Document:

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[US BANK LOGO]

                                  LOAN AGREEMENT

<TABLE>
<CAPTION>
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  PRINCIPAL        LOAN DATE     MATURITY    LOAN NO   CALL    COLLATERAL     ACCOUNT      OFFICER   INITIAL
<S>               <C>           <C>          <C>       <C>     <C>           <C>           <C>       <C>
$15,000,000.00    12-10-1999    06-30-2000     391                 070       6057628480     TWC02       TL
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         References in the shaded area are for Lender's use only and do not limit the applicability
                             of this document to any particular loan or item.
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BORROWER:  MULTIPLE ZONES INTERNATIONAL, INC.    LENDER:  U.S. BANK NATIONAL ASSOCIATION
           707 SOUTH GRADY WAY                            EAST KING COUNTY CORPORATE BANKING
           RENTON, WA 98055                               10800 NE 8TH STREET, SUITE 1000
                                                          BELLEVUE, WA 98004
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THIS LOAN AGREEMENT between MULTIPLE ZONES INTERNATIONAL, INC. ("Borrower") and
U.S. Bank National Association ("Lender") is made and executed on the following
terms and conditions. Borrower has received prior commercial loans from Lender
or has applied to Lender for a commercial loan or loans and other financial
accommodations, including those which may be described on any exhibit or
schedule attached to this Agreement. All such loans and financial
accommodations, together with all future loans and financial accommodations
from Lender to Borrower, are referred to in this Agreement individually as the
"Loan" and collectively as the "Loans." Borrower understands and agrees that:
(a) in granting, renewing, or extending any Loan, Lender is relying upon
Borrower's representations, warranties, and agreements, as set forth in this
Agreement; (b) the granting, renewing, or extending of any Loan by Lender at
all times shall be subject to Lender's sole judgment and discretion; and (c)
all such Loans shall be and shall remain subject to the following terms and
conditions of this Agreement.

TERM.  This Agreement shall be effective as of DECEMBER 13, 1999, and shall
continue thereafter until all Indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.

DEFINITIONS.  The following words shall have the following meanings when used
in this Agreement. Terms not otherwise defined in this Agreement shall have
the meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.

     AGREEMENT.  The word "Agreement" means this Loan Agreement, as this Loan
     Agreement may be amended or modified from time to time, together with all
     exhibits and schedules attached to this Loan Agreement from time to time.

     ACCOUNT.  The word "Account" means a trade account, account receivable, or
     other right to payment for goods sold or services rendered owing to
     Borrower (or to a third party grantor acceptable to Lender).

     ACCOUNT DEBTOR.  The words "Account Debtor" mean the person or entity
     obligated upon an Account.

     ADVANCE.  The word "Advance" means a disbursement of Loan funds under
     this Agreement.

     BORROWER.  The word "Borrower" means MULTIPLE ZONES INTERNATIONAL, INC.
     The word "Borrower" also includes, as applicable, all subsidiaries and
     affiliates of Borrower as provided below in the paragraph titled
     "Subsidiaries and Affiliates."

     BORROWING BASE.  The words "Borrowing Base" mean, as determined by Lender
     from time to time, the lesser of (a) $15,000,000.00; or (b) 70.000% of
     the aggregate amount of Eligible Accounts.

     BUSINESS DAY.  The words "Business Day" mean a day on which commercial
     banks are open for business in the State of Washington.

     CERCLA.  The word "CERCLA" means the Comprehensive Environmental
     Response, Compensation, and Liability Act of 1980, as amended.

     CASH FLOW.  The words "Cash Flow" mean net income after taxes, and
     exclusive of extraordinary gains and income, plus depreciation and
     amortization.

     COLLATERAL.  The word "Collateral" means and includes without limitation
     all property and assets granted as collateral security for a Loan,
     whether real or personal property, whether granted directly or indirectly,
     whether granted now or in the future, and whether granted in the form of
     a security interest, mortgage, deed of trust, assignment, pledge, chattel
     mortgage, chattel trust, factor's lien, equipment trust, conditional
     sale, trust receipt, lien, charge, lien or title retention contract, lease
     or consignment intended as a security device, or any other security or
     lien interest whatsoever, whether created by law, contract, or otherwise.
     The word "Collateral" includes without limitation all collateral
     described below in the section titled "COLLATERAL."

     DEBT.  The word "Debt" means all of Borrower's liabilities excluding
     Subordinated Debt.

     ELIGIBLE ACCOUNTS.  The words "Eligible Accounts" mean, at any time, all
     of Borrower's Accounts which contain selling terms and conditions
     acceptable to Lender. The net amount of any Eligible Account against which
     Borrower may borrow shall exclude all returns, discounts, credits, and
     offsets of any nature. Unless otherwise agreed to by Lender in writing,
     Eligible Accounts do not include:

          (a)  Accounts with respect to which the Account Debtor is an
          officer, an employee or agent of Borrower.

          (b)  Accounts with respect to which the Account Debtor is a
          subsidiary of, or affiliated with or related to Borrower or its
          shareholders, officers, or directors.

          (c)  Accounts with respect to which goods are placed on consignment,
          guaranteed sale, or other terms by reason of which the payment by
          the Account Debtor may be conditional.

          (d)  Accounts with respect to which Borrower is or may become liable
          to the Account Debtor for goods sold or services rendered by the
          Account Debtor to Borrower.

          (e)  Accounts which are subject to dispute, counterclaim, or setoff.

          (f)  Accounts with respect to which the goods have not been shipped
          or delivered, or the services have not been rendered, to the Account
          Debtor.

          (g)  Accounts with respect to which Lender, in its sole discretion,
          deems the creditworthiness or financial condition of the Account
          Debtor to be unsatisfactory.

          (h)  Accounts of any Account Debtor who has filed or has had filed
          against it a petition in bankruptcy or an application for relief
          under any provision of any state or federal bankruptcy, insolvency,
          or debtor-in-relief acts; or who has had appointed a trustee,
          custodian, or receiver for the assets of such Account Debtor; or who
          has made an assignment for the benefit of creditors or has become
          insolvent or fails generally to pay its debts (including its
          payrolls) as such debts become due.

          (i)  Accounts which have not been paid in full within 60 days past
          due. The entire balance of any Account of any single Account debtor
          will be ineligible whenever the portion of the Account past due 60
          days is in excess of 25.00% of the total amount outstanding on the
          Account.

          (j)  Datings, Progress Billings, Retainages, Cash Sales, Cash on
          Delivery, Service Charges.

     ERISA.  The word "ERISA" means the Employee Retirement Income Security
     Act of 1974, as amended.

     EVENT OF DEFAULT.  The words "Event of Default" mean and include without
     limitation any of the Events of Default set forth below in the section
     titled "EVENTS OF DEFAULT."

     EXPIRATION DATE.  The words "Expiration Date" mean the date of
     termination of Lender's commitment to lend under this Agreement.

     GRANTOR.  The word "Grantor" means and includes without limitation each
     and all of the persons or entities granting a Security Interest in any
     Collateral for the indebtedness, including without limitation all
     Borrowers granting such a Security Interest.

     GUARANTOR.  The word "Guarantor" means and includes without limitation
     each and all of the guarantors, sureties, and accommodation parties in
     connection with any indebtedness.

     INDEBTEDNESS.  The word "Indebtedness" means and includes without
     limitation all Loans, together with all other obligations, debts and
     liabilities of Borrower to Lender, or any one or more of them, as well as
     all claims by Lender against Borrower, or any one or more of them;
     whether now or hereafter existing, voluntary or involuntary, due or not
     due, absolute or contingent, liquidated or unliquidated; whether
     Borrower may be liable individually or jointly with others; whether
     Borrower may be obligated as a guarantor, surety, or otherwise; whether
     recovery upon such indebtedness may be or hereafter may become barred by
     any statute of limitations; and whether such indebtedness may be or
     hereafter may become otherwise unenforceable.

     LENDER.  The word "Lender" means U.S. Bank National Association, its
     successors and assigns.

     LINE OF CREDIT.  The words "Line of Credit" mean the credit facility
     described in the Section titled "LINE OF CREDIT" below.

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12-10-1999                         LOAN AGREEMENT                         PAGE 2
LOAN NO 391                         (CONTINUED)
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     LIQUID ASSETS. The words "Liquid Assets" mean Borrower's cash on hand plus
     Borrower's readily marketable securities.

     LOAN. The word "Loan" or "Loans" means and includes without limitation any
     and all commercial loans and financial accommodations from Lender to
     Borrower, whether now or hereafter existing, and however evidenced,
     including without limitation those loans and financial accommodations
     described herein or described on any exhibit or schedule attached to
     this Agreement from time to time.

     NOTE. The word "Note" means and includes without limitation Borrower's
     promissory note or notes. If any, evidencing Borrower's Loan obligations in
     favor of Lender, as well as any substitute, replacement or refinancing note
     or notes thereafor.

     PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and security
     interests securing indebtedness owed by Borrower to Lender; (b) liens for
     taxes, assessments, or similar charges either not yet due or being
     contested in good faith; (c) liens of materialmen, mechanics, warehousemen,
     or carriers, or other like liens arising in the ordinary course of business
     and securing obligations which are not yet delinquent; (d) purchase money
     liens or purchase money security interests upon or in any property acquired
     or held by Borrower in the ordinary course of business to secure
     indebtedness outstanding on the date of this Agreement or permitted to be
     incurred under the paragraph of this Agreement titled "Indebtedness and
     Liens"; (e) liens and security interests which, as of the date of this
     Agreement, have been disclosed to and approved by the Lender in writing;
     and (f) those liens and security interests which in the aggregate
     constitute an immaterial and insignificant monetary amount with respect to
     the net value of the Borrower's assets.

     RELATED DOCUMENTS. The words "Related Documents" mean and include without
     limitation all promissory notes, credit agreements, loan agreements,
     environmental agreements, guaranties, security agreements, mortgages, deeds
     of trust, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the Indebtedness.

     SECURITY AGREEMENT. The words "Security Agreement" mean and include without
     limitation any agreements, promises, covenants, arrangements,
     understandings or other agreements, whether created by law, contract, or
     otherwise, evidencing, governing, representing, or creating a Security
     Interest.

     SECURITY INTEREST. The words "Security Interest" mean and include without
     limitation any type of collateral security, whether in the form of a lien,
     charge, mortgage, deed of trust, assignment, pledge, chattel mortgage,
     chattel trust, factor's lien, equipment trust, conditional sale, trust
     receipt, lien or title retention contract, lease or consignment intended
     as a security device, or any other security or lien interest whatsoever,
     whether created by law, contract or otherwise.

     SARA. The word "SARA" means the Superfund Amendments and Reauthorization
     Act of 1986 as now or hereafter amended.

     SUBORDINATED DEBT. The words "Subordinated Debt" mean indebtedness and
     liabilities of Borrower which have been subordinated by written agreement
     to indebtedness owed by Borrower to Lender in form and substance
     acceptable to Lender.

     TANGIBLE NET WORTH. The words "Tangible Net Worth" mean Borrower's total
     assets excluding all intangible assets (i.e., goodwill, trademarks,
     patents, copyrights, organizational expenses, and similar intangible items,
     but including leaseholds and leasehold improvements) less total Debt.

     WORKING CAPITAL. The words "Working Capital" mean Borrower's current
     assets, excluding prepaid expenses, less Borrower's current liabilities.

LINE OF CREDIT. Lender agrees to make Advances to Borrower from time to
time from the date of this Agreement to the Expiration Date, provided the
aggregate amount of such Advances outstanding at any time does not exceed the
Borrowing Base. Within the foregoing limits, Borrower may borrow, partially
or wholly prepay, and reborrow under this Agreement as follows.

     CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make any
     Advance to or for the account of Borrower under this Agreement is
     subject to the following conditions precedent, with all documents,
     instruments, opinions, reports, and other items required under this
     Agreement to be in form and substance satisfactory to lender.

          (a) Lender shall have received evidence that this Agreement and all
          Related Documents have been duly authorized, executed, and delivered
          by Borrower to Lender.

          (b) Lender shall have received such opinions of counsel,
          supplemental opinions, and documents as Lender may request.

          (c) The security interests in the Collateral shall have been duly
          authorized, created, and perfected with first lien priority and
          shall be in full force and effect.

          (d) All guaranties required by Lender for the Line of Credit shall
          have been executed by each Guarantor, delivered to Lender, and be
          in full force and effect.

          (e) Lender, at its option and for its sole benefit, shall have
          conducted an audit of Borrower's Accounts, books, records, and
          operations, and Lender shall be satisfied as to their condition.

          (f) Borrower shall have paid to Lender all fees, costs, and
          expenses specified in this Agreement and the Related Documents as
          are then due and payable.

          (g) There shall not exist at the time of any Advance a condition
          which would constitute an Event of Default under this Agreement,
          and Borrower shall have delivered to Lender the compliance
          certificate called for in the paragraph below titled "Compliance
          Certificate."

     MAKING LOAN ADVANCES. Advances under the credit facility, as well as
     directions for payment from Borrower's accounts, may be requested orally or
     in writing by authorized persons. Lender may, but need not, require that
     all oral requests be confirmed in writing. Each Advance shall be
     conclusively deemed to have been made at the request of and for the benefit
     of Borrower (a) when credited to any deposit account of Borrower
     maintained with Lender or (b) when advanced in accordance with the
     instructions of an authorized person. Lender, at its option, may set a
     cutoff time, after which all requests for Advances will be treated as
     having been requested on the next succeeding Business Day.

     MANDATORY LOAN REPAYMENTS. If at any time the aggregate principal amount
     of the outstanding Advances shall exceed the applicable Borrowing Base,
     Borrower, immediately upon written or oral notice from Lender, shall pay to
     Lender an amount equal to the difference between the outstanding principal
     balance of the Advances and the Borrowing Base. On the Expiration Date,
     Borrower shall pay to Lender in full the aggregate unpaid principal amount
     of all Advances then outstanding and all accrued unpaid interest, together
     with all other applicable fees, costs and charges, if any, not yet paid.

     LOAN ACCOUNT. Lender shall maintain on its books a record of account in
     which Lender shall make entries for each Advance and such other debits and
     credits as shall be appropriate in connection with the credit facility.
     Lender shall provide Borrower with periodic statements of Borrower's
     account, which statements shall be considered to be correct and
     conclusively binding on Borrower unless Borrower notifies Lender to the
     contrary within thirty (30) days after Borrower's receipt of any such
     statement which Borrower deems to be incorrect.

COLLATERAL. To secure payment of the Line of Credit and performance of all
other Loans, obligations and duties owed by Borrower to Lender, Borrower (and
others, if required) shall grant to Lender Security Interests in such
property and assets as Lender may require (the "Collateral"), including
without limitation Borrower's present and future Accounts and general
intangibles. Lender's Security Interests in the Collateral shall be
continuing liens and shall include the proceeds and products of the
Collateral, including without limitation the proceeds of any insurance. With
respect to the Collateral, Borrower agrees and represents and warrants to
Lender:

     PERFECTION OF SECURITY INTERESTS. Borrower agrees to execute such
     financing statements and to take whatever other actions are requested by
     Lender to perfect and continue Lender's Security Interests in the
     Collateral. Upon request of Lender, Borrower will deliver to Lender any
     and all of the documents evidencing or constituting the Collateral, and
     Borrower will note Lender's interest upon any and all chattel paper if
     not delivered to Lender for possession by Lender. Contemporaneous with
     the execution of the Agreement, Borrower will execute one or more UCC
     financing statements and any similar statements as may be required by
     applicable law, and will file such financing statements and all such
     similar statements in the appropriate location or locations. Borrower
     hereby appoints Lender as its irrevocable attorney-in-fact for the
     purpose of executing any documents necessary to perfect or to continue
     any Security Interest. Lender may at any time, and without further
     authorization from Borrower, file a carbon, photograph, facsimile, or
     other reproduction of any financing statement for use as a financing
     statement. Borrower will reimburse Lender for all expenses for the
     perfection, termination, and the continuation of the perfection of
     Lender's security interest in the Collateral. Borrower promptly will
     notify Lender of any change in Borrower's name including any change to
     the assumed business names of Borrower. Borrower also promptly will
     notify Lender of any change in Borrower's Social Security Number or
     Employer Identification Number. Borrower further agrees to notify Lender
     in writing prior to any change in address or location of Borrower's
     principal governance office or should Borrower merge or consolidate with
     any other entity.

     COLLATERAL RECORDS. Borrower does now, and at all times hereafter
     shall, keep correct and accurate records of the Collateral, all of which
     records shall be available to Lender or Lender's representative upon
     demand for Inspection and copying at any reasonable time. With respect
     to the Accounts, Borrower agrees to keep and maintain such records as
     Lender may require, including without limitation information concerning
     Eligible Accounts and Account balances and agings.

     COLLATERAL SCHEDULES. Concurrently with the execution and delivery
     of this Agreement, Borrower shall execute and deliver to Lender a
     schedule of Accounts and Eligible Accounts, in form and substance
     satisfactory to the Lender. Thereafter Borrower shall execute and
     deliver to Lender such supplemental schedules of Eligible Accounts and
     such other matters and information relating to Borrower's Accounts as
     Lender may request. Supplemental schedules shall be delivered according
     to the following schedules:

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12-10-1999                    LOAN AGREEMENT                              PAGE 3
LOAN NO 391                    (CONTINUED)
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     AGINGS OF ACCOUNTS RECEIVABLE AND PAYABLE. Borrower covenants and agrees
     with Lender that, while this Agreement is in effect, Borrower shall deliver
     to Lender within twenty (20) days after the end of each month, a detailed
     aging of Borrower's accounts and contracts receivable and accounts payable
     as of the last day of that quarter, together with an explanation of any
     adjustments made at the end of that quarter, all in a form acceptable to
     Lender.

     CUSTOMER LISTING. Borrower agrees with Lender that, while this Agreement is
     in effect, Borrower will furnish Lender, no later than twenty (20) days
     after the end of each fiscal quarter and in form satisfactory to Lender, a
     current listing of Accounting Debtors and their addresses.

     BORROWING BASE CERTIFICATE. Unless waived in writing by Lender, Borrower
     agrees to provide Lender with a Borrower's Certificate within twenty (20)
     days after the end of each month and with each Advance. Each Borrower's
     Certificate shall be in a form acceptable to Lender, duly executed by
     Borrower and detailing the status of the Line of Credit as of the date
     thereon.

     REPRESENTATIONS AND WARRANTIES CONCERNING ACCOUNTS. With respect to the
     Accounts, Borrower represents and warrants to Lender: (a) Each Account
     represented by Borrower to be an Eligible Account for purposed of this
     Agreement conforms to the requirements of the definition of an Eligible
     Account; (b) All Account information listed on schedules delivered to
     Lender will be true and correct, subject to immaterial variance; and (c)
     Lender, its assigns, or agents shall have the right at any time and at
     Borrower's expense to inspect, examine, and audit Borrower's records and to
     confirm with Account Debtors the accuracy of such Accounts.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any indebtedness exists:

     ORGANIZATION. Borrower is a corporation which is duly organized, validly
     existing, and in good standing under the laws of the State of Washington
     and is validly existing and in good standing in all states in which
     Borrower is doing business. Borrower has the full power and authority to
     own its properties and to transact the businesses in which it is presently
     engaged or presently proposes to engage. Borrower also is duly qualified as
     a foreign corporation and is in good standing in all states in which the
     failure to so qualify would have a material adverse effect on its
     businesses or financial condition.

     AUTHORIZATION. The execution, delivery, and performance of this Agreement
     and all Related Documents by Borrower, to the extent to be executed,
     delivered or performed by Borrower, have been duly authorized by all
     necessary action by Borrower; do not require the consent or approval of any
     other person, regulatory authority or governmental body; and do not
     conflict with, result in a violation of, or constitute a default under (a)
     any provision of its articles of incorporation or organization, or bylaws,
     or any agreement or other instrument binding upon Borrower or (b) any law,
     governmental regulation, court decree, or order applicable to Borrower.

     FINANCIAL INFORMATION. Each financial statement of Borrower supplied to
     Lender truly and completely disclosed Borrower's financial condition as of
     the date of the statement, and there has been no material adverse change
     in Borrower's financial condition subsequent to the date of the most
     recent financial statement supplied to Lender. Borrower has no material
     contingent obligations except as disclosed in such financial statements.

     LEGAL EFFECT. This Agreement constitutes, and any instrument or agreement
     required hereunder to be given by Borrower when delivered will constitute,
     legal, valid and binding obligations of Borrower enforceable against
     Borrower in accordance with their respective terms.

     PROPERTIES. Except for Permitted Liens, Borrower owns and has good title to
     all of Borrower's properties free and clear of all Security Interests, and
     has not executed any security documents or financing statements relating to
     such properties. All of Borrower's properties are titled in Borrower's
     legal name, and Borrower has not used, or filed a financing statement
     under, any other name for at least the last five (5) years.

     HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous substance,"
     "disposal," "release," and "threatened release," as used in this Agreement,
     shall have the same meanings as set forth in the "CERCLA," "SARA," the
     Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
     the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et
     seq., or other applicable state or Federal laws, rules, or regulations
     adopted pursuant to any of the foregoing. Except as disclosed to and
     acknowledged by Lender in writing, Borrower represents and warrants that:
     (a) During the period of Borrower's ownership of the properties, there has
     been no use, generation, manufacture, storage, treatment, disposal, release
     or threatened release of any hazardous waste or substance by any person on,
     under, about or from any of the properties. (b) Borrower has no knowledge
     of, or reason to believe that there has been (i) any use, generation,
     manufacture, storage, treatment, disposal, release, or threatened release
     of any hazardous waste or substance on, under, about or from the properties
     by any prior owners or occupants of any of the properties, or (ii) any
     actual or threatened litigation or claims of any kind by any person
     relating to such matters. (c) Neither Borrower nor any tenant, contractor,
     agent or other authorized user of any of the properties shall use,
     generate, manufacture, store, treat, dispose of, or release any hazardous
     waste or substance on, under, about or from any of the properties; and any
     such activity shall be conducted in compliance with all applicable federal,
     state, and local laws, regulations, and ordinances, including without
     limitation those laws, regulations and ordinances described above. Borrower
     authorizes Lender and its agents to enter upon the properties to make such
     inspections and tests as Lender may deem appropriate to determine
     compliance of the properties with this section of the Agreement. Any
     inspections or tests made by Lender shall be at Borrower's expense and for
     Lender's purposes only and shall not be construed to create any
     responsibility or liability on the part of Lender to Borrower or to any
     other person. The representations and warranties contained herein are based
     on Borrower's due diligence in investigating the properties for hazardous
     waste and hazardous substances. Borrower hereby (a) releases and waives any
     future claims against Lender for indemnity or contribution in the event
     Borrower becomes liable for cleanup or other costs under any such laws, and
     (b) agrees to indemnify and hold harmless Lender against any and all
     claims, losses, liabilities, damages, penalties, and expenses which Lender
     may directly or indirectly sustain or suffer resulting from a breach of
     this section of the Agreement or as a consequence of any use, generation,
     manufacture, storage, disposal, release or threatened release of a
     hazardous waste or substance on the properties. The provisions of this
     section of the Agreement, including the obligation to indemnify, shall
     survive the payment of the indebtedness and the termination or expiration
     of this Agreement and shall not be affected by Lender's acquisition of any
     interest in any of the properties, whether by foreclosure or otherwise.

     LITIGATION AND CLAIMS. No litigation, claim, investigation, administrative
     proceeding or similar action (including those for unpaid taxes) against
     Borrower is pending or threatened, and not other event has occurred which
     may materially adversely affect Borrower's financial condition or
     properties, other than litigation, claims, or other events, if any, that
     have been disclosed to and acknowledged by Lender in writing.

     TAXES. To the best of Borrower's knowledge, all tax returns and reports of
     Borrower that are or were required to be filed, have been filed, and all
     taxes, assessments and other governmental charges have been paid in full,
     except those presently being or to be contested by Borrower in good faith
     in the ordinary course of business and for which adequate reserves have
     been provided.

     LIEN PRIORITY. Unless otherwise previously disclosed to Lender in writing,
     Borrower has not entered into or granted any Security Agreements, or
     permitted the filing or attachment of any Security Interests on or
     affecting any of the Collateral directly or indirectly securing repayment
     of Borrower's Loan and Note, that would be prior or that may in any way be
     superior to Lender's Security interests and rights in and to such
     Collateral.

     BINDING EFFECT. This Agreement, the Note, all Security Agreements directly
     or indirectly securing repayment of Borrower's Loan and Note and all of the
     Related Documents are binding upon Borrower as well as upon Borrower's
     successors, representatives and assigns, and are legally enforceable in
     accordance with their respective terms.

     COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely for
     business or commercial related purposes.

     EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower may
     have any liability complies in all material respects with all applicable
     requirements of law and regulations, and (i) no Reportable Event nor
     Prohibited Transaction (as defined in ERISA) has occurred with respect to
     any such plan, (ii) Borrower has not withdrawn from any such plan or
     initiated steps to do so, (iii) no steps have been taken to terminate any
     such plan, and (iv) there are no unfunded liabilities other than those
     previously disclosed to Lender in writing.

     LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of business,
     or Borrower's Chief Executive office, if Borrower has more than one place
     of business, is located at 707 SOUTH GRADY WAY, RENTON, WA 98055. Unless
     Borrower has designated otherwise in writing this location is also the
     office or offices where Borrower keeps its records concerning the
     collateral.

     INFORMATION. All information heretofore or contemporaneously herewith
     furnished by Borrower to Lender for the purposes of or in connection with
     this Agreement or any transaction contemplated hereby is, and all
     information hereafter furnished by or on behalf of Borrower to Lender will
     be, true and accurate in every material respect on the date as of which
     such information is dated or certified; and none of such information is
     or will be incomplete by omitting to state any material fact necessary
     to make such information not misleading.

     SURVIVAL OF REPRESENTATION AND WARRANTIES. Borrower understands and agrees
     that Lender, without independent investigation, is relying upon the above
     representations and warranties in extending Loan Advances to Borrower.
     Borrower further agrees that the foregoing representations and warranties
     shall be continuing in nature and shall remain in full force and effect
     until such time as Borrower's indebtedness shall be paid in full, or until
     this Agreement shall be terminated in the manner provided above, whichever
     is the last to occur.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:

     LITIGATION. Promptly Inform Lender in writing of (a) all material adverse
     changed in Borrower's financial condition, and (b) all existing and all
     threatened litigation, claims, investigations, administrative proceedings
     or similar actions affecting Borrower or any Guarantor which could
     materially affect the financial condition of Borrower or the financial
     condition of any Guarantor.

     FINANCIAL RECORDS. Maintain its books and records in accordance with
     generally accepted principles, applied on a consistent basis
<PAGE>

12-10-1999                        LOAN AGREEMENT                          PAGE 4
LOAN NO 391                        (CONTINUED)
--------------------------------------------------------------------------------

     and permit Lender to examine and audit Borrower's books and records at all
     reasonable times.

     FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but in no
     event later than one hundred twenty (120) days after the end of each
     fiscal year, Borrower's balance sheet and income statement for the year
     ended, audited by a certified public accountant satisfactory to Lender,
     and, as soon as available, but in no event later than sixty (60) days after
     the end of each fiscal quarter, Borrower's balance sheet and profit and
     loss statement for the period ended, prepared and certified as correct to
     the best knowledge and belief by Borrower's chief financial officer or
     other officer or person acceptable to Lender. All financial reports
     required to be provided under this Agreement shall be prepared in
     accordance with generally accepted accounting principles, applied on a
     consistent basis, and certified by Borrower as being true and correct.

     ADDITIONAL INFORMATION. Furnish such additional information and statements,
     lists of assets and liabilities, agings of receivables and payables,
     inventory schedules, budgets, forecasts, tax returns, and other reports
     with respect to Borrower's financial condition and business operations as
     Lender may request from time to time.

     FINANCIAL COVENANTS AND RATIOS. Comply with the following convenants and
     ratios:

     (F4) BORROWER AGREES AND UNDERSTANDS THAT COMPLIANCE WITH ALL RATIOS AND
     COVENANTS WILL BE TESTED QUARTERLY. Except as provided above, all
     computations made to determine compliance with the requirements contained
     in this paragraph shall be made in accordance with generally accepted
     accounting principles, applied on a consistent basis, and certified by
     Borrower as being true and correct.

     INSURANCE. Maintain fire and other risk insurance, public liability
     insurance, and such other insurance as Lender may require with respect to
     Borrower's properties and operations, in form, amounts, coverages and with
     insurance companies reasonably acceptable to Lender. Borrower, upon request
     of Lender, will deliver to Lender from time to time the policies or
     certificates of insurance in form satisfactory to Lender, including
     stipulations that coverages will not be cancelled or diminished without at
     least ten (10) days' prior written notice to Lender. Each insurance policy
     also shall include an endorsement providing that coverage in favor of
     Lender will not be impaired in any way by any act, omission or default of
     Borrower or any other person. In connection with all policies covering
     assets in which Lender holder or is offered a security interest for the
     Loans, Borrower will provide Lender with such loss payable or other
     endorsements as Lender may require.

     INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on
     each existing insurance policy showing such information as Lender may
     reasonably request, including without limitation the following: (a) the
     name of the insurer; (b) the risks insured; (c) the amount of the policy;
     (d) the properties insured; (e) the then current property values on the
     basis of which insurance has been obtained, and the manner of determining
     those values; and (f) the expiration date of the policy. In addition, upon
     request of Lender (however not more often than annually), Borrower will
     have an independent appraiser satisfactory to Lender determine, as
     applicable, the actual cash value or replacement cost of any Collateral.
     The cost of such appraisal shall be paid by Borrower.

     OTHER AGREEMENTS. Comply with all terms and conditions of all other
     agreements, whether now or hereafter existing, between Borrower and any
     other party and notify Lender immediately in writing of any default in
     connection with any other such agreements.

     LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
     operations, unless specifically consented to the contrary by Lender in
     writing.

     TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
     indebtedness and obligations, including without limitation all
     assessments, taxes, governmental charges, levies and liens, of every kind
     and nature, imposed upon Borrower or its properties, income, or profits,
     prior to the date on which penalties would attach, and all lawful claims
     that, if unpaid, might become a lien or charge upon any of Borrower's
     properties, income, or profits. Provided however, Borrower will not be
     required to pay and discharge any such assessment, tax, charge, levy, lien
     or claim so long as (a) the legality of the same shall be contested in
     good faith by appropriate proceedings, and (b) Borrower shall have
     established on its books adequate reserves with respect to such contested
     assessment, tax, charge, levy, lien, or claim in accordance with generally
     accepted accounting practices. Borrower, upon demand of Lender, will
     furnish to Lender evidence of payment of the assessments, taxes, charges,
     levies, liens and claims and will authorize the appropriate governmental
     official to deliver to Lender at any time a written statement of any
     assessments, taxes, charges, levies, liens and claims against Borrower's
     properties, income, or profits.

     PERFORMANCE. Perform and comply with all terms, conditions, and provisions
     set forth in this Agreement and in the Related Documents in a timely
     manner, and promptly notify Lender if Borrower learns of the occurrence of
     any event which constitutes an Event of Default under this Agreement or
     under any of the Related Documents.

     OPERATIONS. Maintain executive and management personnel with substantially
     the same qualifications and experience as the present executive and
     management personnel; provide written notice to Lender of any change in
     executive and management personnel; conduct its business affairs in
     reasonable and prudent manner and in compliance with all applicable
     federal, state and municipal laws, ordinances, rules and regulations
     respecting its properties, charters, businesses and operations, including
     without limitation, compliance with the Americans With Disabilities Act and
     with all minimum funding standards and other requirements of ERISA and
     other laws applicable to Borrower's employee benefit plans.

     INSPECTION. Permit employees or agents of Lender at any reasonable time to
     inspect any and all Collateral for the Loan or Loans and Borrower's other
     properties and to examine or audit Borrower's books, accounts, and records
     and to make copies and memoranda of Borrower's books, accounts, and
     records. If Borrower now or at any time hereafter maintains any records
     (including without limitation computer generated records and computer
     software programs for the generation of such records) in the possession
     of third party, Borrower, upon request of Lender, shall notify such party
     to permit Lender free access to such records at all reasonable times and
     to provide Lender with copies of any records it may request, all at
     Borrower's expense.

     COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide Lender
     QUARTERLY and at the time of each disbursement of Loan proceeds with a
     certificate executed by Borrower's chief financial officer, or other
     officer or person acceptable to Lender, certifying that the
     representations and warranties set forth in this Agreement are true and
     correct as of the date of the certificate and further certifying that,
     as of the date of the certificate, no Event of Default exists under
     this Agreement.

     ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all
     respects with all environmental protection federal, state and local laws,
     statutes, regulations and ordinances; not cause or permit to exist, as a
     result of an intentional or unintentional action or omission on its part or
     on the part of any third party, on property owned and/or occupied by
     Borrower, any environmental activity where damage may result to the
     environment, unless such environmental activity is pursuant to and in
     compliance with the conditions of a permit issued by the appropriate
     federal, state or local government authorities; shall furnish to Lender
     promptly and in any event within thirty (30) days after receipt thereof a
     copy of any notice, summons, lien, citation, directive, letter or other
     communication from any governmental agency or instrumentality concerning
     any intentional or unintentional action or omission on Borrower's part in
     connection with any environmental activity whether or not there is damage
     to the environment and/or other natural resources.

     ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such promissory
     notes, mortgages, deeds of trust, security agreements, financing
     statements, instruments, documents and other agreements as Lender or its
     attorneys may reasonably request to evidence and secure the Loans and to
     perfect all Security interests.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent
of Lender:

     INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the normal
     course of business and indebtedness to Lender contemplated by this
     Agreement, create, incur or assume indebtedness for borrowed money,
     including capital leases, (b) except as allowed as a Permitted Lien,
     sell, transfer, mortgage, assign, pledge, lease, grant a security interest
     in, or encumber any of Borrower's assets, or (c) sell with recourse any of
     Borrower's accounts, except to Lender.

     CONTINUITY OF OPERATIONS. (a) Engage in any business activities
     substantially different than those in which Borrower is presently engaged,
     (b) cease operations, liquidate, merge, transfer, acquire or consolidate
     with any other entity, change ownership, change its name, dissolve or
     transfer or sell Collateral out of the ordinary course of business, (c) pay
     any dividends on Borrower's stock (other than dividends payable in its
     stock), provided, however that notwithstanding the foregoing, but only so
     long as no Event of Default has occurred and is continuing or would result
     from the payment of dividends, if Borrower is a "Subchapter S Corporation"
     (as defined in the Internal Revenue Code of 1986, as amended), Borrower may
     pay cash dividends on its stock to its shareholders from time to time in
     amounts necessary to enable the shareholders to pay income taxes and make
     estimated income tax payments to satisfy their liabilities under federal
     and state law which arise solely from their status as Shareholders

<PAGE>

12-10-1999                         LOAN AGREEMENT                         PAGE 5
LOAN NO 391                          (CONTINUED)

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

     of a Subchapter S Corporation because of their ownership of shares of stock
     of Borrower, or (d) purchase or retire any of Borrower's outstanding shares
     or alter or amend Borrower's capital structure.

     LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance money or
     assets, (b) purchase, create or acquire any interest in any other
     enterprise or entity, or (c) incur any obligation as surety or guarantor
     other than in the ordinary course of business.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender; or (e) Lender in good faith deems itself insecure, even
though no Event of Default shall have occurred.

DISCLOSURE. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.

YEAR 2000. Borrower has reviewed and assessed its business operations and
computer systems and applications to address the "year 2000 problem" (that
is, that computer applications and equipment used by Borrower, directly or
indirectly through third parties, may be unable to properly perform
date-sensitive functions before, during and after January 1, 2000). Borrower
reasonably believes that the year 2000 problem will not result in a material
adverse change in Borrower's business condition (financial or otherwise),
operations, properties or prospects or ability to repay Lender. Borrower agrees
that this representation will be true and correct on and shall be deemed made by
Borrower on each date Borrower requests any advance under this Agreement or Note
or delivers any information to Lender. Borrower will promptly deliver to Lender
such information relating to this representation as Lender requests from time to
time.

ACCESS LAWS. Without limiting the generality of any provision of this agreement
requiring Borrower to comply with applicable laws, rules and regulations,
Borrower agrees that it will at all times comply with applicable laws relating
to disabled access including, but not limited to, all applicable titles of the
Americans with Disabilities Act of 1990.

COLLATERAL AUDITS. Borrower agrees that Lender without limitation may require
semi-annual collateral audits, the cost of which will be borne by Borrower.

RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and Keogh accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on the Indebtedness against any and all such accounts,
and, at Lender's option, to administratively freeze all such accounts to allow
Lender to protect Lender's charge and setoff rights provided on this paragraph.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

     DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when due
     on the Loans.

     OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
     perform when due any other term, obligation, covenant or condition
     contained in this Agreement or in any of the Related Documents, or failure
     of Borrower to comply with or to perform any other term, obligation,
     covenant or condition contained in any other agreement between Lender and
     Borrower.

     DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
     under any loan, extension of credit, security agreement, purchase or sales
     agreement, or any other agreement, in favor of any other creditor or person
     that may materially affect any of Borrower's property or Borrower's or any
     Grantor's ability to repay the Loans or perform their respective
     obligations under this Agreement or any of the Related Documents.

     FALSE STATEMENTS. Any warranty, representation or statement made or
     furnished to Lender by or on behalf of Borrower or any Grantor under this
     Agreement or the Related Documents is false or misleading in any material
     respect at the time made or furnished, or becomes false or misleading at
     any time thereafter.

     DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related documents
     ceases to be in full force and effect (including failure of any Security
     Agreement to create a valid and perfected Security Interest) at any time
     and for any reason.

     INSOLVENCY. This dissolution or termination of Borrower's existence as a
     going business, the insolvency of Borrower, the appointment of a receiver
     for any part of Borrower's property, any assignment for the benefit of
     creditors, any type of creditor workout, or the commencement of any
     proceeding under any bankruptcy or insolvency laws by or against Borrower.

     CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Borrower, any
     creditor of any Grantor against any collateral securing the indebtedness,
     or by any governmental agency. This includes a garnishment, attachment, or
     levy on or of any of Borrower's deposit accounts with Lender.

     EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
     to any Guarantor of any of the Indebtedness or any Guarantor dies or
     becomes incompetent, or revokes or disputes the validity of, or liability
     under, any Guaranty of the Indebtedness.

     CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent (25%)
     or more of the common stock of Borrower.

     ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
     condition, or Lender believes the prospect of payment or performance of
     the Indebtedness is impaired.

     INSECURITY. Lender, in good faith, deems itself insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
Loan Advances or disbursements), and, at Lender's option, all indebtedness
immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the "insolvency" subsection above, such acceleration shall be automatic and
not optional. In addition, Lender shall have all the rights and remedies
provided in the Related Documents or available at law, in equity, or otherwise.
Except as may be prohibited by applicable law, all of Lender's rights and
remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an
obligation of Borrower or of any Grantor shall not affect Lender's right to
declare a default and to exercise its rights and remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

     AMENDMENTS. This Agreement, together with any Related Documents,
     constitutes the entire understanding and agreement of the parties as to the
     matters set forth in this Agreement. No alteration of or amendment to this
     Agreement shall be effective unless given in writing and signed by the
     party of parties sought to be charged or bound by the alteration or
     amendment.

     APPLICABLE LAW. This agreement has been delivered to Lender and accepted by
     Lender in the State of Washington. If there is a lawsuit, Borrower agrees
     upon Lender's request to submit to the jurisdiction of the courts of King
     County, the State of Washington. Subject to the provisions on arbitration,
     this Agreement shall be governed by and construed in accordance with the
     laws of the State of Washington.

     ARBITRATION. Lender and Borrower agree that all disputes, claims and
     controversies between them, whether individual, joint, or class in nature,
     arising from this Agreement or otherwise, including without limitation
     contract and tort disputes, shall be arbitrated pursuant to the Rules of
     the American Arbitration Association, upon request of either party. No act
     to take or dispose of any Collateral shall constitute a waiver of this
     arbitration agreement or be prohibited by this arbitration agreement. This
     includes, without limitation, obtaining injunctive relief or a temporary
     restraining order; invoking a power of sale under any deed of trust or
     mortgage; obtaining a writ of attachment or imposition of a receiver; or
     exercising any rights relating to personal property, including taking or
     disposing of such property with or without judicial process pursuant to
     Article 9 of the Uniform Commercial Code. Any disputee, claims, or
     controversies concerning the lawfulness or reasonableness of any act, or
     exercise of any right, concerning any Collateral, including any claim to
     rescind, reform, or otherwise modify any agreement relating to the
     Collateral, shall also be arbitrated, provided however that no arbitrator
     shall have the right or the power to enjoin or restrain any act of any
     party. Judgment upon any award rendered by any arbitrator may be entered in
     any court having jurisdiction. Nothing in this Agreement shall preclude any
     party from seeking equitable relief from a court of competent jurisdiction.
     The statute of limitations, estoppel, waiver, laches, and similar doctrines
     which would otherwise be applicable in any action brought by a party shall
     be applicable in any arbitration proceeding, and the commencement of an
     arbitration proceeding shall be deemed the commencement of an action for
     these purposes. The Federal Arbitration Act shall apply to the
     construction, interpretation, and enforcement of this arbitration
     provision.

     CAPTION HEADINGS. Caption headings in this Agreement are for convenience
     purposes only and are not to be used in interpret or define the provisions
     of this Agreement.

     CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
     sale or transfer, whether now or later, of one or more participation
<PAGE>

12-10-1999                         LOAN AGREEMENT                         PAGE 6
LOAN NO 391                          (CONTINUED)

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

     interests in the Loans to one or more purchasers, whether related or
     unrelated to Lender. Lender may provide, without any limitation
     whatsoever, to any one or more purchasers, or potential purchasers, any
     information or knowledge Lender may have about Borrower or about any
     other matter relating to the Loan, and Borrower hereby waives any rights
     to privacy it may have with respect to such matters. Borrower
     additionally waives any and all notices of sale of participation
     interests, as well as all notices of any repurchase of such participation
     interests. Borrower also agrees that the purchasers of any such
     participation interests will be considered as the absolute owners of such
     interests in the Loans and will have all the rights granted under the
     participation agreement or agreements governing the sale of such
     participation interests. Borrower further waives all rights of offset or
     counterclaim that it may have now or later against Lender or against any
     purchaser of such a participation interest and unconditionally agrees
     that either Lender or such purchaser may enforce Borrower's obligation
     under the Loans irrespective of the failure or insolvency of any holder
     of any interest in the Loans. Borrower further agrees that the purchaser
     of any such participation interests may enforce its interests
     irrespective of any personal claims or defenses that Borrower may have
     against Lender.

     COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
     expenses, including without limitation attorneys' fees, incurred in
     connection with the preparation, execution, enforcement, modification and
     collection of this Agreement or in connection with the Loans made
     pursuant to this Agreement. Lender may pay someone else to help collect
     the Loans and to enforce this Agreement, and Borrower will pay that
     amount. This includes, subject to any limits under applicable law,
     Lender's attorneys' fees and Lender's legal expenses, whether or not
     there is a lawsuit, including attorneys' fees for bankruptcy proceedings
     (including efforts to modify or vacate any automatic stay or injunction),
     appeals, and any anticipated post-judgment collection services. Borrower
     also will pay any court costs, in addition to all other sums provided by
     law.

     NOTICES. All notices required to be given under this Agreement shall be
     given in writing, may be sent by telefacsimile (unless otherwise required
     by law), and shall be effective when actually delivered or when deposited
     with a nationally recognized overnight courier or deposited in the United
     States mail, first class, postage prepaid, addressed to the party to whom
     the notice is to be given at the address shown above. Any party may
     change its address for notices under this Agreement by giving formal
     written notice to the other parties, specifying that the purpose of the
     notice is to change the party's address. To the extent permitted by
     applicable law, if there is more than one Borrower, notice to any
     Borrower will constitute notice to all Borrowers. For notice purposes,
     Borrower will keep Lender informed at all times of Borrower's current
     address(es).

     SEVERABILITY. If a court of competent jurisdiction finds any provision of
     this Agreement to be invalid or unenforceable as to any person or
     circumstance, such finding shall not render that provision invalid or
     unenforceable as to any other persons or circumstances. If feasible, any
     such offending provision shall be deemed to be modified to be within the
     limits of enforceability or validity; however, if the offending provision
     cannot be so modified, it shall be stricken and all other provisions of
     this Agreement in all other respects shall remain valid and enforceable.

     SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of any
     provisions of this Agreement makes it appropriate, including without
     limitation any representation, warranty or covenant, the word "Borrower"
     as used herein shall include all subsidiaries and affiliates of Borrower.
     Notwithstanding the foregoing however, under no circumstances shall this
     Agreement be construed to require Lender to make any Loan or other
     financial accommodation to any subsidiary or affiliate of Borrower.

     SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
     behalf of Borrower shall bind its successors and assigns and shall inure
     to the benefit of Lender, its successors and assigns. Borrower shall not,
     however, have the right to assign its rights under this Agreement or any
     interest therein, without the prior written consent of Lender.

     SURVIVAL. All warranties, representations, and covenants made by Borrower
     in this Agreement or in any certificate or other instrument delivered by
     Borrower to Lender under this Agreement shall be considered to have been
     relied upon by Lender and will survive the making of the Loan and
     delivery to Lender of the Related Documents, regardless of any
     investigation made by Lender or on Lender's behalf.

     WAIVER. Lender shall not be deemed to have waived any rights under this
     Agreement unless such waiver is given in writing and signed by Lender. No
     delay or omission on the part of Lender in exercising any right shall
     operate as a waiver of such right or any other right. A waiver by Lender
     of a provision of this Agreement shall not prejudice or constitute a
     waiver of Lender's right otherwise to demand strict compliance with that
     provision or any other provision of this Agreement. No prior waiver by
     Lender, nor any course of dealing between Lender and Borrower, or between
     Lender and any Grantor, shall constitute a waiver of any of Lender's
     rights or of any obligations of Borrower or of any Grantor as to any
     future transactions. Whenever the consent of Lender is required under
     this Agreement, the granting of such consent by Lender in any instance
     shall not constitute continuing consent in subsequent instances where
     such consent is required, and in all cases such consent may be granted or
     withheld in the sole discretion of Lender.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS LOAN AGREEMENT,
AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF DECEMBER 10,
1999.

BORROWER:

MULTIPLE ZONES INTERNATIONAL, INC.

By:     /s/ [illegible]
----------------------------------------------------
   AUTHORIZED OFFICER, TITLE
                          SUP & CFO
                          ---------

LENDER:

U.S. BANK NATIONAL ASSOCIATION

By:     /s/ Tony W. Chalfant, V.P.
----------------------------------------------------
   AUTHORIZED OFFICER

===============================================================================
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.28 (c) 1999 CFI ProServices, Inc.
All rights reserved. [WA-C40 ZONE.LNC12.OVL]

<PAGE>

                           ALTERNATIVE RATE OPTIONS
                               PROMISSORY NOTE
                             (PRIME RATE, LIBOR)

$15,000,000.00                                            Dated as of: 12/13/99
-----------------------------                                          --------

MULTIPLE ZONES INTERNATIONAL, INC.                                 ("Borrower")

U.S. BANK NATIONAL ASSOCIATION                                       ("Lender")

1.  TYPE OF CREDIT. This note is given to evidence Borrower's obligation
to repay all sums which Lender may from time to time advance to Borrower
("Advances") under a:

     / / single disbursement loan. Amounts loaned to Borrower hereunder will
         be disbursed in a single Advance in the amount shown in Section 2.

     X   revolving line of credit. No Advances shall be made which create a
         maximum amount outstanding at any one time which exceeds the maximum
         amount shown in Section 2. However, Advances hereunder may be borrowed,
         repaid and reborrowed, and the aggregate Advances loaned hereunder from
         time to time may exceed such maximum amount.

     / / non-revolving line of credit. Each Advance made from time to time
         hereunder shall reduce the maximum amount available shown in Section 2.
         Advances loaned hereunder which are repaid may not be reborrowed.

2.  PRINCIPAL BALANCE. The unpaid principal balance of all Advances
outstanding under this note ("Principal Balance") at one time shall not
exceed $15,000,000.00.

3.  PROMISE TO PAY. For value received Borrower promises to pay to Lender or
order at COMMERCIAL LOAN SERVICE CENTER-WEST AT 555 S.W. OAK, PORTLAND, OR.
97220, the Principal Balance of this note, with interest thereon at the
rate(s) specified in Sections 4 and 11 below.

4.  INTEREST RATE. The interest rate on the Principal Balance outstanding may
vary from time to time pursuant to the provisions of this note. Subject to
the provisions of this note, Borrower shall have the option from time to time
of choosing to pay interest at the rate or rates and for the applicable
periods of time based on the rate options provided herein; PROVIDED, however,
that once Borrower notifies Lender of the rate option chosen in accordance
with the provisions of this note, such notice shall be irrevocable. The rate
options are the Prime Borrowing Rate and the LIBOR Borrowing Rate, each as
defined herein.

(a) DEFINITIONS. The following terms shall have the following meanings:

    "Business Day" means any day other than a Saturday, Sunday, or other day
that commercial banks in Portland, Oregon, Minneapolis, Minnesota, New York
City or Seattle, Washington are authorized or required by law to close;
provided, however that when used in connection with a LIBOR Rate, LIBOR
Amount or LIBOR Interest Period such term shall also exclude any day on which
dealings in U.S. dollar deposits are not carried on in the London interbank
market.

    "Dow Jones Page 3750" means the display designated as such on the Dow
Jones Markets Service (formerly known as Telerate) (or such other page as may
replace page 3750 on that service for the purpose of displaying London
interbank offered rates of major banks for United States Dollar deposits).

    "LIBOR Amount" means each principal amount for which Borrower chooses to
have the LIBOR Borrowing Rate apply for any specified LIBOR Interest Period.

    "LIBOR Interest Period" means as to any LIBOR Amount, a period of 1, 2, 3
OR 6 months commencing on the date the LIBOR Borrowing Rate becomes
applicable thereto; PROVIDED, however, that: (i) the first day of each LIBOR
Interest Period must be a Business Day; (ii) no LIBOR Interest Period shall
commence on or after MAY 31, 2000; (iii) no LIBOR Interest Period shall be
selected which would extend beyond JUNE 30, 2000; (iv) no LIBOR Interest
Period shall extend beyond the date of any principal payment required under
Section 6 of this note, unless the sum of the Prime Rate Amount, plus LIBOR
Amounts with LIBOR Interest Periods ending on or before the scheduled date of
such principal payment, plus principal amounts remaining unborrowed under a
line of credit, equals or exceeds the amount of such principal payment; (v)
any LIBOR Interest Period which would otherwise expire on a day which is not
a Business Day, shall be extended to the next succeeding Business Day, unless
the result of such extension would be to extend such LIBOR Interest Period
into another calendar month, in which event the LIBOR Interest Period shall
end on the immediately preceding Business Day; and (vi) any LIBOR Interest
Period that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at
the end of such LIBOR Interest Period) shall end on the last Business Day of
a calendar month.

    "LIBOR Rate" means, for any LIBOR Interest Period, the average offered
rate for deposits in United States Dollars (rounded upwards, if necessary, to
the nearest 1/16 of 1%) for delivery of such deposits on the first day of
such LIBOR Interest Period, for the number of months therein, which appears
on Dow Jones Page 3750 as of 11:00 a.m., London time (or such other time as
of which such rate appears) on the day that is two Business Days preceding
the first day of such LIBOR Interest Period; or the rate for such deposits
determined by Lender at such time based on such other published service of
general application as shall be selected by Lender for such purpose;
provided, that in lieu of determining the rate in the foregoing manner, Lender
may determine the rate based on the rates offered to Lender for deposits in
United States Dollars (rounded upwards, if necessary, to the nearest 1/16 of
1%) in the interbank eurodollar market at such time for delivery on the first
day of such LIBOR Interest Period for the number of months therein; and
provided, further, that in any case the LIBOR Rate shall be adjusted to take
into account the maximum reserves required to be maintained for Eurocurrency
liabilities by banks during each such LIBOR Interest Period as specified in
Regulation D of the Board of Governors of the Federal Reserve System or any
successor regulation.

    "Prime Rate" means the rate of interest which Lender from time to time
establishes as its prime or reference rate and is not, for example, the
lowest rate of interest which Lender collects from any borrower or class of
borrowers. When the Prime Rate is applicable under Section 4(b) or 11(b), the
interest rate hereunder shall be adjusted without notice effective on the day
the Prime Rate changes, but in no event shall the rate of interest be higher
than allowed by law.

    "Prime Rate Amount" means any portion of the Principal Balance bearing
interest at the Prime Borrowing Rate.

(b) THE PRIME BORROWING RATE.

    (i)       The Prime Borrowing Rate is a variable per annum rate equal to
the Prime Rate plus 0.750%.

    (ii)      Whenever Borrower desires to use the Prime Borrowing Rate
option, Borrower shall give Lender notice orally or in writing in accordance
with Section 15 of this note, which notice shall specify the requested
effective date (which must be a Business Day) and principal amount of the
Advance or increase in the Prime Rate Amount, and whether Borrower is
requesting a new Advance under a line of credit or conversion of a LIBOR
Amount to the Prime Borrowing Rate.

    (iii)      Subject to Section 11 of this note, interest shall accrue on
the unpaid Principal Balance at the Prime Borrowing Rate unless and except to
the extent that the LIBOR Borrowing Rate is in effect.

(c) THE LIBOR BORROWING RATE.

    (i)       The LIBOR Borrowing Rate is the LIBOR Rate plus 2.500% per
annum.

    (ii)      Borrower may obtain LIBOR Borrowing Rate quotes from Lender
before 10:00 a.m. (Portland, Oregon time) on any Business Day. Borrower may
request an Advance, conversion of any portion of the Prime Rate Amount to a
LIBOR Amount or a new LIBOR Interest Period for an existing LIBOR Amount, at
such rate only by giving Lender notice in accordance with Section 4(c)(iii)
before 10:00 a.m. (Portland, Oregon time) on such day.

Libor-wa (Washington) (6/99) LHH                                   Page 1 of 4

<PAGE>

     (iii) Whenever Borrower desires to use the LIBOR Borrowing Rate option,
Borrower shall give Lender irrevocable notice (either in writing or orally and
promptly confirmed in writing) no late than 10:00 a.m. (Portland, Oregon time)
two (2) Business Days prior to the desired effective date of such rate. Any oral
notice shall be given by, and any written notice or confirmation of an oral
notice shall be signed by, the person(s) authorized in Section 15 of this note,
and shall specify the requested effective date of the rate, LIBOR Interest
Period and LIBOR Amount, and whether Borrower is requesting a new Advance at the
LIBOR Borrowing Rate under a line of credit, conversion of all or any portion of
the Prime Rate Amount to a LIBOR Amount, or a new LIBOR Interest Period for an
outstanding LIBOR Amount. Notwithstanding any other term of this note, Borrower
may elect the LIBOR Borrowing Rate in the minimum principal amount of
$500,000.00 and in multiples of $100,000.00 above such amount; PROVIDED,
however, that no more than FOUR (4) separate LIBOR Interest Periods may be in
effect at any one time.

     (iv) If at any time the LIBOR Rate is unascertainable or unavailable to
Lender or if LIBOR Rate loans become unlawful, the option to select the LIBOR
Borrowing Rate shall terminate immediately. If the LIBOR Borrowing Rate is then
in effect, (A) it shall terminate automatically with respect to all LIBOR
Amounts (i) on the last day of each then applicable LIBOR Interest Period, if
Lender may lawfully continue to maintain such loans, or (ii) immediately if
Lender may not lawfully continue to maintain such loans through such day, and
(B) subject to Section 11, the Prime Borrowing Rate automatically shall become
effective as to such amounts upon such termination.

     (v) If at any time after the date hereof (A) any revision in or adoption of
any applicable law, rule, or regulation or in the interpretation or
administration thereof (i) shall subject Lender or its Eurodollar lending office
to any tax, duty, or other charge, or change the basis of taxation of payments
to Lender with respect to any loans bearing interest based on the LIBOR Rate, or
(ii) shall impose or modify any reserve, insurance, special deposit, or similar
requirements against assets of, deposits with or for the account of, or credit
extended by Lender or its Eurodollar lending office, or impose on Lender or its
Eurodollar lending office any other condition affecting any such loans, and (B)
the result of any of the foregoing is (i) to increase the cost to Lender of
making or maintaining any such loans or (ii) to reduce the amount of any sum
receivable under this note by Lender or its Eurodollar lending office, Borrower
shall pay Lender within 15 days after demand by Lender such additional amount as
will compensate Lender for such increased cost or reduction. The determination
hereunder by Lender of such additional amount shall be conclusive in the absence
of manifest error. If Lender demands compensation under this Section 4(c)(v),
Borrower may upon three (3) Business Days' notice to Lender pay the accrued
interest on all LIBOR Amounts, together with any additional amounts payable
under Section 4(c)(vi). Subject to Section 11, upon Borrower's paying such
accrued interest and additional costs, the Prime Borrowing Rate immediately
shall be effective with respect to the unpaid principal balance of such LIBOR
Amounts.

     (vi) Borrower will indemnify Lender upon demand against any loss or expense
which Lender may sustain or incur (including, without limitation, any loss or
expense sustained or incurred in obtaining, liquidating or employing deposits or
other funds acquired to effect, fund or maintain any portion of the loan or any
Advance) as a consequence of (A) any failure of Borrower to make any payment
when due of any amount due hereunder, (B) any failure of Borrower to borrow, if
permitted by the terms of this note, continue or convert any portion of the
Prime Rate Amount to a LIBOR Amount, on a date specified therefor in a notice
thereof, or (C) any payment, voluntary or mandatory or mandatory prepayment or
payment on default or conversion of any LIBOR Amount to the Prime Borrowing
Rate, on a date other than the last day of the applicable LIBOR Interest Period.
Determinations by Lender of the amount required to indemnify Lender shall be
conclusive in the absence of manifest error.

     (vii) Notwithstanding any provision of this note to the contrary, Lender
shall be entitled to fund and maintain its funding of all or any part of the
loan evidenced by this note in any manner it elects; it being understood,
however, that with respect to any LIBOR Amount, all determinations hereunder
shall be made as if Lender had actually funded and maintained each LIBOR Amount
during the LIBOR Interest Period applicable to it through the purchase of
deposits having a term corresponding to such LIBOR Interest Period and bearing
an interest rate equal to the LIBOR Rate for such LIBOR Interest Period (whether
or not Lender shall have granted any participations in such LIBOR Amounts).

     (viii) Notwithstanding any other term of this note, Borrower may not select
the LIBOR Borrowing Rate if an event of default hereunder has occurred and is
continuing.

     (ix) Nothing contained in this note, including without limitation the
determination of any LIBOR Interest Period or Lender's quotation of any LIBOR
Borrowing Rate, shall be construed to prejudice Lender's right, if any, to
decline to make any requested Advance or require payment on demand.

5.   COMPUTATION OF INTEREST. All interest under Section 4 and Section 11 will
be computed at the applicable rate based on a 360-day year and applied to the
actual number of days elapsed.

6.   PAYMENT SCHEDULE

(a)  PRINCIPAL. Principal shall be paid:

     / /       on demand.

      X        on demand, or if no demand, on JUNE 30, 2000.

     / /       on _______________________.

     / /       subject to Section 8, in installments of

               / /  _________________________ each, plus accrued interest,
                    beginning on ____ and on the same day of each
                    __________________ thereafter until
                    __________________________ when the entire Principal Balance
                    plus interest thereon shall be due and payable.

               / /  _________________________ each, plus accrued interest,
                    beginning on ____ and on the same day of each
                    __________________ thereafter until
                    __________________________ when the entire Principal Balance
                    plus interest thereon shall be due and payable.

     / /       ___________________________________.

(b)  INTEREST.

     (i)       Interest on the Prime Rate Amount shall be paid:

               X    on the LAST day of DECEMBER, 1999, and on the same day of
                    each MONTH thereafter prior to maturity and at maturity.

               / /  at maturity.

               / /  at the time each principal installment is due and at
                    maturity.

               / /  _________________________________________.
                    _________________________________________.

     (ii)      Interest on all LIBOR Amounts shall be paid:

               / /  on the last day of the applicable LIBOR Interest Period, and
                    if such LIBOR Interest Period is longer than three months,
                    on the last day of each three month period occurring during
                    such LIBOR Interest Period, and at maturity.

               X    on the LAST day of December, 1999, and on the same day of
                    each MONTH thereafter prior to maturity and at maturity.

               / /  at maturity.

               / /  at the time each principal installment is due and at
                    maturity.

               / /  _________________________________________.

     (iii)     PERFORMANCE PRICING: IF DURING THE TERM OF THE CREDIT LINE
                    FACILITY, BEGINNING WITH THE QUARTER ENDING DECEMBER 31,
                    1999, THE COMPANY REPORTS A QUARTERLY PROFIT, THE INTEREST
                    RATE OPTIONS WILL IMMEDIATELY DECREASE TO THE PRIME
                    BORROWING RATE PLUS 0.000 PER ANNUM FULLY FLOATING OR THE
                    LIBOR BORROWING RATE PLUS 1.750 PER ANNUM.

7.   PREPAYMENT.

(a)  Prepayments of all or any part of the Prime Rate Amount may be made at
     any time without penalty.

(b)  Except as otherwise specifically set forth herein, Borrower may not prepay
     all or any part of any LIBOR Amount or terminate any LIBOR Borrowing Rate,
     except on the last day of the applicable LIBOR Interest Period.

(c)  Principal prepayments will not postpone the date of or change the amount of
     any regularly scheduled payment. At the time of any principal prepayment,
     all accrued interest, fees, costs and expenses shall also be paid.

Libor-wa (Washington) (6/99)LHH                                      Page 2 of 4
<PAGE>

8.   CHANGE IN PAYMENT AMOUNT. Each time the interest rate on this note changes
the holder of this note may, from time to time, in holder's sole discretion,
increase or decrease the amount of each of the installments remaining unpaid at
the time of such change in rate to an amount holder in its sole discretion
deems necessary to continue amortizing the Principal Balance at the same rate
established by the installment amounts specified in Section 6(a), whether or not
a "balloon" payment may also be due upon maturity of this note. Holder shall
notify the undersigned of each such change in writing. Whether or not the
installment amount is increased under this Section 8, Borrower understands that,
as a result of increases in the rate of interest the final payment due, whether
or not a "balloon" payment, shall include the entire Principal Balance and
interest thereon then outstanding, and may be substantially more than the
installment specified in Section 6.

9.   ALTERNATE PAYMENT DATE. Notwithstanding any other term of this note, if in
any month there is no day on which a scheduled payment would otherwise be due
(e.g. February 31), such payment shall be paid on the last banking day of that
month.

10.  PAYMENT BY AUTOMATIC DEBIT.

X    Borrower hereby authorizes Lender to automatically deduct the amount of all
principal and interest payments from account number 153504884322 with Lender. If
there are insufficient funds in the account to pay the automatic deduction in
full, Lender may allow the account to become overdrawn, or Lender may reverse
the automatic deduction. Borrower will pay all the fees on the account which
result from the automatic deductions, including any overdraft and non-sufficient
funds charges. If for any reason Lender does not charge the account for a
payment, or if an automatic payment is reversed, the payment is still due
according to this note. If the account is a Money Market Account, the number of
withdrawals from that account is limited as set out in the account agreement.
Lender may cancel the automatic deduction at any time in its discretion.

Provided, however, if no account number is entered above, Borrower does not want
to make payments by automatic debit.

11.  DEFAULT.

(a)  Without prejudice to any right of Lender to require payment on demand or to
decline to make any requested Advance, each of the following shall be an event
of default: (i) Borrower fails to make any payment when due. (ii) Borrower fails
to perform or comply with any term, covenant or obligation in this note or any
agreement related to this note, or in any other agreement or loan Borrower has
with Lender or any affiliate of Lender. (iii) Borrower defaults under any loan,
extension of credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person that may materially
affect any of Borrower's property or Borrower's ability to repay this note or
perform Borrower's obligations under this note or any related documents. (iv)
Any representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (v) Borrower dies, becomes insolvent, liquidates
or dissolves, a receiver is appointed for any part of Borrower's property,
Borrower makes an assignment for the benefit of creditors, or any proceeding is
commenced either by Borrower or against Borrower under any bankruptcy or
insolvency laws. (vi) Any creditor tries to take any of Borrower's property on
or in which Lender has a lien or security interest. This includes a garnishment
of any of Borrower's accounts with Lender. (vii) Any of the events described in
this default section occurs with respect to any general partner in Borrower or
any guarantor of this note, or any guaranty of Borrower's indebtedness to Lender
ceases to be, or is asserted not to be, in full force and effect. (viii) There
is any material adverse change in the financial condition or management of
Borrower or Lender in good faith deems itself insecure with respect to the
payment or performance of Borrower's obligations to Lender. If this note is
payable on demand, the inclusion of specific events of default shall not
prejudice Lender's right to require payment on demand or to decline to make any
requested Advance.

(b)  Without prejudice to any right of Lender to require payment on demand,
upon the occurrence of an event of default, Lender may declare the entire
unpaid Principal Balance on this note and all accrued unpaid interest
immediately due and payable, without notice; provided, however, that if any
proceeding under any bankruptcy or insolvency law is commenced by or against
Borrower, the availability of Advances shall be immediately terminated
without notice and the entire Principal Balance and all accrued interest
shall, without notice, become immediately due and payable. Upon default,
including failure to pay upon final maturity, Lender, at its option, may
also, if permitted under applicable law, increase the interest rate on this
note to a rate equal to the Prime Borrowing Rate plus 5%. The interest rate
will not exceed the maximum rate permitted by applicable law. In addition, if
any payment of principal or interest is 15 or more days past due, Borrower
will be charged a late charge of 5% of the delinquent payment.

12.  EVIDENCE OF PRINCIPAL BALANCE; PAYMENT ON DEMAND. Holder's records shall,
at any time, be conclusive evidence of the unpaid Principal Balance and interest
owing on this note. Notwithstanding any other provisions of this note, in the
event holder makes Advances hereunder which result in an unpaid Principal
Balance on this note which at any time exceeds the maximum amount specified in
Section 2, Borrower agrees that all such Advances, with interest, shall be
payable on demand.

13.  LINE OF CREDIT PROVISIONS. If the type of credit indicated in Section 1 is
a revolving line of credit or a non-revolving line of credit, Borrower agrees
that Lender is under no obligation and has not committed to make any Advances
hereunder. Each Advance hereunder shall be made at the sole option of Lender.

14.  DEMAND NOTE. If this note is payable on demand, Borrower acknowledges and
agrees that (a) Lender is entitled to demand Borrower's immediate payment in
full of all amounts owing hereunder and (b) neither anything to the contrary
contained herein or in any other loan documents (including but not limited to,
provisions relating to defaults, rights of cure, default rate of interest,
installment payments, late charges, periodic review of Borrower's financial
condition, and covenants) nore any act of Lender pursuant to any such provisions
shall limit or impair Lender's right or ability to require Borrower's payment in
full of all amounts owing hereunder immediately upon Lender's demand.

15.  REQUEST FOR ADVANCES.

(a)  Any Advance may be made or interest rate option selected upon the
request of Borrower (if an individual), any of the undersigned (if Borrower
consists of more than one individual), any person or persons authorized in
subsection (b) of this Section 15, and any person or persons otherwise
authorized to execute and deliver promissory notes to Lender on behalf of
Borrower.

(b)  Borrower hereby authorizes any one of the following individuals to request
Advances and to select interest rate options:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
unless Lender is otherwise instructed in writing.

(c)  All Advances shall be disbursed by deposit directly to Borrower's account
number ________________________ with Lender, or by cashier's check issued to
Borrower.

(d)  Borrower agrees that Lender shall have no obligation to verify the
identity of any person making any request pursuant to this Section 15, and
Borrower assumes all risks of the validity and authorization of such
requests. In consideration of Lender agreeing, at its sole discretion, to
make Advances upon such requests, Borrower promises to pay holder, in
accordance with the provisions of this note, the Principal Balance together
with interest thereon and other sums due hereunder, although any Advances
may have been requested by a person or persons not authorized to do so.

16.  PERIODIC REVIEW. Lender will review Borrower's credit accommodations
periodically. At the time of the review, Borrower will furnish Lender with any
additional information regarding Borrower's financial condition and business
operations that Lender requests. This information may include but is not limited
to, financial statements, tax returns, lists of assets and liabilities, agings
of receivables and payables, inventory schedules, budgets and forecasts. If upon
review, Lender, in its sole discretion, determines that there has been a
material adverse change in Borrower's financial condition, Borrower will be in
default. Upon default, Lender shall have all rights specified herein.

17.  NOTICES. Any notice hereunder may be given by ordinary mail, postage paid
and addressed to Borrower at the last known address of Borrower as shown on
holder's records. If Borrower consists of more than one person, notification of
any of said persons shall be complete notification of all.

18.  ATTORNEY FEES. Whether or not litigation or arbitration is commenced,
Borrower promises to pay all costs of collecting overdue amounts. Without
limiting the foregoing, in the event that holder consults an attorney
regarding the enforcement of any of its rights under this note or any
document securing the same, or if this note is placed in the hands of an
attorney for collection of if suit or litigation is brought to enforce this
note or any document securing the same, Borrower promises to pay all costs
thereof including such additional sums as the court or arbitrator(s) may
adjudge reasonable as attorney fees, including without limitation, costs and
attorney fees incurred in any appellate court, in any proceeding under the
bankruptcy code, or in any receivership and post-judgment attorney fees
incurred in enforcing any judgment.

Libor-wa (Washington) (6/99)LHH                                      Page 3 of 4
<PAGE>

19.  WAIVERS; CONSENT. Each party hereto, whether maker, co-maker, guarantor or
otherwise, waives diligence, demand, presentment for payment, notice of
non-payment, protest and notice of protest and waives all defenses based on
suretyship or impairment of collateral. Without notice to Borrower and without
diminishing or affecting Lender's rights or Borrower's obligations hereunder,
Lender may deal in any manner with any person who at any time is liable for, or
provides any real or personal property collateral for, any indebtedness of
Borrower to Lender, including the indebtedness evidenced by this note. Without
limiting the foregoing, Lender may, in its sole discretion: (a) make secured or
unsecured loans to Borrower and agree to any number of waivers, modifications,
extensions and renewals of any length of such loans, including the loan
evidenced by this note; (b) impair, release (with or without substitution of new
collateral), fail to perfect a security interest in, fail to preserve the value
of, fail to dispose of in accordance with applicable law, any collateral
provided by any person; (c) sue, fail to sue, agree not to sue, release, and
settle or compromise with, any person.

