Document:

<PAGE>   1
                                                                   EXHIBIT 10.27

                                  OFFICE LEASE

                                       BY

                                       AND

                                     BETWEEN

                        CATELLUS DEVELOPMENT CORPORATION,

                             A DELAWARE CORPORATION,

                                   AS LANDLORD

                                       AND

                            ALLOS THERAPEUTICS, INC.,

                             A DELAWARE CORPORATION,

                                   AS TENANT.

                          CIRCLEPOINT CORPORATE CENTER

                              WESTMINSTER, COLORADO

<PAGE>   2

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                   Page
                                                                   ----
<S>    <C>                                                         <C>
1.     BASIC LEASE INFORMATION .......................................1

2.     PREMISES ......................................................1
       2.1    Premises ...............................................1
       2.2    Common Facilities ......................................1
       2.3    Reserved Rights ........................................1
       2.4    Parking ................................................2
       2.5    Right of First Offer ...................................2

3.     TERM ..........................................................3
       3.1    Initial Term ...........................................3
       3.2    Option to Extend .......................................4

4.     RENT ..........................................................5
       4.1    Base Rent ..............................................5
       4.2    Additional Rent ........................................6
       4.3    Late Charge and Interest ...............................6
       4.4    Security Deposit .......................................6

5.     SERVICES AND UTILITIES ........................................7
       5.1    Standard Tenant Services ...............................7
       5.2    Overstandard Tenant Use ................................8
       5.3    Interruption of Use ....................................8
       5.4    Abatement ..............................................8

6.     TAXES .........................................................9
       6.1    Real Property Taxes ....................................9
       6.2    Definition of Real Property Taxes ......................9
       6.3    Taxes on Tenant Improvements/Personal Property ........10

7.     OPERATING EXPENSES ...........................................10
       7.1    Operating Expenses ....................................10
       7.2    Definition of Operating Expenses ......................10
       7.3    Exclusions from Operating Expenses ....................11

8.     ESTIMATED EXPENSES ...........................................12
       8.1    Payment ...............................................12
       8.2    Adjustment ............................................12

9.     INSURANCE ....................................................12
       9.1    Landlord ..............................................12
       9.2    Tenant ................................................13
       9.3    General ...............................................13
       9.4    Indemnity .............................................14
       9.5    Exemption of Landlord from Liability ..................15

10.    REPAIRS AND MAINTENANCE ......................................15
       10.1   Tenant ................................................15
       10.2   Landlord ..............................................15

11.    ALTERATIONS ..................................................16
       11.1   Trade Fixtures; Alterations ...........................16
       11.2   Removal of Tenant's Property and Alterations ..........16
       11.3   Liens .................................................17
       11.4   Remodel ...............................................17

12.    USE ..........................................................17

13.    SIGNS ........................................................18

14.    DAMAGE AND DESTRUCTION .......................................18
       14.1   Landlord's Obligation to Rebuild ......................18
       14.2   Landlord's Right to Terminate .........................19
       14.3   Tenant's Right to Terminate ...........................19
       14.4   Abatement of Rent; Tenant's Fault .....................19
</Table>

                                       (v)
<PAGE>   3

<Table>
<Caption>
                                                                   Page
                                                                   ----
<S>    <C>                                                         <C>
       14.5   Damage Near End of Term ...............................19
       14.6   Insurance Proceeds ....................................19

15.    EMINENT DOMAIN ...............................................20
       15.1   Total Condemnation ....................................20
       15.2   Partial Condemnation ..................................20
       15.3   Award .................................................20
       15.4   Temporary Condemnation ................................20

16.    DEFAULT ......................................................20
       16.1   Events of Default .....................................20
       16.2   Notice ................................................21
       16.3   Remedies ..............................................21
       16.4   Cumulative ............................................22
       16.5   Mitigation of Damages .................................22

17.    DEFAULT BY LANDLORD ..........................................22

18.    ASSIGNMENT AND SUBLETTING ....................................22
       18.1   Landlord's Consent Required ...........................22
       18.2   General Provisions ....................................23
       18.3   Information to be Furnished ...........................23
       18.4   Landlord's Election ...................................23
       18.5   Termination ...........................................24
       18.6   Bonus Rental ..........................................24
       18.7   Executed Counterparts .................................24
       18.8   Permitted Transfers ...................................24
       18.9   Permitted Occupants ...................................25

19.    ESTOPPEL, ATTORNMENT AND SUBORDINATION .......................25
       19.1   Estoppel ..............................................25
       19.2   Subordination .........................................25
       19.3   Attornment ............................................25

20.    RELOCATION ...................................................25

21.    MISCELLANEOUS ................................................26
       21.1   General ...............................................26
       21.2   Waiver ................................................26
       21.3   Financial Statements ..................................27
       21.4   Limitation of Liability ...............................27
       21.5   Notices ...............................................27
       21.6   Commission ............................................27
       21.7   Authorization .........................................27
       21.8   Holding Over/Surrender ................................27
       21.9   Confidentiality .......................................28
       21.10  Covenants and Conditions ..............................28
       21.11  Use of Name, Filming and Photographs of Project .......28
       21.12  Force Majeure .........................................28
       21.13  Constant Dollars ......................................28
       21.14  Development of the Project ............................29
       21.15  Communication Equipment ...............................29
</Table>

                                      (vi)
<PAGE>   4

                                      INDEX

<Table>
<Caption>
                                                              Page(s)
                                                              -------
<S>                                                         <C>
Abatement Event ....................................................8
Abatement Notice ...................................................8
Additional Rent ....................................................6
Adjustment ........................................................12
Adjustment Dates ...................................................6
Affiliate .........................................................24
Affiliated Assignee ...............................................24
Alterations .......................................................16
Applicable Interest Rate ...........................................6
Applicable Laws ...................................................17
Approved Working Drawings ..................................Exhibit B
Architect ..................................................Exhibit B
Assignment ........................................................22
Base Rent .........................................................ii
BOMA ...............................................................1
Building ..........................................................ii
Building Hours .....................................................8
Building Specifications ....................................Exhibit B
Building Systems ..................................................17
Change Order ...............................................Exhibit B
Commencement Date .................................................ii
Common Facilities ..................................................1
Communication Equipment ...........................................29
Communication Equipment Notice ....................................29
Comparable Area ....................................................4
Condemned .........................................................20
Constant Dollars ..................................................28
Contemplated Effective Date .......................................24
Contractor .................................................Exhibit B
Control ...........................................................24
Cost Pools ........................................................11
Cost Proposal ..............................................Exhibit B
Cost Proposal Delivery Date ................................Exhibit B
Delay Notice .......................................................4
Delinquency Costs ..................................................6
Delivery Date .....................................................ii
Delivery Outside Date ..............................................3
Economic Terms .....................................................3
Effective Date .....................................................i
Eligibility Period .................................................9
Engineering Drawings .......................................Exhibit B
Engineers ..................................................Exhibit B
Estimated Delivery Date ...........................................ii
Estimated Expenses ................................................12
Event of Default ..................................................20
Expiration Date ...................................................ii
Extension Term .....................................................4
Final Space Plan ...........................................Exhibit B
Final Working Drawings .....................................Exhibit B
First Offer Notice .................................................3
First Offer Space ..................................................2
Force Majeure Event ...............................................28
Holidays ...........................................................8
Indemnified Parties ...............................................14
Intention to Transfer Notice ......................................24
Interest Rate .....................................................10
Landlord ...........................................................i
Landlord Claims ...................................................14
Landlord Indemnified Party ........................................14
Landlord Supervision Fee ...................................Exhibit B
Landlord's Work ............................................Exhibit B
Letter of Credit ...................................................6
Market Rent ........................................................4
Mortgagee .........................................................22
Objectionable Name ................................................18
</Table>

                                      (vii)

<PAGE>   5

<Table>
<Caption>
                                                              Page(s)
                                                              -------
<S>                                                         <C>
Occupant ..........................................................25
Operating Expenses ................................................10
Outside Agreement Date .............................................4
Over-Allowance Amount ......................................Exhibit B
Partial Cost Proposal ......................................Exhibit B
Permits ....................................................Exhibit B
Permitted Use .....................................................ii
Premises ...........................................................i
Project ...........................................................ii
Real Property Taxes ................................................9
Rent ...............................................................6
Rent Commencement Date ............................................ii
Repair Notice .....................................................19
Rules and Regulations .............................................18
Security Deposit ..................................................ii
Signs and graphics ................................................18
Six Month Period ..................................................24
Stated Amount ......................................................6
Subletting ........................................................23
Substantial Completion .....................................Exhibit B
Superior Leases ....................................................2
Superior Rights ....................................................3
Tenant .............................................................i
Tenant Delays ..............................................Exhibit B
Tenant Improvement Allowance ......................................ii
Tenant Improvements ........................................Exhibit B
Tenant Parties ....................................................10
Tenant Party ......................................................10
Tenant's Agents ............................................Exhibit B
Tenant's Percentage Share .........................................ii
Tenant's Percentage Share of Operating Expenses ...................10
Tenant's Percentage Share of Real Property Taxes ...................9
Tenant's Property .................................................17
Term ..............................................................ii
TI Allowance ...............................................Exhibit B
TI Allowance Items .........................................Exhibit B
time deadlines .............................................Exhibit B
Transfer Effective Date ...........................................23
Utility Installations .............................................16
Work Letter ................................................Exhibit B
Working Drawings ...........................................Exhibit B
</Table>

                                     (viii)
<PAGE>   6

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

CA                                                              CDC#
   -----------                                                       -----------

                                  OFFICE LEASE

                             BASIC LEASE INFORMATION

Effective Date:                        April __, 2001

Landlord:                              CATELLUS DEVELOPMENT CORPORATION, a
                                       Delaware corporation

Landlord's Address for Notice:         165 South Union Street, Suite 852
                                       Lakewood, Colorado 80228
                                       Attn: Property Manager
                                       CirclePoint Corporate Center
                                       Telephone: (303) 980-3485
                                       Fax: (303) 980-3493

with a copy to:                        201 Mission Street
                                       San Francisco, CA 94105
                                       Attn: Asset Management
                                       Telephone: (415) 974-4500
                                       Fax: (415) 974-4502

and:                                   201 Mission Street
                                       San Francisco, CA 94105
                                       Attn: Office of General Counsel
                                       Telephone: (415) 974-4500
                                       Fax: (415) 974-4613

Landlord's Address for                 Catellus Commercial Group, LLC
Payment of Rent:                       c/o Cushman & Wakefield of California -
                                       Agent
                                       P. O. Box 45258
                                       San Francisco, 94145-0258

Tenant:                                Allos Therapeutics, Inc.,
                                       a Delaware corporation
Tenant's Address for Notice:
       Prior to Commencement Date:     7000 North Broadway, Suite 400
                                       Denver, CO 80221
                                       Attn: Michael E. Hart
                                       Telephone: 303-426-6262
                                       Fax: 303-412-9160

       After Commencement Date:        Two Circle Point, Suite 200
                                       Westminster, CO 80020
                                       Attn:  Michael E. Hart
                                       Telephone: [TENANT TO PROVIDE TO LANDLORD
                                       BY COMMENCEMENT DATE]
                                       Fax: [TENANT TO PROVIDE TO LANDLORD BY
                                       COMMENCEMENT DATE]

       In either case, with a copy to: Hutchinson, Black and Cook, LLC
                                       921 Walnut St., Suite 200
                                       P.O. Box 1170
                                       Boulder, CO 80306
                                       Attn: Bruce D. Dierking, Esq.
                                       Telephone: (303) 442-6514
                                       Fax: (303) 442-6593

Premises:                              Approximately 31,228 rentable square feet
                                       comprising the entire second (2nd) floor
                                       of the Building and known as Suite 200,
                                       as more particularly shown in Exhibit
                                       A-1.

                                       -i-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   7

Building:                              That certain five (5) story building
                                       consisting of approximately 150,872
                                       rentable square feet, located and
                                       addressed at Two Circle Point in the
                                       Project known as CirclePoint Corporate
                                       Center in Westminster, Colorado
                                       ("PROJECT"), as more particularly
                                       depicted as Building "2" in Exhibit A-2,
                                       attached hereto.

Delivery Date:                         The date of Substantial Completion of
                                       Landlord's Work and the Tenant
                                       Improvements (as defined in Exhibit B)
                                       and of delivery of the Premises to
                                       Tenant, which date is estimated to be
                                       September 15, 2001 ("ESTIMATED DELIVERY
                                       DATE").

Rent Commencement Date:                The Rent Commencement Date shall be the
                                       Delivery Date.

Commencement Date:                     The first day of the first full calendar
                                       month after the Delivery Date unless the
                                       Delivery Date is the first day of a
                                       calendar month, in which event the
                                       Commencement Date shall be the Delivery
                                       Date.

Expiration Date:                       The Expiration Date shall be the date
                                       that is seven (7) years and one (1) month
                                       after the Commencement Date.

Term:                                  Seven (7) years and one (1) month.

<Table>
<Caption>
Base Rent:                             Month of
                                         Term        Annual Base Rent       Monthly Base Rent
<S>                                    <C>           <C>                    <C>
                                         1-30*              [*]                    [*]

                                         31-60              [*]                    [*]

                                         61-84              [*]                    [*]

                                          85                [*]                    [*]
</Table>

                                       *Plus the period of time, if any, between
                                       the Rent Commencement Date and the
                                       Commencement Date and subject to
                                       abatement pursuant to Section 4.1 below.
                                       **Subject to adjustment based on as-built
                                       measurements pursuant to Section 2.1
                                       below.

Tenant's Percentage Share:             Twenty point seven percent (20.7%)**

Permitted Use:                         General office use (including, without
                                       limitation but subject to Applicable
                                       Laws, corporate offices, administrative
                                       offices, professional offices, and
                                       offices used for software development,
                                       engineering, research, design,
                                       development, data processing, publishing,
                                       telecommunications services, internet
                                       services and any lawful related uses) and
                                       no other uses shall be permitted without
                                       the prior written consent of Landlord,
                                       which consent may be given or withheld in
                                       Landlord's sole and absolute discretion.
                                       In no event shall Tenant be permitted to
                                       use the Premises for any laboratory or
                                       biotechnical purposes.

Security Deposit:                      [*] (Letter of Credit - See Section 4.4)

Tenant Improvement Allowance:          [*] (subject to adjustment as provided in
                                       Section 2.1 of Exhibit B)

Tenant's Broker:                       Equis Corporation

                                      -ii-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   8

EXHIBITS

       A-1    --     Premises

       A-2    --     Project

       B      --     Work Letter

       C      --     Commencement Date Memorandum

       D      --     Rules and Regulations

       E      --     Estoppel Certificate

                                      -iii-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   9

1. BASIC LEASE INFORMATION. The Basic Lease Information set forth on the
preceding pages and the Exhibits attached hereto are incorporated into and made
a part of this Lease. In the event of any conflict between the Basic Lease
Information and the other provisions of this Lease, the latter shall control.

2. PREMISES.

         2.1 Premises. Subject to the terms and conditions set forth in this
Lease, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord,
the Premises as shown on Exhibit A-1. Tenant has determined that if constructed
in accordance with this Lease, the Premises will be acceptable for Tenant's use
and Tenant acknowledges that neither Landlord nor any broker or agent has made
any representations or warranties in connection with the physical condition of
the Premises or their fitness for Tenant's use. Within thirty (30) days after
the Delivery Date, Landlord's space measurement consultant shall verify in
writing to Tenant the number of rentable square feet contained in the Premises
and the Building, and such verification shall be made in accordance with the
Standard Method for Measuring Floor Area in Office Buildings, ANSI/BOMA Z65.1 -
1996 ("BOMA"). In the event that Landlord's space measurement consultant
determines that the amounts thereof shall be different from those set forth in
this Lease, Landlord shall modify all amounts, percentages and figures appearing
or referred to in this Lease to conform to such corrected rentable square
footage (including, without limitation, the amount of Base Rent and Tenant's
Percentage Share). If such modification is made, it will be confirmed in writing
by Landlord to Tenant. Tenant's architect shall have the opportunity, but only
within ten (10) days after Landlord's written notice to Tenant of the verified
number of rentable square feet (after which time Tenant shall have no right to
object to such verification as provided hereinbelow), to consult with Landlord's
space measurement consultant regarding such verification to confirm that
Landlord's space measurement consultant's determination is accurate and in
accordance with BOMA; provided, however, that Tenant shall notify Landlord in
writing of any objection to such determination no later than three (3) days
after Tenant's consultation with Landlord's space measurement consultant.
Tenant's failure to timely object to Landlord's determination shall be deemed
Tenant's acceptance of such determination and such determination shall then be
conclusive and binding upon the parties. Tenant's objection notice, if any,
shall include the basis for Tenant's objection to such determination in
sufficient detail to allow Landlord's space measurement consultant to
investigate such objection. Landlord's space measurement consultant shall, no
later than fifteen (15) days after Landlord's receipt of Tenant's objection
notice, provide Tenant with a second determination (which may or may not be
revised from the first determination based on such consultant's reasonable
applicable of BOMA standards), which second determination shall then be
conclusive and binding upon the parties.

         2.2 Common Facilities. "COMMON FACILITIES" shall mean all areas,
facilities, utilities, equipment and services within the Building and Project
provided by Landlord for the common use or benefit of the tenants of the
Building and Project including, without limitation, pedestrian walkways, malls
and courts, parks and varas, driveways and access roads, parking facilities,
entrances and exits, truck service ways, loading docks, landscaped areas,
stairways, elevators, lobbies, common corridors and hallways, restrooms and all
offsite areas Landlord is required to maintain under the provisions of
applicable governmental requirements. Tenant and its employees and business
invitees shall be entitled to use the Common Facilities during the Term, in
common with Landlord and with other persons authorized by Landlord from time to
time, subject to the Rules and Regulations. Tenant expressly covenants that its
use of the Common Facilities shall comply with the Rules and Regulations,
including those established for shipping and receiving of goods. Anything in
this Lease to the contrary notwithstanding, it is expressly understood and
agreed that the designation or use from time to time of portions of the Common
Facilities shall not restrict Landlord's use of such areas for such purposes as
Landlord shall determine in its commercially reasonable discretion.
Notwithstanding anything to the contrary contained herein, Tenant hereby agrees
and acknowledges that because (and so long as) Tenant is leasing an entire floor
in the Building and is thereby entitled to exclusive use of the lobby located on
such floor, such lobby shall not be included in the Common Facilities and
Landlord shall have no obligation whatsoever to maintain, repair and/or
otherwise service such lobby. In the event that Tenant no longer leases an
entire floor in the Building, Tenant shall no longer have exclusive use of such
lobby area and such lobby area shall be included in the Common Facilities
hereunder.

         2.3 Reserved Rights. Landlord will operate and maintain the Common
Facilities in such manner as Landlord, in its commercially reasonable discretion
shall determine from time to time, and the cost thereof shall be included in
Operating Expenses. Notwithstanding anything to the contrary contained in this
Lease, Landlord reserves the right to do the following from time to time,
provided that such activities do not materially, adversely affect Tenant's use,
occupancy, or enjoyment of the Premises or Common Facilities or materially
increase Tenant's costs under this Lease, but subject to the requirements of
Applicable Law: (i) relocate, alter, improve, adjust or modify the size of any
Common Facilities; provided, however, that Landlord shall use reasonable efforts
not to materially and adversely affect Tenant's access to the Premises; (ii)
construct, maintain and operate lighting on the Common Facilities and in the
Project; (iii) modify the Common Facilities including, without limitation, the
parking facilities;

                                       -1-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   10
(iv) close temporarily or permanently all or any portion of the Common
Facilities and (v) do and perform such other acts in and to the Common
Facilities that Landlord determines may improve the convenience and use thereof
by tenants and their officers, agents, employees and customers. The Common
Facilities shall at all times be subject to the exclusive control and management
of Landlord and Landlord shall have the right from time to time to establish,
modify and enforce reasonable rules and regulations with respect to the Common
Facilities and any other portions of the Project; provided, however, that no
such rules or regulations shall have any material adverse impact on Tenant's
operations in the Premises or materially increase Tenant's costs under this
Lease, and further provided that Landlord shall use commercially reasonable
efforts to enforce such rules and regulations uniformly among tenants of the
Building and/or Project. Landlord reserves unto itself and its designees the
exclusive right to use the roof, exterior walls and areas beneath the floor and
above the ceiling of the Premises; provided, however, that Landlord agrees,
subject to Landlord's approval and supervision, to give Tenant reasonable access
to and use of the area above the ceiling of the Premises solely for Tenant's
installation and servicing of pipes, vents, conduits, VAV boxes and related
equipment. In addition, Landlord reserves the right to enter the Premises upon
reasonable prior notice to Tenant (except in case of an emergency or for
regularly scheduled maintenance and services, in which event no notice shall be
required) and/or to undertake the following: (a) access and inspect the Premises
to confirm the performance by Tenant of the provisions of this Lease and/or to
access mechanical installations therein; (b) install, use, maintain, repair,
alter, relocate or replace any Common Facilities and any pipes, ducts, conduits,
wires, utility lines, shafts, appurtenant meters and mechanical, electrical and
plumbing equipment and other facilities under, over or through the Premises, in
locations that will not materially interfere with Tenant's use of the Premises
for the Permitted Use; (c) record covenants, conditions and restrictions
("CC&Rs") affecting the Project and/or amendments to the CC&Rs; provided,
however, that no such CC&Rs or amendments thereto shall have any material
adverse impact on Tenant's operations in the Premises or materially increase
Tenant's costs under this Lease; (d) change the name of the Building or the
Project; (e) affix signs and displays in, on or to the Building and/or the
Project including, without limitation, signs for the rental of the Premises
and/or sale of all or any portion of the Building or the Project; and (f) show
the Premises to existing and potential Mortgagees, potential purchasers and,
during the last twelve (12) months of the Term, potential tenants.

         2.4 Parking. During the initial Lease Term and the first (1st)
Extension Term only, if any, and provided that Tenant is leasing at least the
number of rentable square feet initially leased hereunder (as such initial
square footage number may be adjusted pursuant to Section 2.1 above), Tenant
shall rent [*] parking spaces but Tenant shall not be required to pay any
monthly rental fee therefor during such initial Lease Term and the first (1st)
Extension Term only, if any (the number of parking spaces and the monthly rental
fee therefor for the second (2nd) Extension Term, if any, to be subject to
determination pursuant to Section 3.2 below). Each such parking space so rented
by Tenant shall permit Tenant's officers, agents and employees to park one (1)
passenger vehicle in the Project's parking facilities, on an unreserved,
as-available basis, and in compliance with any applicable, reasonable rules and
regulations promulgated by Landlord and/or other Applicable Laws (as defined
hereinbelow), throughout the Lease Term. Landlord reserves the right to (i)
adopt and/or discontinue a parking validation program, (ii) institute and/or
discontinue valet parking, (iii) designate or redesignate specific areas within
the Project for use by Tenant and its officers, agents and employees, and
restrict parking by Tenant and its officers, agents and employees to those
specific areas (provided, however, that any specific areas so designated for
Tenant's use shall be reasonably convenient to the Premises and of substantially
equal or better quality than the specific areas designated for the use of the
majority of other tenants of the Building), and (iv) designate or redesignate
specific parking spaces for the exclusive or non-exclusive use of specific
tenants in the Project (provided, however, that any specific areas so designated
for Tenant's use shall be reasonably convenient to the Premises and of
substantially equal or better quality than the specific areas designated for the
use of any other tenant of the Building). Tenant agrees not to overburden the
parking facilities and agrees to cooperate with Landlord and other tenants of
the Project in the use of parking facilities. Tenant agrees to assume
responsibility for compliance by its employees and agents with any applicable
rules and regulations promulgated by Landlord and/or other Applicable Laws (as
defined hereinbelow).

         2.5 Right of First Offer. Landlord hereby grants to Tenant a right of
first offer with respect to all leasable space on the [*] and [*] floors of the
Building (collectively, the "FIRST OFFER SPACE"). Notwithstanding the foregoing
(i) such first offer right of Tenant shall commence only following the
expiration or earlier termination of (A) any existing lease pertaining to the
First Offer Space, and (B) as to any First Offer Space that is vacant as of the
date of this Lease, the first lease pertaining to any portion of such First
Offer Space entered into by Landlord after the date of this Lease (collectively,
the "SUPERIOR LEASES"), including any renewal or extension of such existing or
future lease, whether or not such renewal or extension is pursuant to an express
written provision in such lease, and regardless of whether any such renewal or
extension is consummated pursuant to a lease amendment or a new lease, and (ii)
such first offer right shall be subordinate and secondary to all rights of
expansion, first refusal, first offer or similar rights granted to (A) the
tenants of the Superior Leases, (B) any other tenant of the Building or the
Project under a lease existing as of the date hereof (the rights described in
items (i) and (ii) above to be known

                                       -2-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   11

collectively as "SUPERIOR RIGHTS"). Tenant's right of first offer shall be on
the terms and conditions set forth in this Section 2.5.

                  2.5.1 Procedure for Offer. Landlord shall notify Tenant (the
"FIRST OFFER NOTICE") from time to time when Landlord determines that Landlord
shall commence the marketing of any First Offer Space because such space shall
become available for lease to third parties, where no holder of a Superior Right
desires to lease such space. The First Offer Notice shall describe the space so
offered to Tenant and shall set forth Landlord's proposed economic terms and
conditions applicable to Tenant's lease of such space, including the proposed
term (collectively, the "ECONOMIC TERMS"). Notwithstanding the foregoing,
Landlord's obligation to deliver the First Offer Notice shall not apply during
the last six (6) months of the initial Term unless Tenant has delivered a notice
to Landlord indicating Tenant's exercise of its option to extend the Lease
pursuant to Section 3.2 below.

                  2.5.2 Procedure for Acceptance. If Tenant wishes to exercise
Tenant's right of first offer with respect to the space described in the First
Offer Notice, then within ten (10) calendar days after delivery of the First
Offer Notice to Tenant, Tenant shall deliver notice to Landlord of Tenant's
intention to exercise its right of first offer with respect to the entire space
described in the First Offer Notice. If concurrently with Tenant's exercise of
the first offer right, Tenant notifies Landlord that it does not accept the
Economic Terms set forth in the First Offer Notice, Landlord and Tenant shall,
for a period of twenty- one (21) calendar days after Tenant's exercise,
negotiate in good faith to reach agreement as to such Economic Terms. If Tenant
does not so notify Landlord that it does not accept the Economic Terms set forth
in the First Offer Notice concurrently with Tenant's exercise of the first offer
right, the Economic Terms shall be as set forth in the First Offer Notice. In
addition, if Tenant does not exercise its right of first offer within the ten
(10) calendar day period, or, if Tenant exercises its first offer right but
timely objects to Landlord's determination of the Economic Terms and if Landlord
and Tenant are unable to reach agreement on such Economic Terms within said
twenty-one (21) calendar day period, then Landlord shall be free to lease the
space described in the First Offer Notice to anyone to whom Landlord desires and
Tenant's right of first offer shall terminate as to the space described in the
First Offer Notice. Notwithstanding anything to the contrary contained herein,
Tenant must elect to exercise its right of first offer, if at all, with respect
to all of the space offered by Landlord to Tenant at any particular time, and
Tenant may not elect to lease only a portion thereof.

                  2.5.3 Lease of First Offer Space. If Tenant timely exercises
Tenant's right to lease the space described in the First Offer Notice as set
forth herein, Landlord and Tenant shall execute an amendment adding such First
Offer Space to this Lease upon the same non-economic terms and conditions as
applicable to the initial Premises and the Economic Terms as provided in this
Section 2.5.

                  2.5.4 No Defaults. The rights contained in this Section 2.5
shall be personal to the original Tenant named in this Lease, and may only be
exercised by the original Tenant and any Affiliated Assignee (and not any other
assignee, sublessee or other transferee of the original Tenant's interest in
this Lease) if the original Tenant or any Affiliated Assignee physically
occupies at least eighty percent (80%) of the entire Premises as of the date of
the First Offer Notice. Tenant shall not have the right to lease First Offer
Space as provided in this Section 2.5 if, as of the date of the First Offer
Notice, or, at Landlord's option, as of the scheduled date of delivery of such
First Offer Space to Tenant, an Event of Default exists under this Lease (and
has not been cured within any applicable grace or cure period provided herein)
or if Tenant or any Affiliated Assignee does not physically occupy at least
eighty percent (80%) of the entire Premises.

3. TERM.

         3.1 Initial Term. The Term shall commence on the Commencement Date and
shall continue in full force and effect for the period of time specified as the
Term or until this Lease is terminated as otherwise provided herein. During the
period from the Delivery Date to the Commencement Date, all terms and provisions
of this Lease shall apply, except that Tenant's obligations to pay Rent shall
commence as of the Rent Commencement Date. Tenant, upon demand after
commencement of the Term, shall execute and deliver to Landlord a Commencement
Date Memorandum in the form attached hereto as Exhibit C acknowledging (a) the
Commencement Date, the Rent Commencement Date and the Expiration Date, (b) the
rentable square footage of the Premises, and (c) Tenant's acceptance of the
Premises. If for any reason the Delivery Date has not occurred by the Estimated
Delivery Date, this Lease shall remain in effect and Landlord shall not be
liable to Tenant for any loss or damage resulting therefrom; provided, however,
that if the Delivery Date has not occurred by December 31, 2001 (the "DELIVERY
OUTSIDE DATE"), as a result of any reason other than Tenant Delays or Force
Majeure Events, Tenant shall have the right to terminate this Lease upon written
notice delivered to Landlord no later than the date that is fifteen (15) days
after the Delivery Outside Date (such termination to be effective upon the date
of Tenant's notice). Notwithstanding the foregoing, if prior to commencement of
construction of the Tenant Improvements, Landlord determines in its good faith
judgment that, by utilizing commercially reasonable efforts, the Delivery Date
will not occur by the Delivery Outside Date, Landlord may give Tenant written
notice thereof prior to the date Landlord commences construction of the Tenant
Improvements (the

                                       -3-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   12

"DELAY NOTICE"), which Delay Notice shall inform Tenant of Landlord's estimate
of a revised Delivery Outside Date, as applicable. If Landlord delivers the
Delay Notice, Tenant may elect to terminate this Lease by giving Landlord
written notice thereof within ten (10) business days following delivery of the
Delay Notice. If Tenant does not so elect to terminate this Lease, then the
revised Delivery Outside Date set forth in the Delay Notice shall be substituted
for the date set forth above.

         3.2 Option to Extend.

                  3.2.1 Terms of Option. Provided that (i) an Event of Default
under this Lease does not exist at the time this extension option is exercised
or, at Landlord's option, at the scheduled commencement of the Extension Term
(and such Event of Default is not cured within any applicable cure period
provided herein), (ii) the original Tenant under this Lease (or an Affiliated
Assignee) is physically occupying at least eighty percent (80%) of the entire
Premises at the time this extension option is exercised and, at Landlord's
option, at the scheduled commencement of the Extension Term, (iii) Landlord has
not given more than two (2) notices of default in any twelve (12) month period
for nonpayment of monetary obligations and (iv) as of the date this extension
option is exercised and at the scheduled commencement of the Extension Term,
Tenant's (or any Affiliated Assignee's) net worth, as determined in accordance
with generally accepted accounting principles, is at least [*] Constant Dollars
[*], Tenant shall have the option to extend the Term (provided that the Premises
contain at least as many rentable square feet as initially leased hereunder, as
such initial square footage number may be adjusted pursuant to Section 2.1
above) for two (2) additional periods of five (5) years each (each, an
"Extension Term"). Landlord shall lease the Premises to Tenant during an
Extension Term on all the terms and conditions of this Lease, except that
Landlord shall have no additional obligation for free rent, tenant improvements
or for any other tenant inducements for the Extension Term (or for free parking
during the second (2nd) Extension Term, if any). During an Extension Term, the
Base Rent shall be increased (or decreased but in no event to an amount less
than ninety-five percent (95%) of the Base Rent in effect for the month
immediately preceding the Extension Term) to the Market Rent for the Premises
during the Extension Term as set forth below, and the Security Deposit will be
increased to reflect any increase in Base Rent payable under this Lease. There
shall be no additional extension terms beyond the Extension Terms set forth
herein. Tenant must exercise its option to extend this Lease by giving Landlord
written notice of its election to do so no later than six (6) months prior to
the end of the initial Term (or the first Extension Term, as applicable). Any
notice not given in a timely manner shall be void, and Tenant shall be deemed to
have waived its extension option hereunder. The extension option set forth
herein is personal to the original Tenant under this Lease and it shall not be
included in any assignment of Tenant's interest in this Lease (except to an
Affiliated Assignee) nor in any sublease of all or any portion of the Premises.

                  3.2.2 Determination of Base Rent During Extension Term.

                           3.2.2.1 Agreement on Base Rent. Landlord and Tenant
shall have until that date that is one hundred twenty (120) days prior to the
expiration of the initial Term, or the first Extension Term, as applicable (the
"OUTSIDE AGREEMENT DATE") in which to agree on the Base Rent during an Extension
Term (and as to the second (2nd) Extension Term only, the number of parking
spaces and the monthly rental fee therefor). Notwithstanding anything in this
Section to the contrary, in no event shall the Base Rent for an Extension Term
be less than [*] of the Base Rent in effect for the month immediately prior to
the Extension Term.

                           3.2.2.2 Arbitration. If Landlord and Tenant are
unable to agree upon the Base Rent for an Extension Term (and as to the second
(2nd) Extension Term only, the number of parking spaces and the monthly rental
fee therefor) prior to the Outside Agreement Date, then, within fifteen (15)
days following the Outside Agreement Date, each party shall submit to the other
party a separate written determination of the Market Rent (and parking
specifications, if applicable), and such determinations shall be submitted to
arbitration in accordance with clauses (A) through (G) below. Failure of Tenant
or Landlord to submit a written determination of the Market Rent within the
required period shall conclusively be deemed to be the non-determining party's
approval of the Market Rent submitted within such required period by the other
party.

                                    (A) Each party, by giving written notice to
the other party, shall appoint a real estate appraiser who is a current member
of the American Institute of Real Estate Appraisers, with at least five (5)
years of experience appraising first-class office building space comparable to
the Premises in the Comparable Area (as defined below) to determine the Market
Rent. "MARKET RENT" shall mean the monthly base rent amount per rentable square
foot in the Premises that a willing, non-equity new tenant would pay and a
willing landlord would accept at arm's length for a term comparable to and
commencing upon approximately the same time as the Extension Term for non-
sublease space in the Project or in comparable first-class office buildings with
prudent ownership (with management practices comparable with institutional
ownership), along the Boulder Turnpike from Denver to Boulder (the "COMPARABLE
AREA"), with comparable tenant improvements, in a comparable location, giving
appropriate consideration to monthly rental rates per rentable square foot, the
presence or

                                       -4-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   13

absence of rent escalation clauses such as operating expense and tax
pass-throughs, length of lease term, size and location of premises being leased,
free rent or any other similar tenant concessions or inducements, and other
generally applicable terms and conditions of tenancy for a similar building or
buildings. The determination of the appraisers shall be limited solely to the
issue of whether Landlord's or Tenant's submitted Market Rent is the closest to
the actual Market Rent as determined by such appraisers, taking into account the
definition of Market Rent as set forth above (i.e., the appraisers may only
select Landlord's or Tenant's determination but not a compromise position). Each
such appraiser shall be appointed within thirty (30) days after the Outside
Agreement Date.

                                    (B) The two (2) appraisers so appointed
shall, within ten (10) days of the date of the appointment of the last appointed
appraiser, agree upon and appoint a third appraiser who shall be qualified under
the same criteria as set forth above for qualification of the initial two (2)
appraisers.

                                    (C) The three (3) appraisers shall within
twenty (20) days after the appointment of the third appraiser reach a decision
as to whether Landlord's or Tenant's submitted Market Rent is the closest to the
actual Market Rent, and shall use the closest of Landlord's or Tenant's
submitted Market Rent as the Base Rent for the Extension Term, and shall notify
Landlord and Tenant thereof in writing.

                                    (D) The decision of the majority of the
three (3) appraisers shall be binding upon Landlord and Tenant.

                                    (E) If either Landlord or Tenant fails to
appoint an appraiser within thirty (30) days after the Outside Agreement Date,
the appraiser appointed by the other party shall reach a decision, notify
Landlord and Tenant thereof, and such appraiser's decision shall be binding upon
Landlord and Tenant.

