENS. Tenant has no express or implied authority
to create or place any lien or encumbrance of any kind upon, or in any manner to
bind the interest of Landlord or Tenant in, the Premises or to charge the
rentals payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for any
construction or repairs. Tenant covenants and agrees that it will pay or cause
to be paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed on the
Premises and that it will save and hold Landlord harmless from all loss, cost or
expense based on or arising out of asserted claims or liens against the
leasehold estate or against the interest of Landlord in the Premises or under
this Lease. Tenant shall give Landlord immediate written notice of the placing
of any lien or encumbrance against the Premises and cause such lien or
encumbrance to be discharged within 30 days of the filing or recording thereof;
provided, however, Tenant may contest such liens or encumbrances as long as such
contest prevents foreclosure of the lien or encumbrance and Tenant causes lien
or encumbrance to be bonded or insured over in a manner satisfactory to Landlord
within such 30 day period.

         29.      ESTOPPEL CERTIFICATES. Tenant agrees, from time to time,
within 10 days after request of Landlord, to execute and deliver to Landlord, or
Landlord's designee, any estoppel certificate requested by Landlord, stating
that this Lease is in full force and effect, the date to which rent has been
paid, that Landlord is not in default hereunder (or specifying in detail the
nature of Landlord's default), the termination date of this Lease and such other
matters pertaining to this Lease as may be requested by Landlord. Tenant's
obligation to furnish each estoppel certificate in a timely fashion is a
material inducement for Landlord's executive of this Lease. No cure or grace
period provided in this Lease shall apply to Tenant's obligations to timely
deliver an estoppel certificate.

                                      -9-

<PAGE>

          30.     ENVIRONMENTAL REQUIREMENTS. Except for Hazardous Material
contained in products used by Tenant in de minimis quantities for ordinary
cleaning and office purposes, Tenant shall not affirmatively consent or cause
any party to bring any Hazardous Material upon the Premises or transport, store,
use, generate, manufacture or release any Hazardous Material in or about the
Premises without Landlord's prior written consent. Tenant, at its sole cost and
expense, shall operate its business in the Premises in strict compliance with
all Environmental Requirements and shall remediate in a manner reasonably
satisfactory to Landlord any Hazardous Materials released on or from the Project
by Tenant, its agents, employees, contractors, subtenants or invitees. Tenant
shall complete and certify to disclosure statements as requested by Landlord
from time to time relating to Tenant's transportation, storage, use, generation,
manufacture or release of Hazardous Materials on the Premises. The term
"Environmental Requirements" means all applicable present and future statutes,
regulations, ordinances, rules, codes, judgments, orders or other similar
enactments of any governmental authority or agency regulating or relating to
health, safety, or environmental conditions on, under, or about the Premises or
the environment, including without limitation, the following: the Comprehensive
Environmental Response, Compensation and Liability Act; the Resource
Conservation and Recovery Act; and all state and local counterparts thereto, and
any regulations or policies promulgated or issued thereunder. The term
"Hazardous Materials" means and includes any substance, material, waste,
pollutant, or contaminant listed or defined as hazardous or toxic, under any
Environmental Requirements, asbestos and petroleum, including crude oil or any
fraction thereof, natural gas liquids, liquified natural gas, or synthetic gas
usable for fuel (or mixtures of natural gas and such synthetic gas). As defined
in Environmental Requirements, Tenant is and shall be deemed to be the
"operator" of Tenant's "facility" and the "owner" of all Hazardous Materials
brought on the Premises by Tenant, its agents, employees, contractors or
invitees, and the wastes, by-products, or residues generated, resulting, or
produced therefrom.

                   Tenant shall indemnify, defend, and hold Landlord harmless
from and against any and all losses (including, without limitation, diminution
in value of the Premises or the Project and loss of rental income from the
Project), claims, demands, actions, suits, damages (including, without
limitation, punitive damages), expenses (including, without limitation,
remediation, removal, repair, corrective action, or cleanup expenses), and costs
(including, without limitation, actual attorneys' fees, consultant fees or
expert fees and including, without limitation, removal or management of any
asbestos brought into the property or disturbed in breach of the requirements of
this Paragraph 30, regardless of whether such removal or management is required
by law) which are brought or recoverable against, or suffered or incurred by
Landlord as a result of any release of Hazardous Materials for which Tenant is
obligated to remediate as provided above or any other breach of the requirements
under this Paragraph 30 by Tenant, its agents, employees, contractors,
subtenants, assignees or invitees, regardless of whether Tenant had knowledge of
such noncompliance. The obligations of Tenant under this Paragraph 30 shall
survive any termination of this Lease.

                  Notwithstanding anything to the contrary in this Paragraph 30,
Tenant shall have no liability of any kind to Landlord as to Hazardous Materials
on the Premises caused or permitted by (i) Landlord, its agents, employees,
contractors or invitees; or (ii) any other tenants in the Project or their
agents, employees, contractors, subtenants, assignees or invitees; or (iii) any
other person or entity located outside of the Premises or the Project.

                  Landlord shall have access to, and a right to perform
inspections and tests of, the Premises to determine Tenant's compliance with
Environmental Requirements, its obligations under this Paragraph 30, or the
environmental condition of the Premises. Access shall be granted to Landlord
upon Landlord's prior notice to Tenant and at such times so as to minimize, so
far as may be reasonable under the circumstances, any disturbance to Tenant's
operations. Such inspections and tests shall be conducted at Landlord's expense,
unless such inspections or tests reveal that Tenant has not complied with any
Environmental Requirement, in which case Tenant shall reimburse Landlord for the
reasonable cost of such inspection and tests. Landlord's receipt of or
satisfaction with any environmental assessment in no way waives any rights that
Landlord holds against Tenant.

