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                                                                    EXHIBIT 10.1

                              SETTLEMENT AGREEMENT

        REGARDING AGREEMENTS IN CONNECTION WITH THE REHABILITATION OF THE
          SUPERIOR NATIONAL INSURANCE COMPANIES IN CONSERVATION AND THE
  REORGANIZATION OF SUPERIOR NATIONAL INSURANCE GROUP, INC., AND ITS AFFILIATES

         The Parties, for good and valuable consideration, agree to the
following terms and conditions (the "Settlement Agreement"):

I.       PARTIES AND DEFINITIONS.

         A.       THE "BANKRUPTCY COURT" shall mean the United States Bankruptcy
                  Court for the Central District of California, which court has
                  jurisdiction over the chapter 11 cases of the Debtors.

         B.       THE "CONSERVED COMPANIES" shall mean, collectively, Superior
                  National Insurance Company in Conservation; Superior Pacific
                  Casualty Company in Conservation; California Compensation
                  Insurance Company in Conservation; Combined Benefits Insurance
                  Company in Conservation; and Commercial Compensation Casualty
                  Company in Conservation, formerly known as Commercial
                  Compensation Insurance Company.

         C.       THE "CONSERVATOR" shall mean the California Insurance
                  Commissioner, in his capacity as statutory conservator of the
                  Conserved Companies under California Insurance Code section
                  1010, ET SEQ. The Conservator shall be a party to this
                  Settlement Agreement (as defined hereafter), acting on behalf
                  of the Conserved Companies, but not individually.

         D.       THE "CLO" shall mean the Conservation & Liquidation Office of
                  the California Department of Insurance, which acts under the
                  direction and authority of Special Deputy Insurance
                  Commissioner, Richard G. Krenz. The Conservator has delegated
                  responsibility for the operation of the Conserved Companies to
                  the CLO.

         E.       THE "COMMISSIONER" shall mean the California Insurance
                  Commissioner, in his regulatory capacity, including any Acting
                  Insurance Commissioner and any duly elected or appointed
                  successor in office. The Commissioner shall be a party to this
                  Settlement Agreement, but only with respect to his obligations
                  this Settlement Agreement.

         F.       THE "DEBTORS" shall mean, collectively, Superior National
                  Insurance Group, Inc., Business Insurance Group, Inc. ("BIG"),
                  SN Insurance Services, Inc. ("SNIS"), and SN Insurance
                  Administrators, Inc. ("SNIA"). The Debtors shall be a party to
                  this Settlement Agreement.

         G.       THE "FACILITATOR" shall mean Christopher M. Maisel, P.C., in
                  his capacity as the "access facilitator" and as approved by
                  the Bankruptcy Court in Debtors' chapter 11 cases. The
                  Facilitator shall be a party to this Settlement Agreement, but
                  only with respect to his obligations under this Settlement
                  Agreement.

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         H.       "FRONT COMPANIES" shall mean, collectively, Underwriters
                  Insurance Company, Centre Insurance Company and/or ZC
                  Insurance Company, but only to the extent such companies have
                  issued Front Business, as defined below.

         I.       "FRONT BUSINESS" OR "FRONTED BUSINESS" shall mean insurance
                  policies issued through the facilities and systems of Debtors
                  or the Conserved Companies but on the policy forms of the
                  Front Companies.

         J.       "KEMPER" shall mean, collectively, Lumbermens Mutual Casualty
                  Company, Kemper Employers Group, Inc., and Kemper Employers
                  Insurance Company, and any affiliates mentioned in the
                  Rehabilitation Plan. Kemper shall be a Party to this
                  Settlement Agreement and its obligations Settlement Agreement.

         K.       THE "LENDERS" shall mean any creditor of Debtors that holds or
                  purports to hold a lien, security interest or other
                  encumbrance on any property or asset identified in III.B.
                  Unless required to implement the agreements contemplated in
                  this Settlement Agreement, it is not contemplated that the
                  Lenders are to be parties hereto.

         L.       "OLD FRONT COMPANY BUSINESS" shall mean insurance policies
                  issued through the facilities and systems of Debtors or the
                  Conserved Companies, or their predecessors, but on the policy
                  forms of any insurer (i) that is not affiliated with Debtors
                  or the Conserved Companies, or (ii) that is not a Front
                  Company.

         M.       [RESERVED]

         N.       THE "PARTIES" shall mean the parties to this Settlement
                  Agreement, namely the Conserved Companies, the Conservator,
                  the Commissioner, the Debtors, the Facilitator and Kemper.

         O.       THE "SUPERIOR COURT" shall mean the Superior Court of the
                  State of California for the County of Los Angeles, which court
                  has jurisdiction over the conservation proceedings of the
                  Conserved Companies.

         P.       The "Rehabilitation Plan" shall mean any agreement between or
                  amongst Kemper, the Conservator and /or the California
                  Insurance Guarantee Association (CIGA) which requires or which
                  is submitted for court approval, and shall include all
                  pleadings and proposed orders related thereto.

II.      STANDSTILL AND NON-WAIVER AGREEMENT.

         The Parties have acted in good faith while negotiating this Settlement
Agreement. In the event that the agreements contemplated under this Settlement
Agreement are not finalized due to (i) the failure of any party to execute the
Settlement Agreement; or (ii) the failure of either the Superior Court or the
Bankruptcy Court to approve the Settlement Agreement or the agreements
contemplated herein, neither party will assert in any proceedings that delay of
any actions by either party during the term covered by this Settlement Agreement
(a) constitutes a waiver or triggers the application of the doctrine of laches
or any other defense associated with the passage of time; or (b) adversely
affects that party's ability to conduct such proceedings.

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         The Parties agree to the following terms, and agree to take the
following actions and/or execute the following agreements to support the
approval, confirmation, implementation and operation of the Conservator's plan
of rehabilitation for the insurance businesses of the Conserved Companies (the
"Rehabilitation Plan").

         A. SUPPORT FOR REHABILITATION PLAN. Debtors shall support the
Conservator's (1) Application for Order Appointing Liquidator and Restraining
Orders; (2) Application for Order Approving and Authorizing Rehabilitation Plan,
and (3) Application for Orders Shortening Time or Specially Setting the
Applications (hereinafter "Applications").

         The Conservator covenants and represents that (i) he did not and does
not intend these Applications or the Rehabilitation Plan to (a) result in any
way conflict with the performance of this Settlement Agreement or a violation of
any provision of this Settlement Agreement; (b) result in the material
impairment of the ownership or value of the NOLs (as defined in Section IV.A);
or (c) address in any the Debtors' obligation, if any, to any surety; and (ii)
he has not taken any action that he knew or knows would materially impair the
ownership or value of the NOLs and will take no such action without the prior
approval of a court of competent jurisdiction. The Order Approving the
Rehabilitation Plan and the Liquidation Orders shall contain language (1)
expressly stating the contents of the above covenant and representation and (2)
requiring the Conservator or the Liquidator, as the case may be, to obtain an
order from a court of competent jurisdiction to take any action which is
intended to or does knowingly result in (a), (b) and (c) described above.
Provided further that in the event that it is subsequently discovered that there
is any provision in the Applications, Orders and the Rehabilitation Plan that is
intended to or does result in (a), (b) and (c) described above, then the
Conservator or the Liquidator, as the case may be, shall take all reasonable
steps to correct and cure the same provided that he shall not be required to
perform any act which adversely affects the rights of Kemper as contained in the
Rehabilitation Plan. Debtors shall neither file nor solicit the filing of any
objection or opposition to any motion, application or other proceeding in the
Superior Court related to the Rehabilitation Plan. Debtors shall file a pleading
formally withdrawing their objections filed June 29, 2000 in connection with the
Conservator's identification of Kemper's proposal as the prevailing proposal
under the RFP process. Only in the event there is any claim by the Debtors
against Conservator or the Liquidator, as the case may be, for breach of the
foregoing covenants and representations occurring up to and including the date
of the approval by the Superior Court of the Applications, Orders, and the
Rehabilitation Plan, any such claim for money damages shall be subordinated to
any indemnification right owed to Kemper by the Conservator under the
Rehabilitation Plan.

         B. AGREEMENTS REGARDING IMPLEMENTATION OF REHABILITATION PLAN. The
Conservator and Debtors agree to the following with respect to the closing and
implementation of the Rehabilitation Plan.

            1. ASSIGNMENT OF LEASES, FACILITIES AND OPERATING ASSETS TO KEMPER.
Debtors will assign to the Conservator for the benefit of Kemper all right,
title and interest in, if any and without warranty, and will use their best
efforts to require the Lenders to release any security interest, lien or
encumbrance on the assets described in subsections (a) and (b) of this Section,
provided, however, that as used in this Section, the term "best efforts" shall
not be construed so as to require Debtors to advance funds to or pay monetary
consideration to Lenders to secure consents to assignments or lien releases:

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                  a. All owned or leased property, real or personal, tangible
and intangible, designated or to be designated by Kemper in connection with the
Rehabilitation Plan, including without limitation, furniture, fixtures and
equipment, software, hardware, office equipment and any other assets, the sale
or assignment of which is not inconsistent with the agreements provided for in
this Settlement Agreement or any commitment made or that may be made to Debtors
in the final form of the Rehabilitation Plan ultimately approved by the Superior
Court. With respect to leased property, Debtors' obligation under this Section
III.B.1.a is to use its best efforts to assume said executory leases and to
thereafter assign such leases to the Conservator or to Kemper, as the case may
be; and

                  b. Any of the names or trade names, trademarks, service marks
and logos under which any of the Conserved Companies has conducted business,
except (i) the corporate names "SN Insurance Administrators, Inc." and "SN
Insurance Services, Inc.," ownership and control of which shall be retained by
Debtors, and (ii) the domain name "Superior.com" and the server that supports
it. Provided further that the ownership, possession, or control of all right,
title and interest in the domain name "Superior.com" and the server that
supports it is in all things vested in Debtors and the Conservator releases all
claims to the same. The Conservator represents that he has not transferred said
domain name to any other person and will execute any necessary documents and
take all necessary actions to effectuate this ownership, possession or control
of all right, title and interest by the Debtors of "Superior.com" and the server
that supports it. In the event the server is leased property, the Debtors shall
have the right to negotiate to purchase or lease the server. The Debtors have
agreed not to use the Superior.com domain name, and not to sell or assign said
domain name to any entity that will use it in connection with an insurance
business.

                  c. Debtors shall be under no obligation to assign or secure
lien releases on any property owned by Debtors that is (i) located outside of
California or (ii) located within California and not designated for assignment
by Kemper or, (iii) cash, cash equivalents, securities, bonds, the NOLs, or
causes in action or any rights in VI.A.3.c-g of this agreement. Notwithstanding
the foregoing, this subsection shall not be construed as a release by any Party
of any claim of ownership to operating assets that are not subject to assignment
by Debtors hereunder.

                  d. Other than pleadings to be filed in the Bankruptcy Court,
the Debtors shall not be responsible for the preparation of any documents
required to effect the transfers or assignments by Debtors set forth in this
Section.

            2. ASSIGNMENT OF LEASES, FACILITIES AND OPERATING ASSETS TO
CONSERVATOR. Debtors will assign to the Conservator and/or the CLO all right,
title and interest in, if any and without warranty, and will use their best
efforts to require the Lenders to release any security interest, lien or
encumbrance on the assets described in section III.B.2.a below, provided,
however, that as used in this Section, the term "best efforts" shall not be
construed so as to require Debtors to advance funds or pay monetary
consideration to Lenders to secure consents to assignments or lien releases:

                  a. All owned or leased property, real or personal, tangible
and intangible, located within the State of California, designated or to be
designated by the Conservator in connection with the Rehabilitation Plan,
including without limitation, the real property lease at 26541 Agoura Road,
Calabasas, California, furniture, fixture and equipment, software, hardware,

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office equipment and any other assets, the sale or assignment of which is not
inconsistent with the agreements provided for in this Settlement Agreement or
any commitment made or that may be made to Debtors in connection the final
Rehabilitation Plan ultimately approved by the Superior Court. In the event the
Conservator and Kemper designate identical assets to be assigned by Debtors,
Debtors shall be deemed to have satisfied their obligations under Section
III.B.1 by assigning such designated asset or assets to the Conservator, who
shall thereafter be solely responsible for resolving with Kemper any conflict
over designated assets. With respect to leased property, Debtors' obligation
under this Section III.B.2.a is to use its best efforts to assume said executory
leases and to thereafter assign such leases to the Conservator and/or the CLO;
and

                  b. Debtors shall be under no obligation to assign or secure
lien releases on any property owned by Debtors that is (i) located outside of
California; or (ii) located within California and not designated for assignment
by either Kemper or the Conservator or, (iii) except as provided for in V.C.,
cash, cash equivalents, securities, equities, bonds, the NOLs, or any cause of
action or any rights in VI. A. 3 c.-g. Notwithstanding the foregoing, this
subsection shall not be construed as a release by any Party of any claim of
ownership to operating assets that are not subject to assignment by Debtors
hereunder.

            5. Other than pleadings to be filed in the Bankruptcy Court, the
Conservator shall be responsible for the preparation of all documents required
to effect the transfers or assignments by Debtors set forth in this Section.

            6. TRANSITION PERIOD TO PROVIDE FOR ASSUMPTION/REJECTION OF
EXECUTORY CONTRACTS. The Conservator and Debtors will cooperate in good faith to
effect an expedited and orderly transition and transfer of the owned and leased
facilities and other operating assets to be assumed and assigned and transferred
pursuant to this Settlement Agreement and to complete this process by November
15, 2000 (the "Transition Period"). At any time during the Transition Period,
the Conservator may identify any real property or personal property including
facilities and other operating assets, leases or licenses (collectively "Leased
Property") that will not be assigned to or assumed by the Conservator or Kemper
and will give Debtors prompt written notice of such determination. The
Conservator will use his best efforts to provide Debtors as soon as possible
with written notice of the Leased Property which the Conservator will vacate,
abandon or not use, or has vacated, abandoned or ceased using and will provide
all information necessary to provide the landlord, licensor, or the like with
possession of or access to such Leased Property. The Debtors will use best
efforts to at their election either assume such obligations for their own right
or reject said obligations in accordance with the applicable provisions of the
bankruptcy law. In the event of such a rejection, the Debtors will use best
efforts to defend against any claim for damages made by any person in connection
with the Leased Property, and will consult with the Conservator and permit the
Conservator to assist in the defense against such claims. In the event that any
claim for damages, including any unpaid rent, lease payments, or license fees is
allowed in Debtors' bankruptcy, the Conservator shall indemnify and hold
harmless the Debtors from all such claims plus the cost of defense including
reasonable attorneys' fees. To the extent that such claims are allowed as a
claim in a certain amount in the Bankruptcy Court that is indemnified herein,
the Conserved Companies shall only be Debtors' estates for the amount
distributable in respect of such claims, calculated without giving effect to the
indemnification, pursuant to an order of the Bankruptcy Court or a confirmed
plan of reorganization or plan of liquidation, not the allowed amount of the
allowed claim. This limitation on the indemnification is not intended to affect
the Conserved Companies'

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obligation to indemnify and hold harmless the Debtors for the cost of defense
including reasonable attorneys' fees. This indemnity agreement shall be paid as
an administrative expense of the Conserved Companies and shall be secured by (1)
the proceeds in the U.S. Life matter as described and limited in section V.C.
and (2) a security interest and/or lien on the proceeds of any indemnity
provided to the Conservator by Kemper whereby Kemper indemnifies the Conservator
in whole or in part for the claim related to the Leased Property. Debtors shall
file any necessary motions in the Bankruptcy Court to extend the statutory
period for assuming or rejecting Debtors' executory obligations on Leased
Property until November 30, 2000. Nothing in this provision is intended to
confer rights upon any creditor of Debtors or the Conserved Companies as a third
party beneficiary or otherwise, and no such creditor may rely upon Debtors'
indemnification rights hereunder in pursuing claims against either the Debtors
or the Conserved Companies.

            7. INDEMNITY. In consideration of Debtors' agreement to assume,
transfer and assign any lease or license of any Leased Property designated by
the Conservator, the Conserved Companies will indemnify and hold harmless the
Debtors' estate for any and all past and future contractual obligations
associated with all such assigned, or transferred Leased Property, and any tort
claims relating to the Leased Property where the cause of action accrued on or
after March 3, 2000. Such indemnity shall include the cost of defense including
reasonable attorneys' fees. To the extent that a claim that is indemnified
herein is allowed as a claim in a certain amount in the Bankruptcy Court, the
Conserved Companies shall only be obligated to hold harmless and indemnify the
Debtors' estates for the amount distributable in respect of such claims,
calculated without giving effect to the indemnification, pursuant to an order of
the Bankruptcy Court or a confirmed plan of reorganization or plan of
liquidation, not the allowed amount of the allowed claim. This limitation on the
indemnification is not intended to affect the Conserved Companies' obligation to
indemnify the Debtors for the cost of defense including reasonable attorneys'
fees. This indemnity shall be paid as an administrative expense of the Conserved
Companies and shall be secured by (1) the proceeds in the U.S. Life matter as
described and limited in section V.C. and (2) a security interest and/or lien on
the proceeds of any indemnity provided to the Conservator by Kemper whereby
Kemper indemnifies the Conservator in whole or in part for the Leased Property.
Debtors shall file any necessary motions in the Bankruptcy Court to extend the
statutory period for assuming or rejecting Debtors' executory obligations on
"Leased Property." Nothing in this provision is intended to confer rights upon
any creditor of Debtors or the Conserved Companies as a third party beneficiary
or otherwise, and no such creditor may rely upon Debtors' indemnification rights
hereunder in pursuing claims against either the Debtors or the Conserved
Companies.

         C. AGREEMENTS IN CONNECTION WITH OPERATIONS UNDER THE REHABILITATION
PLAN. The Conservator, Kemper and Debtors agree to the following terms in
connection with their respective business operations under the Rehabilitation
Plan. This Agreement shall supercede that certain letter agreement between
Kemper and Debtors dated on or about June 28, 2000.

            1. NON-COMPETE/NON-SOLICITATION. The Conservator, Kemper and
Debtors, including any of their subsidiaries currently in existence or
subsequently created, agree to the following terms regarding competition and the
solicitation of insurance business under the Rehabilitation Plan.

                  a. CALIFORNIA. Debtors will not conduct insurance business in
California from the date hereof for a period of 30 months, commencing on the
Trigger Date. The Trigger Date

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shall be (i) August 31, 2000, if the closing takes place by September 30, 2000;
or (ii) on the date of closing, if the closing takes place after September 30,
2000, but in no event shall the closing take place after November 30, 2000
without the consent of the Conservator, Kemper, and the Debtors. Excepted from
this 30 month non-compete period are the following: (i) the activities allowed
by Sections III.C.1.b., c. and III.C.2., herein, and (ii) the runoff services
provided with respect to the fronted policies (excluding any renewal rights or
any role with respect to the renewal of such policies (the "Fronted Business
Run-Off"). However, Debtors may apply to the Commissioner for permission to
conduct lines of insurance business other than workers compensation after August
31, 2001. The Commissioner in the exercise of his discretion shall not
arbitrarily withhold that permission.

                  b. NATIONAL SALES. Debtors may compete with Kemper only as an
agent, managing general agent, third party administrator, underwriter, or risk
management services provider, with respect to workers' compensation insurance,
and only in the following 19 states: IL, NJ, CO, TX, AZ, OK, IN, PA, KS, MO, NY,
GA, FL, AR, OR, TN, IA, MD, and DE (collectively, the "Permitted States").
Eligible business for the Debtors is defined as acting as agent, managing
general agent, risk management services provider or third party administrator
with respect to workers' compensation policies, and where both of the following
conditions are satisfied: (i) where each agent or other producer with respect to
the policy is located in a Permitted State, and (ii) more than 90% of the total
payroll (measured by reference to each policy) arises in the Permitted States
(the "Debtor Eligible Business"). In addition, Debtor Eligible Business is
expanded to include sale or renewal of policies where the insured is one of the
entities or its affiliates listed on the schedule attached hereto as Exhibit
"A." Finally, Debtor Eligible Business also includes any reinsurance by Superior
(Bermuda) Ltd. of any Debtor Eligible Business. To the extent it is an asset
acquired by Kemper under the Rehabilitation Plan, all renewal information and
data in existence as of closing of the Rehabilitation Plan will remain owned by
Kemper; provided, however, that Kemper will provide all data and information to
Debtors necessary to effectuate the Fronted Business Run-Off.

                  c. FRONTED BUSINESS. From the date hereof and continuing for a
period of thirty (30) months commencing on the Trigger Date, Debtors will not
solicit, compete with Kemper with respect to, or write any business with respect
to workers' compensation insurance that is not Debtor Eligible Business. Debtors
will be expressly permitted to solicit, to compete for, and to write renewals of
fronted business that represent Debtor Eligible Business. For purposes of
clarity, fronted policies that are Debtor Eligible Business shall be listed, by
policy number, on a schedule, to be referred to as the Debtor Fronted Eligible
Business Schedule, agreed to by Debtors and Kemper. Any fronted policy not on
the Debtor Fronted Eligible Business Schedule shall not be Debtor Eligible
Business. Kemper represents and warrants that it will use its best efforts to
prepare the Debtor Fronted Eligible Business Schedule no later than ten business
days after execution of this agreement and to ensure that such schedule lists
all policies qualifying as Debtor Fronted Eligible Business.

                  d. APPLICATION TO INDIVIDUALS. The following individuals will
enter into limited non-compete agreements with Kemper: Arnold Senter, William
Gentz and J. Chris Seaman. The scope of those non-compete agreements will be as
follows: The individuals will agree that (i) while employed or being paid by any
of the Debtors, they will not engage in any business, and will not be associated
with any other organization that engages in any business, that the Debtors
cannot engage in pursuant to the terms hereof; and (ii) if two or more of the
individuals are employed by or involved in a business, and the individuals' own
efforts constitute a significant percentage of

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the activities of that business, then those individuals will not engage in any
business in which the Debtors cannot engage. For example, the foregoing would
not prohibit two or more of the individuals from being employed by an insurance
company, since the individuals' own efforts would constitute only a small part
of the business of that company.

            2. LOCATION OF DEBTORS' OFFICES AND EMPLOYEES. The Debtors will be
permitted to operate administrative, corporate headquarters in California.
During the period commencing on the date hereof and continuing for thirty-months
after the Trigger Date, (i) Debtors' corporate headquarters office will have no
more than twenty-five (25) total employees, (ii) aside from the corporate
headquarters executive office, no other office in California will have more than
five (5) employees, and (iii) no office in California will perform production or
underwriting functions, excluding data processing operations relating to
production or underwriting on Debtor Eligible Business, provided that this
subsection (iii) shall not be construed as prohibiting a manager of production
or underwriting functions from residing or working in a California office. The
Debtors will have no processing/administrative location in states other than the
Permitted States, except with respect to the Fronting Business Run-Off.

         For purposes of Section IIIC.3 and IIIC.4, "CLO or Conserved Companies"
shall mean collectively the CLO, the Conserved Companies and the Conservator.
Capitalized terms in this Letter Agreement will have the meanings defined in the
Settlement Agreement.

III.C.3. REGARDING EMPLOYEES

         (a) The CLO, Debtors, and Kemper shall refrain from the hiring of, the
extending of employment offers to, and the termination of "employees" (currently
employed by the Conserved Companies) through Friday, September 8, 2000, 10:00
a.m. Termination of "employees" may recommence on Friday, September 8, 2000, at
10:00 a.m.

         (b) Subject to the limitations described below, commencing on Friday,
September 8, 2000, at 10:00 a.m., the CLO, Kemper, and Debtors may make
employment offers to (and subsequently hire) all individuals employed by the
Conserved Companies including but not limited to employees of the Conserved
Companies who have received offers, have accepted offers, have been or are hired
as Conserved Companies employees. The foregoing individuals do not include,
however, those employees designated by any party as "Exclusive." For the
purposes of this Section, the designation of an employee as "Exclusive" shall
mean that the employee can only be hired by the party designating that employee
as "Exclusive," for the duration of the Exclusion Period, defined below. Also
for the purposes of this Section, "employees" shall mean any and all employees
who were, or are, or will be employed by the Conserved Companies or their
affiliates.

         (c) Conserved Companies "employees" outside of California are not
Exclusive "employees" with the exception of the thirteen "employees" designated
by the Debtors as Exclusive and named in a list provided to all parties.

         (d) Conserved Companies "employees" in California are not Exclusive
"employees" except as provided below:

             (1) Claims "employees" in California: Kemper has designated seven
individuals as Exclusive and has provided a list of these individuals to all
parties. Debtors may make

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employment offers to a maximum of twenty Claims employees and may hire a maximum
of ten Claims "employees," provided that said employees are not designated as
Exclusive.

             (2) Underwriting "employees" in California: Kemper has designated a
list of 30 individuals as Exclusive and has provided a list of these individuals
to all parties. Debtors may hire a maximum of five Underwriting "employees" who
are not designated Exclusive.

             (3) IT employees in California (generally): Debtors may hire a
maximum of seven (7) IT employees. The IT employees are divided into three
categories: SNTL Systems; ACT/APT Systems; and Operations/ Network/ Desk Top/
Help Desk. Generally, Debtors may hire a maximum of three employees from each
category and in all events, six from SNTL Systems.

                 (i) SNTL Systems: Kemper has designated seven SNTL systems
employees as Exclusive and has provided a list of these individuals to all
parties. The CLO has designated a list of two SNTL systems individuals as
Exclusive and has provided a list of these individuals to all parties. Debtors
may make offers to four of Kemper's non-SWAMI Exclusives and may hire a maximum
of three of them. Debtors may make "Second Offers" to (and subsequently hire)
the two CLO Exclusive employees. In addition, Debtors may make an offer to (and
subsequently hire) one other specific employee from the SNTL Staff.

                 (ii) ACT / APT Systems: The CLO has designated a list of four
ACT / APT Systems employees as Exclusive and has provided a list of these
individuals to all parties. Debtors may hire a maximum of three ACT / APT
employees.

                 (iii) Operations/ Network / Desk Top/Help Desk Group: The CLO
has designated a list of four Operations/ Network/ Desk Top/ Help Desk Group
employees as Exclusive and has provided a list of these individuals to all
parties. Debtors may hire a maximum of three Operations/ Network/ Desk Top/ Help
Desk Group employees.

                 (iv) As to any IT employee listed as Exclusive by the CLO, if
any such employee has not accepted an employment offer from the CLO, and if a
"cooling off" period of at least two weeks has elapsed from the CLO's last
offer, then Debtors may extend such an individual an employment offer provided,
however, that the offer is made while the employee is still employed by the CLO.

             (5) Accounting "employees" in California: CLO may make the first
offers to six "employees" designated as Exclusive. Provided however that with
respect to the three accounting employees agreed to between the Debtors and the
CLO, when the Conservator makes the first offer he shall inform in writing the
employee that "Before you accept this offer you are advised that the Debtors and
possibly Kemper may be interested in employing you and you are free to contact
them to inquire about employment opportunities with them. You may not accept our
offer for three (3) business days so that you can consider other employment
opportunities." As to the other three Exclusive employees, if any such employee
has not accepted an employment offer from the CLO, and if a "cooling off" period
of at least two weeks has elapsed from the CLO's last offer, then Debtors may
extend such an individual an employment offer. With respect to any employee that
is not exclusive and is not subject to the right of any party to make the first
offer, at a minimum any party that makes them an offer shall inform them that
they may have employment opportunities with the other Parties, but no waiting
period shall apply before offers may be accepted.

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             (6) As to any IT employee hired by Debtors, employee shall provide
to the CLO Chief Information Officer documentation (not to exceed ten
typewritten pages) as to his/her job responsibilities. Said documentation shall
describe the procedures used to fulfill his/her job duties and obligations, and
shall be provided within 30 days of accepting of employment with the Debtors. As
part of the IT employee access and cooperation agreement provision in this
Settlement, Debtors and the CLO will, to the extent practical, transition the
timing of the IT employees and will provide assistance and cooperation to the
employee retained in their former positions for the first sixty days of
employment with Debtors.

         (e) Debtors are subject to the limitations in hiring stated above in
paragraph d. for the duration of the Exclusion Period.

         (f) All parties are precluded from hiring Exclusive employees for the
duration of the Exclusion Period. Any party, however, may seek from another
party a waiver of Exclusive employee rights. It is hoped that such requests will
not be refused unreasonably.