                                    (F) If the two (2) appraisers fail to agree
upon and appoint a third appraiser within the time period provided in clause (B)
above, then Landlord and Tenant shall mutually select the third appraiser. If
Landlord and Tenant are unable to agree upon the third appraiser within ten (10)
days after the expiration of the time period in Clause (B) above, then either
party may, upon at least five (5) days' prior written notice to the other party,
request the Presiding Judge of the Jefferson County District Court, acting in
such judge's private and nonjudicial capacity, to appoint the third appraiser.
Following the appointment of the third appraiser, the panel of appraisers shall
within twenty (20) days thereafter reach a decision as to whether Landlord's or
Tenant's submitted Market Rent shall be used and shall notify Landlord and
Tenant thereof.

                                    (G) The fees of the appraisers and the costs
of the appraisal proceeding shall be paid by the non-prevailing party.

                           3.2.2.3 Amendment of Lease. Immediately after the
Base Rent for an Extension Term is determined pursuant to this Section 3.2,
Landlord and Tenant shall execute an amendment to this Lease stating the new
Base Rent in effect. In recognition that the Market Rent may not be determined
until after the commencement of an Extension Term, Tenant shall pay, during the
Extension Term until the Market Rent is determined, the amount of Rent
(including Base Rent and all other charges) in effect as of the expiration of
the initial Term of this Lease (or First Extension Term, as applicable). Under
no circumstances shall the Base Rent during an Extension Term ever be less than
[*] of such amount of Base Rent in effect as of the expiration of the initial
Term of the Lease (or First Extension Term, as applicable), regardless of the
Market Rent as determined in accordance with the foregoing provisions. If the
Market Rent is determined to be greater than such amount, Tenant shall pay
Landlord, within thirty (30) days after written request therefor, the difference
between the amount required by such determination of the Market Rent and the
amount of Base Rent theretofore paid by Tenant during the Extension Term.

4. RENT.

         4.1 Base Rent. Tenant shall pay to Landlord, at Landlord's Address for
Payment of Rent designated in the Basic Lease Information, or at such other
address as Landlord may from time to time designate in writing to Tenant for the
payment of Rent, the Base Rent, without notice, demand, offset or deduction
(except as otherwise provided herein), in advance, on the first day of each
calendar month during the Term commencing on the Rent Commencement Date. Upon
the execution of this Lease, Tenant shall pay to Landlord the Base Rent due for
the first full calendar month during the Term after the Rent Commencement Date
and any abatement period. If the Rent Commencement Date occurs on a date other
than the first day of a month or the Term ends on a date other than the last day
of a month, Base Rent shall be prorated on the basis of a thirty (30) day month.

                                       -5-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   14

         Notwithstanding anything to the contrary contained herein and provided
that Tenant faithfully performs all of the terms and conditions of this Lease,
Landlord hereby agrees to abate Tenant's obligation to pay monthly Base Rent for
the first (1st) full month of the initial Lease Term. During such abatement
period, Tenant shall still be responsible for the payment of all of its other
monetary obligations under this Lease, including Tenant's Percentage Share of
Operating Expenses and Real Estate Taxes. In the event of a default by Tenant
under the terms of this Lease that results in early termination pursuant to the
provisions of Section 16.3 of this Lease, then as a part of the recovery set
forth in such Section 16.3 of this Lease, Landlord shall be entitled to the
recovery of the monthly Base Rent that was abated under the provisions of this
Section 4.1.

         4.2 Additional Rent. All sums other than Base Rent that Tenant is
obligated to pay under this Lease, including Tenant's Percentage Share of Real
Property Taxes and Operating Expenses, shall be deemed to be "Additional Rent"
due hereunder, whether or not such sums are designated as Additional Rent. Base
Rent and Additional Rent are collectively referred to herein as "RENT."

         4.3 Late Charge and Interest. The late payment of any Rent will cause
Landlord to incur additional costs, including administration and collection
costs, processing and accounting expenses and increased debt service (the
"DELINQUENCY COSTS"). If Landlord has not received any installment of Rent
within five (5) days after such amount is due, Tenant shall pay to Landlord (a)
for the first such delinquency in any calendar year, a one-time late charge of
five percent (5%) of the delinquent amount, and (b) for the second and any
subsequent delinquencies in any calendar year, a one-time late charge of ten
percent (10%) of the delinquent amount, which amounts are agreed to represent a
reasonable estimate of the Delinquency Costs incurred by Landlord. In addition,
all such delinquent amounts shall bear interest from the date such amount was
due until paid in full at the Applicable Interest Rate. Landlord and Tenant
recognize that the damage that Landlord shall suffer as a result of Tenant's
failure to pay such amounts is difficult to ascertain and said late charge and
interest are the best estimate of the damage that Landlord shall suffer in the
event of late payment. If a late charge becomes payable for any three (3)
installments of Rent within any twelve (12) month period, then the Rent shall
automatically become due and payable quarterly in advance. "APPLICABLE INTEREST
RATE" shall mean a rate per annum equal to the lesser of (i) the maximum
interest rate permitted by law or (ii) five percent (5%) above the rate publicly
announced by Bank of America, N.A. (or if Bank of America, N.A. ceases to exist,
the largest bank then headquartered in the State of Colorado) (the "Bank") as
its "Reference Rate." If the use of the announced Reference Rate is discontinued
by the Bank, then the term Reference Rate shall mean the announced rate charged
by the Bank that is, from time to time, substituted for the Reference Rate.

         4.4 Security Deposit.

                  4.4.1 Letter of Credit. No later than May 15, 2001, Tenant
shall deliver to Landlord an unconditional, irrevocable and renewable letter of
credit ("LETTER OF CREDIT") in favor of Landlord in a form approved by Landlord,
issued by a bank approved by Landlord with a branch located in Denver, Boulder
or Westminster, Colorado, (which approval shall not be unreasonably withheld,
conditioned or delayed) in the principal amount ("STATED AMOUNT") specified
below, as security for the faithful performance and observance by Tenant of the
terms, provisions and conditions of this Lease. If Tenant fails to deliver the
Letter of Credit by May 15, 2001, and such failure is not cured within five (5)
days after written notice to Tenant, then such failure shall be an Event of
Default hereunder. If the issuer of the Letter of Credit shall become insolvent
or fail to maintain at least an "A" issuer rating under the Thomson Financial
Bank Watch or an equivalent rating service reasonably selected by Landlord, then
Tenant shall, within thirty (30) days of receipt of Landlord's written notice,
cause a replacement Letter of Credit to be issued by a bank that qualifies under
the foregoing requirements. Tenant shall pay all expenses, points and/or fees
incurred by Tenant in obtaining the Letter of Credit. The Stated Amount shall
be[*]; provided, however, that upon the dates specified below ("ADJUSTMENT
DATES"), the Stated Amount shall be reduced to the following amounts:

<Table>
<Caption>
                   Anniversary of
                 Commencement Date                    Stated Amount
                 -----------------                    -------------
<S>                      <C>
                         4th                               [*]

                         5th                               [*]

                         6th                               [*]
</Table>

         However, if (i) an Event of Default occurs under this Lease, or (ii)
circumstances exist that would, with notice or lapse of time, or both,
constitute an Event of Default, and Tenant has failed to cure such circumstance
within the time period permitted by Section 16 or such lesser time as may remain
before the relevant Adjustment Date as provided above (including, without
limitation, a failure to deposit the cash Security Deposit pursuant to Section
4.4.2 below), the Stated Amount shall not thereafter be reduced unless and until
such default or circumstance shall have been fully cured pursuant to the terms
of

                                       -6-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   15

this Lease, at which time the Stated Amount may be reduced as hereinabove
described. The Letter of Credit shall state that an authorized officer or other
representative of Landlord may make demand on Landlord's behalf for the Stated
Amount of the Letter of Credit, or any portion thereof, and that the issuing
bank must immediately honor such demand, without qualification or satisfaction
of any conditions, except the proper identification of the party making such
demand, and the signed certification of such party that (a) an Event of Default
by Tenant has occurred under the Lease and that Tenant has not cured such Event
of Default within the applicable grace or cure periods provided under this Lease
and/or (b) the term of the Letter of Credit will expire prior to thirty (30)
days following the last day of the Term and has not been extended, nor has a new
Letter of Credit for an extended period of time been substituted at least thirty
(30) days prior to the expiration of the Letter of Credit. In addition, the
Letter of Credit shall indicate that it is transferable in its entirety by
Landlord as beneficiary and that upon receiving written notice of transfer, and
upon presentation to the issuing bank of the original Letter of Credit, the
issuer or confirming bank will reissue the Letter of Credit naming such
transferee as the beneficiary. Tenant shall pay to Landlord, within thirty (30)
days following written request therefor, any transfer fee payable by Landlord to
the issuer in connection with such transfer; provided, however, that Tenant
shall not be obligated to pay for more than one (1) transfer in any twenty-four
(24) month period (Landlord to pay for any transfers subsequent to the first
such transfer in any such twenty-four (24) month period). If the term of the
Letter of Credit held by Landlord will expire prior to thirty (30) days
following the last day of the Term and it is not extended, or a new Letter of
Credit for an extended period of time is not substituted, at least thirty (30)
days prior to the expiration of the Letter of Credit, then Landlord shall be
entitled to make demand for the Stated Amount of said Letter of Credit and,
thereafter, to hold such funds in accordance with this Section 4.4. The Letter
of Credit and any such proceeds thereof shall be held by Landlord as security
for the faithful performance by Tenant of all of the terms, covenants and
conditions of this Lease. If Tenant fails to perform fully and timely all or any
of Tenant's covenants and obligations hereunder, Landlord may (but shall not be
required to) draw upon all or any portion of the Stated Amount of the Letter of
Credit, and Landlord may then use, apply or retain all or any part of the
proceeds for the payment of any sum which is in default, or for the payment of
any other amount which Landlord may spend or become obligated to spend by reason
of Tenant's failure or to compensate Landlord for any loss or damage which
Landlord may suffer by reason of Tenant's failure. If any portion of the
proceeds of the Letter of Credit are so used or applied, Tenant shall, within
ten (10) days after demand therefor, post an additional Letter of Credit in an
amount to cause the aggregate amount of the unused proceeds and such new Letter
of Credit to equal the total Stated Amount required in this Section 4.4.1 above.
Landlord shall not be required to keep any proceeds from the Letter of Credit
separate from its general funds. Should Landlord sell its interest in the
Premises during the Term, Landlord shall deposit with the purchaser thereof the
Letter of Credit or any proceeds of the Letter of Credit, and provided that such
purchaser agrees in writing to be bound by the terms of this Lease that apply to
the Letter of Credit under this Section 4.4.1 as assignee of Landlord, thereupon
Landlord shall be discharged from any further liability with respect to the
Letter of Credit and said proceeds.

                  4.4.2 Cash Security Deposit. Tenant shall deposit with
Landlord, on or before the 6th anniversary of the Rent Commencement Date, an
amount equal to the last month's Base Rent [*] (subject to adjustment based upon
the as-built measurement verification specified in Section 2.1), which amount
Landlord shall hold as a Security Deposit hereunder to secure the full and
faithful performance of each provision of this Lease to be performed by Tenant.
Landlord shall not be required to pay interest on the Security Deposit or to
keep the Security Deposit separate from Landlord's own funds. If Tenant fails to
perform fully and timely all or any of Tenant's covenants and obligations
hereunder, Landlord may, but without obligation, apply all or any portion of the
Security Deposit toward fulfillment of Tenant's unperformed covenants and/or
obligations. If Landlord does so apply any portion of the Security Deposit,
Tenant shall immediately pay to Landlord an amount sufficient to restore the
Security Deposit to an amount equal to the greater of (i) the amount of the
Security Deposit immediately before Landlord's application of a portion of the
Security Deposit or (ii) the amount of the then current Base Rent per month.
Upon any increase in Base Rent, Landlord may require Tenant to increase the
Security Deposit by the amount of the increase in Base Rent per month. Within
sixty (60) days after the later of (a) the date Tenant vacates the Premises or
(b) the expiration or sooner termination of this Lease, if Tenant is not then in
default, Landlord shall return to Tenant any unapplied balance of the Security
Deposit. Tenant hereby waives the provisions of any law, now or hereafter in
force, which provide that Landlord may claim from a security deposit only those
sums reasonably necessary to remedy defaults in the payment of rent, to repair
damage caused by Tenant or to clean the Premises, it being agreed that Landlord
may, in addition, claim those sums reasonably necessary to compensate Landlord
for any other loss or damage, foreseeable or unforeseeable, caused by the act or
omission of Tenant or any of the Tenant Parties.

5. SERVICES AND UTILITIES.

         5.1 Standard Tenant Services. Subject to the terms and provisions of
this Lease, Tenant shall be allowed to use the Premises on a twenty-four (24)
hour per day, seven (7) day per week basis.

                  5.1.1 Subject to all governmental rules, regulations and
guidelines applicable thereto, Landlord shall provide (a) heating, ventilating
and air conditioning ("HVAC") when necessary for normal

                                       -7-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   16

comfort for normal office use in the Premises and for cooling required by
customary reasonable office computer systems, from Monday through Friday, during
the period from 8:00 a.m. to 6:00 p.m., and on Saturdays during the period from
8:00 a.m. to 12:00 p.m. (collectively, the "BUILDING HOURS"), except for
nationally and locally recognized holidays as designated by Landlord
(collectively, the "HOLIDAYS"); (b) electrical wiring and facilities and power
for normal general office use as such wiring, facilities and power are specified
in the Approved Working Drawings (as defined in Exhibit B attached hereto); (c)
city water from the regular Building outlets for drinking, lavatory and toilet
purposes; (d) janitorial services five (5) days per week, except the date of
observation of the Holidays, in and about the Premises; and (e) nonexclusive
automatic elevator service. Tenant shall pay Landlord, within fifteen (15) days
after invoice, charges for replacement of lamps, starters and ballasts for
non-Building standard lighting fixtures within the Premises. Landlord shall also
have the exclusive right, but not the obligation, to provide any additional
services that may be required by Tenant, including, without limitation,
locksmithing, additional janitorial services, and additional repairs and
maintenance, provided that Tenant shall pay to Landlord, within fifteen (15)
days after billing, the actual costs incurred by Landlord to provide such
additional services plus a reasonable administration fee. Landlord shall provide
the services described in this Section 5.1.1 from the Rent Commencement Date
through the remainder of the Term, unless otherwise stated herein.

         5.2 Overstandard Tenant Use. Tenant shall not, without Landlord's prior
written consent, use heat-generating machines, machines other than normal office
machines, or equipment or lighting other than building standard lights in the
Premises, which may affect the temperature otherwise maintained by the HVAC
system or increase the water normally furnished for the Premises by Landlord
pursuant to the terms of Section 5.1 of this Lease. If Tenant uses water or HVAC
in excess of that supplied by Landlord pursuant to Section 5.1 of this Lease, or
if Tenant's consumption of electricity (exclusive of Building- standard HVAC and
Building-standard lighting) shall exceed an average of three (3) watts per
rentable square foot of the Premises, connected load, calculated on a monthly
basis during the Building Hours set forth in Section 5.1.1 above, then Tenant
shall pay to Landlord, within ten (10) days after billing, the cost of such
excess consumption, the cost of the installation, operation, and maintenance of
equipment which is installed in order to supply such excess consumption, and the
cost of the increased wear and tear on existing equipment caused by such excess
consumption; and Landlord may install devices to separately meter any increased
use and in such event Tenant shall pay the increased cost directly to Landlord,
within ten (10) days after demand, including the cost of such additional
metering devices. If Tenant desires to use HVAC during hours other than the
Building Hours, (i) Tenant shall give Landlord such prior notice, as Landlord
shall from time to time establish as appropriate, of Tenant's desired use, (ii)
Landlord shall supply such after-hours HVAC to Tenant at such hourly rate as
Landlord shall from time to time establish, and (iii) Tenant shall pay such
charges within ten (10) days after billing.

         5.3 Interruption of Use. Except as otherwise provided hereinbelow,
Tenant agrees that Landlord shall not be liable for damages, by abatement of
Rent or otherwise, for failure to furnish or delay in furnishing any service
(including telephone and telecommunication services), or for any diminution in
the quality or quantity thereof, and such failures or delays or diminution shall
never be deemed to constitute an eviction or disturbance of Tenant's use and
possession of the Premises or relieve Tenant from paying Rent or performing any
of its obligations under this Lease. Furthermore, Landlord shall not be liable
under any circumstances for a loss of, or injury to, property or for injury to,
or interference with, Tenant's business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any of the services or utilities as set forth in this Lease.

         5.4 Abatement. An "ABATEMENT EVENT" shall be defined as an event that
prevents Tenant from using the Premises or any portion thereof, as a result of
any failure to provide services or access to the Premises, where (i) Tenant does
not actually use the Premises or such portion thereof, and (ii) such event is
caused by the negligence or willful misconduct of Landlord, its agents,
employees or contractors. Tenant shall give Landlord and any mortgagee of
Landlord (of whom Tenant is notified) notice ("ABATEMENT NOTICE") of any such
Abatement Event, and if such Abatement Event continues beyond the "Eligibility
Period" (as that term is defined below), then the Base Rent and Tenant's Share
of Operating Expenses and Real Property Taxes shall be abated entirely or
reduced, as the case may be, after expiration of the Eligibility Period for such
time that Tenant continues to be so prevented from using, and does not use, the
Premises or a portion thereof, in the proportion that the rentable area of the
portion of the Premises that Tenant is prevented from using, and does not use,
bears to the total rentable area of the Premises; provided, however, in the
event that Tenant is prevented from using, and does not use, a portion of the
Premises for a period of time in excess of the Eligibility Period and the
remaining portion of the Premises is not sufficient to allow Tenant to
effectively conduct its business therein, and if Tenant does not conduct its
business from such remaining portion, then for such time after expiration of the
Eligibility Period during which Tenant is so prevented from effectively
conducting its business therein, the Base Rent and Tenant's Share of Operating
Expenses and Real Property Taxes for the entire Premises shall be abated
entirely for such time as Tenant continues to be so prevented from using, and
does not use, the Premises. If, however, Tenant reoccupies any portion of the
Premises during such period, the Base Rent and Tenant's Share of Operating
Expenses and Real Property Taxes allocable to such reoccupied portion,

                                       -8-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   17

based on the proportion that the rentable area of such reoccupied portion of the
Premises bears to the total rentable area of the Premises, shall be payable by
Tenant from the date Tenant reoccupies such portion of the Premises.
Notwithstanding anything to the contrary contained herein, if Landlord is
diligently pursuing the repair of such utilities or services and Landlord
provides substitute services reasonably suitable for Tenant's purposes as
reasonably determined by Landlord, for example bringing in portable air
conditioning or heating equipment, then there shall be no abatement of Base Rent
and Tenant's Share of Operating Expenses and Real Property Taxes. The term
"Eligibility Period" shall mean a period of five (5) consecutive business days
after Landlord's and Landlord's mortgagee's (if applicable), receipt of the
applicable Abatement Notice. Such right to abate Base Rent and Tenant's Share of
Operating Expenses and Real Property Taxes shall be Tenant's sole and exclusive
remedy at law or in equity for an Abatement Event and such abatement shall not
apply in case of damage to, or destruction of, the Premises or the Building, or
any eminent domain proceedings which shall be governed by separate provisions of
this Lease.

6. TAXES.

         6.1 Real Property Taxes. Tenant shall pay to Landlord in the manner set
forth in Section 8 below, and as Additional Rent, Tenant's Percentage Share of
Real Property Taxes attributable to the tax parcel within which the Building is
located and the portion of Real Property Taxes attributable to the developed
Common Facilities in the Project (including, but not limited to, common
detention ponds, the central park area, Building and Project roads, Building and
Project landscaping, etc.) allocated by Landlord to the Building based on the
Building's pro rata share thereof (as such pro rata share is reasonably
determined by Landlord) (collectively, "TENANT'S PERCENTAGE SHARE OF REAL
PROPERTY TAXES"). Landlord shall not allocate to Tenant any portion of any Real
Property Taxes attributable to undeveloped portions of the Project, developed
portions of the Project held for lease (excluding the Building), or developed
portions of the Project that are not Common Facilities. Tenant's obligation to
pay Tenant's Percentage Share of Real Property Taxes during the Term shall
survive the expiration or early termination of this Lease provided that Landlord
invoices Tenant for such amounts no later than two (2) years after such
expiration or early termination. If this Lease shall commence or terminate on a
day other than the first or last day of a calendar year, respectively, the
amount of Tenant's Percentage Share of Real Property Taxes payable by Tenant for
such calendar year shall be prorated on the basis of a 365 day year and shall be
due and payable when rendered notwithstanding termination of this Lease provided
that Landlord invoices Tenant for such amounts no later than two (2) years after
such expiration or early termination. Tenant's Percentage Share of Real Property
Taxes allocable to the calendar year in which this Lease commences or terminates
shall be deemed to have been incurred evenly over the entire twelve (12) month
period of such calendar year.

         6.2 Definition of Real Property Taxes. The term "REAL PROPERTY TAXES"
shall mean the sum of the following: all real property taxes, mill levies, metro
district charges, including ad valorem taxes (including all components thereof,
such as amounts payable to any public or quasi-public authority or agency,
including school districts) and special taxes, possessory interest taxes,
business or license taxes or fees, service payments in lieu of such taxes or
fees, annual or periodic license or use fees, excises, common or community
facilities district assessments and any other assessments, bonds, levies, fees,
penalties (if a result of Tenant's delinquency), exactions or charges, general
and special, ordinary and extraordinary, unforeseen as well as foreseen
(including fees "in-lieu" of any such tax or assessment) that are assessed,
levied, charged, conferred or imposed by any public authority or quasi-public
authority upon the Project (or any real property comprising any portion thereof)
or its operations, together with all taxes, assessments or other fees imposed by
any public authority upon or measured by any Rent or other charges payable
hereunder, including any gross receipts tax or excise tax levied with respect to
receipt of rental income, or upon, with respect to or by reason of the
development, possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises or any portion
thereof, or documentary transfer taxes upon this transaction or any document to
which Tenant is a party creating or transferring an interest in the Premises,
together with any tax imposed in substitution, partially or totally, of any tax
previously included within the aforesaid definition or any additional tax the
nature of which was previously included within the aforesaid definition,
together with the costs and expenses (including attorneys' and expert witness'
fees and costs) of challenging any of the foregoing, seeking a reduction in or
abatement, redemption or return of any of the foregoing or contesting the
validity or applicability of any governmental enactments that may affect Real
Property Taxes but only to the extent of any actual reduction, abatement,
redemption or return achieved unless such challenge or contest is requested by
Tenant. All references to Real Property Taxes during a particular year shall be
deemed to refer to taxes accrued during such year, including supplemental tax
bills, regardless of when they are actually assessed and without regard to when
such taxes are payable. The obligation of Tenant to pay for supplemental taxes
shall survive for two (2) years after the expiration or early termination of
this Lease. Nothing contained in this Lease shall require Tenant to pay any
franchise, corporate, estate or inheritance tax of Landlord, or any income or
profits tax. In no event shall Tenant or any of Tenant's officers, directors,
employees, agents, representatives, customers, visitors, invitees, licensees,
contractors, assignees and/or subtenants (collectively, "TENANT PARTIES" and
individually, a "TENANT PARTY") be entitled to file any real property tax
assessment appeal.

                                       -9-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   18

         6.3 Taxes on Tenant Improvements/Personal Property. Notwithstanding any
other provision hereof, Tenant shall pay, not less than ten (10) days before
delinquency, (a) the full amount of any increase in Real Property Taxes during
the Term resulting from any and all alterations and tenant improvements
(exclusive of the Tenant Improvements but including any increases resulting from
the Tenant Improvements to the extent of the Over-Allowance Amount) of any kind
whatsoever placed in, on or about or made to the Premises for the benefit of, at
the request of, or by Tenant, to the extent the same exceed Building standard
allowances for leasehold improvements as reasonably determined by Landlord and
(b) all taxes and assessments levied upon Tenant's Property. Upon Landlord's
request, Tenant shall provide Landlord copies of receipts for payment of all
such taxes. To the extent any such taxes are not separately assessed or billed
to Tenant, Tenant shall pay to Landlord the amount thereof as invoiced by
Landlord with thirty (30) days following delivery of such invoice. Landlord
agrees that in no event shall Additional Rent hereunder include any amounts
specified in this Section 6.3 (or amounts specified in substantially similar
provisions in other leases or agreements) payable by other tenants of the
Building.

7. OPERATING EXPENSES.

         7.1 Operating Expenses. Tenant shall pay to Landlord, in the manner set
forth in Section 8 below, and as Additional Rent, Tenant's Percentage Share of
Operating Expenses attributable to Landlord's operation, management, repair and
maintenance of the Building and the portion of Operating Expenses attributable
to the operation, management, repair and/or maintenance of the developed Common
Facilities of the Project (including, but not limited to, common detention
ponds, the central park area, Building and Project roads, Building and Project
landscaping, etc.) allocated by Landlord to the Building based upon the
Building's pro rata share thereof (as such pro rata share is reasonably
determined by Landlord) (collectively, "TENANT'S PERCENTAGE SHARE OF OPERATING
EXPENSES"). Landlord shall not allocate to Tenant any portion of Operating
Expenses attributable to undeveloped portions of the Project, developed portions
of the Project held for lease (excluding the Building), or developed portions of
the Project that are not Common Facilities. Tenant's obligation to pay Tenant's
Percentage Share of Operating Expenses during the Term shall survive the
expiration or any earlier termination of this Lease provided that Landlord
invoices Tenant for such amounts no later than two (2) years after such
expiration or early termination. If this Lease shall commence or terminate on a
day other than the first or last day of a calendar year, respectively, the
amount of Tenant's Percentage Share of Operating Expenses payable by Tenant for
such calendar year shall be prorated on the basis of a 365 day year and shall be
due and payable when rendered notwithstanding termination of this Lease.
Tenant's Percentage Share of Operating Expenses allocable to the calendar year
in which this Lease commences or terminates shall be deemed to have been
incurred evenly over the entire twelve (12) month period of such calendar year.
"TENANT'S PERCENTAGE SHARE" is a percentage equal to the rentable square footage
of the Premises divided by the rentable square footage of the Building (as set
forth in the Basic Lease Information).

       7.2 Definition of Operating Expenses. The term "OPERATING EXPENSES" shall
mean (except as otherwise excluded below) the total costs and expenses
reasonably paid or incurred by Landlord in the operation, management, repair and
maintenance of the Building and developed Common Facilities of the Project
(including, but not limited to, common detention ponds, the central park,
Building and Project roads, Building and Project landscaping, etc.), including,
but not limited to, all costs of: (i) maintenance, repair and replacement of
HVAC, electricity, steam, water, gas, sewer, mechanical, telephone and
telecommunications systems, escalator and elevator systems and all other
utilities and systems; (ii) landscaping, gardening and site maintenance; (iii)
security, life safety and fire protection; (iv) general maintenance, trash
removal, cleaning and service contracts and the cost of all supplies, tools and
equipment required in connection therewith; (v) all deductibles, self-insured
retentions, premiums and other costs relating to the insurance carried by
Landlord or Landlord's agent for the Project, and the costs of any
self-insurance as reasonably determined by Landlord; (vi) wages, salaries,
payroll taxes and other labor costs and employee benefits of employees directly
employed and working at the Building and/or Project (or a pro-rata share of such
amounts for employees indirectly employed and working at the Building and/or
Project); (vii) fees, charges and other costs of all independent contractors
engaged by Landlord to provide operations, maintenance, or repair service at or
with respect to the Building and/or Project; (viii) directory revisions at the
Building; (ix) charges on or surcharges imposed by any governmental agencies on
or with respect to transit or automobile usage or parking facilities; (x) costs
incurred in connection with any private transit association; (xi) amortization
over the useful life (together with interest at a rate equal to the floating
commercial loan rate announced from time to time by Bank of America, N.A., or
its successor, as its prime rate, plus two percent (2%) per annum (the "INTEREST
RATE") on the unamortized balance) of all of the following costs of a capital
nature (including, without limitation, improvements, replacements, repairs and
equipment): (1) reasonably intended to produce a reduction in operational
charges or energy consumption; or (2) required by Applicable Laws enacted or
first applicable after the Commencement Date; or (3) replacement of exterior
perimeter windows (except during the initial Term); or (4) minor capital
expenditures or improvements where the total cost of all such expenditures or
improvements is less than Fifty Thousand Constant Dollars ($50,000) in any
twelve- month period in the aggregate, and the cost of capital tools not in
excess of Ten Thousand Constant Dollars ($10,000) in any twelve (12) month
period in the aggregate or (5) the refurbishment or replacement of improvements
when repair is no longer feasible; (xii) the cost of contesting the validity or

                                      -10-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   19

applicability of any governmental enactments which may affect Operating
Expenses; (xiii) reasonable and customary association fees and costs assessed
under the CC&Rs and/or in connection with any property owners or maintenance
association; and (xiv) any other expenses of any kind whatsoever incurred in
connection with the operation, management, repair and maintenance of the
Building and Project. Operating Expenses shall also include either (a) an
administrative fee to Landlord for accounting and project management services
relating to the Project in an amount equal to three percent (3%) of Base Rent
and Additional Rent from all tenants of the Project (other than the
administrative fee), or (b) all costs and fees incurred by Landlord in
connection with the management of this Lease and the Building and Project,
including the costs of those services customarily performed by a property
management services company whether performed internally or through an outside
management company. If the Building and/or Project are not fully occupied during
any year, an adjustment shall be made in computing the Operating Expenses for
such year so that Operating Expenses include an equitable portion of all
variable items of Operating Expenses, as reasonably determined by Landlord.
Landlord shall have the right, from time to time, to equitably allocate and
prorate some or all of the Operating Expenses among different tenants and/or
different buildings of the Project and/or on a building-by-building basis (the
"COST POOLS"). Such Cost Pools may include, without limitation, the office space
tenants and retail space tenants of the buildings in the Project.

         7.3 Exclusions from Operating Expenses. Notwithstanding Section 7.2 to
the contrary, Operating Expenses shall exclude the following:

                  (i) Costs of repairs, replacements or other work occasioned by
fire, windstorm or other casualty to the extent of the greater of the amount
actually covered by insurance or the amount of insurance that Landlord is
required to maintain under this Lease (excluding commercially reasonable
deductibles), or by the exercise by governmental authorities of the right of
eminent domain.

                  (ii) Leasing commissions, attorney's fees, costs,
disbursements and other expenses incurred by Landlord or its agents in
connection with leases with other tenants, other occupants or prospective
tenants or other occupants of the Building and the Project, and similar costs
incurred in connection with and/or enforcement of any leases with other tenants,
other occupants, or prospective tenants or other occupants of the Building and
the Project.

                  (iii) "Tenant allowances," "tenant concessions," work letters,
and other costs or expenses (including permit, license and inspection fees but
not including such costs or expenses incurred in connection with any Common
Facilities) incurred in completing, fixturing, furnishing, renovating or
otherwise improving, decorating or redecorating space for other tenants or other
occupants of the Building and the Project, or vacant, leasable space in the
Building, including space planning/interior design fees for same.

                  (iv) Costs of correcting material defects, including any
allowances for same, in the original construction of the Building (including
latent defects) or equipment used therein (or the replacement of defective
equipment).

                  (v) Costs (including fines, penalties and legal fees) incurred
due to the knowing and willful violation by Landlord, its employees, agents
and/or contractors, of any terms and conditions of this Lease or of the leases
of the other tenants in the Building or the Project, and/or of any Applicable
Laws that would not have been incurred but for such violation by Landlord, its
employees, agents and/or contractors.

                  (vi) Payments in respect of overhead and/or profit to any
subsidiary or affiliate of Landlord as a result of a non-competitive selection
process for services (other than property and construction management fees) on
or to the Building or the Project, or for goods, supplies or other materials, to
the extent that the costs of such services, goods, supplies and/or materials
exceed the costs that would have been paid had the services, goods, supplies or
materials been provided by parties unaffiliated with Landlord of similar skill,
competence and experience, on a competitive basis.

                  (vii) Payments of principal, finance charges or interest on
debt or amortization on any mortgage or deed of trust encumbering the Building
or the Project, and rental payments (or increases in same) under any ground or
underlying lease or leases (except to the extent the same may be made to pay or
reimburse, or may be measured by, Real Property Taxes).

                  (viii) Except for property and construction management fees,
and the administrative fee to Landlord set forth in Section 7.2, costs of
Landlord's general overhead and general administrative expenses (individual,
partnership or corporate, as the case may be), which costs would not be
chargeable to Operating Expenses of the Building or the Project in accordance
with generally accepted accounting principles, including, without limitation,
all costs related to accounting and audit services by certified public
accountants for Landlord and its affiliates (excepting accounting and audit
services necessary to satisfy normal property management requirements).

                                      -11-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   20

                  (ix) Compensation paid to clerks, attendants or other persons
in commercial concessions (such as a snack bar, restaurant or newsstand), if
any, operated by Landlord or any subsidiary or affiliate of Landlord.

                  (x) Advertising and promotional expenses.

                  (xi) Costs for which Landlord is directly reimbursed by
insurance.

                  (xii) Depreciation on the Building, the Project or any
equipment or materials used by Landlord or Landlord's manager in conjunction
therewith, except on equipment or materials purchased by Landlord to enable
Landlord to supply services Landlord might otherwise contract for with a third
party, where such depreciation would otherwise have been included in the charge
for such third party's services, all as determined in accordance with generally
accepted accounting principles, consistently applied, and when depreciation is
permitted or required, the item shall be amortized over its reasonably
anticipated useful life.

                  (xiii) Costs of capital improvements except those set forth in
Section 7.2(xi).

8. ESTIMATED EXPENSES.

         8.1 Payment. The term "ESTIMATED EXPENSES" for any particular calendar
year during the Term shall mean Landlord's estimate of Tenant's Percentage Share
of Operating Expenses and Tenant's Percentage Share of Real Property Taxes which
are payable by Tenant for such calendar year. Before the commencement of each
calendar year during the Term or as soon thereafter as is reasonably
practicable, Landlord shall notify Tenant in writing of the Estimated Expenses
for such calendar year (and upon Tenant's written request, Landlord shall
provide an annual budget supporting such Estimated Expenses). Tenant shall pay
to Landlord monthly, in advance, one-twelfth (1/12) of the Estimated Expenses;
provided, however, that if Landlord fails to notify Tenant of the Estimated
Expenses for any particular calendar year before the start of such calendar
year, Tenant shall be required to continue to pay to Landlord, each month in
advance, the amount of the Estimated Expenses due for the immediately prior
month until Landlord notifies Tenant of the amount of the Estimated Expenses for
such calendar year, whereupon Tenant shall (i) thereafter commence to pay
one-twelfth (1/12) of such newly determined Estimated Expenses and (ii) pay,
with its next installment of Estimated Expenses, a fraction of the Estimated
Expenses for the then-current calendar year (reduced by any amounts paid with
respect to the then-current calendar year pursuant to the immediately preceding
sentence), which fraction shall have as its numerator the number of months which
have elapsed in such current calendar year (including the month of such payment)
and twelve (12) as its denominator. If at any time Landlord determines that
Tenant's Percentage Share of Operating Expenses and Tenant's Percentage Share of
Real Property Taxes are projected to vary from the then Estimated Expenses,
Landlord may, by notice to Tenant, revise the Estimated Expenses, and Tenant's
monthly installments for the remainder of such year shall be adjusted so that by
the end of such calendar year Tenant has paid to Landlord the revised Estimated
Expenses for such year.

         8.2 Adjustment. The term "ADJUSTMENT" shall mean for any calendar year
the difference between (i) the Estimated Expenses and (ii) the sum of (a)
Tenant's Percentage Share of Real Property Taxes, and (b) Tenant's Percentage
Share of Operating Expenses. After the end of each calendar year, Landlord shall
deliver to Tenant a statement of Tenant's Percentage Share of Operating Expenses
and Tenant's Percentage Share of Real Property Taxes for such calendar year,
accompanied by a computation of the Adjustment. If Tenant's payments of
Estimated Expenses are less than Tenant's Percentage Share of Operating Expenses
and Tenant's Percentage Share of Real Property Taxes, then Tenant shall pay the
difference within thirty (30) days after receipt of such statement. Tenant's
obligation to pay such amount shall survive the termination of this Lease
provided that Landlord invoices Tenant for such amounts no later than two (2)
years after such termination. If Tenant's payments of Estimated Expenses exceed
Tenant's Percentage Share of Operating Expenses and Tenant's Percentage Share of
Real Property Taxes, then, provided that Tenant is not in default hereunder,
Landlord shall credit such excess amount to future installments of Estimated
Expenses for the next calendar year. If Tenant is in default, Landlord may, but
shall not be required to, credit such amount to Rent arrearage. In no event
shall Tenant be entitled to any credit in the event that Tenant's Percentage
Share of Real Property Taxes and/or Tenant's Share of Operating Expenses are
less than such amounts for the Base Year.