20.  JOINT AND SEVERAL LIABILITY. All undertakings of the undersigned Borrowers
are joint and several and are binding upon any marital community of which any
of the undersigned are members. Holder's rights and remedies under this note
shall be cumulative.

21.  SEVERABILITY. If any term or provision of this note is declared by a court
of competent jurisdiction to be illegal, invalid or unenforceable for any reason
whatsoever, such illegality, invalidity or unenforceability shall not affect the
balance of the terms and provisions hereof, which terms and provisions shall
remain binding and enforceable, and this note shall be construed as if such
illegal, invalid or unenforceable provision had not been contained herein.

22.  ARBITRATION.

(a)  Either Lender or Borrower may require that all disputes, claims,
counterclaims and defenses, including those based on or arising from any alleged
tort ("Claims") relating in any way to this note or any transaction of which
this note is a part (the "Loan"), be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and Title 9 of the U.S. Code. All Claims will be subject to
the statutes of limitation applicable if they were litigated. This provision
is void if the Loan, at the time of the proposed submission to arbitration, is
secured by real property located outside of Oregon or Washington, or if the
effect of the arbitration procedure (as opposed to any Claims of Borrower) would
be to materially impair Lender's ability to realize on any collateral securing
the Loan.

(b)  If arbitration occurs and each party's Claim is less than $100,000, one
neutral arbitrator will decide all issues; if any party's Claim is $100,000 or
more, three neutral arbitrators will decide all issues. All arbitrators will be
active Washington State Bar members in good standing. All arbitration hearings
will be held in Seattle, Washington. In addition to all other powers, the
arbitrator(s) shall have the exclusive right to determine all issues of
arbitrability. Judgment on any arbitration award may be entered in any court
with jurisdiction.

(c)  If either party institutes any judicial proceeding relating to the Loan,
such action shall not be a waiver of the right to submit any Claim to
arbitration. In addition, each has the right before, during and after any
arbitration to exercise any number of the following remedies, in any order or
concurrently; (i) setoff; (ii) self-help repossession; (iii) judicial or
non-judicial foreclosure against real or personal property collateral; and (iv)
provisional remedies, including injunction, appointment of receiver, attachment,
claim and delivery and replevin.

23.  GOVERNING LAW. This note shall be governed by and construed and enforced in
accordance with the laws of the State of Washington without regard to conflicts
of law principles; PROVIDED, however, that to the extent that Lender has greater
rights or remedies under Federal law, this provision shall not be deemed to
deprive Lender of such rights and remedies as may be available under Federal
law.

24.  YEAR 2000. Borrower has reviewed and assessed its business operations and
computer systems and applications to address the "year 2000 problem" (that is,
that computer applications and equipment used by Borrower, directly or
indirectly through third parties, may be unable to properly perform
date-sensitive functions before, during and after January 1, 2000). Borrower
reasonably believes that the year 2000 problem will not result in a material
adverse change in Borrower's business condition (financial or otherwise),
operations, properties or prospects or ability to repay Lender. Borrower agrees
that this representation will be true and correct on any shall be deemed made by
Borrower on each date Borrower requests any advance under this Agreement or Note
or delivers any information to Lender. Borrower will promptly deliver to Lender
such information relating to this representation as Lender requests from time to
time.

25.  RENEWAL AND EXTENSION. This Note is given in renewal and extension and not
in novation of the following described indebtedness: That certain Promissory
Note dated February 28, 1999, in the amount of $15,000,000.00 executed by
Borrower payable to Lender. It is further agreed that all liens and security
interest securing said indebtedness are hereby renewed and extended to secure
the Note and all renewals, extensions and modifications thereof.

26.  DISCLOSURE.

     ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.

EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS
DOCUMENT.

MULTIPLE ZONES INTERNATIONAL, INC.
----------------------------------
Borrower Name (Corporation, Partnership or other Entity)

illegible   SUP & CFO
----------------------------------
AUTHORIZED OFFICER, TITLE

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

For valuable consideration, Lender agrees to the terms of the arbitration
provision set forth in this note.

                                                  U.S. BANK NATIONAL ASSOCIATION

                                                  By: /s/ Tony W. Chalfant
                                                     ---------------------------
                                                  Title:  Vice President
                                                        ------------------------
                                                  Date:   12/14/99
                                                       -------------------------

Libor-wa (Washington) (6/99)LHH                                     Page 4 of 4<PAGE>

              TRAINING CENTER AND FRACTIONAL OWNERSHIP AGREEMENT

         This TRAINING CENTER AND FRACTIONAL OWNERSHIP AGREEMENT ("Agreement")
is made this 14th day of September, 1999 (the "Effective Date") by and between
AIMS CONTINUING EDUCATION AUTHORITY, a Colorado nonprofit corporation, having
its principal office and place of business at 5401 West 20th Street, Greeley,
Colorado 80634 (the "Authority"), and TRAINING DEVICES INTERNATIONAL, INC., a
Colorado corporation, having its principal office and place of business at 7367
South Revere Parkway, Building #2C, Englewood, Colorado 80112 ("TDI"; the
Authority and TDI sometimes hereinafter named individually as "Party" and
collectively the "Parties").

         WHEREAS, the Authority and TDI desire to establish a full flight
simulator training center to be located at or near the Greeley campus of Aims
Junior College District; and

         WHEREAS, TDI desires to gift to the Authority, and the Authority
desires to receive, a fractional ownership interest in a full flight simulator
to be built by TDI; and

         WHEREAS, TDI desires to manage and operate the training center and
manage the use, maintenance and operation of the full flight simulator.

         NOW THEREFORE, in consideration of the premises and the mutual
agreements, representations, warranties, covenants and understandings
hereinafter set forth, the sufficiency of which consideration is hereby
acknowledged, the parties hereto agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

         In addition to the terms defined elsewhere in this Agreement, the
following terms shall have the following meanings when used herein with initial
capital letters:

         "AGREEMENT" means this Agreement.

         "AUTHORITY" has the meaning set forth above, and shall include the
College to the extent the Authority assigns its rights hereunder to the College.

         "BUILDING" means that building to be provided by the Authority for the
purpose of, among other things, housing the Center.

         "CALENDAR" means the calendar maintained by TDI in real time on an
Internet web site showing, among other things, the Hours for which use of the
Equipment has been scheduled and the name of the party scheduling such use.

         "CENTER" means the Premises, together with all leasehold improvements,
and the Equipment and other personal property relating to the operation or
maintenance of the Equipment.

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         "CLAIM" means any and all liabilities, obligations, losses, damages,
deficiencies, demands, claims, fines, penalties, interest, assessments,
judgments, actions, proceedings and suits of whatever kind and nature and all
costs and expenses relating thereto (including, without limitation, reasonable
attorneys' fees).

         "COLLEGE" means Aims Junior College District.

         "COMMENCEMENT DATE" means the date when the Lease will be effective and
which is the earlier of (a) the Installation Date, (b) the date that the
Equipment is first delivered to the Premises, or (c) the date TDI first makes
preparations at the Premises for the delivery or installation of the Equipment.

          "EQUIPMENT" means the Beech 1900 D Level C Full Flight Simulator to
be manufactured by TDI for use under this Agreement.

         "FAA" means the Federal Aviation Administration.

         "1ST CHOICE LIEN" means the security interest in the Equipment granted
to 1st Choice Bank.

         "FRACTIONAL OWNERSHIP AGREEMENTS" means those agreements entered into
between TDI and the Fractional Share Owners, other than the Authority, governing
the ownership of the Fractional Shares.

         "FRACTIONAL SHARE" means each and any 1,000 Hour ownership interest in
the Equipment.

         "FRACTIONAL SHARE OWNERS" means the Authority and those individuals or
entities that purchase one or more Fractional Share(s) and execute the
Fractional Ownership Agreements.

         "HOUR" means one hour of usage of the Equipment.

         "INSTALLATION DATE" means the date specified by TDI by written notice
to the Authority pursuant to Section 4.01 when TDI anticipates installing the
Equipment at the Premises.

         "LEASE" means that lease agreement to be entered into between the
Authority and TDI with respect to the Premises, such lease agreement to be
substantially in the form of EXHIBIT A attached hereto and made a part hereof.

         "LEGAL REQUIREMENT" means any statute, ordinance, code, law, rule,
regulation, order or other requirement, standard or procedure enacted, adopted
or applied by any governmental authority, including judicial decisions applying
common law or interpreting any other Legal Requirement.

         "LIEN" means any mortgage, lien, security interest, security agreement,
conditional sale or other title retention agreement, pledge, option, charge,
assessment, restriction, adverse interest,

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restriction on transfer or any exception to or defect in title.

         "OWNERS MANUALS" means all owners manuals and other technical materials
relating to the Equipment as provided to the other Fractional Share Owners which
may be reasonably necessary for the operation of the Equipment.

         "PREMISES" means the approximately 4,000 square feet of the Building to
be leased by TDI from the Authority pursuant to the Lease.

         "PROHIBITED LIEN" means any Lien which through any of act or omission
of TDI attaches to the Equipment or any Fractional Share, other than (a)
mechanics liens to be discharged in the ordinary course of business, (b) the
rights of any other Fractional Share Owner pursuant to the terms of a Fractional
Ownership Agreement, or (c) any financing arrangement entered into by a
Fractional Share Owner, but only with respect to such Fractional Share Owner's
Fractional Share.

         "QUALIFICATION DATE" means the date that the Equipment receives initial
FAA Level C qualification.

         "SOFTWARE" means all computer software and hardware included in or
constituting a part of the Equipment.

         "TRANSFER DATE" means the date upon which TDI gifts to the Authority
all right, title and interest in and to one Fractional Share pursuant to Section
3.01, which shall be the earliest date that TDI transfers ownership of a
Fractional Share to any other Fractional Owner.

         "YEAR" means the period of time beginning on the Qualification Date and
on the same date for each subsequent year during the term hereof, and ending at
12:00 midnight on the day before the same date of the year next following.

         "YEAR 2000 COMPLIANT" means that the Software shall: (a) manage and
manipulate data involving dates, including, without limitation, century and
multi-century formulas and leap year formulas, without causing an abnormal end
to the application or generating incorrect values involving such dates; (b)
provide that all date-related user interface functionalities and date fields
include the indication of a century; (c) provide that all date-related data
interface functionalities include the indication of a century; and (d) provide
that all logic pertaining to dates will work within the context of the Software
to easily identify or use the century portion of any date fields without any
special processing.

                                  ARTICLE II

                                  THE CENTER

         SECTION 2.01.  MANAGEMENT. TDI shall manage and operate the Center,
provided that the Authority may, from time to time, have input. In connection
with the management and operation of the Center, TDI shall, at is sole cost and
expense:

<PAGE>

                  (a)      employ and supervise the Center personnel;

                  (b)      schedule the use of the Equipment;

                  (c)      maintain the Center as provided in the Lease;

                  (d) provide such training as may be necessary or advisable to
         qualify such of the Authority's or the College's employees or
         independent contractors as may be designated by the Authority in the
         proper operation of the Equipment; and

                  (e) require and ensure that at least one Center personnel is
         supervising the operation of the Equipment at all times that the
         Equipment is in use or scheduled for use.

         SECTION 2.02.  TRAINING CENTER. The Authority shall lease to TDI the
Premises which shall meet the specifications and standards set forth in EXHIBIT
B attached hereto and made a part hereof. The Lease shall be executed and
delivered by each of the Authority and TDI within five business days after the
location and design of the Building have been finalized by the Authority. TDI
may occupy the Premises pursuant to the terms of the Lease and the Premises
shall be ready for installation of the Equipment on or before the Installation
Date.

         SECTION 2.03.  CENTER LEASE. As more fully set forth in the Lease, the
Lease shall provide among other things, that:

                  (a) TDI shall pay the Authority equal monthly lease payments
         aggregating per annum $127,000 in years one through four, $137,000 in
         years five through seven and $147,000 in years eight through ten, which
         lease payments shall be on a triple net basis, except that the
         Authority shall provide at its own expense (i) general interior
         maintenance, cleaning and janitorial services, (ii) the maintenance of
         the exterior and roof, and (iii) the maintenance of the heating,
         ventilation, and air conditioning systems;

                  (b) the initial term shall be ten years from and after the
         Commencement Date;

                  (c) within 90 days prior to the expiration of the then current
         term, the Authority and TDI may, but shall have no obligation to, enter
         into a mutually agreeable five year extension of the Lease, the annual
         rent for which five-year period shall be the prior year's base rate
         increased by the cumulative consumer price index for the prior five
         years;

                  (d) upon the expiration of the term of the Lease, whether of
         the initial term or any extension, TDI shall relocate the Equipment
         within six months thereafter, during which period TDI shall continue to
         make lease payments at the then current rate; and

                  (e) TDI shall procure and maintain in full force and effect,
         at all times, commercial general liability insurance relating to the
         operation of the Center and fire and casualty insurance on the
         leasehold improvements and other personal property of the Center and
         the Authority shall be responsible for securing fire and replacement
         insurance on the Building.

<PAGE>

         SECTION 2.04.  CENTER OPERATING COSTS. The Authority shall install a
separate utility meter for the Center, and TDI shall reimburse the Authority for
the monthly utility costs incurred by the Center. TDI shall provide the
Authority with the electricity requirement for the Equipment, and the Authority
shall ensure that the Center is sufficiently wired to meet that electricity
requirement. TDI shall be liable for, and shall pay, any and all costs or
expenses incurred by it in connection with the performance of its duties and
obligations hereunder, including all personnel costs and other normal operating
expenses of the Center.

         SECTION 2.05.  EXPANDED TEACHING CONTENT. The Parties agree that they
will explore diligently ways to expand the teaching content of the Center to
include all relevant academic disciplines at the Authority and the College.

                                  ARTICLE III

                       FRACTIONAL OWNERSHIP OF EQUIPMENT

         SECTION 3.01.  GIFT OF ONE FRACTIONAL SHARE.

                  (a) TDI hereby covenants and agrees to gift, transfer and
         assign to the Authority all right, title and interest in and to one
         Fractional Share in perpetuity on the Transfer Date pursuant to a bill
         of sale. From and after the earlier of the Transfer Date or the
         Qualification Date the Authority shall have the right to use, or to
         assign the right to use, the Equipment for 1,000 hours per Year. The
         Authority can use its Hours as it wishes subject to the limitations set
         forth in Sections 3.07 and 3.08. The Authority shall have no liability
         with respect to any costs or expenses associated with ownership or
         management of the Equipment or with using its Hours, except to the
         extent of any liability set forth in Sections 3.06, 3.07 and 3.09.
         Prior to the Transfer Date, TDI shall deliver to the Authority all
         Owners Manuals.

                  (b) TDI acknowledges and agrees that the Authority, in
         reliance upon TDI's representations, warranties, covenants and
         agreements contained herein, will develop and implement a curriculum
         based on the Equipment for the benefit of students of the Authority and
         the College. TDI's obligations under this paragraph (b) will be
         satisfied once TDI gifts, transfers and assigns to the Authority all
         right, title and interest in and to one Fractional Share in accordance
         with the terms hereof.

         SECTION 3.02.  REPRESENTATION AND WARRANTIES.  TDI hereby represents
that as of the Transfer Date:

                  (a) TDI shall have good and marketable title to the Equipment
         free and clear of any and all Liens.

                  (b) The Equipment shall be free from defects of workmanship
         and design for a period of one year from and after the Qualification
         Date.

<PAGE>

                  (c) TDI has delivered to the Authority true and complete
         copies of all Owners Manuals.

                  (d) All Software shall perform, operate and function when used
         prior to, during and after the calendar year 2000 A.D. without error
         relating to date data, including, without limitation, any error which
         represents or references the incorrect century or more than one
         century, and shall be Year 2000 Compliant when used in connection with
         the Equipment.

                  (e) TDI either owns, owns jointly or has the right to use as a
         licensee all of the Software in connection with the Equipment and to
         transfer ownership to Equipment as contemplated herein, free and clear
         of Liens, including any exclusive rights, however described, granted to
         persons with respect to the Software.

         SECTION 3.03.  MANAGEMENT. TDI hereby covenants and agrees to manage
the Equipment for the benefit of the Fractional Share Owners and the
Authority's Fractional Share for the benefit of the Authority. In addition to
its obligations otherwise set forth herein, TDI covenants and agrees that it
shall:

                  (a) use, manage, maintain and operate the Equipment, for the
         benefit of the Fractional Share Owners, with all due reasonable care
         and in accordance with all applicable Legal Requirements, including any
         standards and guidelines established by the FAA;

                  (b) permit the Equipment to be used only as contemplated by
         the manufacturer thereof as specified in the Owners Manuals and in a
         manner consistent with FAA Level C qualification;

                  (c) respond to all FAA and manufacturer's correspondence and
         directives;

                  (d) identify and diligently prosecute enforcement of all
         warranty claims; and

                  (e) identify and diligently prosecute all enforcement,
         litigation and settlement of insurance matters.

         SECTION 3.04.  FAA QUALIFICATION. TDI shall be solely responsible for
(a) installing the Equipment in the Premises, (b) submitting the Equipment to
the FAA for initial FAA Level C qualification of the Equipment no later than 30
days after the Installation Date, and (c) maintaining Level C FAA qualification
of the Equipment thereafter.

         SECTION 3.05.  MAINTENANCE. From and after the Transfer Date, TDI
shall, at its own cost and expense, (a) maintain, inspect, service, repair
and test the Equipment by duly competent personnel in strict accordance with
the manufacturer's maintenance program and any applicable FAA rules,
regulations or directives as may be in effect from time to time, so as to
keep the Equipment in good operating condition, and in such condition as may
be necessary to enable the FAA Level C qualification of the Equipment to be
maintained in good standing at all times, (b) maintain an adequate supply of
spare parts, (c) repaint the exterior and refurbish the interior of

<PAGE>

the Equipment as often as necessary to the extent required to keep the Equipment
in a good cosmetic appearance as reasonably determined by TDI, and (d) maintain
all records, logs and other materials required by the FAA to be maintained in
respect of the Equipment and make the same available for inspection by the
Authority during normal business hours. TDI shall schedule maintenance on the
Calendar as far in advance as possible and so as not to disrupt the scheduled
Hours.

         SECTION 3.06.  INSURANCE. TDI covenants and agrees to arrange for,
obtain and keep in effect, for the benefit of the Fractional Share Owners, on or
before the Transfer Date, all-risk insurance with a deductible, in such amount
as may be determined by owners of four of the Fractional Shares, with respect to
the Equipment, against any loss, theft or damage to the Equipment, including
extended coverage with respect to any parts while removed from the Equipment for
the greater of the fair market value or the replacement cost of the Equipment,
naming the Fractional Share Owners as named insureds and loss payees with losses
payable as their respective interests may appear. Copies of such policies and
certificates of insurance shall be furnished to the Authority on or before the
Transfer Date. Such insurance shall be maintained by TDI in full force and
effect throughout the term hereof and the insurer shall provide the Authority
30-days advance notice of cancellation or material alteration. All such
insurance shall contain a breach of warranty endorsement in favor of the
Fractional Share Owners. The Authority shall be liable for and shall reimburse
TDI for its share of the cost of such insurance based on its Fractional Share
ownership percentage.

         SECTION 3.07.  SCHEDULING. The Authority shall be entitled to the use
of the Equipment, and TDI agrees to make the Equipment available to the
Authority, for 1,000 Hours each Year at no cost to the Authority. TDI shall
maintain the Calendar. The Authority may schedule Hours up to four months in
advance by posting on the Calendar, subject to availability. Once scheduled,
the Authority's Hours may not be changed or modified in any manner without
the Authority's prior written consent. Third party users of the Equipment,
who are not Fractional Share Owners, may schedule Hours no more than three
months in advance, subject to availability. The Authority may purchase up to
an additional eight Hours per week, Monday through Thursday from 2:00 A.M. to
6:00 A.M., subject to Equipment availablity. The Authority may schedule such
additional Hours up to 60 days in advance. The Authority will be charged
$65.00 for each additional Hour.

         TDI shall schedule all maintenance between the hours of 2:00 A.M. and
6:00 A.M. as far in advance as practicable. To the extent the Equipment is
unavailable for use when scheduled, TDI shall use its best efforts to
accommodate the user or users scheduled during that time and reschedule a
similar number of Hours as soon as possible.

         SECTION 3.08.  SALE OF THE AUTHORITY'S HOURS. TDI shall use
commercially reasonable efforts to sell such of the Authority's 1,000 Hours
per Year as the Authority may request from time to time, as agent for the
Authority at a market rate to be established by TDI and agreed to by the
Authority. TDI shall bill and collect for the sale of the excess hours and
remit to the Authority fifty percent (50%) of the collected fees within ten
(10) days from the end of each month. The remaining 50% shall be retained by
TDI as its fees for selling the Hours. TDI shall use commercially reasonable
efforts to collect such fees, but shall not commence any action in the
Authority's name without the prior written consent of the Authority. However,
TDI shall not be

<PAGE>

responsible for any bad debts. TDI will provide monthly reports on the status of
the sale of the Authority's Hours and the collection of the fees relating
thereto. TDI makes no warranties or representations about the number of Hours
that will be sold or the hourly rate that will be achieved.

         SECTION 3.09.  RIGHT OF FIRST REFUSAL. Upon entering into each
Fractional Share Agreement, TDI shall assign to the Authority TDI's right of
first refusal to purchase each Fractional Share Owner's Fractional Share and to
purchase the Equipment all as set forth in the applicable Fractional Share
Agreement; provided, however that the Authority shall have no obligation to
purchase the Equipment or any Fractional Share. In the event the Authority
purchases any other Fractional Share, the Authority shall assume the Fractional
Ownership Agreement relating thereto, including the obligation to pay monthly
and hourly fees as set forth therein. The Authority hereby grants to TDI a right
of first refusal to acquire the Authority's Fractional Share. The Authority
shall not sell or otherwise transfer any interest in or to its Fractional Share,
other than to a related party, without first offering such Fractional Share to
TDI and granting TDI 60 days in which to purchase the Fractional Share at the
purchase price offered by a bona fide third party purchaser.

         SECTION 3.10.  LIENS. TDI covenants and agrees that on or before the
Transfer Date it shall cause the 1st Choice Lien to be paid in full and released
and otherwise, throughout the term of this Agreement, it shall not cause or
suffer to exist any Prohibited Lien and shall take any and all actions necessary
to release any Prohibited Lien.

         SECTION 3.11.  LOCATION. Except as set forth in Section 4.01, the
Equipment shall remain at the Center at all times during the term of this
Agreement and may not be moved without the prior written consent of the
Authority.

         SECTION 3.12.  SALE OF EQUIPMENT. The Equipment may be sold only upon a
determination by Fractional Share Owners owning all Fractional Shares. In the
event the Fractional Share Owners elect to sell the Equipment, TDI shall use
commercially reasonable efforts to sell the Equipment at the highest price then
available, but for not less than the amount, if any, designated by the
Fractional Share Owners. In the event of the sale of the Equipment, the proceeds
of such sale, less a sales commission of 3% of the sales price, but not less
than $40,000.00, payable to TDI, shall be distributed to each Fractional Share
Owner based on the number of Fractional Shares owned by such Fractional Share
Owner. TDI shall cause the Fractional Ownership Agreements to provide that the
Equipment may be sold as provided herein. TDI shall not receive such sales
commission if the Equipment is sold to the Authority or a related party thereof.

         SECTION 3.13.  COVENANTS OF TDI. TDI covenants and agrees that (a)
there shall be not more than seven Fractional Shares at any time and (b) the
Fractional Ownership Agreements shall provide that this Agreement and the
Fractional Ownership Agreements may be terminated on the terms and conditions
set forth in Section 9.01.

<PAGE>

                                  ARTICLE IV

                              DELAYS AND REMEDIES

         SECTION 4.01.  DELAYS IN CENTER AVAILABILITY. Availability of the
Premises for timely Equipment installation and subsequent FAA qualification is
critical to the sale of the Fractional Ownership Shares. No later than two weeks
after the date hereof, TDI shall provide the Authority with the Installation
Date, which shall not be earlier than 12 months after the date hereof. If the
Premises is not ready for installation of the Equipment on or prior to the
Installation Date, the Authority may postpone the Installation Date for up 30
days upon the payment to TDI of a penalty equal to $150,000, payable on the date
the Authority elects to postpone the Installation Date. The Authority shall
notify TDI if the Premises will not be ready on or before the Installation Date,
not less than seven days prior to the Installation Date. If the Premises is not
ready for installation of the Equipment at the end of any such postponement, the
Equipment shall be FAA certified at the TDI facility and remain there for not
less than 12 months, after which the Authority may, at its expense, instruct TDI
to relocate the Equipment to the Center. Timing of the relocation shall require
the concurrence of all Fractional Share Owners. In such event, TDI shall have no
obligation under the Lease until the Equipment is relocated to the Premises.

         SECTION 4.02.  DELAY IN EQUIPMENT AVAILABILITY. Should the Equipment
not be available on the Installation Date, TDI shall be liable under the
Lease and shall be liable for all other actual Center operating costs as if
the Equipment was installed as of the Installation Date.

         SECTION 4.03.  DELAY CONSULTATION. Each Party shall promptly inform the
other in writing and consult with the other as to any matter, which, in the
judgment of such Party, may be the cause of any delay in performance hereunder.

                                   ARTICLE V

                                     TAXES

         SECTION 5.01.  TDI'S OBLIGATIONS. TDI shall be responsible for
collecting and paying any applicable tax due on the sale of the six Fractional
Shares and all personal property tax with respect to the ownership or use of the
Equipment.

         SECTION 5.02.  THE AUTHORITY'S OBLIGATIONS. The Authority shall be
responsible for any applicable tax on the receipt of its one Fractional Share
and the sale of the Authority's Hours.

                                  ARTICLE VI

                        REPRESENTATIONS AND WARRANTIES

         SECTION 6.01.  REPRESENTATIONS AND WARRANTIES OF TDI. TDI hereby
represents and warrants to the Authority as follows:

                  (a) TDI is a corporation duly organized, validly existing and
         in good standing under the laws of the State of Colorado, with full
         power and authority to own and operate its business, to execute and
         deliver this Agreement, and to carry out the transactions contemplated
         hereby.

<PAGE>

                  (b) All requisite corporate actions for the execution,
         delivery, performance and satisfaction by TDI of this Agreement have
         been duly performed and/or obtained. This Agreement has been duly
         executed and delivered by TDI and is a legal, valid and binding
         obligation of TDI, enforceable in accordance with its terms, except to
         the extent that such enforcement may be subject to applicable
         bankruptcy, reorganization, insolvency, moratorium or similar laws of
         general application affecting the rights and remedies of creditors or
         secured parties, and the availability of equitable remedies including
         specific performance and injunctive relief may be subject to equitable
         defenses and the discretion of the court before which any proceedings
         therefor may be brought.

                  (c) The execution and delivery of this Agreement and the
         consummation of the transactions contemplated hereby will not (a)
         violate TDI's Articles of Incorporation or bylaws; (b) violate any
         Legal Requirements applicable to TDI; (c) conflict with, or result in
         any breach of, or default under, the terms, conditions or provisions of
         any agreement or instrument to which TDI is a party or by which its
         business or its assets are bound; or (d) result in the creation or
         imposition of any Lien on the Equipment, except for the Lien granted to
         1st Choice Bank.

         SECTION 6.02.  REPRESENTATIONS AND WARRANTIES OF THE AUTHORITY. The
Authority hereby represents and warrants to TDI as follows:

                  (a) The Authority is a nonprofit corporation duly organized,
         validly existing and in good standing under the laws of the State of
         Colorado, with full power and authority to own and operate its
         business, to execute and deliver this Agreement, and to carry out the
         transactions contemplated hereby and thereby.

                  (b) All requisite corporate actions for the execution,
         delivery, performance and satisfaction by the Authority of this
         Agreement have been duly performed and/or obtained. This Agreement has
         been duly executed and delivered by the Authority and is a legal, valid
         and binding obligation of the Authority, enforceable in accordance with
         its terms, except to the extent that such enforcement may be subject to
         applicable bankruptcy, reorganization, insolvency, moratorium or
         similar laws of general application affecting the rights and remedies
         of creditors or secured parties, and the availability of equitable
         remedies including specific performance and injunctive relief may be
         subject to equitable defenses and the discretion of the court before
         which any proceedings therefor may be brought.

                  (c) The execution and delivery of this Agreement and the
         consummation of the transactions contemplated hereby will not (a)
         violate the Authority's Articles of Incorporation or bylaws; (b)
         violate any Legal Requirements applicable to the Authority; (c)
         conflict with, or result in any breach of, or default under, the terms,
         conditions or provisions of any agreement or instrument to which the
         Authority is a party or by which its business or its assets are bound;
         or (d) result in the creation or imposition of any Lien on the
         Equipment.

<PAGE>

                                  ARTICLE VII

                                INDEMNIFICATION

         SECTION 7.01.  TDI INDEMNIFICATION. TDI agrees to indemnify and hold
harmless the Authority and its affiliates, stockholders, directors, officers,
employees, agents, successors and assigns from and against any and all Claims to
the extent such Claims are based upon, arise out of or relate to (i) any
untruthful or inaccurate representation or any breach of any warranty or any
failure to perform or comply with any of the covenants, conditions or agreements
of TDI set forth in this Agreement, and (ii) the assertion of any claim or legal
action against the Authority or its affiliates, stockholders, directors,
officers, employees, agents, successors and assigns by any person based upon,
arising out of or relating to any negligent or willful act or omission of TDI at
the Center or in connection with the use of the Equipment, excluding special,
consequential, punitive and other similar damages.

         SECTION 7.02.  ASSERTION OF CLAIMS.

                  (a) If a party entitled to indemnification hereunder (the
         "Indemnitee") believes that it has incurred a Claim, it shall notify
         the party from whom indemnification is sought (the "Indemnitor")
         promptly in writing describing such Claim with reasonable particularity
         and containing a reference to the provisions of this Agreement under
         which such Claim has arisen.

                  (b) Neither this Article VII, nor any other provision of this
         Agreement, is intended to confer any third party beneficiary rights,
         including but not limited to any extension of any statutes of
         limitations pertaining to suits, actions or proceedings brought by
         third parties.

         SECTION 7.03.  NOTICE OF AND RIGHT TO DEFEND THIRD PARTY CLAIMS.
Promptly, upon receipt of notice of any claim or the commencement of any suit,
action or proceeding by a third party in respect of which indemnification may be
sought on account of an indemnification agreement contained in this Article VII,
the Indemnitee shall give notice in writing to the Indemnitor. Except to the
extent that the Indemnitor is prejudiced thereby, the omission of the Indemnitee
so to notify promptly the Indemnitor of any such claim or action shall not
relieve the Indemnitor from any liability which it may have to the Indemnitee in
connection therewith. In case any claim shall be asserted or suit, action or
proceeding commenced against the Indemnitee, the Indemnitor will be entitled to
participate therein, and, to the extent that it may wish, to assume the defense,
conduct or settlement thereof. After notice from the Indemnitee to the
Indemnitor of its election so to assume the defense, conduct or settlement
thereof, the Indemnitor will not be liable to the Indemnitee for any legal or
other expenses subsequently incurred by the Indemnitee in connection with the
defense, conduct or settlement thereof. The Indemnitee will cooperate with the
Indemnitor in connection with any such claim assumed by the Indemnitor to make
available to the Indemnitor all pertinent information under the Indemnitee's
control.

<PAGE>

                                 ARTICLE VIII

                                   COVENANTS

         SECTION 8.01.  THE AUTHORITY PERSONNEL. The Authority shall ensure that
any of its employees or independent contractors who operate the Equipment
receive training by TDI and operate the Equipment in accordance with the Owners
Manuals. TDI shall provide all necessary initial training to the Authority's and
the College's employees and independent contractors who will, from time to time,
operate or use the Equipment, at no cost to the Authority. The Authority and TDI
will use reasonable efforts to ensure that a sufficient number of the
Authority's and the College's employees and independent contractors are properly
trained on or before the Qualification Date. The Authority shall be liable for
any damages actually incurred by TDI as a result of the Authority's use of
personnel who are not trained for the task they are performing in connection
with the operation of the Equipment.

         SECTION 8.02.  INTELLECTUAL PROPERTIES. The Authority agrees that the
ownership of the copyright in and all other intellectual property rights in the
Equipment, documentation, specifications and Software shall remain at all times
vested in TDI. The Authority shall not record, reproduce, duplicate or in any
way copy, sell, disclose or divulge the same or any information relating thereto
to any third party. The Authority undertakes to impose restrictions in the same
form upon its employees, agents or any other persons having access to TDI's
copyright or other intellectual property rights pursuant to this Agreement. TDI
agrees to be bound by the same conditions set forth in this Section 8.02 with
respect to any intellectual properties of the Authority that are so identified.

         SECTION 8.03.  COMPLIANCE WITH LAW. In the performance of their
respective obligations hereunder, each Party shall comply with all applicable
Legal Requirements (and when requested by one Party, shall furnish proof of such
compliance within 72 hours).

                                  ARTICLE IX

                                  TERMINATION

         SECTION 9.01.  TERMINATION. This Agreement may be terminated:

                  (a) at any time by mutual consent of the Authority and TDI; or

                  (b) in whole or in part by the owners of all Fractional Shares
         immediately upon written notice to TDI upon (i) the filing of any
         petition by TDI under any provision of the federal Bankruptcy Code or
         any state law relating to insolvency; (ii) the filing of any such
         petition against TDI, unless such petition and all proceedings
         thereunder are dismissed within 60 days from such filing; (iii) the
         appointment of a trustee or receiver for all or any assets of TDI,
         unless such appointment is vacated or dismissed within 60 days from the
         date of such appointment; or (iv) an adjudication that TDI is insolvent
         or bankrupt; provided, however, that this Agreement may not be
         terminated if TDI is not in breach of

<PAGE>

         any of its obligations under this Agreement; or

                  (c) in whole or in part by the owners of all Fractional Shares
         immediately upon written notice to TDI if TDI is in material breach or
         material default of its covenants and agreements under this Agreement,
         or if any of its representations or warranties are not true in all
         material respects and either (i) TDI does not cure such breach or
         default within 30 days after notice thereof is delivered in writing
         (ii) if such breach or default is not capable of cure within such
         30-day period, TDI does not commence a good faith effort to cure such
         breach or default within such 30-day period and continue in good faith
         until such breach or default is cured.

         TDI shall cause the Fractional Ownership Agreements to provide that
such agreements may be terminated on terms substantially similar to the terms
set forth in this Section 9.01.

         SECTION 9.02.  EFFECTS OF TERMINATION.

                  (a) In the event of termination of this Agreement pursuant to
         Section 9.01, all obligations of the parties hereunder shall terminate,
         except for the obligations set forth in Section 10.13
         (confidentiality), Article VII (indemnification), and this Section
         9.02, each of which shall remain in effect.