         (g) Notwithstanding the restrictions in (e) and (f), the Debtors shall
be allowed to hire any accounting employee that was designated Exclusive by the
CLO where such employee has not accepted employment from the CLO, and any IT
employee designated as exclusive by the CLO where such employee has not accepted
employment with the CLO and a two week period has passed from such
non-acceptance. In the event that Debtors extend an offer to such an IT
employee, then Debtors shall meet and confer with the CLO regarding a mutually
agreeable transition period where such employee has accepted an offer from
Debtors.

         (h) The Exclusion Period is defined as September 8, 2000, through the
later of (i) March 8, 2001, or (ii) the date upon which Debtors cease to use
SWAMI and relinquish all access to SWAMI to the CLO and/or Kemper.

III.C.4  COMPUTER SYSTEMS.

         1. Debtors shall receive from the CLO with Kemper's consent copies of
all software that Kemper has purchased or received exclusively or non
exclusively or has been given a right to use or share with the CLO, or that
Kemper shall be purchasing or receiving exclusively or non exclusively or will
be given a right to use or share with the CLO, as described in the
Rehabilitation Agreement, with the exception of the SWAMI system. "Software"
shall include all programs, associated applications, source codes, associated
hardware information, development environments, compilers, executors, link
editors, methodology, and other things described and contemplated by
Rehabilitation Agreement Schedules 6.1(d)(1), 6.1(d)(2) and 6.1(d) (3).
Additionally, Debtors will receive from the CLO copies of any and all other
software, programs, and utilities which were not purchased or received by Kemper
that was, or is the property of the Conserved Companies or the Debtors. All of
the above referenced software is described on Exhibit "E" attached hereto. At
the CLO's expense, it shall promptly recreate and copy, as needed, the computer
systems and software programs described in Exhibit "E" and deliver them to the
Debtor, and collectively such copies shall be called the "Debtors Software." To
the extent that the CLO cannot locate any of the Conserved Company items
described as the Debtors Software, the CLO shall use all reasonable efforts to
find such software and shall afford the Debtors the opportunity to locate the
software. The Conservator will not be obligated to grant Debtors System
Administrator Access for this purpose. The Debtors' Software shall be a non
exclusive license to be used by Debtors for any business purpose except that

                                    Page 10
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it may not be transferred, sold or assigned. No party shall object to any party
seeking any and all software licenses, from vendors, which licenses that party
requires. In connection with this Settlement Agreement the debtors when
transferring software rights to the CLO will transfer any licenses that are
transferable and will use reasonable efforts to seek the consents of vendors.
Debtors will not be required to pay any transfer fees, consent fees or any other
fees to so transfer. If vendors do not agree, Debtors may keep such licenses.
Generally, the parties shall cooperate to properly transfer and coordinate the
required licenses.

         2. During the "Systems Transition Period" (which begins upon court
approval of the Rehabilitation Plan and ends on the later of 12 months or the
date upon which all connectivity is requested by the Debtor to be terminated),
Debtors will have access to and use of (1) all of the software and systems as
described in Section One above as they currently exist and (2) the existing
version of SWAMI (but excluding source codes), for the purpose of conducting
Debtor Eligible Business (including Debtor Fronted Eligible Business) only.
Kemper will continue to own SWAMI.

         3. During the Systems Transition Period, Debtors alone will be solely
responsible for implementing a standalone replacement for SWAMI, on their own
platforms and hardware, for their own exclusive use.

         4. The current physical systems will remain in the Conservator's
possession in California during the Systems Transition Period. Debtors shall
receive remote access to the Companies' systems under coordination with the CLO.
During the Systems Transition Period, Debtors will bear any direct incremental
cost, as a result of the Debtors' access and use of the current existing systems
including SWAMI including without limitation, creating firewalls and segmenting
data (as reasonably required by the Conservator,), modifying software or
hardware or special requests that are not out of the ordinary, Debtors shall
also pay the direct incremental cost of transferring authorized data and the
software to the "Debtors Software" on a stand alone system and hardware.
Incremental cost shall include employee cost based upon salary and out of pocket
employee benefits on an hourly basis, as well as materials, but shall not
include overhead. Additionally, Debtors shall pay an "allocated" cost for the
general maintenance of the software systems maintained by the CLO and used by
the Debtors. Only with respect to premiums or claims where the Debtors use the
system for policy issuance, policy maintenance or claims administration. Debtors
will pay such an allocated cost in two components: (i) a 1% charge of premiums
earned where such premium is on a policy "produced" through Debtors as a
managing general agent, (ii) a systems charge per claim (to be negotiated in
good faith) for claim business handled by the Debtors as a third party
administrator. where Debtors obligation is solely as a claims administrator and
there was no associated premium that was produced by or through the Debtor.
Charges to Debtors shall be billed and collected monthly. All of the above
charges are only applicable for the use of the systems during the Systems
Transition Period and shall be prorated as appropriate.

         5. Debtors will be responsible for all applications programming support
for Debtors' Software and systems during and after the Systems Transition
Period. Should the Debtors use the Companies' systems during the Systems
Transition Period for the issuance of insurance policies, the Debtors will
provide all human resources at Debtors' expense for the operation and
development (including entry of rates and policy forms) of such policy issuance
and administration on the Companies' systems. In addition, the Debtors will pay
the cost of an employee who will serve as overall coordinator of the Debtors'
systems activities at the Companies. Such employee will report

                                    Page 11
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to the Chief Information Officer of the CLO and will be eligible to be hired by
Debtors at the conclusion of the Systems Transition Period. The employee so
designated has been agreed to between Debtors and the CLO.

         6. After the Systems Transition Period, all connectivity by Debtors to
all the existing Companies' systems, including the SWAMI system, will be
terminated. Debtors will be responsible for procurement of all physical and
software applications infrastructure and components to create a standalone
system. To the extent reasonably practical, Debtors will remove all data and
software developed or entered by the Debtors during the Systems Transition
Period at or prior to the end of the Systems Transition Period.

            5. DATA. The Conservator shall possess exclusive right to, and may
assign to Kemper, free and clear of any encumbrance or conflicting claim from
Debtors and the Lenders, and the Debtors waive any right to assert an interest
in all present and past data generated directly or indirectly from the operation
of the Conserved Companies, including but not limited to policyholders lists of
the Conserved Companies, underwriting information, all individual and collective
original policy information, all historical paid, reserve and incurred loss
data, all individual and collective claims information, information regarding
policies issued by the fronting carriers and reinsured on any basis to the
Conserved Companies, and any other information and data that Kemper or the
Conservator deems necessary to the implementation and operation of the
Rehabilitation Plan or the ultimate liquidation of the Conserved Companies
(collectively, the "Conservation Data"), provided, further, that Debtors make no
representations or warranties regarding any portion of the Conservation Data to
which the Front Companies may assert a claim or interest, and Debtors assignment
and waiver herein is only effective to the extent it does not constitute a
breach of any fiduciary or contractual obligation owed to the Front Companies.
Notwithstanding the foregoing, Debtors represent that to the best of their
knowledge, no Front Company has presented any Debtor with any written notice of
an event of default under an underwriting manager agreement. The foregoing
representation is limited, however, by the contents of any written
communications between the Front Companies and the Debtors which is delivered to
the Conservator by the close of business, Monday, September 11, 2000. Debtors
shall have equal right to possess and/or have access to data (i) necessary for
the writing of Debtor Eligible Business; (ii) necessary for the administration
of the Fronted Business Run-Off and to otherwise comply with the terms of
Debtors' contracts with the Front Companies; (iii) that can be readily
identified as constituting solely Debtors' legal, corporate, regulatory,
accounting, financial and human resource records and data, including but not
limited to subsidiaries' records (e.g., Superior Bermuda Ltd.), and the BIG
acquisition (collectively, the "Debtors' Data"); and (iv) all employee-related
benefits, including but not limited to the 401(k) plan. Debtors' right to
possession and/or access to Debtors' Data shall apply regardless of whether such
data is in the Debtors' possession, Kemper's possession, the CLO's possession,
the Conserved Companies' possession or the Conservator's possession. Debtors
shall not use the Debtors' Data in any manner that directly or indirectly
conflicts with the non-compete provision set forth in Section III.C.1 hereof.
The Debtors shall retain exclusive right to data concerning any employees who
are employed by the Debtors in a manner consistent with Section III.C.3, in
whatever form they or successor entities emerge from bankruptcy, including but
not limited to personnel files and human resource files.

         D. RELEASE AND IMMUNITY. The Debtors and the individuals specified in
Section III.C.1.d, on the one hand, and Kemper on the other, will exchange
releases and immunity

                                    Page 12
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agreements substantially in the form attached hereto as Exhibit "D," prohibiting
lawsuits based on any activities involving the Conserved Companies from the time
of the conservation to the approval of the Rehabilitation Plan.

         E. NO CHALLENGE TO CERTAIN FEE APPLICATIONS. Debtors will not challenge
the right to feeS by Marsh & McLennan Securities Corporation or Guy Carpenter &
Company, Inc. or any other application by the Conservator seeking approval for
the retention or payment of any person or entity retained pursuant to Insurance
Code sections 1035 or 1036, or approval to pay any other administrative expenses
of the conservation from the assets of the Conserved Companies. In the event,
however the Conserved Companies are in default on any obligation to pay an
indemnity claim by Debtors hereunder as an expense of administration, Debtors
retain the right to object to the timing of the payment of any fees under
sections 1035 or 1036, but not the amount sought.

IV.      SUPPORT FOR DEBTORS' PLAN OF REORGANIZATION.

         Kemper acknowledges that it has no standing to object to the Debtors'
Plan of Reorganization except insofar as it is a creditor of the Debtors. With
respect to the Conservator, however, in addition to the agreements and rights
benefiting Debtors under Section III, the Conservator shall undertake the
following actions and/or agreements to support Debtors' effort to reorganize and
to emerge from their bankruptcy cases

         A. FORMULATION OF DEBTORS' PLAN OF REORGANIZATION. The Conservator will
continue to negotiate in good faith with Debtors to facilitate Debtors'
formulation of a plan or plans of reorganization (collectively "plan of
reorganization"). Included in such plan of reorganization will be a provision
for an independent senior executive for SNIS and SNIA with no affiliation or
involvement in the pre-conservation or pre-bankruptcy management of the Debtors
or the Conserved Companies, and to whom the Commissioner must consent (such
consent not to be unreasonably withheld) insofar as establishing a different
management composition than that which existed pre-conservation and
pre-bankruptcy and to ensure compliance with the non-compete provision and other
restrictions placed on Debtors under Section III of this Settlement Agreement.
The independent senior executive's term will be for at least two years
commencing on the effective date of the plan of reorganization unless the
Conservator and the Commissioner consent to a shorter duration. The fundamental
objective of Debtors' plan of reorganization is to successfully reorganize and
continue its insurance business, a significant component of which reorganization
and continuation will be the preservation of existing tax net operating loss
carry-forwards ("NOLs"), such that any value of the NOLs is preserved for the
benefit of those entitled to the benefit thereof or who become entitled to such
benefit by agreement or court order. The use of the NOLs and the allocation of
the value realized on the NOLs will be subject to further negotiations between
the Parties and to the confirmation of a plan of reorganization by the
Bankruptcy Court. However, Debtors acknowledge the Conservator's expectations
that (1) the plan of reorganization will not destroy the ability of the
Conserved Companies to use the NOLs to offset their otherwise taxable income and
(2) the Conserved Companies will share in a percentage of the ultimate value
realized on of the NOLs that reflects and generally is in proportion with the
losses suffered by the creditors of the Conserved Companies and creditors of the
Debtors. Similarly, the Conservator acknowledges that Debtors and their
creditors have expectations that conflict with the Commissioners' expectations
stated above. Resolution of such issues is beyond the scope of this Settlement
Agreement, and thus the Conservator reserves the right to object to any proposed
plan of reorganization as it relates to the

                                    Page 13
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NOLs. In addition, the Debtors agree to continue the hearing set for September
12, 2000 on its motion regarding injunctive relief on the NOLs, and to schedule
any other hearings regarding the NOLs based upon regular notice, no earlier than
November 1, 2000 or as soon thereafter as the Bankruptcy Court permits (the "NOL
Standstill Deadline"). The Conservator agrees not to file any pleadings in any
court regarding the NOLs before the NOL Standstill Deadline nor to take any
action affecting the NOLs until after the expiration of the NOL Standstill
Deadline.

         B. COOPERATION OF TAX PROFESSIONALS. The Conservator and the Debtors
will cause their respective tax professionals, and to the extent possible, the
tax professionals of the Lenders, to meet and confer regarding the preservation
and viability of the NOLs. Debtors' management also shall assist in such
analysis to the extent requested by the tax professionals. In the event Debtors
are unable to confirm a plan of reorganization or a chapter 7 trustee is
appointed, then the Conservator shall have no further obligations under this
Section IV, provided, however, that Debtors' obligations under Section III shall
survive any such event.

         C. TRANSITION PERIOD AND "STAND ALONE" SYSTEM. Within one week of
delivering to the Conservator satisfactory evidence of the consent of the Front
Companies' and any insurer who issued Old Front Company Business to Debtors'
administration of the Fronted Business Run-Off, the Conserved Companies will
provide the Debtors with the continued administration of such Front Company
business, including the transfer of rights with any existing third party
administrator involved in the administration of such business, including R.E.M.
The transfer shall include the right to control, manage, direct and require
performance of the obligations of any such third party administrator and the
transferee shall enjoy the benefit of any prepaid fees to such third party
administrator. Such transfer shall not release any claim by the Conservator to
seek reimbursement from any Front Company for any amounts or claims of loss
payment advanced by any Conserved Company. The transfer also will include
providing access to computer hardware and software as described in Section
III.C.4. Notwithstanding the foregoing, Debtors shall have restricted access on
such systems, based upon the Front Companies' company codes, which will permit
them to access solely: (i) information Debtors input on a going-forward basis in
administering the Fronted Business Run-Off; (ii) historical data necessary to
administer the Fronted Business Run-Off; and (iii) information necessary to
renew or write and service any Debtor Fronted Eligible Business during the time
period described in Section III.C.4. Additionally, Debtors in connection with
their rights in Section IIIC.4 shall have the right to input data in the systems
(protected by codes) on other Debtor Eligible Business. For purposes of this
paragraph, such data shall be referred to as "Other Debtor Eligible Business
Data." Kemper and the Conserved Companies shall not have access to the
information described in items (I), (II) and (III ) and "Other Debtor Eligible
Business Data above, except that the CLO can require reports on the Fronting
Business Run-Off and Debtor Eligible Business to be provided to it on reasonable
notice, which reports cannot and will not be made public or distributed to third
parties and no information on Debtor Eligible Business contained therein shall
be provided to Kemper without Debtors' prior written consent. Any independent
third party retained by the Conservator to audit the Debtor Eligible Business to
ensure that Debtors are in compliance with the competition restrictions set
forth in this Settlement Agreement, shall be subject to the same restrictions on
disclosure as apply to the Conservator. The Conservator will also promptly
commence efforts to assist Debtors' in establishing the segregated "stand alone"
systems described in Section III.C.4, subject to the restrictions and
limitations set forth therein. The CLO, the Conservator and the Debtors agree to
a reasonable access to their employees for the purpose of the

                                    Page 14
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transitioning each other's obligations, up to and including March 31, 2001,
unless such date is extended by written agreement of the Parties. The employers
shall be compensated on a basis of the relevant employee's cost equivalent to
their salary, out of pocket benefits, e.g., health insurance, costs, bonuses).
Nothing herein shall limit the Parties' rights and obligations under Section
III.C.4.

         D. LETTERS RE REORGANIZATION. The Conservator shall deliver the
"Letters Re Reorganization" and the executed "Release and Covenant Not to Sue"
all in the forms attached hereto as Exhibits "B" and "C," respectively.

V.       MISCELLANEOUS PROVISIONS.

         A. EMPLOYEE ACCESS. The Parties who ultimately employ any of the former
employees of the Conserved Companies or Debtors agree to provide reasonable
access to any such former employees for the purpose of assisting other Parties
in (i) conducting the future businesses contemplated under Articles III and IV
hereof, (ii) resolving certain pending or future disputes, known and unknown,
with third parties arising from the prior operation of the Conserved Companies
and Debtors, including without limitation, the U.S. Life reinsurance dispute,
any dispute with Hannover Re and E.W. Blanch & Co., and the M&R and FHS
litigation; and (iii) implementing the Rehabilitation Plan or any ultimate
liquidation of the Conserved Companies. Such agreement includes access to
information, records and/or witnesses necessary in connection with the foregoing
matters, subject to reasonable limitations on access and reasonable compensation
for time spent by employees, and balances the need for the employee to satisfy
the duties of his/her employment with the importance of the information needed.
The foregoing shall not obligate Kemper to make any of its employees that were
never employed by either the Conserved Companies or the Debtors available
pursuant to this paragraph. Debtors are not obligated to give access to the
Conservator as a direct or indirect benefit to Kemper.

         B. TAX RETURNS. Debtors and the Conservator shall cooperate in the
preparation of the year 2000 tax returns, and the Conservator and his tax
professionals shall be permitted to review, comment upon and request changes to
any portion of the 1999 tax returns, including requesting the filing of an
amended return for 1999, and the 2000 tax returns that impact the interests of
the Conserved Companies. Debtors agree to file or cause to be filed at the
request of the Conservator an amended tax return for 1999 to address any adverse
impact on the Conserved Companies arising from the 1999 tax return filed by SNIG
on or around June 7, 2000, but only to the extent the 1999 tax return reflects a
tax position relating to the Conserved Companies that is materially different
from or in conflict with the tax positions taken in previous tax returns. In
connection with the rights in this paragraph, the Debtors and Conserved
Companies agree to meet and discuss requests of the Conserved Companies for
documents, including certain working papers that it believes are necessary in
assisting them in connection with their rights under this paragraph; provided,
however, that this provision shall not obligate the Debtors to agree with such
request.

         C. PREMIUM ACCOUNTS. The Conservator and Debtors agree to resolve the
current dispute over the insurance premiums and entitlement to fees in the
following manner:

         Simultaneously with the delivery of the executed duplicate original of
this agreement by all parties, the executed "Letters Re Reorganization" and the
fully-executed Release and Covenant Not to Sue described below to Christopher M.
Maisel, as the court-designated "Facilitator," SNIS shall wire, or SNIG shall
cause SNIS to wire to the Conserved Company

                                    Page 15
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account designated below, the sum of TWENTY-FOUR MILLION DOLLARS ($24,000,000),
constituting premiums attributable to policies issued by any of the Conserved
Companies. The wire instructions for said transfer are as follows:

                               BK OF NYC/CUST
                               ABA # 021 000 018
                               IOC 565 - INST'L CUSTODY
                               CDT ACCOUNT #:  350791
                               ACCOUNT NAME: SUPERIOR NATIONAL INSURANCE CO.

         The Facilitator shall release to the Debtors' counsel, immediately upon
verification of receipt of the TWENTY-FOUR MILLION DOLLARS ($24,000,000) by the
Conserved Companies the executed duplicate original of this Agreement, the
executed "Letters Re Reorganization" and the fully-executed Release and Covenant
Not to Sue.

         Debtors, directly or through SNIS, will wire transfer to the
Conservator, via the wire instructions set forth above within two (2) business
days of Bankruptcy Court and Superior Court approval of this Settlement
Agreement, THIRTY MILLION FIVE HUNDRED NINETY-FIVE THOUSAND THREE HUNDRED TEN
DOLLARS AND NINETY-THREE CENTS ($30,595,310.93) from the Conserved Company
alleged premiums in possession of the Debtors as of this date and the Debtor
shall keep free and clear of any claims of the Conserved Companies the sum of
TEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($10,500,000.00) as further
consideration for the agreement of debtors to the Settlement Agreement,
including releases, property transfers and assignments and a release of the
claims against the Conserved Companies relating to the premium dispute with the
Conserved Companies. The parties, except for the terms of this Agreement,
including the releases and indemnities and provisions providing for the payment
and transfer of premium provided for in this Agreement, have resolved all
disputes between them relating to the premiums due allegedly to the Conserved
Companies, and the premiums due or relating to the Front Companies.

         The Conserved Companies shall indemnify and hold harmless Debtors with
respect to any claims by the Front Companies relating to the actual possession,
collection or disposition of Front Company premiums after March 3, 2000 and with
respect to any claims by the Front Companies relating to any performance or
non-performance of the underwriting or claims administration pursuant to the
contracts with the Front Companies that occurred or should have occurred at any
date after March 3, 2000. Debtors will use their best effort to defend against
any claims for damages made by any Front Company and will consult with the
Conservator and permit the Conservator to assist in the defense against such
claims. The actual indemnity hereunder shall include reasonable attorneys' fees
and costs. To the extent that such claims are allowed as a claim in a certain
amount in the Bankruptcy Court that is indemnified herein, the Conserved
Companies shall only be Debtors' estates for the amount distributable in respect
of such claims, calculated without giving effect to the indemnification,
pursuant to an order of the Bankruptcy Court or a confirmed plan of
reorganization or plan of liquidation, not the allowed amount of the allowed
claim. This limitation on the indemnification is not intended to affect the
Conserved Companies' obligation to defend and indemnify the Debtors for the
costs of defense as an expense of administration in the Conserved Companies'
estates and is subject to the security described below. It is also agreed that
any claim under this indemnity and defense obligation is to be treated as an
administrative expense of the

                                    Page 16
<Page>

Conserved Companies' estates. Nothing in this provision is intended to confer
rights upon any creditor of Debtors or the Conserved Companies as a third party
beneficiary or otherwise, and no such creditor may rely upon Debtors'
indemnification rights hereunder in pursuing claims against either the Debtors
or the Conserved Companies. Security for said indemnity obligation is as
follows:

         In addition, the Debtors are granted and shall have a lien upon the
proceeds of the U.S. Life arbitration, litigation or dispute between U.S. Life
and the Conserved Companies, up to an amount of TWENTY-EIGHT MILLION DOLLARS
($28,000,000.00) to satisfy any and all obligations, including indemnity and
defense obligations of the Conserved Companies given by the Conserved Companies
pursuant to this agreement. Subsequent to the approval of this Agreement, the
Debtors and the Conserved Companies shall enter into a written agreement
perfecting the lien herein and such agreement shall provide a mechanism for
partial releases of said lien. Notwithstanding the security interest (lien) in
said proceeds, the Conserved Companies shall retain control over the U.S. Life
proceedings itself, including but not limited to, all settlement authority.

         The Debtors shall transmit on a weekly basis the full amount of any
premiums related to the Conserved Companies' policies that came or come into the
possession of the Debtors after August 22, 2000. Such payments shall be made
pursuant to wire transfer instructions provided by the Conservator, and shall
occur every Friday commencing on the Friday of the first week following the
court approvals of this Agreement. By the end of the Business day on every
Thursday the Conserved Companies shall provide the data identifying the amounts
of premiums that should be transmitted pursuant to this paragraph. The parties
will meet and confer regarding the amounts so collected. The payment by the
Debtors of any sums (premiums) under this Agreement shall not include interest
earned or to BE earned.

         The Conservator shall file within two business days after execution of
the settlement agreement a pleading in the bankruptcy court which supplements
and clarifies his pleadings filed with regard to the bankruptcy court's
jurisdiction over leases and licenses, by simply attaching the declaration of
Richard Krenz, filed in support of the Conservator's ex parte application for an
order of liquidation in the superior court.

VI.      RELEASES AND OTHER ACTIONS.

         A.       RELEASES.

                  1. RELEASE OF DEBTORS. Effective upon the later of entry of
both court orders described in Section , the Commissioner and the Conservator
release the Debtors, their officers, directors, employees, attorneys, except the
entities and individuals or claims reserved in , as follows:

                     a. for any and all liability or claims arising out of the
premium funds held by the Debtors during the period of the conservation of the
Conserved Companies;

                     b. for any and all liability of or claims against SNIS
arising out of its obligations under the Underwriting Manager Agreement with the
Conserved Companies, and SNIA arising out of its obligations under the Claims
Administration Agreement with the Conserved Companies, including but not limited
to, any claims for paid time off or other claim relating to residual liabilities
to employees providing services to the conserved companies;

                                    Page 17
<Page>

                     c. from all claims other than any claim or obligation
arising out of this Settlement Agreement.

                  2. RESERVED CLAIMS. The Conservator's obligation to release
Debtors' officers, directors, employees, attorneys and certain others shall
under no circumstances be construed as a release of, and the Conservator
expressly reserves all claims against or arising from or in connection with: (i)
Zurich Insurance Group ("Zurich") or any affiliate of Zurich other than Debtors;
(ii) any individual officer, director and employee of Zurich or any of its
affiliates (other than an individual who is an officer, director or employee of
one or more of the Debtors and not of Zurich or any of its other affiliates);
(iii) any claim against the Conserved Companies officers and directors,
regardless of whether they also are Debtors' officers and directors, for errors
and omissions in the management of the Conserved Companies; (iv) any claim
against actuarial, accounting or other professional firms who provided services
to or for the benefit of the Conserved Companies, including without limitation,
Milliman & Robertson or (v) any claim against the recoveries sought in Debtors'
action against Foundation Health Systems, Milliman & Robertson and others (the
"FHS Case") or any entitlement of the Conservator to intervene in the FHS Case
on behalf of the Conserved Companies. Notwithstanding the foregoing, Debtors
reserve all rights and defenses available to them and do not acknowledge any
right of the Conservator or the Conserved Companies regarding any alleged claim
the Conservator or the Conserved Companies may have to intervene in or share in
any recovery from the FHS Case.

                  3. RELEASE OF CONSERVED COMPANIES. Also effective upon the
entry of the later of both court orders described in Section VI.B.6, the Debtors
release the Conserved Companies, the Conservator, the Commissioner and their
officers, directors, employees and attorneys, except the entities and
individuals or claims reserved in Subsections (c), (d), (e), (f) and (g) as
follows:

                     a. from any and all liability or claim arising out of the
alleged conversion of property, employees etc. or from the takeover of the
Debtors' offices.

                     b. from any and all claims in the estates of the Conserved
Companies other than any claim arising out of this Settlement Agreement.

                     c. Nothing contained herein shall be construed as a release
or waiver by Debtors of any claim or action against the Conserved Companies for
indemnity, contribution or like claims arising from any losses or threatened
losses resulting from the actions of the Conserved Companies in administering or
otherwise performing the rights or duties of Debtors pursuant to any contracts
with the Front Companies, but only as to actions after March 3, 2000.

                     d. Nothing herein shall be construed as a waiver or release
of the right of any person to assert any and all facts and defenses which
support defenses, offsets, mitigation of damages, determination of damages,
determination of causation, or proximate cause, in connection with any action
brought by the Conserved Companies or the Conservator.

                     e. BIG expressly reserves its rights as the sole
shareholder of the Conserved Companies to (i) share in any dividends or other
distributions to shareholders from the Conserved Companies' estates; (ii)
receive any liquidation distribution to shareholders from the liquidation
estates of the Conserved Companies; or (iii) any other right it may have solely
as a shareholder of the Conserved Companies including but not limited to its
entitlement to the NOLs.

                                    Page 18
<Page>

                     f. Debtors expressly reserve their right, title and
interest in any insurance policies of which they are the named owner or named
insured, including but not limited to professional liability insurance policies,
D&O policies, and company liability policies. Debtors do not transfer or assign
such rights to any person hereunder. Debtors acknowledge that the Conserved
Companies may have rights and coverage under such policies and the foregoing
reservation is not intended to nor shall limit any such rights.

                     g. Debtors reserve all rights, claims and defenses with
respect to any claims by employees, the Conserved Companies, the Conservator or
any liquidator of the Conserved Companies that assert that Debtors are in any
way obligated for any residual claims of employees, including but not limited to
unpaid "personal time off," vacation leave and sick leave.

         B.       OTHER ACTIONS.

                  1. RELEASE OF MEADOWBROOK. Meadowbrook Insurance Group shall
be released from any claims arising from its receipt of proprietary information
of the Conserved Companies from Debtors and their officers, provided however,
that the Conservator's obligation to release Meadowbrook shall be conditioned on
Meadowbrook's delivery to the Conservator of (i) all, documents, data and
materials relating directly or indirectly to the Conserved Companies received
from Debtors or any person acting on behalf of Debtors or their management; and
(ii) a sworn statement that Meadowbrook has not disseminated, copied or
otherwise duplicated any such information and has returned all original
information and destroyed or returned all copies thereof.