9. INSURANCE.

         9.1 Landlord. Landlord, either directly or through its agent, shall
maintain "all risk" or "Special Form" property insurance, including boiler and
machinery comprehensive form, if applicable, through individual or blanket
policies insuring the Building against fire and other casualties, including all
alterations, additions and improvements, whether owned by Landlord or by Tenant
(but excluding the cost of Tenant's Property and the cost of the Tenant
Improvements or Alterations in excess of Building- standard), in amounts equal
to the full replacement value thereof, with deductibles and the form and

                                      -12-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   21

endorsements of such coverage as selected by Landlord in a commercially
reasonable manner. Landlord may also carry such other insurance as Landlord may
deem prudent or advisable, in such amounts, with such deductibles and upon such
terms as Landlord shall determine in a commercially reasonable manner. The cost
of the insurance obtained by Landlord under this Section 9.1 shall be included
in Operating Expenses.

         9.2 Tenant. Tenant shall, at Tenant's expense, obtain and keep in force
at all times the following insurance (and any other form(s) of insurance
Landlord may reasonably require from time to time) in the following coverage
amounts, which coverage amounts Landlord may reasonably increase from time to
time but upon prior written notice to Tenant, and all such coverage shall be
primary without right of contribution by Landlord:

                  9.2.1 Commercial General Liability Insurance (Occurrence
Form). A policy of commercial general liability insurance (occurrence form)
having a combined single limit of not less than One Million Dollars ($1,000,000)
per occurrence and Two Million Dollars ($2,000,000) aggregate per location if
Tenant has multiple locations, and Two Million Dollars ($2,000,000)
products/completed operations aggregate, providing coverage for, among other
things, blanket contractual liability, premises, host liquor, products/completed
operations with an "Additional Insured-Managers or Lessors of Premises
Endorsement" and containing the "Amendment of the Pollution Exclusion
Endorsement" for damage caused by heat, smoke or fumes from a hostile fire, and
personal and advertising injury coverage, with deletion of the exclusion for
explosion, collapse or underground hazard, if applicable, and, if necessary,
Tenant shall provide for restoration of the aggregate limit, and provided that
the policy shall include coverage for liability assumed under this Lease as an
"insured contract" for the performance of Tenant's indemnity obligations under
this Lease.

                  9.2.2 Automobile Liability Insurance. Business automobile
liability insurance having a combined single limit of not less than One Million
Dollars ($1,000,000) per occurrence and insuring Tenant against liability for
claims arising out of ownership, maintenance or use of any owned, hired or
non-owned automobiles (but only as applicable based on Tenant's actual
ownership, maintenance or use of any such automobiles);

                  9.2.3 Workers' Compensation and Employer's Liability
Insurance. Workers' compensation insurance having limits not less than those
required by state statute and federal statute, if applicable, and covering all
persons employed by Tenant in the conduct of its operations on the Premises
(including the all states endorsement and, if applicable, the volunteers
endorsement), together with employer's liability insurance coverage in the
amount of at least One Million Dollars ($1,000,000) for bodily injury by
accident and One Million Dollars ($1,000,000) for bodily injury;

                  9.2.4 Property Insurance. "Special Form" or "all risk"
property insurance, including boiler and machinery comprehensive form, if
applicable, on a replacement cost basis, each covering damage to or loss of any
of Tenant's Property and/or any Tenant Improvements or Alterations in excess of
Building-standard. Tenant's property insurance deductible shall not exceed
Twenty-Five Thousand Dollars ($25,000.00);

                  9.2.5 Business Interruption. Loss of income and extra expense
insurance and contingent business income insurance in amounts as will reimburse
Tenant for direct or indirect loss of earnings attributable to all perils
commonly insured against by prudent lessees in the business of Tenant, or
attributable to prevention of access to the Premises as a result of such perils.
Such insurance will provide for an extended period of indemnity to be not less
than one hundred eighty (180) days/six (6) months; and

                  9.2.6 Umbrella/Excess Insurance. An umbrella liability policy
or excess liability policy having a limit of not less than Ten Million Dollars
($10,000,000.00), which policy shall be in "following form" and shall provide
that if the underlying aggregate is exhausted, the excess coverage will drop
down as primary insurance. Such umbrella liability policy or excess liability
policy shall include coverage for additional insureds.

         9.3 General.

                  9.3.1 Insurance Companies. Insurance required to be maintained
by Tenant shall be written by companies licensed to do business in the state in
which the Premises are located and having a "General Policyholders Rating" of at
least A-VIII (or such higher rating as may be required by any Mortgagee) as set
forth in the most current issue of "Best's Insurance Guide."

                  9.3.2 Certificates of Insurance. Tenant shall deliver to
Landlord certificates of insurance for all insurance required to be maintained
by Tenant in the form of the ACORD 27 (Evidence of Property Insurance) and the
ACORD 25-5 (Certificate of Liability Insurance) (or in a form acceptable to
Landlord in its sole discretion), no later than seven (7) days before the date
on which Tenant is to take

                                      -13-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   22

possession of the Premises. Tenant shall, at least ten (10) days before the
expiration of the policy, furnish Landlord with certificates of renewal or
"binders" thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification except after sixty
(60) days' prior written notice to the parties named as additional insureds in
this Lease (except in the case of cancellation for nonpayment of premium in
which case cancellation shall not take effect until at least ten (10) days'
notice has been given to Landlord). If Tenant fails to procure or maintain any
insurance required in this Lease, Tenant shall be liable for all losses and
costs suffered or incurred by Landlord (including litigation costs and
attorneys' fees and expenses) resulting from said failure. In addition, if
Tenant shall fail to procure or maintain such insurance, or to deliver such
certificates, within the time periods set forth above, Landlord may, at its
option, in addition to all of its other rights and remedies under this Lease,
and without regard to any notice and cure periods set forth in Section 16 below,
procure such policies for the account of Tenant, and the cost thereof shall be
paid to Landlord as Additional Rent within ten (10) days after delivery of bills
therefor.

                  9.3.3 Additional Insured. Landlord, as well as any property
management company of Landlord for the Building or the Project, each Mortgagee
and any other interested party having an insurable interest reasonably
designated by Landlord in writing to Tenant shall be named as additional
insureds under all of the policies required by Section 9.2.1 and 9.2.6, and such
endorsement shall be included with the certificates to be provided to Landlord
pursuant to Section 9.3.2 above. The policies required under Section 9.2.1 shall
provide for severability of interest. Landlord is to be insured as its interests
may appear and is to be designated as a loss payee on the insurance required to
be maintained by Tenant pursuant to Section 9.2.4.

                  9.3.4 Limits of Insurance. The limits of insurance maintained
by the parties hereunder shall not limit such parties' respective liability
under this Lease.

                  9.3.5 Mutual Waiver of Subrogation. Landlord and Tenant each
waive any right to recover against the other for claims for damages to each
parties' respective property required to be insured hereunder. This provision is
intended to waive fully, and for the benefit of the parties, any rights and/or
claims which might give rise to a right of subrogation in favor of any insurance
carrier. This waiver extends to any business interruption or loss of earnings
coverage of Tenant whether such coverage is purchased as part of Tenant's
property insurance policy or as a separate policy.

                  9.3.6 Notification of Incidents. Tenant shall notify Landlord
within twenty-four (24) hours after the occurrence of any accidents or incidents
in the Premises, the Building, the Common Facilities or other portions of the
Project which, in Tenant's reasonable opinion, could give rise to a claim
against Landlord.

         9.4 Indemnity.

                  9.4.1 By Tenant. Tenant shall indemnify, protect, defend (by
counsel reasonably acceptable to Landlord) and hold harmless Landlord and
Landlord's affiliated entities, and each of their respective members, managers,
partners, directors, officers, employees, shareholders, lenders, agents,
contractors, successors and assigns (collectively, the "LANDLORD INDEMNIFIED
PARTIES" and each, a "LANDLORD INDEMNIFIED PARTY") from and against any and all
claims, judgments, causes of action, damages, penalties, costs, liabilities, and
expenses, including all costs, attorneys' fees, expenses and liabilities
reasonably incurred in the defense of any such claim or any action or proceeding
brought thereon (collectively, "LANDLORD CLAIMS") arising from any cause
whatsoever in the Premises (but excluding Landlord Claims to the extent caused
by a Landlord Indemnified Party's negligence or willful or criminal misconduct).
In addition, Tenant shall further indemnify, protect, defend (by counsel
reasonably acceptable to Landlord) and hold harmless the Landlord Indemnified
Parties from and against any and all Landlord Claims arising from (i) any
default in the performance of any obligation on Tenant's part to be performed
under the terms of this Lease; (ii) Tenant's use of the Premises, the conduct of
Tenant's business or any activity, work or things done, permitted or suffered by
Tenant or any Tenant Party in or about the Premises, the Building, the Common
Facilities or other portions of the Project and/or (iii) any acts, omissions or
negligence of Tenant or any Tenant Party. The obligations of Tenant under this
Section 9.4 shall survive the termination of this Lease with respect to any
Claims or liability attributable to events which occurred before such
termination.

                  9.4.2 By Landlord. Landlord shall indemnify, protect, defend
(by counsel reasonably acceptable to Tenant) and hold harmless Tenant and Tenant
Parties (collectively, the "TENANT INDEMNIFIED PARTIES" and each, an "TENANT
INDEMNIFIED PARTY") from and against any and all claims, judgments, causes of
action, damages, penalties, costs, liabilities, and expenses, including all
costs, attorneys' fees, expenses and liabilities reasonably incurred in the
defense of any such claim or any action or proceeding brought thereon
(collectively, "TENANT CLAIMS") arising from any cause whatsoever in the Common
Facilities but only to the extent that such Tenant Claims are covered by the
insurance maintained, or required to be maintained hereunder, by Landlord (but
excluding Tenant Claims to the extent caused by a Tenant Indemnified Party's
negligence or willful or criminal misconduct). In addition,

                                      -14-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   23

Landlord shall further indemnify, protect, defend (by counsel acceptable to
Tenant) and hold harmless the Tenant Indemnified Parties from and against any
and all Tenant Claims arising from any negligence or willful misconduct of
Landlord or its employees, agents or contractors. The obligations of Landlord
under this Section 9.4.2 (a) shall survive the termination or expiration of this
Lease with respect to any Tenant Claims or liability attributable to events
which occurred before such termination or expiration and (b) are subject to
Section 9.3.5.

         9.5 Exemption of Landlord from Liability. Tenant, as a material part of
the consideration to Landlord, (i) hereby assumes all risk of damage to property
including, but not limited to, Tenant's fixtures, equipment, furniture,
improvements and alterations or injury to persons in, upon or about the
Premises, the Building, the Common Facilities or other portions of the Project
arising from any cause, and (ii) hereby expressly releases Landlord and waives
all claims in respect thereof against Landlord and all other Landlord
Indemnified Parties, except that clauses 9.5(i) and (ii) above will not apply
with respect to damage or injury (a) caused by the negligence or willful or
criminal misconduct of a Landlord Indemnified Party that is of a type not
covered by the insurance maintained, or required to be maintained hereunder, by
Tenant or (b) covered by Landlord's indemnity under Section 9.4.2 above. Tenant
hereby agrees that neither Landlord nor any other Indemnified Party shall be
liable for injury to Tenant's business or any loss of income therefrom. Tenant
further agrees that neither Landlord nor any other Landlord Indemnified Party
shall be liable for damage to the property of Tenant, or injury to or death or
illness of Tenant, Tenant's employees, invitees, customers, agents or
contractors or any other person in or about the Premises, the Building, the
Common Facilities or the Project, except for any loss, damage or injury
attributable in whole or in part to the act, omission or negligence of any
Landlord Indemnified Party or the willful or criminal misconduct of such
Landlord Indemnified Party that is of a type not covered by the insurance
maintained, or required to be maintained hereunder, by Tenant, whether such
damage, illness or injury is caused by fire, steam, electricity, gas, water or
rain, or from the breakage, leakage or other defects of sprinklers, wires,
appliances, plumbing, ventilation, air conditioning or lighting fixtures, or
from any other cause, and whether such damage, illness or injury results from
conditions arising upon the Premises, or from other sources or places, and
regardless of whether the cause of such damage, illness or injury or the means
of repairing the same is inaccessible to Tenant. Landlord shall not be liable to
Tenant for any damages arising from any act or neglect of any other tenant, if
any, of the Building or the Project or Landlord's failure to enforce the terms
of any agreements with parties other than Tenant.

10. REPAIRS AND MAINTENANCE.

         10.1 Tenant. Except as set forth in Section 10.2 below, Tenant shall
keep and maintain the Premises and every part thereof, including, but not
limited to, floors and floor coverings, interior plumbing, interior walls and
ceilings, including electrical wiring, appliances and devices using or
containing refrigerants, fixtures and equipment in good repair and in a clean
and safe condition, and repair and/or replace any and all of the foregoing in a
good and workmanlike manner. Without limiting the foregoing, but subject to the
provisions of Section 14 below, Tenant shall, at Tenant's sole expense, repair
any area of the Premises damaged by Tenant or any Tenant Party or by any other
cause. If Tenant, in the reasonable judgment of Landlord, fails to maintain the
Premises in accordance with the terms of this Lease and correct such failure
within ten (10) days following Tenant's receipt of written notice from Landlord
stating the nature of the failure, Landlord shall have the right to enter the
Premises and perform such maintenance, repairs or replacements at Tenant's sole
cost and expense (including a sum for overhead to Landlord equal to ten percent
(10%) of the cost of the maintenance, repairs or replacements). Tenant shall
maintain written records of maintenance and repairs, as required by any
Applicable Law, and shall use certified technicians to perform such maintenance
and repairs, as so required. Landlord shall have the right to approve all
service maintenance contractors hired by Tenant which approval shall not be
unreasonably withheld, conditioned or delayed. Upon Landlord's request, Tenant
shall deliver to Landlord full and complete copies of all service or maintenance
contracts entered into by Tenant for the Premises within one hundred twenty
(120) days after the Commencement Date and, thereafter, within ten (10) days
after entering into any new or materially amending any existing service or
maintenance contract.

         10.2 Landlord. Landlord shall, at its sole cost and expense or as an
Operating Expense if permitted under Section 7 above, repair damage to
structural portions, foundations, roofs, and exterior walls of the Building and
the Project; provided that, if such damage is caused by the negligence or
willful or criminal misconduct of Tenant or a Tenant Party, then such repairs
shall be at Tenant's sole expense but only to the extent such damage is not
covered by insurance carried by Landlord hereunder. There shall be no abatement
of Rent during the performance of such work provided that Landlord makes
commercially reasonable efforts to minimize any adverse impact on Tenant's use
and enjoyment of the Premises for the conduct of Tenant's business. Landlord
shall not be liable to Tenant for injury or damage that may result from any
defect in the construction or condition of the Building or the Premises unless
the same is the result of the negligence or willful or criminal misconduct of
Landlord or any of its agents, employees or contractors that is of a type not
covered by the insurance maintained, or required to be maintained hereunder, by
Tenant, nor (except as otherwise provided herein) for any damage that may result
from interruption of Tenant's use of the Premises during any repairs by
Landlord. Nevertheless,

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   24

Landlord shall use commercially reasonable efforts to enforce any applicable
construction warranties pertaining to any defect in the construction or
condition of the Building or the Premises. Tenant waives any right to repair the
Premises, the Building, the Project and/or the Common Facilities at the expense
of Landlord under any Applicable Law.

11. ALTERATIONS.

         11.1 Trade Fixtures; Alterations. Tenant may, without any further
consent or approval by Landlord but subject to all other requirements of this
Section 11 (e.g., Tenant's insurance, delivery of as- built drawings to
Landlord, etc.), install trade fixtures, equipment, data and telephone cable and
conduit, furniture, and office decorations in the Premises (collectively,
"UTILITY INSTALLATIONS"), provided that such Utility Installations are installed
and are removable without structural or other damage to the Premises, the
Building, the Common Facilities or the Project, subject to the other provisions
of this Section 11. Tenant shall not construct, nor allow to be constructed, any
alterations, improvements or physical additions other than Utility Installations
(collectively, "ALTERATIONS") in, about or to the Premises without obtaining the
prior written consent of Landlord, which will not be unreasonably withheld,
conditioned, or delayed; provided, however, Landlord shall have the right, in
Landlord's sole discretion, to withhold its consent to any Alteration that would
adversely affect the structural portions of the Building or any Building Systems
or which would be visible from the exterior of the Premises or the Building.
Landlord may impose, as a condition of its consent to all Alterations, such
requirements as Landlord may reasonably deem appropriate, including, but not
limited to, the requirement that Tenant utilize only contractors, materials,
mechanics and materialmen reasonably approved by Landlord; however, a contractor
of Landlord's selection shall perform all mechanical, electrical, plumbing,
structural and heating, ventilation and air conditioning work, provided that
Landlord's contractor is willing to perform such work at commercially reasonable
and competitive rates and in a commercially reasonable timeframe. If such
Alterations trigger a legal requirement upon Landlord to make any Alterations or
improvements to the Building or Common Facilities and if Tenant elects to
proceed with such Alterations after receipt of written notice from Landlord of
such requirements, Tenant shall, as Additional Rent, reimburse Landlord for the
cost thereof within thirty (30) days following receipt of an invoice therefor.
The construction of the initial improvements to the Premises shall be governed
by the terms of Exhibit B attached hereto and not by the terms of this Section
11.1. Tenant shall submit plans and specifications to Landlord with Tenant's
request for approval to construct Alterations. If Landlord does not approve
Tenant's proposed Alterations, Landlord shall notify Tenant of such disapproval
in writing and shall specify with reasonable specificity the reasons for such
disapproval and the changes to the proposed Alterations that Landlord reasonably
requires in order to grant its approval. Landlord's approval of the plans,
specifications (and working drawings, if reasonably requested by Landlord for
Alterations necessitating such working drawings) for Alterations shall create no
responsibility or liability on the part of Landlord for their completeness,
design sufficiency, or compliance with Applicable Laws. If Landlord does not
respond within ten (10) business days to Tenant's written request for Landlord's
approval, then Landlord shall be deemed to disapprove such request; provided,
however, if Landlord has not responded to Tenant's written request within such
ten (10) business day period, Tenant may give Landlord an additional written
request containing the following phrase (or a phrase substantially similar to
the following phrase) on page 1 of such additional request in capital letters
and 12-point boldface type (in the absence of which it shall not be deemed
validly delivered to Landlord) "YOUR FAILURE TO APPROVE OR DISAPPROVE OF THE
MATTERS REQUESTED IN THIS NOTICE WITHIN TEN (10) BUSINESS DAYS SHALL CONSTITUTE
YOUR APPROVAL THEREOF," and if Landlord does not respond to such request within
such additional ten (10) business day period, then Landlord shall be deemed to
have approved such request. Tenant shall reimburse Landlord for all costs which
Landlord incurs in responding to Tenant's request and reviewing Tenant's plans
and specifications (and working drawings, if applicable) including any costs or
expenses that Landlord may incur in having outside architects and engineers
review said matters (such costs not to exceed Two Thousand Five Hundred Constant
Collars ($2,500.00) for cosmetic, non-structural Alterations in the Premises
initially leased hereunder only), together with a fee in the amount of four
percent (4%) of the total hard costs of construction and installation of the
Alterations. All Alterations shall be diligently constructed to completion and
shall be completed at Tenant's expense, in compliance with all Applicable Laws,
in strict accordance with any design or construction procedures reasonably
established by Landlord for the Building and/or the Project and in a good and
workmanlike manner. Tenant agrees to carry "Builder's All Risk" insurance in an
amount approved by Landlord covering the construction of Alterations, and such
other insurance as Landlord may require of Tenant or its contractors. Tenant
shall file a notice of completion after completion of such work and provide
Landlord with a copy thereof. Tenant shall provide Landlord with a set of
"as-built" drawings for any such work. Except as provided in Section 11.2, all
Alterations shall remain the property of Tenant until the expiration or earlier
termination of this Lease, at which time they shall be and become the property
of Landlord.

         11.2 Removal of Tenant's Property and Alterations. All Utility
Installations and articles of movable personal property installed in the
Premises by or for the account of Tenant (except for ceiling and related
fixtures, HVAC equipment and floor coverings), and that can be removed without
structural or other damage to the Premises or the Building (collectively,
"TENANT'S PROPERTY") shall be and remain

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   25

the property of Tenant and may be removed by it at any time during the Term;
provided, however, that any equipment or other property for which Landlord has
granted any allowance or credit to Tenant or which is a replacement for items
originally provided by Landlord at Landlord's expense shall not be considered
Tenant's Property, and provided further that Landlord, in Landlord's sole
discretion, shall have the right to reserve ownership of any telecommunications
cabling and/or conduit installed by Tenant. Upon the expiration or earlier
termination of this Lease, Tenant shall have removed from the Premises all of
Tenant's Property except such items as the parties have agreed are to remain and
to become the property of Landlord and, upon the request of Landlord, Tenant, at
its sole cost and expense, shall also remove any Alterations designated in
writing by Landlord at the time Landlord gave its consent for the
construction/installation of such Alterations (provided that Tenant requested
Landlord's consent for such Alterations and if Tenant did not request such
consent, Tenant, at its sole cost and expense, shall remove any Alterations
designated by Landlord upon the expiration or earlier termination of this Lease
to be removed, and except for any data and telephone cable and/or conduit, of
which Landlord may require removal upon the expiration or earlier termination of
this Lease). If Landlord requires any such removal, Tenant shall be given a
reasonable period of time after any early termination of this Lease in which to
accomplish such removal and repair, but in no event shall such removal and
repair period extend for more than fifteen (15) days after such early
termination and provided that Tenant shall pay to Landlord, no later than ten
(10) days after Landlord's invoice, the Base Rent specified in Section 21.8(a)
below for Tenant's use of the Premises during such removal/repair period. Tenant
shall repair or pay the cost of repairing any damage to the Premises or the
Project resulting from such removal. Tenant's obligations under this Section
11.2 shall survive the termination of this Lease. Any items of Tenant's Property
which shall remain in the Premises after the Expiration Date or earlier
termination of this Lease may, at the option of Landlord, be deemed abandoned
and in such case may either be retained by Landlord as its property or be
disposed of, without accountability, at Tenant's expense in such manner as
Landlord may reasonably deem fit.

         11.3 Liens. Tenant shall promptly pay and discharge all claims for
labor performed, supplies furnished and services rendered at the request of
Tenant and shall keep the Premises free of all mechanics' and materialmen's
liens in connection therewith. Tenant shall provide at least ten (10) days'
prior written notice to Landlord before any labor is performed, supplies
furnished or services rendered on or at the Premises and Landlord shall have the
right to post on the Premises notices of non-responsibility. If any lien is
filed, Tenant shall cause such lien to be released and removed (by bonding or
otherwise) within ten (10) days after the date of filing, and if Tenant fails to
do so, Landlord may take such action as may be reasonably necessary to remove
such lien and Tenant shall pay Landlord the amounts expended by Landlord
together with interest thereon at the Applicable Interest Rate from the date of
expenditure.

         11.4 Remodel. Landlord reserves the right, at any time , to make
alterations, additions, repairs or improvements to or in, or to increase or
decrease the size or area of, all or any part of the Building or the Project and
the fixtures and equipment therein including, without limitation, the HVAC,
plumbing, electrical, fire protection, life safety, security and other
mechanical, electrical and communications systems of the Premises, the Building
and the Project (collectively, the "BUILDING SYSTEMS"); provided that any such
alterations, additions, repairs, improvements or increases/decreases in the size
of the Building or the Project shall not materially and adversely affect
Tenant's use and enjoyment of the Premises or materially increase Tenant's costs
under this Lease.

12. USE. The Premises shall be used only for the Permitted Use set forth in the
Basic Lease Information and for no other use (including laboratory use) without
Landlord's prior written consent, which consent may be granted or denied in
Landlord's commercially reasonable discretion, and Tenant shall not cause or
permit, nor allow any of Tenant Parties to cause or permit, any hazardous
materials (as defined under Applicable Laws, as defined below) to be brought
upon, stored, manufactured, recycled, disposed or used in, on, under or about
the Premises, the Building, the Common Facilities or any other portion of the
Project. Tenant's use of the Premises shall be in compliance with and subject to
all laws, codes, ordinances, statutes, orders, rules, regulations, conditions of
approval and requirements of all federal, state, county, municipal and other
governmental authorities and all administrative or judicial orders or decrees
and all permits, licenses, approvals and other entitlements issued by
governmental entities, and rules of common law, relating to or affecting the
Project or any portion thereof or the use or operation thereof, whether now
existing or hereafter enacted, as the same may be amended from time to time, and
all covenants, conditions and restrictions of record, including the CC&Rs and
any supplement thereto, now or hereafter recorded in any official or public
records that are applicable to the Project or any portion thereof ("APPLICABLE
LAWS"). Tenant shall be responsible for obtaining any permit, business license,
certificate of occupancy, or other permits or licenses required by any
governmental agency permitting Tenant's use or occupancy of the Premises (except
that Landlord shall obtain all necessary permits or licenses with respect to the
base, shell and core of the Premises to be delivered to Tenant pursuant to
Exhibit "B" attached hereto). Tenant shall comply with the rules and regulations
(the "RULES AND REGULATIONS") attached hereto as Exhibit C, together with such
additional and/or modifications to such Rules and Regulations as Landlord may
from time to time prescribe; provided, however, that no such additional or
modified Rules and Regulations shall have any material adverse impact on
Tenant's use and enjoyment of the Premises or materially increase Tenant's costs
to conduct business in the Premises.

                                      -17-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   26

Tenant shall not commit waste, overload the floors or structure of the Building,
subject the Premises, the Building, the Common Facilities or any other portion
of the Project to any use which would damage the same or increase the risk of
loss or violate any insurance coverage, permit any unreasonable odors, smoke,
dust, gas, substances, noise or vibrations to emanate from the Premises, take
any action which would constitute a nuisance or would disturb, obstruct or
endanger Landlord or any third party, take any action which would abrogate any
warranties, or use or allow the Premises to be used for any unlawful purpose.
Landlord shall not be responsible for non-compliance by any other tenant or
occupant with, or Landlord's failure to enforce, any of the Rules and
Regulations or any other terms or provisions of such tenant's or occupant's
lease. Tenant shall promptly comply with the reasonable requirements of any
board of fire insurance underwriters or other similar body now or hereafter
constituted. Tenant shall not do any act which shall in any way encumber the
title of Landlord in and to the Premises, the Building or any other portion of
the Project.

13. SIGNS. Provided Tenant is not in default under this Lease, Tenant shall be
entitled to, at Tenant's sole cost and expense and subject to the provisions of
this Section 13, (a) Building-standard signage on the Building lobby directory
and (b) one strip on the Building's monument sign (at a location to be
determined by Landlord and in a size to be determined by Landlord based
equitably on the square footage of the Premises in relation to the square
footage of the premises of other tenants designated on such sign) identifying
the name of the original Tenant signing this Lease or any Affiliated Assignee;
provided that the name of any such Affiliated Assignee is not an "Objectionable
Name," as that term is defined below. In addition, should the name of the Tenant
originally signing this Lease change, Tenant shall be entitled to modify, at
Tenant's sole cost and expense, Tenant's signage to reflect Tenant's new name,
but only if Tenant's new name is not an "Objectionable Name." The term
"OBJECTIONABLE NAME" shall mean any name that relates (i) to an entity that is
of a character or reputation, or is associated with a political orientation or
faction that is materially inconsistent with the quality of the Project, or that
would otherwise reasonably offend a landlord of a building or project comparable
to the Project, taking into consideration the level and visibility of Tenant's
signage, or (ii) conflicts with any covenants in other leases of space in the
Building or the Project. In connection with Section 13(b) hereinabove, Landlord
agrees that only in the event Landlord allows other tenants that lease
approximately the same number of square feet in the Building as Tenant leases
hereunder to place their logo and/or personalized typeface on the Building's
monument sign, Tenant shall be entitled to place its logo and/or personalized
typeface thereon, provided that such logo and/or typeface shall be subject to
Landlord's approval as further provided in this Section 13. All signs and
graphics of every kind visible in or from public view or corridors, the Common
Facilities or the exterior of the Premises, whether located inside or outside
the Premises, Building or Project, shall be subject to Landlord's prior written
approval, which approval may be given or withheld in Landlord's commercially
reasonable discretion, and shall be subject to all Applicable Laws and in
compliance with Landlord's signage program. Landlord hereby consents to the
design and specifications for Tenant's standard corporate name and Landlord
further agrees that, subject to all Applicable Laws and Landlord's signage
program, such name may be used for all Tenant signage in accordance with this
Section 13. For purposes hereof, the term "SIGNS AND GRAPHICS" includes, without
limitation, all signs, designs, monuments, logos, banners, projected images,
pennants, decals, advertisements, pictures, notices, lettering, graphics and
decorations. Tenant shall keep all such signs and graphics in good condition and
repair during the Term and shall remove all such signs and graphics before the
termination of this Lease. Such installations and removals shall be made in such
manner, to the extent reasonably practicable, as to avoid injury or defacement
of the Premises or the Project and Tenant shall repair any injury or defacement,
including without limitation, discoloration caused by such installation or
removal. Subject to the requirements of Applicable Laws, any signs and graphics
that are installed and that have not been separately approved by Landlord may be
removed without notice by Landlord at the sole expense of Tenant. Except as
otherwise provided herein, Tenant may not install any signs and graphics on the
exterior or roof of the Building, the Common Facilities or other portions of the
Project. Any signs and graphics, window coverings, or blinds (even if the same
are located behind the Landlord-approved window coverings for the Building), or
other items visible from the exterior of the Premises or Building, shall be
subject to the prior written approval of Landlord, in accordance with this
Section 13.

14. DAMAGE AND DESTRUCTION.

         14.1 Landlord's Obligation to Rebuild. If the Premises and/or the
Building are damaged or destroyed, Landlord shall promptly and diligently repair
or restore the Premises and/or the Building subject to the provisions of this
Section 14 unless Landlord or Tenant duly and timely elects, if so entitled
pursuant to this Section 14 to terminate this Lease by written notice to the
other party. Landlord's obligation, should Landlord elect or be obligated to
repair or rebuild, shall be limited to the shell of the Building, the Building
first floor lobby, all Common Facilities reasonably required for Tenant's access
to and use of the Premises, and any improvements, additions or alterations
constructed in the Premises; provided, however that Landlord shall not be
obligated to repair or rebuild any such improvements, additions or alterations
in the Premises that are in excess of Building-standard unless Tenant pays to
Landlord, within ten (10) days after Landlord's invoice therefor and prior to
Landlord's commencement of

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   27

any such repairs or rebuilding, all costs for such repairs or rebuilding.
Tenant, at its sole cost and expense, shall replace or fully repair Tenant's
Property to the extent deemed necessary or desirable.

         14.2 Landlord's Right to Terminate. Landlord shall have the option to
terminate this Lease if the Premises or the Building is destroyed or damaged by
fire or other casualty, regardless of whether the casualty is insured against
under this Lease, if (i) Landlord reasonably determines that there are
insufficient insurance proceeds to pay all of the costs of the repair or
restoration, (ii) the holder of any indebtedness secured by the Building or all
or any portion of the Premises requires that the insurance proceeds be applied
to such indebtedness, or (iii) Landlord reasonably determines that the repair or
restoration of the Premises or the Building cannot be completed within three
hundred (300) days after the date of the issuance of permits for the necessary
repair or restoration of the portion of the Building or Premises which was
damaged. If Landlord elects to exercise the right to terminate this Lease as a
result of a casualty, Landlord shall exercise the right by written notice to
Tenant of its election to terminate this Lease within forty-five (45) days after
the date Landlord learns of the necessity for repairs as a result of the
casualty, in which event this Lease shall terminate fifteen (15) days after the
date of the notice, provided that Tenant shall be given a reasonable period of
time thereafter to remove its property from the Premises but in no event shall
such removal period extend for more than fifteen (15) days after such early
termination and provided that Tenant shall pay to Landlord, no later than ten
(10) days after Landlord's invoice, the Base Rent specified in Section 21.8(a)
below for Tenant's use of the Premises during such removal period.

         14.3 Tenant's Right to Terminate. Tenant shall have the option to
terminate this Lease if the Premises or the Building is destroyed or damaged by
fire or other casualty to an extent that materially and adversely impacts
Tenant's use and enjoyment of the Premises, regardless of whether the casualty
is insured against under this Lease, and Landlord reasonably determines that the
repair or restoration of the Premises or the Building cannot be substantially
completed within three hundred (300) days after the date of the issuance of
permits for the necessary repair or restoration of the portion of the Premises
which was damaged. Within thirty (30) days after Landlord learns of the
necessity for repairs as a result of the casualty, Landlord shall notify Tenant
in writing ("REPAIR NOTICE") as to Landlord's determination of the number of
days required to repair or restore the Premises after the receipt of such
permits. If Tenant elects to exercise its right to terminate this Lease as a
result of a casualty, Tenant shall exercise the right by written notice to
Landlord within fifteen (15) days after delivery of the Repair Notice, in which
event this Lease shall terminate fifteen (15) days after the delivery of
Tenant's termination notice. Except as otherwise expressly provided in this
Section 14.3, Tenant waives all rights it may have to terminate this Lease as a
result of damage to the Premises or Building pursuant to rights presently or
hereafter accorded by law, equity or otherwise.

         14.4 Abatement of Rent; Tenant's Fault. If the Premises are damaged or
destroyed by other than Tenant's or a Tenant Parties' negligence or willful or
criminal misconduct, the Base Rent shall be temporarily abated proportionately
to the degree the Premises are rendered untenantable as a result of the damage
or destruction. Such abatement shall commence on the date of the damage or
destruction and shall continue through the period required by Landlord to
substantially complete the repair and restoration of the Premises or until such
time as the Premises are tenantable for the operation of Tenant's business,
whichever is earlier. Except for the rent abatement provided above or as
otherwise provided in this Lease, Tenant shall not be entitled to any
compensation or damages from Landlord for loss of the use of the Premises,
damage to Tenant's Property or any inconvenience occasioned by any damage,
repair or restoration. If the Premises or any portion of the Building is damaged
as a result of the negligence or willful or criminal misconduct by Tenant or any
Tenant Parties, Base Rent shall not be abated during the repair of such damage
and Tenant shall be liable to Landlord for the cost of the repair necessitated
thereby to the extent such cost is not covered by insurance proceeds received by
Landlord.

         14.5 Damage Near End of Term. In addition to Landlord's right to
terminate this Lease under Section 14.2, Landlord shall have the right to
terminate this Lease upon thirty (30) days' prior written notice to Tenant if
the Premises or Building is damaged or destroyed during the last twelve (12)
months of the Term and Landlord reasonably determines that the repair or
restoration of the Premises or the Building cannot be completed within thirty
(30) days after the date Landlord learns of the necessity for repairs as a
result of the casualty. Landlord shall notify Tenant in writing of its election
to terminate this Lease under this Section 14.5, if at all, within forty-five
(45) days after the date of the casualty. If Landlord does not elect to
terminate this Lease pursuant to this Section 14.5, the repair of the Premises
or Building shall be governed by Section 14.1.

         14.6 Insurance Proceeds. If this Lease is duly terminated pursuant to
this Section 14, Landlord may keep all the insurance proceeds resulting from the
damage, and Tenant does hereby assign to Landlord and agrees to deliver to
Landlord the proceeds of Tenant's insurance policies covering the Tenant
Improvements, any Alterations and any other installation or property located in
the Premises that is to become Landlord's property upon the expiration or
earlier termination of this Lease (or the proceeds that would have been
available to Tenant [and, in turn, to Landlord] had Tenant properly maintained
the insurance required to be carried on such property pursuant to this Lease).
Any insurance proceeds from

                                      -19-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   28

Tenant's insurance policies not otherwise due and payable to Landlord under the
foregoing sentence shall be and remain the property of Tenant.

15. EMINENT DOMAIN.

         15.1 Total Condemnation. If the entire Premises is condemned by eminent
domain, inversely condemned or sold under threat of condemnation for any public
or quasi-public use or purpose ("CONDEMNED"), this Lease shall terminate as of
the earlier of the date title vests in the condemning authority or the date an
order of immediate possession is issued, and Rent shall be adjusted to the date
of termination.