                  (b) Termination of this Agreement pursuant to Section 9.01 or
         otherwise shall not affect the Authority's ownership rights in and to
         its Fractional Share.

                  (c) Nothing in this Section 9.02 or elsewhere in this
         Agreement shall (i) be deemed to release either Party from any
         liability for any breach by such Party of the terms and provisions of
         this Agreement or any failure by such party to perform its obligations
         hereunder or (ii) to impair the right of either Party to pursue all
         legal remedies for breach of contract and actual damages relating
         thereto.

                                   ARTICLE X

                              GENERAL PROVISIONS

         SECTION 10.01. ENTIRE AGREEMENT. The Parties agree that this Agreement
constitutes the entire agreement between the Parties with respect to the subject
matter hereof and supersedes all prior understandings and agreements with
respect thereto.

         SECTION 10.02. PARTIES OBLIGATED AND BENEFITED. Subject to the
limitations set forth below, this Agreement will be binding upon the Parties and
their respective assigns and successors in interest and will inure solely to the
benefit of the parties and their respective assigns and successors in interest,
and no other person will be entitled to any of the benefits conferred by this
Agreement. Without the prior written consent of the other parties, which consent
shall not be unreasonably withheld, no Party will assign any of its rights under
this Agreement or delegate any of its duties under this Agreement; provided,
however, that the Authority may assign its rights hereunder to use the Equipment
and to receive training to Aims Junior College District and may

<PAGE>

otherwise assign its right hereunder to any party which purchases all or any
part of the Authority's Ownership Interest.

         SECTION 10.03. NOTICES. All notices, requests, consents and other
communications under this Agreement shall be in writing and shall be delivered
in person or mailed by first-class, certified or registered mail, return receipt
requested, postage prepaid, by reputable overnight mail or courier, with receipt
confirmed, or by telecopy if receipt is confirmed, addressed as follows:

         If to the Authority:       Aims Continuing Education Authority
                                    Aims Community College
                                    5401 W. 20th Street
                                    Greeley, Colorado 80632
                                    Telephone Number: (970) 330-8008
                                    Facsimile Number: (970) 330-5705
                                    Attention: Office of the President

         If to TDI:                 Training Devices Inc.
                                    7367 South Revere Parkway, Bldg. #2C
                                    Englewood, CO 80112-3931
                                    Telephone Number: (303) 792-3792
                                    Facsimile Number:(303) 792-3793
                                    Attention: Mr. Bruce Betschart

or at such other address or addresses as may have been furnished in writing by
any party to the others in accordance with the provisions of this Section 10.03.

         Notices and other communications provided in accordance with this
Section 10.03 shall be deemed delivered upon receipt. The furnishing of any
notice or communication required hereunder may be waived in writing by the party
entitled to receive such notice. Failure or delay in delivering copies of any
notice to persons designated above to receive copies shall in no way adversely
affect the effectiveness of such notice or communication.

         SECTION 10.04. AMENDMENTS AND WAIVERS. Except as otherwise expressly
set forth in this Agreement, any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Parties. Any amendment or waiver effected in accordance
with this Section 10.04 shall be binding upon each Party. No waivers of or
exceptions to any term, condition or provision of this Agreement, in any one or
more instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.

         SECTION 10.05. SEVERABILITY. If any provision of this Agreement shall
be held or deemed to be, or shall in fact be, invalid, inoperative or
unenforceable because of the conflict of such provision with any constitution or
statute or rule or public policy or for any other reason, such circumstance
shall not have the effect of rendering any other provision or provisions herein
contained invalid, inoperative or unenforceable, but this Agreement shall be
reformed and

<PAGE>

construed as if such invalid, inoperative or unenforceable provision had never
been contained herein and such provision reformed so that it would be valid,
operative and enforceable to the maximum extent permitted.

         SECTION 10.06. SECTION HEADINGS AND TERMS. The section headings in this
Agreement are for convenience and reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement. Terms used with
initial capital letters will have the meaning specified, applicable to both
singular and plural forms, for all purposes of this Agreement. The word
"include" and derivatives of that word are used in this Agreement in an
illustrative sense rather than limiting sense.

         SECTION 10.07. MULTIPLE COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument, and shall become
effective when counterparts which together contain the signatures of each Party
hereto shall have been delivered to the Parties. In proving this Agreement it
shall not be necessary to produce or account for more than one such counterpart.

         SECTION 10.08. ARBITRATION AND JURISDICTION.

                  (a) If any controversy or claim arising out of or relating to
         this Agreement or any related agreement shall not be resolved in 30
         days, then any claim, controversy or dispute, whether sounding in
         contract, statue, tort, fraud, misrepresentation or other legal theory,
         between or among the parties shall be resolved by arbitration in
         Greeley, Colorado. The Federal Arbitration Act, 9 U.S.C. Sects. 1-15,
         not state law, shall govern the arbitrability of all claims. The
         arbitration shall be conducted by a single arbitrator of the Judicial
         Arbiter Group under its then current rules. The arbitrator's award
         shall be final and binding and may be entered in any court having
         jurisdiction thereof. The prevailing party, as determined by the
         arbitrator, shall be entitled to an award of reasonable attorneys' fees
         and costs. It is expressly agreed that either party may seek injunctive
         relief of the confidentiality provisions hereunder in an appropriate
         court of law or equity pending an award in arbitration.

                  (b) The existence and details of any arbitration proceedings
         between the parties pursuant to this Section 10.08, and any documents
         generated in connection with such arbitration proceedings, shall be and
         shall be kept private and confidential. The parties shall not divulge
         such information to third parties, other than the parties' legal or
         accounting advisers, or their bankers, or in connection with any
         judicial proceedings or as otherwise required by law.

         SECTION 10.09. PERFORMANCE NOT CONTRARY TO LAW. Nothing herein shall be
construed to require the performance by either party of any act contrary to law;
and, in the event of conflict between any provision hereof and any law or
governmental regulation, the latter shall prevail; and such event, the affected
portions of this Agreement shall be deemed amended to the extent necessary to
conform to the requirements of such law or governmental regulation.

<PAGE>

         SECTION 10.10. ATTORNEYS' FEES. In the event any proceeding is
brought by one party against the other to enforce or for the breach of any of
the provisions of this Agreement, the prevailing party shall be entitled in
such proceedings and in any appeal therefrom to recover reasonable attorneys'
fees, together with the costs of such proceeding therein incurred.

         SECTION 10.11. COUNTERPART FACSIMILE EXECUTION. For purposes of
executing this Agreement, a document signed and transmitted by facsimile
machine or telecopier is to be treated as an original document. The signature
of any party thereon, for purposes hereof, is to be considered as an original
signature, and the document transmitted is to be considered to have the same
binding effect as an original signature on an original document. At the
request of any party, any facsimile or telecopy document is to be re-executed
in original form by the parties who executed the facsimile or telecopy
document. No party may raise the use of a facsimile machine or telecopier or
the fact that any signature was transmitted through the use of a facsimile or
telecopier machine as a defense to the enforcement of this Agreement or any
amendment or other document executed in compliance with this Section.

         SECTION 10.12. GOVERNING LAW. This Agreement shall be governed by
and interpreted in accordance with the substantive laws of the State of
Colorado without regard to its provisions on conflict of laws.

         SECTION 10.13. CONFIDENTIALITY. Each party shall treat as
proprietary all such information specifically identified and marked as
"confidential," "proprietary," or words of similar import. Neither Party
shall disclosure any confidential or proprietary information relating to the
Center or the Equipment to any person not authorized to receive it without
the written consent of the other Party. The receiving Party shall only use
the information supplied by the disclosing Party to accomplish work covered
by this Agreement and for no other purpose. Neither Party shall be liable to
the other for confidential or proprietary information which (i) at time of
disclosure is in the public domain; (ii) after disclosure becomes part of the
public domain through no violation of this Agreement by the receiving Party;
(iii) as shown by written records, was in the possession of the receiving
Party prior to disclosure by the disclosing Party hereunder; (iv) hereafter
becomes available to the receiving Party from a third party having no
confidential obligation with respect thereto; or (v) is independently
developed by the receiving Party as shown by written records. Upon completion
or termination of this Agreement, if directed by the disclosing Party in
writing, all proprietary information shall be returned. Neither TDI nor the
Authority shall be liable for any inadvertent disclosure, publication, or
statement, provided it exercised the same degree of care it normally takes to
protect and safeguard its own proprietary information. Notwithstanding
anything to the contrary in this Agreement, TDI may describe this Agreement
and any related arrangements in documents filed with the Securities and
Exchange Commission or other securities regulatory agencies or documents sent
to shareholders of TDI. TDI may make this Agreement or related documents
exhibits to any registration statement of TDI filed with the Securities and
Exchange Commission.

         SECTION 10.14. TRADEMARK OR TRADE NAME. Parties will not make any
use whatsoever of the corporate or trade name of a Party, or any of their
affiliates, or any of their respective trademarks, insignia, logo or
markings, or any portion thereof, including, but not limited to, any use in
connection with any advertising, promotion, publicity or other printed
material, without the

<PAGE>

prior written consent of the Party. TDI will use its trademark name of
NEXUSim for this Center in all promotion, marketing, and advertising.

         SECTION 10.15. PUBLICITY. Except in any filings with the Securities
and Exchange Commission, or in press releases designed for TDI shareholders
or possible investors in TDI, or in marketing the sale of Fractional
Ownership interests or the Authority's simulator Hours, the Parties shall not
in any manner advertise or publish or release for publication any statement
mentioning the other Party or the fact that the Parties have furnished or
contracted to furnish to the other Party items and/or services required by
this Agreement, or quote the opinion of any employees of the other Party,
unless the written consent of the other Party is first obtained.

         SECTION 10.16. RISK OF LOSS. The risk of loss, damage or destruction
to the Equipment from fire, theft or other casualty or cause shall be borne
by TDI at all times up to Qualification Date. It is expressly understood and
agreed that in the event of any material loss or damage to the Equipment from
fire, casualty or other cause prior to the Qualification Date, TDI shall
notify the Authority of same in writing immediately. TDI shall maintain
appropriate insurance to cover the full replacement value of the Equipment,
together with consequential losses, including loss of profits that would be
incurred if the Equipment was damaged, destroyed or stolen, naming the
Authority as a third party insured.

         IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first above written.

                                     AIMS CONTINUING EDUCATION
                                     AUTHORITY

                                     By:
Date: ____________                   Its:

                                     TRAINING DEVICES INTERNATIONAL, INC.

                                     By:   Ronald C. Ellington
Date: ____________                   Its:  Chief Executive Officer

<PAGE>

                                    Article I

<TABLE>
<CAPTION>

<S>                                                                            <C>
DEFINITIONS....................................................................1

                                   Article II

                                   THE CENTER

Section 2.01.     Management...................................................3
Section 2.02.     Training Center..............................................4
Section 2.03.     Center Lease.................................................4
Section 2.04.     Center Operating Costs.......................................4
Section 2.05.     Expanded Teaching Content....................................5

                                   Article III

                        FRACTIONAL OWNERSHIP OF EQUIPMENT

Section 3.01.     Gift of One Fractional Share.................................5
Section 3.02.     Representation and Warranties................................5
Section 3.03.     Management...................................................6
Section 3.04.     FAA Qualification............................................6
Section 3.05.     Maintenance..................................................6
Section 3.06.     Insurance....................................................6
Section 3.07.     Scheduling...................................................7
Section 3.08.     Sale of the Authority's Hours................................7
Section 3.09.     Right of First Refusal.......................................7
Section 3.10.     Liens........................................................8
Section 3.11.     Location.....................................................8
Section 3.12.     Sale of Equipment............................................8
Section 3.13.     Covenants of TDI.............................................8

                                   Article IV

                               DELAYS AND REMEDIES

Section 4.01.     Delays in Center Availability................................8
Section 4.02.     Delay in Equipment Availability..............................9
Section 4.03.     Delay Consultation...........................................9

<PAGE>

                                    Article V

                                      TAXES

<S>                                                                            <C>
Section 5.01.     TDI's Obligations............................................9
Section 5.02.     The Authority's Obligations..................................9

                                   Article VI

                         REPRESENTATIONS AND WARRANTIES

Section 6.01.     Representations and Warranties of TDI........................9
Section 6.02.     Representations and Warranties of the Authority.............10

                                   Article VII

                                 INDEMNIFICATION

Section 7.01.     TDI Indemnification.........................................10
Section 7.02.     Assertion of Claims.........................................11
Section 7.03.     Notice of and Right to Defend Third Party Claims............11

                                  Article VIII

                                    COVENANTS

Section 8.01.     The Authority Personnel.....................................11
Section 8.02.     Intellectual Properties.....................................11
Section 8.03.     Compliance with Law.........................................12

                                   Article IX

                                   TERMINATION

Section 9.01.     Termination.................................................12
Section 9.02.     Effects of Termination......................................12

                                    Article X

                               GENERAL PROVISIONS

Section 10.01.    Entire Agreement............................................13
Section 10.02.    Parties Obligated and Benefited.............................13
Section 10.03.    Notices.....................................................13
Section 10.04.    Amendments and Waivers......................................14
Section 10.05.    Severability................................................14
Section 10.06.    Section Headings and Terms..................................14
Section 10.07.    Multiple Counterparts.......................................14
Section 10.08.    Submission to Jurisdiction..................................14

<PAGE>

<S>                                                                           <C>
Section 10.09.    Performance Not Contrary to Law.............................15
Section 10.10.    Attorneys' Fees.............................................15
Section 10.11.    Counterpart Facsimile Execution.............................15
Section 10.12.    Governing Law...............................................15
Section 10.13.    Confidentiality.............................................15
Section 10.14.    Trademark or Trade Name.....................................16
Section 10.15.    Publicity...................................................16
Section 10.16.    Risk of Loss................................................16
</TABLE>

<PAGE>

                                    EXHIBIT A

                                 LEASE AGREEMENT

         THIS LEASE AGREEMENT (the "Lease") is made as of this 14th day of
September, 1999, but is effective for all purposes as of the Commencement
Date, by and between AIMS CONTINUING EDUCATION AUTHORITY, a Colorado
nonprofit corporation, having its principal office and place of business at
5401 West 20th Street, Greeley, Colorado 80634 (the "Landlord") and TRAINING
DEVICES INC., a Colorado corporation, having its principal office and place
of business at 7367 South Revere Parkway, Building #2C, Englewood, Colorado
80112 (the "Tenant").

                              W I T N E S S E T H:

         WHEREAS, Landlord intends to build the Building on the Land; and

         WHEREAS, Landlord wishes to lease the Leased Premises within the
Building to Tenant, and Tenant wishes to lease the Leased Premises from
Landlord, all subject to and upon the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, Landlord and Tenant
hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         SECTION 1.01. DEFINITIONS. For all purposes of this Lease, except as
otherwise expressly provided or unless the context otherwise requires, (a)
the terms defined in this Article shall have the meanings assigned to them in
this Article and include the plural as well as the singular, (b) all
accounting terms not otherwise defined herein shall have the meanings
assigned to them in accordance with GAAP, (c) all references in this Lease to
designated "Articles," "Sections" and other subdivisions are to the
designated Articles, Sections and other subdivisions of this Lease, and (d)
the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Lease as a whole and not to any particular Article, Section or
other subdivision.

         "ADDITIONAL RENT" has the meaning set forth in Section 3.01(b).

         "AFFILIATE" means any individual or Entity directly or indirectly
through one or more intermediaries controlling, controlled by or under common
control with a party. The term "control," as used in the immediately
preceding sentence, means, with respect to a corporation, the right to
exercise, directly or indirectly, fifty percent (50%) or more of the voting
rights of any class of the shares of the controlled corporation, and, with
respect to an entity that is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of

<PAGE>

the management or polices of the controlled entity.

         "AWARD" means all compensation, sums or other value awarded, paid or
received by virtue of a total or partial Condemnation of the Leased Premises
(after deduction of all reasonable legal fees and other reasonable costs and
expenses, including, without limitation, expert witness fees, incurred by
Landlord in connection with obtaining any such award).

         "BANKRUPTCY CODE" means Title 11 of the United States Code, as
amended.

         "BUILDING" means the building to be built by Landlord in which the
Leased Premises are to be located, which building will be located on the
Land. The Building will contain approximately _______ square feet of Rentable
Area.

         "BUILDING STANDARD" means the brand name, type, quantity or quality
of services, finishes, materials, supplies, equipment or other items which
are selected for or may be used in the Complex in Landlord's sole discretion.

         "BUSINESS DAY" means any day other than Saturday, Sunday or any
other day on which banking institutions in the State of Colorado are
authorized by law or executive action to close.

         "CASUALTY" has the meaning given such term in Section 9.01.

         "CENTER" has the meaning ascribed thereto in the Training Center
Agreement.

         "CLAIMS" has the meaning given such term in Section 7.01.

         "COMMENCEMENT DATE" has the meaning ascribed thereto in the Training
Center Agreement.

         "COMMON TENANT SHARED AREAS" has the meaning given such term within
the definition of "Rentable Area."

         "COMPLEX" means the Building, the Land and all Parking Structures.

         "CONDEMNATION" means, with respect to the Leased Premises, (a) the
exercise of any governmental power with respect to all or part of the Leased
Premises by a Condemnor of its power of condemnation; (b) a voluntary sale or
transfer of all or part of the Leased Premises by Landlord to any Condemnor,
either under threat of condemnation or while legal proceedings for
condemnation are pending; or (c) a taking or voluntary conveyance of all or
part of the Leased Premises, or any interest therein, or right accruing
thereto or use thereof, as the result or in settlement of any Condemnation or
other eminent domain proceeding affecting the Leased Premises, whether or not
the same shall have actually been commenced.

         "CONDEMNOR" means any public or quasi-public authority, or private
corporation or individual, having the power of Condemnation.

<PAGE>

         "CONTRACTOR" has the meaning given such term in Section 8.08.

         "CONTRACTOR'S INSURANCE CERTIFICATE" has the meaning given such term
in Section 8.08.

         "CONTRACTOR'S LIABILITY COVERAGE" has the meaning given such term in
Section 8.08.

         "DEFAULT" means any event, act or condition that with the giving of
notice or lapse of time, or both, would constitute an Event of Default.

         "EMERGENCY SITUATIONS" means fire, any other Casualty, or any other
events, circumstances or conditions that threaten the safety or physical
well-being of the Leased Premises' occupants or employees or that involve the
risk of material property damage or loss.

         "ENTITY" means any corporation, general or limited partnership,
limited liability company or partnership, stock company or association, joint
venture, association, company, trust, bank, trust company, land trust,
business trust, cooperative, any government or agency or political
subdivision thereof or any other entity.

         "ENVIRONMENT" means soil, surface water, groundwater, land, stream,
sediment, surface or subsurface strata, ambient air, physical structures and
equipment, and where radon gas is present, the interior air of buildings.

         "ENVIRONMENTAL LAWS" means any federal, state or local law, rule or
regulation (both present and future) dealing with the use, generation,
treatment, storage, disposal, or abatement of Hazardous Materials, including,
but not limited to: (a) the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 6091 ET SEQ., as amended;
(b) any so-called "Superfund" or "Superlien" law; and (c) or any federal,
state or local statute, law, ordinance, code, rule, regulation, order or
decree regulating, relating to, or imposing liability or standards of conduct
concerning, any Hazardous Materials, as now or at any time hereafter in
effect.

         "ENVIRONMENTAL NOTICE" has the meaning given such term in
Section 4.03(a).

         "ENVIRONMENTAL OBLIGATION" has the meaning given such term set forth
in Section 4.03(a).

         "EVENT OF DEFAULT" has the meaning given such term in Section 11.01.

         "EXTENDED TERM" has the meaning given such term in Section 2.02(b).

         "FACILITY MORTGAGE" means, with respect to the Leased Premises, any
Lien by Landlord placed upon the Leased Premises in accordance with
Article XVII.

         "FACILITY MORTGAGEE" means the holder of a Facility Mortgage.

         "FIXTURES" means all equipment, machinery and other items of
property, now or hereafter permanently affixed to or incorporated into the
Leased Premises, including, without limitation, all of the items set forth on
EXHIBIT C hereto, as well as all lift systems, furnaces, boilers, heaters,

<PAGE>

electrical equipment, heating, plumbing, lighting, ventilating,
refrigerating, incineration, air and water pollution control, waste disposal,
air-cooling and air-conditioning systems and apparatus, sprinkler systems,
and fire and theft protection equipment, all of which, to the maximum extent
permitted by law, are hereby deemed by the parties hereto to constitute real
estate, together with all replacements, modifications, alterations and
additions thereto, but specifically excluding Tenant's Personal Property.

         "GAAP" means U.S. generally accepted accounting principles
consistently applied.

         "GOVERNMENT AGENCY" or "GOVERNMENT AGENCIES" means any court,
agency, authority, board (including, without limitation, environmental
protection, planning and zoning), bureau, commission, department, office or
instrumentality of any nature whatsoever of any governmental unit of the
United States, Colorado, any county, or any political subdivision of any of
the foregoing, whether now or hereafter in existence, having jurisdiction
over Tenant or the Leased Premises or any portion thereof.

         "GROSS REVENUES" means all revenues and receipts of every kind
derived from operating the Leased Premises and parts thereof, including
without limitation, proceeds, if any, from business interruption or other
loss of income insurance. [USED ONLY IN SECTIONS 9.03]

         "HAZARDOUS MATERIALS" means any substance or material, including
without limitation, any substance or material containing one or more of any
of the following: "hazardous material," "hazardous waste," "regulated
substance," "petroleum," "pollutant," "contaminant," or "asbestos," as such
terms are defined in any applicable Environmental Law, in such
concentration(s) or amount(s) as may impose cleanup, removal, monitoring or
other responsibility under any applicable Environmental Law, or which may
present a significant risk of harm to Tenant or any subtenants, employees,
licensees, invitees or guests of the Leased Premises.

         "IMPOSITIONS" means, collectively, all taxes (including, without
limitation, all AD VALOREM, sales and use, single business, gross receipts,
transaction, privilege, rent or similar taxes as the same relate to or are
imposed upon the Leased Premises, Tenant or the business conducted upon the
Leased Premises), assessments, water, sewer or other rents and charges,
excises, tax levies, fees (including, without limitation, license, permit,
inspection, authorization and similar fees) and all other governmental
charges, in each case whether general or special, ordinary or extraordinary,
usual or unusual, foreseen or unforeseen, of every character in respect of
the Leased Premises or the business conducted thereon by Tenant (including
all interest and penalties thereon due to any failure in payment by Tenant),
which at any time during or in respect of the Term hereof may be charged,
laid, levied, assessed or imposed on or in respect of or be a Lien upon: (a)
Landlord's interest in the Leased Premises; (b) the Leased Premises, any part
thereof, and/or the sidewalks and streets in front of same or any vaults
thereunder, or any fixtures, machinery and equipment owned by Tenant thereon
or therein or any part thereof, any rent therefrom, or any estate, right,
title or interest therein; or (c) any occupancy, operation, use or possession
of, or sales from, or activity conducted on or in connection with the Leased
Premises or the leasing or use of the Leased Premises or any part thereof by
Tenant.

         "INDEBTEDNESS" means all obligations, contingent or otherwise,
which, in accordance with

<PAGE>

GAAP, should be reflected on the obligor's balance sheet as debt.

         "INITIAL TERM" has the meaning given such term in Section 2.02(a).

         "INSURANCE REQUIREMENTS" means all terms of any insurance policy
required by this Lease and all requirements of the issuer of any such policy.

         "LAND" means that certain tract of land containing approximately
_____ acres located in Greeley, ____ County, Colorado, as more particularly
described on EXHIBIT A attached hereto.

         "LANDLORD" means Aims Continuing Education Authority, a Colorado
nonprofit corporation, and its successors and assigns.

         "LANDLORD INDEMNITEE" or "LANDLORD INDEMNITEES" has the meaning
given such term in Section 4.03(c).

         "LEASE" means this Lease Agreement dated as of ________, 1999,
between Landlord and Tenant.

         "LEASED PREMISES" means the approximately 4,000 square feet on the
__ floor of the Building, which area is cross-hatched on the floor plan
attached hereto as EXHIBIT B. The Leased Premises are hereby stipulated to
contain ______ square feet of Rentable Area, which includes Tenant's occupied
space plus Tenant's allocable portion of Tenant Shared Areas.

         "LEGAL REQUIREMENTS" means all applicable federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
and ordinances, and all applicable judicial, administrative and regulatory
judgments, decrees and injunctions, affecting Tenant or the Leased Premises
or the maintenance, construction, alteration or operation thereof, whether
now or hereafter enacted or in existence, including, without limitation, (a)
all permits, licenses, certificates of need, authorizations and regulations
necessary to operate the Leased Premises for its Primary Intended Use, and
(b) all covenants, agreements, restrictions and encumbrances contained in any
instruments either of record or actually known to Tenant (other than
encumbrances hereafter created by Landlord without the consent of Tenant) at
any time in force affecting the Leased Premises, including those which may
(i) require material repairs, modifications or alterations in or to the
Leased Premises, or (ii) in any way materially adversely affecting the use
and enjoyment thereof.

         "LICENSES" means all licenses, operating permits and other
governmental authorizations and all contracts with governmental or
quasi-governmental entities, that may be necessary for the operation of the
Center.

         "LIEN" means any mortgage, security interest, pledge, collateral
assignment, or other encumbrance, lien or charge of any kind (including,
without limitation, any easements, covenants, conditions and restrictions),
or any transfer of any property or assets for the purpose of subjecting the
same to an encumbrance, lien or charge securing the payment of Indebtedness
or performance of any other obligation in priority to payment of any Person's
general creditors.

<PAGE>

         "MINIMUM RENT" has the meaning given such term in Section 3.01(a).

         "MONTHLY TERM" has the meaning given such term in Section 2.02(c).

         "NOTICE" or "NOTICES" has the meaning given such term in
Section 17.08.

         "PARKING STRUCTURE" means the parking facility and all improvements
thereto, to be located on a portion of the Land.

         "PERMITTED LIENS" means: (a) this Lease; (b) all rights,
restrictions and easements of record as of the Commencement Date acceptable
to Landlord; (c) any Facility Mortgage; (d) security interests securing the
purchase price of equipment or personal property acquired by Tenant before or
after the Commencement Date; PROVIDED, HOWEVER, that (i) any such Lien
described in this clause (d) shall at all times be confined solely to the
asset in question, and (ii) the aggregate principal amount of Indebtedness
secured by any such Lien described in this clause (d) shall not exceed the
cost of acquisition of the property subject thereto; and (e) any other Liens
as may have been consented to in writing by Landlord.

         "PERSON" means any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person
where the context so requires.

         "PLANS AND SPECIFICATIONS" has the meaning given such term in
Section 5.06(a)(v).

         "PRIMARY INTENDED USE" has the meaning given such term in
Section 4.01(a).

         "REAL ESTATE TAXES" means all real estate taxes, including general
and special assessments and impact fees, if any, which are imposed upon or
relate to the Land and any improvements thereon (including the Leased
Premises), including without limitation, the following:

                  (a) any franchise, corporate, estate, inheritance,
         succession or capital levy imposed on Landlord;

                  (b) special assessments (regardless of when due or whether
         they are paid as a lump sum or in installments over time) imposed
         because of facilities that are constructed by or on behalf of the
         assessing jurisdiction (i.e., roads, sidewalks, sewers, culverts,
         etc.) which directly benefit the Leased Premises or any part thereof
         (regardless of whether or not they also benefit other buildings);

                  (c) impact fees (regardless of when due or whether they are
         paid as a lump sum or in installments over time) that are required
         of Landlord as a condition to the issuance of site plan approval,
         zoning variances or building permits; and

                  (d) tax-increment financing or similar financing whereby
         the municipality or other taxing authority has assisted in financing
         the construction of the Leased Premises or any part thereof by
         temporarily reducing or abating normal impositions in return for
         substantially higher levels of impositions at later dates.

<PAGE>

         "RENT" or "RENTS" means, collectively, the Minimum Rent and all
items of Additional Rent payable by Tenant to Landlord pursuant to the
provisions of this Lease.

         "RENT DAY" means any day on which Rent is due and payable pursuant
to Article III.

         "RENTABLE AREA" means the rental square footage within the Complex,
including without limitation, the following:

                  (a) in the case of a single-tenancy floor, all floor area
         measured from the inside surface of the outer glass line or exterior
         wall of the Building (including balcony areas) forming a part of the
         Leased Premises even though all or a part of the area of such
         balconies might extend past the glass line) to the inside surface of
         the opposite outer wall, excluding only those areas within the
         outside walls used for Building stairs, fire towers, elevator
         shafts, flues, vents, stacks, pipe shafts and vertical ducts, but
         including any such areas which are for the specific use of Tenant,
         such as special stairs or elevators, and

                  (b) in the case of a partial floor, all floor areas within
         the inside surface of the outer glass line or exterior wall
         enclosing the Tenant occupied portion of the floor (including
         balcony areas forming a part of the Leased Premises even though all
         or a part of the area of such balconies might extend past the glass
         or exterior wall line) and measured to the midpoint of the demising
         walls separating areas leased by or held for lease to other tenants
         and from areas devoted to elevator foyers, rest rooms, mechanical
         rooms, janitor closets, vending areas and other similar facilities
         for the use of all tenants on the particular floor (the "Tenant
         Shared Areas"), but including a part of the Tenant Shared Areas
         located on such floor based upon the ratio which the Tenant's total
         occupied portion of such floor bears to the aggregate occupiable
         areas on such floor.

         The Leased Premises also shall include any areas of the Complex
which are incorporated into the Leased Premises or which are reserved or
designated for exclusive use or occupancy by Tenant even though such areas
would have been classified as Tenant Shared Areas or Common Tenant Shared
Areas (defined herein) were it not for such reservation or designation
(including, without limitation, foyers, lobby areas, passageways and
bathrooms situated on the ground floor of any building and any balconies or
enclosed patios even though all or a part of such areas might extend past the
glass or exterior wall line of the Building of which they form a part). All
such areas shall be deemed Tenant occupied areas for purposes of any area
calculations described herein.

         Rentable Area also shall include a portion of the areas in the
Complex which exist for the common benefit or use of all tenants or which are
occupied and used by Landlord to provide Building services and management
including, without limitation (if applicable), the management office, the
Building engineers office, the central mechanical room, postal and security
stations, lobby areas and interior passageways through the Complex not
reserved for the exclusive use of a specific tenant, and offices and rooms in
the Complex used by independent contractors such as the janitorial and
security service companies, and all other areas in the Complex similar
thereto (the "Common Tenant Shared Areas"). The total Rentable Area of the
Leased Premises shall be the Rentable Area of each floor of the Leased
Premises as calculated in (a) and (b) above plus a

<PAGE>

portion of the Common Tenant Shared Areas based upon the ratio which the
Rentable Area of the Leased Premises (excluding the Common Tenant Shared
Areas) bears to the total net rental Area of the Complex (excluding the
Common Tenant Shared Areas). No deductions from Rental Area are made for
columns or other projections. The Rentable Area in the Leased Premises has
been calculated on the basis of the foregoing definition and is stipulated
for all purposes hereof to be the number of square feet as shown in EXHIBIT B
hereto (this calculation includes Tenant's occupied portion of each floor
plus Tenant's share of Tenant Shared Area and Common Tenant Shared Areas),
whether the same should be more or less as a result of minor variations
resulting from actual construction and completion of the Leased Premises for
occupancy so long as such work is done in accordance with the terms and
provisions hereof.

         "REPLACEMENT COST" means the actual replacement cost of the Leased
Premises requiring replacement from time to time, including an increased cost
of construction endorsement, if available, and the cost of debris removal
less exclusions provided in the standard form of fire insurance policy.
Landlord shall have the right to have such full Replacement Cost redetermined
by an independent accredited appraiser and the determination of such
appraiser shall be final and binding on the parties hereto.

         "SECURITY DEPOSIT" has the meaning given such term in
Section 3.01(b)(vi).

         "SPECIFICATIONS" means the specifications and standards attached
hereto as Exhibit D.

         "SUCCESSOR LANDLORD" has the meaning given such term in Section 16.02.

         "TENANT" means Training Devices Inc., a Colorado corporation, its
successors and assigns, and any Person with which such company may be merged
or consolidated.

         "TENANT CHANGE" or "TENANT CHANGES" has the meaning given such term
in Section 5.05(a).

         "TENANT'S PERSONAL PROPERTY" means all tangible and intangible
personal property now owned, leased or hereafter acquired by Tenant on or
after the date hereof, not affixed to the Leased Premises, and all contracts
and agreements to which Tenant is a party used in the operation of the Center.

         "TENANT'S PROPORTIONATE SHARE" means a fraction, the numerator of
which is the Rentable Area of the Leased Premises and the denominator of
which is the total Rentable Area of the Building, stipulated herein to be
_____ square feet.

         "TENANT SHARED AREAS" has the meaning given such term within the
definition of "Rentable Area."

         "TERM" has the meaning given such term in Section 2.02(a), unless
sooner terminated pursuant to the terms of this Lease.

         "TRAINING CENTER AGREEMENT" means that certain Training Center and
Fractional

<PAGE>

Ownership Agreement dated as of ________, 1999, between Landlord and Tenant.

         "UNAVOIDABLE DELAY" means delay due to strikes, acts of God, force
majeure, governmental restrictions or actions (including the revocation or
refusal to grant Licenses or permits, where such revocation or refusal is not
due to the fault of the party whose performance is excused by reason of such
Unavoidable Delay), enemy action, civil commotion, fire, unavoidable
Casualty, Condemnation or other comparable causes beyond the reasonable
control of Landlord or Tenant; PROVIDED, HOWEVER, that lack of funds shall
not be deemed a cause beyond the reasonable control of a party, unless such
lack of funds is caused by the breach of the other party's obligations under
this Lease.

         "UNSUITABLE FOR PRIMARY INTENDED USE" means a state or condition of
the Leased Premises such that: (a) following any damage or destruction
involving the Leased Premises, the Leased Premises cannot reasonably be
expected to be restored within six (6) months following such damage or
destruction to substantially the same condition as existed immediately before
such damage or destruction; or (b) as the result of a partial taking by
Condemnation, the Leased Premises cannot be operated on a commercially
practicable basis for their Primary Intended Use, taking into account, among
other relevant factors, the amount of square footage and the revenues
affected by such damage, destruction or partial taking.

         "UTILITY CHARGES" has the meaning given such term in
Section 3.01(b)(iii).

                                   ARTICLE II

                            LEASED PREMISES AND TERM

         SECTION 2.01. THE LEASED PREMISES. Upon and subject to the terms and
conditions hereinafter set forth, and subject to the rights of any Facility
Mortgagee, Landlord hereby leases the Leased Premises (including the
Fixtures) to Tenant for the Term, and Tenant hereby leases the Leased
Premises (including the Fixtures) from Landlord for the Term, effective upon
the Commencement Date.

         SECTION 2.02. TERM OF LEASE.

                  (a) TERM. The term of this Lease (the "Term") shall
         commence on the Commencement Date and shall terminate on the last
         day of the tenth year after the Commencement Date (such period, the
         "Initial Term"), unless sooner terminated pursuant to the terms of
         this Lease or extended pursuant to Section 2.02(b) herein.