                  2. TERMS AND CONDITIONS OF THE LETTERS RE REORGANIZATION. The
Commissioner's and the Conservator's agreement to execute, and the Conservator's
agreement to deliver to Debtors the Letters Re Reorganization, are made in
reliance on the Debtor's express representations, which are hereby made by
Debtors that to the best of their knowledge, that except as provided below as of
the first day that the stock of Superior National Insurance Group was publicly
traded, none of the Debtors or any of their respective directors, officers,
employees, agents or attorneys have been contacted by or on behalf of the
Securities & Exchange Commission ("SEC"), the Federal Bureau of Investigation,
the Internal Revenue Service ("IRS"), the United States Justice Department, the
United States Attorney's Office, or any other Federal law enforcement or
regulatory agency, or any division or branch of any of the foregoing agencies,
regarding any pending or threatened investigation, enforcement proceeding,
indictment, charge or any other similar legal action arising from the conduct or
operation of Debtors' businesses or the conduct or operation of the Conserved
Companies' businesses. The exception to the foregoing representation is that
Debtors have been contacted by the SEC regarding their failure to file timely
their Form 10K annual report Debtors do not know if the SEC ever contacted any
person regarding the activities of Business Insurance Group, Inc., or its
subsidiaries, prior to December 31, 1998.

                                    Page 19
<Page>

                  Similarly, Debtors' execution of this Agreement is made in
reliance on the Conservator's representation that the Conservator has not
contacted the IRS or the SEC on any matter relating to the Debtors or the
Conserved Companies, other than the filing of Forms 56 to notify the IRS of the
appointment of the Commissioner as a fiduciary for the Conserved Companies and
the Commissioner's and Conservator's representation and warranty that neither of
them has, to the best of his knowledge, asked, suggested, encouraged or assisted
directly or indirectly any other regulator to pursue or take any action adverse
to the Debtors. In the event that the Commissioner or the Conservator learn
that, without his knowledge, such a request, suggestion, encouragement or
assistance has occurred in contradiction to the above representation and
warranty, the Commissioner or the Conservator, as applicable, shall take all
necessary action to correct and modify such request, suggestion, encouragement
or assistance consistent with the terms and conditions set forth herein and in
the Letters re Reorganization and in the Release and Covenant Not to Sue.
Provided further, execution, delivery and performance of the Release and
Covenant Not to Sue in connection with this agreement is agreed to be a material
consideration provided to the Debtors.

                  3. COURT APPROVAL. This Settlement Agreement is subject to
approval by both the Bankruptcy Court and the Superior Court. The Conservator
promptly will seek Superior Court approval of this Settlement Agreement,
independent of the Rehabilitation Plan. The Debtors will promptly seek
Bankruptcy Court approval of this Settlement Agreement, independent of the plan
of reorganization. Debtors will use best efforts to obtain orders of the
Bankruptcy Court entered no later than twelve business days after execution of
this agreement, approving this Settlement Agreement and authorizing the
transactions described in the Settlement Agreement, including but not limited to
transfer of the assets described in Section III.B, the releases described in
Section VI.A, the assumption and assignment of leases described in Section III,
and all other acts required to close the Rehabilitation Plan. The Conservator
shall obtain an order of the Superior Court approving this Settlement Agreement
prior to or simultaneously with the entry of an order approving the
Rehabilitation Plan and the order of liquidation. Such approval order shall
authorize the transactions described herein. The Parties hereto agree and
acknowledge that this Settlement Agreement is the product of good faith
negotiations among the Parties.

                  4. SURVIVAL AFTER LIQUIDATION OF CONSERVED COMPANIES. The
Parties recognize that the Conservator is likely to apply for the entry of an
order of liquidation for the Conserved Companies pursuant to Insurance Code
Section 1016. The Debtors will not oppose any application by the Conservator for
such an order provided the application or the Order is not inconsistent with any
term or condition of this Agreement. The Debtors shall withdraw the motion filed
seeking a modification of the Conservation Order with respect to the set-off
issues. The provisions of this entire agreement shall survive the entry of an
order of liquidation and shall be fully enforceable notwithstanding any
subsequent order, including the order of liquidation. Further, extant
obligations of the Conserved Companies (such as indemnities) that exist as of
the date of entry of a liquidation order shall survive liquidation and shall be
treated as an expense of administration accorded "class one" priority under
Insurance Code Section 1033(a). Provided further, the Conservator shall cause
the Order of liquidation to expressly provide for the survival of the terms of
this agreement and be binding on the Liquidator and or the estates in
Liquidation.

                  5. TERMINATION OF MANAGEMENT AGREEMENTS. The Claims
Administration Agreement and the Underwriting Manager Agreement ("UMA") among
the SNIS and the Conserved

                                    Page 20
<Page>

Companies dated as of January 1, 2000 shall be terminated effective as of the
effective date of this Settlement Agreement, provided however, that the
fiduciary obligations of SNIS regarding the Conserved Companies premiums held or
received by SNIS under the UMA shall survive such termination.

         6. KEMPER AS A NON-PARTY TO THE SETTLEMENT AGREEMENT. In the event that
Kemper is not or ceases to be a Party to the Settlement Agreement or is not
obligated to perform under the Settlement Agreement, the remaining parties agree
to be bound by the terms of the Settlement Agreement provided however such terms
shall be amended and modified in the appropriate places, automatically, to
provide for the following: (1) Debtors shall be permitted to compete for
National Sales; (2) Debtors shall not compete in California in the insurance
business for a period of six months commencing August 31, 2000, except as
otherwise permitted above, provided further that before so competing in
California, the Debtors shall represent and warrant that they have not prior to
that date violated Section III. C. 1.(a) of this Agreement; (3) Debtors shall
have the right, but not the obligation, to run-off all Fronted Company business,
(4) Debtors shall have a non-exclusive license to all software, hardware,
computer systems, data and source codes to conduct any business of the Debtors;
and, (5) the Debtor's agreement not to solicit employees shall expire, provided,
however, that in the event Kemper is not or ceases to be a party to the
Settlement Agreement or is not obligated to perform under the Settlement
Agreement, because of Debtors' breach hereunder or other bad faith act related
thereto, then Debtors shall be in the same position, and subject to the same
restrictions, that they would have been in or subject to had Kemper been a party
to the Settlement Agreement and obligated to perform hereunder.

VII.     SUPERIOR BERMUDA, LTD., COMMUTATION.

         The Conservator and the Debtors have previously agreed to cause
Superior National Insurance Company and Superior, Bermuda, Ltd., ("SBL") to
enter into a commutation agreement which, without any exchange of funds,
commutes the reinsurance liabilities SBL has to Superior National Insurance
Company by virtue of prior reinsurance agreements. The Conservator and the
Debtors will use best efforts to document and execute the commutation agreement
between SBL and Superior National Insurance Company on or before Friday,
September 15, 2000, but agree that this Settlement Agreement can be used in lieu
of a Commutation Agreement to demonstrate to any regulatory authority that SBL's
liabilities to Superior National Insurance Company are commuted.

Dated:   September __, 2000        J. CLARK KELSO, ACTING INSURANCE
                                   COMMISSIONER OF THE STATE OF CALIFORNIA

                                   By
                                      ------------------------------------------
                                      Richard G. Krenz, Special Deputy Insurance
                                      Commissioner
                                      California Department of Insurance

Dated:  September __, 2000         SUPERIOR NATIONAL INSURANCE COMPANY
                                   IN CONSERVATION, SUPERIOR PACIFIC CASUALTY
                                      COMPANY IN CONSERVATION, CALIFORNIA

                                    Page 21
<Page>

                                   COMPENSATION INSURANCE COMPANY IN
                                   CONSERVATION, COMBINED BENEFITS
                                   INSURANCE COMPANY IN CONSERVATION,
                                   COMMERCIAL COMPENSATION CASUALTY
                                   COMPANY IN CONSERVATION, FORMERLY KNOWN
                                   AS COMMERCIAL COMPENSATION INSURANCE
                                   COMPANY

Dated:  September __, 2000         By
                                      ------------------------------------------
                                                  Richard G. Krenz
                                      Special Deputy Insurance Commissioner on
                                      behalf of J. Clark Kelso, Acting Insurance
                                      Commissioner of the State of California

Dated:  September __, 2000         LUMBERMENS MUTUAL CASUALTY COMPANY,
                                   KEMPER EMPLOYERS GROUP, INC. AND KEMPER
                                   EMPLOYERS INSURANCE COMPANY

                                   By
                                      ------------------------------------------
                                      John G. Pasqualetto
                                      Its:
                                          --------------------------------------

Dated:  September __, 2000         CHRISTOPHER M. MAISEL, P.C.

                                   By
                                      ------------------------------------------
                                      Christopher M. Maisel
                                      as: Facilitator

                                    Page 22
<Page>

Dated:  September __, 2000         SUPERIOR NATIONAL INSURANCE GROUP, INC.,
                                   BUSINESS INSURANCE GROUP, INC., SN
                                   INSURANCE SERVICES, INC., AND SN INSURANCE
                                   ADMINISTRATORS, INC.

                                   By
                                      ------------------------------------------
                                                  J. Chris Seaman
                                      Its:
                                          --------------------------------------

                                    Page 23
<Page>

                                    EXHIBIT A

                 (SCHEDULE OF POTENTIAL DEBTOR ELIGIBLE BUSINESS
                    INSUREDS PURSUANT TO SECTION III.C.1.(b)

                             [TO COME FROM DEBTORS]

                                    Page 24
<Page>

                                    EXHIBIT B

         (FORM OF "LETTERS RE REORGANIZATION" PURSUANT TO SECTION IV.C)

                                    Page 25
<Page>

                                    EXHIBIT C

                        (RELEASE AND COVENANT NOT TO SUE)

                                    Page 26<PAGE>

                           COLORADO CENTER TOWER ONE
                                  OFFICE LEASE

                                    between

                              WRC PROPERTIES, INC.

                             a Delaware corporation

                                  as Landlord

                                      and

                    Superior National Insurance Group, Inc.
                             a Delaware Corporation

                                   as Tenant

<PAGE>
                               TABLE OF CONTENTS
                                      FOR
                                     LEASE

Basic  Lease Information                                                      A
1.     Definitions.                                                           1
2.     Premises.                                                              3
       2.1   Grant                                                            3
       2.2   Center Common Area                                               3
       2.3   Tenant's Right to Use                                            3
       2.4   Parking Area                                                     4
       2.5   Parking Charges                                                  4
3.     Term                                                                   4
       3.1   Preliminary Term                                                 4
       3.2   Initial Term                                                     4
       3.3   Extended Terms                                                   4
       3.4   Commencement Date, Expiration Date and Lease Year                4
       3.5   Commencement Date Certificate                                    5
4.     Rent                                                                   5
       4.1   Payment of Rent - General                                        5
       4.2   Preliminary Term Rent                                            5
       4.3   Base Rent                                                        5
       4.4   Additional Rent                                                  6
       4.5   Tenant's Operating Expenses                                      6
5.     Completion and Occupancy of Premises                                   6
       5.1   Construction of Leasehold Improvements                           6
       5.2   Tenant's Allowance                                               6
       5.3   Delayed Possession                                               7
       5.4   Occupancy of Premises                                            7
6.     Use and Operation of Premises                                          7
       6.1   Operations                                                       7
       6.2   Unlawful Purposes                                                7
       6.3   Abandonment                                                      7
       6.4   Nuisance                                                         7
       6.5   No Sale of Goods from Premises                                   7
       6.6   Rules and Regulations                                            8
7.     Services, Maintenance, Repair and Alterations by Landlord              8
       7.1   Operation of Building                                            8
       7.2   Services to Premises                                             8
       7.3   Building Services                                                8
       7.4   Maintenance, Repair and Replacement                              9
       7.5   Additional Services and Utilities                               10
       7.6   Alterations by Landlord                                         10
       7.7   Energy, Conservation and Security Policies                      11
8.     Center Common Area                                                    11

<PAGE>

       8.1   Landlord's Reserved Rights                                      11
       8.2   Maintenance and Repair                                          11
9.     Maintenance by Tenant                                                 11
       9.1   Condition of Premises                                           12
       9.2   Failure to Maintain Premises                                    12
10.    Tenant's Property                                                     12
       10.1  Trade Fixtures and Personal Property                            12
       10.2  Signs                                                           12
11.    Alterations by Tenant                                                 13
12.    Mechanic's Liens                                                      13
13.    Assignment and Subletting                                             13
       13.1  Consent Required                                                13
       13.2  Tenant Remains Liable                                           14
       13.3  Standard For Consent                                            14
       13.4  Transfer by Landlord                                            14
       13.5  Assignment to Permitted Assignee                                15
14.    Taxes                                                                 15
       14.1  Payment by Landlord                                             15
       14.2  Payment by Tenant                                               16
15.    Insurance                                                             16
       15.1  Coverage by Landlord                                            16
       15.2  Coverage by Tenant                                              16
       15.3  Insurance Provisions                                            17
       15.4  Waiver of Subrogation                                           18
       15.5  Increase in Insurance Premiums                                  18
       15.6  Payment of Landlord's Insurance Expenses                        18
16.    Access by Landlord                                                    18
17.    Damage by Fire or Other Casualty                                      19
       17.1  Limited Damage to Premises                                      19
       17.2  Major Damage to Premises                                        19
       17.3  Abatement                                                       19
       17.4  Major Damage to Building                                        19
       17.5  Limitation on Landlord's Liability                              20
18.    Eminent Domain                                                        20
       18.1  Taking of Premises                                              20
       18.2  Partial Taking of Building                                      20
       18.3  Surrender                                                       20
       18.4  Partial Taking of Premises                                      21
       18.5  Awards                                                          21
19.    Quiet Enjoyment                                                       21
20.    Landlord's Warranties and Covenants                                   21
21.    Hazardous Materials                                                   21
22.    Subordination                                                         22
23.    Holding Over                                                          22
24.    Default                                                               23

<PAGE>
       24.1  Events of Default                                               23
       24.2  Remedies                                                        24
25.    Default by Landlord                                                   25
26.    Indemnification                                                       25
       26.1  Landlord's Indemnification                                      25
       26.2  Tenant's Indemnification                                        25
       26.3  Limitations on Liability of Landlord                            26
27.    Compliance with Laws and Requirements of Public Authorities           26
28.    Arbitration                                                           27
29.    Estoppel Certificate                                                  27
30.    WAIVER OF TRIAL BY JURY                                               27
31.    Notices                                                               28
32.    Miscellaneous                                                         28
       32.1  Attorneys' Fees                                                 28
       32.2  Surrender of the Premises                                       28
       32.3  Force Majeure; Time of the Essence                              29
       32.4  No Implied Surrender or Waiver                                  29
       32.5  Construction and Interpretation                                 29
       32.6  Relationship of the Parties                                     29
       32.7  Severability                                                    29
       32.8  Heirs and Assigns                                               30
       32.9  Entire Agreement: Modification                                  30
       32.10 Captions: References                                            30
       32.11 Brokerage Commission                                            30
       32.12 Choice of Law                                                   30
       32.13 Execution                                                       30
       32.14 Limitation on Right of Recovery                                 30
       32.15 Name of Building and Center                                     31
       32.16 Relocation - Substitute Premises                                31
       32.17 Nondiscrimination                                               31
       32.18 Deposit                                                         31
       32.19 Guaranty                                                        32
       32.20 No Air Rights                                                   32
       32.21 No Recording                                                    32
       32.22 Financial Statements                                            32
       32.23 Tenant Authority                                                33

<PAGE>
                                              Page After Basic Lease Information
                                                     On Which Schedule/Exhibits
                                                           Are First Referenced

SCHEDULE 1-Supplemental Provisions.............................................A
Exhibit A, Floor Plan Indicating the Location of the Premises..................1
Exhibit B-1, Site Plan of the Center...........................................1
Exhibit B-2, Legal Description of Land.........................................1
Exhibit B-3, Legal Description of the Center...................................1
Exhibit C, Determination of Tenant's Operating Expenses........................1
Exhibit D, Commencement Date Certificate.......................................4
Exhibit E, Tenant Improvements...........................[Intentionally Deleted]
Exhibit F, Rules and Regulations...............................................2
Exhibit G, Form of Subordination, Non-Disturbance and Attornment Agreement....16
Exhibit H, Form of Guaranty...................................................22
Exhibit I, Financial Statement................................................22

<PAGE>

                            BASIC LEASE INFORMATION

LEASE DATE:         October 19. 2000

LANDLORD:           WRC Properties, Inc. a Delaware corporation

TENANT:             Superior National Insurance Group, Inc., a Delaware
                    Corporation

ADDRESS OF          Colorado Center Tower One, Suite 11500
PREMISES:           2000 South Colorado Boulevard
                    Denver, Colorado 80222
                    Contact: Regional Manager
                    Telephone: (303) 692-0183

PREMISES:           Suite 11500, of the Tower One Office Building as
                    outlined in Exhibit A, Floor Plan Indicating the
                    Location of the Premises, hereto. The approximate
                    rentable area of the Premises is 5,895 Square Feet.

BUILDING:           Colorado Center Tower One
                    2000 South Colorado Boulevard
                    Denver, CO 80222

LAND:               Legal Description of Building footprint on Exhibit B-2,
                    Legal Description of the Land hereto.

USE:                Office space (Paragraph 6.1)

COMMENCEMENT DATE:  See Schedule 1, Supplemental Provisions, Paragraph 1
(anticipated) (Paragraph 3.4)

EXPIRATION DATE: Schedule 1, Supplemental Provisions, Paragraph I
(anticipated) (Paragraph 3.4)

LEASE TERM:         See Schedule 1, Supplemental Provisions, Paragraph 1
(Paragraph 3.2)

EXTENSIONS:         None

<TABLE>
<CAPTION>
BASE RENT:          Calendar Period                                          Monthly Base Rent
                    -------------------                                      -----------------
<S>                 <C>                                                         <C>
                    October 1,2000 - Expiration of month-to-month term          $12,281.25
                    (as set forth in Schedule 1, Paragraph 1)

                    Commencement of 3 year term - month 12 (as set forth in
                    Schedule 1, Paragraph 1)                                    $12,281.25

                    Month 13 - Month 24                                         $12,526.88
                    Month 25 - Month 36                                         $12,772.50
</TABLE>

                    (Paragraph 4.3)

                                       A
<PAGE>

EXPENSE BASE YEAR:  See Schedule 1, Supplemental Provisions, Paragraph 2
                    (for Tenant's Operating Expenses) (Exhibit C,
                    Determination of Tenant's Operating Expenses)

SECURITY DEPOSIT:   See Paragraph 32.18

PARKING             SPACES: Up to 20 unreserved spaces in Tower One Garage
                    @ $50.00 per month, per parking space [(the "Unreserved
                    Spaces"), and 1 "VIP" space in the Tower One Garage @
                    $75.00 per month, per parking space (Paragraphs 2.4 and
                    2.5)

TENANT'S
ALLOWANCE:          Up to None, credited to Tenant in accordance with
                    Paragraph 5.2.

GUARANTOR:          None (Paragraph 32.19)

BROKER:             Mile High Properties, LLC
                    Corporate Realty Associates, Inc. (Paragraph 32.11)

The foregoing Basic Lease Information is hereby incorporated into and made a
part of this Lease. In the event of any conflict between any Basic Lease
Information and the specific provisions of the Lease, such specific provisions
shall control.

                                       B
<PAGE>

                                     LEASE

      THIS LEASE (the "Lease") is entered into between WRC PROPERTIES, INC., a
Delaware corporation ("Landlord"), and Superior National Insurance Group, Inc.,
a Delaware Corporation ("Tenant") as of the Lease Date set forth on the Basic
Lease Information.

      LANDLORD HEREBY LEASES TO TENANT and Tenant leases from Landlord the
Premises (as defined in Paragraph 1.9) upon the terms and conditions and in
consideration of the rental and the other mutual covenants hereinafter set
forth.

      1. Definitions.

            1.1 "Building" means the Colorado Center Tower One Office Building
in the Center at the location as shown on the Site Plan attached hereto as
Exhibit B-1, Site Plan of the Center (the "Site Plan") and containing
approximately 179,339 Square Feet upon and under the Land described on Exhibit
B-2, Legal Description of Land, attached hereto.

            1.2 "Building Common Area" means all Building areas, including,
without limitation, restroom facilities, interior lobbies, corridors, service
areas and any loading facilities which are not used exclusively by Tenant or
other tenants of the Building, and the exterior of the Building, but does not
include those areas included under the term "Center Common Area" (defined
below).

            1.3 "Center" means the Colorado Center development project,
consisting of both existing development and future construction at the location
of the southeast corner of the intersection of 1-25 and Colorado Boulevard, City
and County of Denver, State of Colorado, which Center is shown generally on the
Site Plan and the legal description of which is attached hereto and incorporated
herein as Exhibit B-3, Legal Description of the Center. The Center may be
changed by Landlord, from time to time, in its sole discretion, so long as
Tenant is not materially deprived of the use of or access to the Premises or its
Parking Area, as provided under this Lease. The Center does not include the
building known as the "Annex" located to the north of the "Tower One Building."

            1.4 "Center Common Area" means any sidewalks, driveways, the parking
areas (including the Tower One Garage and the Tower Two Garage), ramps, service
areas (including loading and unloading facilities which are for use by all
tenants), Center signs, recreation areas, landscaping, walkways, aisles,
lighting facilities to illuminate parking areas or other areas outside
individual stores or buildings, fencing located at the Center, driveways and
truck service ways for ingress and egress to and from the Building and the
Center, and buildings and other facilities of the Center now or hereafter
designed for use by and made available for the benefit of occupants of the
Center; provided that Landlord in Landlord's sole discretion, may restrict the
use of certain Center Common Area, including any and all parking areas, from
time to time, so long as Tenant is not materially deprived of the use of or
access to the Premises or its Parking Area, as provided under this Lease.

            1.5 "Commencement Date" means the date provided for in Paragraph
3.4.1; the anticipated Commencement Date is set forth in the Basic Lease
Information.

<PAGE>

            1.6 "Expense Base Year" shall be as set forth in Schedule 1,
Supplemental Provisions, Paragraph 2, and is defined and determined pursuant to
Exhibit C, Determination of Tenant's Operating Expenses.

            1.7 "Land" means that certain parcel of real property owned by
Landlord, exclusive of all construction or other improvements now or hereafter
located thereon or thereunder, on which the Building is located. The Land is
located within the Center and is described in Exhibit B-2, Legal Description of
Land.

            1.8 "Landlord's Operating Costs" for the Building and Center Common
Area are defined and determined pursuant to Exhibit C, Determination of Tenant's
Operating Expenses.

            1.9 "Premises" means the office space to be located in Suite 11500
of the Building as shown generally on the floor plan, attached as Exhibit A,
Floor Plan Indicating Location of Premises, consisting of approximately 5,895
Square Feet.

            1.10 "Prime Rate" means the prime rate published by The Wall Street
Journal (or similar publication if The Wall Street Journal is discontinued) as
of the date on which a payment was due which requires a determination of the
Prime Rate.

            1.11 "Rent" means all sums payable by Tenant under this Lease,
including but not limited to "Base Rent" (as defined in Article 4), "Parking
Charges" (as defined in Paragraph 2.5), Operating Expenses, late charges and any
other charges due from Tenant to Landlord herein.

            1.12 "Rules and Regulations" means the Rules and Regulations, from
time to time adopted by Landlord pursuant to Paragraph 6.6. The current Rules
and Regulations are attached hereto as Exhibit F, Rules and Regulations.

            1.13 "Square Feet" and "Square Foot" are defined in Exhibit C,
Determination of Tenant's Operating Expenses.

            1.14 "Retail Center" means the retail building constructed in the
Center in the location depicted on the Site Plan. The Retail Center is not
included in the Center Common Area.

            1.15 "Surface Parking Area" is defined as the four hundred and
thirty five (435) surface parking spots located in the Center and dedicated to
the exclusive use of the Retail Center and designated portions of the Tower Two
Building. The Surface Parking Area is not included in the Center Common Area.

            1.16 "Tenant's Operating Expenses" are defined and determined
pursuant to Exhibit C, Determination of Tenant's Operating Expenses. Tenant's
Operating Expenses are payable by Tenant pursuant to Paragraph 4.5.

            1.17 "Tower One Building" means that certain existing office
building located within the Center in the location depicted on the Site Plan.

                                       2
<PAGE>

            1.18"Tower One Garage" means that certain existing parking structure
located in the Center in the location depicted on the Site Plan. The Tower One
Garage is included in the Center Common Area and the costs associated therewith
are included in Landlord's Operating Costs.

            1.19 "Tower Two Building" means that certain office building
adjacent to the Retail Center located within the Center in the location depicted
on the Site Plan.

            1.20 "Tower Two Garage" means the parking structure in the Center
next to the Tower Two Building in the location shown on the Site Plan. The Tower
Two Garage will be included in the Center Common Area and the costs associated
therewith will be included in Landlord's Operating Costs.

      2. Premises.

            2.1 Grant. Landlord leases to Tenant and Tenant leases from Landlord
the

            Premises, upon and subject to the terms and provisions of this
Lease. 2.2 Center Common Area. Landlord and Tenant acknowledge and agree that
the Center is a master planned mixed-use development to which certain office
buildings, a hotel, one or more parking structures, additional landscaping and
other improvements may be added from time to time and that the location and size
of the Center Common Area may, at Landlord's discretion, increase or decrease as
such changes or additions are made. However, Landlord shall have no obligation
to build any of the aforementioned improvements. In the event Landlord builds
additional improvements, the construction thereof shall not materially interfere
with Tenant's use of or access to the Premises or its Parking Area, as provided
under this Lease. Landlord also reserves the right to assign or convey all or
part of the Center Common Area to an owner's association which shall thereafter
maintain the Center Common Area. Tenant shall reimburse Landlord for Landlord's
Operating Costs for the Center Common Area as part of Tenant's Operating
Expenses pursuant to Paragraph 4.5 and Exhibit C, Determination of Tenant's
Operating Expenses.

            2.3 Tenant's Right to Use. Landlord, for itself and its successors
and assigns, hereby grants to Tenant, for the benefit of Tenant and its
successors and assigns and their respective employees, customers, agents and
invitees, without charge, a non-exclusive license for so long as this Lease
shall be in force and effect, subject to the Rules and Regulations, and in
common with others having business in the Center, to use all of the Center
Common Area including those areas designated for ingress or egress on the Site
Plan. In addition, Landlord, for itself and its successors and assigns, hereby
grants to Tenant, for the benefit of Tenant and its successors and assigns and
their respective employees, customers, agents and invitees, without charge, a
non-exclusive license for so long as this Lease shall be in force and effect,
subject to the Rules and Regulations and in common with others having business
in the Building, to use the Building Common Area. In the event of any
contradiction or inconsistency between the terms and provisions of this Lease
concerning hours of operation or amount or location of parking spaces and the
terms and conditions of the Rules and Regulations, the terms and conditions of
this Lease shall control and be interpreted in such a manner as to override any
provision of the Rules and Regulations which would prevent those terms and
provisions of this Lease concerning hours of operation or amount or location of
parking spaces from being given full force and effect.

                                       3
<PAGE>

            2.4Parking Area. Tenant shall be allowed to use up to twenty (20)
Unreserved parking spaces, which will be located within the Tower One Garage and
which will be striped and will be non-exclusive and up to 1, VIP space, which
will be striped, non-exclusive and gated, and also located within the Tower one
Garage (the "Parking Area"). The Parking Area will be available during "Business
Hours" (as defined in the Rules and Regulations). Tenant acknowledges and agrees
that Tenant shall not be entitled to use any parking spaces located within the
Surface Parking Area or the Tower Two Garage, unless Landlord changes the
Parking Area to include parking in such locations. Landlord may modify the
master plan or the Phase II PUD for the Center in its sole discretion without
the consent of Tenant and shall have no obligation to construct or maintain any
portion of the Center so long as Tenant's Parking Area is not reduced or except
as otherwise provided in this Lease.

            2.5 Parking Charges. Commencing upon the Commencement Date, Tenant
shall pay to Landlord, as Rent, as and when Base Rent is due and payable, fifty
& no/100 Dollars ($50.00) per parking space per month for the Unreserved Spaces
and seventy-five and no/i00 Dollars ($75.00) per VIP space per month ("Parking
Charges").