         If Hazardous Materials are hereafter discovered on the Premises, and
the presence of such Hazardous Materials is not the result of Tenant's use of
the Premises or any act or omission of Tenant or its agents, employees,
contractors, subtenants or invitees, and the presence of such Hazardous
Materials results in any contamination, damages, or injury to the Premises that
materially and adversely affects Tenant's occupancy or use of the Premises,
Landlord shall promptly take all actions at its sole expense as are necessary to
remediate such Hazardous Materials and as may be required by the Environmental
Requirements. Actual or threatened action or litigation by any governmental
authority is not a condition prerequisite to Landlord's obligations under this
paragraph. Within 30 days after notification from Tenant supported by reasonable
documentation setting forth such presence or release of Hazardous Materials, and
after Landlord has been given a reasonable period of time after such 30-day
period to conduct its own investigation to confirm such presence or release of
Hazardous Materials, Landlord shall either terminate this Lease or commence to
remediate such Hazardous Materials within 180 days after the completion of
Landlord's investigation and thereafter diligently prosecute such remediation to
completion. If Landlord fails to commence such remediation or if Landlord
commences such remediation and fails to diligently prosecute same until
completion, then Tenant as its sole remedy may terminate this Lease by written
notice to Landlord after expiration of 30 days following a notice to Landlord
that Tenant intends to terminate this Lease if Landlord does not promptly
commence or diligently prosecute the remediation within such 30-day period. If
Landlord commences remediation pursuant to this paragraph, Base Rent and
Operating Expenses shall be equitably adjusted if and to the extent and during
the period the Premises are unsuitable for Tenant's business. Notwithstanding
anything herein to the contrary, if Landlord obtains a letter from the
appropriate governmental authority that no further remediation is required prior
to the effective date of any such termination, such termination shall be null
and void and this Lease shall remain in full force and effect.

         31.      RULES AND REGULATIONS. Tenant shall, at all times during the
Lease Term and any extension thereof, comply with all reasonable rules and
regulations at any time or from time to time established by Landlord covering
use of the Premises and the Project. The current rules and regulations are
attached hereto. In the event of any conflict between

                                      -10-

<PAGE>

said rules and regulations and other provisions of this Lease, the other terms
and provisions of this Lease shall control. Landlord shall not have any
liability or obligation for the breach of any rules or regulations by other
tenants in the Project.

          32.     SECURITY SERVICE. Tenant acknowledges and agrees that, while
Landlord may patrol the Project, Landlord is not providing any security services
with respect to the Premises and that Landlord shall not be liable to Tenant
for, and Tenant waives any claim against Landlord with respect to, any loss by
theft or any other damage suffered or incurred by Tenant in connection with any
unauthorized entry into the Premises or any other breach of security with
respect to the Premises.

         33.      FORCE MAJEURE. Except for monetary obligations, neither
Landlord nor Tenant shall be held responsible for delays in the performance of
its obligations hereunder when caused by strikes, lockouts, labor disputes, acts
of God, inability to obtain labor or materials or reasonable substitutes
therefor, governmental restrictions, governmental regulations, governmental
controls, delay in issuance of permits, enemy or hostile governmental action,
civil commotion, fire or other casualty, and other causes beyond the reasonable
control of Landlord or Tenant, as the case may be ("Force Majeure").

         34.      ENTIRE AGREEMENT. This Lease constitutes the complete
agreement of Landlord and Tenant with respect to the subject matter hereof. No
representations, inducements, promises or agreements, oral or written, have been
made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant,
which are not contained herein, and any prior agreements, promises,
negotiations, or representations are superseded by this Lease. This Lease may
not be amended except by an instrument in writing signed by both parties hereto.

         35.      SEVERABILITY. If any clause or provision of this Lease is
illegal, invalid or unenforceable under present or future laws, then and in that
event, it is the intention of the parties hereto that the remainder of this
Lease shall not be affected thereby. It is also the intention of the parties to
this Lease that in lieu of each clause or provision of this Lease that is
illegal, invalid or unenforceable, there be added, as a part of this Lease, a
clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.

         36.      BROKERS. Tenant represents and warrants that it has dealt with
no broker, agent or other person in connection with this transaction and that no
broker, agent or other person brought about this transaction, other than the
broker, if any, set forth on the first page of this Lease, and Tenant agrees to
indemnify and hold Landlord harmless from and against any claims by any other
broker, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with Tenant with regard to this leasing
transaction.

         37.      MISCELLANEOUS, (a) Any payments or charges due from Tenant to
Landlord hereunder shall be considered rent for all purposes of this Lease.

         (b)      If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation, each shall be
jointly and severally liable for the obligations of Tenant.

         (c)      All notices required or permitted to be given under this Lease
shall be in writing and shall be sent by registered or certified mail, return
receipt requested, or by a reputable national overnight courier service, postage
prepaid, or by hand delivery addressed to the parties at their addresses below,
and with a copy sent to Landlord at 14100 East 35th Place, Aurora, Colorado
80011. Either party may by notice given aforesaid change its address for all
subsequent notices. Except where otherwise expressly provided to the contrary,
notice shall be deemed given upon delivery.

         (d)      Except as otherwise expressly provided in this Lease or as
otherwise required by law, Landlord retains the absolute right to withhold any
consent or approval.

         (e)      At Landlord's request from time to time Tenant shall furnish
Landlord with true and complete copies of its most recent annual and quarterly
financial statements prepared by Tenant or Tenant's accountants and any other
financial information or summaries that Tenant typically provides to its lenders
or shareholders.