                  (b) EXTENSION. So long as there is no Default or Event of
         Default hereunder, Tenant still occupies the Leased Premises and
         Landlord consents to the exercise thereof, which consent may be
         withheld in Landlord's sole and absolute discretion, Tenant shall
         have one (1) option to extend the Initial Term of this Lease for
         five (5) additional years commencing on the first day after the
         expiration of the Initial Term (such period, the "Extended Term").
         Such Extended Term shall be on the same terms and conditions as set
         forth herein; PROVIDED, HOWEVER, that the Minimum Rent for such
         Extended Term shall be

<PAGE>

         increased as set forth in Section 3.01(a) below. If Tenant shall
         elect to exercise its option to extend the Term of this Lease as set
         forth herein, Tenant shall do so by giving written notice thereof to
         Landlord not less than ninety (90) days prior to the expiration of
         the Initial Term of this Lease. Any references to "Term" shall
         include the Initial Term of this Lease, the permitted Extended Term
         hereunder, the permitted Monthly Term hereunder and, subject to the
         terms of Article XII, any period of holding over by Tenant.

                  (c) MONTHLY TERM. So long as there is no Default or Event
         of Default hereunder and Tenant still occupies the Leased Premises,
         at the end of the Initial Term or at the end of the Extended Term
         (if applicable), Tenant shall have the option of leasing the Leased
         Premises on a month-to-month basis for a period of up to six (6)
         months (such period, the "Monthly Term"). Such Monthly Term shall be
         on the same terms and conditions as set forth herein; PROVIDED,
         HOWEVER, that the Minimum Rent for such Monthly Term shall be as set
         forth in Section 3.01(a) below; and FURTHER PROVIDED that the Leased
         Property's Primary Intended Use during such Monthly Term shall be
         limited to the use and operation of one Beech 1900 D Level C Full
         Flight Simulator in the Leased Premises. If Tenant elects to
         exercise its option for a monthly tenancy as set forth herein,
         Tenant shall do so by giving written notice thereof to Landlord not
         less than _____ (__) days prior to the expiration of the Initial
         Term or Extended Term (if applicable) of this Lease.

                  (d) NO CANCELLATION.

                           (i) After the Commencement Date, Tenant shall have
                  no right, and hereby waives any right, to cancel or
                  terminate this Lease, to seek a diminution of rent, sue for
                  damages, or assert any other contractual, legal or equitable
                  remedy based either on a claim that Landlord failed to
                  deliver possession in accordance with the terms of this
                  Lease or based on a claim that the size, location, layout,
                  dimensions or construction of the Leased Premises or any
                  other building, the service area (if any), sidewalks,
                  parking or any other facilities were not furnished in
                  accordance with the terms of this Lease.

                           (ii) On the Commencement Date, Tenant shall be
                  deemed to have certified to Landlord that the Leased
                  Premises has been delivered to Tenant in accordance with the
                  terms of this Lease and that possession thereof has been
                  accepted, fully and completely, by Tenant who is then in
                  possession of the same, and that there is not then any
                  offset of any Rents nor any violation of any of the Lease
                  terms on the part of Landlord. The foregoing provisions
                  shall be self-operative and no further instrument, letter,
                  or certificate shall be required by Landlord or any Facility
                  Mortgagee unless such parties shall deem the same
                  appropriate, in which event, in confirmation of the
                  foregoing, upon written request, Tenant promptly shall
                  execute, in writing, a certificate containing the foregoing
                  provisions, including the Rents, and the commencement and
                  expiration dates of the Term of this Lease.

         SECTION 2.03. INCOME AND EXPENSES. Except as otherwise set forth
herein, this Lease

<PAGE>

shall be a "triple net" lease and Tenant shall be entitled to all income and
shall be responsible for the payment or settlement of all expenses of the Leased
Premises accruing on and after the Commencement Date and until the expiration or
earlier termination of the Term.

         SECTION 2.04. CONDITION OF LEASED PREMISES. Landlord and Tenant
acknowledge that the Leased Premises will be constructed in accordance with the
plans set forth on Exhibit B and that the Leased Premises shall be in accordance
with the Specifications. Tenant accepts the Leased Premises in its "as is"
condition as of the Commencement Date, subject to the rights of Landlord, the
existing state of title, including all covenants, conditions, restrictions,
reservations, mineral leases, easements and other matters of record or that are
visible or apparent on the Leased Premises, all applicable Legal Requirements,
the lien of financing instruments, mortgages and deeds of trust, and such other
matters which would be disclosed by an inspection of the Leased Premises and the
record title thereto or by an accurate survey thereof, and all other Permitted
Liens. TENANT REPRESENTS THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
LEASE, IT IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY OF LANDLORD OR
LANDLORD'S AGENTS OR EMPLOYEES WITH RESPECT TO THE CONDITION OF THE LEASED
PREMISES, AND EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS LEASE, TENANT
WAIVES ANY CLAIM OR ACTION AGAINST LANDLORD IN RESPECT THEREOF. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS LEASE, LANDLORD MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED PREMISES OR ANY
PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY
PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS TO THE QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE
TO BE BORNE BY TENANT.

                                   ARTICLE III

                                      RENTS

         SECTION 3.01.   RENTS.

                  (a)    MINIMUM RENT. Tenant covenants to pay to Landlord as
         set forth in Section 3.02, without previous demand therefor and without
         any delay, defense, set-off, deduction or abatement whatsoever, a
         minimum rent (the "Minimum Rent") in the following amounts: (i) for
         years one through four of the Initial Term, $127,000 per year,
         payable in (A) one monthly installment of $10,583.37 followed by (B)
         eleven equal monthly installments of $10,583.33, each installment
         payable in advance on the first day of each and every calendar
         month, with the first installment of year one for $10,583.37 due on
         the Commencement Date; (ii) for years five through seven of the
         Initial Term, $137,000 per year, payable in (A) one monthly
         installment of $11,416.74 followed by (B) eleven equal monthly
         installments of $11,416.66, each installment payable in advance on
         the first day of each and every calendar month; (iii) for years
         eight through ten of the Initial Term, $147,000 per year, payable in
         twelve equal monthly installments of $12,250.00, each installment
         payable in advance on the first day of each and every

<PAGE>

         calendar month; (iv) for the Extended Term, $147,000 per year
         increased by the cumulative consumer price index for the prior
         five years, payable in twelve equal monthly installments in
         advance on the first day of each and every calendar month of the
         Extended Term; and (v) for the Monthly Term, the Minimum Rent in
         effect at the time the option granted to Tenant in Section 2.02(c)
         is exercised.

                  (b) ADDITIONAL RENT. Tenant shall pay, as additional rent
         ("Additional Rent"), all charges, costs, expenses and other payments
         which Tenant assumes or agrees to pay under any of the provisions of
         this Lease, including without limitation, the following:

                           (i) IMPOSITIONS. Tenant shall pay or cause to be paid
                  Tenant's Proportionate Share of the Impositions attributable
                  to any period during the Term before any fine, penalty,
                  interest or cost (other than any opportunity cost as a result
                  of a failure to take advantage of any discount for early
                  payment) may be added for nonpayment. Within thirty (30) days
                  after receipt of written Notice of the amount of Tenant's
                  Proportionate Share of the Impositions, Tenant shall pay such
                  amount to Landlord. Landlord, at its expense, to the extent
                  required or permitted by Legal Requirements, shall prepare and
                  file all tax returns required to be filed by Landlord, and
                  Tenant, at its expense, to the extent required or permitted by
                  Legal Requirements, shall prepare and file all tax returns and
                  reports required to be filed by Tenant in respect of any
                  Imposition as may be required by any Government Agency.
                  Provided that no Default or Event of Default shall have
                  occurred and be continuing, if any refund shall be due from
                  any taxing authority in respect of any Imposition paid by
                  Tenant, Tenant's Proportionate Share of such refund shall be
                  paid over to Tenant. Upon request of the other, Landlord and
                  Tenant each shall provide such data as is maintained by the
                  party to whom the request is made with respect to the Leased
                  Premises as may be necessary to prepare any required returns
                  and reports. In the event that Government Agencies classify
                  any portion of the Leased Premises covered by this Lease as
                  personal property, Tenant shall file all personal property tax
                  returns in such jurisdictions where it may legally be required
                  to so file. Upon request, each party shall provide, to the
                  extent it possesses the same, the other with cost and
                  depreciation records necessary for filing returns for any
                  portion of the Leased Premises so classified as personal
                  property. Landlord shall use its best efforts to give prompt
                  Notice to Tenant of all Impositions payable by Tenant
                  hereunder of which Landlord at any time has knowledge;
                  PROVIDED, HOWEVER, that Landlord's failure to give any such
                  Notice shall in no way diminish Tenant's obligation hereunder
                  to pay such Impositions.

                           Notwithstanding the provisions of this Section, in
                  the event that Landlord, in its sole discretion, determines
                  that it will deliver payment of any Impositions referred to in
                  this Section to the appropriate taxing or Government Agencies,
                  then, in such event, Landlord agrees to notify Tenant of the
                  delivery of payment of said Impositions by Landlord to the
                  appropriate taxing or Government Agencies and the amount of

<PAGE>

                  Tenant's Proportionate Share of such Impositions so paid by
                  Landlord to the appropriate taxing or Government Agencies, and
                  the amount of Tenant's Proportionate Share of such Impositions
                  paid by Landlord on account of said Impositions thereafter
                  shall be reimbursed and paid by Tenant to Landlord on the next
                  succeeding Minimum Rent payment date and shall be added to the
                  next or any subsequent rent thereafter to become due as
                  Landlord elects and shall be collectible as such as Additional
                  Rent. It is understood and agreed by Landlord and Tenant that
                  notwithstanding Landlord's determination pursuant to this
                  Section to deliver the payment of said Impositions to the
                  appropriate taxing or Government Agencies, that the obligation
                  to pay Tenant's Proportionate Share of said Impositions during
                  the Term of this Lease shall be the obligation of Tenant
                  hereunder at all times whether said Impositions shall be paid
                  by Tenant directly to Landlord or reimbursed to Landlord as
                  stipulated herein if Landlord so elects. Furthermore, it
                  expressly is understood that payment by Landlord of any said
                  Impositions, whether pursuant to this Section or in the Event
                  of Default hereunder, shall not be deemed to waive or release
                  the obligation of Tenant to make payment for said Impositions
                  or to waive or release any rights of Landlord hereunder.

                           (ii) REAL ESTATE TAXES. Tenant shall deposit with
                  Landlord funds for the payment of Tenant's Proportionate Share
                  of Real Estate Taxes, as estimated by Landlord at the
                  commencement of the Term, payable in twelve (12) equal monthly
                  installments in advance on the first day of each and every
                  calendar month during the Term of this Lease; PROVIDED,
                  HOWEVER, that notwithstanding any provision contained herein,
                  upon Tenant's execution of this Lease, Tenant shall deposit
                  with Landlord funds for payment of Tenant's Proportionate
                  Share of the Real Estate Taxes for the Leased Premises for the
                  year 1999, based upon the 1998 Real Estate Taxes. At any time
                  during the Term, Landlord may re-estimate Tenant's Real Estate
                  Tax obligations and thereafter adjust Tenant's equal monthly
                  installments thereof. In the event that the laws of the State
                  of Colorado shall be altered so as to reduce or replace the
                  amount of the Real Estate Taxes on the Leased Premises and in
                  place thereof impose any tax, charge, or assessment against
                  the holder of any mortgage on the Leased Premises, or any
                  note, bond or other indebtedness secured thereby, or any tax
                  on this Lease or leasehold estate, then Tenant shall pay
                  Tenant's Proportionate Share of such tax, charge or assessment
                  as Additional Rent.

                           It is understood and agreed by and between Landlord
                  and Tenant that, at all times during the Term of this Lease,
                  Landlord shall have the right, but not the obligation, to
                  elect at its option, to challenge the assessed value of the
                  Leased Premises and/or to challenge the Real Estate Taxes
                  levied or assessed against the Leased Premises. In any such
                  event, Landlord shall be entitled to retain the services of
                  individuals or companies of its selection, including, but not
                  limited to, attorneys and appraisers to support such
                  challenge. It is understood and agreed that Landlord shall be
                  authorized to arrange for payment of such services as a
                  percentage of the reduction in the Real Estate Taxes payable
                  for the Leased Premises. Tenant agrees, as Additional Rent, to
                  reimburse Landlord for Tenant's Proportionate Share of any
                  such payments within ten (10) days of Landlord's

<PAGE>

                  written demand for such payment.

                           (iii) UTILITY CHARGES. Landlord shall ensure that the
                  Leased Premises are wired to meet the electricity requirements
                  set forth in the Specifications. Landlord shall cause to be
                  installed a separate meter to measure the amount of
                  electricity used by the Leased Premises. Tenant shall pay or
                  cause to be paid promptly, as and when the same shall become
                  due and payable, all charges for electricity used by the
                  Leased Premises. [AND THE COSTS OF THE SEPARATE METER?]

                           Tenant shall pay or cause to be paid promptly, as and
                  when the same shall become due and payable, Tenant's
                  Proportionate Share of all water rents, rates and charges, all
                  sewer rents and all charges for power, gas, oil, heat, steam,
                  hot water and other utilities, including charges for repairing
                  and setting meters, supplied to the Leased Premises at anytime
                  during the Term of this Lease (collectively with electricity
                  charges, the "Utility Charges"). Tenant shall keep the Leased
                  Premises sufficiently heated so as to prevent freezing and
                  deterioration thereof and/or of the equipment and facilities
                  contained therein.

                           (iv) INSURANCE PREMIUMS. Tenant shall pay or cause to
                  be paid all premiums for insurance coverage required to be
                  maintained by Tenant pursuant to Article VIII.

                           (v) BUILDING SERVICES. Tenant shall pay or cause to
                  be paid Tenant's Proportionate Share of the building services
                  costs listed in Section 5.01.

                           (vi) OTHER CHARGES. Tenant shall pay or cause to be
                  paid all other amounts, liabilities and obligations that
                  Tenant assumes or agrees to pay under this Lease, including,
                  without limitation, all agreements to indemnify Landlord under
                  Sections 4.03(c) (Environmental), 5.02(b) (Legal Requirement
                  Compliance), 6.01 (Liens), 7.01 (Permitted Contests) and 8.08
                  (General Indemnification).

                           (vii) SECURITY DEPOSIT. On the Commencement Date,
                  Tenant shall pay to Landlord the sum of $_____ (the "Security
                  Deposit") which shall be held by Landlord for the performance
                  of Tenant's covenants and obligations under this Lease, it
                  being expressly understood that the Security Deposit shall not
                  be considered an advance payment of Rent or a measure of
                  Landlord's damage in case of Default hereunder by Tenant, and
                  shall be held by Landlord without payment of any interest
                  thereon. Upon the occurrence of any Event of Default by Tenant
                  under this Lease, without prejudice to any other remedy,
                  Landlord from time to time may use the Security Deposit to the
                  extent necessary to make good any arrears of Rents or to
                  repair any damage or injury or pay any expense or liability
                  incurred by Landlord as a result of an Event of Default or
                  breach of covenant, and any remaining balance of the Security
                  Deposit shall be returned by Landlord to Tenant upon the
                  termination of this Lease. If any portion of the Security
                  Deposit is so used or applied, Tenant shall deposit with
                  Landlord, upon ten (10) days' Notice from Landlord, by cash or
                  cashier's check an amount

<PAGE>

                  sufficient to restore the Security Deposit to its original
                  amount. The Security deposit may be assigned and
                  transferred by Landlord to the Successor Landlord, and upon
                  acknowledgment by such Successor Landlord of receipt of
                  such security and its assumption of the obligation to
                  account to Tenant for such security in accordance with the
                  terms of this Lease, Landlord shall thereby be discharged
                  of any further obligation relating thereto.

                           (viii) PERFORMANCE BY LANDLORD. Except as otherwise
                  provided herein, in the event that Landlord shall pay any sum
                  of money, or do any act which shall require the expenditure of
                  any sums by reason of the failure of Tenant to perform any of
                  the covenants, terms or conditions herein contained, Tenant
                  covenants to repay promptly such sums with interest at the
                  rate of eighteen percent (18%) per annum, to Landlord upon
                  demand, and in Default thereof, the sums so paid by Landlord
                  and the interest thereon, may be added as Additional Rent to
                  the Minimum Rent becoming due upon the next Rent Day, or, at
                  Landlord's option, on any subsequent Rent Day and shall be
                  payable as such. Nothing contained herein, however, shall be
                  construed to postpone the right of Landlord, immediately upon
                  expending such sums, to collect such sums by action or
                  otherwise.

                           (ix) LATE CHARGES. If any installment of Minimum Rent
                  or Additional Rent (but only as to those Additional Rents that
                  are payable directly to Landlord) shall not be paid on its due
                  date, Tenant shall pay Landlord, on demand, as Additional
                  Rent, a late charge (to the extent permitted by law) equal to
                  five percent (5%) of the amount of such installment. To the
                  extent that Tenant timely pays any Additional Rent directly to
                  Landlord pursuant to any requirement of this Lease, Tenant
                  shall be relieved of its obligation to pay such Additional
                  Rent to the Entity to which it would otherwise be due.

                           In the event of any failure by Tenant to pay any
                  Additional Rent when due to any Entity other than Landlord,
                  Tenant shall promptly pay and discharge, as Additional Rent,
                  every fine, penalty, interest and cost that may be added by
                  the Entity to which such Additional Rents are due (other than
                  Landlord) for nonpayment or late payment of such items.

         SECTION 3.02. PAYMENT OF RENT. Tenant, during the Term hereby granted,
shall pay to Landlord, at such place as it, in writing, shall designate, and to
such person, firm or corporation as Landlord, in writing, shall designate, or to
its assignee, the Minimum Rent and any Additional Rent due hereunder. Until
further notice from Landlord, said Minimum Rent and any Additional Rent shall be
paid by wire transfer of immediately available federal funds, on the date due,
to the account identified on SCHEDULE 3.02. [WANT WIRE PAYMENTS?]

         SECTION 3.03. NET LEASE. The Rents shall be absolutely net to Landlord
so that this Lease shall yield to Landlord the full amount of the installments
or amounts of Rent throughout the Term, subject to any other provisions of this
Lease which expressly provide for adjustment or abatement of such Rent. It is
the intention of the parties that Landlord shall receive the Rents herein
reserved free from all taxes, charges, expenses, damages and deductions of every

<PAGE>

description, and that Tenant shall pay all of the above items and expenses and
damages which, except for the execution and delivery of this Lease, would have
been chargeable against the Leased Premises and payable by Landlord.

         SECTION 3.04. NO TERMINATION OR ABATEMENT. Except as otherwise
specifically provided in this Lease, Tenant, to the maximum extent permitted by
law, shall remain bound by this Lease in accordance with its terms and shall
neither take any action without the consent of Landlord to modify, surrender or
terminate this Lease, nor seek, nor be entitled to, any abatement, deduction,
deferment or reduction of the Rents, or set-off against the Rents, nor shall the
respective obligations of Landlord and Tenant be otherwise affected by reason of
(a) any damage to or destruction of the Leased Premises or any portion thereof
from whatever cause or any Condemnation; (b) the lawful, or unlawful prohibition
of, or restriction upon, Tenant's use of the Leased Premises, or any portion
thereof, or the interference with such use by any Person; (c) any claim that
Tenant may have against Landlord by reason of any default or breach of any
warranty by Landlord under this Lease or any other agreement between Landlord
and Tenant, or to which Landlord and Tenant are parties; (d) any bankruptcy,
insolvency, reorganization, composition, readjustment liquidation, dissolution,
winding up or other proceedings affecting Landlord or any assignee or transferee
of Landlord; or (e) any other cause whether similar or dissimilar to any of the
foregoing, other than a discharge of Tenant from any such obligations as a
matter of law; PROVIDED, HOWEVER, that the foregoing shall not apply or be
construed to restrict any other rights Tenant may have as a result of any act or
omission by Landlord constituting gross negligence or willful misconduct. Tenant
hereby waives all rights arising from any occurrence whatsoever, which may now
or hereafter be conferred upon it by law, to (i) modify, surrender or terminate
this Lease or quit or surrender the Leased Premises or any portion thereof, or
(ii) entitle Tenant to any abatement, reduction, suspension or deferment of the
Rents or other sums payable or other obligations to be performed by Tenant
hereunder, except as otherwise specifically provided in this Lease. The
obligations of Tenant hereunder shall be separate and independent covenants and
agreements, and the Rents and all other sums payable by Tenant hereunder shall
continue to be payable in all events unless the obligations to pay the same
shall be terminated pursuant to the express provision of this Lease.
Notwithstanding anything set forth in this Lease to the contrary, in any
instance where, after the occurrence of a Default or an Event of Default, this
Lease expressly permits Landlord to retain funds which, but for the Default or
Event of Default, would be payable to Tenant, Landlord shall refund such funds
to Tenant to the extent that the amount exceeds the amount estimated by Landlord
in good faith to be necessary to compensate Landlord for any cost, loss or
damage incurred or reasonably expected to be incurred in connection with such
Default or Event of Default.

                                   ARTICLE IV

                           USE OF THE LEASED PREMISES

         SECTION 4.01.       PERMITTED USE.

                  (a) PRIMARY INTENDED USE. Tenant shall have the right, at all
         times during the Term and at any other time that Tenant shall be in
         possession of any Leased Premises, to use the Leased Premises for the
         operation of a full flight simulator training center and for

<PAGE>

         such other uses as may be incidental or necessary thereto (such use
         being hereinafter referred to as the Leased Premises' "Primary
         Intended Use"). Tenant shall not use the Leased Premises or any
         portion thereof for any use inconsistent with the Primary Intended Use
         without the prior written consent of Landlord. Tenant shall not take
         or omit to take any action, the taking or omission of which materially
         impairs the value or the usefulness of the Leased Premises or any part
         thereof for its Primary Intended Use.

                  (b) NECESSARY APPROVALS. Tenant shall proceed with all due
         diligence and exercise commercially reasonable efforts to obtain and
         maintain all Licenses necessary to use and operate, for its Primary
         Intended Use, the Leased Premises and Leased Premises located thereon
         under Legal Requirements and Landlord shall cooperate with respect to
         obtaining any such Licenses, including joining in any application for
         Licenses to the extent required by Legal Requirements.

                  (c) LAWFUL USE. Tenant shall not use, and shall use
         commercially reasonable efforts to prohibit third parties from using,
         the Leased Premises or Tenant's Personal Property for any unlawful
         purpose. Tenant shall not commit, and shall use commercially reasonable
         efforts not to suffer to be committed, any waste on the Leased
         Premises, or in the Leased Premises, nor shall Tenant cause or permit
         any nuisance thereon or therein. Tenant shall not use, and shall use
         commercially reasonable efforts to prohibit third parties from using,
         the Leased Premises or any portion thereof, including Tenant's Personal
         Property, in such a manner as (i) might reasonably tend to impair
         Landlord's (or Tenant's, as the case may be) title thereto or to any
         portion thereof; or (ii) may reasonably make possible a claim or claims
         for adverse usage or adverse possession by the public, or of implied
         dedication of the Leased Premises or any portion thereof. Tenant shall
         not use, and shall use commercially reasonable efforts to prohibit
         third parties from using, the Leased Premises in any manner that will
         cause the cancellation of any insurance policy covering the Leased
         Premises or any part thereof (unless another adequate policy is
         available), nor shall Tenant sell or otherwise provide to customers,
         and shall use commercially reasonable efforts to prohibit third parties
         from keeping, using or selling in or about the Leased Premises, any
         article which may be prohibited by law or by the standard form of fire
         insurance policies, or any other insurance policies required to be
         carried hereunder, or fire underwriter's regulations.

         SECTION 4.02. COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS. Subject
to the provisions of Article VII hereof, Tenant, at its sole expense, shall (a)
comply in all material respects with Legal Requirements and Insurance
Requirements in respect of the use, operation, maintenance, repair, alteration
and restoration of the Leased Premises; and (b) procure, maintain and comply in
all material respects with all appropriate Licenses, permits and other
authorizations and agreements required for any use of the Leased Premises and
Tenant's Personal Property then being made, and for the proper erection,
installation, operation and maintenance of the Leased Premises or any part
thereof.

         SECTION 4.03.   ENVIRONMENTAL MATTERS.

                  (a) RESTRICTIONS ON USE. Tenant shall not store, spill upon,
         dispose of or

<PAGE>

         transfer to or from the Leased Premises any Hazardous Materials,
         except that Tenant may store, transfer and dispose of Hazardous
         Materials in compliance with all Environmental Laws. Tenant promptly
         shall: (i) notify Landlord in writing of any material change in the
         nature or extent of Hazardous Materials at the Leased Premises of
         which Tenant has notice or actual knowledge; (ii) transmit to Landlord
         a copy of any Community Right to Know report which is required to be
         filed by Tenant with respect to the Leased Premises pursuant to Title
         III of the Superfund Amendments and Reauthorization Act of 1986 or any
         other Environmental Law; (iii) transmit to Landlord copies of any
         demand letters, complaints or other documents initiating legal action,
         citations, orders, notices or other material communications asserting
         claims by private parties or Government Agencies with respect to
         Hazardous Materials received by Tenant or its agents or
         representatives (collectively, "Environmental Notice"), which
         Environmental Notice requires a written response or any action to be
         taken and/or if such Environmental Notice gives notice of and/or could
         give rise to a material violation of any Environmental Law and/or
         could give rise to any material cost, expense, loss or damage (an
         "Environmental Obligation"); (iv) subject to Section 4.03(b), use
         commercially reasonable efforts to comply with all Environmental Laws
         relating to the use, maintenance and disposal of Hazardous Materials
         and all orders or directives from any official, court or agency of
         competent jurisdiction relating to the use or maintenance thereof or
         requiring the removal, treatment, containment or other disposition
         thereof; and (v) subject to Section 4.03(b), pay or otherwise dispose
         of any fine, charge or imposition related thereto, unless Tenant shall
         contest the same in good faith and by appropriate proceedings and the
         right to use, and the value of, the Leased Premises are not adversely
         affected thereby in any substantial manner.

                  Tenant shall submit to Landlord on an annual basis copies of
         its approved Hazardous Materials communication plan, OSHA monitoring
         plan, and permits required by the Resource Recovery and Conservation
         Act of 1976, if Tenant is required to prepare, file or obtain any such
         plans or permits.

                  If at any time Hazardous Materials are discovered in violation
         of Environmental Laws on the Leased Premises, subject to Section
         4.03(b), Tenant shall exercise commercially reasonable efforts to take
         all actions and incur any and all expenses (which actions and expenses
         shall be subject to Landlord's prior approval, not to be unreasonably
         withheld, conditioned or delayed, except in Emergency Situations, in
         which case Landlord's prior approval shall not be required) as may be
         necessary or required by any Government Agency to: (i) clean up and
         remove from and about the Leased Premises all Hazardous Materials
         thereon; (ii) contain and prevent any further release or threat of
         release of Hazardous Materials on or about the Leased Premises; and
         (iii) use good faith efforts to eliminate any further release or threat
         of release of Hazardous Materials on or about the Leased Premises.

                  (b) TENANT'S RESPONSIBILITY FOR DISPOSAL. It shall be Tenant's
         responsibility to see that any Hazardous Material which is required to
         be disposed of by Tenant pursuant to Environmental Law or this Section
         4.03 is (i) temporarily stored on the Leased Premises in a manner
         consistent with all Environmental Laws, and (ii) is removed and handled
         by an

<PAGE>

         individual or firm licensed, in the case of Hazardous Material, to
         dispose of such material. If Tenant fails to dispose of such Hazardous
         Material as required by this Lease, Landlord may (but is not required
         to) dispose of or contract for disposal and Tenant shall pay Landlord
         for the cost thereof as Additional Rent hereunder. Nothing contained
         herein shall be deemed to impose an obligation on Landlord to see that
         Tenant properly disposes of Hazardous Material Waste stored or
         generated on the Leased Premises. Landlord's approval of a firm or
         individual selected by Tenant to remove such Hazardous Material shall
         not be deemed to constitute acceptance by Landlord of the adequacy of
         the services of such individual or firm nor shall Landlord be
         responsible for such individual's or firm's performance of such
         services.

                  (c) ENVIRONMENTAL INDEMNIFICATION. Tenant shall protect,
         indemnify and hold harmless Landlord and all Facility Mortgagees, their
         Affiliates and their respective members, shareholders or other equity
         owners, directors, management committee, or similar persons, trustees,
         officers and employees, and any of their respective successors or
         assigns (hereafter the "Landlord Indemnitees" and when referred to
         singly, a "Landlord Indemnitee") for, from and against any and all
         debts, liens, claims, causes of action, administrative orders or
         notices, costs, fines, penalties or expenses (including without
         limitation, attorneys' fees and expenses) imposed upon, incurred by or
         asserted against any Landlord Indemnitee resulting from, either
         directly or indirectly, the presence in the Environment of the Leased
         Premises or any properties surrounding the Leased Premises of any
         Hazardous Materials arising during the Term, except to the extent that
         the same arises by reason of the gross negligence or willful misconduct
         of Landlord or any Landlord Indemnitee. Tenant's duty herein includes,
         but is not limited to, indemnification for costs associated with
         personal injury or property damage claims as a result of the presence
         of Hazardous Materials in, upon or under the soil or ground water of
         the Leased Premises in violation of any Environmental Law.

                  Upon demand, Tenant shall pay to Landlord, as Additional Rent,
         any cost, expense, loss or damage (including without limitation,
         attorneys' fees and costs) incurred by Landlord in asserting any right
         under this Section 4.03(c), including, without limitation, any right of
         indemnity under this Section 4.03(c) or otherwise arising from a
         failure of Tenant to strictly observe and perform the foregoing
         requirements.

                  (d) SURVIVAL. The provisions of this Section 4.03 shall
         survive for a period of six (6) years from the date of expiration or
         sooner termination of this Lease.

                  (e) LANDLORD'S RIGHTS. In addition to the rights heretofore
         reserved by Landlord, at Landlord's option Landlord shall have the
         right to restrain by injunction any violation or attempted violation by
         the Tenant, or its assignees, or agents, of any of the restrictions or
         covenants or agreements as to the use or occupation or the Leased
         Premises as herein provided.

<PAGE>

                                    ARTICLE V

                 MAINTENANCE AND REPAIRS; SURRENDER; ALTERATIONS

         SECTION 5.01.    BUILDING SERVICES.

                  (a) HVAC. Landlord shall furnish central heating and air
         conditioning ("HVAC") in season on business days during hours
         designated by Landlord (the "Regular Building Hours") and at
         temperatures and in amounts as are considered by Landlord, in
         Landlord's sole discretion, to be Building Standard or in compliance
         with governmental regulations. Any request for HVAC service at times
         other than the Regular Building Hours may be furnished, at Landlord's
         election, upon not less than twenty-four (24) hours' advance notice
         from Tenant who shall bear the entire cost thereof at the rate
         established by Landlord. In its sole discretion, Landlord may provide
         additional services not enumerated herein. Failure by Landlord to any
         extent to provide HVAC services or any other services not enumerated,
         or any cessation thereof, shall not render Landlord liable in any
         respect of damages to either person or property, be construed as an
         eviction of Tenant, work an abatement of Rents or relieve Tenant from
         fulfilling any covenant in this Lease. If any of the equipment or
         machinery useful or necessary for provision of utility services or HVAC
         services, and for which Landlord is responsible, breaks down, or for
         any reason ceases to function properly, Landlord shall use reasonable
         diligence to repair the same promptly, but Tenant shall have no claim
         for rebate of Rents or for damages on account of any interruption in
         service occasioned thereby. Landlord reserves the right from time to
         time to make changes in the utilities and services provided by Landlord
         to the Building. If Tenant requires any non-Building Standard HVAC
         services, such as specialty air conditioning systems for special
         equipment requiring special cooling or heating, Tenant shall be
         responsible, subject to the prior written approval of Landlord, for the
         entire cost of installation, maintenance, repair and operation of such
         non-Building Standard service.

                  (b) JANITORIAL SERVICE. Landlord shall furnish Building
         Standard janitorial services to the Leased Premises and public areas of
         the Building five (5) times per week, excluding holidays. Landlord
         shall not provide maid service to kitchens or storage areas included in
         the Leased Premises. Tenant shall procure and pay the entire cost of
         any non-Building Standard janitorial or maid services even though such
         services may be provided in lieu of the Building services described
         herein.

                  (c) ELEVATORS AND SERVICE AREAS. Landlord shall provide
         passenger and freight elevator service for use in common with other
         tenants for access to and from the Leased Premises. From time to time,
         for any reason and without prior Notice to Tenant, Landlord permanently
         or temporarily may limit the number of elevators available to Tenant or
         designate a specific elevator for use by Tenant and Tenant's invitees.
         The freight elevator, if any, shall be available only during the hours
         specified by Landlord.

                  (d) WATER. Landlord shall furnish water to drinking fountains
and lavatories.

                  (e) SECURITY. Landlord shall have the right to provide a
         uniformed security guard or guards to patrol the Complex and to
         maintain and control access to and from the

<PAGE>

         Building and the Leased Premises. Landlord may install an access card
         security system and may install, implement and maintain such other
         security measures, procedures and systems from time to time as
         Landlord, in its sole discretion, shall deem necessary or advisable.
         Landlord shall not be responsible or liable to Tenant or any other
         person for losses to Tenant's property or for personal injury caused
         by criminal acts or entry by unauthorized persons into the Leased
         Premises or the Building, including, without limitation, personal
         property, equipment, money or jewelry lost or stolen from the Leased
         Premises or the Common Tenant Shared Areas, regardless of whether such
         loss occurs when those areas are locked against entry or not. At its
         expense, and with the prior written approval of Landlord, which
         Landlord shall not unreasonably withhold, Tenant may install, at
         Tenant's sole cost and expense, such additional safety and security
         systems or devices as Landlord shall have approved, provided that such
         systems or devices do not interfere with Landlord's rights under this
         Lease and provided that Landlord shall not be denied access to the
         Leased Property thereby. At all times Tenant shall comply with
         Landlord's security regulations for the Complex.

                  (f) CHARGE FOR SERVICES. All costs of Landlord for providing
         the services set forth in this Section shall be subject to the
         Additional Rent provisions of Section 3.01(b) and shall be payable as
         provided therein.

         SECTION 5.02.  MAINTENANCE AND REPAIRS.

                  (a)   LANDLORD REPAIR OBLIGATIONS. Except as expressly
         provided in this Lease, Landlord shall not be required to build or
         rebuild any improvement on the Leased Premises, or to make any
         repairs, replacements, alterations, restorations, or renewals of any
         nature or description to the Leased Premises, whether ordinary or
         extraordinary, structural or nonstructural, foreseen or unforeseen,
         or to make any expenditure whatsoever with respect thereto, or to
         maintain the Leased Premises in any way during the Term hereof.
         Landlord shall have the right to give, record and post, as
         appropriate, notices of non-responsibility under any mechanic's lien
         laws now or hereafter existing. Landlord shall maintain the exterior
         of the Leased Premises (including the repair, maintenance and
         replacement of the roof, gutters, leaders, downspouts, plumbing and
         sewage lines, and electrical conduits and lines), shall maintain the
         Common Tenant Shared Areas (including making all repairs and
         replacements to the sidewalks, curbs and parking areas of the
         Complex), and shall maintain the structural soundness of the
         exterior walls, doors, corridors, windows and other structures and
         equipment serving the Leased Premises (including the HVAC system).
         Landlord shall not be liable to Tenant for any damage or
         inconvenience and Tenant shall not be entitled to any damages nor to
         any abatement or reduction of Rent by reason of any repairs,
         alterations or additions made by Landlord hereunder. All requests
         for repairs or maintenance that are the responsibility of Landlord
         pursuant to any provision hereof must be made in writing to Landlord
         at the address given in Section 18.08.