      3. Term. The term of this Lease (the "Term") shall consist of the
Preliminary Term, the Initial Term and the Extended Terms (as such terms are
defined in Paragraphs 3.1, 3.2, and 3.3, respectively), in each case unless
previously terminated in accordance with the provisions of this Lease.

            3.1 Preliminary Term. The "Preliminary Term" of this Lease shall be
defined as the period of time commencing on the date of this Lease and
continuing thereafter until the day prior to the Commencement Date.

            3.2 Initial Term. The "Initial Term" of this Lease shall be defined
as the period of time commencing on the Commencement Date and continuing
thereafter until the Expiration Date set forth in the Basic Lease Information
and in Section 3.4.2, below (the "Expiration Date").

            3.3 Extended Terms. Tenant shall have no options to extend the
Initial Term of this Lease.

            3.4 Commencement Date, Expiration Date and Lease Year. For the
purposes of this Lease, the following terms shall have the following meanings:

                  3.4.1 "Commencement Date" Shall be defined as set forth in
Schedule 1, Supplemental Provisions, , Paragraph 1.

                  3.4.2 "Expiration Date" Shall be as set forth in Schedule 1,
Supplemental Provisions, Paragraph 1 3.4.3 "Lease Year" shall be each period of
twelve (12) consecutive months, with a total of three hundred sixty-five (365)
days, during the Term commencing as follows:

                          3.4.3.1 The first Lease Year shall begin on January 1
of the year immediately following the year of the Commencement Date, unless the
Commencement Date falls on January 1, in which case the first Lease Year shall
begin on the Commencement Date and shall end on December 31; and

                                       4
<PAGE>

                          3.4.3.2 Each successive Lease Year shall commence on
January 1 and end on December 31.

                  3.4.4 "First Partial Lease Year" shall be defined as the
period of time, if any, beginning on the Commencement Date through and ending on
the day prior to January 1 of the first Lease Year.

                  3.4.5 "Partial Lease Year" shall be defined as any Lease Year
that spans less than a calendar year (which shall be deemed to be 365 days) such
as the First Partial Lease Year or any portion of a Lease Year resulting from
the expiration or early termination of this Lease.

            3.5 Commencement Date Certificate. Within thirty (30) days after the
occurrence of the Conversion Date as set forth in Schedule 1, Paragraph 1,
Tenant shall execute and deliver to Landlord a certificate in recordable form,
confirming the Conversion Date, the date of the beginning of the first Lease
Year, the Expiration Date, the Base Rent, the "Building's Pro Rata Share of the
Center Common Area" and the "Tenant's Pro Rata Share" (each as defined in
Exhibit C, Determination of Tenant's Operating Expenses), which certificate
shall be substantially similar to the certificate attached hereto and
incorporated herein as Exhibit D, Commencement Date Certificate, and which shall
include a restated Basic Lease Information page to attach to this Lease.

      4. Rent.

            4.1 Payment of Rent - General. All amounts payable by Tenant to
Landlord under this Lease shall be deemed to be Rent and shall be payable and
recoverable as Rent in the manner herein provided. Rent shall be paid to
Landlord, without demand, deduction, set-off or counterclaim, at the address of
Landlord as set forth in this Lease, or to such other person or at such other
address as Landlord may from time to time designate in writing. Tenant's
obligation to pay Rent for the entire Term shall survive the expiration or
earlier termination of this Lease and is independent of any covenant or
obligation of Landlord hereunder.

            4.2 Preliminary Term Rent. There shall be no Rent during the
Preliminary Term.

            4.3 Base Rent. Commencing on the Commencement Date and on the first
day of each calendar month in the Term thereafter, Tenant shall pay to Landlord
as rent ("Base Rent"), in advance, the monthly amounts, with the periodic
increases (if any), set forth in the Basic Lease Information. In the event that
the Commencement Date is not the first day of a calendar month then any Base
Rent shall be prorated for such month based on the actual number of days in such
month.

            4.4 Additional Rent. Tenant shall also pay to Landlord as Rent under
this Lease, Parking Charges pursuant to Paragraph 2.5 and Tenant's Operating
Expenses pursuant to Paragraph 4.5.

            4.5 Tenant's Operating Expenses.

                                       5
<PAGE>

4.5.1 At the beginning of each calendar year after the Commencement Date,
Landlord shall compute and deliver to Tenant a bona fide estimate of Tenant's
Operating Expenses determined pursuant to Exhibit C, Determination of Tenant's
Operating Expenses, for the appropriate Lease Year or Partial Lease Year and
without further notice Tenant shall pay to Landlord in monthly installments,
simultaneously with Tenant's payments of Base Rent during such Lease Year or
Partial Lease Year, one-twelfth of such estimate (during a full Lease Year), or,
in any Partial Lease Year, an adjusted portion of such estimate based on the
actual number of calendar days in such Partial Lease Year. Any failure by
Landlord to deliver any such estimate as aforesaid shall not relieve Tenant of
its obligation to pay Tenant's Operating Expenses as herein provided. If at any
time it reasonably appears to Landlord that the Tenant's Operating Expenses for
the current Lease Year or Partial Lease Year will vary from Landlord's estimate
then Landlord may readjust the Tenant's Operating Expenses for such Lease Year
or Partial Lease Year by notice delivered to Tenant, and subsequent payments by
Tenant for such Lease Year or Partial Lease Year will be based upon such
readjusted Tenant's Operating Expenses.

                  4.5.2 Unless delayed by causes beyond Landlord's reasonable
control, Landlord shall deliver to Tenant within one hundred twenty (120) days
after the end of each calendar year a written statement (the "Statement")
setting out in reasonable detail the amount of Tenant's Operating Expenses for
the preceding Lease Year or Partial Lease Year. If the aggregate of monthly
installments of Tenant's Operating Expenses actually paid by Tenant to Landlord
during such Lease Year or Partial Lease Year differs from the amount of Tenant's
Operating Expenses payable for such Lease Year or Partial Lease Year under this
Paragraph 4.5, as indicated in the Statement, then, as the case may be, Tenant
shall pay the difference to Landlord or Landlord shall issue a credit to Tenant
against the Rent remaining to be paid hereunder for the difference, or if no
Rent then remains to be paid, refund the difference to Tenant, without interest,
within thirty (30) days after the date of delivery of the Statement. Landlord's
obligation to make any refund pursuant to this Paragraph 4.5.2 shall survive the
expiration or earlier termination of this Lease.

                  4.5.3 If Tenant disagrees with the accuracy of Tenant's
Operating Expenses as set forth in the Statement or in any adjustment thereto
made by Landlord pursuant to this Paragraph 4.5, Tenant shall be required to
give Landlord written notice thereof within thirty (30) days after the date
Landlord gives Tenant the Statement or notice of adjustment thereto, as the case
may be, or Tenant shall conclusively be deemed to have accepted the accuracy of
the Statement, or modification thereto, as the case may be, and to have waived
any right to claim any readjustment in connection therewith.

      5. Completion and Occupancy of Premises.

            5.1 Construction of Leasehold Improvements. The Premises are being
leased in "as is "condition.

            5.2 Tenant's Allowance. Landlord shall pay up to $N/A (the "Tenant's
Allowance") to be applied to the cost of the Leasehold Improvements to the
Premises.

            5.3 Delayed Possession. This Lease shall not be void or voidable nor
shall Landlord be liable to Tenant for any loss or damage resulting from any
delay in delivering possession of the Premises to Tenant. If such delay is not
caused by or attributable to Tenant, its servants, agents or independent
contractors as further provided in Exhibit E, Work Letter, no Rent shall be
payable by Tenant until Landlord can so deliver possession of all the Premises.
In the event Landlord is delayed in delivering

                                       6
<PAGE>

possession of the Premises by any delay, interference or hindrance of such work
by Tenant, Tenant's contractors or any of their employees or agents, or by any
changes in such work requested by Tenant and agreed to by Landlord or by
Tenant's failure to timely and properly perform any of its obligations imposed
pursuant to Exhibit E, Work Letter, the Premises shall be conclusively deemed
delivered to Tenant on the date on which the same would have occurred in the
absence of such delay, which date shall be determined by Landlord's Architect
and the Commencement Date shall be deemed such date.

            5.4 Occupancy of Premises. The taking of occupancy of the Premises
by Tenant or anyone claiming by, under or through Tenant shall be conclusive
evidence that: (1) Tenant accepts possession; and (2) the Premises and the
Building were in good and satisfactory condition subject to punchlist items
indicated on a list delivered by Tenant to Landlord pursuant to Exhibit E, Work
Letter.

      6. Use and Operation of Premises.

            6.1 Operations. Tenant shall use the Premises only for general
office purposes consistent with a first-class office building and for no other
purpose without the prior written consent of Landlord, in its sole discretion.

            6.2 Unlawful Purposes. Tenant shall not use or allow the Premises or
any part thereof to be used or occupied for any unlawful purpose. Tenant shall
not do, permit or suffer any use of the Premises in violation of the certificate
of occupancy for the Building.

            6.3 Abandonment. Tenant shall not vacate or abandon the Premises or
any portion thereof at any time during the Term.

            6.4 Nuisance. Tenant, its employees, agents and invitees, shall not
cause or maintain any nuisance in or about the Premises. Tenant shall keep the
Premises free of debris, rodents, vermin and anything of a dangerous, noxious or
offensive nature or which could create a fire hazard (through undue load on
electrical circuits or otherwise) or undue vibration, heat or noise. No
deliveries shall be made through the lobby or other parts of the Building Common
Area except those corridors designated for such use by Landlord. No items,
including but not limited to supplies and trash, shall be allowed to accumulate
outside the Premises for any period of time.

            6.5 No Sale of Goods from Premises. Tenant shall not conduct or
permit the conduct of any "fire," "bankruptcy," "going out of business" or
auction sale in or from the Premises.

            6.6 Rules and Regulations. Tenant, its employees, agents and
invitees shall comply with the Rules and Regulations attached hereto and
incorporated herein as Exhibit F, Rules and Regulations, which Rules and
Regulations Tenant has reviewed and hereby agrees to be reasonable requirements
of Landlord; provided, however, Landlord shall have the right, from time to
time, to change, alter and amend the Rules and Regulations and to establish such
additional reasonable and nondiscriminatory Rules and Regulations as Landlord
deems necessary or advisable, in its sole discretion, for the proper and
efficient maintenance of the Center and the Building, but which do not conflict
with the terms of this Lease or materially alter the terms and conditions of
Tenant's occupancy hereunder. In the event of any inconsistency between the
Lease and the Rules and Regulations, the terms of the Lease shall prevail.
Landlord shall have no liability to Tenant for failure to enforce such Rules and
Regulations against any other

                                       7
<PAGE>

tenant or employee of the Center. To the best of Landlord's ability, Landlord
agrees to uniformly enforce the Rules and Regulations in a reasonable manner.

      7. Services, Maintenance, Repair and Alterations by Landlord.

            7.1 Operation of Building. During the Term, Landlord shall operate
and maintain the Building in accordance with all applicable laws and
regulations, the requirements of Landlord's insurance carriers and standards
from time to time prevailing for first-class office buildings of comparable age
and character in the area in which the Building is located, and shall provide
the services set out in this Article 7.

            7.2 Services to Premises. Landlord shall provide or cause to be
provided in the Premises:

                  7.2.1 heat, ventilation and cooling as required for the
comfortable use and occupancy of the Premises during Business Hours;

                  7.2.2 janitorial services, including window washing, provided
that Tenant shall leave the Premises in a reasonably tidy condition at the end
of each business day;

                  7.2.3 electric power as supplied by the local utility company
for normal lighting and small business office equipment (provided, however, that
Landlord shall not be required to supply to Tenant or the Premises electrical
power which is disproportionate to that used by other tenants in the Building
during normal operations such as, without limitation, electrical power to
computer rooms, to above Building standard lighting fixtures, or to supplemental
air conditioning equipment);

                  7.2.4 replacement of Building standard fluorescent tubes,
light bulbs and ballasts as required from time to time as a result of normal
usage; and

                  7.2.5 maintenance, repair and replacement as set out in
Paragraph 7.4.

                  7.3 Building Services. Landlord shall provide or cause to be
provided in the Building and Building Common Area:

                  7.3.1 domestic running water and necessary supplies in
washrooms sufficient for the normal use thereof by occupants in the Building;

                  7.3.2 access to and egress from the Premises, including
elevator or escalator service if included in the Building;

                  7.3.3 heat, ventilation, cooling, lighting, electric power,
domestic running water and janitorial service in the Building Common Area during
Business Hours;

                  7.3.4 a general directory board on which Tenant shall be
entitled to have its name shown, provided that Landlord shall have exclusive
control thereof and of the space thereon to be allocated to each tenant; and

                                       8
<PAGE>

                  7.3.5 maintenance, repair and replacement as set out in
PARAGRAPH 7.4.

            7.4 Maintenance, Repair and Replacement. Landlord shall operate,
maintain, repair and replace the systems, facilities and equipment necessary for
the proper operation of the Building and for provision of Landlord's services
under Paragraphs 7.2 and 7.3 above (but not including any systems, facilities or
equipment in the Premises such as, without limitation, non-Building standard
items such as light fixtures and bulbs, partitioned glass, doors and frames if
due to Tenant's misuse, and plumbing fixtures, such as sinks, water heaters,
refrigerators, and garbage disposals, rest rooms exclusively within the Premises
and supplemental air conditioning equipment, all of which Tenant shall be
responsible for pursuant to Article 9), and shall maintain and repair the
foundations, structure and roof of the Building and repair damage to the
Building which Landlord is obligated to insure against under Article 15.
Notwithstanding the foregoing:

                  7.4.1 if all or part of such systems, facilities and equipment
are destroyed, damaged or impaired, Landlord shall have a reasonable time in
which to complete necessary repair or replacement, and shall diligently pursue
to completion, and during that time shall be required only to maintain such
services as are reasonably possible in the circumstances;

                  7.4.2 Landlord may temporarily discontinue such services or
any of them at such times as may be necessary due to causes (except lack of
funds) beyond the reasonable control of Landlord;

                  7.4.3 Landlord shall use reasonable diligence in carrying out
its obligations under this Paragraph 7.4, but shall not be liable under any
circumstances for any consequential damage to any person or property for any
failure to do so; and

                  7.4.4 no reduction or discontinuance of such services as
permitted by this Lease shall be construed as an eviction of Tenant or release
Tenant from any obligation of Tenant under this Lease;

                  7.4.5 Notwithstanding anything contained herein to the
contrary, if(1) service in the Building is interrupted, (2) Landlord is aware of
such cessation, (3) such cessation does not arise as a result of an act or
omission of Tenant, and (4) as a result of such cessation, the Premises or a
material portion thereof are rendered untenantable (meaning that Tenant is
unable to use such space in the normal course of its business), then Tenant's
exclusive remedy for such cessation shall be as follows: beginning on the fifth
(5th) consecutive business day after the affected space becomes untenantable,
the Rent and other charges payable hereunder shall be equitably abated based on
the percentage of the space in the Premises so rendered untenantable, and such
abatement shall continue until the date the Premises becomes tenantable again.

subject to Landlord's obligations under Article 17.

            7.5 Additional Services and Utilities.

                                       9
<PAGE>

                  7.5.1 If from time to time requested in writing by Tenant, and
to the extent that it is reasonably able to do so, Landlord shall provide in the
Premises services in addition to those set out in Paragraph 7.2 such as, by way
of example but not in limitation, heat, ventilation and cooling during times
other than Business Hours, provided that Tenant shall within thirty (30) days of
receipt of an invoice for any such additional service pay Landlord therefor at
rates as Landlord may from time to time establish.

                  7.5.2 Tenant shall not without Landlord's written consent
install or operate in the Premises equipment (including telephone equipment or
lighting) which generates sufficient heat to affect the temperature otherwise
maintained in the Premises by the air conditioning system as normally operated.
Landlord may install supplementary air conditioning units, facilities or
services in the Premises, or modify its air conditioning system, as may in
Landlord's reasonable opinion be required to maintain proper temperature levels,
and Tenant shall pay Landlord within ten (10) days of receipt of any invoice for
the cost thereof, including installation, operation and maintenance expense.

                  7.5.3 If Landlord shall from time to time reasonably determine
that the use of electricity or any other utility or service in the Premises is
disproportionate to the use of other tenants, Landlord may separately charge
Tenant for, and Tenant shall pay to Landlord, the excess costs at rates
attributable to such disproportionate use together with the costs incurred by
Landlord in determining that Tenant's use is disproportional. At Landlord's
request, Tenant shall install and maintain, at Tenant's expense, metering
devices for measuring the use of any such utility or service in the Premises.

            7.6 Alterations by Landlord. Landlord may from time to time

                  7.6.1 make repairs, replacements, changes or additions to the
structure, systems, facilities and equipment in the Premises where necessary or
desirable to serve the Premises or other parts of the Building;

                  7.6.2 make changes in or additions to any part of the Building
not in or forming part of the Premises; and

                  7.6.3 change or alter the location of the Building Common
Area, provided that in doing so Landlord shall not unreasonably disturb or
interfere with Tenant's use of the Premises and operation of its business.

            7.7 Energy, Conservation and Security Policies. Landlord shall be
deemed to have observed and performed the terms and conditions to be performed
by Landlord under this Lease, including those relating to the provision of
utilities and services, if in so doing it acts in accordance with a directive,
policy or request of a governmental or quasi-governmental authority serving the
public interest in the fields of energy, conservation or security.

      8. Center Common Area.

            8.1 Landlord's Reserved Rights. Landlord shall maintain the Center
Common Area as provided in this Article 8. Tenant shall pay to Landlord,
Tenant's Pro Rata Share of the Building's Pro Rata Share of Landlord's Operating
Costs for the Center Common Area, as part of Tenant's Operating

                                       10
<PAGE>

Expenses (all as defined in Exhibit C, Determination of Tenant's Operating
Expenses). Landlord, in its sole discretion, reserves the right at any time and
from time to time (i) to make or permit changes or revisions in its plan for the
Center, including additions to, subtractions from, rearrangements of,
alterations of, modifications or supplements to the building areas, walkways,
the parking areas, driveways or other Center Common Area; (ii) to construct
other buildings or improvements in the Center, including additional parking
structures, and to make alterations thereof or additions thereto, which may
increase or decrease the Center Common Area; (iii) to make or permit changes or
revisions in the Center or Center Common Area, including additions thereto; (iv)
to convey portions of the Center to others for the purpose of constructing
thereon other buildings or improvements, including additions thereto and
alterations thereof; or (v) to convey portions of the Center Common Area to an
owner's association for the purpose of maintaining the Center Common Area; and
(vi) to convey the Building or the Land with or without a portion of the Center
Common Area to third parties; provided, however, that Landlord's exercise of its
reserved rights shall not materially interfere with Tenant's use of or access to
the Premises or its Parking Area, as provided under this Lease. 8.2 Maintenance
and Repair. Landlord shall: (i) operate, manage and maintain the Center Common
Area; (ii) keep the Center Common Area in a safe condition free of obstructions,
cleaned, swept, and in first-class order and repair; (iii) remove all snow and
ice from the Center Common Area as promptly as reasonably possible during
Business Hours after any accumulation of two inches or more of snow or ice has
occurred; (iv) keep the Center Common Area (including parking areas) routinely
used by Tenant's employees properly lighted during Business Hours; (v) provide
security throughout the Center Common Area as Landlord deems necessary in its
sole discretion; (vi) provide for proper drainage of surface and subsurface
waters; and (vii) keep the Parking Area properly graded, lit, marked, paved and
striped and periodically resealed to assist in the orderly parking of cars.
Except in the case of an emergency, Landlord shall use reasonable efforts to
perform all Center Common Area maintenance and repairs in a prompt manner and at
such times and in such a manner as shall minimize any inconvenience to the
business conducted in the Premises and in the Center. If Landlord conveys any or
all of the Center Common Area to an owner's association such association may
provide the services required of Landlord hereunder.

      9. Maintenance by Tenant.

            9.1 Condition of Premises. Tenant shall maintain the Premises and
all improvements therein in good order and in first-class condition, normal wear
and tear and casualty excluded, consistent with the Building and the premises of
other tenants therein, including, but not limited to:

                  9.1.1 repainting and redecorating the Premises and cleaning
window coverings and carpets at reasonable intervals as needed; and

                  9.1.2 making repairs, replacements and alterations within the
premises as needed, including those necessary to comply with the requirements of
any governmental or quasi-governmental authority having jurisdiction.

            9.2 Failure to Maintain Premises. If Tenant fails to perform any
obligation under this Article 9, then on not less than thirty (30) days notice
to Tenant during which time Tenant has not cured its failure of performance
under this Article 9 (or immediately in the event of an emergency), Landlord may
enter the Premises and perform such obligation without liability to Tenant for
any loss or damage to

                                       11
<PAGE>

Tenant thereby incurred, and without the same constituting an eviction or
entitling Tenant to any abatement of Rent or otherwise relieving Tenant from any
of its obligations hereunder, and Tenant shall pay to Landlord for the cost
thereof, plus ten (10%) of such cost for overhead and supervision, within ten
(10) days of receipt of Landlord's invoice therefor.

      10. Tenant's Property.

            10.1 Trade Fixtures and Personal Property. Tenant may install in the
Premises its usual trade fixtures and personal property in a proper, lawful and
workmanlike manner, without causing damage to the Premises, provided that no
such installation shall interfere with or damage the mechanical or electrical
systems or the structure of the Building. If Tenant is not then in default
hereunder, trade fixtures and personal property installed in the Premises by
Tenant may, at Tenant's sole expense, be removed from the Premises:

                  10.1.1 from time to time in the ordinary course of Tenant's
business or in the course of reconstruction, renovation or alteration of the
Premises by Tenant; and

                  10.1.2 during a reasonable period prior to the expiration of
the Term, provided that Tenant promptly repairs at its own expense any damage to
the Premises or Building resulting from such installation and removal.

            10.2 Signs. Any sign, lettering, decal or design of Tenant placed in
or upon the Premises which is visible from the exterior of the Premises shall be
at Tenant's expense and subject to approval by Landlord (in Landlord's sole
discretion), shall conform to the uniform pattern of identification signs for
tenants in the Building as prescribed by Landlord from time to time and shall be
removed, and the surface it was located upon repaired and restored to the
condition it was in prior to the installation of the same, by Tenant, at its
sole expense, at or prior to the expiration of the Term. Tenant shall not
inscribe or affix any sign, lettering, decal or design in the Premises or
Building which is visible from the exterior of the Building.

      11. Alterations by Tenant. Tenant may, from time to time, at its own
expense, make changes, additions and improvements in the Premises to better
adapt the same to its business, provided that any change, addition or
improvement shall:

            11.1 comply with the requirements of any governmental or
quasi-governmental authority having jurisdiction and with the requirements of
Landlord's insurance carriers;

            11.2 be made only with the prior written consent of Landlord (which
shall not be unreasonably withheld, unless it relates in Landlord's sole opinion
to the structure or systems of the Building, in which case Landlord may withhold
its consent in its sole discretion);

            11.3 equal or exceed the then current standard for the Building and
be performed in a good and workmanlike manner; and
            11.4 be carried out only by persons approved in writing in advance
by Landlord.

                                       12
<PAGE>

            Tenant shall, if required by Landlord, deliver to Landlord, before
commencement of any change, addition or improvement pursuant to this Paragraph
11, performance and payment bonds, or other evidence of financial capability
satisfactory to Landlord to show the Tenant's ability to pay for such change,
addition or improvement, as well as proof of worker's compensation and public
liability and property damage insurance coverage, with Landlord named as an
additional insured, in amounts, with companies, and in a form reasonably
satisfactory to Landlord, which shall remain in effect during the entire period
in which the Tenant's work will be carried out. Any increase in property taxes
on or fire or casualty insurance premiums for the Building attributable to such
change, addition or improvements shall be borne solely. by Tenant.

      12. Mechanic's Liens. Tenant shall pay before delinquency all costs for
work done or caused to be done by Tenant in the Premises which could result in
any lien or encumbrance on Landlord's interest in the Land or Building or any
part thereof, shall keep the title to the Land or Building and every part
thereof free and clear of any lien or encumbrance in respect of such work, and
shall indemnify and hold harmless Landlord against any claim, loss, cost, demand
and legal or other expense, whether in respect of any lien or otherwise, arising
out of the supply of material, services or labor for such work. Tenant shall
immediately notify Landlord of any such lien, claim of lien or other action of
which it has or reasonably should have knowledge and which affects the title to
the Land or Building or any part thereof, and shall post a bond or other
undertaking in accordance with Colorado Revised Statutes ss. 38-22-131, or take
such other action as shall cause the same to be removed within ten (10) days,
failing which Landlord may take such action as Landlord deems necessary to
remove the same and the entire cost thereof shall be immediately due and payable
by Tenant to Landlord. Tenant shall permit Landlord to post a notice on the
Premises as may be contemplated by applicable law, as amended from time to time,
or any comparable or other statutory provision for protection of the Building
and the Center and Landlord's interest therein from mechanic's or other liens
and to take all other actions Landlord may desire for Landlord.

      13. Assignment and Subletting.

            13.1 Consent Required. Tenant shall not assign, mortgage, pledge,
encumber or in any manner transfer this Lease, or any interest herein, in whole
or in part, or sublet all or any part of the Premises, or assign or collaterally
assign the Lease as part of any financing, whether or not such financing is
Debtor-in-Possession financing, if Tenant becomes a debtor under the United
States Bankruptcy Code, without the prior written consent of Landlord in each
instance, and any attempt to do any of such acts without such consent shall be
null and void and of no effect. A transfer of control of Tenant, including but
not limited to a transfer of stock, shall be deemed an assignment under this
Lease and shall be subject to all the provisions of this Article 13, including
the requirement of obtaining Landlord's prior written consent. The consent by
Landlord to any assignment, mortgage, pledge, encumbrance, transfer or
subletting shall not constitute a waiver of the necessity for such consent to
any subsequent assignment, mortgage, pledge, encumbrance, transfer or
subletting. This prohibition against assigning, mortgaging, pledging,
encumbering, transferring or subletting shall be construed to include a
prohibition against any assignment, mortgage, pledge, encumbrance, transfer or
subletting by operation of law.

            13.2 Tenant Remains Liable. If this Lease is assigned, or if the
Premises or any part thereof is sublet or occupied by anybody other than Tenant,
Landlord may collect Rent from the assignee, subtenant or occupant, and apply
the net amount collected to the Rent herein reserved, but no such assignment,
subletting, occupancy or collection shall be deemed a waiver of this covenant,
or the acceptance

                                       13
<PAGE>

of the assignee, subtenant or occupant as tenant, or a release of Tenant from
the further performance by Tenant of covenants on the part of Tenant contained
in this Lease. Notwithstanding any assignment, mortgage, pledge, encumbrance,
transfer or sublease, Tenant shall remain fully liable on this Lease and shall
not be released from performing any of the terms, covenants and conditions of
this Lease. If Landlord is advised by its counsel that all or any portion of the
rent payable under any assignment consented to under this Section 13, is or may
be deemed to be unrelated business income within the meaning of the Internal
Revenue Code as amended from time to time (the "Code") or regulations issued
thereunder, Landlord may elect, in Landlord's sole discretion, to amend
unilaterally the calculation of rent so that none of the rent payable to
Landlord under this Lease will constitute unrelated business income, and Tenant
and its assignee shall execute any document necessary to effect such amendment;
provided, however, that such amendment will not increase payment obligations or
other liability of the Tenant under this Lease or reduce the obligations of
Landlord under this Lease.

            13.3 Standard For Consent. Landlord shall retain sole discretion to
grant or deny its consent under this Article 13. Additionally, (I) any consent
to a sublease shall be conditioned upon receipt by Landlord of fifty percent
(50%) of the difference, if any, between the monthly rent paid by the sublessee
and the monthly Base Rent due the Landlord under this Lease (ii) any consent to
an assignment shall be conditioned upon receipt by Landlord of any premium fee
or other charge paid by the proposed assignee to the Tenant; and (iii) Landlord
may withhold its consent to any proposed assignment or sublease that provides
for rent based in whole or in part on the income or profits derived from the
Premises (except for percentage rent based on gross (not net) receipts or
sales), or would cause Landlord to be deemed to have received unrelated business
income or subject Landlord to unrelated business income tax pursuant to the
Code, as determined by Landlord in its sole discretion.