         15.2 Partial Condemnation. If only a portion of the Premises or the
Building is Condemned and such partial condemnation materially and adversely
impacts Tenant's ability to use and enjoy the Premises for the conduct of
Tenant's business, Landlord shall have the option of either (i) relocating
Tenant to comparable space within the Building reasonably acceptable to Tenant
or (ii) terminating this Lease as of the earlier of the date title vests in the
condemning authority or the date an order of immediate possession is issued, and
Rent shall be adjusted to the date of termination. If such partial condemnation
does not materially and adversely impact Tenant's ability to use and enjoy the
Premises for the conduct of Tenant's business, Landlord shall fully and promptly
restore the Premises and the Building to the extent of any condemnation proceeds
recovered by Landlord, excluding the portion thereof lost in such condemnation,
and this Lease shall continue in full force and effect except that after the
date of such title vesting or order of immediate possession, Rent shall be
reasonably and equitably prorated.

         15.3 Award. If the Premises are wholly or partially Condemned, Landlord
shall be entitled to the entire award paid for such condemnation, and Tenant
waives any claim to any part of the award from Landlord or the condemning
authority; provided, however, that Tenant shall have the right to recover from
the condemning authority such compensation as may be separately awarded to
Tenant in connection with any taking of Tenant's Property and for costs in
moving Tenant's Property to a new location. No condemnation of any kind shall be
construed to constitute an actual or constructive eviction of Tenant or a breach
of any express or implied covenant of quiet enjoyment. Tenant hereby waives any
rights at law or equity now or hereafter existing to terminate this Lease as a
result of a condemnation except to the extent expressly granted herein.

         15.4 Temporary Condemnation. Upon a temporary condemnation not
extending beyond the Term, this Lease shall remain in effect, Tenant shall
continue to pay Rent and Tenant shall receive any award made for such
condemnation with respect to the Premises except damages to any of Landlord's
property. If a temporary condemnation is for a period which extends beyond the
Term, this Lease shall terminate as of the date of such temporary taking by the
condemning authority and any such award shall be distributed in accordance with
Section 15.3 above. If a temporary condemnation remains in effect at the
expiration or earlier termination of this Lease, Tenant shall pay Landlord the
reasonable cost of performing any obligations required of Tenant with respect to
the surrender of the Premises.

16. DEFAULT.

         16.1 Events of Default. The occurrence of any of the following events
shall, at Landlord's option, constitute an "EVENT OF DEFAULT":

                  16.1.1 Failure to pay Rent within three (3) days after
Landlord's written notice to Tenant that such payment is due;

                  16.1.2 Failure to perform any of Tenant's covenants and
obligations hereunder (other than a default described in Sections 16.1.1,
16.1.3, 16.1.4, 16.1.5, 16.1.6, and 16.1.7) where such failure continues for a
period of thirty (30) days after written notice from Landlord; provided,
however, if the nature of the default is such that more than thirty (30) days
are reasonably required for its cure, Tenant shall not be deemed to be in
default if Tenant promptly commences the cure within ten (10) days after receipt
of notice and diligently and continuously prosecutes such cure to completion;

                  16.1.3 The making of a general assignment by Tenant for the
benefit of creditors; the filing of a voluntary petition by Tenant or the filing
of an involuntary petition by any of Tenant's creditors seeking the
rehabilitation, liquidation or reorganization of Tenant under any law relating
to bankruptcy, insolvency or other relief of debtors and, in the case of an
involuntary action, the failure to remove or discharge the same within ninety
(90) days of such filing; the appointment of a receiver or other custodian to
take possession of substantially all of Tenant's assets or this leasehold;
Tenant's insolvency or inability to pay Tenant's debts or failure generally to
pay Tenant's debts when due; any court entering a decree or order directing the
winding up or liquidation of Tenant or of substantially all of Tenant's assets;
Tenant's taking any action toward the dissolution or winding up of Tenant's
affairs; the cessation or suspension of Tenant's use of the Premises; or the
attachment, execution or other judicial seizure of substantially all of Tenant's
assets or this leasehold;

                                      -20-

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   29

                  16.1.4 Knowingly making any material misrepresentation by
Tenant or any successor-in-interest of Tenant in any materials delivered by or
on behalf of Tenant to Landlord or any Mortgagee pursuant to this Lease;

                  16.1.5 Tenant's failure to comply with the provisions
contained in Section 19; r

                  16.1.6 Any assignment by Tenant of its interest in this Lease
or sublease by Tenant of all or any portion of the Premises in violation of the
provisions contained in Section 18; or

                  16.1.7 Tenant's failure to deliver the Letter of Credit by May
15, 2001, which failure is not cured within five (5) days following written
notice thereof to Tenant.

         16.2 Notice. Any notice required to be given by Landlord under this
Lease in connection with a default by Tenant hereunder shall be in lieu of, and
not in addition to, any notice required under Section 13-40.104 of the Colorado
Revised Statutes (1999). Tenant shall pay to Landlord the amount of Five Hundred
Constant Dollars ($500.00) for each notice of default given to Tenant under this
Lease, which is the amount the parties reasonably estimate will compensate
Landlord for the cost of giving such notice of default.

         16.3 Remedies. Upon the occurrence of any Event of Default, if such
Event of Default has not been cured within any applicable grace or cure periods
provided hereunder, Landlord shall have all rights and remedies available at law
and/or in equity, including the following:

                  16.3.1 Termination. Landlord shall have the right to terminate
this Lease by written notice to Tenant and, on the date specified in such
notice, this Lease shall terminate.

                           16.3.1.1 Repossession. Following termination, without
prejudice to other remedies Landlord may have, Landlord may: (i) reenter the
Premises upon voluntary surrender by Tenant or remove Tenant therefrom and any
other persons occupying the Premises, using such legal proceedings as may be
available; (ii) repossess the Premises or relet the Premises or any part thereof
for such term (which may be for a term extending beyond the Term), at such
rental and upon such other terms and conditions as Landlord in Landlord's sole
discretion shall determine, with the right to make reasonable alterations and
repairs to the Premises; and/or (iii) remove all personal property therefrom.

                           16.3.1.2 Unpaid Rent. Upon such termination, Landlord
shall have all the rights and remedies of a landlord provided by Applicable Law,
including the right to recover from Tenant: (i) the worth, at the time of award,
of the unpaid Rent that had been earned at the time of termination, (ii) the
worth, at the time of award, of the amount by which the unpaid Rent that would
have been earned after the date of termination until the time of award exceeds
the amount of loss of rent that Tenant proves could have been reasonably
avoided, (iii) the worth, at the time of award, of the amount by which the
unpaid Rent for the balance of the Term after the time of award exceeds the
amount of the loss of rent that Tenant proves could have been reasonably
avoided, and (iv) any other amount, and court costs, necessary to compensate
Landlord for all detriment proximately caused by Tenant's default. The phrase
"worth, at the time of award," as used in (i) and (ii) above, shall be computed
at the Applicable Interest Rate, and as used in (iii) above, shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).

                  16.3.2 Continuation. Even though an Event of Default may have
occurred, this Lease shall continue in effect for so long as Landlord does not
terminate Tenant's right to possession; and Landlord may enforce all of
Landlord's rights and remedies under this Lease, including the right to recover
Rent as it becomes due. Landlord, without terminating this Lease, may, during
the period Tenant is in default, enter the Premises and relet the same, or any
portion thereof, to third parties for Tenant's account and Tenant shall be
liable to Landlord for all costs Landlord incurs in reletting the Premises,
including, without limitation, brokers' commissions, expenses of repairing any
damage in the Premises (beyond ordinary wear and tear), remodeling the Premises
and like costs to the extent such costs relate to the remainder of the Term
hereunder, less any excess Rent or other consideration received or to be
received by Landlord in connection with such reletting over the Rent otherwise
due and owing from Tenant hereunder. Reletting may be for a period shorter or
longer than the remaining Term. Tenant shall continue to pay the Rent on the
date the same is due provided that Landlord shall credit Tenant's account for
all amounts received directly by Landlord in connection with such reletting
(less Landlord's expenses incurred in connection with such reletting), which
credits Landlord may apply monthly or otherwise and which credits may be
reflected on invoices to Tenant for remaining amounts due or may be reflected in
a lump sum payment to Tenant within thirty (30) days after the termination of
this Lease. No act by Landlord hereunder, including acts of maintenance,
preservation or efforts to lease the Premises or the appointment of a receiver
upon application of Landlord to protect Landlord's interest under this Lease,
shall terminate this Lease unless Landlord notifies Tenant that Landlord elects
to terminate this Lease. If Landlord relets the Premises, the rent that Landlord
receives from reletting shall be applied to the payment of, first, any
indebtedness from Tenant to Landlord under this Lease (other than Base Rent,

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AMENDED.
<PAGE>   30

Tenant's Percentage Share of Operating Expenses and Tenant's Percentage Share of
Real Property Taxes); second, all costs, including maintenance, incurred by
Landlord in reletting as provided herein; and, third, Base Rent and Tenant's
Percentage Share of Operating Expenses and Tenant's Percentage Share of Real
Property Taxes under this Lease. After deducting the payments referred to above,
any sum remaining from the rental Landlord receives from reletting shall be held
by Landlord and applied in payment of future Rent as Rent becomes due under this
Lease. In no event, and notwithstanding anything in this Section 16 to the
contrary, shall Tenant be entitled to any excess rent received by Landlord. If,
on the date Rent is due under this Lease, the rent received from the reletting
is less than the Rent due on that date, Tenant shall pay to Landlord, in
addition to the remaining Rent due, all costs, including maintenance, which
Landlord incurred in reletting the Premises that remain after applying the rent
received from reletting as provided hereinabove. So long as this Lease is not
terminated, Landlord shall have the right to remedy any default of Tenant, to
maintain or improve the Premises, to cause a receiver to be appointed to
administer the Premises and new or existing subleases and to add to the Rent
payable hereunder all of Landlord's reasonable costs in so doing, with interest
at the Applicable Interest Rate from the date of such expenditure.

         16.4 Cumulative. Each right and remedy of Landlord provided for herein
or now or hereafter existing at law, in equity, by statute or otherwise shall be
cumulative and shall not preclude Landlord from exercising any other rights or
remedies provided for in this Lease or now or hereafter existing at law or in
equity, by statute or otherwise. No payment by Tenant of a lesser amount than
the Rent nor any endorsement on any check or letter accompanying any check or
payment as Rent shall be deemed an accord and satisfaction of full payment of
Rent; and Landlord may accept such payment without prejudice to Landlord's right
to recover the balance of such Rent or to pursue other remedies.

         16.5 Mitigation of Damages. Notwithstanding anything to the contrary
contained in this Lease, Landlord shall, but only as may be required under
Applicable Law, make commercially reasonable efforts to mitigate its damages in
case of any Event of Default by Tenant.

17. DEFAULT BY LANDLORD. Landlord shall not be in default under this Lease
unless Landlord fails to perform an obligation required of Landlord within
thirty (30) days after written notice by Tenant to Landlord and to each
Mortgagee of which Tenant has received prior written notice, specifying the
nature of the alleged default; provided, however, that if the nature of the
obligation is such that more than thirty (30) days are required for performance,
then Landlord shall not be in default if Landlord commences performance within
such thirty (30) day period and thereafter diligently prosecutes the same to
completion. Tenant agrees to give each Mortgagee, at the same time Tenant
delivers written notice to Landlord, by registered or certified mail or
nationally recognized overnight delivery service, a copy of any notice of
default served upon Landlord by Tenant, provided that, prior to such notice,
Tenant has been notified in writing (by way of service on Tenant of a copy of
assignment of rents and leases or otherwise) of the address of such Mortgagee.
Tenant further agrees that if Landlord shall have failed to cure such default
within thirty (30) days after such notice to Landlord (or if such default cannot
be cured or corrected within that time, then such additional time as may be
necessary if Landlord has commenced within such thirty (30) day period and is
diligently pursuing the remedies or steps necessary to cure or correct such
default), then any Mortgagee shall have an additional thirty (30) days within
which to cure or correct such default (or if such default cannot be cured or
corrected within that time, then such additional time as may be necessary if
such Mortgagee has commenced within such thirty (30) day period and is
diligently pursuing the remedies or steps necessary to cure or correct such
default). Notwithstanding the foregoing, in no event shall any Mortgagee have
any obligation to cure any default of Landlord. "MORTGAGEE" shall mean the
holder of any mortgage or deed of trust secured by the Building or the real
property on which the Building is located, the master lessor under any master
lease affecting the Building or the real property on which the Building is
located, and/or the ground lessor under any ground lease affecting the Building
or the real property on which the Building is located. If any event of default
by Landlord has not been cured within the time periods provided for herein,
Tenant shall have all rights and remedies afforded under Applicable Law in
connection therewith.

18. ASSIGNMENT AND SUBLETTING.

         18.1 Landlord's Consent Required. Except as otherwise provided herein,
Tenant may not voluntarily or by operation of law, sell, assign or otherwise
transfer all or any part of its interest in or rights with respect to the
Premises or its leasehold or subleasehold estate hereunder (collectively,
"ASSIGNMENT"), or (subject to Section 18.9 below) permit all or any portion of
the Premises to be occupied by anyone other than itself, its employees, agents,
and contractors, or sublet all or any portion of the Premises (collectively,
"SUBLETTING") without Landlord's prior written consent in each instance, which
shall not be unreasonably withheld, conditioned or delayed. Any sale or transfer
of Tenant's stock or other securities through any initial public offering or on
any nationally-recognized stock exchange shall not be deemed an Assignment or
Subletting hereunder. Under no circumstances shall Tenant mortgage, encumber,
pledge or hypothecate this Lease or any interest in the Premises. Without
limiting the circumstances in which it may be reasonable for Landlord to
withhold its consent to an Assignment or Subletting, Landlord and Tenant
acknowledge that it shall be reasonable for Landlord to withhold its

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   31

consent in the following instances: (i) the proposed assignee or subtenant is a
governmental agency; (ii) the use of the Premises by the proposed assignee or
subtenant would not be permitted under this Lease, would entail any alterations
which would lessen the value of the leasehold improvements in the Premises,
would require increased services by Landlord or would violate any Applicable
Law; (iii) the financial condition of the proposed assignee or subtenant does
not meet the credit standards applied by Landlord for other tenants under leases
in the Project with comparable terms; (iv) the Premises, or the relevant part
thereof, will be used in a manner that will violate any negative covenant as to
use contained in any other lease of space in the Building or Project; (v)
Landlord has experienced previous defaults by or is in litigation with the
proposed assignee or subtenant; (vi) the proposed assignment or sublease
involves a party who is a tenant in the Building or Project or involves a party
with whom Landlord has negotiated for other space in the Building or Project
within the six (6) months immediately preceding Tenant's notice to Landlord of a
proposed Assignment or Subletting; (vii) Tenant is in default of any obligation
of Tenant under this Lease, or Tenant has defaulted under this Lease on two (2)
or more occasions during the Term; or (viii) in the case of a Subletting of less
than the entire Premises, if the Subletting would result in the division of the
Premises into more than two subparcels or would require access to be provided
through space leased or held for lease to another tenant or improvements to be
made outside of the Premises.

         18.2 General Provisions. The merger of Tenant with any other entity or
the transfer of any controlling or managing ownership or beneficial interest in
Tenant (as a consequence of a single transaction or a number of multiple
transactions), or the assignment or sale of a substantial portion of the assets
of Tenant, whether or not located at the Premises, that does not satisfy the
requirements of Section 18.8, shall constitute an Assignment hereunder. Except
in the event Landlord elects to terminate this Lease pursuant to Section 18.4
below, no Assignment or Subletting by Tenant shall relieve Tenant or any
guarantor of any obligation under this Lease, including Tenant's obligation to
pay Rent hereunder, and Tenant shall continue to be liable as a principal and
not as a guarantor or surety to the same extent as though no Assignment or
Subletting had been made. Any purported Assignment or Subletting contrary to the
provisions of this Lease without Landlord's prior written consent shall be null
and void and shall constitute an Event of Default hereunder. The consent by
Landlord to any Assignment or Subletting shall not constitute a waiver of the
necessity of obtaining Landlord's consent to any subsequent Assignment or
Subletting. Landlord may consent to any subsequent Assignment or Subletting, or
any amendment to or modification of this Lease with the assignees of Tenant,
without notifying Tenant or any successor of Tenant, and without obtaining its
or their consent thereto, and such action shall not relieve Tenant or any
successor of Tenant of any liability under this Lease but such action shall in
no event materially increase Tenant's obligations hereunder.

         18.3 Information to be Furnished. If Tenant desires to assign this
Lease or sublet any or all of the Premises, Tenant shall give Landlord written
notice thereof with copies of all documents and agreements associated with the
Assignment or Subletting, including without limitation, the name and address of
the proposed assignee or subtenant, the nature of the business proposed to be
carried on in the Premises, the effective date of the Assignment or Subletting
(the "TRANSFER EFFECTIVE DATE"), and such financial statements and other
documents as Landlord may reasonably require, not later than forty-five (45)
days prior to the anticipated effective date of the Assignment or Subletting.
Tenant shall pay Landlord's reasonable attorneys' fees incurred in the review of
such documentation, not to exceed Two Thousand Five Hundred Constant Dollars
($2,500.00). Tenant shall also pay, in advance, an administrative fee of Five
Hundred Constant Dollars ($500.00) for each proposed transfer.

         18.4 Landlord's Election. At any time within fifteen (15) days after
Landlord's receipt of Tenant's notice of its proposed Assignment or Subletting
and the information specified in Section 18.3, Landlord may, by written notice
to Tenant, elect to (i) consent to the proposed Assignment or Subletting by
Tenant or (ii) reasonably withhold its consent to the proposed Assignment or
Subletting by Tenant (however, if the foregoing fifteen (15) day period will
expire prior to the expiration of the thirty (30) day period following Tenant's
delivery of the Intention to Transfer Notice pursuant to the following
paragraph, then such fifteen (15) day period shall be extended to be coterminous
with such thirty (30) day period). If Landlord fails to notify Tenant in writing
of such election, Landlord shall be deemed to have disapproved of such
Assignment or Subletting. Notwithstanding anything to the contrary contained
herein, if Tenant claims that Landlord has unreasonably withheld or delayed its
consent under this Section 18 or otherwise has breached or acted unreasonably
under this Section 18, Tenant's sole remedies shall be a declaratory judgment
and an injunction for the relief sought without monetary damages, and Tenant
hereby waives all other remedies, including, without limitation, any right at
law or equity to terminate this Lease.

         Notwithstanding anything to the contrary contained in this Section
18.4, if Tenant contemplates a proposed Assignment of its entire interest in
this Lease or the Subletting of the entire Premises, then

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   32

Tenant shall give Landlord notice (the "INTENTION TO TRANSFER NOTICE") of such
contemplated transfer (whether or not the contemplated transferee or the terms
of such contemplated transfer have been determined). The Intention to Transfer
Notice shall specify the contemplated date of commencement of the contemplated
transfer, which shall not be earlier than thirty (30) days following Landlord's
receipt of the Intention to Transfer Notice (the "CONTEMPLATED EFFECTIVE DATE").
Thereafter, Landlord shall have the option, by giving written notice to Tenant
within thirty (30) days after Landlord's receipt of the Intention to Transfer
Notice, to terminate this Lease and release Tenant and any guarantor hereunder
from all obligations first occurring under this Lease as of the Contemplated
Effective Date (except those obligations that expressly survive the expiration
or earlier termination of this Lease). If Landlord declines, or fails to elect
in a timely manner to terminate this Lease under this Section 18.4 within such
thirty (30) day period, then, provided Landlord has consented to the proposed
transfer, Tenant shall be entitled to proceed with the proposed transfer and
Landlord shall not have any right to recapture with respect to any transfer
thereof consummated within a period of six (6) months (the "SIX MONTH PERIOD")
commencing on the expiration of such thirty (30) day period; provided, however,
that any such transfer shall be subject to other terms of this Section 18. If
such a transfer is not so consummated within the Six Month Period (or if a
transfer is so consummated, then upon the expiration of the term of any transfer
consummated within such Six Month Period), Tenant shall again be required to
submit a new Intention to Transfer Notice to Landlord with respect to any
proposed Assignment of its entire interest in this Lease or any Subletting of
the entire Premises.

         18.5 Termination. If Landlord elects to terminate this Lease pursuant
to Section 18.4 above, this Lease shall terminate effective as of the
Contemplated Effective Date and Tenant and any guarantor shall be released from
all obligations first accruing under the Lease as of such Contemplated Effective
Date (except those obligations that expressly survive the expiration or earlier
termination of this Lease).

         18.6 Bonus Rental. If Tenant receives rent or other consideration in
connection with any Assignment or Subletting in excess of the Rent, or in case
of the Subletting of a portion of the Premises, in excess of such Rent that is
fairly allocable to such portion (after deducting the reasonable expenses
incurred by Tenant for (1) any changes, alterations or improvements to the
Premises paid for by Tenant in connection with the transfer, (2) any other
out-of-pocket monetary concessions provided by Tenant to the transferee, and (3)
any brokerage commissions and/or reasonable attorneys' fees paid for by Tenant
in connection with the transfer), Tenant shall pay Landlord fifty percent (50%)
of the difference between each such payment of rent or other consideration and
the Rent required hereunder. If Tenant is in default hereunder, Landlord may,
without waiving any rights or remedies, collect rent from the subtenant or
occupant and apply the net amount collected to the Rent herein reserved and
apportion any excess rent so collected in accordance with the terms of the
preceding sentence.

         18.7 Executed Counterparts. No permitted Assignment or Subletting shall
be effective until there has been delivered to Landlord a written counterpart of
the assignment agreement or sublease reasonably satisfactory in form and
substance to Landlord in which the assignee or subtenant agrees to be and remain
jointly and severally liable with Tenant for the payment of Rent pertaining to
the Premises and for the performance of all the terms and provisions of this
Lease relating thereto arising on or after the date of the Assignment or
Subletting.

         18.8 Permitted Transfers. The term "AFFILIATE" shall mean (i) any
entity that is controlled by, controls or is under common control with, Tenant
or (ii) any entity that merges with, is acquired by, or acquires Tenant through
the purchase of stock or assets, and where the net worth of such entity (as to
(i) above) and the net worth of the surviving entity (as to (ii) above) as of
the date such transfer or transaction, as applicable, is completed is not less
than [*] Constant Dollars [*], except in the event of any transaction pursuant
to (ii) above in which (a) Tenant is not the surviving entity, and (b) the net
worth of the surviving entity is less than Tenant's net worth immediately prior
to such transaction calculated under generally accepted accounting principles,
in which case the net worth of the surviving entity as of the date such
transaction is completed shall not be less than [*] Constant Dollars [*].
Notwithstanding anything to the contrary contained in this Section 18, an
Assignment or Subletting of all or a portion of the Premises to an affiliate
("AFFILIATE") of Tenant shall not be deemed a transfer requiring Landlord's
consent under this Section 18, provided that (1) Tenant notifies Landlord of any
such assignment or sublease and promptly supplies Landlord with any documents or
information requested by Landlord regarding such assignment or sublease or such
Affiliate (including evidence of the assignee's assumption of Tenant's
obligations under this Lease in the event of an assignment), (2) such assignment
or sublease is not a subterfuge by Tenant to avoid its obligations under this
Lease, and (3) such assignment or sublease does not cause Landlord to be in
default under any existing lease at the Building or Project. An assignee of
Tenant's entire interest in this Lease pursuant to the immediately preceding
sentence may be referred to herein as an "AFFILIATED ASSIGNEE." "CONTROL," as
used in this Section 18.8, shall mean the ownership, directly or indirectly, of
greater than fifty percent (50%) of the voting securities of, or possession of
the right to vote, in the ordinary direction of its affairs, of greater than
fifty percent (50%) of the voting interest in, an entity

                                      -24-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   33

         18.9 Permitted Occupants. Notwithstanding the provisions of Section
18.1 above, Tenant may allow any Affiliate, or any person or company that is an
agent or contractor of Tenant to occupy certain portions of the Premises for the
primary purpose of furthering the business conducted by Tenant at the Premises
without such occupancy being deemed an Assignment or Subletting and without
Landlord's consent (for purposes of this Section 18.9 each such person or
company is referred to as an "OCCUPANT"), provided the following conditions are
satisfied: (a) such occupancy is not a subterfuge to avoid the provisions of
Section 18.1 concerning an Assignment or Subletting; (b) Tenant shall have
provided Landlord with the name and address of the Occupant and a copy of the
agreement, if any, under which such Occupant is occupying the Premises prior to
such Occupant's occupancy of the Premises; and (c) the aggregate amount of
rentable square feet occupied by all Occupants in the Premises does not, at any
one time, exceed twenty percent (20%) of the total rentable square feet in the
Premises. If an occupancy does not satisfy all of the foregoing conditions, then
such occupancy shall constitute a Subletting and shall be subject to the
provisions of Section 18.1.

19. ESTOPPEL, ATTORNMENT AND SUBORDINATION.

         19.1 Estoppel. Within ten (10) days after request by Landlord, Tenant
shall deliver to any Mortgagee, proposed Mortgagee, proposed purchaser and/or
Landlord an estoppel certificate duly executed (and acknowledged if required by
Landlord or any Mortgagee, proposed Mortgagee or proposed purchaser), in the
form attached hereto as Exhibit E, or in such other form as may be reasonably
acceptable to any existing or proposed Mortgagee or purchaser which form may
include some or all of the provisions contained in Exhibit E, to the extent the
certifications contained in such form are true and within the knowledge of
Tenant. Tenant's failure to deliver said statement in such time period shall be
an Event of Default hereunder unless Tenant delivers such statement within five
(5) days after Landlord's written notice to Tenant of such failure, and shall be
conclusive upon Tenant that (i) this Lease is in full force and effect, without
modification except as may be represented by Landlord; (ii) there are no uncured
defaults in Landlord's performance and Tenant has no right of offset,
counterclaim or deduction against Rent hereunder; and (iii) no more than one
month's Base Rent has been paid in advance. If any Mortgagee or proposed
Mortgagee should require that this Lease be amended (except as will materially
and adversely affect the rights of Tenant), Landlord shall give written notice
thereof to Tenant and Tenant shall, within ten (10) days after the receipt of
Landlord's notice, execute and deliver to Landlord the required Lease amendment.

         19.2 Subordination. This Lease shall be subject and subordinate to all
present and future ground leases, master leases and underlying leases, and to
the lien of all mortgages, deeds of trust and other encumbrances now or
hereafter in force against the Building, or any part thereof, or Landlord's
interest therein, and to all renewals, extensions, modifications, consolidations
and replacements thereof, and to all advances made or hereafter to be made upon
the security of such mortgages, deeds of trust or other encumbrances, all
without the necessity of Tenant's executing any further instrument to effect
such subordination, unless the holders of such mortgages, deeds of trust or
other encumbrances, or the lessors under such ground leases, master leases or
underlying leases, require that this Lease be superior thereto. Landlord's
interest herein may be assigned as security at any time to any lienholder.
Tenant shall, within ten (10) days following request by Landlord, execute such
further instruments or assurances as Landlord may reasonably deem necessary or
as may be reasonably required by any Mortgagee or proposed Mortgagee to evidence
or confirm the subordination or superiority of this Lease to any such mortgages,
deeds of trust, ground leases, master leases or underlying leases, Tenant's
failure to deliver said documentation in such time period shall be an Event of
Default hereunder. As a condition precedent to this Lease being subject and
subordinate to any future ground leases, master leases and underlying leases,
and to the lien of any future mortgages, deeds of trust and other encumbrances
hereafter in force against the Building, Landlord shall have delivered to Tenant
a commercially reasonable non-disturbance agreement in favor of Tenant.

         19.3 Attornment. Tenant hereby agrees that Tenant will recognize as its
landlord under this Lease, and shall attorn to, any person succeeding to the
interest of Landlord in the Building or the land upon which the Building is
located upon any foreclosure of any mortgage or deed of trust upon the Building
or the land upon which the Building is located, upon the execution of any deed
in lieu of foreclosure with respect to any deed of trust encumbering the
Building or such land, or upon the expiration or termination of any ground
lease, master lease or underlying lease encumbering the Building or such land,
if requested to do so by such successor or lienholder or ground lessor, master
lessor or underlying lessor. If requested, Tenant shall execute and deliver a
commercially reasonable instrument or instruments confirming its attornment as
provided for herein. Notwithstanding anything to the contrary contained herein,
as a condition precedent to Tenant's agreement to attorn to any holder of a
superior ground lease, master lease, underlying lease, mortgage, deed of trust
or other encumbrance, Tenant shall have received a commercially reasonable
non-disturbance agreement in favor of Tenant.

20. RELOCATION. Landlord shall have the right, upon reasonable prior notice to
Tenant, to require Tenant to relocate the Premises to other substantially
similar premises in the Building designated by Landlord. If such relocation
becomes necessary, Landlord agrees that it will pay Tenant's reasonable

                                      -25-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   34

expenses for architectural fees and construction costs to build tenant
improvements comparable to those located in the original Premises; and
relocation of Tenant's fixtures and equipment, telephone and utility services.
Landlord and Tenant agree to adjust the rental, to the extent necessary, to
reflect any increase or decrease in the aggregate number of rentable square feet
contained in such substitute premises. Notwithstanding anything to the contrary
contained herein but provided that (a) Tenant leases and occupies space in the
Building that contains at least one-half (1/2) the number of rentable square
feet as Tenant initially leases hereunder (as such initial square footage number
may be adjusted pursuant to Section 2.1 above) and (b) Tenant has a net worth,
as determined in accordance with generally accepted accounting principles, of at
least [*] Constant Dollars [*], Landlord shall not exercise its relocation right
under this section 20 as to the original Tenant or an Affiliated Assignee
hereunder only (i.e., Landlord's covenant to not relocate the original Tenant,
provided the conditions of this Section 20(a) and (b) above are met, shall be
personal to the original Tenant and may not be assigned or otherwise transferred
except to an Affiliated Assignee and any other transfer of Tenant's interest
shall be subject to Landlord's right to relocate the Tenant under this Section
20).

21. MISCELLANEOUS.

         21.1 General.

                  21.1.1 Entire Agreement. This Lease and the Exhibits hereto
set forth all the agreements between Landlord and Tenant concerning the Premises
and there are no agreements either oral or written other than as set forth
herein.

                  21.1.2 Time of Essence. Time is of the essence of this Lease.

                  21.1.3 Attorneys' Fees. In any action or proceeding which
either party brings against the other to enforce its rights hereunder, the
unsuccessful party shall pay all costs incurred by the prevailing party,
including reasonable attorneys' fees, which amounts shall be a part of the
judgment in said action or proceeding.

                  21.1.4 Severability. If any provision of this Lease or the
application of any such provision shall be held by a court of competent
jurisdiction to be invalid, void or unenforceable to any extent, the remaining
provisions of this Lease and the application thereof shall remain in full force
and effect and shall not be affected, impaired or invalidated.

                  21.1.5 Law. This Lease shall be construed and enforced in
accordance with the laws of the State of Colorado.

                  21.1.6 No Option. Submission of this Lease to Tenant for
examination or negotiation does not constitute an option to lease, offer to
lease or a reservation of, or option for, the Premises. This document shall
become effective and binding only upon the execution and delivery hereof by
Landlord and Tenant.

                  21.1.7 Successors and Assigns. This Lease shall be binding
upon and inure to the benefit of the successors and assigns of Landlord and
shall be binding upon and, subject to compliance with the terms of Section 18,
inure to the benefit of the successors and assigns of Tenant.

                  21.1.8 Third Party Beneficiaries. Nothing herein is intended
to create any third party beneficiaries.

                  21.1.9 Memorandum of Lease. Tenant shall not record this Lease
or a short form memorandum hereof.

                  21.1.10 Agency, Partnership or Joint Venture. Nothing
contained herein nor any acts of the parties hereto shall be deemed or construed
by the parties hereto, nor by any third party, as creating the relationship of
principal and agent or of partnership or of joint venture by the parties hereto
or any relationship other than the relationship of landlord and tenant.

                  21.1.11 Merger. The voluntary or other surrender of this Lease
by Tenant or a mutual cancellation thereof or a termination by Landlord shall
not constitute a merger and shall, at the option of Landlord, terminate all or
any existing subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all of such subtenancies.

                  21.1.12 Headings. Section headings have been inserted solely
as a matter of convenience and are not intended to define or limit the scope of
any of the provisions contained therein.

         21.2 Waiver. No waiver of any default or breach hereunder shall be
implied from any omission to take action on account thereof, notwithstanding any
custom and practice or course of dealing. No waiver by either party of any
provision of this Lease shall be effective unless in writing and signed by

                                      -26-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   35

such party. No waiver shall affect any default other than the default specified
in the waiver and then such waiver shall be operative only for the time and to
the extent therein stated. Waivers of any covenant shall not be construed as a
waiver of any subsequent breach of the same covenant.

         21.3 Financial Statements. Tenant shall provide to any Mortgagee,
purchaser, potential Mortgagee or purchaser, and/or Landlord, within ten (10)
days after request, a current, accurate, certified financial statement for
Tenant and Tenant's business prepared under generally accepted accounting
principles consistently applied and such other certified financial information
or tax returns as may be reasonably requested by Landlord, any existing or
proposed Mortgagee, and/or any purchaser or any lender of such purchaser;
provided, however, that Landlord may not request such information from Tenant
more than once in any calendar year (except as may be more frequently required
in connection with any sale or financing of the Building or Project). Further,
with regard to any such financial statements and related documents conspicuously
marked "confidential" by Tenant, Landlord agrees to use commercially reasonable
efforts to prevent disclosure of any financial statements and related documents
so marked to parties other than (a) Landlord's employees, agents, outside
financial or legal consultants, Mortgagee(s) and/or lender(s) who have a
reasonable need to access such financial statements or related documents, (b)
any prospective purchasers of the Building or Project and their employees,
agents, financial or legal consultants, and/or lender(s) who have a reasonable
need to access such financial statements or related documents or (c) as required
by Applicable Laws. In no event shall Tenant be required to disclose any
information or statements in violation of applicable securities laws or other
Applicable Laws and in no event shall Landlord be liable to Tenant in connection
with any "confidential" information provided to Landlord by Tenant.

         21.4 Limitation of Liability. The obligations of Landlord under this
Lease are not personal obligations of the individual members, managers,
partners, directors, officers, shareholders, agents or employees of Landlord and
Tenant shall look solely to Landlord's interest in the Building (including,
without limitation, any insurance proceeds, condemnation proceeds, accounts,
claims, causes of action, personal property, contracts, leases, and other assets
of Landlord solely related to the Building or Project) for satisfaction of any
liability of Landlord and shall not look to other assets of Landlord nor seek
recourse against the assets of the individual members, managers, partners,
directors, officers, shareholders, agents or employees of Landlord. Whenever
Landlord transfers its interest in the Building, provided that the transferee of
Landlord's interest agrees in writing to be bound by all of the terms and
conditions of the Lease arising after the date of the transfer, Landlord shall
be automatically released from further performance under this Lease arising from
and after the date of transfer and from all further liabilities and expenses
hereunder arising from and after the date of transfer, and the transferee of
Landlord's interest shall assume all liabilities and obligations of Landlord
hereunder arising from and after the date of such transfer. Nothing contained
herein shall be construed to release Landlord from liabilities hereunder that
accrued or that arose prior to the date of any such transfer.

         21.5 Notices. All notices to be given hereunder shall be in writing and
sent via a method capable of being traced (mailed postage prepaid by USPS
certified or registered mail, return receipt requested, or delivered by a
nationally-recognized overnight delivery service (e.g., Federal Express, UPS)),
or sent by facsimile, electronically confirmed (immediately followed by one of
the preceding methods), to Landlord's Address and Tenant's Address set forth in
the Basic Lease Information or to such other place as Landlord or Tenant may
designate in a written notice given to the other party or, in the case of
Tenant, delivered to Tenant at the Premises. Notices shall be deemed served upon
the first attempted delivery by the U.S. Postal Service, the courier or a
nationally recognized overnight delivery service, or upon receipt of the
facsimile before 5 p.m. on any business day, or, if receipt is after 5 p.m., on
the next business day.

         21.6 Commission. Landlord shall pay a brokerage commission to Tenant's
Broker specified in the Basic Lease Information in accordance with a separate
agreement between Landlord and Tenant's Broker. Landlord shall have no further
or separate obligation for payment of any commissions or fees to any other
broker or finder. Subject to the first sentence of this Section 21.6, Tenant
agrees to indemnify and hold harmless Landlord from any claims, including
reasonable attorneys' fees, in connection with a claim by any person for a real
estate broker's commission, finder's fee or other compensation based upon any
statement, representation or agreement of Tenant, and Landlord agrees to
indemnify and hold Tenant harmless from any such claims or liability, including
reasonable attorneys' fees, based upon any statement, representation or
agreement of Landlord.

         21.7 Authorization. Each individual executing this Lease on behalf of
the respective parties represents and warrants that to the best of his or her
respective knowledge, he or she is duly authorized to execute and deliver this
Lease on behalf of such party and that such execution is binding upon such
party.