                  (b)   TENANT'S OBLIGATIONS. Tenant, at its sole cost and
         expense, during the Term hereof, shall maintain the Leased Premises and
         make repairs thereto and replacements thereof so that the Leased
         Premises shall be in as good repair and operating

<PAGE>

         condition as when delivered by Landlord to Tenant on the Commencement
         Date, whether said repairs or replacements be usual or unusual,
         foreseen or unforeseen, ordinary or extraordinary, structural and
         non-structural (whether or not the need for such repairs occurs as a
         result of Tenant's use, any prior use, the elements or the age of the
         Leased Premises or Tenant's Personal Property, or any portion
         thereof), and shall: (i) keep and maintain in good order, condition,
         replacement and repair the Leased Premises and each and every interior
         part thereof; and (ii) keep the alterations and improvements made by
         Tenant in good repair, including structural repairs. Tenant shall not
         take or omit to take any action, the taking or omission of which
         materially impairs or degrades the value or the usefulness of the
         Leased Premises or any part thereof for its Primary Intended Use.
         Tenant's obligations under this Section 5.02 shall be limited, in the
         event of any Casualty or Condemnation involving the Leased Premises,
         as set forth in Articles IX and X. Tenant shall have the non-exclusive
         right to prosecute claims against Landlord's predecessors-in-interest
         (other than any Affiliates of Landlord), contractors, subcontractors
         and suppliers for breach of any representation or warranty or for any
         latent defects in the Leased Premises, unless Landlord is already
         diligently pursuing such claims.

                  Notwithstanding any provision contained herein, Tenant shall
         not be obligated to improve the Leased Premises beyond the condition as
         delivered to Tenant by Landlord at the Commencement Date.

                  (c)   COMPLIANCE WITH ALL LEGAL REQUIREMENTS. Tenant further
         covenants and agrees that it will comply with all Legal Requirements of
         every kind and nature relating to the Leased Premises now or hereafter
         in effect, of the federal, state, municipal or other Government
         Agencies and Board of Fire Insurance Underwriters having jurisdiction,
         whether they be usual or unusual, ordinary or extraordinary, or whether
         they or any of them relate to structural changes or requirements of
         whatever nature, or to changes or requirements incident to and as a
         result of any use and occupation thereof or otherwise, and Tenant will
         pay all costs and expenses incidental to such compliance and will
         indemnify and save harmless Landlord from all expense and/or damages by
         reason of any notices, orders, violations or penalties filed against or
         imposed upon the Leased Premises, or against Landlord because of the
         failure of Tenant to comply with this covenant.

         SECTION 5.03.  TENANT'S PERSONAL PROPERTY. At its expense, Tenant may
(and, as provided hereinbelow, shall) place on the Leased Premises any items of
Tenant's Personal Property, and, subject to the conditions set forth below,
Tenant may remove and replace the same at any time in the ordinary course of
business. Tenant shall provide and maintain throughout the Term all such
Tenant's Personal Property as shall be necessary in order to operate the Leased
Premises in compliance in all material respects with applicable Legal
Requirements and Insurance Requirements and otherwise in accordance with
customary practice in the industry for such Primary Intended Use.

         SECTION 5.04.  SURRENDER.

                  (a)   CONDITION OF LEASED PREMISES UPON SURRENDER. Upon the
         expiration or sooner termination of this Lease, Tenant shall vacate and
         surrender the Leased Premises

<PAGE>

         (and as to any permitted additions to the Leased Premises transfer the
         permitted additions by deed or bill of sale) to Landlord in the
         condition in which the Leased Premises was on the Commencement Date,
         except as repaired, rebuilt, restored, altered or added to as
         permitted or required by the provisions of this Lease, ordinary wear
         and tear and damage by Casualty or Condemnation excepted. Together
         therewith Tenant shall surrender to Landlord any and all records and
         documents related to the Leased Premises (but not, subject to Section
         5.04(b) hereof, documents primarily related to Tenant's business
         operated therein except as provided in Section 5.04(b) herein).

                  (b)   TRANSITION PROCEDURES. Tenant shall cooperate in good
         faith to provide access and information to any prospective purchaser or
         tenant of the Leased Premises that may acquire the Leased Premises or
         lease it upon the expiration or earlier termination of the Term. Upon
         any expiration or earlier termination of the Term, Landlord and Tenant
         shall cooperate in good faith to effect an orderly transition of the
         Leased Premises. Upon any expiration or earlier termination of the
         Term, Tenant promptly shall deliver or make available for inspection
         and copying to Landlord or Landlord's designee, to the extent that
         Landlord has not already received copies thereof, copies of all books
         and records (including computer records) for the Leased Premises kept
         by (or available to) Tenant.

                  (c)   LANDLORD'S CONSENT. No surrender to Landlord of this
         Lease or of the Leased Premises, or any part thereof, or of any
         interest therein, shall be valid or effective unless agreed to and
         accepted in writing by Landlord, and no act or omission by Landlord
         or any representative or agent of Landlord, other than such a
         written acceptance by Landlord, shall constitute an acceptance of
         any such surrender.

         SECTION 5.05.  ALTERATIONS.

                  (a)   TENANT CHANGES. Subject to the limitations set forth
         herein, Tenant, at its sole cost and expense, shall have the right at
         any time and from time to time during the Term of this Lease to make
         changes and alterations to the Leased Premises (individually a "Tenant
         Change" and collectively, "Tenant Changes"), subject, however, in all
         cases, to the following:

                           (i) Landlord's prior written consent shall be
                  required in each instance of any Tenant's Change involving the
                  structure or exterior of any building (which consent shall not
                  be unreasonably withheld; it shall not be unreasonable for
                  Landlord to withhold such consent if the same shall be in
                  violation of any Facility Mortgage or if any Facility
                  Mortgagee shall not give its consent to the same where its
                  consent is required by the terms of such mortgage).

                           (ii) In addition to the consent required under
                  Section 5.05(a)(i) above, any Tenant Change, whether or not
                  structural or exterior, involving an estimated cost of more
                  than $50,000.00 shall require the prior written consent of
                  Landlord and, if applicable, any Facility Mortgagee.

                           (iii) No Tenant Change shall be undertaken until the
                  Tenant shall have

<PAGE>

                  procured and paid for all required permits and authorizations
                  of all municipal departments and governmental subdivisions
                  having jurisdiction; and, at Tenant's expense, Landlord shall
                  join in application for such permits and authorizations
                  whenever such action is necessary.

                           (iv) No Tenant Change shall violate any Legal
                  Requirement or Insurance Requirement applicable to the Leased
                  Premises.

                           (v) Any Tenant Change involving an estimated cost of
                  more than $50,000.00 shall be conducted under the supervision
                  of a licensed architect or engineer selected by Tenant and
                  shall be made in accordance with detailed plans and
                  specifications (the "Plans and Specifications") and cost
                  estimates prepared by such architect or engineer and approved
                  in writing by the Landlord, which approval Landlord agrees not
                  to unreasonably withhold.

                           (vi) Any Tenant Change shall be made promptly and in
                  good workmanlike manner and in compliance with all applicable
                  permits, authorizations, building and zoning laws, and all
                  laws, statutes, ordinances, rules and regulations of all
                  Government Agencies having jurisdiction and in accordance with
                  the orders, rules and regulations of the Board of Fire
                  Insurance Underwriters and any other body hereafter exercising
                  similar functions having or asserting jurisdiction over the
                  Leased Premises.

                           (vii) The cost of any Tenant Change shall be paid in
                  cash or its equivalent by the Tenant, so that the Leased
                  Premises shall at all times be free of liens for labor or
                  materials supplied or claimed to have been supplied to the
                  Leased Premises.

                           (viii) Any such Tenant Change shall immediately be
                  and become the property of the Landlord.

                           (ix) Tenant shall carry all necessary worker's
                  compensation insurance and shall furnish Landlord with
                  evidence of any and all such coverage.

                           (x) No Tenant Change shall tie-in or connect the
                  Leased Premises with any property outside the Leased Premises
                  without the prior written consent of the Landlord.

                           (xi) No Tenant Change shall reduce the value of the
                  Leased Premises or impair the structural integrity of any
                  building comprising a part of the Leased Premises, it being
                  understood and agreed that the fair market value of the Leased
                  Premises including such Tenant Change shall be at least equal
                  to or greater than the fair market value of the Leased
                  Premises prior to such Tenant Change.

                  (b)   RESTRICTIONS. Notwithstanding anything to the contrary
         contained in this Lease, Tenant shall not, without Landlord's prior
         written approval, make any alteration or change to the Leased Premises
         which would decrease the size or decrease the square foot

<PAGE>

         floor area of any building comprising a part of the Leased Premises.

                  (c)   COST OF TENANT CHANGES. It is understood and agreed by
         and between Landlord and Tenant that the cost of all such Tenant
         Changes shall be paid solely by Tenant. Under no circumstances shall
         the cost of any such Tenant Change be deducted from the Minimum Rent or
         Additional Rent due hereunder.

                                   ARTICLE VI

                                      LIENS

         SECTION 6.01. COVENANT AGAINST LIENS. Tenant agrees that it will not
create, permit or suffer the imposition of any Lien on the Leased Premises or
any part thereof or any interest therein other than: (a) Permitted Liens; (b)
liens for Real Estate Taxes not yet due and payable; (c) subleases permitted by
Article XIII; (d) liens for Impositions or for sums arising from the application
of Legal Requirements so long as the same (i) are not yet delinquent, or (ii)
are being contested in accordance with Article VII; (e) liens of mechanics,
laborers, materialmen, suppliers or vendors incurred in the ordinary course of
business that are not yet delinquent or are for sums that are being contested in
accordance with Article VII; and (f) any Facility Mortgage or other liens which
are permitted pursuant to the provisions of Article XVII. If, because of any act
or omission (or alleged act or omission) of Tenant, any Lien, at any time shall
be filed against the Leased Premises, or any improvements thereon, or against
Landlord or any interest in the Leased Premises (whether or not such Lien is
valid or enforceable as such), by reason of, or arising out of any labor or
materials furnished or alleged to have been furnished or to be furnished to or
for Tenant at the Leased Premises by reason of any construction, alterations, or
repair of all or any part thereof, or for any other reason whatsoever, Tenant
promptly, at its own cost and expense, shall cause same to be canceled and
discharged of record by bond or otherwise within ten (10) days after notice to
Tenant of the filing thereof and Tenant shall defend on behalf of Landlord, but
at Tenant's sole cost and expense, any action, suit or proceeding which may be
brought thereon or for the enforcement of such Lien, or in the event Landlord
elects to defend any such action, suit, or proceeding, by counsel or legal
representatives of its own selection, Tenant shall pay all costs thereof,
including, but not limited to, attorneys' fees. Tenant shall pay and shall
indemnify and save harmless Landlord against and from all costs, damages,
liabilities, suits, penalties, claims and demands, including reasonable counsel
fees resulting therefrom and from any action, suit or proceeding which may be
brought thereon or for the enforcement of such lien, charge, order, judgment or
encumbrance. Tenant further agrees to pay any damages and to discharge any
judgments entered therein and to save Landlord harmless from any claims or
damages resulting therefrom. If Tenant fails to comply with the foregoing
provisions, Landlord shall have the option of discharging or bonding any such
Lien and Tenant agrees to reimburse Landlord for all costs, expenses and other
sums of money in connection therewith (as Additional Rent) with interest at the
maximum rate allowed by law promptly upon demand. All materialmen, contractors,
artisans, mechanics, laborers and any other persons now or hereafter contracting
with Tenant for the furnishing of any labor, services, materials, supplies or
equipment with respect to any portion of the Leased Premises, at any time from
the date hereof until the end of the Lease Term, are hereby charged with notice
that they must look exclusively to Tenant, and not to Landlord, to obtain
payment for same.

<PAGE>

                                   ARTICLE VII

                               PERMITTED CONTESTS

         SECTION 7.01.  PERMITTED CONTESTS. Tenant shall have the right to
contest the amount or validity of any Imposition, Legal Requirement, Insurance
Requirement, Environmental Obligation, lien, attachment, levy, encumbrance,
charge or claim (collectively, "Claims") as to the Leased Premises, by
appropriate legal proceedings, conducted in good faith and with due diligence;
PROVIDED, HOWEVER, that: (a) the foregoing shall in no way be construed as
relieving, modifying or extending any obligation of Tenant provided for in this
Lease to pay any Claims as finally determined; (b) such contest, or the
maintenance of any Lien during such contest, shall not cause Landlord or Tenant
to be in default under any Facility Mortgage or other agreement encumbering the
Leased Premises or any interest therein or result in a Lien attaching to the
Leased Premises unless Tenant shall within ten (10) days thereafter, have such
Lien released of record or deliver to Landlord a bond or other security
reasonably satisfactory to Landlord, which shall be in form, amount, and issued
by a surety reasonably satisfactory to Landlord, indemnifying Landlord against
all costs and liabilities resulting from such Lien and the foreclosure or
attempted foreclosure thereof; (c) no part of the Leased Premises nor any Rent
therefrom shall be in any immediate danger of sale, forfeiture, attachment or
loss; and (d) Tenant shall indemnify and hold harmless Landlord from and against
any cost, claim, damage, penalty or reasonable expense, including reasonable
attorneys' fees, incurred by Landlord in connection therewith or as a result
thereof. Provided that there is no Default or Event of Default hereunder, Tenant
shall be entitled to any refund of any Claims and such charges and penalties or
interest thereon which have been paid by Tenant or paid by Landlord and for
which Landlord has been fully reimbursed by Tenant. If Tenant shall fail (i) to
pay any Claims when finally determined, (ii) to provide reasonable security
therefor, or (iii) to prosecute any such contest diligently and in good faith,
Landlord may, upon reasonable notice to Tenant (which notice may be oral and
shall not be required if Landlord shall reasonably determine that the same is
not practicable), pay such charges, together with interest and penalties due
with respect thereto, and Tenant shall reimburse Landlord therefor, upon demand,
as Additional Rent. Landlord agrees to join in any such proceedings if required
legally to prosecute such contest; PROVIDED, HOWEVER, that Landlord shall not
thereby be subjected to any liability or cost therefor (including, without
limitation, for the payment of any costs or expenses in connection therewith).

                                  ARTICLE VIII

                          INSURANCE AND INDEMNIFICATION

         SECTION 8.01.  LANDLORD'S INSURANCE. At all times during the Term,
Landlord shall insure the Building against all risk of direct physical loss in
an amount and with such deductibles as Landlord considers appropriate; PROVIDED
that such insurance must be in an amount equal to at least the Replacement Cost
of the Building; PROVIDED FURTHER that Landlord shall not be obligated in any
way or manner to insure any of Tenant's Personal Property upon or within the
Leased Premises, any fixtures installed or paid for by Tenant upon or within the
Leased Premises or any

<PAGE>

improvements which Tenant may construct on the Leased Premises. Tenant
acknowledges that, except as otherwise expressly set forth in this Lease, it has
no right to receive any proceeds from any such insurance policies carried by
Landlord, and that such insurance will be for the sole benefit of Landlord, with
no coverage for Tenant for any risk insured against.

         SECTION 8.02.  TENANT'S GENERAL INSURANCE REQUIREMENTS. At all times
during the Term and at any other time Tenant shall be in possession of the
Leased Premises, the Leased Premises shall be insured against the risks and in
the amounts described below. This insurance shall be written by companies
authorized to issue insurance in the State of Colorado. The policies must name
Tenant as the insured and Landlord and any Facility Mortgagee as additional
named insureds and/or as loss payees. Losses shall be payable to Landlord or
Tenant as provided in Article IX of this Lease. Any loss adjustment for
coverages insuring both parties shall require the written consent of Landlord
and Tenant, each acting reasonably and in good faith. The policies on the Leased
Premises (including the Leased Premises and Fixtures owned by Landlord), and on
Tenant's Personal Property, shall, subject to Section 8.02(f), be primary,
non-contributory, satisfy the requirements of any ground lease, mortgage,
security agreement or other financing then affecting the Leased Premises, and at
a minimum shall include:

                  (a) "All Risk" property insurance, including insurance against
         loss or damage by fire, vandalism and malicious mischief, and all
         physical loss perils insurance for the full insurable value of Tenant's
         Personal Property upon or within the Leased Premises, any fixtures
         installed or paid for by Tenant upon or within the Leased Premises or
         any improvements which Tenant may construct on the Leased Premises;

                  (b) loss of rent insurance (on the "Special Form") in the
         minimum amount of one (1) year of Minimum Rent and Additional Rent
         (based on the last twelve (12) months in which the Leased Premises were
         operated for their Primary Intended Use) for the benefit of Landlord,
         and business interruption insurance on the "Special Form" in the amount
         of one (1) year of projected net profit of Tenant from the Leased
         Premises (exclusive of collection costs and any operating expenses that
         are considered by the applicable insurance company to be non-continuing
         as a result of any Casualty), for the benefit of Tenant;

                  (c) comprehensive general liability insurance, including
         bodily injury and property damage (including broad form contractual
         liability, fire legal liability and completed operations coverage)
         having policy limits as to claims with respect to the Leased Premises
         of at least ONE MILLION DOLLARS ($1,000,000) per occurrence, TWO
         MILLION DOLLARS ($2,000,000) aggregate per location; PROVIDED, HOWEVER,
         that such limits shall be modified to conform to any required
         underlying statutory coverage, and umbrella coverage shall be provided
         having limits of TWENTY MILLION DOLLARS ($20,000,000) per occurrence
         and in the aggregate, and attaching in excess of policy limits as to
         general liability, where applicable, and employer's liability coverage,
         covering each of the following: bodily injury, death, or property
         damage liability per occurrence, personal injury, general aggregate,
         products and completed operations, and "all risk legal liability"
         (including liquor law or "dram shop" liability, if liquor or alcoholic
         beverages are served

<PAGE>

on the Leased Premises) with respect to Landlord and Tenant;

                  (d)   insurance coverage for claims by employees of Tenant for
         wrongful termination, discrimination or sexual harassment;

                  (e)   worker's compensation insurance coverage for all persons
         employed by Tenant directly, as borrowed employees, or as statutory
         employees, with statutory limits and otherwise with limits of and
         provisions in accordance with Legal Requirements, and employer's
         liability insurance having a limit of $500,000; and

                  (f)   such additional insurance and endorsements (and/or
         increased amounts of insurance hereinabove required) as may be
         reasonably required, from time to time, by Landlord, any Facility
         Mortgagee or any rating agency, or any existing or future ground
         lessor.

         SECTION 8.03.  RESPONSIBILITY FOR TENANT'S INSURANCE. Tenant shall
obtain or cause to be obtained the insurance and pay the premiums for the
coverages described in Section 8.02. Tenant also shall be responsible for any
and all deductibles and self-insured retentions in connection with such
coverages.

         SECTION 8.04.  WAIVER OF SUBROGATION. Landlord and Tenant agree that
(insofar as and to the extent that such agreement may be effective without
invalidating or making it impossible to secure insurance coverage from
responsible insurance companies doing business in Colorado) with respect to any
loss covered by insurance then being carried by Landlord or Tenant,
respectively, the party carrying such insurance and suffering said loss releases
the other of and from any and all claims with respect to such loss; and they
further agree that their respective insurance companies shall have no right of
subrogation against the other on account thereof, even though extra premium may
result therefrom.

         SECTION 8.05.  SATISFACTORY FORMS All insurance policies and
endorsements required of Tenant pursuant to this Article VIII shall be fully
paid for, nonassessable and, except for umbrella coverage, shall contain such
provisions and expiration dates and be in such form and amounts and issued by
insurance carriers authorized to do business in Colorado, having a general
policy holder's rating of "A/VI" in Best's latest rating guide (or such other
higher rating or such other customarily used rating agency as may be required by
any Facility Mortgagee), and otherwise satisfactory to Landlord. Without
limiting the foregoing, such policies shall include only deductibles reasonably
approved by Landlord. Tenant shall deliver policies or certificates thereof to
Landlord and any Facility Mortgagee prior to their effective date (and, with
respect to any renewal policy, thirty (30) days prior to the expiration of the
existing policy), and, in the event Tenant shall fail to effect such insurance
as herein required, to pay the premiums therefor or to deliver such policies or
certificates to Landlord or any Facility Mortgagee at the times required,
Landlord shall have the right, but not the obligation, after ten (10) days'
written notice to Tenant, to acquire such insurance and pay the premiums
therefor, which amounts shall be paid by Tenant as Additional Rent. All such
policies shall provide Landlord and any Facility Mortgagee thirty (30) days'
prior written notice of any material modification, expiration or cancellation of
such policy.

<PAGE>

         SECTION 8.06.  BLANKET POLICY. Notwithstanding anything to the contrary
contained in this Article VIII, Tenant's obligations to maintain the insurance
herein required may be brought within the coverage of a so-called blanket policy
or policies of insurance, provided that, except as otherwise approved by
Landlord in writing, (a) the coverage thereby afforded will not be reduced or
diminished from that which would exist under a separate policy meeting all other
requirements of this Lease, and (b) the requirements of this Article VIII are
otherwise satisfied.

         SECTION 8.07.  GENERAL INDEMNIFICATION OF LANDLORD BY TENANT.

                  (a) NON-LIABILITY. Landlord shall not be responsible or liable
         to Tenant or any of its employees, guests, licensees or invitees, and
         Tenant, for itself, its employees, guests, licensees or invitees,
         hereby waives all claims against Landlord, for any loss, injury or
         damage to any person or property in or about the Leased Premises on any
         space adjacent to or adjoining the Leased Premises, or any part thereof
         by and from any cause whatsoever, including, without limiting the
         generality of the foregoing, the following: (a) those caused by snow,
         ice or water leakage of any character from the roof, walls, pipes,
         basement or other portion of the Leased Premises; (b) those caused by
         steam, gas, fire, oil, electricity or any cause whatsoever in, on or
         about the Leased Premises; or (c) those caused by the acts of Tenant,
         occupants, invitees, licensees and/or guests of the Leased Premises.

                  (b) INDEMNIFICATION. Except as otherwise provided in Sections
         4.03(c) (Environmental Indemnification), 5.01(b) (Legal Requirement
         Compliance), 6.01 (Liens) and 7.01 (Permitted Contest), Tenant shall
         protect, indemnify and hold harmless Landlord and each Landlord
         Indemnitee from and against all liabilities, obligations, claims,
         damages, penalties, causes of action, costs and reasonable expenses
         (including, without limitation, reasonable attorneys' fees), to the
         maximum extent permitted by law, and notwithstanding the existence of
         any insurance provided for herein, but subject to Section 8.04 hereof,
         and without regard to the policy limits of any such insurance, imposed
         upon or incurred by or asserted against Landlord or any Landlord
         Indemnitee by reason of:

                           (i)   any breach, violation or non-performance by
                  Tenant or any Person claiming under Tenant or the agents,
                  employees, patients, guests, invitees or licensees of Tenant
                  or of any such person of any term, obligation or promise under
                  this Lease or any law, ordinance or governmental requirement
                  of any kind arising prior to and during the Term;

                           (ii)  the use or occupancy or manner of use or
                  occupancy of the Leased Premises by Tenant or any Person
                  claiming under Tenant, or their respective agents;

                           (iii) any activity, work or thing done, permitted or
                  suffered by Tenant or any Person claiming under Tenant, or
                  their respective agents, in or about the Leased Premises;

<PAGE>

                           (iv)  liabilities under any leases, contracts,
                  concession agreements or other agreements entered into by
                  Tenant or any Person claiming under Tenant, or their
                  respective agents, with respect to the Leased Premises;

                           (v)   the negligence or willful misconduct of Tenant
                  or any Person claiming under Tenant, or their respective
                  agents prior to and during the Term, including any such
                  negligence or willful misconduct giving rise to any employee
                  claims by employees of Tenant or such Persons for wrongful
                  termination, discrimination or sexual harassment;

                           (vi)  any accident, injury to or death of persons or
                  loss of or damage to property occurring on or about the Leased
                  Premises or adjoining sidewalks, steps, railings and
                  approaches appurtenant thereto or rights of way by any Person
                  whatsoever prior to and during the Term, including, without
                  limitation, any claims under liquor liability, "dram shop" or
                  similar laws;

                           (vii)  any litigation, proceeding (other than
                  Condemnation proceedings) or claim by Government Agencies or
                  other third parties to which Landlord or any Landlord
                  Indemnitee is made a party or participant or which is
                  otherwise asserted against Landlord or any Landlord
                  Indemnitee, relating to the Leased Premises or Tenant's
                  Personal Property, the business conducted in or on the Leased
                  Premises, or any use, misuse, non-use, condition, management,
                  maintenance, or repair thereof, the occurrence giving rise to
                  which litigation, proceeding or claim occurs prior to and
                  during the Term;

                           (viii) any Impositions, Real Estate Taxes, Utility
                  Charges, Insurance Requirements and other Additional Rent that
                  are the obligations of Tenant pursuant to the applicable
                  provisions of this Lease; and

                           (ix)   any act or omission of Tenant, or any
                  concessionaire or assignee or its licensees, invitees, guests,
                  patients, servants, agents, employees or contractors prior to
                  and during the Term.

         Tenant shall pay all amounts payable under this Section 8.07 within
seven (7) Business Days after demand therefor and, if not timely paid, such
amounts shall bear interest at eighteen percent (18%) per annum from the date of
determination to the date of payment. Tenant, at its expense, shall contest,
resist and defend any such claim, action or proceeding asserted or instituted
against Landlord and/or any Landlord Indemnitee or may compromise or otherwise
dispose of the same, with Landlord's and/or Landlord Indemnitee's prior written
consent. The obligations of Tenant under this Section 8.07 are in addition to
the obligations set forth in Sections 4.03(c), 5.01(b), 6.01 and 7.01, and shall
survive for a period of six (6) years from the date of termination or expiration
of this Lease.

         SECTION 8.08. INDEPENDENT CONTRACTORS. Except as otherwise approved by
Landlord

<PAGE>

in writing, Tenant shall cause any person or company entering upon the Leased
Premises to provide any installation, construction or repair (each a
"Contractor"), (a) to have in full force and effect Contractor's Liability
Coverage (hereafter defined) effective throughout the period said Contractor is
upon the Leased Premises and for one year thereafter, and (b) to deliver within
five (5) Business Days of Landlord's request a certificate ("Contractor's
Insurance Certificate") evidencing compliance with this Section 8.08 prior to
the Contractor's first entry upon the Leased Premises. As used herein, the term
"Contractor's Liability Coverage" means a comprehensive general liability
insurance policy meeting the requirements of this Article VIII (as if required
to be provided by Tenant) except the minimum policy limit shall be $1,000,000
per occurrence and $3,000,000 in the aggregate. Within thirty (30) days after
delivery of Landlord's written request, Tenant shall deliver copies of all
Contractor's Insurance Certificates to Landlord. Additionally, Tenant shall
require any Contractor who is also an employer as defined by the Workers'
Compensation Act of Colorado (C.R.S. 8-40-101, ET SEQ.) to have workers'
compensation insurance for such entity and the entity's employees with limits
and provisions in accordance with Legal Requirements.

                                   ARTICLE IX

                                    CASUALTY

         SECTION 9.01.  RECONSTRUCTION IN THE EVENT OF CASUALTY.

                  (a)   LEASED PREMISES RENDERED UNSUITABLE FOR PRIMARY INTENDED
         USE. If during the Term, the Leased Premises are totally or partially
         destroyed by any loss, damage or destruction to the Leased Premises, or
         any portion thereof (a "Casualty") and the Leased Premises are thereby
         rendered Unsuitable for their Primary Intended Use for a period of
         thirty (30) or more days, as reasonably determined by Landlord, and
         insurance proceeds are available for restoration or repair, Landlord
         shall give Tenant written Notice of its election of one of the
         following options:

                        (i)   This Lease shall terminate as of the date of the
                  Casualty and neither Landlord nor Tenant shall have any
                  further liability hereunder except for any liabilities which
                  have arisen or occurred prior to such termination, and those
                  which expressly survive termination of this Lease, and
                  Landlord shall be entitled to retain all Casualty insurance
                  proceeds (except for any amount thereof paid with respect to
                  Tenant's Personal Property); or

                        (ii)  Landlord promptly shall restore the Leased
                  Premises, utilizing the insurance proceeds, and this Lease
                  shall not terminate.

                  For purposes of this Section 9.01(a), the term "Casualty"
         shall be deemed to include a final unappealable determination by
         applicable federal or Colorado authorities of the revocation or
         limitation of any material License, permit, certification, or approval
         required for the material lawful operation of the Leased Premises in
         accordance with its Primary Intended Use or the loss or limitation of
         any material License, permit, certification, or approval under any
         other circumstances under which Tenant is required to

<PAGE>

         cease its operation of the Leased Premises in accordance with their
         Primary Intended Use at the time of such loss or limitation, which
         revocation, limitation or loss is not caused by actions of Tenant, its
         agents, employees, patients, guests, invitees and/or licensees, or
         which is not beyond the reasonable control of Tenant.

                  (b) LEASED PREMISES NOT RENDERED UNSUITABLE FOR PRIMARY
         INTENDED USE. If during the Term, the Leased Premises are partially
         destroyed by a Casualty, but the Leased Premises are not thereby
         rendered Unsuitable for Primary Intended Use for a period of thirty
         (30) or more days, as reasonably determined by Landlord, Landlord shall
         proceed, to the extent of insurance proceeds actually received by
         Landlord after the exercise by any Facility Mortgagee of an option (if
         any) to apply proceeds against Landlord's debt to such Facility
         Mortgagee, with reasonable diligence to rebuild or repair the Building
         or other improvements to substantially the same condition in which they
         existed prior to the Casualty.

         SECTION 9.02. TENANT'S PROPERTY INSURANCE. All insurance proceeds
payable by reason of any loss of or damage to any of Tenant's Personal Property
shall be paid to Tenant.

         SECTION 9.03. ABATEMENT OF RENT. Any damage or destruction due to
Casualty notwithstanding, this Lease shall remain in full force and effect
(except as otherwise expressly provided in this Article IX) and Tenant's
obligation to pay Rents required by this Lease shall remain unabated by any
Casualty which: (a) is caused by the negligence or misconduct of Tenant, its
agents, employees, patients, guests, invitees or licensees; (b) does not result
in a reduction of Gross Revenues; or (c) does not result in the payment of loss
of rent insurance proceeds to Landlord pursuant to Section 8.02(b) above. If the
Leased Premises are to be rebuilt or repaired and are rendered Unsuitable for
Primary Intended Use in whole or in part following a Casualty (excluding those
described in the preceding sentence), the Minimum Rent payable under this Lease
during the period for which the Leased Premises are Unsuitable for Primary
Intended Use shall be reduced to an amount determined by multiplying the Minimum
Rent that would otherwise be payable but for this provision by the ratio that
the Rentable Area of the portion of the Leased Premises not rendered Unsuitable
for Primary Intended Use bears to the total rental Area of the Leased Premises
prior to the Casualty. Landlord's obligation to rebuild or restore shall be
limited to restoring the Leased Premises to substantially the condition in which
the same existed prior to the Casualty, exclusive of improvements which Tenant
may construct on the Leased Premises.

                                    ARTICLE X

                                  CONDEMNATION

         SECTION 10.01. TOTAL CONDEMNATION, ETC. If either (a) the whole of the
Leased Premises shall be taken by Condemnation or (b) a Condemnation of less
than the whole of the Leased Premises renders the Leased Premises Unsuitable for
Primary Intended Use, as reasonably determined by Landlord, Landlord shall give
Tenant Notice that the Leased Premises will be Unsuitable for Primary Intended
Use and this Lease shall terminate as of the day of the Condemnation and neither
Landlord nor Tenant shall have any further liability hereunder except for any
liabilities which have arisen or occurred prior to such termination, and those
which

<PAGE>

expressly survive termination of this Lease, and Tenant and Landlord shall seek
the Award for their respective interests in the Leased Premises as provided in
Section 10.04.

         SECTION 10.02. PARTIAL CONDEMNATION. In the event of a Condemnation
of less than the whole of the Leased Premises such that the Leased Premises
is still suitable for its Primary Intended Use, as reasonably determined by
Landlord, to the extent that the Award is sufficient therefor, Landlord shall
proceed with reasonable diligence to restore the untaken portion of the
Leased Premises so that the Leased Premises shall constitute a complete
architectural unit of the same general character and condition (as nearly as
may be possible under the circumstances) as the Leased Premises existing
immediately prior to such Condemnation, in full compliance with all Legal
Requirements. Landlord may, at its option, condition its restoration on the
absence of any continuing Event of Default and the approval by all Government
Agencies and other regulatory bodies whose approval is required. Landlord's
obligation under this Section 10.02 to restore the Leased Premises shall be
subject to (i) the collection of the Award by Landlord and (ii) the
satisfaction of any applicable requirements of any Facility Mortgage, and the
release of such Award by any Facility Mortgagee. If Landlord has not received
the Award, or the Award is insufficient to restore the untaken portion of the
Leased Premises as provided above, then Landlord, in its sole discretion,
shall have the right to terminate this Lease and neither Landlord nor Tenant
shall have any further liability hereunder, except for any liabilities which
have arisen or occurred prior to such termination and those which expressly
survive termination of this Lease, and Landlord shall be entitled to retain
the entire Award; provided that Tenant shall be permitted to seek a separate
award for the value of Tenant's Personal Property that was taken in such
Condemnation.

         SECTION 10.03. ABATEMENT OF RENT. In the event of a partial
Condemnation as described in Section 10.02 which does not result in a
termination of this Lease by Landlord, the Minimum Rent payable under this
Lease as of the day of the Condemnation shall be reduced to an amount
determined by multiplying the Minimum Rent that would otherwise be payable
but for this provision by the ratio that the Rentable Area of the portion of
the Leased Premises not taken by Condemnation bears to the total rental Area
of the Leased Premises prior to the Condemnation.

         SECTION 10.04. ALLOCATION OF AWARD. The total Award shall be solely
the property of and payable to Landlord; PROVIDED, HOWEVER, that any portion
of the Award made for the taking of Tenant's leasehold interest in the Leased
Premises (valued without regard to any right of termination in Landlord that
otherwise exists under this Article X), loss of business during the remainder
of the Term (determined without regard to any provision for termination that
might otherwise arise under this Article X), the taking of Tenant's Personal
Property or Tenant's removal and relocation expenses shall be the sole
property of and payable to Tenant (subject to the provisions of Section
10.02). Subject to the rights of any Facility Mortgagee under any Facility
Mortgage, in any Condemnation proceedings, Landlord and Tenant shall each
seek its own Award in conformity herewith, at its own expense.

<PAGE>

                                   ARTICLE XI

                            TENANT DEFAULTS; REMEDIES

         SECTION 11.01. DEFAULT. The occurrence of any one or more of the
following events shall constitute an "Event of Default" hereunder:

                  (a)  Tenant fails (i) to make any payment of the Minimum Rent
         payable hereunder when due, or (ii) subject to the right to contest
         same pursuant to Article VII hereof, to make any required payments of
         Additional Rent within three (3) Business Days after receipt of Notice
         thereof from Landlord.