            13.4 Transfer by Landlord. In the event of a transfer or assignment
by Landlord of its interest in this Lease or in the Premises, all of Landlord's
obligations under this Lease shall cease without the necessity of any further
document signed or actions taken by any party, except for obligations accruing
prior to the date of such assignment and Landlord shall be released from any and
all further obligations hereunder, and Tenant agrees to look solely to the
Landlord's successor-in-interest for performance of such obligations; provided
that such successor-in-interest of the Landlord assumes the obligations of
Landlord under this Lease that arise from and after the date of such transfer or
assignment. Notwithstanding anything in this Lease to the contrary, Landlord
reserves the right to assign this Lease or to sell the Building, the Land or all
or a portion of the Center or the Center Common Area without notice to or the
consent of Tenant.

            13.5 Assignment to Permitted Assignee. Notwithstanding the provision
of Article 13 hereof, the Tenant may, without the Landlord's consent, assign
this Lease to any parent, affiliated or subsidiary corporation, provided such
assignment does not relieve the original Tenant of any liability hereunder, and
may also assign this Lease without Landlord's consent in connection with the
merger or consolidation of Tenant with or into any other corporation or entity,
or in connection with the sale or transfer of a majority of the assets and
liabilities of Tenant, so long as, with respect to any of the foregoing (i) the
shareholders' equity (determined in accordance with generally accepted
accounting principles) of any assignee is equal to or greater than the
shareholders' equity equivalently determined in Tenant as of the effective date
of said assignment, (ii) as of the effective date of such assignment, the
assignee is engaged in a business customarily acceptable for a tenant in a
building such as the Building in metropolitan Denver, Colorado, (iii) the
assignee assumes all of the obligations of Tenant under this Lease, (iv) at the
time of the

                                       14
<PAGE>

assignment, this Lease is in full force and effect and there is no event of
default under this Lease on the part of Tenant, (v) the assignee's proposed use
of the Premises is not in violation of the approved use provision of this Lease,
(vi) the transaction giving rise to the assignment was not entered into as a
subterfuge to avoid obligations and restrictions under this Lease, and (vii)
assignment does not result in the payment of rent based in whole or in part on
the income or profits derived from the Premises except for percentage rent based
on gross (not net) receipts or sales. An assignee complying with the terms of
this Paragraph 13.5 is a "Permitted Assignee." At least thirty (30) days prior
to the effective date of any such assignment to a Permitted Assignee, Tenant
agrees to furnish Landlord with notice of such assignment, fully executed copies
of the instruments intended to effect such assignment, and with documentation
establishing Tenant's satisfaction of the requirements set forth above. If
Landlord is advised by its counsel that all or any portion of the rent payable
under any assignment entered into pursuant to this Section 13.5, is or may be
deemed to be unrelated business income within the meaning of the Code or
regulations issued thereunder, Landlord may elect, in Landlord's sole
discretion, to amend unilaterally the calculation of rent so that none of the
rent payable to Landlord under this Lease will constitute unrelated business
income, and Tenant and its Permitted Assignee shall execute any document
necessary to effect such amendment; provided, however, that such amendment will
not increase payment obligations or other liability of Tenant under this Lease
or reduce the obligations of Landlord under this Lease. Any Permitted Assignee
of Tenant must assume and agree in writing to fully perform and observe all of
the obligations and agreements of Tenant under this Lease. No such assignment
shall relieve any Tenant of this Lease of any covenants or obligations under
this Lease and the Tenant, its successors and assigns shall remain fully liable
hereunder.

      14. Taxes.

            14.1 Payment by Landlord. Subject to Tenant's obligations pursuant
to Paragraph 14.2, Landlord shall pay all taxes which may be levied or assessed
by a lawful authority against the Building and the Center Common Area.

            14.2 Payment by Tenant. Tenant shall pay personal property taxes
which are assessed against Leasehold Improvements (if not included in "Real
Estate Taxes", as defined in Exhibit C, Determination of Tenant's Operating
Expenses), and Tenant's fixtures, equipment and personal property in the
Premises and all other taxes imposed upon Tenant by law. Tenant shall pay to
Landlord as part of Tenant's Operating Expenses, Tenant's Pro Rata Share of the
Real Estate Taxes for the Building and the Center Common Area, pursuant to
Paragraph 4.5 and Exhibit C, Determination of Tenant's Operating Expenses.

      15. Insurance.

            15.1 Coverage by Landlord.

                  15.1.1 All-Risk Premises Insurance. From and after the
Commencement Date and thereafter during the Term, Landlord, it successors or
assigns shall carry and maintain property insurance against perils customarily
included within all-risk, fire, theft and extended coverage, including coverage
for earthquake, flood, windstorm, hail and other hazards, casualties and
contingencies, on the Center Common Area and the Building, including the
Premises, leasehold improvements to the Premises (whether made by Landlord or
Tenant), and including any other property of Landlord within the Premises but
excluding Tenant's trade fixtures and equipment, and other personal property on
or about the Premises,

                                       15
<PAGE>

in an amount equal to the full replacement value thereof at the time of loss,
with annual adjustments of value under the policy.

                  15.1.2 Commercial General Liability Insurance. From and after
the Commencement Date and thereafter during the Term, Landlord, its successors
or assigns, shall carry and maintain commercial general liability insurance with
minimum limits of not less than $5,000,000 with respect to injury or death to
any one person, and of not less than $10,000,000 with respect to any one
occurrence, and with minimum limits of not less than $1,000,000 with respect to
property damage arising out of any one occurrence on or about the Center Common
Area or the Building Common Area.

                  15.1.3 Rental Income Insurance. From and after the
Commencement Date and thereafter during the Term, Landlord, its successors or
assigns, shall place and maintain, subject to availability at a reasonable cost,
insurance on rental income derived by Landlord from the Building upon a rental
value form of coverage or, alternatively in the Landlord's sole discretion, on a
profit form of coverage, with a period of coverage of not less than the period,
as estimated from time to time by Landlord, which would be required to rebuild
and re-tenant the Building or the Premises as a result of such casualty.

                  15.1.4 Other Insurance. Landlord, its successors or assigns,
shall also carry and maintain, at its option, such other property, casualty, or
other insurance as Landlord or any such successor or assign deems reasonably
necessary for the Building and the Center Common Area.

            15.2 Coverage by Tenant.

                  15.2.1 All-Risk Premises Coverage. From and after the
Commencement Date and thereafter during the Term, Tenant shall carry and
maintain, at Tenant's sole expense, property insurance against perils
customarily included within all-risk, fire, theft and extended coverage
including coverage from windstorms, hail and other hazards, casualties and
contingencies, on Tenant's trade fixtures and equipment and other personal
property on or about the Premises, in an amount equal to the full replacement
value of such items at the time of loss, with annual adjustments of value under
the policy.

                  15.2.2 Commercial General Liability Insurance. From and after
the Commencement Date, and thereafter during the Term of this Lease, Tenant
shall also maintain, at Tenant's sole expense, commercial general liability and
contractual indemnity or liability coverage (including coverage for contractual
liability and fire legal liability) with respect to liability arising out of the
use, occupancy or maintenance of the Premises with minimum limits of not less
than $1,000,000 with respect to injury or death to any one person, and of not
less than $3,000,000 with respect to any one occurrence, and with minimum limits
of not less than $500,000 with respect to property damage arising out of any one
occurrence in the Premises.

                  15.2.3 Workman's Compensation and Employer's Liability
Insurance. From and after the Commencement Date, and thereafter during the Term
of this Lease, Tenant shall also maintain, at Tenant's sole cost and expense,
statutory workman's compensation insurance and employer's liability insurance as
prescribed by applicable law.

                  15.2.4 Insurance Required During Tenant's Construction. During
any periods of construction of the Premises by Tenant, including during the
Preliminary Term, all of Tenant's

                                       16
<PAGE>

general contractors and subcontractors shall carry commercial general liability
insurance (including coverage for product liability, completed operations and
contractual liability), automobile liability (including hired and non-owned
liability) and workman's compensation insurance and Tenant shall carry builder's
risks coverage to insure against losses during construction and such other
insurance as required by Article 11 and Exhibit E, Work Letter.

                  15.2.5 Other Insurance. Tenant shall also obtain and maintain,
throughout the Term of this Lease, at Tenant's sole cost and expense, such other
insurance with respect to the Premises or any replacement or substitutions
therefor, or additions thereto, and in such amounts as Landlord or any mortgagee
or transferee of Landlord shall from time to time reasonably request, against
such other insurable hazards or casualties which at the time in question are
commonly insured against in the case of property similar to the Premises.

            15.3 Insurance Provisions. All policies required to be maintained by
Tenant hereunder shall be written and underwritten by solvent and responsible
insurance companies licensed to do business in the state in which the Premises
are located, which shall have a Best rating of A-IX or better. Prior to the
Commencement Date, and thereafter during the Term upon Landlord's request,
Tenant shall deliver to Landlord and Landlord's mortgagees certificates of
insurance and policy endorsements evidencing the insurance required to be
carried hereunder including but not limited to the term and limits of coverage
in force, names of applicable insurers and persons insured and a statement that
coverage may not be canceled, altered or permitted to lapse or expire without
thirty (30) days advance written notice to Landlord and Landlord's mortgagee.
Revised certificates of insurance shall be forwarded to Landlord each time a
change in coverage or insurance carrier is made by Tenant or upon renewal of
expired coverages. At Landlord's option, Tenant may be required to provide
Landlord with certified copies of Tenant's insurance policies required
hereunder. Tenant shall ensure that all policies are written on a fully insured
basis. Deductibles in Tenant's policies hereunder or self-insured retentions by
Tenant are subject to approval by Landlord on an individual basis. All casualty
insurance policies carried by Tenant may be in one or more blanket, umbrella or
excess liability policies covering other locations of Tenant subject to
Landlord's prior written approval of such policies. All insurance coverage which
Tenant is required to carry pursuant to Paragraph 15.2 shall contain a standard
mortgagee loss payable clause as well as a waiver of subrogation endorsement
pursuant to Paragraph 15.4 and shall provide that the proceeds of any loss shall
be payable to Landlord and Landlord's mortgagee, as their interests may appear.
All insurance required to be carried by Tenant under this Lease shall name both
Landlord and any mortgagee of Landlord whose name and address shall have been
furnished to Tenant as additional insureds or loss payees. If Tenant shall fail
to perform any of its obligations under Paragraphs 15.2 or 15.3 herein, Landlord
may perform the same and the cost of the same shall be deemed Rent and shall be
payable by Tenant upon Landlord's demand.

            15.4 Waiver of Subrogation. Anything to the contrary in this Lease
notwithstanding, neither party, nor its officers, directors, employees, agents
or invitees, nor, in case of Tenant, its subtenants, shall be liable to the
other party or to any insurance company (by way of subrogation or otherwise)
insuring the other party for any loss or damage to any building, structure or
other tangible property, when such loss is caused by any of the perils which are
or could be insured against under the all-risk property policies required
hereunder, or losses under workers' compensation laws and benefits, even though
such loss or damage might have been occasioned by the negligence of such party,
its agents or employees (this clause shall not apply, however, to any damage
caused by intentionally wrongful acts or omissions). Each party represents that
its current insurance policies allow such waiver.

                                       17
<PAGE>

            15.5 Increase in Insurance Premiums. Tenant shall not do or suffer
to be done, or keep or suffer to be kept, anything in upon or about the Premises
which shall violate Landlord's insurance policies as set forth in Paragraph 15.1
above or which shall prevent Landlord from procuring such policies from
companies acceptable to Landlord. If anything done, omitted to be done or
suffered by Tenant to be kept in, upon or about the Premises shall cause the
rate of fire or other insurance on the Premises or on other property of Landlord
or of other property within the Center to be increased beyond the minimum rate
from time to time applicable to the Premises or to any such property for the use
or uses made thereof, Tenant shall pay, as Rent, the amount of any such increase
upon Landlord's demand.

            15.6 Payment of Landlord's Insurance Expenses. Tenant shall pay to
Landlord as part of Tenant's Operating Expenses pursuant to Paragraph 4.5, with
respect to all periods commencing on and after the Commencement Date, Tenant's
Pro Rata Share of the aggregate amount of all insurance premiums for the
Building and the Center Common Area ("Insurance Costs" as further defined in
Exhibit C, Determination of Tenant's Operating Expenses) included in Landlord's
Operating Costs, as they may increase or decrease during the Term of this Lease
for the then current Lease Year for insurance carried by Landlord pursuant to
Paragraph 15.1 herein.

      16. Access by Landlord. Tenant shall permit Landlord to enter the Premises
outside Business Hours, and during Business Hours when such entry will not
unreasonably disturb or interfere with Tenant's use of the Premises and
operation of its business, to examine, inspect and show the Premises to persons
wishing to lease them or to any lender, prospective lender or purchaser of the
Building or Center, or any portion thereof or interest therein, to provide
services or make repairs, replacements, changes or alterations as set out in
this Lease, to monitor Tenant's compliance with its obligations hereunder, and
to take such steps as Landlord may deem necessary or desirable for the safety,
improvement or preservation of the Premises or the Building. Landlord shall
whenever possible (except in an emergency) consult with or give reasonable
notice to Tenant prior to such entry, but no such entry shall constitute an
eviction or entitle Tenant to any abatement of Rent, or otherwise relieve Tenant
of any of its obligations hereunder.

      17. Damage by Fire or Other Casualty.

            17.1 Limited Damage to Premises. If all or part of the Premises are
rendered untenantable by damage from fire or other casualty which in Landlord's
sole opinion can be substantially repaired under applicable laws and
governmental regulations within two hundred seventy (270) days from the date of
such casualty (employing normal construction methods without overtime or other
premium) Landlord shall, but only to the extent that sufficient insurance
proceeds are available therefor (and subject to the rights of any mortgagee of
the Land or the Building in and to such insurance proceeds), repair such damage
other than damage to improvements, furniture, chattels or trade fixtures which
do not belong to Landlord, which shall be repaired forthwith by Tenant at its
own expense.

            17.2 Major Damage to Premises. If all or part of the Premises are
rendered untenantable by damage from fire or other casualty which in Landlord's
sole opinion, as set forth in a written notice given to Tenant, cannot be
substantially repaired under applicable laws and governmental regulations within
two hundred seventy (270) days from the date of such casualty (employing normal
construction methods without overtime or other premium) then either Landlord or
Tenant may elect to terminate this Lease as of the date of such casualty by
written notice delivered to the other not more than fifteen (15)

                                       18
<PAGE>

business days after Landlord gives Tenant such written notice, failing which
Landlord shall, but only to the extent that sufficient insurance proceeds are
available therefor (and subject to the rights of any mortgagee of the Land or
the Building in and to such insurance proceeds), repair such damage other than
damage to improvements, furniture, chattels or trade fixtures which do not
belong to Landlord, which shall be repaired forthwith by Tenant at its own
expense.

            17.3 Abatement. If Landlord elects to repair damage to all or part
of the Premises under Paragraph 17.1 or 17.2, the Rent payable by Tenant
hereunder shall be proportionately reduced based on the number of Square Feet of
the Premises which are thereby rendered untenantable from the date of such
casualty until five (5) days after completion by Landlord of the repairs to the
Premises (Or the part thereof rendered untenantable) or until Tenant again uses
the Premises (or the part thereof rendered untenantable) in its business,
whichever first occurs.

            17.4 Major Damage to Building. If more than fifty percent (50%) of
the Square Feet of the Building (whether or not including the Premises) or more
than fifty percent (50%) of any parking structure is rendered untenantable by
damage from fire or other casualty which in Landlord's sole opinion, as set
forth in a written notice given to Tenant, cannot be substantially repaired
under applicable laws and governmental regulations within two hundred seventy
(270) days from the date of such casualty (employing normal construction methods
without overtime or other premium) then Landlord or Tenant may elect to
terminate this Lease as of the date of such casualty by written notice delivered
to Tenant not more than sixty (60) days after the date of such casualty. If
Landlord elects not to terminate this Lease, Landlord shall, but only to the
extent that sufficient insurance proceeds are available therefor (and subject to
the rights of any mortgagee of the Land or the Building in and to such insurance
proceeds), commence repair of the damaged portion of the Building or parking
structure, as appropriate and the Lease shall remain in full force and effect in
accordance with its terms.

            17.5 Limitation on Landlord's Liability. Except as specifically
provided in this Article 17, there shall be no reduction of Rent and Landlord
shall have no liability to Tenant by reason of any injury to or interference
with Tenant's business or property arising from fire or other casualty,
howsoever caused, or from the making of any repairs resulting therefrom in or to
any portion of the Building or the Premises. Notwithstanding anything contained
herein, Rent payable by Tenant hereunder shall not be abated under Paragraph
17.3 if the damage is caused by the intentionally wrongful act or omission of
Tenant, its agents, servants, employees or any other person entering upon the
Premises under express invitation of Tenant.

      18. Eminent Domain.

            18.1 Taking of Premises. If during the Term, all of the Building,
any parking structure or the Premises is permanently taken for any public or
quasi-public use under any statute or by right of eminent domain, or purchased
under threat of such taking, this Lease shall automatically terminate on the
date on which the condemning authority takes possession of the Premises (the
"Date of Taking").

            18.2 Partial Taking of Building. If during the Term only part of the
Building or any parking structure is taken or purchased as set out in Paragraph
18.1, then,

                                       19
<PAGE>

                  18.2.1 if in the reasonable opinion of Landlord, substantial
alteration or reconstruction of the Building or such parking structure is
necessary or desirable as a result thereof, whether or not the Premises are or
may be affected, Landlord shall have the right to terminate this Lease by giving
Tenant at least thirty (30) days written notice of such termination, which
notice shall be given within thirty (30) days after the Date of Taking, and

                  18.2.2 if more than one-third (1/3) of the number of Square
Feet of the Premises is included in such taking or purchase, and Landlord is
unable to provide Tenant with comparable replacement premises in the Center,
Tenant shall have the right to terminate this Lease by giving at least thirty
(30) days written notice thereof, which notice shall be given within thirty (30)
days after the Date of Taking, if in Tenant's reasonable judgment, the Premises
cannot be operated by Tenant in an economically viable fashion because of such
partial taking.

If either party exercises its right of termination hereunder, this Lease shall
terminate on the date stated in the notice; provided, however, that no
termination pursuant to notice hereunder may occur later than sixty (60) days
after the Date of Taking.

            18.3 Surrender. On any such date of termination under Paragraph 18.1
or 18.2, Tenant shall immediately surrender to Landlord the Premises and all
interests therein under this Lease. Landlord may re-enter and take possession of
the Premises and remove Tenant therefrom, and the Rent shall no longer accrue
from the date of termination, except that if a portion of the Premises is
included as a part of such taking, then that portion of the Rent attributable to
such portion, determined by Landlord on a pro rata basis, based on the number of
Square Feet contained within such portion, shall no longer accrue from the Date
of Taking. After such termination, and on notice from Landlord stating the Rent
then owing, Tenant shall forthwith pay Landlord such Rent.

            18.4 Partial Taking of Premises. If any portion of the Premises (but
less than the whole thereof) is so taken, and no rights of termination herein
conferred are timely exercised, the Term of this Lease shall expire with respect
to the portion so taken on the Date of Taking. In such event, the Rent payable
hereunder with respect to such portion so taken shall no longer accrue from such
date, and the Rent thereafter payable with respect to the remainder not so taken
shall be adjusted pro rata by Landlord in order to account for the resulting
reduction in the number of Square Feet in the Premises.

            18.5 Awards. Upon such taking or purchase pursuant to this Article
18, Landlord shall be entitled to receive and retain the entire award or
consideration for the Land, Building or Premises and improvements subject to the
rights of any mortgagee of Landlord's interest in the Land or the Building as
their respective interests may appear, and Tenant shall not have or advance any
claim against Landlord or the condemning authority for the value of its property
or its leasehold estate or the unexpired Term of this Lease, or, except as
otherwise permitted in the next sentence, for costs of removal or relocation, or
business interruption expense or any other damages arising out of such taking or
purchase. Nothing herein shall give Landlord any interest in or preclude Tenant
from seeking and recovering on its own account from the condemning authority any
award or compensation attributable to the taking or purchase of Tenant's
chattels or trade fixtures or attributable to Tenant's relocation expenses
provided that any such separate claim by Tenant shall not reduce or adversely
affect the amount of Landlord's award. If any such award made or compensation
paid to either party specifically includes an award or amount for the other, the
party first receiving the same shall promptly account therefor to the other.

                                       20
<PAGE>

      19. Quiet Enjoyment. As long as Tenant is not in default under this Lease,
Tenant's quiet enjoyment of the Premises will not be disturbed by Landlord or by
anyone claiming by, through or under Landlord.

      20. Landlord's Warranties and Covenants. Landlord represents and warrants
that it has the full right, power and authority to enter into this Lease and
make the agreements contained herein on its part to be performed; that the
execution, delivery and performance of this Lease has been duly authorized by
Landlord; and that the Lease constitutes the valid and binding obligation of
Landlord, enforceable in accordance with its terms, subject to bankruptcy and
laws regarding creditors' rights generally.

      21. Hazardous Materials. Tenant shall not (either with or without
negligence) cause or permit the escape, disposal or release of any biologically
or chemically active or other hazardous substances, or materials on or about the
Premises or any other portion of the Center, nor shall Tenant allow the storage
or use of such substances or materials on or about the Premises or any other
portion of the Center, nor allow to be brought into the Premises or any other
portion of the Center any such materials or substances. Without limitation,
hazardous substances and materials shall include those described in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Resource Conservation and Recovery Act, the Superfund Amendments and
Reauthorization Act of 1986, the Occupational Safety and Health Act, the Clean
Water Act, any amendments to such Acts, and any federal, state or municipal
laws, ordinances, regulations or common law which may now or hereafter impose
liability on Landlord with respect to hazardous substances. Tenant will be
solely responsible for and will defend, indemnify' and hold Landlord, its agents
and employees harmless from and against all claims, costs and liabilities,
including attorneys' fees, court costs, and other expenses of litigation (i)
arising out of or in connection with any breach of this Article, or (ii) arising
out of or in connection with the removal, clean-up and restoration work and
materials necessary to return the Premises and the Center and any other property
of whatever nature located therein to their condition existing prior to the
introduction of hazardous materials in or about the Premises or Center in
connection with any breach of this Article. If any lender or governmental agency
shall ever require testing to ascertain whether or not there has been any
hazardous materials on or about the Premises (or, as a result of Tenant's
actions, on or about other portions of the Center), then the costs thereof shall
be reimbursed by Tenant to Landlord upon demand as additional Rent. In addition,
Tenant shall execute affidavits, representations and the like from time to time
at Landlord's request concerning Tenant's knowledge and belief regarding the
presence of hazardous substances or materials on the Premises. The within
covenants and indemnity shall survive the expiration or earlier termination of
the Term.

      22. Subordination. This Lease, and all rights of Tenant hereunder, are and
shall at all times be subject to and subordinate to all ground or underlying
leases, reciprocal easement agreements, declarations, restrictive covenants or
the lien of any Mortgage (as defined below) or other security instrument, and
any extensions, consolidations, modifications or replacements thereof, that may
now or hereafter affect such instruments on or affect the real property which
includes the Premises or any portions thereof, by Landlord. "Mortgage" shall
refer to any deed of trust, pledge, charge, encumbrance or security agreement
affecting the Building, the Land or all or any portion of the Center. In
confirmation of such subordination, Tenant shall execute promptly any
certificate that the Landlord, its successors and assigns and any mortgagee may
request evidencing this Lease subordination, including but not limited to a
subordination non-disturbance and attornment agreement in a form substantially
similar to that attached hereto and incorporated herein as Exhibit G, Form of
Subordination, Non-Disturbance and Attornment Agreement.

                                       21
<PAGE>

Provided, however, that notwithstanding the foregoing, the party secured by any
Mortgage shall have the right to recognize this Lease, and in the event of any
foreclosure sale under such Mortgage, this Lease shall continue in full force
and effect at the option of the party secured by such Mortgage, or the purchaser
under any such foreclosure sale. Provided further that the party secured by any
Mortgage may not disturb Tenant's possession of the Premises, in the event of a
foreclosure sale under such Mortgage, if Tenant is not in default beyond any
applicable grace and cure periods under the Lease. Tenant covenants and agrees
further that it will, at the written request of such party, execute, acknowledge
and deliver any instrument that has for its purpose and effect the subordination
of said Mortgage to the lien of this Lease. No first mortgagee shall be liable
for Landlord's obligations under this Lease until such mortgagee takes title.
This Article 22 shall be self-operative and no further instrument of
subordination shall be required.

      23. Holding Over. If Tenant shall continue to possess the Premises after
the termination of this Lease for any reason, such possession shall be deemed to
be a month-to-month tenancy terminable upon thirty (30) days' prior written
notice given at any time by either party. Such tenancy shall be upon all of the
terms and conditions of this Lease, other than those pertaining to the Term, as
were in effect immediately prior to such termination. Further, the Base Rent
during the holding over period shall be deemed to be one hundred fifty percent
(150%) of the most current rental obligation. In addition to this increase in
Base Rent, nothing herein shall preclude Landlord from seeking damages or any
other remedy available at law or in equity or any remedy available under
Paragraph 24.2 herein as a result of such breach. Tenant shall indemnify' and
hold harmless Landlord for any additional costs incurred by Landlord as a result
of Tenant's holdover.

      24. Default by Tenant.

            24.1 Events of Default. The occurrence of any of the following shall
be deemed to be an "Event of Default" under this Lease:

                  24.1.1 The failure by Tenant to pay any installment of Rent or
other money herein required to be paid by it on or before the date due and such
failure continues for more than five (5) days from written notice to Tenant;

                  24.1.2 If after the Commencement Date, Tenant shall file a
petition in bankruptcy or insolvency or for reorganization or arrangement under
the bankruptcy laws of the United States or under any insolvency act of any
state, or shall voluntarily take advantage of any such law or act by answer or
otherwise, or shall be dissolved or shall make an assignment for the benefit of
creditors.

                  24.1.3 The levying of a writ of execution or attachment on or
against property of Tenant located upon or used in connection with the Premises,
and the same not being released or discharged within thirty (30) days
thereafter;

                  24.1.4 The failure by Tenant to, within ten (10) days after
the filing thereof, discharge or bond against (in accordance with Article 12 and
Colo. Rev. Stat.ss.38-22-131) any lien attached to the Premises, the Building or
the Center relating to construction or alteration by Tenant within the Center;

                                       22
<PAGE>

                  24.1.5 The failure by Tenant to comply with any of its
obligations under this Lease, other than the obligation to pay Rent or other
money hereunder, within thirty (30) days after notice of such failure is given
by Landlord or, if it is not reasonably feasible to cure such failure within
such 30-day period, the failure to advise Landlord within such 30-day period of
Tenant's intention to cure such failure, the failure to begin performance of
such cure within such 30-day period or the failure to diligently pursue the
performance to completion within a reasonable time thereafter; or

                  24.1.6 If Tenant is in monetary default of the terms of the
lease beyond the applicable cure period and shall abandon the Premises or any
substantial portion of the Premises without first giving Landlord thirty (30)
days prior written notice.

                  24.1.7 If after the Commencement Date, involuntary proceedings
under the bankruptcy laws of the United States or under any insolvency act of
any state or for the dissolution of Tenant shall be instituted against Tenant,
or a receiver or trustee shall be appointed of all or substantially all of the
property of Tenant, and such proceedings shall not be dismissed or such
receivership or trusteeship vacated within thirty (30) days after such
institution or appointment.

      25. Remedies. Upon the occurrence of an Event of Default hereunder,
Landlord shall have the option to do and perform any one or more of the
following in addition to, and not in limitation of, any other remedy or right
permitted it by law or by this Lease and Landlord shall have automatic relief
from the automatic stay in order to enforce any rights of Landlord set forth in
this Paragraph 25 if Tenant becomes a debtor under the United States Bankruptcy
Code:

                  25.1.1 Terminate this Lease on not less than three (3) days
notice to Tenant, in which event Tenant shall immediately surrender the Premises
to Landlord; but if Tenant shall fail to do so, Landlord may, without prejudice
to any other remedy which it may have for possession or arrearages in Rent,
enter upon and take possession of the Premises and expel or remove Tenant, any
other person who may be occupying said Premises or any part thereof, and
Tenant's personal property therefrom, without notice or the need to resort to
legal process and without being deemed guilty of trespass or becoming liable for
any loss or damage which Tenant may suffer by reason of such termination,
including, without limitation, all costs of reletting the Premises, reasonable
attorneys' fees and the worth at the time of such termination of the amount of
Rent and charges reserved for the remainder of the Term of this Lease over the
then reasonable rental value of the Premises for the remainder of the Term, all
of which amounts shall be discounted to present value at a rate of nine percent
(9%), and shall be immediately due and payable by Tenant to Landlord.