         (f)      Neither this Lease nor a memorandum of lease shall be filed
by or on behalf of Tenant in any public record. Landlord may prepare and file,
and upon request by Landlord Tenant will execute, a memorandum of lease.

         (g)      The normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Lease or any exhibits or amendments hereto.

         (h)      The submission by Landlord to Tenant of this Lease shall have
no binding force or effect, shall not constitute an option for the leasing of
the Premises, nor confer any right or impose any obligations upon either party
until execution of this Lease by both parties.

         (i)      Words of any gender used in this Lease shall be held and
construed to include any other gender, and words in the singular number shall be
held to include the plural, unless the context otherwise requires. The captions
inserted in this Lease are for convenience only and in no way define, limit or
otherwise describe the scope or intent of this Lease, or any provision hereof,
or in any way affect the interpretation of this Lease.

         (j)      Any amount not paid by Tenant within 5 days after its due date
in accordance with the terms of this Lease shall bear interest from such due
date until paid in full at the lesser of the highest rate permitted by
applicable law or 12 percent per year. It is expressly the intent of Landlord
and Tenant at all time to comply with applicable law

                                      -11-

<PAGE>

governing the maximum rate or amount of any interest payable on or in connection
with this Lease. If applicable law is ever judicially interpreted so as to
render usurious any interest called for under this Lease, or contracted for,
charged, taken, reserved, or received with respect to this Lease, then it is
Landlord's and Tenant's express intent that all excess amounts theretofore
collected by Landlord be credited on the applicable obligation (or, if the
obligation has been or would thereby be paid in full, refunded to Tenant), and
the provisions of this Lease immediately shall be deemed reformed and the
amounts thereafter collectible hereunder reduced, without the necessity of the
execution of any new document, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder.

          (k)     Construction and interpretation of this Lease shall be
governed by the laws of the state in which the Project is located, excluding any
principles of conflicts of laws.

         (1)      Time is of the essence as to the performance of each party's
obligations under this Lease.

         (m)      All exhibits and addenda attached hereto are hereby
incorporated into this Lease and made a part hereof. In the event of any
conflict between such exhibits or addenda and the terms of this Lease, such
exhibits or addenda shall control.

         38.      LANDLORD'S LIEN/SECURITY INTEREST. Intentionally deleted.

         39.      LIMITATION OF LIABILITY OF TRUSTEES, SHAREHOLDERS, AND
OFFICERS OF PROLOGIS TRUST. Any obligation or liability whatsoever of ProLogis
Trust, a Maryland real estate investment trust, which may arise at any time
under this Lease or any obligation or liability which may be incurred by it
pursuant to any other instrument, transaction, or undertaking contemplated
hereby shall not be personally binding upon, nor shall resort for the
enforcement thereof be had to the property of, its trustees, directors,
shareholders, officers, employees or agents, regardless of whether such
obligation or liability is in the nature of contract, tort, or otherwise.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first above written.

Signed and acknowledged
in the presence of:                   LANDLORD

/s/ Thomas J. Wheehan                 ProLogis Development Services Incorporated
----------------------------

                                      By: /s/ Douglas A. Kiersey, Jr.
                                          --------------------------------------
                                      Name: Douglas A. Kiersey, Jr.
                                      Title: Senior Vice President

                                      Address:
                                      4710 T Interstate Drive

                                      Cincinnati, OH 45246

                                      (513) 874-9728

Signed and acknowledged
in the presence of:
                                      TENANT

                                      Innotrac Corporation

/s/ Thomas J. Wheehan
----------------------------

                                      By:  /s/ Larry Hanger
                                         -------------------------------------
                                      Name:  Larry Hanger
                                           -----------------------------------
                                      Title:  VP
                                            ----------------------------------

                                      Address:
                                      6655 Sugarloaf Parkway

                                      Duluth, GA  30097-4916

                                      -12-

<PAGE>

STATE OF ILLINOIS

COUNTY OF DU PAGE

         Before me, the subscribers, a notary public in and for said county,
personally appeared Douglas A. Kiersey, Jr. the Senior V.P. of Prologis Trust,
the Landlord in the foregoing instrument, who acknowledged the signing of the
foregoing instrument to be his/her free act and deed on behalf of the Landlord
for the uses and purposes set forth therein.

         IN WITNESS WHEREOF, I have hereunto signed my name and affixed my
official seal on the 23 day of April, 2002.

                                    /s/ Vera Marie Harder
                                    --------------------------------------------
                                    NOTARY PUBLIC, STATE OF ILLINOIS

STATE OF GEORGIA

COUNTY OF GWINNETT

         Before me, the subscribers, a notary public in and for said county,
personally appeared Larry Hanger, the VP of Innotrac, the Tenant in the
foregoing instrument, who acknowledged the signing of the foregoing instrument
to be his/her free act and deed on behalf of the Tenant for the uses and
purposes set forth therein.

         IN WITNESS WHEREOF, I have hereunto signed my name and affixed my
official seal on the 10 day of April, 2002.

                                   /s/
                                   ---------------------------------------------
                                   NOTARY PUBLIC, STATE OF

                                   NOTARY PUBLIC, GWINNETT COUNTY, GEORGIA
                                     MY COMMISSION EXPIRES JUNE 23, 2002

                                      -13-

<PAGE>

                              Rules and Regulations

1.       The sidewalk, entries, and driveways of the Project shall not be
         obstructed by Tenant, or its agents, or used by them for any purpose
         other than ingress and egress to and from the Premises.

2.       Tenant shall not place any objects, including antennas, outdoor
         furniture, etc., in the parking areas, landscaped areas or other areas
         outside of its Premises, or on the roof of the Project.