         21.8 Holding Over/Surrender. If Tenant holds over the Premises or any
part thereof after expiration of the Term, such holding over shall be considered
to be at sufferance only, at a rent equal to (a) for the first thirty (30) days
after such expiration, the Base Rent in effect immediately preceding the
expiration and (b) thereafter, one hundred fifty percent (150%) of the Base Rent
in effect immediately

                                      -27-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   36

preceding the expiration and shall otherwise be on all the other terms and
conditions of this Lease. This paragraph shall not be construed as Landlord's
permission for Tenant to hold over. Acceptance of Rent by Landlord following
expiration or termination shall not constitute a renewal of this Lease or
extension of the Term except as specifically set forth above. If Tenant fails to
surrender the Premises upon expiration or earlier termination of this Lease,
Tenant shall indemnify and hold harmless Landlord from and against all loss or
liability proximately resulting from or arising out of Tenant's failure to
surrender the Premises, including, but not limited to, lost profits and any
amounts required to be paid to any tenant or prospective tenant who was to have
occupied the Premises after the expiration or earlier termination of this Lease
and any related attorneys' fees and brokerage commissions. Subject to the terms
and conditions hereof, upon the termination of this Lease or Tenant's right to
possession of the Premises, Tenant will surrender the Premises, together with
all keys, in good condition and repair, reasonable wear and tear excepted.
Conditions existing because of Tenant's failure to perform maintenance, repairs
or replacements shall not be deemed "reasonable wear and tear."

         21.9 Confidentiality. Tenant acknowledges that the economic terms of
this Lease are confidential information. Tenant shall use commercially
reasonable efforts to keep such confidential information strictly confidential
and shall not disclose such confidential information to any person or entity
other than (a) Tenant's Architect, Tenant's financial, legal and space planning
consultants and any proposed subtenants or assignees and/or (b) as may be
required by Applicable Laws.

         21.10 Covenants and Conditions. Each provision to be performed by a
party hereunder shall be deemed to be both a covenant and a condition.

         21.11 Use of Name, Filming and Photographs of Project. Tenant
acknowledges and agrees that the names Catellus, CirclePoint Corporate Center,
and all variations thereof, are proprietary to Landlord. Tenant shall not use
any such name or any variation thereof or identify Landlord in any promotional
advertising or other promotional materials to be disseminated to the public or
any portion thereof or use any trademark, service mark, trade name or symbol of
Landlord or that is associated with it, without Landlord's prior written
consent, which may be given or withheld in Landlord's sole discretion.
Notwithstanding the foregoing, Tenant may use the term "CirclePoint Corporate
Center" only to identify the location of the Premises. Further, Tenant shall not
film or photograph the Premises, Building or Project (or allow or permit any
third party to so film or photograph) without Landlord's prior written consent,
which, consent in Landlord's sole and absolute discretion, may be withheld, or
conditioned upon Tenant's payment of a fee.

         21.12 Force Majeure. If either party is delayed in the performance of
any obligation hereunder, except for the payment of money, by reason of a Force
Majeure Event, then the performance of the obligation shall be excused for the
period of the delay and the period for performing the obligation shall be
extended for a period equivalent to the period of the delay. Nothing contained
in this Section shall excuse Tenant from the obligation to pay Rent when due
without regard to the occurrence of any Force Majeure Event, or extend the
Commencement Date or the Rent Commencement Date. "FORCE MAJEURE EVENT" shall
mean and include any delay caused by fire, flood, inclement weather, strikes,
lockouts or other labor or industrial disturbance (whether or not on the part of
agents or employees of either party hereto engaged in the construction of the
Premises), civil disturbance, order of any government, court or regulatory body
claiming jurisdiction or otherwise, act of public enemy, war, riot, sabotage,
blockade, embargo or failure or inability to secure materials, supplies or labor
through ordinary sources by reason of shortages or priority that are beyond the
reasonable control of the party claiming the occurrence of a Force Majeure Event
or any other event that is beyond the reasonable control of the party claiming
the occurrence of a Force Majeure Event.

         21.13 Constant Dollars. Certain dollar amounts set forth in this Lease
are referred to as being Constant Dollars. The term "CONSTANT DOLLARS" shall
mean the present value of the dollars to which such phrase refers, and an
adjustment shall occur on each anniversary of the Commencement Date as
hereinafter set forth. Constant Dollars shall be determined by multiplying the
dollar amount to be adjusted by a fraction, the numerator of which is the
Current Index Number and the denominator of which is the Base Index Number (as
such terms are hereinafter defined). The "Base Index Number" shall be the level
of the Index (as hereinafter defined) for the calendar month in which the
Commencement Date occurs; the "Current Index Number" shall be the level of the
Index for the calendar month in which the adjustment is to take place; and the
"Index" shall be the Consumer Price Index - All Urban Consumers
(Denver-Boulder-Greeley, CO.) All Items Base 1982-84=100) or any successor index
thereto as hereinafter provided. If publication of the Index is discontinued, or
if the basis of calculating the Index is materially changed, then Landlord shall
substitute for the Index comparable statistics as computed by an agency of the
United States Government or, if none, by a periodical or publication of
recognized authority closely approximating the result which would have been
achieved by the Index.

                                      -28-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   37

         21.14 Development of the Project.

                  21.14.1 Subdivision. Tenant acknowledges that the Project has
been, or is in the process of being, subdivided. Landlord reserves the right to
further subdivide all or a portion of the Project. Tenant agrees to execute and
deliver, within ten (10) days after request by Landlord and in the form
reasonably requested by Landlord, any additional commercially reasonable
documents needed to conform this Lease to the circumstances resulting from a
subdivision and any all maps in connection therewith, provided Tenant shall not
be required to incur any unreasonable costs, undue burden or diminution of
Tenant's rights hereunder in connection therewith.

                  21.14.2 Multiple Ownership. If portions of the Project are
owned by an entity other than Landlord, Landlord, at its option, may enter into
an agreement with the owner or owners of such portion(s) to provide (i) for
reciprocal rights of access, use and/or enjoyment of the Project, (ii) for the
common management, operation, maintenance, improvement and/or repair of all or
any portion of the Project, (iii) for the allocation of Operating Expenses for
Common Facilities, and (iv) for any other matter which Landlord reasonably deems
necessary. Tenant agrees that this Lease shall be subordinate to any such
agreement, and agrees to execute and deliver, within ten (10) days after request
by Landlord, and in the form reasonably requested by Landlord, any additional
commercially reasonable documents designated by Landlord to further evidence the
subordination of this Lease to such agreement, provided Tenant shall not be
required to incur any unreasonable costs, undue burden or diminution of Tenant's
rights hereunder as a result thereof, and provided that no such document or
agreement shall have any material adverse effect on Tenant's use and enjoyment
of the Premises for the conduct of its business.

                  21.14.3 Construction of Project. Tenant acknowledges that
portions of the Project may be under construction following Tenant's occupancy
of the Premises, and that such construction may result in levels of noise, dust,
and obstruction of access, which are in excess of that present in a fully
constructed project. Provided that such levels of noise, dust, and obstruction
of access do not commercially unreasonably prevent or impair Tenant's ability to
use and enjoy the Premises for the conduct of its business, Tenant hereby waives
any and all Rent offsets or claims of constructive eviction which may arise in
connection with such construction, and further provided that Landlord shall take
all reasonable measures to minimize any interference or disruption to Tenant's
use of the Premises.

                  21.14.4 Site Plan. Tenant acknowledges that the purpose of the
site plan set forth on Exhibit A-2 is to show the general location of the
Building and other proposed improvements within the Project, and is not meant to
constitute an agreement, representation or warranty as to the precise location,
size or configuration of any of the improvements shown thereon, nor shall it
constitute an agreement, representation or warranty that any such improvements
will be constructed, except as otherwise expressly provided herein with respect
to Landlord's Work.

                  21.14.5 Expansion of Project. Tenant acknowledges that
Landlord may from time to time include within the Project additional land by
annexing the same into the CC&Rs, whereupon such annexed land will constitute a
portion of the Project.

         21.15 Communication Equipment. If Tenant desires to use the roof of the
Building to install communication equipment to be used from the Premises in
connection with Tenant's business at the Premises only, Tenant may so notify
Landlord in writing ("COMMUNICATION EQUIPMENT NOTICE"), which Communication
Equipment Notice shall generally describe the specifications for the equipment
desired by Tenant. If at the time of Landlord's receipt of the Communication
Equipment Notice, Landlord reasonably determines that space is available on the
roof of the Building for such equipment, then subject to all governmental laws,
rules and regulations, Tenant and Tenant's contractors (which shall first be
reasonably approved by Landlord) shall have the right and access to install,
repair, replace, remove, operate and maintain one (1) so-called "satellite dish"
or other similar device, such as antennae no greater than one (1) meter in
diameter, together with all cable, wiring, conduits and related equipment
(collectively, "COMMUNICATION EQUIPMENT"), for the purpose of receiving and
sending radio, television, computer, telephone or other communication signals,
at a location on the roof of the Building designated by Landlord. Landlord shall
have the right to require Tenant to relocate the Communication Equipment at any
time to another location on the roof of the Building reasonably approved by
Tenant. Tenant shall retain Landlord's designated roofing contractor to make any
necessary penetrations and associated repairs to the roof in order to preserve
Landlord's roof warranty. Tenant's installation and operation of the
Communication Equipment shall be governed by the following terms and conditions:

                  (a) Tenant's right to install, replace, repair, remove,
operate and maintain the Communication Equipment shall be subject to all
governmental laws, rules and regulations and Landlord makes no representation
that such laws, rules and regulations permit such installation and operation.

                  (b) All plans and specifications for the Communication
Equipment shall be subject to Landlord's reasonable approval.

                                      -29-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   38

                  (c) All costs of installation, operation and maintenance of
the Communication Equipment and any necessary related equipment (including,
without limitation, costs of obtaining any necessary permits and connections to
the Building's electrical system) shall be borne by Tenant.

                  (d) It is expressly understood that Landlord retains the right
to use the roof of the Building for any purpose whatsoever provided that
Landlord shall not unduly interfere with Tenant's use of the Communication
Equipment.

                  (e) Tenant shall use the Communication Equipment so as not to
cause any interference to other tenants in the Building or to other tenants of
the Building or with any other tenant's Communication Equipment, and not to
damage the Building or interfere with the normal operation of the Building.

                  (f) Landlord shall not have any obligations with respect to
the Communication Equipment. Landlord makes no representation that the
Communication Equipment will be able to receive or transmit communication
signals without interference or disturbance (whether or not by reason of the
installation or use of similar equipment by others on the roof of the Building)
and Tenant agrees that Landlord shall not be liable to Tenant therefor.

                  (g) Tenant shall (i) be solely responsible for any damage
caused as a result of the Communication Equipment, (ii) promptly pay any tax,
license or permit fees charged pursuant to any laws or regulations in connection
with the installation, maintenance or use of the Communication Equipment and
comply with all precautions and safeguards recommended by all governmental
authorities, and (iii) pay for all necessary repairs, replacements to or
maintenance of the Communication Equipment.

                  (h) The Communication Equipment shall remain the sole property
of Tenant. Tenant shall remove the Communication Equipment and related equipment
at Tenant's sole cost and expense upon the expiration or sooner termination of
this Lease or upon the imposition of any governmental law or regulation which
may require removal, and shall repair the Building upon such removal to the
extent required by such work of removal. If Tenant fails to remove the
Communication Equipment and repair the Building within fifteen (15) days after
the expiration or earlier termination of this Lease, Landlord may do so at
Tenant's expense. The provisions of this Section 21.15 shall survive the
expiration or earlier termination of this Lease.

                  (i) The Communication Equipment shall be deemed to constitute
a portion of the Premises for purposes of Section 9 of this Lease.

         IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first set forth above.

"Landlord"                             CATELLUS DEVELOPMENT CORPORATION,
                                       a Delaware corporation

                                       By:  Catellus Commercial Group, LLC, a
                                            Delaware limited liability company
                                            Its: Agent

                                            By: /s/ Ted Antenucci
                                               ---------------------------------
                                               Name: Ted Antenucci
                                                    ----------------------------
                                               Its:  E.V.P.
                                                   -----------------------------

"Tenant"                               ALLOS THERAPEUTICS, INC.,
                                       a Delaware corporation

                                            By: /s/ Michael E. Hart
                                               ---------------------------------
                                               Name: Michael E. Hart
                                                    ----------------------------
                                               Its:  Chief Financial Officer and
                                                     Sr. VP, Operations
                                                   -----------------------------

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

                                      -30-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>   39

                                   EXHIBIT A-1

                                    PREMISES

                                  [FLOOR PLAN]

                                       -1-
<PAGE>   40

                                   EXHIBIT A-2

                                     PROJECT

                                  [FLOOR PLAN]

                                   EXHIBIT A-2
                                        1
<PAGE>   41

                                    EXHIBIT B

                                   WORK LETTER

         This Work Letter ("WORK LETTER") is attached to the Lease as Exhibit B
and incorporated into the Lease by reference. Capitalized terms used herein and
not defined herein shall have the respective meanings set forth in the Lease.

         1. Landlord's Work. Landlord shall arrange for the construction the
Building in the Project in accordance with the plans and specifications
described in Schedule 1, attached hereto and incorporated herein by reference
(collectively, "LANDLORD'S WORK"), which Landlord's Work shall include
construction of the lobby and restrooms located on the second (2nd) floor of the
Building, as further detailed on the plans attached hereto as Schedule 2.

         2. Tenant Improvements.

                  2.1 TI Allowance. Tenant shall be entitled to a one-time
tenant improvement allowance (the "TI ALLOWANCE") in the amount of [*] for the
costs relating to the initial design and construction of Tenant's improvements
that are permanently affixed to the Premises (the "TENANT IMPROVEMENTS"). In no
event shall Landlord be obligated to make disbursements pursuant to this Work
Letter in a total amount which exceeds the TI Allowance. Tenant shall not be
entitled to any credit for any unused portion of the TI Allowance. The parties
hereto agree that, in the event the number of rentable square feet of the
Premises is adjusted from 31,228 pursuant to Section 2.1 of the Lease, the TI
Allowance shall be reduced or increased (as the case may be) by the product of
(a) Twenty-Eight Dollars ($28.00) and (b) the difference between such adjusted
number of rentable square feet in the Premises and 31,228 (and in the event of
such increase or reduction, the parties shall promptly execute an amendment to
the Lease reflecting such adjusted TI Allowance amount).

                  2.2 Disbursement of the TI Allowance. Except as otherwise set
forth in this Work Letter, the TI Allowance shall be disbursed by Landlord (each
of which disbursements shall be made pursuant to Landlord's disbursement
process), only for the following items and costs (collectively, the "TI
ALLOWANCE ITEMS"): (a) payment of the fees of the "Architect" and the
"Engineers," as those terms are defined in Section 2.3 of this Work Letter
(including fees for one "test fit"), and payment of the fees incurred by, and
the cost of documents and materials supplied by, Landlord and Landlord's
consultants in connection with the preparation and review of the "Working
Drawings," as that term is defined in Section 2.3 of this Work Letter; (b) the
payment of plan check, permit and license fees relating to construction of the
Tenant Improvements; (c) the cost of construction of the Tenant Improvements;
(d) the cost of any changes in the base, shell and core of the Building when
such changes are required by the Working Drawings (including if such changes are
due to the fact that such work is prepared on an unoccupied basis) or are
otherwise required by Applicable Law as a result of the construction of the
Tenant Improvements, such cost to include all direct architectural and/or
engineering fees and expenses incurred in connection therewith; (e) the cost of
any changes to the Working Drawings or Tenant Improvements required by
Applicable Law; (f) sales and use taxes and/or applicable fees; (g) "Landlord's
Supervision Fee," as that term is defined in Section 2.10 of this Work Letter;
(h) all other costs to be expended by Landlord in connection with the
construction of the Tenant Improvements; and (i) one-half (1/2) of the costs of
the demising walls between the Premises and the Building's second (2nd) floor
lobby, which one-half (1/2) of the costs shall not exceed Four Thousand Dollars
($4,000.00). However, in no event shall more than Ninety Thousand Dollars
($90,000.00) of the TI Allowance be used for the items described in (a) above;
any additional amount incurred as a result of (a) above shall be deemed to
constitute an Over-Allowance Amount.

                  2.3 Building Specifications. Landlord may establish
specifications for the Building-standard components to be used in the
construction of the Tenant Improvements in the Premises (collectively, the
"BUILDING SPECIFICATIONS"), which shall be available to Tenant upon request.
Tenant shall utilize materials and finishes that comply with the Building
specifications and Tenant shall not substitute any such materials or finishes
without Landlord's prior written consent. Landlord may make changes to the
Building Specifications from time to time.

                           2.3.1 Selection of Architect/Working Drawings.
Conditioned upon Landlord's reasonable approval of a contract for services,
Tenant shall retain Gray Design (the "ARCHITECT") to prepare the "Working
Drawings," as that term is defined in this Section 2.3.1 below. Landlord shall
retain Landlord's designated engineering consultants (the "ENGINEERS") to
prepare all plans and engineering working drawings relating to the structural,
mechanical, HVAC/lifesafety, electrical, plumbing, and sprinkler work in the
Premises. The plans and drawings to be prepared by the Architect hereunder shall
be known collectively as the "WORKING DRAWINGS" and the plans and drawings to be
prepared by the Engineers hereunder shall be known collectively as the
"ENGINEERING DRAWINGS." Notwithstanding that Landlord has retained the Engineers
to prepare the Engineering Drawings and that

                                    EXHIBIT B
                                       -1-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>   42

Landlord shall review the Working Drawings required hereunder, Landlord shall
have no liability whatsoever in connection therewith and shall not be
responsible for any omissions or errors contained in the Working Drawings or the
Engineering Drawings.

                           2.3.2 Selection of Contractor. Landlord shall also
retain a contractor ("CONTRACTOR") designated by Landlord and reasonably
approved by Tenant to construct the Tenant Improvements. The Contractor shall
subcontract with Landlord's designated subcontractors for any and all
mechanical, electrical plumbing, HVAC/lifesafety, and sprinkler systems. Tenant
shall be permitted to participate with Landlord in the process of selecting the
Contractor; provided, however, that if Landlord and Tenant have not reasonably
agreed on the selection of the Contractor by May 1, 2001, such failure to agree
shall be deemed a Tenant Delay as further provided in Section 3.2 below.

                  2.4 Final Space Plan. Tenant and the Architect shall prepare
the final space plan for Improvements in the Premises (collectively, the "FINAL
SPACE PLAN"), which Final Space Plan shall include a layout and designation of
all offices, rooms and other partitioning, their intended use, and equipment to
be contained therein, and shall deliver the Final Space Plan to Landlord for
Landlord's approval or reasonable disapproval, which approval or reasonable
disapproval shall be delivered by Landlord to Tenant no later than five (5)
business days after Landlord's receipt of such Final Space Plan. If Landlord
reasonably disapproves of any portion of the Final Space Plan, the parties shall
meet, within five (5) days after Landlord's disapproval, to agree upon revisions
to be made to the Final Space Plan to meet the reasonable satisfaction of
Landlord. The Architect shall then revise the Final Space Plan to the form
agreed upon in such meeting and Landlord shall then approve or reasonably
disapprove the revised Final Space Plan in writing no later than five (5)
business days after Landlord's receipt of such revised Final Space Plan. If
Landlord shall again reasonably disapprove the revised Final Space Plan, the
parties will revise and review the Final Space Plan again in accordance with the
procedure set forth above until Landlord's reasonable approval is obtained.

                  2.5 Final Working Drawings. Tenant and the Architect shall
complete the architectural drawings for the Premises, and the Architect shall
compile a fully coordinated set of architectural working drawings in a form
which is complete to allow subcontractors to bid on the work and to obtain all
applicable permits (collectively, the "FINAL WORKING DRAWINGS") and shall submit
the same to Landlord for Landlord's approval or reasonable disapproval, which
approval or reasonable disapproval shall be delivered by Landlord to Tenant no
later than five (5) business days after Landlord's receipt of such Final Working
Drawings. If Landlord reasonably disapproves of any portion of the Final Working
Drawings, the parties shall meet, within five (5) days after Landlord's
disapproval, to agree upon revisions to be made to the Final Working Drawings to
meet the reasonable satisfaction of Landlord. The Architect shall then revise
the Final Working Drawings to the form agreed upon in such meeting. Landlord
shall then approve or reasonably disapprove the revised Final Working Drawings
no later than five (5) business days after Landlord's receipt of such revised
Final Working Drawings. If Landlord shall again reasonably disapprove the
revised Final Working Drawings, the parties will revise and review the Final
Working Drawings again in accordance with the procedure set forth above until
Landlord's reasonable approval is obtained.

                  2.6 Approved Working Drawings. The Final Working Drawings
approved by Landlord and Tenant and the Engineering Drawings shall be referred
to herein collectively as (the "APPROVED WORKING DRAWINGS") and Tenant shall
submit the same to the appropriate governmental entities for all applicable
building permits necessary to allow the Contractor to commence and fully
complete the construction of the Tenant Improvements (the "PERMITS"). If Tenant
desires any change, modification or alteration in the Approved Working Drawings,
Tenant must first obtain the prior written consent of Landlord, provided that
Landlord may withhold its consent, in its sole discretion, to any change in the
Approved Working Drawings, if such change would directly or indirectly delay the
Substantial Completion of the Premises. Prior to commencing any change requested
by Tenant to the Approved Working Drawings, Landlord shall prepare and deliver
to Tenant, for Tenant's approval, a change order ("CHANGE ORDER") setting forth
the additional time required to perform the change and the total cost of such
change, which shall include associated architectural, engineering and
Contractor's fees. If Tenant fails to approve such Change Order in writing
within two (2) business days after such delivery by Landlord, Tenant shall be
deemed to have withdrawn the Change Order and Landlord shall not proceed to
perform the change but will continue with construction in accordance with the
Approved Working Drawings.

                  2.7 Time Deadlines. Tenant shall cooperate with (i) the
Architect, the Engineers, and Landlord to complete all phases of the Working
Drawings, the Engineering Drawings and the permitting process and Tenant shall
exercise its best efforts to obtain the Permits no later than May 15, 2001, and
(ii) the Contractor, for approval of the "Cost Proposal," as that term is
defined in Section 2.8, below, in accordance with the dates set forth herein.
Tenant shall meet with Landlord on a weekly basis to discuss Tenant's progress
in connection with the same. The applicable dates for approval of items, plans
and drawings and selection of a contractor as described in this Work Letter are
referred to herein as the "TIME DEADLINES." Tenant agrees to comply with the
time deadlines.

                                    EXHIBIT B
                                       -2-
<PAGE>   43

                  2.8 Cost Proposal. After the Approved Working Drawings are
approved by Landlord and Tenant, Landlord shall provide Tenant with a cost
proposal in accordance with the Approved Working Drawings, which cost proposal
shall include, as nearly as possible, the cost of all TI Allowance Items to be
incurred by Tenant in connection with the construction of the Tenant
Improvements (the "COST PROPOSAL"). Landlord does not guaranty the accuracy of
the Cost Proposal. Notwithstanding the foregoing, portions of the cost of the
Tenant Improvements may be delivered to Tenant as such portions of the Tenant
Improvements are priced by Contractor (on an individual item-by-item or
trade-by-trade basis), even before the Approved Working Drawings are completed
(the "PARTIAL COST PROPOSAL"). Tenant shall either (i) approve and deliver the
Cost Proposal to Landlord within five (5) business days of the receipt of the
same (or, as to a Partial Cost Proposal, within two (2) business days of receipt
of the same), or (ii) notify Landlord within five (5) business days after
Tenant's receipt of the Cost Proposal (or Partial Cost Proposal, as the case may
be) that Tenant desires to revise the Approved Working Drawings to reduce the
amount of the Cost Proposal (or Partial Cost Proposal, as the case may be), in
which case such changes shall be made to the Approved Working Drawings only in
accordance with Section 2.7 above and the revised Working Drawings shall be
provided to the Contractor for repricing whereupon Landlord shall revise the
Cost Proposal (or Partial Cost Proposal, as the case may be) for Tenant's
approval. This procedure shall be repeated until the Cost Proposal (or Partial
Cost Proposal, as the case may be) is approved by Tenant. The date by which
Tenant has approved the Cost Proposal, or the last Partial Cost Proposal, as the
case may be, shall be known hereafter as the "COST PROPOSAL DELIVERY DATE." The
total of all Partial Cost Proposals, if any, shall be known as the Cost
Proposal.

                  2.9 Over-Allowance Amount. The amount that is equal to the
difference between (i) the amount of the Cost Proposal and (ii) the amount of
the TI Allowance (less any portion thereof already disbursed by Landlord, or in
the process of being disbursed by Landlord, on or before the Cost Proposal
Delivery Date that is not otherwise included within the Cost Proposal) shall be
referred to herein as the "OVER-ALLOWANCE AMOUNT." Tenant shall pay to Landlord
(a) one-half (1/2) of such Over- Allowance Amount no later than ten (10) days
after the Cost Proposal Delivery Date and (b) the other one-half (1/2) of such
Over-Allowance Amount on or before August 15, 2001. The Over-Allowance Amount
shall be disbursed by Landlord prior to the disbursement of any then remaining
portion of the TI Allowance, and such disbursement shall be pursuant to the same
procedure as the TI Allowance. In the event that after the Cost Proposal
Delivery Date, any revisions, changes, or substitutions shall be made to the
Construction Drawings or the Tenant Improvements, any additional costs which
arise in connection with such revisions, changes or substitutions shall be paid
by Tenant to Landlord as an addition to the Over-Allowance Amount as follows:
(1) one-half (1/2) of such additional amount within five (5) days after
Landlord's invoice therefor and (2) the remaining one-half (1/2) of such
additional amount upon Tenant's receipt of Landlord's written notice that the
work to which the change order applies is complete but in no event later than
August 15, 2001. In the event any such revisions, changes or substitutions occur
after August 15, 2001, Tenant shall pay for such additional amounts within five
(5) days after Landlord's invoice therefor. In addition, upon Landlord's
determination of the actual costs incurred by or on behalf of Landlord for the
TI Allowance Items, Tenant shall pay Landlord the amount, if any, by which such
actual costs exceed the sum of the TI Allowance and the Over-Allowance Amount
within fifteen (15) days after being billed therefor, or Landlord may, at its
election, require that Tenant deposit with Landlord the full amount of such
excess prior to Landlord's delivery of the Premises to Tenant. No portion of the
TI Allowance shall be used to pay Tenant or Tenant's agents, contractors or
employees, unless and until Landlord's contractors and any other persons and
entities employed by or under contract with Landlord have been paid in full.

                  2.10 Landlord Supervision. Landlord shall independently retain
Contractor to construct the Tenant Improvements in accordance with the Approved
Working Drawings and the Cost Proposal and Landlord shall supervise the
construction by Contractor, and Tenant shall pay a construction supervision and
management fee (the "LANDLORD SUPERVISION FEE") to Landlord (or its agent) in an
amount equal to the product of (i) [*] and (ii) the Over-Allowance Amount.

                  2.11 Contractor's Warranties and Guaranties. Landlord hereby
assigns to Tenant all warranties and guaranties by Contractor relating to the
Tenant Improvements, and Tenant hereby waives all claims against Landlord
relating to, or arising out of the construction of, the Tenant Improvements.

         3. Completion of the Tenant Improvements; Delivery Date.

                  3.1 Substantial Completion. "SUBSTANTIAL COMPLETION" of the
Premises shall occur upon completion of construction of the Tenant Improvements
in the Premises pursuant to the Approved Working Drawings, with the exception of
any punch list items and any Tenant fixtures, work-stations, built-in furniture,
or equipment to be installed by Tenant or under the supervision of Contractor.

                  3.2 Delay of Substantial Completion of the Premises. Except as
provided in this Section 3, the Delivery Date shall occur as set forth in the
Basic Lease Information. If there shall be a delay or there are delays in the
Substantial Completion of the Premises (based upon the anticipated date of the
occurrence of the Delivery Date as set forth in the Lease) or in the occurrence
of any of the other

                                    EXHIBIT B
                                       -3-

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>   44

conditions precedent to the Delivery Date, as set forth in the Lease, as a
direct, indirect, partial, or total result of any of the following
(collectively, "TENANT DELAYS"): (a) Tenant's failure to comply with the time
deadlines (including the failure to obtain the Permits by May 15, 2001 and the
failure to agree upon the selection of the Contractor by May 1, 2001); (b)
Tenant's failure to timely approve any matter requiring Tenant's approval; (c) a
breach by Tenant of the terms of this Work Letter or the Lease; (d) changes in
the Final Space Plan or the Final Working Drawings requested by Landlord (but
only as such changes are required to preserve the integrity of Landlord's Work
or structural portions of the Building) or Tenant after Tenant's initial
submission thereof to Landlord; (e) Tenant's request for changes in the Approved
Working Drawings (including, without limitation, any changes made in order to
reduce the amount of the Cost Proposal (or Partial Cost Proposal, as the case
may be); (f) Tenant's requirement for materials, components, finishes or
improvements that are not available in a reasonable time (based upon the
anticipated Delivery Date) or that are different from, or not included in, the
Building Specifications and Tenant's refusal to reasonably accept substitute
materials, components, finishes and improvements proposed by Landlord; (g)
changes to the base, shell and core of the Building required by the Approved
Working Drawings; (h) Tenant's failure to timely deliver the second (2nd) Letter
of Credit as required under Section 4.4.1 of the Lease; or (i) any other acts or
omissions of Tenant, or its agents, or employees (including Tenant's Architect);
then, notwithstanding anything to the contrary set forth in this Lease and
regardless of the actual date of the Substantial Completion of the Premises, the
date of Substantial Completion and delivery of the Premises to Tenant (for
purposes of determining the Delivery Date) shall be deemed to be the date
Substantial Completion and delivery of the Premises to Tenant would have
occurred if no Tenant Delays, as set forth above, had occurred.

                  3.3 Tenant's Entry Into the Premises Prior to Substantial
Completion. Provided that Tenant and its agents do not interfere with, or delay,
Contractor's work in the Building and the Premises, Contractor shall allow
Tenant access to the Premises prior to the Substantial Completion of the
Premises for the purpose of Tenant installing overstandard equipment or fixtures
(including Tenant's data and telephone equipment) in the Premises. Prior to
Tenant's entry into the Premises as permitted by the terms of this Section 3.3,
Tenant shall submit a schedule to Landlord and Contractor, for their approval,
which schedule shall detail the timing and purpose of Tenant's entry. Tenant
shall hold Landlord harmless from and indemnify, protect and defend Landlord
against any loss or damage to the Building or Premises and against injury to any
persons caused by Tenant's actions pursuant to this Section 3.3.

                  3.4 Tenant's Representative. Tenant has designated Rhonda
Gardner and Kurt Vanderslice as its sole representatives with respect to the
matters set forth in this Work Letter, each of whom shall have full authority
and responsibility to act on behalf of the Tenant as required in this Work
Letter.

                  3.5 Landlord's Representative. Landlord has designated Lance
Kitt and Greg Weaver as its sole representatives with respect to the matters set
forth in this Work Letter, each of whom, until further notice to Tenant, shall
have full authority and responsibility to act on behalf of the Landlord as
required in this Work Letter.

                  3.6 Time of the Essence. Unless otherwise indicated, all
references herein to a "number of days" shall mean and refer to calendar days.
In all instances where Tenant is required to approve or deliver an item, if no
written notice of approval is given or the item is not delivered within the
stated time period, at Landlord's sole option, at the end of said period the
item shall automatically be deemed approved or delivered by Tenant and the next
succeeding time period shall commence.

                  3.7 Tenant's Lease Default. Notwithstanding any provision to
the contrary contained in this Lease, if an Event of Default as described in
Section 16 of the Lease or this Work Letter has occurred at any time on or
before the Substantial Completion of the Premises or if a circumstance exists
that with the giving of notice, the lapse of time, or both, would constitute an
Event of Default under the Lease, then (i) in addition to all other rights and
remedies granted to Landlord pursuant to this Lease, Landlord shall have the
right to withhold payment of all or any portion of the TI Allowance and/or
Landlord may cause Contractor to cease the construction of the Premises (in
which case, Tenant shall be responsible for any delay in the Substantial
Completion of the Premises caused by such work stoppage as set forth in Section
3.2 of this Work Letter), and (ii) all other obligations of Landlord under the
terms of this Work Letter shall be forgiven until such time as such default is
cured pursuant to the terms of this Lease.

                  3.8 Tenant's Agents. All of Tenant's agents, contractors, and
subcontractors performing work in, or in connection with, the Premises
(collectively as "TENANT'S AGENTS"), shall be subject to Landlord's reasonable
approval and, if deemed necessary by Landlord to maintain harmony among other
labor at the real property or if required by law or any agreement to which
Landlord is bound, shall be union labor.

                  3.9 Tenant's Architect's Insurance. Prior to Tenant's
Architect performing any services in connection with the Tenant Improvements,
the Final Space Plan, or the Working Drawings,

                                    EXHIBIT B
                                       -4-
<PAGE>   45

Tenant shall deliver to Landlord certificates evidencing that Tenant's Architect
has in force, with insurance companies reasonably acceptable to Landlord, (i)
Professional Liability Insurance with limits of not less than Five Million
Dollars ($5,000,000) per claim and annual aggregate, with a retention of not
more than Fifty Thousand Dollars ($50,000) per claim and an inception date or a
retroactive date coinciding with or prior to the earlier of the Effective Date
or the date of first performance of Tenant's Architect's services, (ii) Workers
Compensation Insurance as required by state and federal statutes with Employer's
Liability Insurance with limits of not less than One Million Dollars
($1,000,000) for bodily injury by accident and One Million Dollars ($1,000,000)
for bodily injury by disease, (iii) Commercial General Liability Insurance in
the amount of not less than One Million Dollars ($1,000,000) per occurrence, One
Million Dollars ($1,000,000) annual general aggregate, and (iv) Commercial
Automobile Liability Insurance for all owned and non-owned automobiles utilized
in connection with the services performed under the Tenant's Architect contract
in the amount of not less than One Million Dollars ($1,000,000) combined single
limit for bodily injury and property damage combined. All such insurance
required by this Section 3.9 shall be maintained for the entire period during
which services are performed under Tenant's Architect's contract, with the
exception of the Professional Liability Insurance policy which shall be
maintained in force for at least one (1) year following Substantial Completion
of the Tenant Improvements. Thereafter, during the second (2nd) and third (3rd)
years following Substantial Completion of the Tenant Improvements, Tenant's
Architect shall maintain Professional Liability Insurance with limits of not
less than One Million Dollars ($1,000,000.00) annual aggregate, on a claims made
basis, during such second (2nd) and third (3rd) years after Substantial
Completion of the Tenant Improvements, so long as such insurance is reasonably
available under standard policies at rates comparable to those in effect as of
the date of such Substantial Completion. Landlord shall be named as an
additional insured on all required Commercial General Liability policies of
Tenant's Architect, and the required certificate of insurance shall include an
additional insured endorsement ISO form number CG 20 10 11 85, or equivalent,
evidencing such additional insured status. All insurance of Tenant's Architect
will be primary as respects any insurance of Landlord, which insurance shall be
non-contributing.

                  3.10 Insurance Requirements. All of Tenant's Agents shall
carry liability and Products and Completed Operation Coverage insurance, each in
amounts not less than One Million Dollars ($1,000,000.00) per incident, One
Million Dollars ($1,000,000.00) in aggregate, and in form and with companies as
are required to be carried by Tenant as set forth in Section 9.2 of the Lease,
and the policies therefor shall insure Landlord and Tenant, as their interests
may appear, as well as Landlord's contractor, and shall name as additional
insureds all mortgagees of the real property or any other party designated by
Landlord. All insurance maintained by Tenant's Agents shall preclude subrogation
claims by the insurer against anyone insured thereunder. Such insurance shall
provide that it is primary insurance as respects the Landlord and that any other
insurance maintained by Landlord is excess and noncontributing with the
insurance required hereunder.

                                    EXHIBIT B
                                       -5-
<PAGE>   46

                             SCHEDULE 1 TO EXHIBIT B

                        BUILDING PLANS AND SPECIFICATIONS

                                   WESTMINSTER

                          BASE BUILDING CORE AND SHELL

PARKING STALLS:                     Parking is provided at 4.1 spaces per 1,000
                                    square feet of rentable building area.

PARKING LOT LIGHTING:               Parking lot lighting is provided, designed
                                    to supply an average to minimum ratio of
                                    approximately 1.0 foot candles/SF.

SITEWORK:                           Asphalt concrete paving in all traffic and
                                    parking areas, concrete curb and gutter per
                                    approved development plans.