                  25.1.2 Without terminating this Lease, Landlord may re-enter
the Premises and remove Tenant, any other person who may be occupying said
Premises or any part thereof, and any personal property therefrom, without being
deemed guilty of trespass or becoming liable for any loss or damage occasioned
thereby. Landlord may make such alterations and repairs as it deems reasonably
advisable to relet the Premises, and may relet the Premises or any part thereof
for such term or terms (which may extend beyond the Term of this Lease) and at
such rentals and upon such other terms and conditions as Landlord in its
reasonable discretion deems advisable. Upon each such reletting all Rent
received by Landlord therefrom shall be applied: first, to any amounts due
hereunder, other than Rent due hereunder, from Tenant to Landlord; second, to
pay any reasonable costs and expenses of reletting, including brokers'

                                       23
<PAGE>

and attorneys' fees and costs of alterations and repairs; third, to Rent due
hereunder; and fourth, the balance, if any, shall be held by Landlord and
applied in payment of future Rent as it becomes due hereunder. If Rent received
from such reletting during any month is less than that to be paid during that
month by Tenant hereunder, Tenant shall immediately pay any such deficiency to
Landlord. In no event shall Tenant be entitled to any excess Rent obtained by
reletting the Premises over and above the Rent reserved herein.

      Nothing contained herein shall prevent the enforcement of any claim
Landlord may have against Tenant for anticipatory breach of the unexpired Term
of this Lease. In the event of a breach or anticipatory breach by Tenant of any
of the covenants or provisions hereof, Landlord shall have the right of
injunction and the right to invoke any remedy allowed at law or in equity.
Mention in this Lease of any particular remedy shall not prohibit Landlord from
exercising any other remedy available at law or in equity.

      No receipt of money by Landlord from Tenant after the termination of this
Lease as herein provided shall reinstate, continue or extend the Term of this
Lease or operate as a waiver of the right of Landlord to enforce the payment of
Rent or other money when due, or operate as a waiver of the right of Landlord to
recover possession of the Premises by proper remedy.

      Notwithstanding anything to the contrary contained herein, in the event
Tenant does not pay Landlord any Rent when due, Tenant shall pay to Landlord
such due Rent, plus a lump sum equal to ten percent (10%) of the amount due and
owing, regardless of whether an Event of Default has occurred, plus interest at
the Prime Rate plus four percent (4%) from the date due until the date such past
due Rent is paid in full.

      25. Default by Landlord. Landlord shall not be in default unless Landlord
fails to perform any obligation required of Landlord within a reasonable time,
but in no event later than thirty (30) days, after written notice by Tenant to
Landlord, specifying wherein Landlord has failed to perform such obligation;
provided, that if the nature of Landlord's obligation is such that more than
thirty (30) days is required for performance, then Landlord shall not be in
default if Landlord commences performance within such thirty (30)-day period and
thereafter diligently prosecutes completion of same; and further provided,
however, that Tenant shall provide Landlord's mortgagees with notice of any
default by Landlord concurrent with such notice given to Landlord and such
mortgagees shall have a reasonable opportunity to cure Landlord's default prior
to Tenant's exercise of any remedy hereunder.

      26 Indemnification.

            26.1 Landlord's Indemnification. Subject to the waiver of
subrogation provided under Paragraph 15.4 Landlord shall indemnify and hold
harmless Tenant and its directors, officers, agents and employees from and
against any and all third-party claims for bodily injury and/or property damage
arising from or in connection with any accident, injury or damage whatever (even
if caused by Tenant's negligence or breach of this Lease) occurring in, at or
upon the Building Common Area or Center Common Area; together with all costs,
expenses and liabilities incurred or in connection with each such claim or
action or proceeding brought thereon, including, without limitation, all
attorneys' fees and expenses at trial and upon appeal. In case any action or
proceeding is brought against Tenant and/or its directors, officers, agents
and/or employees and such claim is a claim from which Landlord is obligated to
indemnify Tenant pursuant to this Paragraph 26.1, Landlord, upon notice from
Tenant, shall resist and defend such action or proceeding

                                       24
<PAGE>

(by counsel reasonably satisfactory to Tenant). The obligation of Landlord under
this Section shall survive termination of this Lease.

            26.2 Tenant's Indemnification. Subject to the waiver of subrogation
provided under Paragraph 15.4, Tenant, its successors and assigns shall
indemnify and hold harmless Landlord and all superior lessors or superior
mortgagees and its and their respective partners, directors, officers, agents
and employees from and against any and all third-party claims arising from or in
connection with: (i) the conduct or management of the Premises or of any
business therein, or any work or thing whatsoever done, or any condition created
(even if due to Landlord's negligence or breach of this Lease) in or about the
Premises, during the Term of this Lease; (ii) any act, omission or negligence of
Tenant or any of its subtenants or licensees or its or their partners,
directors, officers, agents, employees, invitees or contractors; (iii) any
accident, injury or damage whatever (even if caused by Landlord's negligence)
occurring in, at or upon the Premises; and (iv) any breach or default by Tenant
in the full and prompt payment and performance of Tenant's obligations under
this Lease; together with all costs, expenses and liabilities incurred or in
connection with each such claim or action or proceeding brought thereon,
including, without limitation, all attorneys' fees and expenses. In case any
action or proceeding is brought against Landlord or any superior lessor or
superior mortgagee or its or their partners, directors, officers, agents or
employees and such claim is a claim for which Tenant is obligated to indemnify
Landlord pursuant to this Paragraph 26.2, Tenant, upon notice from Landlord or
such superior lessor or superior mortgagee, shall resist and defend such action
or proceeding (by counsel reasonably satisfactory to Landlord). The obligation
of Tenant under this Paragraph 26.2 shall survive termination of this Lease.

            26.3 Limitations on Liability of Landlord.

                  26.3.1 Tenant waives and releases all claims against Landlord,
it employees, and agents with respect to all matters for which Landlord has
disclaimed liability pursuant to the provisions of this Lease. In addition,
Tenant agrees that Landlord, its agents, and employees will not be liable for
any loss, injury, death, or damage (including consequential damages) to persons,
property, or Tenant's business occasioned by theft, act of God, public enemy,
injunction, riot, strike, insurrection, war, court order, requisition, order of
governmental body or authority, fire, explosion, falling objects, steam, water,
rain or snow, leak or flow of water (including water from the elevator system),
or rain or snow from the Premises or into the Premises or from the roof, street,
subsurface or from any other place, or by dampness or from the breakage,
leakage, obstruction, or other defects of the pipes, sprinklers, wire,
appliances, plumbing, air conditioning, or lighting fixtures of the Building
(collectively, the "Building Equipment"), or from construction, repair, or
alteration of the Premises, or from any acts or omissions of any other tenant,
occupant, or visitor of the Premises, or from any cause beyond Landlord's
control.

                  26.3.2 No representation, guaranty, or warranty is made or
assurance given that the communications or security systems, devices, or
procedures of the Building will be effective to prevent injury to Tenant or any
other person or damage to, or loss (by theft or otherwise) of, any of the
Tenant's property or of the property of any other person, and Landlord reserves
the right to discontinue or modify at any time such communications or security
systems or procedures without liability to Tenant.

      27. Compliance with Laws and Requirements of Public Authorities.

                                       25
<PAGE>

      At all times during the Term of this Lease, Tenant shall give prompt
notice to Landlord of any notice Tenant receives of the violation of any law or
requirement of public authority affecting the Premises or the Building. Tenant,
at its sole cost and expense, shall comply with all laws and requirements of
public authorities, which shall, with respect to the Premises or the use,
condition or occupancy thereof, or the abatement of any nuisance, impose any
violation, order or duty on Landlord or Tenant, arising from (i) Tenant's use of
the Premises; (ii) the manner of conduct of Tenant's business or operation of
its installations, equipment or other property therein; (iii) any cause or
condition created by or at the insistence of Tenant; or (iv) breach of any of
Tenant's obligations hereunder.

The judgment of any court of competent jurisdiction or the admission of Tenant,
whether Landlord be a party thereto or not, that Tenant has violated any law or
requirement of public authorities affecting the Building or the Premises shall
be conclusive of such violation as between Landlord and Tenant. Tenant shall pay
all costs, expenses, fines, penalties or damages which may be imposed upon
Landlord by reason of Tenant's failure to comply with provisions of this Article
27.

      28. Arbitration. Unless otherwise, provided herein, these procedures shall
govern any claim, dispute or other matter in question between the parties
hereto, arising out of this Lease:

            28.1 All claims, disputes and other matters in question between the
parties to this Lease, arising out of or relating to this Lease or the breach
thereof, shall be decided by arbitration in accordance with the rules of the
American Arbitration Association then in effect unless the parties mutually
agree otherwise. Any such claim, dispute or other matter involving in excess of
$100,000.00 shall be submitted to three arbitrators; otherwise one arbitrator
shall be used. The arbitrator or arbitrators selected to arbitrate matters under
this Lease shall be paid at least two hundred dollars ($200) per hour, including
any time necessary for the arbitrator or arbitrators to study the matter. This
agreement to arbitrate shall be specifically enforceable under the prevailing
arbitration law.

            28.2 Notice of the demand for arbitration shall be filed in writing
with the other party to this Lease and with the American Arbitration
Association. The demand shall be made within a reasonable time after the claim,
dispute or other matter in question has arisen, except as otherwise provided in
this Lease. In no event shall the demand for arbitration be made after the date
when institution of legal or equitable proceedings based on such claim, dispute
or other matter in question would be barred by the applicable statute of
limitations.

            28.3 The award rendered by the arbitrators shall be final, and
judgement may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof. The prevailing party in any arbitration under this
Lease shall be awarded its reasonable attorneys fees and costs associated with
the arbitration.

            28.4 The location for settlement for any and all claims,
controversies or disputes arising out of or relating to this Lease or any breach
thereof when decided by arbitration shall be in Denver, Colorado.

      29. Estoppel Certificate. At any time and from time to time, Tenant, on or
before the date specified in a request therefor made by Landlord, which date
shall be not earlier than ten (10) days after the making of such request, shall
execute, acknowledge, and deliver to Landlord or Landlord's mortgagee

                                       26
<PAGE>

or the assignee of such mortgagee or a potential or actual purchaser, a
certificate, addressed to such persons or entities as Landlord shall specify in
such request, stating whether or not (a) this Lease is in full force and effect;
(b) this Lease has been amended in any way and identifying any such amendments;
(c) there are any existing defaults hereunder to the knowledge of such party and
specifying the nature of such defaults, if any; (d) the date to which rent and
other amounts due hereunder, if any, have been paid; and (e) such additional
information as reasonably requested.

      30. WAIVER OF TRIAL BY JURY. LANDLORD AND TENANT DO HEREBY WAIVE TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST
THE OTHER UPON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH TILTS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF
INJURY OR DAMAGE.

      31. Notices. Any notice, demand, consent or other communication by either
Tenant or Landlord to the other shall be valid only if in writing and shall be
deemed to be duly given only if (a) delivered personally or sent by overnight
courier, upon receipt thereof; or (b) mailed, upon the third business day
following mailing thereof, all in accordance with the Lease, to the following
addresses or to such other address for either party as that party may designate
by like notice to the other:

             If to Landlord:   WRC Properties, Inc.
                               730 Third Avenue
                               New York, New York 10017-3206
                               Attn: Harold D. Piazza, Jr., Esq.
                               Fax: (212) 986-8375

             With a copy to:   WRC Properties, Inc.
                               730 Third Avenue, 8th Floor
                               New York, New York 100 17-3206
                               Attn: Rob Lavaro,
                               Fax: (212) 916-6929

                               Mile High Property Services, Inc.
                               Colorado Center Tower One Suite 10500
                               Denver, Colorado 80222
                               Attn: Marcene Seeber, Senior Property Manager
                               Fax: (303) 759-2530

             If to Tenant:     Superior National Insurance Group, Inc.
                               2000 5. Colorado Blvd
                               Tower One, Suite 11500
                               Denver, CO 80222

             With a copy to:   To be determined

                                       27
<PAGE>

      32. Miscellaneous.

            32.1 Attorneys' Fees. If either party becomes a party to any
litigation concerning this Lease or the Premises by reason of any act or
omission of the other party, the party that causes the other party to become
involved in the litigation shall be liable to that party for that party's
reasonable attorneys fees and costs incurred in such litigation. If either party
commences an action against the other party arising out of or in connection with
this Lease, the prevailing party shall be entitled to recover reasonable
attorneys fees and costs incurred in such action.

            32.2 Surrender of the Premises. Upon the termination of this Lease
for any reason, Tenant shall surrender to Landlord the Premises in substantially
their condition as of the Commencement Date, loss due to fire, casualty, "Force
Majeure" (defined in Paragraph 32.3), ordinary wear and tear, and obsolescence
excepted. Landlord may elect to retain or dispose of in any manner any of
Tenant's personal property not removed from the Premises by Tenant upon the
expiration of the Term of this Lease, and title to any such fixtures or personal
property shall vest in Landlord. Tenant waives any and all claims against
Landlord for damage to Tenant resulting from Landlord's retention or disposition
of any such personal property.

            32.3 Force Majeure; Time of the Essence. Whenever a period of time
is herein prescribed for action to be taken by either party, such party shall
not be liable or responsible for, and there shall be excluded from the
computation of any such period of time, any delays due to strikes, riots, acts
of God, shortages of labor or materials, war, governmental laws, regulations or
restrictions or any other causes of any kind whatsoever which are beyond the
reasonable control of such party (collectively, "Force Majeure"); provided,
however, that both parties shall use their best reasonable efforts to mitigate
the effects of such occurrences with respect to the required action. Further, no
action to be taken hereunder shall be extended for more than six (6) months
because of Force Majeure. Subject to the foregoing, time is of the essence with
respect to each and every provision of this Lease. The provisions of this
Paragraph 32.3 shall not operate to excuse Tenant's payment of Rent hereunder.

            32.4 No Implied Surrender or Waiver. No provisions of this Lease
shall be deemed to have been waived by Landlord unless such waiver is in writing
signed by Landlord. Landlord's waiver of a breach of any term or condition of
this Lease shall not prevent a subsequent act, which would have originally
constituted a breach, from having all the force and effect of any original
breach. Landlord's receipt of Rent with knowledge of a breach by Tenant of any
term or condition of this Lease shall not be deemed a waiver of such breach.
Landlord's failure to enforce against Tenant or any other tenant in the Building
any of the Rules and Regulations shall not be deemed a waiver of such Rules and
Regulations. No act or thing done by Landlord, its agents or employees during
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept a surrender of the Premises shall be valid, unless in
writing signed by Landlord. Neither the delivery of keys to nor the acceptance
thereof by any of the Landlord's agents or employees, nor the taking possession
of the Premises by Landlord after any vacation thereof by Tenant, shall operate
as a termination of this Lease or a surrender of the Premises. No payment by
Tenant, or receipt by Landlord, of a lesser amount than the Rent due hereunder
shall be deemed to be other than on account of the earliest stipulated Rent, nor
shall any endorsement or statement on any check or any letter accompanying any
check, or payment as Rent, be deemed an accord and satisfaction, and Landlord
may accept such check or payment without prejudice to Landlord's right to
recover the balance of such Rent or pursue any other remedy available to
Landlord.

                                       28
<PAGE>

            32.5 Construction and Interpretation. In the event it shall be
necessary to determine the meaning of this Lease, or any part thereof, this
Lease shall be read in its entirety to determine such meaning.

            32.6 Relationship of the Parties. Landlord and Tenant shall not be
considered or deemed to be joint venturers or partners of one another, and
neither shall have the power to bind or obligate the other except as expressly
set forth herein.

            32.7 Severability. In the event any term, covenant or condition of
this Lease or the application thereof to any person or circumstances shall to
any extent be deemed invalid or unenforceable, the remainder of this Lease, or
the application of such term, covenant, or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and every other term, covenant or condition of this Lease
shall be valid and enforceable to the fullest extent permitted by law.

            32.8 Heirs and Assigns. Without limiting the terms of Article 13,
the provisions of this Lease shall inure to the benefit of and be binding upon
Landlord and Tenant and their respective successors, heirs, legal
representatives and permitted assigns.

            32.9 Entire Agreement; Modification. This Lease, including all
exhibits hereto, contains the entire agreement of the parties hereto and
supersedes all other prior or contemporaneous agreements of the parties. No
representations, inducements, promises or agreements, oral or otherwise, between
Landlord and Tenant not embodied herein shall be of any force or effect. Any
agreement, amendment, change or addition to this Lease shall not be binding upon
either party unless reduced to writing and signed by each party.

            32.10 Captions: References. The captions and paragraph numbers
appearing in this Lease are inserted only as a matter of convenience and in no
way define, limit, or otherwise affect this Lease. The use of the terms
"hereof," "hereunder," "herein," and like terms shall refer to this Lease as a
whole except where noted otherwise. The necessary grammatical changes required
to express applicable gender or number shall be assumed in each case to be fully
expressed.

            32.11 Brokerage Commission. Landlord and Tenant each agree to
indemnify and hold the other harmless from and against all broker's or other
real estate commissions or fees incurred by the indemnifying party or arising
out of its activities with respect to this Lease. Landlord will pay a commission
pursuant to a separate agreement to the Broker(s) identified in the Basic Lease
Information. The provisions of this Paragraph 32.11 shall survive the expiration
or sooner termination of this Lease.

            32.12 Choice of Law. This Lease shall be governed by and construed
in accordance with the laws of the State of Colorado.

            32.13 Execution. This Lease may be executed in multiple
counterparts, all of which, when taken together, shall constitute the Lease.
This Lease shall not be binding on either party until fully signed by both
Landlord and Tenant. Both Landlord and Tenant acknowledge and agree that
notwithstanding any negotiations or letters of intent between the parties,
neither party shall be obligated

                                       29
<PAGE>

under any of the terms or conditions of this Lease nor shall either party be
liable for any costs or expenses incurred by the other party during any such
period of negotiation between the parties.

            32.14 Limitation on Right of Recovery. Tenant acknowledges and
agrees that the liability of Landlord under this Lease shall be limited to its
interest in the Building and any judgments rendered against Landlord shall be
satisfied solely out of the proceeds of sale of its interest in the Building. No
personal judgment shall lie against Landlord upon extinguishment of its rights
in the Building and any judgment so rendered shall not give rise to any right of
execution or levy against Landlord's assets. The provisions hereof shall inure
to Landlord's successors and assigns including any Mortgagee. Neither Landlord
nor Tenant shall be liable for treble, exemplary, consequential or punitive
damages

            32.15 Name of Building and Center. Landlord shall have the right in
its sole discretion after thirty (30) days notice to Tenant, to change the name,
number or designation of the Building or the Center (if any), or both, during
the Term without liability to Tenant.

            32.16 Relocation - Substitute Premises. Landlord shall have the
right at any time, upon reasonable notice to Tenant (the "Relocation Notice"),
to relocate Tenant to different premises in the Center (the "Substitute
Premises"), provided that the Substitute Premises are of approximately the same
size and finish as the Premises, are above the first (1st) floor, and provided
that Landlord reimburses Tenant for all reasonable out-of-pocket expenses
incurred by Tenant as a result of the relocation. Tenant shall relocate to the
Substitute Premises within the time set out in the Relocation Notice. Upon the
date Tenant takes possession of the Substitute Premises, this Lease shall be
deemed amended to provide for the Substitute Premises and all other terms and
conditions of the Lease shall remain in full force and effect Tenant agrees to
execute any document reasonably required by Landlord to reflect the relocation
to the Substitute Premises.

            32.17 Nondiscrimination. Tenant covenants that this Lease is made
and accepted upon and subject to the condition that there shall be no
discrimination against or segregation of any person or group of persons on
account of sex, marital status, race, color, creed, religion, national origin or
ancestry in the leasing, subleasing, transferring, use or enjoyment of the
Premises nor shall Tenant itself, or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, sublessees, subtenants or vendees in the Premises.

            32.18 Deposit. See Schedule 1, Supplemental Provisions, Paragraph 4.

                                       30
<PAGE>

            32.19 Guaranty. [Deleted intentionally]

            32.20 No Air Rights. This Lease does not grant any easements or
rights for light, air or view. Any diminution or blockage of light, air or view
by any structure or condition now or later erected will not affect this Lease or
impose any liability on Landlord.

            32.21 No Recording. Tenant shall not record this Lease, or any
portion or any reference hereto. In the event Tenant records this Lease, or
permits or causes this Lease, or any portion hereof or reference hereto to be
recorded, this Lease shall terminate at Landlord's option or Landlord may
declare a default hereunder and pursue any and all of its remedies provided in
this Lease.

            32.22 Financial Statements. The financial statement(s) attached
hereto as Exhibit I, Financial Statement, is true and complete as of the date
set forth therein and no material changes

                                       31
<PAGE>

have occurred since that date which might adversely affect Tenant or Guarantor
or Tenant's or Guarantor's ability to meet their obligations hereunder. Tenant
acknowledges that Landlord has relied upon the attached financial statement(s)
in its decision to enter into this Lease. Any material misrepresentation or
omission in such financial statement(s) shall constitute an Event of Default
hereunder for which there shall be no cure period.

            32.23 Tenant Authority. If Tenant signs as a corporation or
partnership, each of the persons executing this Lease on behalf of Tenant does
hereby covenant and warrant that Tenant is a duly authorized and existing
corporation or partnership, as the case may be, that Tenant has and is qualified
to do business in Colorado, that the corporation or partnership has full right
and authority to enter into this Lease, and that each and all of the persons
signing on behalf of the corporation or partnership are authorized to do so.
Upon Landlord's request, Tenant shall provide Landlord with evidence reasonably
satisfactory to Landlord confirming the foregoing warranties.

      IN WITNESS WHEREOF, the parties hereto have signed this Lease effective as
of the date first above written.

                                        LANDLORD:

                                        WRC PROPERTIES, INC.,
                                        a Delaware Corporation

                                        /s/ Robert D. Loverro
                                        ---------------------
                                        ROBERT D. LOVERRO
                                        ASSISTANT SECRETARY

                                        TENANT:

                                        Superior National Insurance Group, Inc.,
                                        a Delaware Corporation

                                        By:     /s/ James L. [ILLEGIBLE]
                                                ------------------------
                                        Name:   James L. [ILLEGIBLE]
                                        Its:    SVP

                                       32
<PAGE>

                                   SCHEDULE I

                            SUPPLEMENTAL PROVISIONS

      These Supplemental Provisions are attached to, and incorporated into, the
Colorado Center Tower One Office Lease dated October 19, 2000 (the "Lease"),
between WRC Properties, Inc. ("Landlord"), and Superior National Insurance
Group, Inc., a Delaware corporation ("Tenant"), as if fully set forth therein.
Capitalized terms used in these Supplemental Provisions without definition have
the meanings give to them in the Lease.

1)    Term: Landlord and Tenant acknowledge that prior to the date of this
      Lease, Tenant filed a petition for reorganization or adjustment of debts
      ("Tenant's Bankruptcy") under Chapter 11 of the United States Bankruptcy
      Code (the "Bankruptcy Code") in the United States Bankruptcy Court,
      Central District of California (Case No. SV00- 14099-GM) (the "Bankruptcy
      Court"). Landlord and Tenant further acknowledge that the parties intend
      to reduce the potential risk to Landlord as a result of Tenant's
      Bankruptcy by commencing this Lease as a tenancy from month to month until
      such time as the Plan of Reorganization in Tenant's Bankruptcy is
      effective (the "Conversion Date"), upon the following terms and
      conditions:

      A. The "Commencement Date" of the Lease shall be the later of:

            (1) The date of execution of the Lease by both Landlord and Tenant;
and

            (2) If required under Tenant's Bankruptcy, the date of entry of an
order by the United States Bankruptcy Court, Central District of California,
approving and authorizing Tenant to enter into the Lease and granting Landlord
relief from the automatic stay in order to enforce any rights of Landlord set
forth herein.

      B. The Lease Term shall commence on the Commencement Date and shall
continue until the date of the first to occur of the following (the "Expiration
Date"), unless terminated as otherwise provided in the Lease:

            (1) Prior to the Conversion Date, thirty (30) days after written
notice from either party to the other terminating the Lease.

            (2) If the Conversion Date has not occurred on or before April 30,
2001, then April 30, 2001 shall be the Termination Date.

            (3) Thirty-six (36) months after the Conversion Date.

      C. Notwithstanding anything in the Lease to the contrary, upon the
Commencement Date and until the Conversion Date, unless the Lease is terminated
prior to such date as provided herein, Landlord leases to Tenant and Tenant
leases from Landlord the Premises by tenancy from month to month, terminable on
thirty (30) days' written notice from either party to the other. From and after
the Conversion Date, this Lease shall be converted to a tenancy for a thirty-six
(36) month term.

                                  Page 1 of 5
<PAGE>

2)    Expense Base Year: From the Commencement Date until the Conversion Date,
      Tenant's Expense Base ("Month-to-Month Expense Base") shall be $5.73/rsf.
      From and after the Conversion Date, Tenant's Expense Base Year pursuant to
      Exhibit C, Determination of Tenant's Operating Expenses, Paragraph 3.01,
      shall be calendar year 2001.

3)    Future Bankruptcy or Insolvency: Subject to the provisions of Paragraph 1
      above, if Tenant becomes a debtor under Chapter 7 of the United States
      Bankruptcy Code, or in the event that a petition for reorganization or
      adjustment of debts is filed concerning Tenant under Chapter 11 of the
      Bankruptcy Code, or a proceeding filed under Chapter 7 is converted to
      Chapter 11, or a Chapter 11 is converted to Chapter 7, the Trustee or
      Tenant, as Debtor-in-Possession, shall be deemed to have rejected this
      Lease. No election by Trustee or Debtor-in-Possession to assume this Lease
      shall be effective unless each of the following conditions, which Landlord
      and Tenant hereby acknowledge to be commercially reasonable in the context
      of a bankruptcy proceeding, has been satisfied, and Landlord has so
      acknowledged in writing:

      A. The Trustee or Debtor-in-Possession has cured, or has provided Landlord
"adequate assurance" (as hereinafter defined) that from the date of such
assumption, the Trustee or Debtor-In-Possession will promptly cure all monetary
and non-monetary defaults under this Lease.

      B. The Trustee or Debtor-in-Possession has compensated, or has provided to
Landlord adequate assurance that within ten (10) days of the date of assumption,
Landlord will be compensated, for any pecuniary loss together with all of
Landlord's attorney's fees incurred in connection with Landlord's representation
in Tenant's bankruptcy proceedings or incurred by Landlord arising from 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.

      C. The Trustee or Debtor-in-Possession has provided Landlord with adequate
assurance of future performance of each of Tenant's, the Trustee's, or
Debtor-In-Possession's obligations under this Lease; provided, however, that:

            (1) The Trustee or Debtor-in-Possession shall also deposit with
Landlord, as security for the timely payment of Rent and other sums due
hereunder, an amount equal to three (3) months Base Rent, Additional Rent and
other monetary charges accruing under this Lease; and

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

      D. For purposes of this Paragraph, Landlord and Tenant acknowledge that,
in the context of the bankruptcy proceeding of Tenant, at a minimum, "adequate
assurance" shall mean:

            (1) The Trustee or Debtor-in-Possession will continue to have
sufficient unencumbered assets after the payment of all secured obligations and
administrative expenses to

                                  Page 2 of 5
<PAGE>

assure Landlord that the Trustee or Debtor-in-Possession will have sufficient
funds to fulfill all of the obligations of Tenant under this Lease; or

            (2) The Bankruptcy Court shall have entered an order segregating
sufficient cash payable to Landlord, and the Trustee or Debtor-in-Possession
shall have granted to Landlord a valid and perfected first lien and security
interest or mortgage superior to any prior post-petition financing in property
of Tenant, the Trustee or Debtor-in-Possession, acceptable as to value and kind
to Landlord, in order to secure to Landlord the obligation of the Tenant,
Trustee or Debtor-in-Possession to cure the monetary or non-monetary defaults
under the Lease within the time period set forth above.