3.       Except for seeing-eye dogs, no animals shall be allowed in the offices,
         halls, or corridors in the Project.

4.       Tenant shall not disturb the occupants of the Project or adjoining
         buildings by the use of any radio or musical instrument or by the
         making of loud or improper noises.

5.       If Tenant desires telegraphic, telephonic or other electric connections
         in the Premises, Landlord or its agent will direct the electrician as
         to where and how the wires may be introduced; and, without such
         direction, no boring or cutting of wires will be permitted. Any such
         installation or connection shall be made at Tenant's expense.

6.       Tenant shall not install or operate any steam or gas engine or boiler,
         or other mechanical apparatus in the Premises, except as specifically
         approved in the Lease. The use of oil, gas or inflammable liquids for
         heating, lighting or any other purpose is expressly prohibited.
         Explosives or other articles deemed extra hazardous shall not be
         brought into the Project.

7.       Parking any type of recreational vehicles is specifically prohibited on
         or about the Project. Except for the overnight parking of operative
         vehicles, no vehicle of any type shall be stored in the parking areas
         at any time. In the event that a vehicle is disabled, it shall be
         removed within 48 hours. There shall be no "For Sale" or other
         advertising signs on or about any parked vehicle. All vehicles shall be
         parked in the designated parking areas in conformity with all signs and
         other markings. All parking will be open parking, and no reserved
         parking, numbering or lettering of individual spaces will be permitted
         except as specified by Landlord.

8.       Tenant shall maintain the Premises free from rodents, insects and other
         pests.

9.       Landlord reserves the right to exclude or expel from the Project any
         person who, in the judgment of Landlord, is intoxicated or under the
         influence of liquor or drugs or who shall in any manner do any act in
         violation of the Rules and Regulations of the Project.

10.      Tenant shall not cause any unnecessary labor by reason of Tenant's
         carelessness or indifference in the preservation of good order and
         cleanliness. Landlord shall not be responsible to Tenant for any loss
         of property on the Premises, however occurring, or for any damage done
         to the effects of Tenant by the janitors or any other employee or
         person.

11.      Tenant shall give Landlord prompt notice of any defects in the water,
         lawn sprinkler, sewage, gas pipes, electrical lights and fixtures,
         heating apparatus, or any other service equipment affecting the
         Premises.

12.      Except as otherwise set forth in the Lease, Tenant shall not permit
         storage outside the Premises, including without limitation, outside
         storage of trucks and other vehicles, or dumping of waste or refuse or
         permit any harmful materials to be placed in any drainage system or
         sanitary system in or about the Premises.

13.      All moveable trash receptacles provided by the trash disposal firm for
         the Premises must be kept in the trash enclosure areas, if any,
         provided for that purpose.

14.      No auction, public or private, will be permitted on the Premises or the
         Project.

15.      No awnings shall be placed over the windows in the Premises except with
         the prior written consent of Landlord.

16.      The Premises shall not be used for lodging, sleeping or cooking or for
         any immoral or illegal purposes or for any purpose other than that
         specified in the Lease. No gaming devices shall be operated in the
         Premises.

17.      Tenant shall ascertain from Landlord the maximum amount of electrical
         current which can safely be used in the Premises, taking into account
         the capacity of the electrical wiring in the Project and the Premises
         and the needs of other tenants, and shall not use more than such safe
         capacity. Landlord's consent to the installation of electric equipment
         shall not relieve Tenant from the obligation not to use more
         electricity than such safe capacity.

18.      Tenant assumes full responsibility for protecting the Premises from
         theft, robbery and pilferage.

19.      Tenant shall not install or operate on the Premises any machinery or
         mechanical devices of a nature not directly related to Tenant's
         ordinary use of the Premises and shall keep all such machinery free of
         vibration, noise and air waves which may be transmitted beyond the
         Premises.

                                      -14-

<PAGE>

                                   ADDENDUM 1

                             RIGHT OF FIRST REFUSAL

                  ATTACHED TO AND A PART OF THE LEASE AGREEMENT
                          DATED APRIL 23, 2002, BETWEEN
                   PROLOGIS DEVELOPMENT SERVICES INCORPORATED
                                       and
                              INNOTRAC CORPORATION

         (a)      "Offered Space" shall mean the adjoining 110,000 square feet
of space indicated on Exhibit A attached hereto.

         (b)      Provided that as of the date of the giving of Landlord's
Notice, (x) Tenant is the Tenant originally named herein, (y) Tenant actually
occupies all of the Premises originally demised under this Lease and any
premises added to the Premises, and (z) no Event of Default or event which but
for the passage of time or the giving of notice, or both, would constitute an
Event of Default has occurred and is continuing, if at any time during the first
24 months of the Lease Term if Landlord intends to enter into a lease (the
"Proposed Lease") for such Offered Space with anyone (a "Proposed Tenant")
Landlord shall first offer to Tenant the right to lease the Offered Space upon
all the terms and conditions of the Proposed Lease; provided, however, (i) the
Lease Term with respect to the Offered Space shall run co-terminus with the
Lease Term for the Premises consisting of approximately 286,000 s.f., but in no
event shall the Lease Term for the Offered Space be less than a period equal to
48 months ("Offered Space Term"), (ii) the Base Rent for the Offered Space shall
be calculated at $2.85 p.s.f. per annum for the first 6 months of the Offered
Space Term, and thereafter shall be based upon the Fair Market Rent (as
hereinafter defined in Addendum 2), and (iii) Landlord shall contribute a
maximum amount of $100,000 for Tenant-Made Alterations in connection with the
Offered Space.