                  (b)  Tenant fails to maintain the insurance coverages that it
         is required to maintain under Article VIII.

                  (c)  Except as otherwise expressly provided herein, Tenant
         defaults in the due observance or performance of any of the terms,
         covenants or agreements contained herein to be performed or observed by
         it (other than as specified in clauses (a) and (b) above), and, in
         either case, such default continues for a period of thirty (30) days
         after Notice thereof from Landlord to Tenant; PROVIDED, HOWEVER, that
         if such default is curable but such cure cannot be accomplished with
         due diligence within such period of time and if, in addition, Tenant
         commences to cure such default within thirty (30) days after Notice
         thereof from Landlord and thereafter prosecutes the curing of such
         default with all due diligence, such period of time shall be extended
         to such period of time (not to exceed one hundred twenty (120) days in
         the aggregate, subject to Unavoidable Delay) as may be necessary to
         cure such default.

                  (d)  A default or breach of any other agreements between
         Tenant and/or its Affiliates on the one hand, and Landlord and/or
         its Affiliates on the other hand, and there is no cure of the same
         within the applicable grace or cure period.

                  (e)  Tenant generally is not paying its debts as they become
         due, or Tenant makes a general assignment for the benefit of creditors.

                  (f)  Any petition is filed by or against Tenant under the
         federal bankruptcy laws, or any other proceeding is instituted by or
         against Tenant seeking to adjudicate it bankrupt or insolvent, or
         seeking liquidation, reorganization, arrangement, adjustment or
         composition of it or its debts under any law relating to bankruptcy,
         insolvency or reorganization or relief of debtors, or seeking the entry
         of an order for relief or the appointment of a receiver, trustee,
         custodian or other similar official for Tenant or for any substantial
         part of the property of Tenant, and, in the case of any involuntary
         petition filed or proceeding instituted against Tenant only, such
         proceeding is not dismissed within sixty (60) days after institution
         thereof, or Tenant takes any action to authorize or effect any of the
         actions set forth above in this paragraph.

                  (g)  Tenant causes or institutes any proceeding for its
         dissolution or termination.

                  (h)  Tenant ceases operation of the Center in the Leased
         Premises for its Primary Intended Use for a period in excess of thirty
         (30) consecutive days, except as a

<PAGE>

         result of a Casualty, other Emergency Situations, the matters set
         forth in Section 18.15, or partial or complete Condemnation of the
         Leased Premises or of the immediate surroundings so as to prohibit
         reasonable access by customers of the Center, and does not commence
         operation of the Leased Premises within ten (10) days after receipt of
         Notice thereof from Landlord. [WANT?]

                  (i)  The estate or interest of Tenant in the Leased
         Premises or any part thereof is levied upon or attached in any
         proceeding and the same is not vacated or discharged within the
         later of (i) sixty (60) days after commencement thereof, unless the
         amount in dispute is less than $10,000.00, in which case Tenant
         shall give Notice to Landlord of the dispute but Tenant may defend
         in any suitable way, and (ii) thirty (30) days after receipt by
         Tenant of Notice thereof from Landlord (unless Tenant shall be
         contesting such lien or attachment in good faith in accordance with
         Article VII).

                  (j)  If any representation or warranty of Tenant set forth
         herein is false in any material respect, or if Tenant renders any false
         statement or account.

         In any such event, Landlord, in addition to all other remedies
available to it, may terminate this Lease by giving Notice thereof to Tenant,
and upon the expiration of the time, if any, fixed in such Notice, this Lease
shall terminate and all rights of Tenant under this Lease shall cease.
Notwithstanding any provision contained herein, Landlord shall have, and may
exercise in its sole and absolute discretion, all, or none of the, rights and
remedies available at law and in equity to Landlord as a result of Tenant's
breach of this Lease.

         Upon the occurrence of an Event of Default, Landlord may, in
addition to any other remedies provided herein, enter upon the Leased
Premises and take possession thereof, and either (i) retain any and all of
Tenant's Personal Property on the Leased Premises, without liability for
trespass or conversion (Tenant hereby waiving any right to Notice or hearing
prior to such taking of possession by Landlord) or (ii) sell the same at
public or private sale, after giving Tenant reasonable Notice of the time and
place of any public or private sale, at which sale Landlord or its assigns
may purchase all or any portion of Tenant's Personal Property. Unless
otherwise provided by law and without intending to exclude any other manner
of giving Tenant reasonable notice, the requirement of reasonable Notice
shall be met if such Notice is given at least ten (10) Business Days before
the date of sale. The proceeds from any such disposition, less all expenses
incurred in connection with the taking of possession, holding and selling of
such property (including reasonable attorneys' fees) shall belong to
Landlord. Any surplus shall be paid to Tenant or as otherwise required by
law, and Tenant shall pay any deficiency to Landlord, as Additional Rent,
upon demand. [NEED TO EXCLUDE THE SIMULATOR?]

         SECTION 11.02. REMEDIES. None of (a) the termination of this Lease
pursuant to Section 11.01, (b) the repossession of the Leased Premises, (c)
the failure of Landlord to re-let the Leased Premises, or (d) the re-letting
of the Leased Premises, shall relieve Tenant of its liability and obligations
hereunder, all of which shall survive any such termination, repossession or
re-letting. In the event of any such termination, Tenant shall forthwith pay
to Landlord all Rents due and payable with respect to the Leased Premises
through and including the date of such termination. Thereafter, Tenant, until
the earlier of what would have been the end of the Term of

<PAGE>

this Lease in the absence of such termination, and whether or not the Leased
Premises or any portion thereof shall have been re-let, shall be liable to
Landlord for, and shall pay to Landlord, as current damages, the Rent and
other charges which would be payable hereunder for the remainder of the Term
had such termination not occurred, less the net proceeds, if any, of any
re-letting or other operation by or on behalf of Landlord of the Leased
Premises, after deducting all expenses in connection with such re-letting,
including, without limitation, all repossession costs, brokerage commissions,
legal expenses, attorneys' fees, advertising, expenses of employees,
alteration costs and expenses of preparation for such re-letting. Landlord
may bring action(s) or proceeding(s) for the recovery of any deficits
remaining unpaid, without being obliged to await the end of the Lease Term
for a final determination of Tenant's account, and the commencement or
maintenance of any one or more actions shall not bar Landlord from bringing
other or subsequent actions for further accruals of Minimum Rent, Additional
Rent or other charges or moneys due from Tenant to Landlord under this Lease
pursuant to the provisions of this Section. Tenant shall pay such current
damages to Landlord monthly on the days on which the Minimum Rent would have
been payable hereunder if this Lease had not been so terminated.

         In case of any Event of Default, re-entry, expiration and
dispossession by summary proceedings or otherwise, Landlord may (a) re-let
the Leased Premises or any part or parts thereof, either in the name of
Landlord or otherwise, for a term or terms which may, at Landlord's option,
be equal to, less than or exceed the period which would otherwise have
constituted the balance of the Term and may grant concessions or free rent to
the extent that Landlord considers advisable and necessary to re-let the
same, and (b) make such reasonable alterations, repairs and decorations in
the Leased Premises or any portion thereof as Landlord, in its sole and
absolute discretion, considers advisable and necessary for the purpose of
re-letting the Leased Premises; and the making of such alterations, repairs
and decorations shall not operate or be construed to release Tenant from
liability hereunder as aforesaid. Landlord shall in no event be liable in any
way whatsoever for any failure to re-let all or any portion of the Leased
Premises, or, in the event that the Leased Premises is re-let, for failure to
collect the rent under such re-letting; PROVIDED, HOWEVER, that Landlord
covenants and agrees in the event of any termination of this Lease as a
result of an Event of Default, to use commercially reasonable efforts to
mitigate its damages. To the maximum extent permitted by law, Tenant hereby
expressly waives any and all rights of redemption granted under any present
or future laws in the event of Tenant being evicted or dispossessed, or in
the event of Landlord obtaining possession of the Leased Premises, by reason
of the occurrence and during the continuation of an Event of Default
hereunder.

         Under any of the circumstances heretofore mentioned in which Landlord
shall have the right to hold Tenant liable under this Lease for the payment of
any of the Rents, or any balance then remaining, Landlord shall have the
election in lieu of holding Tenant so liable, forthwith to recover against
Tenant, as damages for loss of the bargain and not as a penalty, an aggregate
sum which, at the time of such termination of this Lease represents the then
present worth discounted at the prime rate of interest in effect as of said date
as said rate is set by Norwest Bank Colorado, N.A., or its successors or
assigns, of the excess, if any, of the aggregate of the Rents payable by Tenant
hereunder that would have accrued for the balance of the Term of the Lease over
the aggregate fair rent value of the Leased Premises for the balance of such
Term. Nothing herein contained, however, shall limit or prejudice the right of
Landlord, in any bankruptcy of insolvency

<PAGE>

proceedings, to prove for, and obtain as, liquidated damages by reason of
such termination an amount equal to the maximum allowed by any statute or
rule of law in effect at the time when, and governing the proceedings in
which, such damages are to be proved whether or not such amount be greater,
equal to, or less than the amount of the difference referred to above. Tenant
agrees to pay, in addition to the Rents and other sums agreed to be paid
hereunder, such additional sums as the court may adjudge reasonable as
attorneys' fees in any successful suit or action instituted by Landlord to
enforce the provisions of this Lease or the collections of the Rents or other
sums due Landlord hereunder.

         No receipt of moneys by Landlord from Tenant after the cancellation
or termination hereof in any manner as herein provided, or in any manner
provided by law, shall reinstate, continue or extend the Term, or affect any
notice theretofore given to Tenant or operate as a waiver of the right of
Landlord to recover possession of the Leased Premises by proper suit, action,
proceeding or other remedy; it being agreed that after service of Notice to
cancel or terminate as herein provided, after the commencement of any suit,
action, proceeding or other remedy, or after final order or judgment for
possession of the Leased Premises, Landlord, in any of such instances, may
demand, receive and collect any moneys due, or thereafter falling due,
without in any manner affecting such Notice, suit, action, proceeding, order
or judgment; and any and all such moneys so collected shall be deemed to be
payments on account of Tenant's liability hereunder.

         In the event of a breach or threatened breach by Tenant of any of
the agreements, terms, covenants or conditions hereof, Landlord shall have
the right of injunction to restrain the same and the right to invoke any
remedy allowed by law or in equity.

         The enumeration anywhere in this Lease of certain rights and/or
remedies of Landlord shall not be construed to be in exclusion or
substitution of any others conferred under this Lease or applicable law. All
the rights and remedies herein given to the Landlord for the recovery of the
Leased Premises because of the Default by the Tenant in the payment of any
sums which may be payable pursuant to the terms of this Lease, or upon the
breach of any of the terms hereof, or the right to re-enter and take
possession of the Leased Premises upon the happening of any of the Defaults
or breaches of any of the said covenants, or the right to maintain any action
for Rents or damages, hereby are reserved and conferred upon the Landlord as
distinct, separate and cumulative remedies, and no one of them, whether
exercised by the Landlord or not, shall be deemed to be in exclusion of any
of the others, but all rights, remedies and powers provided for in this Lease
may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law in the State of Colorado. All
provisions of this Lease are and are intended to be subject to all applicable
mandatory provisions of law that may be controlling in the State of Colorado
and may be limited to the extent necessary so that they will not render this
Lease invalid or unenforceable, in whole or in part, under the provisions of
applicable law. Any provision of this Lease prohibited by law shall be
ineffective to the extent of such prohibition without invalidating the
remaining provisions of this Lease.

         SECTION 11.03. WAIVERS. LANDLORD AND TENANT WAIVE, TO THE EXTENT
PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY MATTER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE,

<PAGE>

THE RELATIONSHIP OF LANDLORD AND TENANT AND/OR TENANT'S USE OR OCCUPANCY OF
THE LEASED PREMISES. TENANT WAIVES, TO THE EXTENT PERMITTED BY LAW, THE
BENEFIT OF ANY LAWS NOW OR HEREAFTER IN FORCE EXEMPTING PROPERTY FROM
LIABILITY FOR RENT OR FOR DEBT. FURTHERMORE, TENANT HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM LANDLORD AND/OR LANDLORD'S
AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR THEIR SUCCESSOR AND ASSIGNS
WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM
OR COUNTERCLAIM BROUGHT BY TENANT AGAINST LANDLORD AND/OR LANDLORD'S
AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR THEIR SUCCESSOR AND ASSIGNS
WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE OR
ANY DOCUMENTS CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER BY TENANT OF
ANY RIGHT IT MAY HAVE TO SEEK SUCH DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES
AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.

         SECTION 11.04. APPLICATION OF FUNDS. Any payments received by
Landlord under any of the provisions of this Lease during the existence or
continuance of any Default or Event of Default (and any payment made to
Landlord rather than Tenant due to the existence of any Default or Event of
Default) shall be applied to Tenant's obligations under this Lease in such
order as Landlord may determine or as may be prescribed by the laws of the
State of Colorado.

         SECTION 11.05. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT. If (a) a
Default shall have occurred and is continuing which in the reasonable
judgment of Landlord requires immediate action on the part of Landlord or (b)
an Event of Default shall have occurred and is continuing, Landlord, after
Notice to Tenant (which Notice need not precede such action if Landlord shall
reasonably determine immediate action is necessary to protect person or
property), without waiving or releasing any obligation of Tenant and without
waiving or releasing any Event of Default, may (but shall not be obligated
to), at any time thereafter, make such payment or perform such act for the
account and at the expense of Tenant, and may, to the maximum extent
permitted by law, enter upon the Leased Premises or any portion thereof for
such purpose and take all such action thereon as, in Landlord's sole and
absolute discretion, may be necessary or appropriate therefor, including the
management of the Leased Premises by Landlord or its designee, and Tenant
hereby irrevocably appoints, in the event of such election by Landlord,
Landlord or its designee as the operator of the Leased Premises and its
attorney-in-fact for such purpose, irrevocably and coupled with an interest,
in the name, place and stead of Tenant. No such entry shall be deemed an
eviction of Tenant. All reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees) incurred by Landlord in connection
therewith, together with interest thereon (to the extent permitted by law) at
the rate of eighteen percent (18%) per annum from the date such sums are paid
by Landlord until repaid, shall be paid by Tenant to Landlord, on demand.

<PAGE>

                                   ARTICLE XII

                                  HOLDING OVER

         SECTION 12.01. HOLDING OVER. Any holding over by Tenant after the
expiration or sooner termination of this Lease (other than with the express
written consent of Landlord) shall be treated as a tenancy at sufferance at a
rate equal to (a) three (3) times one-twelfth of the aggregate Minimum Rent
payable with respect to the last year of the Term, (b) all Additional Rent
accruing during the applicable period, and (c) all other sums, if any,
payable by Tenant under this Lease with respect to the Leased Premises during
the applicable period. Tenant shall also pay to Landlord all damages (direct
or indirect) sustained by reason of any such holding over. Otherwise, such
holding over shall be on the terms and conditions set forth in this Lease, to
the extent applicable. Nothing contained herein shall constitute the consent,
express or implied, of Landlord to the holding over of Tenant after the
expiration or earlier termination of this Lease.

                                  ARTICLE XIII

                      SUBLETTING AND ASSIGNMENT; BANKRUPTCY

         SECTION 13.01. SUBLETTING AND ASSIGNMENT. Tenant shall not, without
the prior written consent of Landlord (which consent may be withheld in
Landlord's sole and absolute discretion), assign, mortgage, pledge,
hypothecate, encumber or otherwise transfer this Lease or any interest
therein, or any sublease (which term shall be deemed to include the granting
of concessions, licenses and the like), or all or any part of the Leased
Premises, or suffer or permit this Lease or the leasehold estate created
hereby or any other rights arising under this Lease to be assigned,
transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in
part, whether voluntarily, involuntarily or by operation of law, or permit
the use or occupancy of the Leased Premises by anyone other than Tenant, or
permit the Leased Premises to be offered or advertised for assignment, and
any of the foregoing actions shall be voidable at Landlord's option.

         If this Lease is assigned or if the Leased Premises or any part
thereof is sublet in contravention of this Lease, Landlord may collect the
rents from such assignee, subtenant or occupant, as the case may be, and
apply the net amount collected to the Rents herein reserved, but no such
collection shall be deemed (a) a waiver of the provisions set forth in the
first paragraph of this Section 13.01, (b) the acceptance by Landlord of such
assignee, subtenant or occupant, as the case may be, as a tenant, or (c) a
release of Tenant from the future performance by Tenant of its covenants,
agreements or obligations contained in this Lease.

         No subletting or assignment shall in any way impair the continuing
primary liability of Tenant hereunder, and no consent to any subletting or
assignment in a particular instance shall be deemed to be a waiver of the
prohibition set forth in this Section 13.01. No assignment, subletting or
occupancy shall affect any Primary Intended Use. No assignment, subletting or
occupancy shall imply consent to the continued existence of this Lease or any
sublease of the Leased Premises in the event of foreclosure by any Facility
Mortgagee. Any subletting, assignment or other transfer of Tenant's interest
under this Lease in contravention of this Article XIII shall be voidable at
Landlord's option.

        SECTION 13.02. NO RIGHT OF TENANT TO MORTGAGE ITS LEASEHOLD.
Notwithstanding any

<PAGE>

other provision of this Lease to the contrary, Tenant shall not assign its
interest in this Lease as collateral for Indebtedness.

         SECTION 13.03. LANDLORD'S RIGHT TO ASSIGN. Landlord shall have the
right to assign or sell its interest in this Lease and in the Leased
Premises. Upon such sale Landlord shall be released from any further
obligations and responsibilities under this Lease, both before and after the
date of said assignment or sale and Tenant agrees to attorn to and to look
solely to such assignee, purchaser or successor in interest of Landlord for
the continued performance of the obligations of Landlord hereunder.

         SECTION 13.04. ASSIGNMENT IN CONTEXT OF BANKRUPTCY OR INSOLVENCY.

                  (a) (i) In the event that Tenant shall become a Debtor under
         Chapter 7 of the Bankruptcy Code, and the Trustee or Tenant shall elect
         to assume this Lease for the purpose of assigning the same or
         otherwise, such election and assignment may only be made if all of the
         terms and conditions of this subsection (i) are satisfied. If such
         Trustee shall fail to elect or assume this Lease within sixty (60) days
         after the filing of the bankruptcy petition, this Lease shall be deemed
         to have been rejected. Landlord shall be thereupon immediately entitled
         to possession of the Leased Premises without further obligation to
         Tenant or Trustee, and this Lease shall be terminated, but Landlord's
         right to be compensated for damages in such liquidation proceeding
         shall survive.

                  No election by the Trustee or Debtor-In-Possession to assume
                  this Lease, whether under Chapters 7 or 11, shall be effective
                  unless each of the following conditions, which Landlord and
                  Tenant acknowledge are commercially reasonable in the context
                  of a bankruptcy case of Tenant, have been satisfied, and
                  Landlord has so acknowledged in writing, which acknowledgment,
                  provided each of the following criteria has been met, shall
                  not be unreasonably withheld:

                                   (A)  Landlord has not terminated this Lease
                           pursuant to the provisions established herein prior
                           to the filing of the bankruptcy petition.

                                   (B)  The Trustee or the Debtor-In-Possession
                           has cured:

                                        (1)  all monetary Defaults under this
                                   Lease; and

                                        (2)  all nonmonetary Defaults under
                                   this Lease.

                                   (C)  The Trustee or the Debtor-In-Possession
                           has compensated any pecuniary loss (including any and
                           all attorneys' fees and expenses) incurred by
                           Landlord arising from the Default of Tenant, the
                           Trustee, or the Debtor-In-Possession as recited in
                           Landlord's written statement of pecuniary loss sent
                           to the Trustee or Debtor-In-Possession.

                                   (D)  The Trustee or the Debtor-In-Possession
                           has provided Landlord with adequate assurance (as
                           defined below) of the future performance of each of
                           Tenant's, Trustee's or Debtor-In-Possession's

<PAGE>

                           obligations under this Lease; PROVIDED, HOWEVER,
                           that:

                                        (1)  the Trustee or
                                   Debtor-In-Possession also shall deposit
                                   with Landlord, as security, for the
                                   timely payment of rent, an amount equal
                                   to three (3) months' Minimum Rent and
                                   other monetary charges accruing under
                                   this Lease;

                                        (2)  if not otherwise required by the
                                   terms of this Lease, the Trustee or
                                   Debtor-In-Possession also shall pay in
                                   advance on the date Minimum Rent is payable,
                                   one-twelfth of Tenant's annual obligations
                                   under this Lease for Impositions, Real
                                   Estate Taxes, Utility Charges, Insurance
                                   Premiums and similar charges; and

                                        (3)  the obligations imposed upon the
                                   Trustee or Debtor-In-Possession shall
                                   continue with respect to Tenant or any
                                   assignee of the Lease after the completion
                                   of the bankruptcy case.

                                   (E)  For purposes of this subsection (i),
                           Landlord and Tenant acknowledge that, in the context
                           of a bankruptcy case of Tenant, at a minimum,
                           "adequate assurance" means:

                                        (1)  the Trustee or the
                                   Debtor-In-Possession has and will continue
                                   to have sufficient current assets after the
                                   payment of all current obligations and
                                   administrative expenses then due to assure
                                   Landlord that the Trustee or
                                   Debtor-In-Possession will have sufficient
                                   funds to fulfill the obligations of Tenant
                                   under this Lease; and

                                        (2)  the Bankruptcy Court shall have
                                   entered an order segregating sufficient cash
                                   payable to Landlord to cure the monetary
                                   and/or nonmonetary Defaults under this
                                   Lease.

                             (ii)  If the Trustee or Debtor-In-Possession has
                  assumed the Lease pursuant to the terms and provisions herein,
                  for the purpose of assigning (or electing to assign) Tenant's
                  interest under this Lease or the estate created thereby, to
                  any other person, such interest or estate may be so assigned
                  only if Landlord shall acknowledge in writing that the Trustee
                  or Debtor-in-Possession has satisfied the conditions in
                  Sections 13.04(a)(i)(B), (C) and (D) above and that the
                  intended assignee has provided "adequate assurance of future
                  performance" as defined in this subsection (ii) of all of the
                  terms, covenants and conditions of this Lease to be performed
                  by Tenant.

                           For purposes of this subsection (ii), Landlord and
                  Tenant acknowledge that, in the context of a bankruptcy case
                  of Tenant, at a minimum "adequate assurance of future
                  performance" means that each of the following conditions has
                  been satisfied, and Landlord has so acknowledged in writing:

<PAGE>

                                   (A)  the assignee has submitted a current
                           financial statement audited by a certified public
                           accountant which shows a net worth and working
                           capital in amounts determined to be sufficient by
                           Landlord to assure the future performance by such
                           assignee of Tenant's obligations under this Lease;

                                   (B)  the assignee, if requested by Landlord,
                           shall have obtained guarantees in form and substance
                           satisfactory to Landlord from one or more persons who
                           satisfy Landlord's standards of credit worthiness;

                                   (C)  the assignee has submitted in writing
                           evidence, satisfactory to Landlord, of substantial
                           experience in the operation of the business permitted
                           under this Lease; and

                                   (D)  Landlord has obtained all consents or
                           waivers from any third party required under any
                           lease, mortgage, financing arrangement or other
                           agreement by which Landlord is bound to permit
                           Landlord to consent to such assignment.

                           (iii) Neither Tenant's interest in the Lease, nor any
                  lesser interest of Tenant herein, nor any estate of Tenant
                  hereby created, shall pass to any trustee, receiver, assignee
                  for the benefit of creditors, or any other person or entity,
                  or otherwise by operation of law under the laws of any state
                  having jurisdiction of the person or property of Tenant
                  (hereinafter referred to as the "state law") unless Landlord
                  shall consent to such transfer in writing. No acceptance by
                  Landlord of rent or any other payments from any such trustee,
                  receiver, assignee, person or other entity shall be deemed, to
                  have waived, nor, shall it waive the need to obtain Landlord's
                  consent for, Landlord's right to terminate this Lease for any
                  transfer of Tenant's interest under this Lease without such
                  consent.

                           (iv)  In the event that the estate of Tenant created
                  hereby shall be taken in execution or by other process of law,
                  or if Tenant or any guarantor of Tenant's obligations
                  hereunder shall be adjudicated insolvent pursuant to the
                  provisions of any present or future insolvency law under state
                  law, or if any proceedings are filed by or against any
                  guarantor under the Bankruptcy Code, or any similar provisions
                  of any future federal bankruptcy law, or if a Receiver or
                  Trustee of the property of Tenant or any guarantor shall be
                  appointed under state law by reason of Tenant's or any
                  guarantor's insolvency or inability to pay its debts as they
                  become due or otherwise, or if any assignment shall be made of
                  Tenant's or any guarantor's property for the benefit of
                  creditors under state law, then and in such event Landlord
                  may, at its option, terminate this Lease and all rights of
                  Tenant hereunder by giving Tenant written notice of the
                  election to so terminate within thirty (30) days after the
                  occurrence of such event.

                           (v)   Notwithstanding any provision contained herein,
                  neither Tenant nor the Trustee shall have the right to assign
                  this Lease or sublet the Leased Premises

<PAGE>

                  or any portion thereof to an assignee or sublessee that (A)
                  is a competitor of Landlord or (B) is not a capable,
                  reliable, qualified Person of good reputation and character
                  with the financial capacity to satisfy Tenant's obligations
                  under this Lease. THE TRUSTEE SHALL NOT HAVE THE RIGHT TO
                  ASSIGN THIS LEASE OR SUBLET THE LEASED PREMISES TO A REAL
                  ESTATE INVESTMENT TRUST THAT IS, OR INTENDS TO BE, PUBLICLY
                  TRADED. [?]

         SECTION 13.05. Other Bankruptcy Issues.

                  (a)  As a material inducement to Landlord executing this
         Lease, Tenant acknowledges and agrees that Landlord is relying upon:
         (i) the financial condition and specific operating experience of
         Tenant; (ii) Tenant's timely performance of all of its obligations
         under this Lease notwithstanding the entry of an order for relief
         under the Bankruptcy Code for Tenant; and (iii) all defaults under
         the Lease being cured promptly and the Lease being assumed within
         sixty (60) days of any order for relief entered under the Bankruptcy
         Code for Tenant, or the Lease being rejected within such sixty (60)
         day period and the Leased Premises surrendered to Landlord.

                       Accordingly, in consideration of the mutual
                   covenants contained in this Lease and for other good and
                   valuable consideration, Tenant hereby agrees that:

                       all obligations that accrue under this Lease
                   (including the obligation to pay Rent), from and after the
                   date that a bankruptcy case is commenced shall be timely
                   performed exactly as provided in this Lease and any failure
                   to so perform shall be harmful and prejudicial to Landlord;

                       any and all Rents that accrue from and after the
                   date that a bankruptcy case is commenced and that are not
                   paid as required by this Lease shall, in the amount of such
                   Rents, constitute administrative expense claims allowable
                   under the Bankruptcy Code with priority of payment at least
                   equal to that of any other actual and necessary expenses
                   incurred after the commencement of such proceeding;

                       any extension of the time period within which the
                   Tenant may assume or reject the Lease without an obligation
                   to cause all obligations under the Lease to be performed as
                   and when required under the Lease shall be harmful and
                   prejudicial to Landlord;

                       any time period designated as the period within
                   which the Tenant must cure all defaults and compensate
                   Landlord for all pecuniary losses which extends beyond the
                   date of assumption of the Lease shall be harmful and
                   prejudicial to Landlord;

                       any assignment of the Lease must result in all terms
                   and conditions of the Lease being assumed by the assignee
                   without alteration or amendment, and any assignment which
                   results in an amendment or alteration of the terms and
                   conditions of the Lease without the express written consent
                   of Landlord shall be

<PAGE>

                   harmful and prejudicial to Landlord;

                       any proposed assignment of the Lease to an assignee
                   that does not possess the financial condition, operating
                   performance and experience characteristics equal to or better
                   than the financial condition, operating performance and
                   experience of Tenant as of the Commencement Date, shall be
                   harmful and prejudicial to Landlord; and

                       the rejection (or deemed rejection) of the Lease for
                   any reason whatsoever shall constitute cause for immediate
                   relief from the automatic stay provisions of the Bankruptcy
                   Code, and Tenant stipulates that such automatic stay shall be
                   lifted immediately and possession of the Leased Premises will
                   be delivered to Landlord immediately without the necessity of
                   any further action by Landlord.

                  (b)  No provision of this Lease shall be deemed a waiver of
         Landlord's rights or remedies under the Bankruptcy Code or applicable
         law to oppose any assumption and/or assignment of this Lease, to
         require timely performance of Tenant's obligations under this Lease, or
         to regain possession of the Leased Premises as a result of the failure
         of Tenant to comply with the terms and conditions of this Lease or the
         Bankruptcy Code.

                  (c)  Notwithstanding anything in this Lease to the contrary,
         all amounts payable by Tenant to or on behalf of Landlord under this
         Lease, whether or not expressly denominated as such, shall constitute
         "rent" for the purposes of the Bankruptcy Code.

                  (d)  For purposes of this Section addressing the rights and
         obligations of Landlord and Tenant in the event that a bankruptcy
         action is commenced, the term "Tenant" shall include Tenant's successor
         in bankruptcy, whether a trustee, Tenant as Debtor-in-Possession or
         other responsible person.

                                   ARTICLE XIV

                 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS

         SECTION 14.01. ESTOPPEL CERTIFICATES. A party, without charge, at any
time and from time to time hereafter, within five (5) days after written request
of the other party, shall certify by written instrument duly executed and
acknowledged to any person, firm or corporation specified in such request: (a)
as to whether this Lease has been supplemented or amended, and if so, the
substance and manner of such supplement or amendment; (b) as to the validity and
force and effect of this Lease in accordance with its terms as then constituted;
(c) as to the existence of any Default hereunder; (d) as to the existence of any
offsets, counterclaims or defenses hereto; (e) as to the commencement and
expiration dates of the Term of this Lease; and (f) as to any other matters as
reasonably may be so requested. Any such certificate may be relied upon the
party requesting it and any other person, firm or corporation to whom the same
may be exhibited or delivered, and the contents of such certificate shall be
binding on Tenant.

         SECTION 14.02. FINANCIAL STATEMENTS. On an annual basis, during the
Term of this

<PAGE>

Lease, Tenant shall furnish to Landlord, within fifteen (15) days immediately
following a request for the same made by Landlord, a current financial statement
of Tenant, certified by an authorized officer of Tenant to be true and correct
and, if available, a current financial statement prepared by a licensed
certified public accountant.

                                   ARTICLE XV

                           LANDLORD'S RIGHT TO INSPECT

         SECTION 15.01. RIGHT TO INSPECT. Landlord and its designees shall have
the right to enter upon the Leased Premises at all reasonable business hours
(and in Emergency Situations at all times): (a) to inspect the same, and/or to
prepare or have prepared on its behalf an inspection report as to the condition
of the Leased Premises; (b) to make repairs, additions or alterations to the
Leased Premises pursuant to the provisions of Article V hereof and/or as may be
required by an inspection report prepared by or on behalf of Landlord; and (c)
for any lawful purpose. If Landlord makes or causes any repairs to be made
pursuant to Article V hereof, Landlord shall not be responsible to Tenant or to
any of Tenant's subtenants for any loss or damage that may accrue to Tenant's
and/or any subtenant's stock or business by reason thereof, unless such damage
is due to the gross negligence or intentional misconduct of Landlord, its
agents, employees or contractors.

         For a period commencing 90 days prior to the end of the Term, Landlord
may have reasonable access to the Leased Premises for the purpose of showing and
exhibiting the same to prospective purchasers or tenants and Landlord shall have
the right to display and to post any "To Let" or "For Sale" signs upon the
Leased Premises.

                                   ARTICLE XVI

                               FACILITY MORTGAGES

         SECTION 16.01.      LANDLORD MAY GRANT LIENS.

                  (a) Without the consent of Tenant, Landlord may, subject to
         the terms and conditions set forth in this Section 16.01, from time to
         time, directly or indirectly, create or otherwise cause to exist any
         Lien upon its interest in the Leased Premises, or any portion thereof
         or interest therein, whether to secure any borrowing or other means of
         financing or refinancing; PROVIDED, HOWEVER, that any such Lien: (i)
         shall not modify the terms of this Lease, except as expressly set forth
         in Section 16.02; (ii) shall not contain more restrictive terms and
         conditions than those currently contained in any Facility Mortgage;
         (iii) shall provide that any insurance proceeds payable with respect to
         a Casualty shall be paid directly to Landlord unless Landlord is in
         default under the terms of any Facility Mortgage; and (iv) shall
         provide that so long as no Event of Default has occurred, neither
         Tenant nor any subtenant shall be disturbed in its possession of the
         Premises.

                  (b) Tenant shall, upon the request of Landlord or
         any existing, potential or

<PAGE>

         future Facility Mortgagee, and to the extent in Tenant's possession,
         (i) provide Landlord or the Facility Mortgagee with copies of all
         Licenses, permits, occupancy agreements, operating agreements, leases,
         contracts, inspection reports, studies, appraisals, assessments,
         default or other notices and similar materials reasonably requested in
         connection with any existing or proposed financing of the Leased
         Premises, and (ii) execute such estoppel certificates and collateral
         assignments with respect to the Leased Premises' Licenses and any of
         the other aforementioned agreements as any Facility Mortgagee may
         reasonably request in connection with any such financing; PROVIDED
         HOWEVER, that no such estoppel certificate or collateral assignment
         shall, except as expressly set forth in Section 16.02, modify the
         terms of this Lease.

         SECTION 16.02. SUBORDINATION OF LEASE. Subject to Section 16.01, this
Lease, and any and all rights of Tenant hereunder, are and shall be subject and
subordinate to any Facility Mortgage, and all renewals, extensions,
modifications, consolidations and replacements thereof, and to each and every
advance made or hereafter to be made under any such Facility Mortgage. This
section shall be self-operative and no further instrument of subordination shall
be required. In confirmation of such subordination, Tenant shall promptly
execute, acknowledge and deliver any instrument that Landlord or the holder of
any such mortgage or the trustee or beneficiary of any deed of trust or any of
their respective successors in interest may reasonably request to evidence such
subordination. Tenant shall not unreasonably withhold its consent to any
amendment to this Lease reasonably required by such lender, provided that such
amendment does not (a) increase Tenant's Rent obligations or other financial
obligations hereunder, or (b) have a material adverse effect upon Tenant's
rights hereunder, or (c) materially increase Tenant's non-economic obligations
hereunder, or (d) decrease Landlord's obligations hereunder. Landlord shall
exercise commercially reasonable efforts to require any future Facility
Mortgagee to provide Tenant with notice and an opportunity to cure landlord
defaults under the Facility Mortgage. Tenant shall have no obligations under any
Facility Mortgage other than those expressly set forth in this Section 16.02.

         In the event of a foreclosure of any Facility Mortgage by any Facility
Mortgagee, Landlord and such Facility Mortgagee covenant and agree that they
shall not disturb Tenant's or any subtenants' possession, use and enjoyment of
the Leased Premises during the Term, provided that there is no Default or Event
of Default hereunder. Each Facility Mortgagee shall have an obligation to
provide a non-disturbance agreement to Tenant; PROVIDED, HOWEVER, that any
Facility Mortgagee shall have the right (subject to the provisions of the next
paragraph) to terminate this Lease upon the foreclosure, deed in lieu of
foreclosure or exercise of the power of sale with respect to the Leased
Premises.