      E. The following conditions shall apply to any assignment of this Lease in
Bankruptcy Proceedings:

            (1) If the Trustee or Debtor-in-Possession has assumed this Lease
and elects to assign the Lease to any other person, such interest or estate of
Tenant in this Lease may be so assigned only if Landlord has acknowledged in
writing that the intended assignee can provide to Landlord "adequate assurance
of future performance" (as hereinafter defined) of all of the terms, covenants
and conditions of this Lease to be performed by Tenant.

            (2) For the purposes of this provision, Landlord and Tenant
acknowledge that, in the context of a bankruptcy proceeding, at a minimum,
"adequate assurance of future performance" shall mean that each of the following
conditions has been satisfied, and that Landlord has so acknowledged in writing:

                  (a) The proposed assignee has submitted a current financial
statement audited by a Certified Public Accountant which shows the net worth and
working capital and amounts determined by Landlord to be sufficient to assure
the future performance by such assignee of all of Tenant's obligations under
this Lease;

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

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

      F. Tenant consents to, and Landlord shall have, automatic relief from the
automatic stay in order to enforce any of the rights or remedies of Landlord set
forth in this Paragraph 3.

                                  Page 3 of 5
<PAGE>

4)    Deposit.

      A.    Simultaneously with the execution of this Lease, Tenant shall
            deposit with Landlord a deposit of $40,000.00 payable to Landlord to
            be held without accruing interest, at Landlord's option in a
            separate account or commingled with other funds to be held by
            Landlord through the term of the Lease. If Tenant fails to comply
            with the provisions hereof, such deposit shall be retained by
            Landlord in payment for its expenses or damages or any amounts
            payable under the Lease, but such retention shall not limit or
            preclude Landlord's right of action for damages or other remedies
            for breach of the provisions of this Lease.

      B.    Notwithstanding any statement in this Paragraph 4 to the contrary,
            after the Conversion Date, at Landlord's option, within ten (10)
            days after written notice to Tenant, Tenant shall deposit with
            Landlord, as security for the performance of Tenant's obligations
            under this Lease an unconditional and irrevocable letter of credit
            (the "Letter of Credit"), in the amount of forty thousand and no/100
            dollars ($40,000.00), which is in the form described, and satisfies
            the conditions set forth, in subparagraph (c) of this Paragraph 4.
            If, at any time during the Term hereof, Tenant shall be in default
            in the performance of any provisions of this Lease, Landlord shall
            have the right but not the obligation to use the Letter of Credit,
            or so much thereof as necessary, in payment of any Rent in default,
            reimbursement of any expense incurred by Landlord, and in payment of
            any damages incurred by the Landlord by reason of Tenant's default.
            In such event, Tenant shall, within (5) days after written demand
            from Landlord restore the Letter of Credit to the amount existing
            immediately prior to Tenant's default. Landlord may deliver the
            Letter of Credit to any purchaser of Landlord's interest in the
            Premises in the event such interest is sold, and thereupon Landlord
            shall be discharged from further liability with respect to the
            Letter of Credit. If Landlord transfers its title or interest in the
            fee title to the Premises, Tenant will deliver to, or at the
            direction of, the assignee of the fee title, such amendments or
            replacements of the Letter of Credit as may be required. The Letter
            of Credit shall not serve as an advance payment of Rent or a measure
            of Landlord's damages for any default under this Lease.

      C.    The Letter of Credit shall be issued by one of the following
            financial institutions: Bank of America, Bank of New York, Bankers
            Trust, Chase Manhattan, Citibank, JP Morgan, US Trust or Marine
            Midland. Additionally, the Letter of Credit shall: (i) be in form
            and substance satisfactory to Landlord; (ii) name Landlord as its
            beneficiary; (iii) expressly allow Landlord to draw upon it at any
            time or from time to time by delivering to the issuer written
            notice, executed by an authorized representative of Landlord, that
            Landlord is entitled to draw thereunder; (iv) be redeemable in the
            State of New York; (v) expire not less than annually; (vi) be
            replaced or renewed, as applicable, by Tenant no less than ten
            business (10) days prior to the expiration date thereof and (vii)
            provided that the issuer give Tenant and Landlord written notice
            thirty (30) days prior to the expiration of such Letter of Credit if
            issuer intends not to renew the Letter of Credit. If Landlord is not

                                  Page 4 of 5
<PAGE>

            provided with a substitute letter of credit complying with all of
            the requirements hereof at least ten (10) business days before any
            stated expiration date of the Letter of Credit, then Landlord
            immediately shall have the right to draw upon such Letter of Credit
            and to hold the resulting funds as a security deposit in accordance
            with the terms under this Paragraph 4.

                                  Page 5 of 5
<PAGE>

                                   EXHIBIT A
                                       TO
                                     LEASE
                             FLOOR PLAN INDICATING
                              LOCATION OF PREMISES

Suite 11500                      5,895 RSF

[GRAPHIC OMITTED]

                            Exhibit A-l Page 1 of 1
<PAGE>

                                  EXHIBIT B-1
                                       TO
                                     LEASE

                            SITE PLAN OF THE CENTER

[GRAPHIC OMITTED]

                                COLORADO CENTER
        THE SITE PLAN MAY BE CHANGED BY LANDLORD IN ITS SOLE DISCRETION.

                            Exhibit B-1 Page 1 of 1
<PAGE>

                                  EXHIBIT B-2
                                       TO
                                     LEASE

                         LEGAL DESCRIPTION OF THE LAND
Tower One:

A parcel of land being a portion of the Northwest Quarter of Section 30,
Township 4 South, Range 67 West of the Sixth Principal Meridian, City and County
of Denver, State of Colorado, described as follows:

Beginning at the intersection of the northerly line of the 100-foot wide
Colorado and Southern Railroad Company right-of-way with the west line of said
Northwest Quarter, from which the northwest corner thereof bears N
00(degrees)03'00" E; thence S 79(degrees)11'51" E along said northerly line,
920.63 feet to the True Point of Beginning;

thence continuing S 79(degrees)11'51" E along said northerly line, 164.67 feet
to a Point "A"; thence continuing S 79(degrees)11`51" E along said northerly
line, 441.08 feet to a point on the southwesterly right-of-way line of Colorado
State Highway 1-25; thence along said southwesterly right-of-way line the
following two (2) courses:

      1)    N 33(degrees)59'11" W, 55.76 feet to a point of curvature;

      2)    along a curve to the left having a central angle of
            11(degrees)06'43" and a radius of 2695.15 feet, an arc length of
            522.70 feet to a point which bears N 10(degrees)48'09" E from the
            herein described Point "A";

thence S 10(degrees)48'09" W, 60.00 feet to a point that lays 312.62 feet north,
when measured perpendicularly from the northerly line of the Colorado and
Southern Railroad Company right-of-way; thence N 79(degrees)11'51" W, 125.68
feet; thence S 10(degrees)48'09" W, 26.16 feet; thence N 79(degrees)11'51" W,
40.00 feet; thence N 10(degrees) 48'09" E, 26.16 feet; thence N 79(degrees)
11'5l" W, 44.91 feet; thence N 34(degrees)24'52" W, 36.74 feet; thence N
10(degrees)48'09" B, 63.13 feet; thence N 79(degrees)11'51" W, 19.00 feet;
thence 10(degrees) 48'09" E, 56.99 feet; thence N 30(degrees)48'09" E, 59.91
feet to a point on the southwesterly right-of-way line of Colorado State Highway
I-25; thence along said southwesterly right-of-way line on a non-tangent curve
to the left, the beginning tangent of which bears N 50(degrees)56'40" W, having
a central angle of 00(degrees)18'02" and a radius of 2695.15 feet, an arc length
of 14.14 feet to a point of non-tangency; thence S 30(degrees)48'09" W, 78.99
feet; thence S 10(degrees)48'09" W, 128.72 feet; thence S 79(degrees)11'51" E,
18.27 feet; thence S 34(degrees)24'52" E, 102.45 feet; thence N
79(degrees)11'51" W, 20.99 feet; thence S 10(degrees)48'09" W, 38.00 feet;
thence S 79(degrees)11'51" E, 20.00 feet; thence S 10(degrees)48'09" W, 188.46
feet to the

                            Exhibit B-2 Page 1 of 1
<PAGE>

True Point of Beginning; Subject to all easements and right-of way existing
and/or of record; and containing 3.429 acres, or 149,349 square feet, more or
less.

City and County of Denver,
State of Colorado

                            Exhibit B-2 Page 2 of 1
<PAGE>

                                  EXHIBIT B-3
                                       TO
                                     LEASE

                          LEGAL DESCRIPTION OF CENTER

A parcel of land being a portion of Blocks 106 through 114 together with the
vacated roadways adjacent thereto, Chamberlin's University Terrace New Filing,
according to the recorded plat thereof, laying southerly and adjacent to the
southeasterly and southwesterly right-of-way lines of Colorado Interstate I-25,
as delineated on the Colorado Department of Highways right-of-way plans, Project
No. FI002-2(7), laying east of and adjacent to the east right-of-way line of
South Colorado Boulevard, said east right-of-way line being 50 feet east of and
parallel with the west line of the north half of the northwest quarter of
Section 30, and also laying north of and adjacent to the northerly right-of-way
line of the Colorado and Southern Railroad Company, all being in the North Half
of the Northwest Quarter of said Section 30, Township 4 South, Range 67 West of
the Sixth Principal Meridian, City and County of Denver, State of Colorado, said
parcel being described as follows:

Beginning at the point of intersection of said east right-of-way line of South
Colorado Boulevard with said northerly right-of-way line of the Colorado and
Southern Railroad Company; thence northerly and parallel with the west line of
the north half of said Section 30, a distance of 260.83 feet to the point of
intersection with said southeasterly right-of-way line of Colorado Interstate
I-25; thence northeasterly on an interior angle left of 122(degrees)03'17" and
along said southeasterly right-of-way line, a distance of 630.44 feet to a point
of non-tangent curvature along the southwesterly right-of-way line of said
Colorado Interstate 1-25; thence southeasterly along said southwesterly
right-of-way line along a curve to the right, the tangent of which is on an
interior angle to the left of 117(degrees)54'03", having a central angle of
25(degrees)55'09" and a radius of 2,695.15 feet, an arc length of 1,219.22 feet
to a point of tangency; thence continuing along said southwesterly right-of-way
line and said tangent, a distance of 55.76 feet to a point of intersection with
the northerly right-of-way line of the Colorado and Southern Railroad Company;
thence northwesterly on an interior angle left of 45(degrees)12'40" and along
said northerly right-of-way line a distance of 1,475.48 feet to the point of
beginning;

Containing 14.642 acres more or less.

EXCEPT the following described parcel conveyed from Colorado Center Building
Partners, Ltd. a Colorado limited partnership, to NCR Corporation, a Maryland
corporation, by that certain Warranty Deed dated November 24, 1987, and recorded
in the records of the Denver County Clerk & Recorder on December 23, 1987, at
Reception No. 219356:

A parcel of land being a portion of the Northwest Quarter of Section 30,
Township 4 South, Range 67 West of the Sixth Principal Meridian, City and County
of Denver, State of Colorado, described as follows:

                            Exhibit B-2 Page 1 of 1
<PAGE>

Beginning at the intersection of the northerly line of the 100-foot wide
Colorado and Southern Railroad Company right-of-way with the west line of said
Northwest Quarter, from which the northwest corner thereof bears N
00(degrees)03'00" E; thence S 79(degrees)11'51" E along said northerly line,
1085.30 feet; thence N 10(degrees)48'09" E, 312.62 feet to the True Point of
Beginning; thence N 79(degrees)11'51" W, 125.68 feet; thence S 10(degrees)48'09"
W, 26.16 feet; thence N 79(degrees)11'51" W, 40.00 feet; thence N
10(degrees)48'09" E, 26.16 feet; thence N 79(degrees)11'51" W, 44.91 feet;
thence N 34(degrees)24'52" W, 36.74 feet; thence N 10(degrees)48'09" E, 63.13
feet; thence N 79(degrees)11'51" W, 19.00 feet; thence N 10(degrees)48'09" E,
56.99 feet; thence N 30(degrees)48'09" E, 59.91 feet to a point on the
southwesterly right-of-way line of Colorado State Highway I-25; thence along
said southwesterly right-of-way line on a non-tangent curve to the right, the
beginning tangent of which bears S 50(degrees)56'40" E, having a central angle
of 05(degrees)50'46" and a radius of 2695.15 feet, an arc length of 275.00 feet
to a point that bears N 10(degrees)48'09" E from the True Point of Beginning;
thence S 10(degrees)48'09" W, 60.00 feet to the True Point of Beginning;

Subject to all easements and rights-of-way existing and/or of record; and
containing 0.7822 acres, or 34,073 square feet, more or less.

City and County of Denver,
State of Colorado

                            Exhibit B-2 Page 3 of 1
<PAGE>
                                   EXHIBIT C
                                       TO
                                     LEASE

                  DETERMINATION OF TENANT'S OPERATING EXPENSES

      1.01 Definitions.

            (1) "Building's Pro Rata Share of the Center Common Area" means a
fraction, the numerator of which shall be the Square Feet of the Building, and
the denominator of which shall be the Square Feet of the Center, including the
Square Feet of the Tower One Building, the Tower Two Building, and the Retail
Center (but excluding the Square Feet of the Annex, the Tower One Garage, the
Tower Two Garage and any other future parking structures). Landlord and Tenant
acknowledge and agree that the Center is a master planned mixed-use development
to which certain office buildings, a hotel, and one or more parking structures
may be added from time to time. The Building's Pro Rata Share of the Center
Common Area shall be adjusted, from time to time, so as to be effective on
January 1 of the Calendar Year following the issuance of a new certificate of
occupancy to reflect any increase or decrease in the Square Feet of the Center.

            (2) "HVAC Cost" means a percentage of the annual costs attributable
to the Building for the operation, repair and maintenance of the systems for
heating, ventilating and air conditioning the Building, as established by
Landlord from time to time on a fair and equitable basis which reflects load and
hours of operation.

            (3) "Real Estate Taxes" shall mean all real estate taxes,
assessments (including water taxes, sewer charges and liens, and charges for
public utilities not separately metered or assessed against the Premises),
license and permit fees, general and special, ordinary and extraordinary,
foreseen or unforeseen, levied, assessed or otherwise imposed upon the Building
and the Center Common Area or any part thereof as they may increase or decrease
from time to time during the Term of this Lease; provided that nothing contained
herein shall require Tenant to pay any franchise, corporate, estate,
inheritance, succession, capital levy or transfer tax of Landlord, or any
income, profits or revenue tax, or any other tax, assessment, charge or levy
upon the Rent payable by Tenant under this Lease, unless such tax is a direct
substitute in full or in part for real property tax in which event Tenant shall
pay same (but only to the extent such tax is a substitute for real property
tax). Real Estate Taxes shall not include Real Estate Taxes attributable to the
Annex, the Retail Center, or any other office building except the Building.

            (4) "Square Feet" or a "Square Foot" means rentable square feet or a
rentable square foot, as determined by Landlord by using the standard method for
measuring floor area in office buildings as defined by the American National
Standards Institute and the

                             Exhibit C Page 1 of 5
<PAGE>

Building Owners and Managers Association dated June 7, 1996 to determine usable
and rentable square footage.

            (5) "Square Feet of the Building" means the aggregate of the Square
Feet of the Building calculated by Landlord on a single tenancy floor basis;
provided that, if from time to time, there is a material change in the rentable
space of the Building, Square Feet of the Building shall from the effective date
of such change until any further change mean the number of Square Feet of the
Building determined by Landlord on completion of such change.

            (6) "Square Feet of the Center" means the rentable square feet of
all rentable areas of the Center as determined by Landlord from time to time but
shall exclude the Annex, all parking areas and parking structures (including the
Tower One Garage and the Tower Two Garage).

            (7) "Square Feet of the Premises" means the Square Feet of the
Premises as determined by Landlord and confirmed pursuant to the Commencement
Date Certificate of the Lease.

            (8) "Tenant's Pro Rata Share" means a fraction, the numerator of
which shall be the Square Feet of the Premises, and the denominator of which
shall be the Square Feet of the Building (including the Square Feet of the
Premises).

      2.01 "Tenant's Operating Expenses". Tenant's Operating Expenses for any
Lease Year is an amount equal to the difference between "Landlord's Operating
Costs" (as defined in Section 4.01) for such Calendar Year less Landlord's
Operating Costs for the Expense Base Year, multiplied by the Square Feet of the
Premises.

      3.01 "Expense Base Year". The Expense Base Year is calendar year (see
Schedule 1. Paragraph 2), as adjusted pursuant to Section 7.01, if applicable.

      4.01 Determination of Landlord's Operating Costs. "Landlord's Operating
Costs" means a per square foot amount in respect of a calendar year (calculated
to the nearest cent) established in accordance with generally accepted
accounting principles and confirmed in a certificate of Landlord, and equal to
the sum of the following costs, divided by the Square Feet of the Building or
the Center, as appropriate:

            (i) all reasonable and customary costs and expenses directly
attributable to the operation, repair, servicing and maintenance of the Building
and Center Common Area, including without limitation Real Estate Taxes,
Insurance Costs and HVAC Cost, and all indirect costs that are reasonably
attributable to the operation, repair, servicing and maintenance of the
Building, or the Center Common Area including without limitation accounting,
administrative and legal costs;

                             Exhibit C Page 2 of 5
<PAGE>

            (ii) all wage, salary and labor costs of all persons engaged in the
operation, maintenance, management, and repair of the Building and the Center
Common Area (including, but not limited to, all applicable taxes, insurance, and
benefits);

            (iii) costs of all utilities, fuel, and building supplies and
materials;

            (iv) cost of all maintenance and service agreements, including, but
not limited to, window cleaning, elevator maintenance, and janitorial service;

            (v) cost of repairs and general maintenance including, but not
limited to, exterior building maintenance, and maintenance of sidewalks, parking
areas, and landscaping;

            (vi) all costs of making any alterations to the Building or Center
Common Area for life-safety systems or energy conservation or other capital
improvements, which are primarily for the purpose of reducing or stabilizing
Landlord's Operating Costs or for providing additional services to the tenants
of the Building, amortized over the useful life of such improvements; and all
compliance costs necessitated by laws enacted or which become effective after
the Lease Date, including traffic impact fees and other rules and regulations
policing and regulating traffic to and from the Building;

            (vii) management fees either as charged to Landlord by independent
management companies or an amount not exceeding the amount typically charged by
independent management companies if Landlord manages the Building itself;

            (viii) reasonable reserve for capital costs, improvements and
repairs; and

            (ix) the Building's Pro Rata Share of all costs and expenses charged
to Landlord by any association formed to own and manage all or any portion of
the Center Common Area, if Landlord is not managing the Center Common Area.

                  Landlord's Operating Costs under this Section 4.01 also
include all net expenses properly allocable to a year for any capital
improvement or structural repair incurred to reduce or limit increases in
Landlord's Operating Costs, or required by Landlord's insurance carrier or by
any change in the laws, rules, regulations or orders of any governmental or
quasi-governmental authority having jurisdiction or expenses resulting from
normal repair or maintenance, which expenses shall be repaid in equal monthly
installments together with interest at applicable rates over the lesser of the
useful capital life of the capital improvement or structural repair or the
operational savings payback period.

      5.01 Limitation on Landlord's Operating Costs. In determining Landlord's
Operating Costs, the cost (if any) of the following shall be excluded except as
specifically provided in Section 4.01:

                             Exhibit C Page 3 of 5
<PAGE>

            (i) costs incurred by Landlord for alterations which are considered
capital improvements and replacements under generally accepted accounting
principles except as expressly permitted under Section 4.01.

            (ii) repair and replacement resulting from inferior or deficient
workmanship, materials, or equipment in the initial construction of the Building
or Center Common Area or for which Landlord is reimbursed by insurers;

            (iii) ground or master lease rent (if any), depreciation,
amortization, and interest on and capital retirement of debt;

            (iv) operation, repair and maintenance which is attributable solely
to any of the components of the Center comprising the Square Feet of the Center
other than the Building and the Center Common Area;

            (v) tenant improvements and leasing commissions;

            (vi) advertising or promotional expenses; and

            (vii) any legal expenses of Landlord incurred in enforcing other
tenants' leases; and

            (viii) any costs payable by a third party or otherwise reimbursed to
Landlord pursuant to Section 9.01.

      6.01 When Services Are Not Provided. Notwithstanding Section 4.01, when
and if any service (such as janitorial service) which is normally provided by
Landlord to tenants of the Building in their premises:

            (i) is not provided by Landlord in the Premises under the specific
terms of this Lease, then in determining Tenant's Operating Expenses for Tenant,
the cost of that service [except as it relates to Common Areas, and to those
areas of the Building from time to time not designated for leasing or designated
by Landlord for use by or for the benefit of Tenant (or by or for the benefit of
the sublessees, agents, employees, customers or licensees of Tenant) in common
with all other tenants and other persons in the Building] shall be excluded, and

            (ii) is not provided by Landlord in a significant portion of the
Building, then in determining Tenant's Operating Expenses (excluding Real Estate
Taxes) for Tenant, the cost of that service shall be divided by the difference
between the Square Feet in the Building and the number of Square Feet in the
Building in which Landlord does not provide such service.

                             Exhibit C Page 4 of 5
<PAGE>

      7.01 Adjustment in Landlord's Operating Costs. If the Building is less
than 100% occupied during any calendar year during the Term of this Lease, or if
the entire Building is not furnished with building standard services during any
calendar year, Landlord's Operating Costs for such year shall be adjusted to
reflect the amount of Landlord's Operating Costs that Landlord reasonably
determines would have been incurred during such year had the Building been 100%
occupied during such year and had the entire Building been furnished with
building standard services during such year.

      8.01 Partial Lease Year. If the Term commences after the beginning of or
terminates before the end of a Lease Year, any amount payable by Tenant or
Landlord shall be adjusted proportionately.

      9.01 Shared Facilities, Services and Utilities.

            (a) If any facilities, services or utilities:

                  (i) for the operation, repair and maintenance of the Center
are provided from another building or other buildings owned or operated by
Landlord or any affiliate of Landlord or any agent of Landlord, or

                  (ii) for the operation, repair and maintenance of another
building or other buildings owned or operated by Landlord or any affiliate of
Landlord, or any agent of Landlord are provided from the Center,

the net costs, charges and expenses therefor, for the purposes of Section 4.01,
shall be allocated by Landlord between the Center and the other building or
buildings on a fair and equitable basis.

            (b) Landlord's Operating Costs shall not include thirty-three
percent (33%) of the costs of operating the Tower One Garage and twenty percent
(20%) of the costs of external grounds maintenance attributable to that part of
the Center subject to the Phase One Planned Unit Development and which are
payable by the Annex property.

      10.01 Adjustment of Landlord's Operating Costs. Landlord shall use
reasonable efforts to recover where circumstances so permit an equitable share
of the cost of operating and maintaining Center Common Area from owners or
occupants of adjoining properties and shall credit any such recoveries to the
gross cost before determination of Landlord's Operating Costs.

                             Exhibit C Pages 5 of 5
<PAGE>

                                   EXHIBIT D
                                       TO
                                     LEASE

                       CONFIRMATION OF COMMENCEMENT DATE

      THIS CONFIRMATION AGREEMENT is made and agreed upon as of this ______ day
of _______________ 19 by and between WRC Properties, Inc., a Delaware
corporation (the "Landlord"), and ______________________, a _______________ (the
"Tenant").

                                   WITNESSETH

      Landlord and Tenant have previously entered into a certain lease agreement
dated __________,19 (the "Lease"), covering certain premises located in Colorado
Center Tower One as more particularly described in the Lease (the "Premises").

      NOW, THEREFORE, in connection with the foregoing, the parties hereto
mutually agree as follows:

1.    For the purpose of confirming the establishment of the Commencement Date,
      as required by the provisions of the Lease, Landlord and Tenant hereby
      agree that:

      a.    The date of________________, __________ is hereby established as the
            Commencement Date referred to in the Lease;

      b.    The date of January 1, __________, is hereby established as the
            first day of the first Lease Year referred to in the Lease.

      c.    The date of _____________, ___________,is hereby established as the
            "Expiration Date" of the Term of the Lease;

      d.    The Square Feet of the Premises is ___________ ( ) square feet. The
            Square Feet of the Building in which the Premises is located is
            __________ (___) square feet; and

      e.    The Base Rent for the Term, payable according to Article 4 herein,
            is:

            Monthly Rent                Annual Base Rent
            ------------                ----------------
              $_____                          $_____

      f.    Tenant's Pro Rata Share is____ percent (__%).

                             Exhibit D Page 1 of 2
<PAGE>

      g.    The Parking Area includes ____ parking spaces pursuant to
Paragraph 2.4.

2.    This Confirmation Agreement and each and all provisions hereof shall inure
      to the benefit of, or bind, as the case may require, the parties hereto
      and their respective heirs, successors and assigns.

      IN WITNESS WHEREOF, the parties hereto have executed this instrument as of
the date and year first written above.

TENANT:                                         LANDLORD:
___________________________,                    ___________________________,
a(n)_______________ corporation                 a(n) ______________ corporation

By:                                             By:
Name:                                           Name:
Its:                                            Its:

                             Exhibit D Page 2 of 2
<PAGE>

                                   EXHIBIT E
                              TENANT IMPROVEMENTS

                            [INTENTIONALLY DELETED]

                             Exhibit E page 1 of 1
<PAGE>

                                    EXHIBIT F
                                       TO
                                      LEASE

                             RULES AND REGULATIONS
                       COLORADO CENTER TOWERS ONE AND TWO

      Tenant agrees to comply with and observe the following rules and
regulations, and Tenant's failure to keep and observe them shall constitute an
Event of Default under the Lease. In the event of any inconsistency between the
terms of the Lease and these Rules and Regulations, the terms of the Lease shall
prevail. Landlord reserves the right from time to time to amend or supplement
these Rules and Regulations, and to adopt and promulgate additional Rules and
Regulations applicable to the Building. Notice of such amended or additional
Rules and Regulations shall be given to Tenant in writing, and Tenant agrees
thereupon to comply with and observe all rules and regulations and amendments
and additions thereto. To the best of Landlord's ability, Landlord shall
uniformly enforce the Rules and Regulations in a reasonable manner.

1.    Business Hours. Business Hours for the Building are 6:00 a.m. to 7:00 p.m.
      Monday through Friday and 8:00 a.m. to noon Saturday, excluding legal
      holidays.

2.    Security. Landlord may from time to time adopt appropriate systems and
      procedures for the security or safety of the Building, any persons
      occupying, using or entering the same, or any equipment, finishings, or
      contents thereof, and Tenant shall comply with Landlord's reasonable
      requirements relative thereto. Landlord may from time to time install and
      change locking mechanisms on entrances to the Building, common areas
      thereof, and the Premises. Tenant shall not add to or change existing
      locking mechanisms on any door in or to the Premises, without the prior
      written consent of Landlord.

3.    Entry. Entry to the Building at times other than Business Hours shall be
      limited to the entrance controlled by use of any after hours card access
      entry system installed by Landlord. Tenants, their employees or agents, or
      anyone else who desires to enter the Building after Business Hours, may be
      required to provide appropriate identification and sign in upon entry, and
      sign out upon leaving, giving the location during such person's stay and
      such person's time of arrival and departure and shall otherwise comply
      with any reasonable access control procedures as Landlord may from time to
      time institute.

4.    Directory. Landlord will provide and maintain in a conspicuous location in
      the Building lobby area a directory for all tenants, and no other
      directory shall be

                             Exhibit F Page 1 of 6
<PAGE>

      permitted. Tenants will be identified on such directory by the name of the
      tenant. The style and size of lettering on such directory shall be
      determined by Landlord.

5.    After-Hours HVAC. HVAC service at times other than Business Hours shall be
      furnished upon Tenant's request in accordance with procedures established
      by Landlord from time to time. Tenant shall bear the entire cost of such
      additional service as such costs are determined by Landlord from time to
      time. Upon Tenant's prior written request, Landlord will notify Tenant of
      the cost per hour of such after-hour HVAC prior to furnishing such
      services to the Premises. Instructions for use of any after hours HVAC
      systems will be provided prior to occupancy.