         (c)      Such offer shall be made by Landlord to Tenant in a written
notice (hereinafter called the "Offer Notice") which offer shall designate the
space being offered and shall specify the terms for such Offered Space which
shall be the same as those set forth in the Proposed Lease, except as otherwise
set forth above. Further, in addition to Landlord's Offer Notice, Landlord shall
provide Tenant with a copy of Landlord's Letter of Intent to the Proposed
Tenant. Tenant may accept the offer set forth in the Offer Notice by delivering
to Landlord an unconditional acceptance (hereinafter called "Tenant's Notice")
of such offer within 5 business days after delivery by Landlord of the Offer
Notice to Tenant. Time shall be of the essence with respect to the giving of
Tenant's Notice. If Tenant does not accept (or fails to timely accept) an offer
made by Landlord pursuant to the provisions of this Addendum with respect to the
Offered Space designated in the Offer Notice, Landlord shall be under no further
obligation with respect to such space by reason of this Addendum. In order to
send the Offer Notice, Landlord does not need to have negotiated a complete
lease with the Proposed Tenant but may merely have agreed upon the material
economic terms for the Proposed Lease, and Tenant must make its decision with
respect to the Offered Space as long as it has received a description of such
material economic terms.

         (d)      Intentionally deleted.

         (e)      If Tenant at any time declines any Offered Space offered by
Landlord, Tenant shall be deemed to have irrevocably waived all further rights
under this Addendum, and Landlord shall be free to lease the Offered Space to
the Proposed Tenant including on terms which may be less favorable to Landlord
than those set forth in the Proposed Lease.

                                      -15-

<PAGE>
                                   ADDENDUM 2

                              TWO RENEWAL OPTIONS
                              --------------------
                             (BASEBALL ARBITRATION)

                  ATTACHED TO AND A PART OF THE LEASE AGREEMENT
                          DATED APRIL 23, 2002 BETWEEN
                   PROLOGIS DEVELOPMENT SERVICES INCORPORATED
                                       and
                              INNOTRAC CORPORATION

         (a)      Provided that as of the time of the giving of the First
Extension Notice and the Commencement Date of the First Extension Term, (x)
Tenant is the Tenant originally named herein, (y) Tenant actually occupies all
of the Premises initially demised under this Lease and any space added to the
Premises, and (z) no Event of Default exists or would exist but for the passage
of time or the giving of notice, or both; then Tenant shall have the right to
extend the Lease Term for an additional term of 1 year (such additional term is
hereinafter called the "First Extension Term") commencing on the day following
the expiration of the Lease Term (hereinafter referred to as the "Commencement
Date of the First Extension Term"). Tenant shall give Landlord notice
(hereinafter called the "First Extension Notice") of its election to extend the
term of the Lease Term at least 6 months, but not more than 9 months, prior to
the scheduled expiration date of the Lease Term.

         (b)      Provided that as of the time of the giving of the Second
Extension Notice and the Commencement Date of the Second Extension Term, (x)
Tenant is the Tenant originally named herein, (y) Tenant actually occupies all
of the Premises initially demised under this Lease and any space added to the
Premises, and (z) no Event of Default exists or would exist but for the passage
of time or the giving of notice, or both and provided Tenant has exercised its
option for the First Extension Term; then Tenant shall have the right to extend
the Lease Term for an additional term of 3 years (such additional term is
hereinafter called the "Second Extension Term") commencing on the day following
the expiration of the First Extension Term (hereinafter referred to as the
"Commencement Date of the Second Extension Term"). Tenant shall give Landlord
notice (hereinafter called the "Second Extension Notice") of its election to
extend the term of the Lease Term at least 6 months, but not more than 9 months,
prior to the scheduled expiration date of the First Extension Term.

         (c)      The Base Rent payable by Tenant to Landlord during the First
Extension Term shall be the greater of:

                  (i)      the Base Rent in effect on the expiration of the
         Lease Term (if the Base Rent is stated as an annual or other periodic
         rate, adjusted for the length of the Lease Term), and

                  (ii)     the Fair Market Rent, as defined and determined
         pursuant to Paragraphs (e), (f), and (g) below.

         (d)      The Base Rent payable by Tenant to Landlord during the Second
Extension Term shall be the greater of:

                  (i)      the Base Rent in effect on the expiration of the
         First Extension Term (if the Base Rent is stated as an annual or other
         periodic rate, adjusted for the length of the Lease Term), and

                  (ii)     the Fair Market Rent, as defined and determined
         pursuant to Paragraphs (e), (f), and (g) below.

         (e)      The term "Fair Market Rent" shall mean the Base Rent,
expressed as an annual rent per square foot of floor area, which Landlord would
have received from leasing the Premises for the First Extension Term or the
Second Extension Term, as applicable, to an unaffiliated person which is not
then a tenant in the Project, assuming that such space were to be delivered in
"as-is" condition, and taking into account the rental which such other tenant
would most likely have paid for such premises, including market escalations,
provided that Fair Market Rent shall not in any event be less than the Base Rent
for the Premises as of the expiration of the Lease Term or the First Extension
Term, as applicable. Fair Market Rent shall not be reduced by reason of any
costs or expenses saved by Landlord by reason of Landlord's not having to find a
new tenant for the Premises (including without limitation brokerage commissions,
cost of improvements necessary to prepare the space for such tenant's occupancy,
rent concession, or lost rental income during any vacancy period). Fair Market
Rent means only the rent component defined as Base Rent in the Lease and does
not include reimbursements and payments by Tenant to Landlord with respect to
operating expenses and other items payable or reimbursable by Tenant under the
Lease. In addition to its obligation to pay Base Rent (as determined herein),
Tenant shall continue to pay and reimburse Landlord as set forth in the Lease
with respect to such operating expenses and other items with respect to the
Premises during the First Extension Term or the Second Extension Term, as
applicable. The arbitration process described below shall be limited to the
determination of the Base Rent and shall not affect or otherwise reduce or
modify the Tenant's obligation to pay or reimburse Landlord for such operating
expenses and other reimbursable items.