         In the event that any Facility Mortgagee or the nominee or designee of
any Facility Mortgagee shall succeed to the rights of Landlord under this Lease
(any such person, "Successor Landlord"), whether through possession or
foreclosure action or delivery of a new lease or deed, or otherwise, such
Successor Landlord shall recognize Tenant's rights under this Lease as herein
provided and Tenant shall attorn to and recognize the Successor Landlord as
Tenant's landlord under this Lease and Tenant shall promptly execute and deliver
any instrument that such Successor Landlord may reasonably request to evidence
such attornment (provided that such instrument does not alter the terms of this
Lease), whereupon, this Lease shall continue in full

<PAGE>

force and effect as a direct lease between the Successor Landlord and Tenant
upon all of the terms, conditions and covenants as are set forth in this Lease,
except that the Successor Landlord (unless formerly the landlord under this
Lease or its nominee or designee) shall not be (a) liable in any way to Tenant
for any act or omission, neglect or default on the party of any prior Landlord
under this Lease, (b) responsible for any monies owing by or on deposit with any
prior Landlord to the credit of Tenant (except to the extent actually paid or
delivered to the Successor Landlord), (c) subject to any counterclaim or setoff
which theretofore accrued to Tenant against any prior Landlord, (d) bound by any
modification of this Lease subsequent to such Facility Mortgage, (e) liable to
Tenant beyond the Successor Landlord's interest in the Leased Premises and the
rents, income, receipts, revenues, issues and profits issuing from the Leased
Premises, (f) responsible for the performance of any work to be done by Landlord
under this Lease to render the Leased Premises ready for occupancy by Tenant
(subject to Landlord's obligations) or with respect to any insurance or
Condemnation proceeds, or (g) required to remove any Person occupying the Leased
Premises or any part thereof, except if such Person claims by, through or under
the Successor Landlord. Tenant agrees at any time and from time to time to
execute a suitable instrument in confirmation of Tenant's agreement to attorn,
as aforesaid.

         SECTION 16.03. NOTICE TO MORTGAGEE. No Default Notice from Tenant to
Landlord as to the Leased Premises shall be effective unless and until a copy of
the same is given to Facility Mortgagee(s) of which Landlord gives notice
thereof to Tenant, which includes the Leased Premises as part of the demised
premises and which complies with Sections 16.01 and 16.02 (which Notice shall
include a copy of the applicable mortgage). No Default Notice from Tenant to
Landlord hereunder shall be effective unless and until a copy of the same is
given to a Facility Mortgagee at the address set forth in such Notice.

         SECTION 16.04. ATTORNMENT. Tenant agrees to attorn: (i) to any assignee
of Landlord; (ii) to the holder of any Facility Mortgage to which this Lease is
subordinate; or (iii) to any party acquiring title to the Leased Premises
pursuant to any right or any power contained in any such Facility Mortgage or
bond or other mortgage instrument or as authorized by law. Neither the
provisions for subordination nor attornment set forth in this Article XVI shall
require the execution of any further instrument.

                                  ARTICLE XVII

                     TENANT'S REPRESENTATIONS AND WARRANTIES

         SECTION 17.01. REPRESENTATIONS AND WARRANTIES OF TENANT. To induce
Landlord to enter into this Lease, Tenant hereby represents and warrants to
Landlord, which representations shall be true and accurate as of the
Commencement Date, as follows:

           DUE ORGANIZATION AND AUTHORITY. Tenant is duly organized, validly
               existing and in good standing under the laws of the jurisdiction
               of its organization and Tenant has all requisite power and
               authority to own or lease and operate its properties and to carry
               on its business as now conducted and as proposed to be conducted.
               Tenant is duly qualified or licensed to do business in all
               jurisdictions in which it owns or leases assets and property or
               in which the conduct of its business requires it to so qualify or
               be

<PAGE>

               licensed.

           DUE AUTHORIZATION AND EXECUTION, ETC. The execution, delivery and
               performance by Tenant of this Lease, and the consummation of the
               transactions contemplated herein, are within the Tenant's powers,
               have been duly authorized by all necessary action, do not
               contravene: (i) Tenant's organizational documents; or (ii) any
               law, rule, regulation, order, writ, judgment, injunction, decree,
               determination or award or any material contractual restriction
               binding on or affecting Tenant or any of its properties and do
               not result in or require the creation of any lien, security
               interest or other charge or encumbrance upon or with respect to
               any of Tenant's properties. Tenant is not in default under any
               such law, rule, regulation, order, writ, judgment, injunction,
               decree, determination, award or restriction.

          GOVERNMENT CONSENTS. No authorization, consent, approval or other
               action by, and no notice to or filing with, any Government
               Agencies or regulatory body is required for the due execution,
               delivery or performance by Tenant of this Lease.

          LEGAL, VALID AND BINDING NATURE. This Lease, when executed and
               delivered hereunder will be the legal, valid and binding
               obligations of Tenant, enforceable against Tenant and in
               accordance with its terms, except to the extent that the
               enforceability hereof may be limited by applicable bankruptcy,
               insolvency, reorganization, moratorium or other laws generally
               affecting creditors' rights and by equitable principles
               (regardless of whether enforcement is sought in equity or at
               law).

            ACCURACY OF INFORMATION. Any financial information provided to
               Landlord will fairly present the financial condition of Tenant
               for the applicable periods and will all be in accordance with
               generally accepted accounting principles consistently applied.

           FRAUDULENT TRANSFER AND REASONABLY EQUIVALENT VALUE. Tenant
               hereby confirms that this Lease is not being entered into with
               the intent to hinder, delay or defraud any entity to which Tenant
               is indebted, and Tenant's intention that this Lease not
               constitute a fraudulent transfer or conveyance for purposes of
               the Bankruptcy Code, the Colorado Uniform Fraudulent Transfer Act
               or any similar federal or state law. Tenant is not insolvent and
               will not become insolvent as a result of the execution and
               performance of its obligations under this Lease. Tenant has
               sufficient capital to honor its obligations and to pay its debts
               as they mature now and after the execution of this Lease.

                                  ARTICLE XVIII

                        ADDITIONAL AGREEMENTS OF PARTIES

         SECTION 18.01. ADDITIONAL AFFIRMATIVE COVENANTS OF TENANT. Tenant
covenants and agrees, at its own cost and expense, to comply with the following:

                  (a) CONDUCT OF BUSINESS. Tenant shall do or cause to be done
         all things

<PAGE>

         necessary to preserve, renew and keep in full force and effect and in
         good standing its existence and its rights and Licenses necessary to
         conduct such business.

                  (b) MAINTENANCE OF ACCOUNTS AND RECORDS. Tenant shall keep
         records and books of account in which full, true and correct entries in
         all material respects will be made of dealings and transactions in
         relation to the business and affairs of Tenant.

                  (c) KEEP LEASED PREMISES CLEAN. Tenant shall keep the Leased
         Premises in the sanitary condition required by health, sanitary and
         police regulations or ordinances of the County of Denver, State of
         Colorado, and keep and maintain all of said buildings, building
         improvements, land improvements, fixtures, machinery and equipment
         located thereon in good order, condition and repair and with a market
         value at least equal to the market value thereof as of the commencement
         of this Lease.

         SECTION 18.02. ADDITIONAL NEGATIVE COVENANTS OF TENANT. Tenant
covenants and agrees that it shall not at any time without first obtaining
Landlord's written consent, do any of the following:

                  (a) NO LIENS. Tenant shall not subject any fixtures,
         furnishings or equipment to or on the Leased Premises and affixed to
         the realty so as to become part thereof, to any Liens.

                  (b) NO DAMAGE TO THE LEASED PREMISES. Tenant shall not commit
         any waste to any of the buildings, building improvements, land
         improvements, fixtures, machinery and equipment located on the Leased
         Premises, or perform any act or carry on any practice which may damage,
         mar or deface the Leased Premises, or which would cause the walls or
         floors thereof to be endangered by overloading.

                  (c) NO JUDGMENTS AND ENCUMBRANCES. Tenant shall not allow any
         judgments or encumbrances of any kind or nature whatsoever to attach to
         the Leased Premises or to this Lease or any interest or interests
         therein.

                  (d) PROHIBITED USE OF LEASED PREMISES. Without the prior
         consent of Landlord, which consent may be granted or withheld in
         Landlord's sole discretion, Tenant shall not, and shall not authorize
         its subtenants to, permit the Leased Premises to be used for the
         training of pilots by any person who does not keep and maintain a valid
         license to engage in such practice pursuant to the laws of the State of
         Colorado and any applicable federal regulatory requirements, and all
         expenses for such compliance shall be paid by Tenant and/or its
         subtenants.

         SECTION 18.03. SIGNS. Landlord shall provide and install, at Tenant's
sole expense and in conformity with all applicable laws, ordinances, regulations
rules and statutes, all letters or numerals at the entrance to the Building and
the Leased Premises requested by Tenant. All such letters and numerals shall be
of a type consistent with that used for signs in other parts of the Building.
Landlord shall not be liable for any inconvenience or damage occurring as a
result of any error or omission in any signs requested by Tenant. No signs,
numerals, letters or other

<PAGE>

graphics shall be used or permitted on the exterior of, or which may be visible
from outside, the Leased Premises except those signs for which drawings are
submitted to Landlord in writing and approved by Landlord in writing. Landlord
reserves the right to remove at Tenant's expense all signs other than signs
approved in writing by Landlord under this Section without Notice to Tenant and
without liability to Tenant for any damages sustained by Tenant as a result
thereof. Tenant shall remove all of its signs upon the expiration of the Term
hereof or any earlier termination of this Lease as herein provided and shall
repair any damage resulting therefrom at its own cost and expense. Any such
signs not removed upon the expiration of the Term hereof or any earlier
termination as herein provided shall become the property of Landlord.

         SECTION 18.04. NO POWER IN TENANT TO CHARGE REVERSION. Tenant shall not
have the power to do any act or make any contract which may create or be the
foundation for any lien upon the present estate, reversion or any other estate
of Landlord in the Leased Premises herein demised or the buildings or
improvements thereon.

         SECTION 18.05. RIGHT OF REDEMPTION. Tenant covenants and agrees that in
the event of the termination of this Lease by summary proceedings or in the
event of the entry of a judgment for the recovery of the possession of the
Leased Premises in any action of ejectment, or if Landlord enters by process of
law or otherwise, as herein provided, the right of redemption provided or
permitted by any statute, law or decision now or hereafter in force, and the
right to any second and further trial provided or permitted by any statute, law
or decision now or hereafter in force shall be and hereby are waived expressly
by Tenant. Tenant, for itself, its successors, heirs, administrators, executors
and assigns, and on behalf of any and all persons claiming by, through or under
Tenant, together with creditors of all classes, hereby does waive, surrender,
and give up all right or privilege which it or they may or might have under any
statute, law or decision now in effect, or by reason of any other present or
future law or decision, to redeem the Leased Premises or have a continuance of
this Lease for the Term hereby demised after having been dispossessed or ejected
therefrom by process of law or as provided under the terms hereof.

         SECTION 18.06. QUIET ENJOYMENT. Landlord covenants that upon Tenant
paying the Rents due hereunder and duly performing and observing all of Tenant's
other Lease obligations, covenants and agreements, Tenant peaceably and quietly
may have, hold and enjoy the Leased Premises for the Lease Term, subject and
subordinate as provided in this Lease. Landlord shall have no liability
whatsoever to Tenant for any breach of this covenant occasioned by the acts or
omissions of any subtenant, or any transferee, successor or assignee of
Landlord.

         SECTION 18.07. RELATIONSHIP OF PARTIES. Nothing contained in this Lease
shall be construed to create the relationship of principal and agent,
partnership, joint venture or any other relationship between the parties hereto
other than the relationship of Landlord and Tenant.

         SECTION 18.08. NOTICES. All notices, demands, requests, consents,
approvals or other instruments required or permitted to be given pursuant to
this Lease (individually, "Notice" and collectively, "Notices") shall be in
writing and given by (i) hand delivery, (ii) facsimile, (iii) express overnight
delivery service or (iv) certified or registered mail, return receipt requested,
and shall be deemed to have been delivered upon (a) receipt, if hand delivered,
(b) transmission, if

<PAGE>

delivered by facsimile during normal business hours, (c) the next Business Day,
if delivered by express overnight delivery service or (d) the third Business Day
following the day of deposit of such notice with the United States Postal
Service, if sent by certified or registered mail, return receipt requested.
Notices shall be provided to the addresses (or facsimile numbers, as applicable)
specified below:

         If to Landlord:            AIMS CONTINUING EDUCATION AUTHORITY
                                    5401 West 20th Street
                                    Greeley, CO  80634
                                    Attn:  ____________
                                    Fax:  (___) ___-____
                                    Telephone:  (___) ___-____

         with copies to:            KUTAK ROCK
                                    717 Seventeenth Street, Suite 2900
                                    Denver, Colorado  80202-3329
                                    Attn:  Dominic A. Lloyd, Esq.
                                    Fax:  (303) 292-7799
                                    Telephone:  (303) 297-2400

         If to Tenant:              TRAINING DEVICES INC.
                                    7367 South Revere Parkway
                                    Building #2C
                                    Englewood, Colorado 80112
                                    Attention:  __________
                                    Fax:  (___) ___-____
                                    Telephone:  (___) ___-____

         with a copy to:            ___________________
                                    ___________________
                                    _______, Colorado  ______
                                    Attn: __________________
                                    Fax:  (___) ___-____
                                    Telephone:  (___) ___-____

or to such other address or addresses as either may give to the other party,
from time to time, by notice as herein provided.

         SECTION 18.09. WAIVER. One or more waivers of any covenant or condition
by Landlord shall not be construed as a waiver of a subsequent breach of the
same or any other covenant or condition and the consent or approval of any
subsequent similar act by Tenant. The receipt of any amounts whether
specifically reserved or payable under any of the covenants herein contained, or
of any portion thereof, after a Default or Event of Default hereunder, whether
or not any such amount becomes due before or after such Default or Event of
Default, shall not be deemed to operate as a waiver of any other Default or
Event of Default or of the right of Landlord to enforce the payment of any Rents
herein reserved or to declare a forfeiture of this Lease and to

<PAGE>

recover possession of the Leased Premises as provided hereunder. The remedies
provided in this Lease shall be cumulative and shall not in any way abridge,
modify or preclude any other rights or remedies to which the Landlord may be
entitled either at law or in equity.

         SECTION 18.10. GENDER. Wherever herein the singular number is used, the
same shall include the plural and the masculine gender shall include the
feminine and neuter genders.

         SECTION 18.11. COVENANTS. Each and every term and provision of this
Lease which requires any performance (whether affirmative or negative) by Tenant
shall be deemed to be both a covenant and a condition.

         SECTION 18.12. CHOICE OF LAW. The parties agree that this Lease shall
be governed by and construed in accordance with the laws of the State of
Colorado.

         SECTION 18.13. COMMENCEMENT. Tenant hereby recognizes and agrees that
this Lease shall have no force or validity until it is duly executed by Tenant
and Landlord.

         SECTION 18.14. CONSENT OR APPROVAL. Wherever in this Lease Landlord
agrees not to unreasonably withhold its consent or approval, or words of like
import, Tenant agrees that it shall not be unreasonable for Landlord to withhold
such consent or approval: (i) if by granting such consent or approval Landlord
shall be in violation of any Facility Mortgage; or (ii) a Facility Mortgagee
shall not give its consent or approval thereto where its consent or approval is
required by the terms of the any Facility Mortgage.

         SECTION 18.15. FORCE MAJEURE. If Landlord or Tenant is in any way
delayed or prevented from performing any obligation, except any monetary
obligation, hereunder due to acts of God, acts of war, civil disturbance, action
of any Government Agency (including the revocation or refusal to grant licenses
or permits, where such revocation or refusal is not due to the fault of the
party whose performance is to be excused for reasons of FORCE MAJEURE), strikes,
fire or other Casualty, or any other cause beyond the reasonable control of
either party (as applicable), then the time for performance of such obligation
shall be excused for the period of such delay or prevention and extended for a
period equal to the period of such delay, interruption or prevention; PROVIDED,
however, that lack of funds shall not be deemed a cause beyond the reasonable
control of a party, unless such lack of funds is caused by the breach of the
other party's obligations under this Lease.

         SECTION 18.16. TIME IS OF THE ESSENCE. Time is of the essence with
respect to the exercise of any rights of, and performance of any obligations by,
Tenant or Landlord under this Lease.

         SECTION 18.17. Characterization.

                  (a) TRUE LEASE. Tenant intends for this Lease to be a "true
         lease" and not a financing lease, capital lease, mortgage, equitable
         mortgage, deed of trust, trust agreement, security agreement or other
         financing or trust arrangement, and the economic realities of this
         Lease are those of a true lease. The Lease Term, including any term
         extensions provided for in this Lease, is less than the remaining
         economic life of the

<PAGE>

         Leased Premises. Tenant waives any claim or defense based upon the
         characterization of this Lease as anything other than a true lease,
         and Tenant stipulates and agrees not to challenge the validity,
         enforceability or characterization of the lease of the Leased Premises
         as a true lease and further stipulates and agrees that nothing
         contained in this Lease creates or is intended to create a joint
         venture, partnership, equitable mortgage, trust, financing device or
         arrangement, security interest or the like. Tenant shall support the
         intent of the parties that the lease of the Leased Premises pursuant
         to this Lease is a true lease and does not create a joint venture,
         partnership, equitable mortgage, trust, financing device or
         arrangement, security interest or the like, if, and to the extent
         that, any challenge occurs.

                  (b) BUSINESS RELATIONSHIP. It is the intent of the parties
         hereto that the business relationship created by this Lease and any
         related documents is solely that of a short-term commercial lease
         between landlord and tenant and has been entered into by both parties
         in reliance upon the economic and legal bargains contained herein. None
         of the agreements contained herein is intended, nor shall the same be
         deemed or construed, to create a partnership between Landlord and
         Tenant, to make them joint venturers, to make Tenant an agent, legal
         representative, partner, subsidiary or employee of Landlord, nor to
         make Landlord in any way responsible for the debts, obligations or
         losses of Tenant.

                  (c) INTERPRETATION. Landlord and Tenant acknowledge and
         warrant to each other that each has been represented by independent
         counsel and has executed this Lease after being fully advised by said
         counsel as to its effect and significance. This Lease shall be
         interpreted and construed in a fair and impartial manner without regard
         to such factors as the party which prepared the instrument, the
         relative bargaining powers of the parties or the domicile of any party.
         Whenever in this Lease any words of obligation or duty are used, such
         words or expressions shall have the same force and effect as though
         made in the form of a covenant.

         SECTION 18.18. PROVISION OF NOTICES AFFECTING LEASED PREMISES. Tenant
agrees to provide Landlord, within two (2) Business Days of Tenant's receipt
thereof, copies of any and all notices received by Tenant that affect or relate
to the Leased Premises in any way whatsoever. Landlord shall give prompt Notice
to Tenant of any matters materially affecting the Leased Premises of which
Landlord receives written notice or actual knowledge.

         SECTION 18.19. ATTORNEYS' FEES. If either party shall default in the
performance of any covenants on its part to be performed by virtue of any
provisions of this Lease, the nondefaulting party, immediately, or at any time
thereafter, may perform the same for the account of the defaulting party after
having given the defaulting party notice as called for herein. If a
nondefaulting party at any time is compelled to pay any sum of money, or do any
act which will require the payment of any sum of money by reason of the failure
of the defaulting party hereto to comply with any provisions hereof, or if a
nondefaulting party, is compelled to incur any expense including reasonable
attorneys' fees in investigating, instituting, prosecuting and/or defending any
action or proceeding instituted by reason of any default of such defaulting
party hereunder, the sum or sums so paid by the nondefaulting party with all
interest, costs and damages, shall be

<PAGE>

deemed to be due immediately from the defaulting party to the nondefaulting
party on the first day of the month following the incurring of such respective
expenses and in the event the Tenant is the defaulting party, the sums shall be
considered as Additional Rent.

         SECTION 18.20. NO MERGER. Landlord's interest hereunder shall not merge
with its interest as Facility Mortgagee under the Facility Mortgage or its
interest under any other document or agreement between Landlord and Tenant
and/or any Affiliates thereof. Landlord's interest herewith shall not merge with
any interest obtained by Landlord by virtue of its exercise of remedies
hereunder or under the Facility Mortgage, it being the express intent of the
parties hereto (which intent shall be binding on third parties to the same
extent) that Landlord's interest hereunder remain independent of the Facility
Mortgagee's interest in, and right and remedies under, the Facility Mortgage.

         SECTION 18.21. ENTIRE AGREEMENT.

                  (a) The covenants, conditions and agreements contained in this
         Lease shall bind and inure to the benefit of Landlord and Tenant and
         their respective successors, heirs, executors, administrators and,
         except as otherwise provided in this Lease, their assigns.

                  (b) The headings or captions of the Sections hereof are
         inserted only as a matter of convenience and reference, are not to be
         deemed or construed in any way as part of this Lease, nor as
         supplemental hereto or amendatory hereof, in no way define, limit or
         otherwise describe the scope of this Lease nor the intent of any term
         hereof, and shall not affect the construction of this Lease.

                  (c) If any term, covenant, condition or provision of this
         Lease or the application thereof, to any person or circumstance, at any
         time or to any extent, shall be invalid or unenforceable, the remainder
         of this Lease, or the application of such term or provision to persons
         or circumstances other than those as to which it is held invalid or
         unenforceable, shall not be affected thereby, and each term, covenant,
         conditions and provision of this Lease shall be valid and be enforced
         to the fullest extent permitted by law.

                  (d) This writing AND THE TRAINING CENTER AGREEMENT contain the
         entire agreement between the parties hereto, and no agent,
         representative, salesman, or officer of either Landlord or Tenant
         hereto has authority to make or has made any statement, agreement or
         representation, either oral or written, in connection herewith,
         modifying, adding or changing the terms and conditions set forth herein
         and therein. No dealings between the parties or custom shall be
         permitted to contradict or modify any of the terms hereof or thereof.
         No modification or waiver of this Lease or any of the terms hereof
         shall be valid or be binding unless such modification or waive shall be
         in writing and signed by duly authorized officers of both of the
         parties hereto.

         SECTION 18.22. RECORDING OF MEMORANDUM OF LEASE. The parties agree that
a Memorandum of Lease, in substantially the form attached hereto as SCHEDULE
18.22, may be recorded in the real estate records of the County of ______, State
of Colorado by either party

<PAGE>

hereto.

                  [Remainder of page intentionally left blank.]

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals to be effective as of the day and year first above written.

                                            LANDLORD:

                                            AIMS CONTINUING EDUCATION AUTHORITY

                                            By
                                            Name
                                            Title

                                            TENANT:

                                            TRAINING DEVICES INC.

                                            By
                                            Name
                                            Title

<PAGE>

                         LIST OF SCHEDULES AND EXHIBITS

<TABLE>
<CAPTION>

Schedules
---------
<S>               <C>
3.02              Wiring Instructions

18.22             Memorandum of Lease

Exhibits
--------
<S>               <C>
A                 Description of Land

B                 Floorplan

C                 Fixtures

D                 Specifications
</TABLE>

<PAGE>

                                    EXHIBIT A

                                LEGAL DESCRIPTION

         Attached hereto is a true and correct legal description of that portion
of the Land owned by Landlord.

<PAGE>

                                    EXHIBIT B

                                    FLOORPLAN

         Attached hereto is a true and correct floorplan showing the Leased
Premises.

<PAGE>

                                    EXHIBIT C

                                    FIXTURES

         Attached hereto is a true and correct list of the Fixtures.

<PAGE>

                                    EXHIBIT D

                                 SPECIFICATIONS

         Attached hereto is a true and correct list of the Specifications.

<PAGE>

                                  SCHEDULE 3.02

                               WIRING INSTRUCTIONS

         Attached hereto is a true and correct copy of the wiring instructions
of Landlord.

<PAGE>

                                 SCHEDULE 18.22

                               MEMORANDUM OF LEASE

         THIS MEMORANDUM OF LEASE (this "Memorandum") is executed effective as
of the ____ day of ________, 1999 (the "Effective Date"), by and between AIMS
CONTINUING EDUCATION AUTHORITY, a Colorado nonprofit corporation ("Landlord"),
whose address is 5401 West 20th Street, Greeley, 80634, and TRAINING DEVICES
INC., a Colorado corporation ("Tenant"), whose address is 7367 South Revere
Parkway, Building 2C, Englewood, Colorado 80112.

                             PRELIMINARY STATEMENT:

         Landlord and Tenant entered into that certain Lease Agreement (the
"Lease") dated as of the Effective Date, the terms, provisions and conditions of
which are incorporated herein by this reference to the same extent as if recited
in their entirety herein, whereby Landlord has leased to Tenant, and Tenant has
leased from Landlord, on and subject to the terms, provisions and conditions of
the Lease, the real property, together with all buildings, structures, fixtures
and improvements thereon, described more particularly in the legal description
attached hereto as SCHEDULE 1 and incorporated herein by this reference (the
"Leased Premises"). Unless otherwise expressly provided herein, all defined
terms used in this Memorandum shall have the same meanings as are ascribed to
such terms in the Lease.

         NOW, THEREFORE, Landlord and Tenant hereby make specific reference to
the following terms, provisions and conditions of the Lease:

                  1. In consideration of the rentals and other sums to be paid
         by Tenant and of the other terms, covenants and conditions on Tenant's
         part to be kept and performed pursuant to the Lease, Landlord leases to
         Tenant, and Tenant takes and leases, the Leased Premises. The term of
         the Lease commences as of the Commencement Date and expires on the last
         day of the tenth year thereafter (the "Initial Term"), unless extended
         as provided below or terminated sooner as provided in the Lease.

                  2. Provided Tenant is not in default under the terms of the
         Lease, Tenant still occupies the Leased Premises, and Landlord consents
         to the exercise thereof (which consent may be withheld in its sole and
         absolute discretion), Tenant, by written notice to Landlord not more
         than ninety (90) days prior to the expiration of the Initial Term of
         the Lease, has one (1) option to extend the Initial Term of the Lease
         for five (5) additional years, commencing on the first day after the
         expiration of the Initial Term.

                  3. NOTICE IS HEREBY GIVEN THAT, WITHOUT THE PRIOR WRITTEN
         CONSENT OF LANDLORD, TENANT IS NOT AUTHORIZED TO PLACE OR ALLOW TO BE
         PLACED ANY LIEN, MORTGAGE, DEED OF TRUST OR ENCUMBRANCE OF ANY KIND
         UPON ALL OR ANY PART OF THE LEASED PREMISES OR TENANT'S LEASEHOLD
         INTEREST THEREIN. ANY SUCH PURPORTED TRANSACTION WHICH IS NOT APPROVED
         BY LANDLORD

<PAGE>

         SHALL BE VOID. FURTHERMORE, ANY SUCH PURPORTED TRANSACTION SHALL BE
         DEEMED TO CONSTITUTE TORTIOUS INTERFERENCE WITH LANDLORD'S
         RELATIONSHIP WITH TENANT AND LANDLORD'S FEE OWNERSHIP OF THE LEASED
         PREMISES.

                  4. Except as otherwise provided in the Lease, Tenant may not
         assign its interest in the Lease in any manner whatsoever without the
         prior written consent of Landlord. ANY SUCH PURPORTED TRANSACTION WHICH
         IS NOT APPROVED BY LANDLORD SHALL BE VOID.

                  5. Any addition to or alteration of the Leased Premises shall
         automatically be deemed part of the Leased Premises and shall belong to
         Landlord.

                  6. The Lease is a "true lease"; the only relationship created
         thereby is that of landlord and tenant. Tenant is not an agent, legal
         representative, partner, subsidiary, or employee of Landlord. Landlord
         is not responsible for any of the debts, obligations or losses of
         Tenant.

                  7. Original copies of the Lease are in the possession of
         Landlord and Tenant. The Lease contains other terms not herein set
         forth but which are incorporated by reference herein for all purposes,
         and this Memorandum is executed for the purpose of placing parties
         dealing with the Leased Premises on notice of the existence of the
         Lease and, where appropriate, its contents, and shall ratify and
         confirm all other terms of the Lease as fully as if the same had been
         set forth herein. Additional information concerning the terms of the
         Lease can be obtained from Landlord or Tenant at the addresses set
         forth above.

                  8. This Memorandum is intended for recording purposes only,
         and does not modify, supersede, diminish, add to or change all or any
         of the terms of the Lease in any respect.

                  9. This Memorandum may be executed in one or more
         counterparts, each of which shall be deemed an original.

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
         Memorandum to be duly executed as of the Effective Date.

                                            LANDLORD:

                                            AIMS CONTINUING EDUCATION AUTHORITY,
                                            a Colorado nonprofit corporation

                                            By:
                                            Name:
                                            Title:

                                            TENANT:

                                            TRAINING DEVICES INC.,
                                            a Colorado corporation

                                            By:
                                            Name:
                                            Title:

<PAGE>

         STATE OF COLORADO                  )
                                            ) ss.
         COUNTY OF ____________________     )

         This instrument was acknowledged before me on the _______ day of
________________, 1999 by _________________________, as ________________________
of AIMS CONTINUING EDUCATION AUTHORITY, a Colorado nonprofit corporation, on
behalf of said corporation.

         Witness my hand and seal.

         My commission expires: __________________________

                                                                   Notary Public

         STATE OF COLORADO                  )
                                            )ss.
         COUNTY OF ____________________     )

         This instrument was acknowledged before me on the _______ day of
_____________________, 1999 by _________________________, as
________________________ of TRAINING DEVICES INC., a Colorado corporation, on
behalf of said corporation.

         Witness my hand and seal.

         My commission expires: __________________________

                                  Notary Public

<PAGE>

                        SCHEDULE 1 TO MEMORANDUM OF LEASE

                                LEGAL DESCRIPTION

         Attached hereto is a true and correct legal description of the Leased
Premises.

<PAGE>

                                   Article I

                                  DEFINITIONS

Section 1.01.     Definitions..................................................1

                                  Article II

                           LEASED PREMISES AND TERM

Section 2.01.     The Leased Premises..........................................9
Section 2.02.     Term of Lease................................................9
Section 2.03.     Income and Expenses.........................................10
Section 2.04.     Condition of Leased Premises................................10

                                  Article III

                                     RENTS

Section 3.01.     Rents.......................................................11
Section 3.02.     Payment of Rent.............................................15
Section 3.03.     Net Lease...................................................15
Section 3.04.     No Termination or Abatement.................................15

                                  Article IV

                          USE OF THE LEASED PREMISES

Section 4.01.     Permitted Use...............................................16
Section 4.02.     Compliance with Legal and Insurance Requirements............17
Section 4.03.     Environmental Matters.......................................17

                                   Article V

                MAINTENANCE AND REPAIRS; SURRENDER; ALTERATIONS

Section 5.01.     Building Services...........................................19
Section 5.02.     Maintenance and Repairs.....................................21
Section 5.03.     Tenant's Personal Property..................................22
Section 5.04.     Surrender...................................................22
Section 5.05.     Alterations.................................................23

<PAGE>

                                  Article VI

                                     LIENS

Section 6.01.     Covenant Against Liens......................................24

                                  Article VII

                              PERMITTED CONTESTS

Section 7.01.     Permitted Contests..........................................25

                                 Article VIII

                         INSURANCE AND INDEMNIFICATION

Section 8.01.     Landlord's Insurance........................................26
Section 8.02.     Tenant's General Insurance Requirements.....................26
Section 8.03.     Responsibility for Tenant's Insurance.......................27
Section 8.04.     Waiver of Subrogation.......................................27
Section 8.05.     Satisfactory Forms..........................................28
Section 8.06.     Blanket Policy..............................................28
Section 8.07.     General Indemnification of Landlord by Tenant...............28
Section 8.08.     Independent Contractors.....................................30

                                  Article IX

                                   CASUALTY

Section 9.01.     Reconstruction in the Event of Casualty.....................30
Section 9.02.     Tenant's Property Insurance.................................31
Section 9.03.     Abatement of Rent...........................................31

                                   Article X

                                 CONDEMNATION

Section 10.01.    Total Condemnation, Etc.....................................32
Section 10.02.    Partial Condemnation........................................32
Section 10.03.    Abatement of Rent...........................................32
Section 10.04.    Allocation of Award.........................................32

                                  Article XI

                           TENANT DEFAULTS; REMEDIES

Section 11.02.    Remedies....................................................35
Section 11.03.    Waivers.....................................................37

<PAGE>

Section 11.04.    Application of Funds........................................37
Section 11.05.    Landlord's Right to Cure Tenant's Default...................37

                                  Article XII

                                 HOLDING OVER

Section 12.01.    Holding Over................................................38

                                 Article XIII

                     SUBLETTING AND ASSIGNMENT; BANKRUPTCY

Section 13.01.    Subletting and Assignment...................................38
Section 13.02.    No Right of Tenant to Mortgage Its Leasehold................39
Section 13.03.    Landlord's Right to Assign..................................39
Section 13.04.    Assignment in Context of Bankruptcy or Insolvency...........39
Section 13.05.    Other Bankruptcy Issues.....................................42

                                  Article XIV

                ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS

Section 14.01.    Estoppel Certificates.......................................43
Section 14.02.    Financial Statements........................................44

                                  Article XV

                          LANDLORD'S RIGHT TO INSPECT

Section 15.01.    Right to Inspect............................................44

                                  Article XVI

                              FACILITY MORTGAGES

Section 16.01.    Landlord May Grant Liens....................................44
Section 16.02.    Subordination of Lease......................................45
Section 16.03.    Notice to Mortgagee.........................................46
Section 16.04.    Attornment..................................................46

<PAGE>

                                 Article XVII

                    TENANT'S REPRESENTATIONS AND WARRANTIES

Section 17.01.    Representations and Warranties of Tenant....................46

                                 Article XVIII

                       ADDITIONAL AGREEMENTS OF PARTIES

Section 18.01.    Additional Affirmative Covenants of Tenant..................48
Section 18.02.    Additional Negative Covenants of Tenant.....................48
Section 18.03.    Signs.......................................................49
Section 18.04.    No Power In Tenant To Charge Reversion......................49
Section 18.05.    Right of Redemption.........................................49
Section 18.06.    Quiet Enjoyment.............................................49
Section 18.07.    Relationship of Parties.....................................49
Section 18.08.    Notices.....................................................50
Section 18.09.    Waiver......................................................50
Section 18.10.    Gender......................................................51
Section 18.11.    Covenants...................................................51
Section 18.12.    Choice of Law...............................................51
Section 18.13.    Commencement................................................51
Section 18.14.    Consent or Approval.........................................51
Section 18.15.    Force Majeure...............................................51
Section 18.16.    Time is of the Essence......................................51
Section 18.17.    Characterization............................................51
Section 18.18.    Provision of Notices Affecting Leased Premises..............52
Section 18.19.    Attorneys' Fees.............................................52
Section 18.20.    No Merger...................................................53
Section 18.21.    Entire Agreement............................................53
Section 18.22.    Recording of Memorandum of Lease............................54

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