6.    Windows. Tenant shall use only window coverings approved by Landlord in
      the Premises so that the Building presents a uniform exterior appearance,
      and shall not install any window shades, screens, drapes, covers, or other
      materials on or at any window in the Premises without Landlord's prior
      written consent. Tenant shall ensure that window coverings are closed on
      all windows in the Premises while they are exposed to the direct rays of
      the sun.

7.    Repairs. Maintenance. Alterations, and Improvements. Tenant shall carry
      out Tenant's repair, maintenance, alterations, and improvements in the
      Premises only during times agreed to in advance by Landlord and in a
      manner which will not interfere with the right of other tenants in the
      Building.

8.    Water Fixtures. Tenant shall not use water fixtures for any purpose for
      which they are not intended, nor shall water be wasted by tampering with
      such fixtures. Any cost or damage resulting from such misuse by Tenant
      shall be paid for by Tenant.

9.    Personal Use of Premises. The Premises shall not be used or permitted to
      be used for residential, lodging, or sleeping purposes or for the storage
      of personal effects or property not required for business purposes.

10.   Heavy Articles. Tenant shall not place in or move about the Premises
      without Landlord's prior written consent any safe or other heavy article
      which in Landlord's reasonable opinion may damage the Building or
      Premises, and Landlord may designate the location of any heavy articles in
      the Premises.

11.   Bicycles: Animals. Tenant shall not bring any animals or birds into the
      Building, unless otherwise required by law. Tenant shall not permit
      bicycles or other vehicles inside or on the sidewalks outside the Building
      except in areas designated from time to time by Landlord for such
      purposes.

                             Exhibit F Page 2 of 6
<PAGE>

12.   Deliveries. Tenant shall ensure that deliveries of materials and supplies
      to the Premises are made through entrances such as loading docks,
      elevators, and corridors and at such times as may from time to time be
      designated by Landlord, and shall promptly pay or cause to be paid to
      Landlord the cost of repairing any damage in the Building caused by any
      person making such deliveries.

13.   Furniture and Equipment. Tenant shall ensure that furniture and equipment
      being moved into or out of the Premises is moved through entrances, such
      as loading docks, elevators, and corridors and at such time as may from
      time to time be designated by Landlord, and by movers or a moving company
      approved by Landlord, and shall promptly pay or cause to be paid to
      Landlord the cost of repairing any damage in the Building caused thereby.

14.   Solicitations. Landlord reserves the right to restrict or prohibit
      canvassing, soliciting, or peddling in the Building.

15.   Food and Beverages. Only persons approved from time to time by Landlord
      may prepare, solicit orders for, sell, serve, or distribute foods or
      beverages in the Building, or use the elevators, corridors, or common
      areas for any such purpose. Except with Landlord's prior written consent
      and in accordance with arrangements approved by Landlord, Tenant shall not
      permit on the Premises the use of equipment of dispensing food or
      beverages or for the preparation, solicitation of order for, sale,
      serving, or distribution of food or beverages (but the foregoing shall not
      prohibit a refrigerator, microwave oven, coffee machines (or similar
      equipment solely for the use by Tenant's employees).

16.   Refuse. Tenant shall place all refuse in proper receptacles provided by
      Tenant at its expense in the Premises or in receptacles (if any) provided
      by Landlord for the Building, and shall keep sidewalks and driveways
      outside the Building, and lobbies, corridors, stairwells, ducts, loading
      dock, and shafts of the Building free of all refuse.

17.   Obstructions. Tenants shall not obstruct or place anything in or on the
      sidewalks or driveways outside the Building or in the lobbies, corridors,
      stairwells, ducts, loading dock or other common areas of the Building, or
      use such locations for any purpose except access to and exit from the
      Premises, without Landlord's prior written consent. Landlord may remove at
      Tenant's expense, any such obstruction or thing (unauthorized by Landlord)
      without notice or obligation to Tenant.

18.   Dangerous or Immoral Activities. Tenant shall not make any use of the
      Premises which involves the danger of injury to any person, nor shall the
      same be used for any immoral purpose.

                             Exhibit F Page 3 of 6
<PAGE>

19.   Proper Conduct. Tenant shall not conduct itself in any manner which is
      inconsistent with the character of the Building as a first class building
      or which will impair the comfort and convenience of other tenants in the
      Building.

20.   Employees. Agents, and Invitees. In these Rules and Regulations, "Tenant"
      includes the employees, agents, invitees, and licensees of Tenant and
      others permitted by Tenant to use or occupy the Premises.

21.   Noise. Tenant shall not make, or permit to be made, any unseemly or
      disturbing noises or disturb or interfere with occupants of the Building
      or neighboring buildings or premises or those having business with them,
      whether by the use of any musical instrument, radio, television set,
      talking machine, unusual noise, whistling, singing, or in any other way.
      Tenant shall not throw anything out of the doors, windows, skylights, or
      down the passageways. No aerial shall be erected on the roof or exterior
      walls of the Premises, or on the Common Area of the Building or Center
      without, in each, instance, the prior written consent of the Landlord. Any
      aerial so installed without such written consent shall be subject to
      removal without notice at any time.

22.   Signage. No sign, advertisement, display, notice or other lettering shall
      be exhibited, inscribed, painted, or affixed on any part of the outside of
      the Premises or inside, if visible from the outside, or outside the
      Building of which they form a part, and subject to the provision of Rule
      25 hereinbelow, no symbol, design, mark, or insignia adopted by Landlord
      of the Center or the tenants therein shall be used in connection with the
      conduct of Tenant's business in the Premises or elsewhere without, in each
      instance, the prior written consent of Landlord. All such signs, displays,
      advertisements, and notices of Tenant so approved by Landlord shall be
      maintained by Tenant in good and attractive condition at Tenant's expense
      and risk. Tenant shall not use handbills for advertising at the Center.

23.   Outside Premises. No awning or other projections shall be attached to the
      outside walls of the Premises or the Building without, in each instance,
      the prior written consent of Landlord. Awnings or other projections shown
      on plans approved by Landlord shall be deemed to have received Landlord's
      prior written consent. Tenant shall not place or maintain any merchandise,
      security devices, signs or other articles outside of the Premises or in
      the Common Areas of the Building or the Center without Landlord's prior
      written consent.

24.   Parking. Tenant shall restrict parking by Tenant, its officers, employees,
      agents and invitees to the Parking Area described in the Lease. There
      shall be no parking in areas designated as fire lanes. Tenant shall
      furnish Landlord with State automobile license numbers assigned to
      Tenant's car(s) or those of its employees within five (5) days after
      taking possession of the Premises and shall thereafter notify Landlord of

                             Exhibit F Page 4 of 6
<PAGE>

      any changes within five (5) days after such changes occur. If Tenant or
      its employees shall fail to park their car(s) in the designated Parking
      Area after giving notice to Tenant, Landlord shall have the right to
      charge Tenant, Ten and No/Dollars ($10.00) per day per car parked in any
      parking area other than those designated. Upon Landlord's prior written
      request, Tenant shall require each of its on-Premises employees, as a
      condition of their employment to acknowledge, in writing, their agreement
      to park in the designated Parking Area. Tenant or Tenant's employees shall
      not park their vehicles overnight or for extended periods without the
      prior written consent of Landlord. Tenant shall take such action as is
      necessary in order to enforce such agreements on behalf of both Landlord
      and Tenant.

25.   Advertising. Tenant may use the Center name and logo, if any be designated
      by Landlord, as either may be changed from time to time, in referring to
      the location of the Premises in advertising. Such logo shall be and remain
      in the sole property of Landlord and Landlord may revoke the license
      hereby granted to Tenant for the use of same at any time.

26.   Life Safety. Tenant shall participate in all fire and other life-safety
      evacuation drills, training exercises and similar activities for the
      Building. Tenant shall post in the Premises all signs and notices, if any,
      furnished by Landlord with respect to evacuation and similar procedures.

27.   Locking Doors. Tenant shall lock all office doors leading to corridors and
      turn out all lights within the Premises at the close of the working day.

28.   Vending Machines. No vending machines shall be placed within the Premises
      without the prior written consent of Landlord.

29.   Locks; Keys. Landlord shall provide all locks for all doors in the
      Premises, at Tenant's expense, and no additional lock(s) shall be placed
      on any door within the Premises without Landlord's prior written consent.
      Landlord shall provide Tenant with an initial set of keys for each
      corridor door entering the Premises. Additional keys shall be provided by
      Landlord at Tenant's expense. All such keys shall remain the property of
      Landlord and shall be surrendered to Landlord at the end of the term of
      Tenant's Lease. Tenant shall not make, or permit to be made, any duplicate
      keys, except those provided by Landlord. All requests for duplicate keys
      shall be made to the Building Management Office. Landlord will provide the
      initial supply of after hours access cards at its expense, however, any
      additional or replacement cards will be supplied by Landlord at Tenant's
      expense. Upon expiration or termination of the Lease, Tenant agrees to
      return all access cards to Landlord and for any keys and/or cards not
      returned, Tenant shall reimburse Landlord for the cost at the then present
      rate for such keys and access cards.

                             Exhibit F Pages 5 of 6
<PAGE>

30.   Flammable Substances. Tenants shall not place or use or keep in the
      Building gasoline, kerosene oil, acids, caustics or any inflammable or
      explosive fluid or substance, or any illuminating material, unless it is
      battery powered.

31.   Use of Premises. The Premises shall not be used for conducting any barter,
      trade, or exchange of goods or sale through promotional give-away gimmicks
      or any business involving the sale of second-hand goods, insurance salvage
      stock, or fire sale stock, and shall not be used for any auction or
      pawnshop business, any fire sale, bankruptcy sale, going-out-of-business
      sale, moving sale, bulk sale, or any other business which, because of
      merchandising methods or otherwise, would tend to lower the character of
      the Building, or which would be in violation of any law.

32.   Personal Property. Landlord will not be responsible for lost or stolen
      personal property, money or jewelry from the Premises or public areas
      regardless of whether such loss occurs when such area is locked against
      entry or not.

33.   Holiday Decorations. All holiday and other temporary or special
      installations or decorations which a tenant desires to install in the
      Premises must be flame retardant.

                             Exhibit F Page 6 of 6
<PAGE>

                                   EXHIBIT G
                                       TO
                                     LEASE

            SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

      THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT ("Agreement")
is made by and between ______________________, a _____________ corporation
("Lender") and Tenant (as defined below).

DEFINITIONS

Borrower:   ________________________, a [an] [individual] [corporation] [limited
            company] [general partnership] [limited partnership].

Tenant:     ________________________,a [an] [individual] _____________
            [corporation] [limited liability company] [general partnership]
            [limited partnership] [d/b/a/ ___________].

Property:   The real property located at 2000 South Colorado Boulevard in the
            City and County of Denver, State of Colorado, more commonly known as
            Colorado Center Tower _____________, as described on Exhibit "B-2",
            Legal Description of the Land, and all fixtures thereon.

Landlord:   The landlord under the Lease and its successors and assigns from
            time to time except a "Successor Landlord" (defined in Appendix
            G-1).

Lease:      The lease, dated _______________, by and between Borrower, as
            landlord, and Tenant, as tenant, as previously amended by
            amendment(s) dated _____________________, for a term of_____ years
            that commenced on _________________.

Leased      Space: [Suite No._____] [Floor _____] [Store No._____] leased to
            Tenant pursuant to the Lease.

Loan:       The loan from Lender to Borrower, including any advances and
            increases, secured by, among other things, a lien on the Property.

Mortgage:   The [Open-End] [Mortgage] [Deed of Trust], Assignment of Leases and
            Rents and Security Agreement by Borrower in favor of Lender, as
            amended or consolidated from time to time, [to be] recorded [on
            _____________ at Book _______________, Page _____________,] in the
            Official Records of the County of ________, State of___________ (the
            "Land Records") to secure the Loan.

                             Exhibit G Page 1 of 3
<PAGE>

Assignment: The Assignment of Leases and Rents, by Borrower in favor of Lender,
            as amended or consolidated from time to time, [to be] recorded [on
            ___________ at Book _______,Page ______,] in the Land Records to
            secure the Loan.

Rent:       [All rents, additional rents and other sums payable under the Lease
            to be inserted.]

Notice
Addresses:  Teachers Insurance and Annuity Association of America 730
            Third Avenue New York, New York 10017 Attention: Director, Portfolio
            Management Mortgage and Real Estate Application #__________________
            Mortgage #_______________________

Lender:     [Name]
            [Address]
            [City, State, Zip Code]
            [Attention:]

Tenant:

      Lender and Tenant incorporate by reference all of the terms of Appendix G-
I attached to this Agreement.

      This Agreement contains the entire agreement between Lender and Tenant
with respect to the subject matter of this Agreement, may be executed in
counterparts that together constitute a single document and may be amended only
by a writing signed by Lender and Tenant.

      IN WITNESS WHEREOF, Lender and Tenant have executed and delivered ________
Agreement as of _________________, 199__.

                                        By:
                                          Name:
                                          Title:

                                     Insert Name of Tenant
                                     ---------------------

                                     _______________________ a [an] [individual]
                                     __________ [corporation] [limited liability

                             Exhibit G Page 2 of 3
<PAGE>

                                    company] [general partnership] [limited
                                    partnership]
                                    [d/b/a/

                                    By:
                                      Name:
                                      Title:

                             Exhibit G Page 3 of 3
<PAGE>

                                  APPENDIX G-1
                                       TO
                                     LEASE

RECITALS:

      E. Borrower and Tenant have executed the Lease pursuant to which Borrower
leased to Tenant the Leased Space.

      F. Tenant and Lender desire to agree on the relative priorities of their
interests in the Property and their rights and obligations if certain events
occur.

      NOW, THEREFORE, for good and sufficient consideration, the parties agree
as set forth below.

      1. Tenant and Lender agree that until the Mortgage is satisfied of
records:

            (a) The Lease and all of Tenant's rights under the Lease are and
will remain subject and subordinate to the lien of the mortgage and to the lien
of all future advances made under the Mortgage or to any other mortgage or other
security instrument on the Property now or in the future made by Lender and
Tenant will not subordinate the Lease to any other lien against the Property
without Lender's prior consent;

            (b) Except for any security deposit, Tenant will not pay Rent more
than one month in advance and will not offset against Rent except as expressly
provided in the Lease;

            (c) Upon receipt of notice from Lender, Tenant will pay the Rent as
and when due under the Lease to Lender and the payments will be credited against
the Rent due under the Lease; Borrower hereby acknowledges and agrees that
Tenant has the right to rely on such notice from Lender without consent of or
notice from Borrower;

            (d) Tenant does not have and will not acquire any right or option to
purchase portion of or interest in the Property.

      2. Tenant may enter into amendments of the Lease without Lender's prior
consent, except as follows:

            (a) Tenant will not enter into any amendment that reduces the Rent
due or payable under the Lease without Lender's prior consent which will not be
unreasonably withheld or delayed, except Tenant may agree to a rent reduction
without Lender's prior consent in

                            Exhibit G-1 Page 1 of 4
<PAGE>

connection with an extension or renewal of the Lease but only if the rent for
the extension or renewal period is consistent with then prevailing market terms
for like space;

            (b) Tenant will not amend the Lease to reduce the initial term of
the Lease or any renewal term of the Lease after the renewal has been exercised,
will not terminate or cancel the Lease except as expressly allowed in the Lease
and will not surrender the Leased Space without Lender's prior consent which
will not be unreasonably withheld or delayed, provided that during the last six
months of the initial term or any renewal term of the Lease, Tenant may
terminate or cancel the Lease or surrender the Leased Space without Lender's
prior consent; and

      3. If Tenant is not in default under this Agreement and is not in default
beyond any applicable grace and cure periods under the Lease, Tenant and Lender
agree as follows:

            (a) If Lender commences a judicial or non-judicial foreclosure or
other proceeding to enforce the Mortgage or exercises any power of sale (an
"Action"), Lender will not name Tenant as a part to the Action unless joinder is
required under applicable law and in such case Lender will not seek affirmative
relief from Tenant, the Lease will not be terminated and Tenant's possession
will not be disturbed;

            (b) If Lender or any other entity (a "Successor Landlord") acquires
the Property through an Action or by deed-in-lieu of foreclosure (an
"Acquisition"), Successor Landlord will not disturb Tenant's possession of the
Leased Space, the Lease will continue in full force and effect with Successor
Landlord and Tenant bound by the Lease; and

            (c) If, notwithstanding the foregoing, the Lease is terminated as a
result of such action, a lease between Successor Landlord and Tenant will be
deemed created on the same terms as the Lease except that the terms of the
replacement lease will be the then unexpired term of the Lease. Successor
Landlord and Tenant will execute a replacement lease on such terms at the
request of either.

      4. Upon an Acquisition Tenant will recognize and attorn to Successor
Landlord as the Landlord under the Lease for the balance of the term. Tenant's
attornment will be self-operative with no further instrument required to
effectuate the attornment except that at the Successor Landlord's request,
Tenant will execute instruments reasonably satisfactory to such Successor
Landlord confirming the attornment.

      5. Successor Landlord will not be:

            (i)   liable for any act or omission of Landlord occurring prior to
                  the date of Acquisition except for repair and maintenance
                  obligations of a continuing nature imposed on the landlord
                  under the Lease;

                            Exhibit G-1 Page 2 of 4
<PAGE>

            (ii)  required to credit Tenant with any Rent for any rental period
                  beyond the then current rental period or for any security
                  deposit unless it has been received by Successor Landlord;

            (iii) bound by any amendment, renewal or extension of the Lease that
                  is not in writing signed by both Tenant and Landlord, that is
                  inconsistent with the terms of this Agreement or that was made
                  without Lender's prior consent, if Lender's prior consent was
                  required under the terms of this Agreement;

            (iv)  subject to any credits, offsets, claims, counterclaims or
                  defenses that Tenant may have against Landlord arising prior
                  to the date of Acquisition, except those expressly provided in
                  the Lease;

            (v)   liable for any damages Tenant may suffer as a result of any
                  misrepresentation, breach of warranty or any act of or failure
                  to act by any party other than Successor Landlord;

            (vi)  obligated to make any payment or to give any credit or
                  allowance to Tenant including, without limitation, for any
                  improvements, demolition or other work in the Leased Space or
                  the Property (other than to reconstruct after a casualty or
                  condemnation if the insurance or condemnation proceeds are
                  paid to Successor Landlord) or to undertake or complete
                  construction of improvements in the Leased Space or the
                  Property or to any leasing commissions arising out of the
                  Lease; or

            (vii) liable for any obligations of Landlord with respect to
                  off-site property or facilities for the use of Tenant (such as
                  off-site leased space or parking) unless Successor Landlord
                  succeeds through Acquisition to Landlord's right, title or
                  interest in the off-site property.

      6. Lender will have the right, but not the obligation, to cure any default
by Borrower under the Lease. Tenant will notify Lender of any default by
Borrower that would entitle Tenant to terminate the Lease or abate the Rent and
any notice of termination or abatement will not be effective unless Tenant has
so notified Lender of the default and Lender has had a 30 day cure period except
for an emergency repair (or such longer period as may be necessary if the
default is not susceptible to cure within 30 days) commencing on the latest to
occur of the date on which (i) the cure period under the Lease expires; (ii)
Lender receives the notice required by this paragraph.

                            Exhibit G-1 Page 3 of 4
<PAGE>

      7. Tenant certifies that except as provided on Exhibit __ the Lease
represents the entire agreement between Borrower and Tenant regarding the Leased
Space; the Lease is in full force and effect; neither party is in default under
the Lease beyond any applicable grace and cure periods and no event has occurred
which with the giving of notice would constitute a default under the Lease;
Tenant has entered into occupancy and is open and conducting business in the
Leased Space; and all conditions to be performed to date by Landlord have been
satisfied.

      8. Upon not less than 20 days' prior request from Lender, Tenant will
execute, acknowledge and deliver to Lender an estoppel certificate containing
the information required in the Lease and any other information reasonably
requested by Lender.

      9. All notices, requests or consents required or permitted to be given
under this agreement must be in writing and sent by certified mail, return
receipt requested or by a nationally recognized overnight delivery service
providing evidence of the date of delivery, with all charges prepaid, addressed
to the appropriate party at its Notice Address.

      10. Tenant acknowledges and agrees that this Agreement constitutes notice
to Tenant of the existence of the lien of the Mortgage and that the Lease and
the Rent have been assigned to Lender as security for the Loan.

      11. Any claim by Tenant against Successor Landlord under the Lease or this
Agreement will be satisfied solely out of Successor Landlord's interest in the
Property and rents and incomes therefrom and Tenant will not seek recovery
against or out of any other assets of Successor Landlord. Successor Landlord
will have no liability or responsibility for any obligations under the Lease
that arise subsequent to any transfer of the Property by Successor Landlord.

      12. This Agreement is governed by and will be construed in accordance with
the laws of the state or commonwealth in which the Property is located.

      13. Lender and Tenant waive trial by jury in any proceeding brought by, or
counterclaim asserted by, Lender or Tenant relating to this Agreement.

      14. If there is a conflict between the terms of the Lease and this
Agreement, terms of this Agreement will prevail.

      15. This Agreement binds and inures to the benefit of Lender and Tenant
and their respective successors, assigns, heirs, administrators, executors,
agents and representatives.

                            Exhibit G-1 Page 4 of 4
<PAGE>

                                   EXHIBIT H
                                       TO
                                     LEASE

                                    GUARANTY

      This Guaranty dated as of , ____, by _________________________________
duly incorporated under the laws of _________________________________, having
an office at ("Guarantor") to WRC Properties, Inc. ("Landlord"), having an
office at 730 Third Avenue, New York, New York 10017-3206.

                                    RECITALS

      WHEREAS, ______________________ ("Tenant") and Landlord have entered into
a Lease dated ___________, 199 for certain premises located in the Colorado
Center Tower Building, 2000 South Colorado Boulevard, Denver, Colorado, (the
"Lease").

      WHEREAS, Guarantor has reviewed the Lease and is fully familiar with the
terms thereof;

      WHEREAS, Landlord is willing to enter into the Lease only if Guarantor
executes and delivers this Guaranty; and

      WHEREAS, Guarantor is willing to execute and deliver this Guaranty to
induce Landlord to enter into the Lease;

      NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledge, Guarantor agrees as follows:

      1. Guaranty of Obligations. Guarantor hereby unconditionally and
irrevocably guarantees to Landlord, its successors and assigns, the full and
timely payment of rent and other charges under the Lease and performance of all
Tenant's obligations under the Lease and the terms, covenants and conditions
thereof (collectively, the "Obligations").

      2. Guaranty Unconditional. The obligations of Guarantor hereunder shall be
unconditional and absolute. Without limiting the generality of the foregoing,
Guarantor shall not be released, discharged or otherwise affected by:

            (a) any settlement, compromise, waiver or release in respect of any
of the Obligations;

                             Exhibit H Page 1 of 5
<PAGE>

            (b) any modification, amendment, renewal or extension of the Lease
including any enlargement or change in the premises under the Lease, and
Guarantor's obligations hereunder shall apply fully to any such modification,
amendment, renewal, or extension;

            (c) any assignment of Tenant's interest under the Lease, whether or
not permitted by Landlord;

            (d) the existence of any claim, setoff or other rights which
Guarantor may have at any time against Landlord; and

            (e) any exercise or restraint from exercising any rights (whether
under contract or by law or equity) against Tenant or any consent to or waiver
of any breach of or default under the Lease by Tenant.

            (f) the institution by or against Tenant of any bankruptcy,
reorganization, arrangement insolvency or liquidation proceedings or other
similar proceedings under any law for the relief of debtors or the benefit of
creditors, or the discharge by Tenant of any of the obligations pursuant to such
law or proceeding; and

            (g) any invalidity or unenforceability for any reason of the Lease
relating to or against Landlord.

      3. Waiver. Landlord shall not be required to initiate, pursue or exhaust
any remedy or claim against Tenant as a condition to enforcement of Guarantor's
obligations under this Guaranty, and Landlord may, at its option, join Guarantor
in any action or proceeding brought against Tenant to enforce any of Tenant's
obligations under the Lease, or may sue Guarantor in one or more separate
proceedings. Guarantor irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein. Until all of Tenant's
obligations under the Lease are fully performed, Guarantor waives any right of
subrogation against Tenant by reason of any payments or acts or performance in
compliance with the obligations of Guarantor under this Guaranty and Guarantor
subordinates any liability or indebtedness of Tenant held by Guarantor to the
Obligations.

      4. Guarantor's Statements. The person executing this Guaranty on behalf of
Guarantor represents and warrants to Landlord that: a) Guarantor is a
corporation duly organized, validly existing and in good standing; b) Guarantor
has the full power and authority to execute and deliver this Guaranty; c) the
execution, delivery and performance by Guarantor of this Guaranty have been duly
authorized by all necessary corporate action of Guarantor; and d) all financial
information of Guarantor previously furnished to Landlord is accurate in all
material respects.

      5. Costs of Collection: Indemnification. After notice to Guarantor and
failure of Guarantor to perform its obligations under this Guaranty, within five
(5) days, Guarantor shall

                             Exhibit H Page 2 of 5
<PAGE>

pay Landlord on demand, all reasonable fees and disbursements of Landlord's
attorneys related to any action or proceeding instituted by Landlord seeking to
cause Guarantor to honor this Guaranty.

      6. WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM OUT OF OR IN ANY WAY
CONNECTED WITH THE GUARANTY OR THE LEASE.

      7. Governing Law: Jurisdiction: Arbitration. This Guaranty shall be
governed by and construed in accordance with the laws of the State of Colorado
and shall constitute the entire and sole understanding of the parties hereto
notwithstanding any prior oral or written statements, instruction, agreements,
representations or other communications.

            (a) All claims, disputes and other matters in question between the
parties to this Guaranty, arising out of or relating to this Guaranty or the
breach thereof, shall be decided by arbitration in accordance with the Lease.
This agreement to arbitrate and any agreement to arbitrate with an additional
person or persons duly consented to by the parties to this Guaranty shall be
specifically enforceable under the prevailing arbitration law.

            (b) Notice of the demand for arbitration shall be filed in writing
with the other party to this Guaranty and with the American Arbitration
Association. The demand shall be made within a reasonable time after the claim,
dispute or other matter in question has arisen. In no event shall the demand for
arbitration be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question would be
barred by the applicable statute of limitations.

            (c) The award rendered by the arbitrators shall be final, and
judgement may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof.

            (d) The location for settlement for any and all claims,
controversies or disputes arising out of or relating to this Guaranty or any
breach thereof when decided by arbitration shall be in Denver, Colorado.

      8. Captions. The captions herein are for convenience of reference only and
shall not be considered when construing or interpreting this Guaranty. Neither
this Guaranty nor any provisions hereof shall be construed against the party
causing this Guaranty or such provisions to be drafted.

      9. Severability. If any provision of this Guaranty or the application
thereof to any person or circumstances shall in whole or in part be invalid or
unenforceable, the remainder of this Guaranty shall be valid and enforced to the
fullest extent permitted by law.

                             Exhibit H Page 3 of 5
<PAGE>

      10. Notice. Any notice, demand or other communication with respect to this
Guaranty that Guarantor or Landlord may desire to give or serve shall be in
writing, by registered or certified mail, postage prepaid, return receipt
requested, by prepaid telegraph, or by personal service (including express or
courier service) and addressed as follows:

        To Landlord:    WRC Properties, Inc.
                        730 Third Avenue
                        New York, NY 10017-3206

        To Guarantor:   ___________________
                        ___________________
                        ___________________

      11. Successors and Assigns. The Guaranty shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. Guarantor may not assign its obligations hereunder, and any
such assignment shall be null and void.

      12. Entire Agreement. This Guaranty is the entire agreement of the
Guarantor and Landlord with respect to the subject matter hereof. This Guaranty
shall not be amended, modified or terminated nor may any of its provisions be
waived, except by a writing signed by Guarantor and Landlord.

      IN WITNESS WHEREOF, this Guaranty has been duly executed as of the date
first above written.

                               ________________________________

                               ________________________________
                               By: ____________________________
                               Title: _________________________

                             Exhibit H Page 4 of 5
<PAGE>

STATE OF                       )
                               ) ss.

COUNTY OF                      )

      The foregoing instrument was acknowledged before me this _____ day of
___________, ___, by _______________________ of ______________________________.

      My commission expires:_________________________

      Witness my hand and official seal.

                             Exhibit H Page 5 of 5
<PAGE>

                                   EXHIBIT I
                                       TO
                                     LEASE

                              FINANCIAL STATEMENT

                             Exhibit I Page 1 of 1

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