         (f)      Landlord shall notify Tenant of its determination of the Fair
Market Rent (which shall be made in Landlord's sole discretion and shall in any
event be not less than the Base Rent in effect as of the expiration of the Lease
Term or the First Extension Term, as applicable) for the First Extension Term or
the Second Extension Term, as applicable, and Tenant shall advise Landlord of
any objection within 15 business days of receipt of Landlord's notice. Failure
to respond within such 15-day period shall constitute Tenant's acceptance of
such Fair Market Rent. If Tenant objects, Landlord and Tenant shall commence
negotiations to attempt to agree upon the Fair Market Rent within 30 days of
Landlord's receipt of Tenant's notice. If the parties cannot agree, each acting
in good faith but without any obligation to agree, then the Lease Term shall not
be extended and shall terminate on its scheduled termination date and Tenant
shall have no further right hereunder or any remedy by reason of the parties'
failure to agree unless Tenant or Landlord invokes the arbitration procedure
provided below to determine the Fair Market Rent.

                                      -16-
<PAGE>

         (g)      Arbitration to determine the Fair Market Rent shall be in
accordance with the Real Estate Valuation Arbitration Rules of the American
Arbitration Association. Unless otherwise required by state law, arbitration
shall be conducted in the metropolitan area where the Project is located by a
single arbitrator unaffiliated with either party. Either party may elect to
arbitrate by sending written notice to the other party and the Regional Office
of the American Arbitration Association within 5 days after the 30-day
negotiating period provided in Paragraph (f), invoking the binding arbitration
provisions of this paragraph. Landlord and Tenant shall each submit to the
arbitrator their respective proposal of Fair Market Rent. The arbitrator must
choose between the Landlord's proposal and the Tenant's proposal and may not
compromise between the two or select some other amount. Notwithstanding any
other provision herein, the Fair Market Rent determined by the arbitrator shall
not be less than, and the arbitrator shall have no authority to determine a Fair
Market Rent less than, the Base Rent in effect as of the scheduled expiration of
the Lease Term or the First Extension Term, as applicable. The cost of the
arbitration shall be paid by Tenant if the Fair Market Rent is that proposed by
Landlord and by Landlord if the Fair Market Rent is that proposed by Tenant, and
shall be borne equally otherwise. If the arbitrator has not determined the Fair
Market Rent as of the end of the Lease Term or the First Extension Term, as
applicable, Tenant shall pay 105 percent of the Base Rent in effect under the
Lease as of the end of the Lease Term or the First Extension Term, as
applicable, until the Fair Market Rent is determined as provided herein. Upon
such determination, Landlord and Tenant shall make the appropriate adjustments
to the payments between them.

         (h)      The parties consent to the jurisdiction of any appropriate
court to enforce the arbitration provisions of this Addendum and to enter
judgment upon the decision of the arbitrator.

         (i)      Except for the Base Rent as determined above, Tenant's
occupancy of the Premises during the First Extension Term or the Second
Extension Term, as applicable, shall be on the same terms and conditions as are
in effect immediately prior to the expiration of the initial Lease Term or the
First Extension Term, as applicable; provided, however, Tenant shall have no
further right to extend the Lease Term pursuant to this addendum or to any
allowances, credits or abatements or options to expand, contract, renew or
extend the Lease.

         (j)      If Tenant does not send the First Extension Notice or the
Second Extension Notice, as applicable, within the period set forth in
Paragraphs (a) and (b), Tenant's right to extend the Lease Term shall
automatically terminate. Time is of the essence as to the giving of the First
Extension Notice and the Second Extension Notice, as applicable, and the notice
of Tenant's objection under Paragraph (f).

         (k)      Landlord shall have no obligation to refurbish or otherwise
improve the Premises for the First Extension Term or the Second Extension Term,
as applicable. The Premises shall be tendered on the Commencement Date of the
First Extension Term and the Second Extension Term, as applicable, in "as-is"
condition.

         (l)      If the Lease is extended for the First Extension Term or the
Second Extension Term, as applicable, then Landlord shall prepare and Tenant
shall execute an amendment to the Lease confirming the extension of the Lease
Term and the other provisions applicable thereto.

         (m)      If Tenant exercises its right to extend the term of the Lease
for the First Extension Term or the Second Extension Term, as applicable,
pursuant to this Addendum, the term "Lease Term" as used in the Lease, shall be
construed to include, when practicable, the First Extension Term and the Second
Extension Term except as provided in (g) above.

                                      -17-
<PAGE>
                                   ADDENDUM 3

                                  CONSTRUCTION
                                    (TURNKEY)

                  ATTACHED TO AND A PART OF THE LEASE AGREEMENT
                          DATED APRIL 23, 2002, BETWEEN
                   PROLOGIS DEVELOPMENT SERVICES INCORPORATED
                                       and
                              INNOTRAC CORPORATION

         (a)      Landlord agrees to furnish or perform at Landlord's sole cost
and expense (except as otherwise set forth below) those items of construction
and those improvements (the "Initial Improvements") specified below:

                  1.       Construct Main Office (approximately 4,800 s.f.) per
                           Exhibit B.

                  2.       Construct one (1) Receiving Office (approximately
                           1,000 s.f.) and one (1) Shipping Office
                           (approximately 1,000 s.f.) per the attached Exhibit
                           B.