LANDSCAPING:                        Landscape planting materials and irrigation
                                    of all planting areas per approved
                                    development plans.

BUILDING STRUCTURE:                 Precast concrete frame with precast concrete
                                    floor and roof structure and approximately
                                    4-inch concrete topping slab.

FLOOR LOADING CRITERIA:             Live load is approximately 50 psf in general
                                    office area, with approximately 100 psf at
                                    corridor and interior office area
                                    immediately adjacent to corridor. Partition
                                    load is approximately 20 psf.

CEILING HEIGHTS:                    Clear ceiling heights are approximately
                                    12'-2" feet at ground floor tenant areas,
                                    and approximately 9'-2" at floors 2, 3, 4
                                    and 5 tenant areas. Typical structure to
                                    structure clearance is approximately 14.5
                                    feet at ground floor 14'-8" from floor to
                                    bottom of "T" at ground floor, and 11'- 8"
                                    approximately 11.5 feet from floor to bottom
                                    of "T" at floors 2, 3, 4 and 5. Clearances
                                    may be 12 inches less at beam locations.

BUILDING SKIN:                      Precast architectural concrete spandrel
                                    panels with continuous glazing in between.
                                    Full height glazing at most locations. See
                                    elevation drawings for detail.

ROOFING:                            60 mil EPDM roof membrane, ballasted, over
                                    2.6" rigid polyisocyanruate board. R-value
                                    of 19.

PERIMETER WALLS:                    Perimeter, exterior walls to be insulated
                                    only, no drywall.

CORE SERVICE AREAS:                 1.  Sound attenuation is provided to meet
                                        NC35 levels.

                                    2.  Janitor's closet provided on each floor.

                                    3.  Finished doors provided for all service
                                        rooms.

                                    4.  Door frames to be anodized aluminum for
                                        all core doors.

                                    5.  One drinking fountain location each
                                        floor, with two fountains, one meeting
                                        ADA requirements.

REST ROOMS:                         Rest rooms to have ceramic tile on floors,
                                    and full height on wet walls. Toilet
                                    partitions to be ceiling hung stainless
                                    steel. Vanity tops to be granite. Restrooms
                                    to be ADA compliant.

SHOWER FACILITIES:                  Ground floor restrooms to include two shower
                                    stalls each in men's and women's. One shower
                                    stall in each to be ADA compliant.

TELEPHONE ROOM:                     Main telephone/fiber optic room provided at
                                    ground floor, approximately 20 feet by 10
                                    feet. Conduit to be stubbed into room for
                                    telephone and 3 possible fiber optic
                                    providers. Approximately 6 foot by 9 foot
                                    communications rooms provided on floors 2,
                                    3, 4 and 5.

                                  SCHEDULE 1 TO
                                    EXHIBIT B
                                       -1-
<PAGE>   47

ELEVATORS:                          Hydraulic elevators, 3,500 lb. capacity
                                    provided. Interior cab height to be
                                    approximately 10 feet, with suspended
                                    ceiling at approximately 9 feet. Finishes
                                    will be compatible with main lobby. Freight
                                    elevator to be supplied with protective
                                    blankets. Waiting time will be average of
                                    27-29 seconds, with 5 minute handling
                                    capacity of 13% of building population
                                    (upper floors only). Elevators to be ADA
                                    compliant, and provided with emergency
                                    telephones.

FIRE PROTECTION:                    Complete fire sprinkler system in accordance
                                    with applicable codes for office occupancy.
                                    Fireproofing of the Building's structural
                                    steel as specified on the structural plans
                                    for the Building as approved by the City of
                                    Westminster (a copy of which plans Tenant
                                    acknowledges receiving).

PLUMBING SYSTEMS:                   Complete plumbing system for domestic water
                                    service, sanitary sewer service, and roof
                                    drainage. Water and sanitary systems will be
                                    accessible to tenant areas for future
                                    connections for convenience sinks and other
                                    uses.

HVAC:                               HVAC system is provided with rooftop units,
                                    total capacity approximately 460 tons, of
                                    approximately 350 sf per ton. Primary trunk
                                    ducts and exterior zone VAV boxes provided
                                    at approximately 1 per 1,100 SF. Exterior
                                    zone VAV boxes are provided with electric
                                    reheat. No distribution ducting or diffusers
                                    are included at these exterior zone boxes.

                                    Energy management system provided, with
                                    remote computer monitoring capability.
                                    Tenant metering capability also included in
                                    system.

                                    HVAC Design criteria for cooling load
                                    allowed include the following:

                                    2 watts per SF for lighting;
                                    1.5 watts per SF for office equipment
                                    150 SF per person.

ELECTRICAL SERVICE:                 The building is provided with primary
                                    electrical service, 277/480 volts, 3 phase,
                                    with main disconnects in the main electrical
                                    room on the first floor. Electrical
                                    distribution panel rooms are provided two
                                    per floor adjacent to stairwells.

                                    Electrical service will provide total
                                    capacity of 27 watts per square foot,
                                    generally allocated as follows:

                                    15 watts per SF for HVAC loads;
                                    3 watts per SF for lighting;
                                    6.5 watts per SF for tenant equipment loads;
                                    2.5 watts per SF spare power;
                                    A pad area for a future generator to be
                                    included in the building shell.

FIRE ALARM:                         Fire alarm panel is provided, including fire
                                    alarm devices as required by code in core
                                    and common areas.

SECURITY:                           A card access system to be provided at the
                                    main entry doors of the building. Elevator
                                    card access also to be available based on
                                    tenant needs (but at Tenant's sole cost and
                                    expense).

                                  SCHEDULE 1 TO
                                    EXHIBIT B
                                       -2-
<PAGE>   48

                                    EXHIBIT C

                          COMMENCEMENT DATE MEMORANDUM

         With respect to that certain lease ("Lease") dated ___________________,
____, between ______________________________________, a
__________________________ ("Tenant"), and CATELLUS DEVELOPMENT CORPORATION, a
Delaware corporation ("Landlord"), whereby Landlord leased to Tenant and Tenant
leased from Landlord approximately ______________ rentable square feet of the
building located at _______________________________ ("Premises"), Tenant hereby
acknowledges and certifies to Landlord as follows:

         (1) The Commencement Date is ____________ and the Expiration Date is
____________;

         (2) The Rent Commencement Date is ____________;

         (3) The Premises contain ___________ rentable square feet of space; and

         (4) Tenant has accepted and is currently in possession of the Premises
and the Premises are acceptable for Tenant's use.

         IN WITNESS WHEREOF, this Commencement Date Memorandum is executed this
____ day of ________, ____.

"Tenant"                                                                       ,
                                       ----------------------------------------
                                       a
                                         ---------------------------------------

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

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

                                    EXHIBIT C
                                       -1-
<PAGE>   49

                                    EXHIBIT D

                              RULES AND REGULATIONS

         1. The sidewalks, entrances, passages and courts of the Project,
including the parks, and the sidewalks, entrances, passages, courts, elevators,
vestibules, stairways, corridors or halls of the Building shall not be
obstructed or used for any purpose other than ingress and egress.

         2. No awning or other projection shall be displayed or attached to the
outside walls of the Building without the prior written consent of Landlord. The
standard window blinds specified by Landlord shall not be removed from the
windows, and no other curtains, blinds, shades or screens shall be attached to
or hung in, or used in connection with, any window or door of the Premises,
without the prior written consent of Landlord. Such awnings, projections,
curtains, blinds, shades, screens or other fixtures must be of a quality, type,
design and color, and attached in the manner approved by Landlord.

         3. No sign, advertisement, or notice shall be exhibited, painted,
inscribed or affixed by any tenant on any part of, or so as to be seen from the
outside of, the Premises or the Building without the prior written consent of
Landlord. In the event of the violation of the foregoing by any tenant, Landlord
may remove same without any liability, and may charge the expense incurred in
such removal to the tenant violating this rule. Interior signs on doors and
directory tablet shall be inscribed, painted or affixed for each tenant by
Landlord at the expense of such tenant, and shall be of a size, color, and style
acceptable to Landlord and consistent with Landlord's signage program.

         4. Except in connection with the initial Tenant Improvements (which
shall be governed by the Approved Working Drawings), electric wiring of every
kind and telephone outlets shall be installed in a manner as will be prescribed
by Landlord. The location of convenience outlets, electric light outlets, power
outlets and telephone outlets shall be approved by Landlord, prior to
installation, but the cost shall be paid by tenant. No electrical wall or
ceiling fixture shall be installed unless first approved by Landlord. All
electric work must be done by electricians so licensed by the State in which the
Premises are located pursuant to proper governmental permits.

         5. The sashes, sash doors, windows, and doors that reflect or admit
light and air into the halls, passageways or other public places in the Building
shall not be covered or obstructed by any tenant, nor shall any bottles, parcels
or other articles be placed on the windowsills, except Landlord shall have the
right to require Tenant to keep the drapes closed at all times or some of the
time.

         6. The toilets, wash bowls and other plumbing fixtures shall not be
used for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures shall be borne by the tenant
who, or whose servants, employees, agents, visitors or licensees shall have
caused the same.

         7. Except for Utility Installations (which are subject to Section 11 of
the Lease), no tenant shall mark, paint, drill into, or in any way deface any
part of the Premises or the Building. No boring, cutting or stringing of wires
or laying of carpeting, linoleum or other similar floor coverings shall be
permitted, except with the prior written consent of Landlord and as Landlord may
direct.

         8. No bicycles, vehicles or animals of any kind shall be brought into
or kept in or about the Premises, and no cooking shall be done or permitted by
any tenant on the Premises, except for the microwaving of foods, preparation of
coffee, tea, hot chocolate and similar items for tenants and their employees and
catered events (subject to Landlord's reasonable approval). No tenant shall
cause or permit any unusual or objectionable odors to be produced upon or
permeate the Premises.

         9. The Premises shall not be used for manufacturing or for the storage
of merchandise except as such storage may be incidental to the use of the
Premises for general office purposes. No tenant shall occupy or permit any
portion of its Premises to be occupied for the manufacture or sale of liquor,
narcotics, or tobacco in any form. No tenant shall engage or pay any employees
on the Premises except those actually working for such tenant on the Premises
nor advertise for laborers giving an address at the Premises. The Premises shall
not be used for lodging or sleeping or for any immoral or illegal purposes.

         10. No tenant shall use, keep or permit to be used or kept any foul or
noxious gas or substances in the Premises or the Building or permit or suffer
the Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other tenants of the Building or of neighboring buildings by reason
of noise, odors and/or vibrations, including, without limitation, by the use of
any musical instrument, radio, phonograph, sound-producing instrument or device
that can be heard outside the Premises.

                                    EXHIBIT D
                                       -1-
<PAGE>   50

         11. No tenant shall place any radio or television antenna on the roof
or on any part of the inside or outside of the Building other than inside the
Premises. No tenant shall operate any electrical device from which may emanate
electrical waves which may interfere with or impair radio or television
broadcasting or reception from or in the Building or any part of the Project. No
tenant shall throw anything out of the doors, windows or down the passageways.
Landlord reserves the right to exclude or expel from the Building or any part of
the Project any person who, in the judgment of Landlord, is intoxicated or under
the influence of liquor or drugs or who shall in any manner do any act in
violation of these Rules and Regulations.

         12. Except for office/cleaning supplies typically used in the ordinary
course of business, no tenant, nor any of tenant's servants, employees, agents,
visitors or licensees, shall at any time keep or permit to be kept upon the
Premises any inflammable, combustible or explosive fluid, chemical or substance.

         13. No additional locks or bolts of any kind shall be placed upon any
of the doors or windows by any tenant, nor shall any changes be made in existing
locks or the mechanism thereof. All keys to the Premises, and any other parts of
the Building, shall be obtained by Tenant only from Landlord. Landlord shall
furnish Tenant, without charge, two keys or magnetic cards to the primary
entrance door to the Premises. Tenant shall obtain any additional keys only from
Landlord and shall not make or otherwise procure any additional sets of keys.
Each tenant must, upon the termination of its tenancy, return to Landlord all
such keys, and in the event of the loss of any keys so furnished, such tenant
shall pay to Landlord the cost of replacing the same or of changing the lock or
locks opened by such lost key if Landlord shall deem it necessary to make such
change.

         14. Except for the initial Tenant Improvements, the weight, size and
position of all safes and other unusually heavy objects used or placed in the
Building shall be prescribed by Landlord, and Landlord reserves the right to
require such safes or other objects to be placed upon supports approved by
Landlord to distribute the weight. The repair of any damage done to the Building
or property therein by putting in or taking out or maintaining such safes or
other unusually heavy objects shall be made and paid for by Tenant. All
removals, or the carrying in or out of the Building or moving within the
Building of any safes, freight, furniture, fixtures or bulky matter of any
description must take place during the hours which Landlord may determine from
time to time. The moving of safes, furniture or other fixtures or bulky matter
of any kind must be made upon previous notice to the superintendent of the
Building and under his supervision, and the persons employed by any tenant for
such work must be acceptable to Landlord. Landlord reserves the right to inspect
all safes, furniture, fixtures, freight or other bulky articles to be brought
into the Building and to exclude from the Building all safes, freight or other
bulky articles which violate any of these Rules and Regulations or the Lease of
which these Rules and Regulations are a part.

         15. No tenant shall purchase janitorial, maintenance or other like
service from any company or persons unless the written consent of Landlord is
first obtained.

         16. Tenant shall not use the name of the Building or Landlord in its
advertising.

         17. Access to the Building between the hours of 6 P.M. in the evening
and 7 A.M. in the morning on weekdays and at all hours on Saturdays and Sundays
and usual holidays is controlled by a card key system. Landlord will furnish
card keys to persons for whom any tenant requests the same in writing. Each
tenant shall be responsible for all persons for whom it requests card keys and
shall be liable to Landlord for all acts of such persons. In the case of mob,
riot, public disorder or other commotion or invasion, Landlord reserves the
right to prevent access to the Building or to any other part of the Project
during the continuance of the same by closing the entrances to the Building or
any other part of the Project, blocking ingress or egress to the Building or any
other part of the Project or by closing the doors, or otherwise, for the safety
of the tenants of the Building or protection of the Building and property in the
Building.

         18. Any persons employed by any tenant to do janitorial work shall,
while in the Building and outside of the Premises, be subject to and under the
control and direction of the superintendent of the Building (but not as an agent
or servant of said superintendent or of Landlord, and the tenant shall be
responsible for all acts of such persons).

         19. All doors opening onto public corridors shall be kept closed,
except when in use for ingress or egress.

         20. The requirements of tenants will be attended to only upon
application to the Office of the Building.

         21. Canvassing, soliciting, and peddling in the Building are prohibited
and each tenant shall cooperate to prevent the same.

                                    EXHIBIT D
                                       -2-
<PAGE>   51

         22. All office equipment of any electrical or mechanical nature shall
be placed by tenants in the Premises in settings approved by Landlord, to absorb
or prevent any vibration, noise or annoyance.

         23. No air conditioning unit or other similar apparatus shall be
installed or used by any tenant without the written consent of Landlord.

         24. There shall not be used in any space or in the public halls of the
Building, either by any tenants or others, any hand trucks except those equipped
with rubber tires and side guards.

         25. The expense of repairing any damage resulting from a violation of
any Rule or Regulation herein shall be borne by the tenant by whom, or by whose
contractors, employees or invitees, the damage shall have been caused.

         26. Tenant shall not smoke in the Premises or the Project, and shall
not allow any smoking by any Tenant Party or any visitor to the Premises or the
Project. Tenant, Tenant Parties and/or any visitors to the Project may smoke
only in areas designated by Landlord.

                                    EXHIBIT D
                                       -3-
<PAGE>   52

                                    EXHIBIT E

                           TENANT ESTOPPEL CERTIFICATE

To:      [Insert name of party to rely on document] ("Relying Party")

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

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

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

         Attn:
              -------------------------------------------------------

Re:      Lease Dated:
                     ------------------------------------------------
         Current Landlord:
                          -------------------------------------------
         Current Tenant:
                        ---------------------------------------------
         [RENTABLE] Square Feet: Approximately
                                               ----------------------
         Floor(s):
                  ---------------------------------------------------
         Located at:
                    -------------------------------------------------
         ____________________________________________ ("Tenant") hereby
certifies that as of _________, ____:

         1. Tenant is the present owner and holder of the tenant's interest
under the lease described above, as it may be amended to date (the "Lease") with
______________________ as Landlord (who is called "Landlord" for the purposes of
this Certificate). (USE THE NEXT SENTENCE IF THE LANDLORD OR TENANT NAMED IN THE
LEASE IS A PREDECESSOR TO THE CURRENT LANDLORD OR TENANT.) [The original
landlord under the Lease was _______________, and the original tenant under the
Lease was _______________.] The Lease covers the premises commonly known as
_______________ (the "Premises") in the building (the "Building") at the address
set forth above.

                (CHOOSE ONE OF THE FOLLOWING SECTION 2(a)s BELOW)

         [2. (a) A true, correct and complete copy of the Lease (including all
modifications, amendments, supplements, side letters, addenda and riders of and
to it) is attached to this Certificate as Exhibit A.]

         [2 (a) The attached Exhibit A accurately identifies the Lease and all
modifications, amendments, supplements, side letters, addenda and riders of and
to it.]

                  (b) (IF APPLICABLE) [The Lease provides that in addition to
the Premises, Tenant has the right to use or rent during the term of the Lease
_______________ [assigned/unassigned] parking spaces near the Building or in the
parking structure of the Project most proximately located to the Premises.]

                  (c) The term of the Lease commenced on _______________, _____,
and will expire on _______________, _____, including any presently exercised
option or renewal term. (CHOOSE ONE OF THE FOLLOWING TWO SENTENCES.) [Tenant has
no option or right to renew, extend or cancel the Lease, or to lease additional
space in the Building or the Project, or to use any parking (IF APPLICABLE)
[other than that specified in Section 2(b) above].] [Except as specified in
Section(s) ____________ of the Lease (copy attached), Tenant has no option or
right to renew, extend or cancel the Lease, or to lease additional space in the
Building or the Project, or to use any parking (IF APPLICABLE) [other than that
specified in Section 2(b) above].]

(CHOOSE ONE OF THE FOLLOWING SECTION 2(d)s)

                  [(d) Tenant has no option or preferential right to purchase
all or any part of the Premises (or the land of which the Premises are a part).
Tenant has no right or interest with respect to the Premises or the Building
other than as Tenant under the Lease.]

                  [(d) Except as specified in Section(s) _____________ of the
Lease (copy attached), Tenant has no option or preferential right to purchase
all or any part of the Premises (or the land of which the Premises are a part).
Except for the foregoing, Tenant has no right or interest with respect to the
Premises or the Building other than as Tenant under the Lease.]

                  (e) The annual minimum rent currently payable under the Lease
is $ _____________ and such rent has been paid through _____________, ____.

                  (f) (IF APPLICABLE) [Additional rent is payable under the
Lease for (i) operating, maintenance or repair expenses, (ii) property taxes
(including CFD special taxes), and/or (iii) consumer price index cost of living
adjustments. Such additional rent has been paid in accordance with Landlord's

                                    EXHIBIT E
                                       -1-
<PAGE>   53

rendered bills through _____________, _______. The base year amounts for
additional rental items are as follows: (1) operating, maintenance or repair
expenses $_____________, (2) property taxes $_____________, and (3) consumer
price index _____________ (please indicate base year CPI level).]

                  (g) Tenant has made no agreement with Landlord or any agent,
representative or employee of Landlord concerning free rent, partial rent,
rebate of rental payments or any other similar rent concession (IF APPLICABLE)
[except as expressly set forth in Section(s) ______ of the Lease (copy
attached)].

                  (h) Landlord currently holds a security deposit in the amount
of $__________ which is to be applied by Landlord or returned to Tenant in
accordance with Section(s) ____ of the Lease. Tenant acknowledges and agrees
that Relying Party shall have no responsibility or liability for any security
deposit, except to the extent that any security deposit shall have been actually
received by Relying Party.

         3. (a) The Lease constitutes the entire agreement between Tenant and
Landlord with respect to the Premises, has not been modified, changed, altered
or amended, and is in full force and effect in the form (CHOOSE ONE) [attached
as/described in] Exhibit A. There are no other agreements, written or oral,
which affect Tenant's occupancy of the Premises.

                  (b) All insurance required of Tenant under the Lease has been
provided by Tenant and all premiums have been paid.

                  (c) To the best knowledge of Tenant, no party is in default
under the Lease. To the best knowledge of Tenant, no event has occurred which,
with the giving of notice or passage of time, or both, would constitute such a
default.

                  (d) The interest of Tenant in the Lease has not been assigned
or encumbered. Tenant is not entitled to any credit against any rent or other
charge or rent concession under the Lease except as set forth in the Lease. No
rental payments have been made more than one month in advance.

         4. All contributions required to be paid by Landlord to date for
improvements to the Premises have been paid in full and all of Landlord's
obligations with respect to tenant improvements have been fully performed.
Tenant has accepted the Premises, subject to no conditions other than those set
forth in the Lease.

         5. Neither Tenant nor any guarantor of Tenant's obligations under the
Lease is the subject of any bankruptcy or other voluntary or involuntary
proceeding, in or out of court, for the adjustment of debtor-creditor
relationships.

         6. (a) As used here, "Hazardous Substance" means any substance,
material or waste (including petroleum and petroleum products) which is
designated, classified or regulated as being "toxic" or "hazardous" or a
"pollutant," or which is similarly designated, classified or regulated, under
any federal, state or local law, regulation or ordinance.

                  (b) Tenant represents and warrants that it has not used,
generated, released, discharged, stored or disposed of any Hazardous Substances
on, under, in or about the Building or the land on which the Building is located
(IF APPLICABLE) [, other than Hazardous Substances used in the ordinary and
commercially reasonable course of Tenant's business in compliance with all
applicable laws]. (IF APPLICABLE) [Except for such commercially reasonable use
by Tenant,] Tenant has no actual knowledge that any Hazardous Substance is
present, or has been used, generated, released, discharged, stored or disposed
of by any party, on, under, in or about such Building or land.

         7. Tenant hereby acknowledges that Landlord intends to [discuss action
to be taken vis-a-vis Relying Party]. Tenant acknowledges the right of Landlord,
Relying Party and any and all of Landlord's present and future lenders,
purchasers and their successors and assigns to rely upon the statements and
representations of Tenant contained in this Certificate and further acknowledges
that any action taken by such parties will be made and entered into in material
reliance on this Certificate.

                                    EXHIBIT E
                                       -2-
<PAGE>   54

         8. Tenant hereby agrees to furnish Relying Party with such other and
further estoppel as Relying Party may reasonably request.

"Tenant"                                                                       ,
                                       ----------------------------------------
                                       a
                                         ---------------------------------------

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

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

                                    EXHIBIT E
                                       -3-<PAGE>   1
                                                                 EXHIBIT 10.23

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

                           SECOND AMENDED AND RESTATED

                                 LOAN AGREEMENT

                                      among

                          PETROLEUM HELICOPTERS, INC.,

                                       and

                             BANK OF AMERICA, N.A.,

                             WHITNEY NATIONAL BANK,

                                  BANK ONE, NA,

                                       and

                              BANK OF AMERICA, N.A.
                                    as Agent,
                                       and
                          Letter of Credit Issuing Bank

                            Dated as of July 3, 2001

<PAGE>   2

                                TABLE OF CONTENTS

<Table>
<Caption>
Section                                                                                                        Page
-------                                                                                                        ----

<S>                                                                                                            <C>
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS.......................................................................2
         1.01     Defined Terms...................................................................................2
         1.02     Use of Certain Terms...........................................................................29
         1.03     Accounting Terms...............................................................................29
         1.04     Rounding.......................................................................................29
         1.05     Exhibits and Schedules.........................................................................29
         1.06     References to Agreements and Laws..............................................................30

SECTION 2. THE LOANS, THE COMMITMENTS AND EXTENSIONS OF CREDIT...................................................30
         2.01     Term Loans.....................................................................................30
         2.02     Revolving Credit Loans.........................................................................31
         2.03     Revolving Credit Borrowings and Continuations of Loans.........................................32
         2.04     Letters of Credit..............................................................................33
         2.05     Prepayments....................................................................................38
         2.06     Reduction or Termination of Commitments........................................................41
         2.07     Interest.......................................................................................41
         2.08     Fees...........................................................................................42
         2.09     Computation of Interest and Fees...............................................................42
         2.10     Making Payments................................................................................42
         2.11     Funding Sources................................................................................44

SECTION 3. TAXES, YIELD PROTECTION AND ILLEGALITY................................................................44
         3.01     Taxes..........................................................................................44
         3.02     Illegality.....................................................................................45
         3.03     Inability to Determine Rates...................................................................45
         3.04     Increased Cost and Reduced Return; Capital Adequacy............................................45
         3.05     Breakfunding Costs.............................................................................46
         3.06     Matters Applicable to all Requests for Compensation............................................46
         3.07     Recapture......................................................................................47
         3.08     Survival.......................................................................................47

SECTION 4. CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT..........................................................47
         4.01     Conditions of Initial Extension of Credit......................................................47
         4.02     Conditions to all Extensions of Credit.........................................................49

SECTION 5. REPRESENTATIONS AND WARRANTIES........................................................................49
         5.01     Existence and Qualification; Power; Compliance with Laws.......................................49
         5.02     Power; Authorization; Enforceable Obligations..................................................50
         5.03     No Legal Bar...................................................................................50
         5.04     Financial Statements; No Material Adverse Effect...............................................50
         5.05     Litigation.....................................................................................50
         5.06     No Default.....................................................................................51
         5.07     Ownership of Property; Liens; Warranty of Title; Leases........................................51
         5.08     Taxes..........................................................................................51
</Table>

                                      -i-

<PAGE>   3

<Table>
<S>                                                                                                             <C>
         5.09     Margin Regulations; Investment Company Act; Public Utility Holding Company Act.................52
         5.10     ERISA Compliance...............................................................................52
         5.11     Intangible Assets..............................................................................53
         5.12     Compliance With Laws...........................................................................53
         5.13     Environmental Compliance.......................................................................53
         5.14     Insurance......................................................................................53
         5.15     Disclosure.....................................................................................54
         5.16     Franchises, Permits, Etc.......................................................................54
         5.17     Description of and Title to Aviation Units and Engines.........................................54
         5.18     Registered Office/Chief Executive Office.......................................................54
         5.19     Title to Parts and Receivables.................................................................55
         5.20     Section 1110 of Bankruptcy Reform Act of 1978..................................................55
         5.21     Status as Air Carrier..........................................................................55
         5.22     Capitalization; Subsidiaries...................................................................55
         5.23     EMTALA.........................................................................................56
         5.24     Medicare and Medicaid Programs; Licensure......................................................56
         5.25     Fraud and Abuse and Stark Law..................................................................57

SECTION 6. AFFIRMATIVE COVENANTS.................................................................................57
         6.01     Financial Statements...........................................................................57
         6.02     Certificates, Notices and Other Information....................................................58
         6.03     Payment of Taxes...............................................................................60
         6.04     Preservation of Existence......................................................................60
         6.05     Maintenance of Properties......................................................................60
         6.06     Maintenance of Insurance.......................................................................61
         6.07     Compliance With Laws...........................................................................61
         6.08     Inspection Rights..............................................................................61
         6.09     Keeping of Records and Books of Account........................................................61
         6.10     Compliance with ERISA..........................................................................61
         6.11     Compliance With Agreements.....................................................................62
         6.12     Use of Proceeds................................................................................62
         6.13     Citizen; Air Carrier...........................................................................62
         6.14     Registration, Maintenance, Operation, Foreign Operations and Marking of Collateral.............62
         6.15     Insurance with Respect to the Aircraft.........................................................64
         6.16     Recording, Etc.................................................................................67
         6.17     Further Assurances.............................................................................68
         6.18     Location of Collateral.........................................................................68

SECTION 7. NEGATIVE COVENANTS....................................................................................69
         7.01     Indebtedness...................................................................................69
         7.02     Liens and Negative Pledges.....................................................................69
         7.03     Fundamental Changes............................................................................70
         7.04     Dispositions...................................................................................70
         7.05     Investments....................................................................................70
         7.06     Lease Obligations..............................................................................71
         7.07     Restricted Payments............................................................................71
         7.08     ERISA..........................................................................................71
         7.09     Change in Nature of Business...................................................................71
</Table>

                                      -ii-

<PAGE>   4

<Table>
<S>                                                                                                             <C>
         7.10     Transactions with Affiliates...................................................................71
         7.11     Capital Expenditures...........................................................................72
         7.12     Limitations on Upstreaming.....................................................................72
         7.13     Margin Regulations.............................................................................72
         7.14     Financial Covenants............................................................................72
         7.15     Change in Auditors.............................................................................72
         7.16     Change in Accounting Method....................................................................72
         7.17     Tax Consolidation..............................................................................72
         7.18     Chief Executive Office; Registered Office; Jurisdiction of Incorporation.......................73
         7.19     Leasing........................................................................................73
         7.20     Hazardous Materials............................................................................73
         7.21     Impairment or Disposition of Collateral........................................................73
         7.22     Valuation of Aircraft, Etc.....................................................................73

SECTION 8. EVENTS OF DEFAULT AND REMEDIES........................................................................74
         8.01     Events of Default..............................................................................74
         8.02     Remedies Upon Event of Default.................................................................76
         8.03     Application of Proceeds of Collateral..........................................................77

SECTION 9. AGENT.................................................................................................79
         9.01     Appointment and Authorization of Agent.........................................................79
         9.02     Delegation of Duties...........................................................................80
         9.03     Liability of Agent.............................................................................80
         9.04     Reliance by Agent..............................................................................80
         9.05     Notice of Default..............................................................................81
         9.06     Credit Decision; Disclosure of Information by Agent............................................81
         9.07     Indemnification of Agent.......................................................................82
         9.08     Agent in Individual Capacity...................................................................83
         9.09     Successor Agent................................................................................83
         9.10     Releases of Collateral.........................................................................83

SECTION 10. MISCELLANEOUS........................................................................................84
         10.01    Amendments; Consents...........................................................................84
         10.02    Requisite Notice; Effectiveness of Signatures and Electronic Mail..............................85
         10.03    Attorney Costs, Expenses and Taxes.............................................................86
         10.04    Binding Effect; Assignment.....................................................................86
         10.05    Set-off........................................................................................88
         10.06    Sharing of Payments............................................................................88
         10.07    No Waiver; Cumulative Remedies.................................................................88
         10.08    Usury..........................................................................................89
         10.09    Counterparts...................................................................................89
         10.10    Integration....................................................................................89
         10.11    Nature of Banks' Obligations...................................................................89
         10.12    Survival of Representations and Warranties.....................................................90
         10.13    Indemnity by Borrower..........................................................................90
         10.14    Nonliability of Banks..........................................................................91
         10.15    No Third Parties Benefited.....................................................................92
         10.16    Severability...................................................................................92
         10.17    Confidentiality................................................................................92
         10.18    Further Assurances.............................................................................92
</Table>

                                     -iii-
<PAGE>   5

<Table>
<S>                                                                                                             <C>
         10.19    Headings.......................................................................................93
         10.20    Time of the Essence............................................................................93
         10.21    Foreign Banks..................................................................................93
         10.22    Governing Law..................................................................................93
         10.23    Waiver of Right to Trial by Jury...............................................................94
         10.24    ENTIRE AGREEMENT...............................................................................94
</Table>

                                      -iv-

<PAGE>   6

EXHIBITS

A-1      -        Term Note

A-2      -        Revolving Credit Note

B        -        Request for Extension of Credit

C        -        Borrower Security Agreement

D        -        Air Evac Security Agreement

E        -        Guaranty Agreement

F-1      -        Opinion of Counsel (Borrower Parties)

F-2      -        Opinion of Counsel (FAA)

G        -        Borrowing Base Certificate

H        -        Compliance Certificate

I        -        Officer's Certificate (Release of Collateral)

J        -        Assignment and Acceptance

SCHEDULES

2.01     -        Commitments and Pro-Rata Shares

5.17     -        Aviation Units and Engines

5.19     -        Location of Parts

5.22     -        Subsidiaries

7.02     -        Existing Liens

7.05     -        Investments

10.02    -        Offshore and Domestic Lending Offices, Addresses for Notices

                                      -v-

<PAGE>   7

                   SECOND AMENDED AND RESTATED LOAN AGREEMENT

         This SECOND AMENDED AND RESTATED LOAN AGREEMENT ("Agreement") is
entered into as of July 3, 2001, by and among PETROLEUM HELICOPTERS, INC., a
Louisiana corporation ("Borrower"), BANK OF AMERICA, N.A., a national banking
association ("Bank of America"), WHITNEY NATIONAL BANK, a national banking
association ("Whitney"), and BANK ONE, NA, a national banking association having
its main office in Chicago, Illinois ("Bank One" and together with Bank of
America, Whitney and each lender from time to time party hereto, collectively
the "Banks" and each, individually, a "Bank"), and BANK OF AMERICA, N.A., as
Agent and Issuing Bank.

                                    RECITALS

         A. Borrower, NationsBank of Texas, N.A. ("NationsBank"), Whitney, First
National Bank of Commerce ("FNBC"), and NationsBank, as Agent, entered into that
certain Loan Agreement, originally dated as of January 31, 1986, as amended and
restated in its entirety as of March 31, 1997, and as further amended by that
certain First Amendment to Amended and Restated Loan Agreement, dated as of
December 31, 1997, that certain Second Amendment to Amended and Restated Loan
Agreement, dated as of November 30, 1998, that certain Limited Waiver and Third
Amendment to Amended and Restated Loan Agreement, dated as of June 30, 1999,
that certain Fourth Amendment to Amended and Restated Loan Agreement, dated as
of June 30, 2000, that certain Fifth Amendment to Amended and Restated Loan
Agreement, dated as of October 30, 2000, that certain Sixth Amendment to Amended
and Restated Loan Agreement, dated as of November 30, 2000, that certain Seventh
Amendment to Amended and Restated Loan Agreement, dated as of December 29, 2000,
that certain Eighth Amendment to Amended and Restated Loan Agreement and Limited
Waiver dated as of March 29, 2001, and that certain Ninth Amendment to Amended
and Restated Loan Agreement dated as of April 30, 2001 (as so amended, the
"Existing Loan Agreement").

         B. Bank of America (f/k/a Bank of America National Trust and Savings
Association, successor by merger to Bank of America, N.A., f/k/a NationsBank,
N.A.) is the successor to NationsBank.

         C. Bank One (successor by merger to Bank One, Louisiana, N.A.) is the
successor to FNBC.

         D. Borrower has requested that the Banks amend and restate the Existing
Loan Agreement, among other things, to (i) extend and renew the term and
revolving loans thereunder, and (ii) increase the aggregate commitments
available to the Borrower thereunder.

         E. Banks are willing to so amend and restate the Existing Loan
Agreement and extend and renew the term and revolving loans thereunder as
hereinafter set forth.

         In consideration of the mutual covenants and agreements herein
contained, Borrower, Banks and Agent hereby agree that, effective as of the
Effective Date (as hereinafter defined), the

<PAGE>   8

Existing Loan Agreement is hereby amended and restated in its entirety on the
terms and conditions set forth herein. It is the intention of Borrower, Banks
and Agent that this Agreement supersede and replace the Existing Loan Agreement
in its entirety; provided, that, (i) such amendment and restatement shall
operate to renew, amend and modify the rights and obligations of the parties
under the Existing Loan Agreement, as applicable and as provided herein, but
shall not effect a novation thereof, (ii) unless otherwise provided for herein
or evidenced by a separate written amendment, the Security Documents (as defined
in the Existing Loan Agreement) shall remain in full force and effect except
that Borrower, the Banks and Agent agree that by executing this Agreement the
definition of "Loan Agreement" contained in such Security Documents shall be
amended to include this Agreement and all future amendments hereto, and (iii)
the Liens securing the loans and other extensions of credit under the Existing
Loan Agreement and granted pursuant to the Security Documents (as defined
therein) shall not be extinguished, but shall be carried forward and shall
secure such loans and extensions of credit as renewed, amended, restated and
modified hereby. Borrower, Banks and Agent hereby further agree as follows:

                                   SECTION 1.
                        DEFINITIONS AND ACCOUNTING TERMS

         1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:

         "Agent" means Bank of America, N.A., in its capacity as agent under any
of the Loan Documents, or any successor agent.

         "Agent's Office" means Agent's address and, as appropriate, account as
set forth on Schedule 10.02, or such other address or account as Agent hereafter
may designate by written notice to Borrower and Banks.

         "Agent-Related Persons" means Agent (including any successor agent),
together with its Affiliates (including, in the case of Bank of America in its
capacity as Agent), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.