                  3.       Install 277/480 volt, 600-amp electrical service
                           panel.

                  4.       Provide portable eyewash station.

                  5.       Install twenty-four (24) pit levelers (24,000 lb.
                           capacity) and twenty-four (24) dock seals; locations
                           to be determined.

                  6.       Install three hundred fifty-five (355) 400-watt metal
                           halide light fixtures to provide 30 footcandles at
                           36" AFF. Rack plan to be determined.

                  7.       Construct foil height drywall / metal stud demising
                           wall. The drywall shall be smooth finished and
                           painted.

                  8.       Mechanically clean warehouse floor.

                  9.       Install emergency egress/exit lighting up to a
                           maximum amount of $8,000.

                  10.      Provide architectural / engineering permits,
                           drawings, and permit fees.

         (b)      If Tenant shall desire any changes, Tenant shall so advise
Landlord in writing and Landlord shall determine whether such changes can be
made in a reasonable and feasible manner. Any and all costs of reviewing any
requested changes, and any and all costs of making any changes to the Initial
Improvements which Tenant may request and which Landlord may agree to shall be
at Tenant's sole cost and expense and shall be paid to Landlord upon demand and
before execution of the change order.

         (c)      Landlord shall proceed with and complete the construction of
the Initial Improvements. As soon as such improvements have been Substantially
Completed, Landlord shall notify Tenant in writing of the date that the Initial
Improvements were Substantially Completed. Such date, unless an earlier date is
specified as the Commencement Date in this Lease or otherwise agreed to in
writing between Landlord and Tenant, shall be the "Commencement Date," unless
the completion of such improvements was delayed due to any act or omission of,
or delay caused by, Tenant including, without limitation, Tenant's failure to
approve plans, complete submittals or obtain permits in connection with Tenant's
installation of its tenant improvements, machinery, equipment, or fixtures
within the time periods agreed to by the parties or as reasonably required by
Landlord, in which case the Commencement Date shall be the date such
improvements would have been completed but for the delays caused by Tenant. The
Initial Improvements shall be deemed substantially completed ("Substantially
Completed") when, in the opinion of the construction manager (whether an
employee or agent of Landlord or a third party construction
manager)("Construction Manager"), the Premises are substantially completed in
accordance with the final plans attached hereto as Exhibit B, except for punch
list items which do not prevent in any material way the use of the Premises for
the purposes for which they were intended, provided such opinion is given in
conjunction with a Certificate of Occupancy or a Temporary Certificate of
Occupancy or a Permit Inspection Card or other documentation from the governing
municipality indicating that Landlord's Initial Improvements work is legal to
occupy. In the event Tenant, its employees, agents, or contractors cause
construction of such improvements to be delayed, the date of Substantial
Completion shall be deemed to be the date that, in the opinion of the
Construction Manager, Substantial Completion would have occurred if such delays
had not taken place. Without limiting the foregoing, Tenant shall be solely
responsible for delays caused by Tenant's request for any changes in the plans,
Tenant's request for long lead items or Tenant's interference with the
construction of the Initial Improvements, and such delays shall not cause a
deferral of the Commencement Date beyond what it otherwise would have been.
After the Commencement Date Tenant shall, upon demand, execute and deliver to
Landlord a letter of acceptance of delivery of the Premises. In the event of any
dispute as to the Initial Improvements, including the Commencement Date, the
certificate of the Construction Manager shall be conclusive absent manifest
error.

         (d)     The failure of Tenant to take possession of or to occupy the
Premises shall not serve to relieve Tenant of obligations arising on the
Commencement Date or delay the payment of rent by Tenant. Subject to applicable
ordinances and building codes governing Tenant's right to occupy or perform in
the Premises, Tenant shall be allowed to install its tenant improvements,
machinery, equipment, fixtures, or other property on the Premises on or about
April 15, 2002, provided that Tenant does not thereby interfere with the
completion of construction or cause any labor dispute as a result of such
installations, and provided further that Tenant does hereby agree to indemnify,
defend, and hold Landlord harmless from any loss or damage to such property, and
all liability, loss, or damage arising from any injury to the Project or the
property of Landlord, its contractors, subcontractors, or materialmen, and any
death or personal injury to any person or persons arising out of such
installations, unless any such loss, damage, liability, death, or personal
injury was caused by Landlord's negligence. Any such occupancy or performance in
the Premises shall be in accordance with the provisions governing Tenant-Made
Alterations and Trade Fixtures in the Lease, and shall be subject to Tenant
providing to Landlord satisfactory evidence of insurance for personal injury and
property damage related to such installations and

                                      -18-

<PAGE>
satisfactory payment arrangements with respect to installations permitted
hereunder. Delay in putting Tenant in possession of the Premises shall not serve
to extend the term of this Lease or to make Landlord liable for any damages
arising therefrom.

       (e) Except for incomplete punch list items and latent defects, Tenant
upon the Commencement Date shall have and hold the Premises as the same shall
then be without any liability or obligation on the part of Landlord for making
any further alterations or improvements of any kind in or about the Premises.

                                      -19-
<PAGE>
                                  ADDENDUM 4

                           MISCELLANEOUS PROVISIONS

                  ATTACHED TO AND A PART OF THE LEASE AGREEMENT
                          DATED April 23, 2002 BETWEEN
                   PROLOGIS DEVELOPMENT SERVICES INCORPORATED
                                       and
                              INNOTRAC CORPORATION

         1.       ECONOMIC DEVELOPMENT INDUCEMENTS. Tenant has submitted a
Kentucky Jobs Development Act ("KJDA") application to the Kentucky Economic
Development Authority ("Authority") for certain economic inducements available
under the KJDA incentive program. This Lease is hereby conditioned upon Tenant
receiving a resolution from the Authority to "preliminarily designate Tenant as
an approved company" and to "preliminarily authorize the undertaking of the
economic development project" by Tenant. Tenant covenants to diligently proceed
with the appropriate process in obtaining such resolution. Without receiving
such preliminary designation, the execution of this Lease would preclude Tenant
from obtaining the inducements available under this local program.

                                      -20-
<PAGE>
                                   ADDENDUM 5

                              CANCELLATION OPTION

                  ATTACHED TO AND A PART OF THE LEASE AGREEMENT
                          DATED APRIL 23, 2002, BETWEEN
                   PROLOGIS DEVELOPMENT SERVICES INCORPORATED
                                       and
                              INNOTRAC CORPORATION

         Provided no Event of Default shall then exist and no condition shall
then exist which with the passage of time or giving of notice, or both, would
constitute an Event of Default, Tenant shall have the right at any time on or
before the first day of the 30th month of the Lease Term to send Landlord
written notice (the "Termination Notice") that Tenant has elected to terminate
this Lease effective on the last day of the 36th month of the Lease Term with
respect to the Premises consisting of approximately 286,000 square feet only.
It is the express intent of the parties that this Cancellation Option shall not
apply to the Offered Space as defined in Addendum 1.

         If Tenant elects to terminate this Lease pursuant to the immediately
 preceding sentence, the effectiveness of such termination shall be conditioned
 upon Tenant paying to Landlord $1,734,240.00 contemporaneously with Tenant's
 delivery of the Termination Notice to Landlord. Such amount is consideration
 for Tenant's option to terminate and shall not be applied to rent or any other
 obligation of Tenant. Landlord and Tenant shall be relieved of all obligations
 accruing under this Lease after the effective date of such termination but not
 any obligations accruing under the Lease prior to the effective date of such
 termination.

                                      -21-
<PAGE>

                                  ADDENDUM 6

                      ASSIGNMENT AND SUBLETTING (CONSENT)

                 ATTACHED TO AND A PART OF THE LEASE AGREEMENT
                         DATED APRIL 23, 2002, BETWEEN
                  PROLOGIS DEVELOPMENT SERVICES INCORPORATED
                                      and
                             INNOTRAC CORPORATION

         (a)      Landlord shall not unreasonably withhold its consent to
Tenant's request for permission to assign the Lease or sublease all or part of
the Premises. It shall be reasonable for the Landlord to withhold its consent to
any assignment or sublease in any of the following instances:

                  (i)      The assignee or sublessee does not have a net worth
         calculated according to generally accepted accounting principles at
         least equal to the greater of the net worth of Tenant immediately prior
         to such assignment or sublease or the net worth of the Tenant at the
         time it executed the Lease;

                  (ii)     The intended use of the Premises by the assignee or
         sublessee is not reasonably satisfactory to Landlord;

                  (iii)    The intended use of the Premises by the assignee or
         sublessee would materially increase the pedestrian or vehicular traffic
         to the Premises or the Project;

                  (iv)     Occupancy of the Premises by the assignee or
         sublessee would, in Landlord's opinion, violate any agreement binding
         upon Landlord or the Project with regard to the identity of tenants,
         usage in the Project, or similar matters;

                  (v)      The identity or business reputation of the assignee
         or sublessee will, in the good faith judgment of Landlord, tend to
         damage the goodwill or reputation of the Project;

                  (vi)     The assignment or sublease is to another tenant in
         the Project and is at rates which are below those charged by Landlord
         for comparable space in the Project;

                  (vii)    In the case of a sublease, the subtenant has not
         acknowledged that the Lease controls over any inconsistent provision in
         the sublease; or

                  (viii)      The proposed assignee or sublessee is a government
         entity.

The foregoing criteria shall not exclude any other reasonable basis for Landlord
to refuse its consent to such assignment or sublease.

         (b)      Any approved assignment or sublease shall be expressly subject
to the terms and conditions of this Lease.

         (c)      Tenant shall provide to Landlord all information concerning
the assignee or sublessee as Landlord may request.

         (d)      Landlord may revoke its consent immediately and without notice
if, as of the effective date of the assignment or sublease, there has occurred
and is continuing any default under the Lease.

         (e)      Landlord's agreement to not unreasonably withhold its consent
shall only apply to the first assignment or sublease under the Lease.

                                      -22-
<PAGE>
                                   EXHIBIT A

                                   SITE PLAN

Tenant:                                 Innotrac Corporation
       ----------------------------------------------------------------------

Approximate Square Feet:                        286,000
                        -----------------------------------------------------

Address of Premises:                    1226 Aviation Blvd.
                    ---------------------------------------------------------

                                        Hebron, KY 41048
-----------------------------------------------------------------------------

                                  [FLOORPLAN]

<PAGE>

                                   EXHIBIT B
                                  PAGE 1 OF 5

                                  [FLOORPLAN]

<PAGE>

                                   EXHIBIT B
                                  PAGE 2 OF 5

                                  [FLOORPLAN]

<PAGE>

                                   EXHIBIT B
                                  PAGE 3 OF 5

                                  [FLOORPLAN]

<PAGE>

                                   EXHIBIT B
                                  PAGE 4 OF 5

                                  [FLOORPLAN]
<PAGE>

                                   EXHIBIT B
                                  PAGE 5 OF 5

                                  [FLOORPLAN]

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