         "Affiliate" means any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to be "controlled by" any other Person if such other
Person possesses, directly or indirectly, power (a) to vote 5% or more of the
securities (on a fully diluted basis) having ordinary voting power for the
election of directors or managing general partners; or (b) to direct or cause
the direction of the management and policies of such Person whether by contract
or otherwise.

         "Agreement" means this Loan Agreement, as amended, restated, extended,
supplemented or otherwise modified in writing from time to time.

         "Aggregate Revolving Credit Commitment" means the sum of all of the
Banks' Revolving Credit Commitments.

         "Air Evac" means Air Evac Services, Inc., a Louisiana corporation.

                                       2
<PAGE>   9

         "Air Evac Borrowing Base" means at any time an amount, equal to the
lesser of (a) $5,000,000 or (b) the sum of (i) 50% of the amount of Eligible
Receivables of Air Evac in which each of the Creditors have a valid equal and
ratable perfected first priority Security Interest, pursuant to the Security
Documents executed by Air Evac, plus (ii) 50% of the Appraised Value of the
Aircraft of Air Evac in which each of the Creditors have a valid equal and
ratable perfected first priority Security Interest, pursuant to the Security
Documents executed by Air Evac, plus (iii) 50% of the value of Eligible Parts
(valued at the lower of average cost or market) of Air Evac in which each of the
Creditors have a valid equal and ratable perfected first priority Security
Interest, pursuant to the Security Documents executed by Air Evac.

         "Aircraft" means the helicopters and fixed-wing aircraft described in
Schedule 5.17 of this Agreement, together with all aircraft engines, airframes,
propellers, rotors, appliances, instruments, mechanisms, equipment (including
communications equipment), parts, apparatus, appurtenances and accessories
(including without limitation property which consists of, or which may from time
to time hereafter consist of, one or more aircraft engines of 750 or more rated
takeoff horsepower or the equivalent of that horsepower, and one or more
propellers capable of absorbing 750 or more rated takeoff shaft horsepower) now
or from time to time hereafter incorporated or installed in or attached or
appertaining to one or more of said helicopters or aircraft, in each case so
long as the same shall be subject or required or intended to be subject to the
Security Interest, including without limitation those aircraft engines described
in Schedule 5.17 of this Agreement, and shall include any helicopters,
fixed-wing aircraft or other Aviation Units from time to time hereafter subject
or required or intended to be subject to the Security Interest, together with
all aircraft engines, airframes, propellers, rotors, appliances, instruments,
mechanisms, equipment (including communications equipment), parts, apparatus,
appurtenances and accessories (including property which consists of, or which
may from time to time hereafter consist of, one or more aircraft engines of 750
or more rated takeoff horsepower or the equivalent of that horsepower, and one
or more propellers capable of absorbing 750 or more rated takeoff shaft
horsepower) from time to time incorporated or installed in or attached or
appertaining to any thereof and subject or required or intended to be subject to
the Security Interest.

         "Aircraft Registry" means the Federal Aviation Administration Aircraft
Registry located in Oklahoma City, Oklahoma, or such different office or
location of said Registry, or the office of any successor to said Registry, as
may be duly designated by the Secretary of Transportation (or his successor or
designee) for receipt and recording of "conveyances" (as defined in the Federal
Aviation Act) to preserve and protect their validity as against, and to publish
notice to, third parties.

         "Applicable Amount" means the following amounts per annum, based upon
the Leverage Ratio as set forth in the most recent Compliance Certificate
received by Agent pursuant to Section 6.02(b); provided, however, that, until
Agent receives the first Compliance Certificate after the Effective Date, such
amounts shall be those indicated for pricing level 1 set forth below:

                                       3
<PAGE>   10

<Table>
<Caption>
                                   APPLICABLE AMOUNT (IN BASIS POINTS PER ANNUM)

                                                                           OFFSHORE RATE +
                                                                           ----------------
                                                                             LETTERS OF
          PRICING LEVEL        LEVERAGE RATIO           COMMITMENT FEE         CREDIT        BASE RATE +
          -------------- --------------------------- --------------------- ---------------- ---------------

<S>                      <C>                         <C>                   <C>              <C>
                1                  > 5.00                   62.50              300.00           200.00
                2            >4.00 < or = to 5.00           50.00              250.00           100.00
                3               < or = to 4.00              50.00              200.00             0.00
</Table>

         The Applicable Amount shall be in effect from the date the most recent
Compliance Certificate is received by Agent to but excluding the date the next
Compliance Certificate is received; provided, however, that if Borrower fails to
timely deliver the next Compliance Certificate, the Applicable Amount from the
date such Compliance Certificate was due to but excluding the date such
Compliance Certificate is received by Agent shall be that indicated for the
highest pricing level set forth above, and, thereafter, the pricing level
indicated by such Compliance Certificate when received.

         "Applicable Payment Date" means, (a) as to any Offshore Rate Loan, the
last day of the relevant Interest Period, any date that such Loan is prepaid or
converted in whole or in part and the Maturity Date; provided, however, that if
any Interest Period for an Offshore Rate Loan exceeds three months, interest
shall also be paid on the Business Day which falls every three months after the
beginning of such Interest Period; (b) as to the commitment fee, the last
Business Day of each calendar quarter and the Revolving Loan Maturity Date; and
(c) as to any other Obligations, the last Business Day of each calendar quarter
and the later to occur of the Term Loan Maturity Date or the Revolving Loan
Maturity Date; provided, further, that interest accruing at the Default Rate
shall be payable from time to time upon demand of Agent.

         "Applicable Time" means Houston, Texas time.

         "Appraised Value" means (a) with respect to any of the Aircraft that
shall at the time be new or not more than one year old, the purchase price
thereof, as certified by the Borrower in Officers' Certificates delivered to
Agent and Banks at the times and under the circumstances contemplated by this
Agreement and (b) with respect to any of the Aircraft that shall at the time be
more than one year old, the purchase price thereof that would be agreed to in an
arm's-length transaction between an informed and willing buyer-user (other than
a user currently in possession or a used equipment or scrap dealer) and an
informed and willing seller under no compulsion to sell or lease (the costs of
removal from the location of current use being deductions from such value), as
specified by the Independent Appraiser (after consultation with the Borrower and
after such physical inspection, if any, of such Aircraft as the Independent
Appraiser shall deem to be necessary or appropriate) in written opinions
addressed and delivered to Agent and Banks at the times and under the
circumstances contemplated by this Agreement. For the purpose of determining
whether clause (a) or (b) of the first sentence of this definition of "Appraised
Value" shall apply to any particular Aircraft, the Aircraft in question shall be
deemed to be one year old upon the expiration of one year from the delivery by
the original manufacturer to, and acceptance

                                       4
<PAGE>   11

by, the first user thereof (or the Person anticipated to be the first user
thereof), whether or not the Borrower shall have been such first user or other
Person. For the purpose of determining the "Appraised Value" of any Aircraft
that shall be new or not more than one year old, the term "purchase price" with
respect thereto means the actual purchase price thereof that shall appear on the
invoice issued by the manufacturer of said Aircraft and by the manufacturer or
distributor of any instruments or other equipment added thereto after the date
of the invoice issued by the manufacturer of said Aircraft (excluding, however,
any freight or transportation charges, erection costs or other charges or costs
that do not reflect the price of materials and components used in the
manufacture of said Aircraft or instruments or equipment, whether or not such
charges or costs shall be separately stated on the invoice).

         "Appropriate Actions" means, with respect to the inclusion of an
Aviation Unit in the Security Interest, (a) filing or causing to be filed a
proper bill or bills of sale covering said Aviation Unit (on FAA Form 8050-2,
"Aircraft Bill of Sale", or on any other appropriate form) in the Aircraft
Registry and in any other public office necessary for full compliance by the
Borrower or Air Evac, as applicable, with the terms hereof; (b) causing said
Aviation Unit to be free and clear of all Liens (other than Permitted Liens),
making the appropriate filings, registrations and recordings (including the
filing of FAA Form 8050-41 and any appropriate termination statements or
releases) necessary to release any existing Liens of record and otherwise
causing said Aviation Unit to be in full compliance with all the terms and
provisions of this Agreement with the same effect as if the same were a portion
of the original Aircraft described in this Agreement; (c) executing and
delivering any registration, recordation or filing documents and any other
appropriate security documentation as Agent or any Creditor through Agent may
request for the purpose of describing said Aviation Unit (including all aircraft
engines, airframes, propellers, rotors, appliances, instruments, mechanisms,
equipment (including communications equipment), parts, apparatus, appurtenances
and accessories) in reasonable detail, and expressly and specifically subjecting
the same to the Security Interest; (d) delivering or causing to be delivered to
Agent and each Creditor an opinion of counsel (dated the date of the filing for
recordation in the Aircraft Registry of the security documentation referred to
in clause (c) above) to the effect that the Borrower has good and marketable
title to said Aviation Unit free of all Liens (other than Permitted Liens) and
that said Aviation Unit has been duly subjected to the Security Interest and
constitutes a portion of the Collateral; and (e) delivering to Agent and each
Creditor an Officers' Certificate certifying that the Borrower is in full
compliance with all provisions of this Agreement with respect to the same.

         "Aviation Unit" means any engine-powered device that is used or
intended to be used for flight in the air and shall include within each such
device all aircraft engines, airframes, propellers, rotors, appliances,
instruments, mechanisms, equipment (including without limitation communications
equipment), parts, apparatus, appurtenances and accessories from time to time
incorporated or installed therein or attached or appertaining thereto.

         "Assignment and Acceptance" means an Assignment and Acceptance
substantially in the form of Exhibit J.

         "Attorney Costs" means and includes all fees and disbursements of any
law firm or other external counsel.

                                       5
<PAGE>   12

         "Audited Financial Statements" means the audited consolidated balance
sheet of Borrower and its Subsidiaries for the fiscal year ended December 31,
2000, and the related consolidated statements of income and cash flows for such
fiscal year of Borrower.

         "Bank" and "Banks" have the meanings set forth in the introductory
paragraph of this Agreement.

         "Bank of America" has the meaning set forth in the introductory
paragraph.

         "Bank One" has the meaning set forth in the introductory paragraph.

         "Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." Such rate is a rate set by Bank of America based
upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.

         "Base Rate Loan" means a Loan made hereunder and specified to be a Base
Rate Loan in accordance with Section 2.

         "Borrower" has the meaning set forth in the introductory paragraph
hereto.

         "Borrower Party" means Borrower or any Person (except Agent, the
Creditors and any of their respective Affiliates) from time to time party to a
Loan Document.

         "Borrowing" and "Borrow" each mean a borrowing of Loans hereunder.

         "Borrowing Base" means at any time an amount equal to (a) the PHI
Borrowing Base, plus (b) the Air Evac Borrowing Base, plus (c) the Value of
Pledged Investment Securities, minus (c) the aggregate principal amount of Term
Loans outstanding at the time of such determination. Notwithstanding any other
provision of this Agreement to the contrary, no Aircraft subject to an Event of
Loss or the provisions of Section 6.15(e) shall be included for the purpose of
determining the Borrowing Base.

         "Borrowing Base Certificate" means an Officers' Certificate in the form
of Exhibit G attached hereto and made a part hereof, with the blanks
appropriately completed.

         "Borrowing Date" means, with respect to a Borrowing, the date
designated in the Request for Extension of Credit with respect thereto upon
which the proceeds of such Borrowing are to be paid or delivered to the
Borrower.

         "Business Day" means any day other than a Saturday, Sunday, or other
day on which commercial banks are authorized to close under the Laws of, or are
in fact closed in, the state where Agent's Office is located or New Orleans,
Louisiana and, if such day relates to any

                                       6
<PAGE>   13

Offshore Rate Loan, means any such day on which dealings in Dollar deposits are
conducted by and between banks in the offshore Dollar interbank market.

         "Capital Lease" means with respect to any Person any lease which
should, in accordance with GAAP, be required to be capitalized on a balance
sheet of the lessee or, if not so capitalized, for which the amounts of the
asset and liability (had such lease been capitalized) be required to be
disclosed in a note to such a balance sheet.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

         "Collateral" means all of the following, whether now owned or hereafter
acquired by the Borrower or Air Evac: (a) the Aircraft, including all
substitutions, renewals and replacements of any portion thereof and all
additions, improvements, accessions and accumulations to any portion thereof,
whether now owned or held or hereafter acquired or now or from time to time
hereinafter incorporated or installed in or attached or appertaining to any
portion of the Aircraft (whether or not the same shall be or remain incorporated
or installed in or attached to any portion of such property), whether now owned
or held or hereafter acquired, (b) the Receivables, (c) the Parts, (d) all
Pledged Investment Securities, (e) all estates, rights, power and privileges in
respect of any of the foregoing and (f) any and all proceeds of the conversion,
voluntary or involuntary, of any portion of the property now or from time to
time hereafter subject or required or intended to be subject to the Security
Interest, into cash, negotiable instruments or other instruments for the payment
of money, chattel paper, security agreements, documents, liquidated claims or
any other form of proceeds, including proceeds of insurance and of any
governmental takings, subject, however, to the further provisions of this
Agreement and the Security Documents (it being understood and agreed that the
inclusion of proceeds in the Collateral does not authorize the Borrower or Air
Evac to sell, dispose of or otherwise use the Collateral in a manner that is not
expressly permitted by this Agreement or the Security Documents).

         "Commitment" means a Revolving Credit Commitment or a Term Loan
Commitment.

         "Compliance Certificate" means a certificate substantially in the form
of Exhibit H, properly completed and signed by a Responsible Officer of
Borrower.

         "Consolidated Current Assets" means, as of the date of determination
thereof, the following assets of the Borrower and Consolidated Subsidiaries,
after eliminating all offsetting debits and credits among the Borrower and
Consolidated Subsidiaries and all other items to be eliminated in the process of
consolidation effected in accordance with GAAP and after deducting from the
value thereof appropriate reserves against any thereof required to be created or
maintained in accordance with GAAP: (a) cash and cash items in any bank or trust
company, on hand and in transit, (b) spare parts and supplies (whether or not
held for sale to customers in the ordinary course of business), stated at the
lower of average cost or fair market value, (c) direct obligations of the United
States Government having a final maturity of not more than one year from the
date of original issuance thereof, stated at the lower of cost or current market
value, (d) commercial paper rated "Prime-1" by Moody's Investors Service, Inc.
or "A-1" by Standard & Poor's Ratings Group (or comparably rated by either such
organization or any successor thereto if the rating system of such organization
is changed or there is such a successor) and having a final

                                       7
<PAGE>   14

maturity of not more than nine months from the date of original issuance
thereof, stated at the lower of cost or current market value, (e) time deposits
in any bank or trust company organized under the laws of the United States of
America, any state thereof or the District of Columbia (provided, however, that
such bank or trust company is a member of the Federal Reserve System and has a
combined capital, surplus and undivided profits in excess of $80,000,000),
stated at the lower of cost or current market value, (f) customers' accounts,
bills and notes receivable, not more than 90 days overdue, (g) such other
Tangible Assets (but excluding investments other than those included in
Consolidated Current Assets by clauses (c), (d) and (e) above and excluding real
property in the process of development or sale), and such insurance proceeds
receivable within one year after the date of determination of "Consolidated
Current Assets", as, in accordance with GAAP, would be included in current
assets and (h) prepaid interest, rents, insurance premiums and taxes which, in
accordance with GAAP, would be included in current assets.

         "Consolidated Current Liabilities" means, as of the date of
determination thereof, the following obligations of the Borrower and
Consolidated Subsidiaries, after eliminating all offsetting debits and credits
among the Borrower and Consolidated Subsidiaries and all other items to be
eliminated in the process of consolidation effected in accordance with GAAP: (a)
all Indebtedness thereof payable on demand or maturing within one year from the
date of determination and not renewable or extendible at the option of the
obligor, under a revolving credit agreement or otherwise, to a date more than
one year from the date of creation thereof, (b) final maturities, prepayments,
sinking fund payments and other payments required to be made within one year
from the date of determination in respect of any Indebtedness thereof (including
the Notes), (c) accounts, bills and notes payable and (d) all other items
(including taxes accrued as estimated) which, in accordance with GAAP, would be
included in current liabilities.

         "Consolidated Current Ratio" means, for any accounting period, (a)
through and including the fiscal quarter ended September 30, 2001, the ratio
obtained by dividing (i) the total assets of the Company and Consolidated
Subsidiaries which would be shown as current assets on the balance sheet of the
Company and Consolidated Subsidiaries prepared in accordance with GAAP at such
time, by (ii) the total liabilities of the Company and Consolidated Subsidiaries
which would be shown as current liabilities on the balance sheet of the Company
and Consolidated Subsidiaries prepared at such time in accordance with GAAP, and
(b) thereafter, the ratio obtained by dividing Consolidated Current Assets by
Consolidated Current Liabilities.

         "Consolidated Indebtedness" means, as of the date of determination
thereof, Indebtedness of the Borrower and Consolidated Subsidiaries, after
eliminating all offsetting debits and credits among the Borrower and
Consolidated Subsidiaries and all other items to be eliminated in the process of
consolidation effected in accordance with GAAP.

         "Consolidated Interest Charges" means, for any accounting period, the
total of interest and amortization of debt discount expense and premium of all
Consolidated Indebtedness, excluding, however, obligations of the Borrower and
the Consolidated Subsidiaries under all Operating Leases.

         "Consolidated Net Income" and "Consolidated Net Loss" means, for any
accounting period, the consolidated net income or loss, as the case may be, of
the Borrower and

                                       8
<PAGE>   15

Consolidated Subsidiaries determined in accordance with GAAP, but in any event
excluding (a) in calculating "Consolidated Net Income", the following items:

                  (i) the earnings of any Person (other than a Consolidated
         Subsidiary) predecessor to the Borrower or any Consolidated Subsidiary
         through merger, consolidation, sale of assets or otherwise during the
         period prior to the date of determination, or the earnings of any
         Consolidated Subsidiary prior to the date it shall have become a
         Consolidated Subsidiary;

                  (ii) all items properly classified as extraordinary in
         accordance with generally accepted accounting principles (provided,
         however, that, irrespective of the classification of earnings or losses
         derived from resales of helicopters by the Borrower or any Consolidated
         Subsidiaries, such earnings or losses shall not be considered as
         extraordinary for the purposes of this definition);

                  (iii) any equity in the earnings of any Person other than a
         Consolidated Subsidiary, except to the extent of any dividend actually
         received by the Borrower from such Person in cash or in other tangible
         property (valued at the fair market value thereof at the time of
         receipt thereof by the Borrower); and

                  (iv) any fees payable by the Borrower under Section 2.08(a);
         and

(b) in calculating "Consolidated Net Loss", losses of any Person other than the
Borrower or a Consolidated Subsidiary.

         "Consolidated Subsidiary" or "Consolidated Subsidiaries" means a
Subsidiary or Subsidiaries, respectively, whose financial statements are
prepared on a consolidated basis with those of the Borrower in accordance with
generally accepted accounting principles.

         "Consolidated Tangible Net Worth" means, as of the date of
determination thereof, the sum of (a) the par value (or value stated on the
books of the Borrower) of all classes of the capital stock of the Borrower and
(b) the amount of the consolidated surplus, whether capital or earned, of the
Borrower and Consolidated Subsidiaries less all deferred charges, patents, trade
names, copyrights, licenses, franchises, goodwill, acquisition expenses,
unamortized debt discount and expense and other intangible items, all determined
in accordance with GAAP.

         "Continuation" and "Continue" mean, with respect to any Offshore Rate
Loan, the continuation of such Offshore Rate Loan as an Offshore Rate Loan on
the last day of the Interest Period for such Loan.

         "Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.

         "Conversion" and "Convert" mean, with respect to any Loan, the
conversion of such Loan from or into another type of Loan.

                                       9
<PAGE>   16

         "Conversion Date" means January 31, 2002.

         "Creditors" means the Banks and any and all Swap Providers.

         "Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other applicable jurisdictions from time to time in effect affecting the rights
of creditors generally.

         "Default" means any event that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.

         "Default Rate" means an interest rate equal to the Base Rate plus the
Applicable Amount, if any, applicable to Base Rate Loans plus 3.00% per annum;
provided, however, that with respect to an Offshore Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable
Amount) otherwise applicable to such Loan plus 3.00% per annum, in each case to
the fullest extent permitted by applicable Laws.

         "Direct Expenses" means all expenses incurred by the Borrower and the
Consolidated Subsidiaries in the operation of their respective Aviation Units
determined in accordance with GAAP excluding (a) depreciation and amortization,
(b) lease rental expense arising under Operating Leases, (c) general and
administrative expenses, (d) interest expense and (e) profit sharing plan
contributions.

         "Disposition" or "Dispose" means the sale, transfer, license or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal with or
without recourse of any notes or accounts receivable or any rights and claims
associated therewith.

         "Dollar" and "$" means lawful money of the United States of America.

         "Effective Date" means the date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 4.01.

         "Eligible Assignee" means (a) a financial institution organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
United States; (c) a Person that is primarily engaged in the business of
commercial banking and that is (i) a Subsidiary of a Bank, (ii) a Subsidiary of
a Person of which a Bank is a Subsidiary, or (iii) a Person of which a Bank is a
Subsidiary; (d) another Bank; (e) any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933, as
amended) which extends credit or buys loans as one of its businesses, including
but not limited to, insurance companies, mutual funds and lease financing
companies; or (f) other lenders or institutional investors consented to in
writing in

                                       10
<PAGE>   17

advance by Agent and Borrower. No Borrower Party or any Affiliate of a Borrower
Party shall be an Eligible Assignee.

         "Eligible Parts" means all Parts on the books of account of the such
Person on the date any determination is made in which Agent shall have a
perfected first priority security interest for the benefit of the Creditors and
which are located, (a) in the case of Borrower within the State of Texas or the
State of Louisiana, or (b) in the case of Air Evac in the State of Arizona.

         "Eligible Receivables" means Receivables carried on its books of
account of such Person which, on the date as of which the determination is being
made (a) arose in the ordinary course of business, (b) arose from the sale or
lease of goods or performance of services by such Person, (c) are evidenced by
an "Invoice" (i.e., an invoice, shipping order or similar writing) dated no
later than the last day of the calendar month in which the sale or lease of
goods or performance of services occurred, and which Invoice provides for
payment within 30 days or less from the date of such Invoice, (d) are not
subject to set-off, counterclaim or defense, (e) are not more than 90 days old
if payable to the Borrower or 210 days old in the case of Air Evac, (f) are not
payable by officers or directors of such Person or officers or directors of an
Affiliate of such Person, (g) are not payable by the United States of America or
any agency or department thereof, provided, however, that Receivables owing by
the United States of America or any agency or department thereof to Air Evac
shall not be so excluded if (i) such Receivables are assignable under the
Assignment of Claims Act of 1940 as amended, and in effect from time to time,
and all regulations issued pursuant thereto (the "Act"), or if a valid security
interest therein may be created under all other applicable laws and regulations,
including, without limitation, those applicable to Government Receivables, (ii)
Agent receives appropriate documentation, in form and substance satisfactory to
the Agent for the ratable benefit of the Banks and under the other loan
documents in compliance with the notification and other provisions for
assignment set forth in such Act and other laws and regulations, and (iii)
agreement, acknowledgment and consent to such assignment by the appropriate
contracting agent(s), disbursing agent(s), if any, and surety(ies) upon the
bond(s), if any; and (h) does not by its terms prohibit the assignment thereof
or require the consent of the obligor thereon to any assignment thereof;
provided, however, Receivables due from Affiliates of any Person or from Persons
located outside the United States shall not constitute in the aggregate more
than 10% of the Eligible Receivables of such Person; and further, provided, that
if any Receivable is more than 90 days old, upon receipt by Borrower of a notice
from Agent, acting at the request of the Requisite Banks, specifying that no
Receivables due from the obligor of such Receivable is to be included as an
Eligible Receivable, no such Receivable shall be included as an Eligible
Receivable unless the prior written consent of the Requisite Banks is obtained.
For purposes of this Agreement, a Receivable is 90 days old on the 90th day
after the date of the Invoice evidencing such Receivable, and the age of any
other Receivable is likewise the number of days since the date of its Invoice.

         "Environmental Protection Statute" means (a) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.A. Section
9601 et seq.), as amended from time to time, and any and all rules and
regulations issued or promulgated thereunder ("CERCLA"); (b) the Resource
Conservation and Recovery Act, (as amended by the Hazardous and Solid Waste
Amendment of 1984, 42 U.S.C.A. Section 6901 et seq.), as amended from time to
time, and any and all

                                       11
<PAGE>   18
rules and regulations promulgated thereunder ("RCRA"); (c) the Clean Air Act,
42 U.S.C.A. Section 7401 et seq., as amended from time to time, and any and all
rules and regulations promulgated thereunder; (d) the Clean Water Act of 1977,
33 U.S.C.A. Section 1251 et seq., as amended from time to time, and any and all
rules and regulations promulgated thereunder; (e) the Toxic Substances Control
Act, 15 U.S.C.A. Section 2601 et seq., as amended from time to time, and any and
all rules and regulations promulgated thereunder; or (f) any other federal or
state law, statute, rule, or regulation enacted in connection with or relating
to the protection or regulation of the environment (including, without
limitation, those laws, statutes, rules, and regulations regulating the
disposal, removal, production, storing, refining, handling, transferring,
processing, or transporting of Hazardous Materials) and any rules and
regulations issued or promulgated in connection with any of the foregoing by any
Governmental Authority, and "Environmental Protection Statutes" means each of
the foregoing.

         "ERISA" means the Employee Retirement Income Security Act of 1974 and
any regulations issued pursuant thereto, as amended from time to time.

         "ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with Borrower within the meaning of Sections
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).

         "ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by Borrower or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon Borrower or
any ERISA Affiliate.

         "Event of Default" means any of the events specified in Section 8.01.

         "Event of Loss" means any of the following events: (a) the total
destruction of any Aviation Unit constituting a portion of the Aircraft, or
damage thereto to an extent which, in the opinion of the Borrower (as evidenced
by an Officers' Certificate to such effect delivered to Agent with a copy to
each Bank, together with, if requested by any Bank, a certificate of the
Independent Appraiser addressed and delivered to Agent with a copy to each
Bank), shall render repair impracticable or uneconomical; or (b) the
condemnation, confiscation, theft or seizure of, or the requisition of title to
or use of, any Aviation Unit constituting a portion of the Aircraft, or any
portion thereof, as shall result in the loss of use or possession of such
helicopter or other Aviation Unit by the Borrower or Air Evac, as applicable,
for a period of 90 days or longer.

                                       12
<PAGE>   19

         "Existing Loan Agreement" has the meaning specified in Recital A.

         "Extension of Credit" means (a) a Borrowing, Conversion or Continuation
of Loans and (b) a Letter of Credit Action wherein a new Letter of Credit is
issued or which has the effect of increasing the amount of, extending the
maturity of, or making a material modification to an outstanding Letter of
Credit or the reimbursement of drawings thereunder (collectively, the
"Extensions of Credit").

         "Federal Aviation Act" means the Federal Aviation Act of 1958, as
amended and in effect at the particular time, or comparable provisions of any
successor statute.

         "Funded Indebtedness" means, with respect to any Person, all
Indebtedness for Money Borrowed of such Person which has a final maturity (or,
pursuant to the terms of the agreement under which it has been issued, an
anticipated maturity) more than one year after the date of creation thereof (or
which is renewable or extendible at the option of the obligor for more than one
year from the date of creation thereof), and shall include the obligation of
such Person to make payments in respect thereof required to be made less than
one year after the date of creation thereof, notwithstanding the fact that the
obligation of such Person to make such payments may at the time also be included
in current liabilities under generally accepted accounting principles.

         "Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank on the Business Day next succeeding such day; provided that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Bank of America on such day on such
transactions as determined by Agent.

         "FNCB" has the meaning set forth in Recital A.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, that are
applicable to the circumstances as of the date of determination, consistently
applied. If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either
Borrower or Requisite Banks shall so request, Agent, Banks and Borrower shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of Requisite Banks), provided that, until so amended, (a) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (b) Borrower shall provide to Agent and Banks financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between

                                       13
<PAGE>   20

calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

         "Governmental Authority" means (a) any international, foreign, federal,
state, county or municipal government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality, central bank or public body, or (c) any court,
administrative tribunal or public utility.

         "Guaranty Agreement" means that certain Guaranty Agreement, of even
date herewith, executed by Air Evac in favor of Agent for the benefit of the
Creditors, guaranteeing the unpaid principal amount of the Loans and all other
obligations and liabilities of the Borrower to the Agent and the Creditors
substantially in the form of Exhibit E.

         "Guaranty Obligation" means, as to any Person, any (a) guaranty by such
Person of Indebtedness of, or other obligation payable or performable by, any
other Person or (b) assurance, agreement, letter of responsibility, letter of
awareness, undertaking or arrangement given by such Person to an obligee of any
other Person with respect to the payment or performance of an obligation by, or
the financial condition of, such other Person, whether direct, indirect or
contingent, including any purchase or repurchase agreement covering such
obligation or any collateral security therefor, any agreement to provide funds
(by means of loans, capital contributions or otherwise) to such other Person,
any agreement to support the solvency or level of any balance sheet item of such
other Person or any "keep-well" or other arrangement of whatever nature given
for the purpose of assuring or holding harmless such obligee against loss with
respect to any obligation of such other Person; provided, however, that the term
Guaranty Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, covered by such
Guaranty Obligation or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the Person in good
faith.

         "Hazardous Materials" means (a) any "hazardous waste" as defined by
RCRA, (b) any "hazardous substance" as defined by CERCLA, (c) asbestos, (d)
polychlorinated biphenyls, (e) any substance the presence of which on any of
Borrower's or any of the Subsidiaries' properties is prohibited by any
Governmental Authority, and (f) any other substance which requires special
handling pursuant to any Environmental Protection Statute.

         "Indebtedness" means, as to any Person at a particular time, all items
(other than capital stock and surplus) which, in accordance with GAAP, would be
shown on the liability side of a balance sheet of such Person as of the date on
which Indebtedness is to be determined. Except as otherwise agreed in writing by
the Requisite Banks, "Indebtedness" shall also mean, whether or not so
reflected, (a) all debt, obligations and liabilities secured by any Lien
existing on property owned by such Person if such property shall be subject to
such Lien, whether or not the debt, obligations or liabilities secured thereby
shall have been assumed; (b) all obligations of such Person under any lease
which is a Capital Lease or any lease which, whether or not such lease is a
Capital Lease, contains terms that require the payment of lease rentals whether
or not the property leased thereunder shall exist or can be used for the purpose
for which it shall have been

                                       14
<PAGE>   21

leased, or provide for a termination payment calculated to be sufficient to
retire any debt, obligations or liabilities secured by a Lien on such lease or
on the property leased thereunder; (c) all Guaranty Obligations of such Person;
(d) all obligations of such Person to purchase any materials, supplies or other
property, or to obtain the services of any other Person, if the relevant
contract or other related document requires that payment for such materials,
supplies or other property, or for such services, shall be made regardless of
whether or not delivery of such materials, supplies or other property is ever
made or tendered or such services are ever performed or tendered; and (e) all
obligations of such Person (contingent or direct) in respect of letters of
credit issued for the account of such Person or other extensions of credit to
such Person.

         "Indebtedness for Money Borrowed" means, with respect to any Person,
all Indebtedness of such Person (a) in respect of money borrowed or evidenced by
a promissory note, debenture or other like written obligation to pay money, (b)
in respect of letters of credit issued for the account of such Person or other
extensions of credit to such Person, (c) in respect of obligations under any
lease of Aviation Units which is a Capital Lease or any lease of Aviation Units
which, whether or not such lease is a Capital Lease, contains terms that require
the payment of lease rentals whether or not the property leased thereunder shall
exist or can be used for the purpose for which it shall have been leased, or
provide for a termination payment calculated to be sufficient to retire any
debt, obligations or liabilities secured by a Lien on such lease or on the
property leased thereunder, (d) representing all or part of the purchase price
of any assets acquired by such Person, other than any such purchase price
payable to a trade creditor in the ordinary course of business the full payment
of which may be deferred for a period customary in the particular trade (but in
any event not exceeding 60 days) and which is not rendered delinquent by
nonpayment before the expiration of such period and (e) in respect of
obligations of such Person to purchase any Aviation Units if the relevant
contract or other related document requires that payment for such Aviation Units
shall be made regardless of whether or not delivery of such Aviation Units is
ever made or tendered.

         "Indemnified Liabilities" has the meaning set forth in Section 10.13.

         "Indemnitees" has the meaning set forth in Section 10.13.

         "Independent Appraiser" means (a) Air Associates, Inc., so long as the
same shall not be an Affiliate or have as an officer or director any Affiliate,
an officer or director of the Borrower or an officer, director or partner of any
Affiliate, or (b) such other Person who or which is neither an Affiliate, an
officer or director of the Borrower nor an officer, director or partner of any
Affiliate and which, if other than an individual, does not have as an officer,
director or partner any Affiliate, an officer or director of the Borrower or an
officer, director or partner of any Affiliate, if the same shall have been
selected by the Borrower and shall be acceptable to the Requisite Banks;
provided, however, that the Requisite Banks may for cause shown at any time and
from time to time remove any Person serving as the Independent Appraiser
hereunder by an instrument in writing delivered to the Borrower, such removal to
become effective at the time (which shall be after the date of delivery of such
instrument to the Borrower) designated in such instrument.

         "Interest Period" means for each Offshore Rate Loan, (a) initially, the
period commencing on the date such Offshore Rate Loan is disbursed or Continued,
or Converted into, such Offshore

                                       15
<PAGE>   22

Rate Loan and (b) thereafter, the period commencing on the last day of the
preceding Interest Period, and ending, in each case, on the earlier of (x) the
scheduled Maturity Date, or (y) one, two, three or six months thereafter;
provided that:

                  (i) any Interest Period that would otherwise end on a day that
         is not a Business Day shall be extended to the next succeeding Business
         Day unless such Business Day falls in another calendar month, in which
         case such Interest Period shall end on the next preceding Business Day;

                  (ii) any Interest Period which begins on the last Business Day
         of a calendar month (or on a day for which there is no numerically
         corresponding day in the calendar month at the end of such Interest
         Period) shall end on the last Business Day of the calendar month at the
         end of such Interest Period; and

                  (iii) unless Agent otherwise consents, there may not be more
         than 5 Interest Periods for Offshore Rate Loans in effect at any time.

         "Investment" means, as to any Person, any acquisition or any investment
by such Person, whether by means of the purchase or other acquisition of stock
or other securities of any other Person or by means of a loan, creating a debt,
capital contribution, guaranty or other debt or equity participation or interest
in any other Person, including any partnership and joint venture interests in
such other Person. For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.

         "Investment Securities" means direct certificated obligations of the
United States Government maturing within three months of issue, or such other
certificated obligations of, or guaranteed by, the United States Government
which are acceptable to the Banks.

         "IRS" means the United States Internal Revenue Service.

         "Issuing Bank" means Bank of America, or any successor issuing lender
hereunder.

         "Laws" or "Law" means all international, foreign, federal, state and
local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority.

         "Lending Office" means, as to any Bank, the office or offices of such
Bank described as such on Schedule 10.02, or such other office or offices as a
Bank may from time to time notify Agent.

         "Letter of Credit" means any letter of credit issued or outstanding
hereunder.

                                       16
<PAGE>   23

         "Letter of Credit Action" means the issuance, supplement, amendment,
renewal, extension, modification or other action relating to a Letter of Credit
hereunder.

         "Letter of Credit Application" means an application for a Letter of
Credit Action from time to time in use by Issuing Bank.

         "Letter of Credit Cash Collateral Account" means a blocked deposit
account at Bank of America in which Borrower hereby grants a first priority
security interest to Agent as security for Letter of Credit Usage and with
respect to which Borrower agrees to execute and deliver from time to time such
documentation as Agent or the Creditors may reasonably request to further assure
and confirm such security interest.

         "Letter of Credit Expiration Date" means the Business Day immediately
prior to the Conversion Date.

         "Letter of Credit Sublimit" means an amount equal to the lesser of the
Aggregate Revolving Credit Commitments and $5,000,000. The Letter of Credit
Sublimit is part of, and not in addition to, the Revolving Credit Commitments.

         "Letter of Credit Usage" means, as at any date of determination, the
aggregate undrawn face amount of outstanding Letters of Credit plus the
aggregate amount of all drawings under the Letters of Credit not reimbursed by
Borrower or converted into Loans.

         "Leverage Ratio" means, for any period of four consecutive fiscal
quarters of the Borrower, a quotient equal to (a) the sum of (i) Funded
Indebtedness of the Borrower and the Consolidated Subsidiaries as of the last
day of such period, and (ii) the product of (A) eight and (B) Rent Expense for
such period, divided by (b) the greater of $1 or the sum of (i) Consolidated Net
Income (or Consolidated Net Loss, as the case may be) for such period, and, (ii)
to the extent actually deducted in computing such Consolidated Net Income (or
Consolidated Net Loss), (A) Consolidated Interest Charges for such period, (B)
depreciation and amortization expense of the Borrower and the Consolidated
Subsidiaries for such period, (C) tax expense of the Borrower and the
Consolidated Subsidiaries for such period, and (D) Rent Expense for such period.

         "Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement (in the nature of compensating balances, cash collateral accounts or
security interests), encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable Laws of any jurisdiction), including
the interest of a purchaser of accounts receivable.

         "Loan" means any advance made by any Bank to Borrower as provided in
Section 2 (collectively, the "Loans").

         "Loan Documents" means this Agreement and each Note, each Security
Document, each Letter of Credit Application, each Request for Extension of
Credit, each Compliance Certificate,

                                       17
<PAGE>   24

each certificate, each fee letter, and each other instrument, document and
agreement from time to time delivered in connection with this Agreement.

         "Material Adverse Effect" means any set of circumstances or events
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document, (b)
is or could reasonably be expected to be material and adverse to the condition
(financial or otherwise), business, assets, operations or prospects of any
Borrower Party, or (c) materially impairs or could reasonably be expected to
materially impair the ability of any Borrower Party to perform its Obligations.

         "Maturity Date" means (a) as to any Term Loan, the Term Loan Maturity
Date, and (b) as to any Revolving Credit Loan, the Revolving Loan Maturity Date.

         "Maximum Rate" has the meaning set forth in Section 10.08.

         "Minimum Amount" means, with respect to each of the following actions,
the minimum amount and any multiples in excess thereof set forth opposite such
action:

<Table>
<Caption>
                                                                           MULTIPLES IN EXCESS
                        TYPE OF ACTION                  MINIMUM AMOUNT           THEREOF
         --------------------------------------------- ------------------ ----------------------

<S>                                                    <C>                <C>
         Borrowing or prepayment of, or Conversion       $   500,000             $250,000
         into, Base Rate Loans

         Borrowing, prepayment or Continuation of,       $   500,000             $250,000
         or Conversion into, Offshore Rate Loans

         Letter of Credit Action                         $   100,000             None

         Reduction in Revolving Credit Commitment        $   500,000             $250,000

         Assignments                                     $ 1,000,000             None
</Table>

         "Modified Cash Flow Coverage" means, for any accounting period, (a)
Consolidated Net Income, plus Federal and state taxes measured on income of the
Borrower and Consolidated Subsidiaries, plus Consolidated Interest Charges, plus
Rent Expense, plus depreciation and amortization of the Borrower and
Consolidated Subsidiaries, for such period, determined in accordance with GAAP
plus any non-recurring significant charge the addition of which has been
approved in writing by each of the Banks for such period, which approval may be
withheld in each Bank's sole discretion, divided by (b) an amount equal to the
sum of all payments of principal on Consolidated Indebtedness, plus Consolidated
Interest Charges, plus Rent Expense, required to be made during such period
under the terms governing such Consolidated Indebtedness, Consolidated Interest
Charges and Rent Expense, regardless of whether such payments or expenses were
actually paid by the Borrower or its Consolidated Subsidiaries during such
period or instead were prepaid during an earlier period or postponed until a
later period; provided, however, from and including the four consecutive fiscal
quarters ending December 31, 2000, through and including the four consecutive
fiscal quarters of Borrower ending September 30,

                                       18
<PAGE>   25

2001, the Company may, to the extent the Non-Recurring Charges are included in
determining Consolidated Net Income in accordance with GAAP and without
duplication, add such Non-Recurring Charges to Consolidated Net Income in
calculating the Modified Cash Flow Coverage for such accounting period.

         "Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA.

         "Negative Pledge" means a Contractual Obligation that restricts Liens
on property.

         "Net Cash Proceeds" means, in connection with any Disposition
(including any sale and leaseback transaction), the cash proceeds (including any
cash payments received by way of deferred payment pursuant to a promissory note,
receivable or otherwise, but only as and when received in cash) of such
Disposition net of (a) reasonable transaction costs (including any underwriting,
brokerage or other selling commissions and reasonable legal, advisory and other
fees and expenses, including title and recording expenses, associated therewith
actually incurred and satisfactorily documented), (b) taxes estimated to be paid
as a result of such Disposition, and (c) any portion of such cash proceeds which
the Borrower determines in good faith should be reserved for post-closing
adjustments or liabilities (to the extent that the Borrower delivers to the
Agent a certificate signed by a Responsible Officer as to such determination),
it being understood and agreed that on the day all such post-closing adjustments
and liabilities have been determined, (x) the amount (if any) by which the
reserved amount of the cash proceeds of such Disposition exceeds the actual
post-closing adjustments or liabilities payable by the Borrower or any
Subsidiary shall constitute Net Cash Proceeds on such date and (y) the amount
(if any) by which the actual post-closing adjustments or other liabilities
payable by the Borrower or any Subsidiary exceeds the reserved amount of the
cash proceeds of such Disposition on such date shall be credited against any
subsequent Net Cash Proceeds that the Borrower or any Subsidiary is required to
apply to prepay the Loans pursuant to Section 2.05(b).

         "Non-Recurring Charges" means charges incurred by the Company in the
fiscal year ended December 31, 2000, or to be incurred in the fiscal year ending
December 31, 2001 for the following items: (a) up to $1,682,000 arising from the
write-down of aircraft leased to, the investment in, and accounts receivable
from Clintondale Aviation, Inc., (b) up to $7,642,000 arising from adjustments
to and the write-down of inventory and inventory related items, (c) up to
$1,240,000 arising from the accrual of a retroactive pay increase for pilots,
(d) up to $1,106,000 arising from the accrual of severance costs, and (e) up to
$782,000 arising from losses on the sale of aircraft

         "Notes" means all Term Notes and Revolving Credit Notes made by
Borrower in favor of the Banks.

         "Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Borrower Party arising under any Loan
Document, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now

                                       19
<PAGE>   26

existing or hereafter arising and including interest that accrues after the
commencement of any proceeding under any Debtor Relief Laws by or against any
Borrower Party or any Subsidiary or Affiliate of any Borrower Party.

         "Offshore Base Rate" has the meaning set forth in the definition of
Offshore Rate.

         "Offshore Rate" means for any Interest Period with respect to any
Offshore Rate Loan, a rate per annum determined by Agent pursuant to the
following formula:

                  Offshore Rate =                 Offshore Base Rate
                                         ------------------------------------
                                         1.00 - Eurodollar Reserve Percentage
                  Where,

                  "Offshore Base Rate" means, for such Interest Period:

                  (a) the rate per annum equal to the rate determined by Agent
         to be the offered rate that appears on the page of the Telerate screen
         that displays an average British Bankers Association Interest
         Settlement Rate for deposits in Dollars (for delivery on the first day
         of such Interest Period) with a term equivalent to such Interest
         Period, determined as of approximately 11:00 a.m. (London time) two
         Business Days prior to the first day of such Interest Period, or

                  (b) in the event the rate referenced in the preceding
         subsection (a) does not appear on such page or service or such page or
         service shall cease to be available, the rate per annum equal to the
         rate determined by Agent to be the offered rate on such other page or
         other service that displays an average British Bankers Association
         Interest Settlement Rate for deposits in Dollars (for delivery on the
         first day of such Interest Period) with a term equivalent to such
         Interest Period, determined as of approximately 11:00 a.m. (London
         time) two Business Days prior to the first day of such Interest Period,
         or

                  (c) in the event the rates referenced in the preceding
         subsections (a) and (b) are not available, the rate per annum
         determined by Agent as the rate of interest (rounded upward to the next
         1/100th of 1%) at which deposits in Dollars for delivery on the first
         day of such Interest Period in same day funds in the approximate amount
         of the Offshore Rate Loan being made, Continued or Converted by Agent
         (or its Affiliate) in its capacity as a Bank and with a term equivalent
         to such Interest Period would be offered by Bank of America's London
         Branch to major banks in the offshore Dollar market at their request at
         approximately 11:00 a.m. (London time) two Business Days prior to the
         first day of such Interest Period.

                  "Eurodollar Reserve Percentage" means, for any day during any
         Interest Period, the reserve percentage (expressed as a decimal,
         rounded upward to the next 1/100th of 1%) in effect on such day,
         whether or not applicable to any Bank, under regulations issued from
         time to time by the Board of Governors of the Federal Reserve System
         for determining the maximum reserve requirement (including any
         emergency, supplemental or other marginal reserve requirement) with
         respect to Eurocurrency funding (currently

                                       20
<PAGE>   27

         referred to as "Eurocurrency liabilities"). The Offshore Rate for each
         outstanding Offshore Rate Loan shall be adjusted automatically as of
         the effective date of any change in the Eurodollar Reserve Percentage.

                  The determination of the Eurodollar Reserve Percentage and the
         Offshore Base Rate by Agent shall be conclusive in the absence of
         manifest error.

         "Officers' Certificate" means a certificate signed in the name of the
Borrower by the Chairman of the Board, the Vice Chairman of the Board, the
President or any Vice President and by any other Vice President, the Treasurer,
the Secretary or any Assistant Secretary or Assistant Treasurer of the Borrower.

         "Offshore Rate Loan" means a Loan bearing interest based on the
Offshore Rate.

         "Operating Lease" means any lease other than a Capital Lease.

         "Ordinary Course Dispositions" means:

                  (a) Dispositions of obsolete or worn out property, whether now
         owned or hereafter acquired, in the ordinary course of business;

                  (b) Dispositions of cash, cash equivalents, inventory and
         other property in the ordinary course of business;

                  (c) Dispositions of property to the extent that such property
         is exchanged for credit against the purchase price of similar
         replacement property, or the proceeds of such sale are reasonably
         promptly applied to the purchase price of such replacement property or
         where Borrower or any Subsidiary determine in good faith that the
         failure to replace such equipment will not be detrimental to the
         business of Borrower or such Subsidiary; and

                  (d) Dispositions of assets or property by any Subsidiary to
         Borrower or another Wholly-Owned Subsidiary;

provided, however, that no such Disposition shall be for less than the fair
market value of the property being disposed of and no Disposition of Aircraft,
Parts or Receivables shall be considered an Ordinary Course Disposition.

         "Ordinary Course Indebtedness" means:

                  (a) intercompany Guaranty Obligations of Borrower or any
         Subsidiaries guarantying Indebtedness otherwise permitted hereunder of
         Borrower or any Wholly-Owned Subsidiary;

                  (b) Indebtedness arising from the honoring of a check, draft
         or similar instrument against insufficient funds;

                  (c) Indebtedness arising from the Swap Agreements;

                                       21
<PAGE>   28

                  (d) trade and other accounts payable in the ordinary course of
         business in accordance with customary trade terms and which are not
         overdue for a period of more than 60 days; and

                  (e) deferred taxes.

         "Ordinary Course Investments" means Investments consisting of:

                  (a) cash and cash equivalents;

                  (b) advances to officers, directors and employees of Borrower
         and Subsidiaries for travel, entertainment, relocation and analogous
         ordinary business purposes not at any time exceeding $200,000 in the
         aggregate;

                  (c) Investments of any Subsidiary in Borrower or another
         Subsidiary;

                  (d) extensions of credit to customers or suppliers of Borrower
         and Subsidiaries in the ordinary course of business and any Investments
         received in satisfaction or partial satisfaction thereof; and

                  (e) Guaranty Obligations permitted by Section 7.01.

         "Ordinary Course Liens" means:

                  (a) Liens for taxes not yet due or which are being contested
         in good faith and by appropriate proceedings, if adequate reserves with
         respect thereto are maintained on the books of the applicable Person in
         accordance with GAAP;

                  (b) carriers', warehousemen's, mechanics', materialmen's,
         repairmen's or other like Liens arising in the ordinary course of
         business which are not overdue for a period of more than 30 days or
         which are being contested in good faith and by appropriate proceedings,
         if adequate reserves with respect thereto are maintained on the books
         of the applicable Person;

                  (c) pledges or deposits in connection with worker's
         compensation, unemployment insurance and other social security
         legislation;

                  (d) deposits to secure the performance of bids, trade
         contracts (other than for borrowed money), leases, statutory
         obligations, surety and appeal bonds, performance bonds and other
         obligations of a like nature incurred in the ordinary course of
         business;

                  (e) easements, rights-of-way, restrictions and other similar
         encumbrances affecting real property which, in the aggregate, are not
         substantial in amount, and which do not in any case materially detract
         from the value of the property subject thereto or materially interfere
         with the ordinary conduct of the business of the applicable Person; and

                                       22
<PAGE>   29

                  (f) attachment, judgment or other similar Liens arising in
         connection with litigation or other legal proceedings (and not
         otherwise a Default hereunder) in the ordinary course of business that
         is currently being contested in good faith by appropriate proceedings,
         adequate reserves have been set aside and no material property is
         subject to a material risk of loss or forfeiture and the claims in
         respect of such Liens are fully covered by insurance (subject to
         ordinary and customary deductibles).

         "Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws; (b) with respect to
any limited liability company, the articles of formation and operating
agreement; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership or joint venture agreement and
any agreement, instrument, filing or notice with respect thereto filed in
connection with its formation with the secretary of state or other department in
the state of its formation, in each case as amended from time to time.

         "Outstanding Obligations" means, as of any date, and giving effect to
making any Extensions of Credit requested on such date and all payments,
repayments and prepayments made on such date, (a) when reference is made to all
Banks, the sum of (i) the aggregate outstanding principal amount of all Loans
and (ii) all Letter of Credit Usage, and (b) when reference is made to one Bank,
the sum of (i) the aggregate outstanding principal amount of all Loans made by
such Bank, and (ii) such Bank's ratable risk participation in all Letter of
Credit Usage.

         "Parts" means, until installed in any Aviation Unit, all aircraft
engines, propellers, rotors, appliances, tires, airframes, spare parts, radios
and other communication equipment together with all other aircraft appliances,
instruments, mechanisms, apparatus, appurtenances, accessories and parts or
components thereof, of such Person wherever maintained, now or hereafter
existing, whether acquired by purchase or otherwise and whether held by such
Person for use in its business or held by such Person for sale or lease or to be
furnished by such Person under contracts of service, and all proceeds and
products thereof and accessories thereto.

         "PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto established under ERISA.

         "Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by Borrower or any
ERISA Affiliate or to which Borrower or any ERISA Affiliate contributes or has
an obligation to contribute, or in the case of a multiple employer plan (as
described in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five plan years.

         "Permitted Liens" has the definition set forth in Section 7.02.

         "Person" means any individual, trustee, corporation, general
partnership, limited partnership, limited liability company, joint stock
company, trust, unincorporated organization, bank, business association, firm,
joint venture, Governmental Authority, or otherwise.

                                       23
<PAGE>   30

         "Plan" means any employee benefit plan maintained or contributed to by
a Borrower Party or by any trade or business (whether or not incorporated) under
common control with a Borrower Party as defined in Section 4001(b) of ERISA and
insured by the Pension Benefit Guaranty Corporation under Title IV of ERISA.

         "Pledged Investment Securities" means all Investment Securities of the
Borrower now or from time to time hereafter delivered to pursuant to a
Securities Pledge Agreement.

         "PHI Borrowing Base" means an amount equal to the sum of (a) 80% of the
amount of Eligible Receivables of Borrower in which each of the Creditors shall
have a valid equal and ratable perfected first priority Security Interest
pursuant to the Security Documents executed by Borrower, plus (ii) 50% of the
Appraised Value of the Aircraft of Borrower in which each of the Creditors shall
have a valid equal and ratable perfected first priority Security Interest
pursuant to the Security Documents executed by Borrower, plus (c) 50% of the
value of Eligible Parts (valued at the lower of average cost or market), in
which each of the Creditors shall have a valid equal and ratable perfected first
priority Security Interest, pursuant to the Security Documents executed by the
Borrower.

         "Pro Rata Share" means, with respect to each Bank, the percentage
(rounded, if necessary to the ninth decimal place) of the Total Commitments set
forth opposite the name of such Bank on Schedule 2.01, as such share may be
adjusted as contemplated herein.

         "Receivables" means, with respect to any Person, all Indebtedness
presently existing or hereafter owing to such Person in connection with such
Person's business, profession, occupation, or any other undertaking, including,
but not limited to the sale of goods or the performance of services or the
leasing of property, together with all proceeds thereof; excluding, however any
indebtedness due to or arising out of claims in tort and indebtedness evidenced
by a promissory note or a negotiable instrument.

         "Rent Expense" means, for any period, all rental expenses of the
Borrower and the Consolidated Subsidiaries for such period (other than rental
expenses under Capital Leases), including without limitation, rental expense for
leases of real, personal or intangible property of the Borrower and each
Consolidated Subsidiary.

         "Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder, a withdrawal from a Plan described in
Section 4063 of ERISA, or a cessation of operations described in Section 4062(e)
of ERISA.

         "Request for Extension of Credit" means, unless otherwise specified
herein, (a) with respect to a Borrowing, Conversion or Continuation of Loans, a
written request substantially in the form of Exhibit B, and (b) with respect to
a Letter of Credit Action, a Letter of Credit Application.

         "Requisite Banks" means, as of any date of determination: (a) if the
Revolving Credit Commitments are then in effect, Banks (excluding any Banks not
funding when required to so hereunder) having in the aggregate 100% of the Total
Commitments then in effect and (b) if the

                                       24
<PAGE>   31

Revolving Credit Commitments have then been terminated and there are Outstanding
Obligations, Banks holding Outstanding Obligations aggregating 100% of such
Outstanding Obligations.

         "Requisite Notice" means a notice delivered in accordance with Section
10.02.

         "Requisite Time" means, with respect to any of the actions listed
below, the time and date set forth below opposite such action:

<Table>
<Caption>
                           TYPE OF ACTION                     APPLICABLE TIME                DATE OF ACTION
         ---------------------------------------------------- ---------------- --------------------------------------------
<S>                                                           <C>              <C>

         Delivery of Request for Extension of
         Credit for, or notice for:
         o        Borrowing or prepayment of Base Rate Loans     9:00 a.m.     1 Business Days prior to such Borrowing or
                                                                               prepayment

         o        Conversion into Base Rate Loans                9:00 a.m.     2 Business Days prior to such Conversion

         o        Borrowing, prepayment or, Continuation        10:00 a.m.     3 Business Days prior to such Borrowing,
                  of, or Conversion into, Offshore Rate Loans                  prepayment, Continuation or Conversion

                                                                               3 Business Days prior to such action (or
         o        Letter of Credit Action                       10:00 a.m.     such lesser time which is acceptable to
                                                                               Issuing Bank)
         o        Voluntary reduction in or termination of
                  Revolving Credit Commitments                  10:00 a.m.     5 Business Days prior to such reduction or
                                                                               termination

         Payments by Banks or Borrower to Agent                 10:00 a.m.     On date payment is due
</Table>

         "Responsible Officer" means the president, chief financial officer,
treasurer or assistant treasurer of a Borrower Party. Any document or
certificate hereunder that is signed by a Responsible Officer of a Borrower
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Borrower Party
and such Responsible Officer shall be conclusively presumed to have acted on
behalf of such Borrower Party.

         "Restricted Payment" means:

                  (a) the declaration or payment of any dividend or distribution
         by Borrower or any Subsidiary, either in cash or property, on any
         shares of the capital stock of any class of Borrower or any Subsidiary
         (except dividends or other distributions payable solely in shares of
         capital stock of Borrower or any Subsidiary or payable by any
         Subsidiary to Borrower or to a Wholly-Owned Subsidiary);

                                       25
<PAGE>   32

                  (b) the purchase, redemption or retirement by Borrower or any
         Subsidiary of any shares of its capital stock of any class or any
         warrants, rights or options to purchase or acquire any shares of its
         capital stock, whether directly or indirectly;

                  (c) any other payment or distribution by Borrower or any
         Subsidiary in respect of its capital stock, either directly or
         indirectly;

                  (d) any Investment other than an Investment otherwise
         permitted under Section 7.05; and

                  (e) the prepayment, repayment, redemption, defeasance or other
         acquisition or retirement for value prior to any scheduled maturity,
         scheduled repayment or scheduled sinking fund payment, of any
         Indebtedness.

         "Revolving Credit Borrowing" means a borrowing consisting of a
simultaneous Revolving Credit Loan from each Bank.

         "Revolving Credit Commitment" has the meaning set forth in Section
2.02(a).

         "Revolving Credit Loan" has the meaning set forth in Section 2.02(a).

         "Revolving Credit Note" means a note, substantially in the form
attached hereto as Exhibit A-2, evidencing the Revolving Credit Loans made by a
Bank, including all renewals, extensions, modifications, amendments,
rearrangements and replacements thereof.

         "Revolving Loan Maturity Date" means (a) January 31, 2003 or (b) such
earlier date upon which the Revolving Credit Loans otherwise become due and
payable in accordance with the terms of this Agreement.

         "Samaritan" means Samaritan Health System, an Arizona non-profit
corporation.

         "Securities Pledge Agreement" means a pledge and security agreement and
such other documents as requested by Agent or any Creditor, each in form and
substance satisfactory to the Agent and each Creditor, executed by the Borrower
in order to grant a valid and perfected first priority security interest in the
Investment Securities delivered to Agent pursuant to this Agreement for the
equal and ratable benefit of the Creditors as security for the Notes and the
Obligations under the Loan Documents.

         "Security Agreements" means collectively (a) the Amended and Restated
Security Agreement, dated as of even date herewith executed by Borrower in favor
of Agent in substantially the form attached as Exhibit C, (b) the Security
Agreement, dated as of even date herewith executed by Air Evac in favor of Agent
in substantially the form attached as Exhibit D, (c) all other security
agreements executed on or after the Effective Date by any of the Borrower
Parties and (d) any and all supplements, modifications or amendments or
restatements of the foregoing.

                                       26
<PAGE>   33

         "Security Documents" means the Security Agreements, the Guaranty
Agreement, and all other documents, agreements, instruments, financing
statements, financing statement changes and continuation statements heretofore,
now or hereafter executed or delivered by any Person in connection with, or as
security for the payment of the Loans.

         "Security Interest" means, with reference to the Collateral (or any
portion thereof), mortgages, liens, security interests, charges or other
encumbrances created by the Borrower or Air Evac in favor of the Banks or other
Creditors, as the case may be, and held by Agent for their respective equal and
ratable benefit pursuant to the Security Documents.

         "Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of Borrower.

         "Swap Agreement" means any interest rate protection agreement, interest
rate futures contract, interest rate option, interest rate cap or other interest
rate hedge arrangement, on terms and conditions satisfactory to the Requisite
Banks at the inception of such interest rate protection agreement, interest rate
futures contract, interest rate option, interest rate cap or other interest rate
hedge arrangement, to or which Borrower is a party or a beneficiary, together
with all schedules thereto and the confirmations thereunder, as may be further
amended, modified, restated or supplemented (including, without limitation,
amendments, modifications, restatements or supplements which have the effect of
increasing the notional amount, liabilities or obligations thereunder).

         "Swap Provider" means any Bank, or any Affiliate of such Bank,
satisfactory to the Requisite Banks at the time such Bank or affiliate initially
enters into its Swap Agreement with Borrower, which is a party to a Swap
Agreement and has agreed in writing to be bound by the terms of this Agreement.

         "Swap Termination Value" means, in respect of any one or more Swap
Agreements, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Agreements, (a) for any date on or after
the date such Swap Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Agreements, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Agreements (which may include any Bank).

         "Tangible Assets" means, with respect to any Person, all assets of such
Person (after deducting applicable reserves for depreciation and all other
reserves properly deductible from the value of such assets in accordance with
GAAP) except (a) deferred assets, (b) patents, copyrights,

                                       27
<PAGE>   34

trademarks, trade names, franchises and goodwill, (c) unamortized debt discount
and expense and (d) all other items generally regarded as intangibles in
accordance with GAAP.

         "Term Loan Borrowing" means a borrowing consisting of a simultaneous
Term Loan from each Bank.

         "Term Loan Commitment" has the meaning set forth in Section 2.01(a).

         "Term Loan Maturity Date" means (a) September 30, 2004 , or (b) such
earlier date upon which the Term Loans otherwise become due and payable in
accordance with the terms of this Agreement.

         "Term Loans" has the meaning set forth in Section 2.01(a).

         "Term Note" means a note, substantially in the form attached hereto as
Exhibit A-1, evidencing the Term Loan made by a Bank, including all renewals,
extensions, modifications, amendments, rearrangements and replacements thereof.

         "to the best knowledge of" means, when modifying a representation,
warranty or other statement of any Person, that the fact or situation described
therein is known by such Person (or, in the case of a Person other than a
natural Person, known by any officer of such Person) making the representation,
warranty or other statement, or with the exercise of reasonable due diligence
under the circumstances (in accordance with the standard of what a reasonable
Person in similar circumstances would have done) would have been known by such
Person (or, in the case of a Person other than a natural Person, would have been
known by an officer of such Person).

         "Total Commitments" means the Aggregate Revolving Commitments and the
aggregate amount of each Bank's Term Loan Commitment hereunder, as such amounts
may be reduced or adjusted from time to time in accordance with the terms of
this Agreement.

         "Trade Payables" means, with respect to any Person, the accounts
payable or trade indebtedness payable by such Person in respect of goods or
services acquired by such Person on a recurring basis and classified as accounts
or trade indebtedness payable on the balance sheet of such Person in accordance
with GAAP.

         "type" of Loan means (a) a Base Rate Loan, and (b) an Offshore Rate
Loan.

         "Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.

         "Value of Pledged Investment Securities" means the value of all Pledged
Investment Securities valued at the lower of cost or market value as of the date
of the applicable Borrowing Base Certificate.

                                       28
<PAGE>   35

         "Voting Stock" means the stock of a corporation the holders of which
are ordinarily, in the absence of contingencies, entitled to elect a majority of
the corporate directors (or persons performing similar functions).

         "Whitney" has the meaning set forth in the introductory paragraph.

         "Wholly-owned Subsidiary" means, with respect to any Person, any
Subsidiary 100% of the stock of every class of which (except for directors'
qualifying shares) at the time as of which any determination is being made, is
owned, directly or indirectly, by such Person.

         1.02 USE OF CERTAIN TERMS.

         (a) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
or thereto, unless otherwise defined therein.

         (b) As used herein, unless the context requires otherwise, the
masculine, feminine and neuter genders and the singular and plural include one
another.

         (c) The words "herein" and "hereunder" and words of similar import when
used in any Loan Document shall refer to the Loan Documents as a whole and not
to any particular provision thereof. The term "including" is by way of example
and not limitation. References herein to a Section, subsection or clause shall,
unless the context otherwise requires, refer to the appropriate Section,
subsection or clause in this Agreement.

         (d) The term "or" is disjunctive; the term "and" is conjunctive. The
term "shall" is mandatory; the term "may" is permissive.

         1.03 ACCOUNTING TERMS. All accounting terms not specifically or
completely defined in this Agreement shall be construed in conformity with, and
all financial data required to be submitted by this Agreement shall be prepared
in conformity with, GAAP applied on a consistent basis, as in effect from time
to time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.

         1.04 ROUNDING. Any financial ratios required to be maintained by
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.

         1.05 EXHIBITS AND SCHEDULES. All exhibits and schedules to this
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.

                                       29
<PAGE>   36

         1.06 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Loan Documents) and
other contractual instruments shall include all amendments, restatements,
extensions, supplements and other modifications thereto (unless prohibited by
any Loan Document), and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.

                                   SECTION 2.
               THE LOANS, THE COMMITMENTS AND EXTENSIONS OF CREDIT

         2.01 TERM LOANS.

         (a) Subject to the terms and conditions set forth in this Agreement,
each Bank severally agrees on the Effective Date to renew, modify and extend the
loans made by it to the Borrower pursuant to the Existing Loan Agreement and to
convert such loans to principal outstanding under a term loan hereunder (each a
"Term Loan"). The Term Loans converted and extended pursuant hereto by each Bank
shall not exceed in aggregate principal amount outstanding the amount set forth
opposite such Bank's name on Schedule 2.01 under the caption "Term Loan
Commitment" (its "Term Loan Commitment" and collectively for all Banks, the
"Term Loan Commitments"). Any portion of each such Bank's Term Loan Commitment
not utilized on the Effective Date shall be permanently canceled. Any Term Loans
that are repaid or prepaid may not be reborrowed. The conversion of the
indebtedness due to each Bank with respect to loans made to the Borrower
pursuant to the Existing Loan Agreement into the Term Loans under the terms of
this Agreement, shall not effect a novation of, but shall be, to the fullest
extent applicable, in modification, renewal, extension, rearrangement and
replacement of, the loans made by the Banks to the Borrower pursuant to the
Existing Loan Agreement.

         (b) Borrower shall repay the Term Loans of each Bank in fourteen
consecutive quarterly installments, payable on the last Business Day of each
June, September, December, and March (each a "Principal Payment Date"),
commencing on September 30, 2001, in amounts equal to such Bank's Pro Rata Share
of the respective amounts set forth opposite the relevant Principal Payment Date
set forth below.

<Table>
<Caption>
                  PRINCIPAL PAYMENT DATE                                              AMOUNT
                  ----------------------                                              ------
<S>                                                                                 <C>
                    September 30, 2001                                              $3,500,000
                     December 31, 2001                                              $3,000,000
                      March 31, 2002                                                $1,875,000
                       June 30, 2002                                                $1,875,000
                    September 30, 2002                                              $1,875,000
                     December 31, 2002                                              $1,875,000
                      March 31, 2003                                                $1,875,000
                       June 30, 2003                                                $1,875,000
                    September 30, 2003                                              $1,875,000
                     December 31, 2003                                              $1,875,000
                      March 31, 2004                                                $1,875,000
                       June 30, 2004                                                $1,875,000
                    September 30, 2004                                                $250,000
</Table>

                                       30
<PAGE>   37

If not sooner paid, Borrower agrees to pay the outstanding principal amount of
each Term Loan, together with accrued interest, on the Term Loan Maturity Date.

         (c) Each Bank's Term Loans shall be evidenced by a Term Note payable to
the order of such Bank in installments and bearing interest as set forth herein.
Each Bank shall post on a schedule attached to its Term Note or in records
relating to its Term Note (i) the rate of interest such Term Loan will bear and
(ii) each payment of principal and interest thereon; provided, however, that
neither the failure to make any such postings nor any inaccuracy therein shall
affect the Borrower's obligations under any Term Note or this Agreement. The
information set forth on such schedule shall be conclusive evidence of the
matters described therein absent clearly demonstrable error.

         2.02 REVOLVING CREDIT LOANS.

         (a) Subject to the terms and conditions set forth in this Agreement,
each Bank severally agrees (i) on the Effective Date to renew, modify and extend
the revolving credit loans made by it to the Borrower pursuant to the Existing
Loan Agreement and to convert such loans to principal outstanding under a
revolving loan hereunder, and (ii) on any Business Day from and after the
Effective Date, but prior to January 31, 2002 (the "Conversion Date"), to make
revolving credit loans pursuant to its Revolving Credit Commitment to the
Borrower (each such loan renewed, modified and extended and each such loan made
on or after the Effective Date, a "Revolving Credit Loan"); provided, however,
that each Bank's Revolving Credit Loans and Pro Rata Share of Letter of Credit
Usage shall not exceed at any one time the amount set forth opposite such Bank's
name on Schedule 2.01 under the caption "Revolving Credit Commitment" (as the
same may be reduced pursuant to Section 2.06 or otherwise from time to time
modified pursuant to Section 10.01, its "Revolving Credit Commitment," and
collectively for all Banks, the "Revolving Credit Commitments"); and provided,
further, that at no time shall additional Revolving Credit Loans be made or
Letter of Credit Actions be taken if, after giving effect to such proposed
Extensions of Credit, the outstanding principal amount of the Revolving Credit
Loans and Letter of Credit Usage would exceed the Borrowing Base. On the
Conversion Date, the Revolving Credit Commitments of the Banks will no longer be
revolving in nature, the

                                       31
<PAGE>   38

Revolving Credit Loans will convert into a term facility and all Revolving
Credit Loans repaid or prepaid may not be reborrowed. Within the foregoing
limits and subject to the conditions set out in Section 4, the Borrower may
obtain Borrowings of Revolving Credit Loans, repay or prepay such Revolving
Credit Loans, and reborrow such Revolving Credit Loans. The conversion of the
indebtedness due to each Bank with respect to loans made to the Borrower
pursuant to the Existing Loan Agreement into Revolving Credit Loans under the
terms of this Agreement, shall not effect a novation of, but shall be, to the
fullest extent applicable, in modification, renewal, extension, rearrangement
and replacement of, the loans made by the Banks to the Borrower pursuant to the
Existing Loan Agreement.

         (b) The principal of the Revolving Credit Loans shall be payable in
quarterly installments each in an amount equal to 5% of the principal amount of
Revolving Credit Loans outstanding as of the Conversion Date, which quarterly
installments shall be payable on the last Business Day of each March, June,
September, December, commencing on March 31, 2002, and ending on the first such
date (after the Conversion Date) on which the aggregate unpaid principal amount
of the Revolving Credit Loans shall be paid in full by reason of quarterly
installments paid as aforesaid and any prepayments made pursuant to Section 2.05
or otherwise (but in any event no later than the Revolving Loan Maturity Date).
If not sooner paid, Borrower agrees to pay the outstanding principal amount of
each Revolving Credit Loan, together with accrued interest, on the Revolving
Loan Maturity Date.

         (c) Each Bank's Revolving Credit Loans shall be evidenced by a
Revolving Credit Note payable to the order of such Bank in installments and
bearing interest as set forth herein. Each Bank shall post on a schedule
attached to its Revolving Credit Note or in records relating to its Revolving
Credit Note (i) the date and principal amount of each Revolving Credit Loan,
(ii) the rate of interest each such Revolving Credit Loan will bear, and (iii)
each payment of principal and interest thereon; provided, however, that neither
the failure to make any such postings nor any inaccuracy therein shall affect
the Borrower's obligations under any Revolving Credit Note or this Agreement.
The information set forth on such schedule shall be conclusive evidence of the
matters described therein absent clearly demonstrable error.

         2.03 REVOLVING CREDIT BORROWINGS AND CONTINUATIONS OF LOANS.

         (a) Borrower may irrevocably request a Revolving Credit Borrowing, or
Conversion or Continuation of any Loans on any Business Day in a Minimum Amount
therefor by delivering a Request for Extension of Credit therefor by Requisite
Notice to Agent not later than the Requisite Time therefor. All Borrowings,
Conversions and Continuations shall constitute Base Rate Loans unless properly
and timely otherwise designated as set forth in the prior sentence.

         (b) In connection with each Revolving Credit Borrowing to be used to
fund the purchase of additional Aviation Units by either the Borrower or Air
Evac, the Borrower shall also (i) deliver, prior to the Borrowing Date set forth
in the Request for Extension of Credit related to such Revolving Credit
Borrowing, to the Agent, with a copy to each Bank, invoices, receipts, or other
evidence of purchase (such evidence to be within seven (7) days prior to such
Borrowing Date) showing an aggregate value thereof that is greater than or equal
to the amount of the Revolving Credit Borrowing referred to in such Request for
Extension of Credit and (ii) within 30

                                       32
<PAGE>   39

days of such purchase, (A) execute and deliver to Agent Security Documents,
satisfactory to Agent, to subject such Aviation Units to a valid and perfected
first priority security interest, (B) complete the Appropriate Actions, and (C)
complete any other actions or filings required by Section 6.16.

         (c) Following receipt of a Request for Extension of Credit, Agent shall
promptly notify each Bank of its Pro Rata Share thereof by Requisite Notice. In
the case of a Borrowing of Loans, each Bank shall make the funds for its Loan
available to Agent at Agent's Office not later than the Requisite Time therefor
on the Business Day specified in such Request for Extension of Credit. Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if the
initial Extension of Credit hereunder, Section 4.01), all funds so received
shall be made available to Borrower in like funds received. Agent shall promptly
notify Borrower and Banks of the interest rate applicable to any Offshore Rate
Loan upon determination of same, which determination shall be conclusive in the
absence of clearly demonstrable error. Agent shall from time to time notify
Borrower and Banks of any change in Bank of America's prime rate used in
determining the Base Rate promptly following the public announcement of such
change.

         (d) Except as otherwise provided herein, an Offshore Rate Loan may be
Continued or Converted only on the last day of the Interest Period for such
Offshore Rate Loan. During the existence of a Default or Event of Default, no
Loans may be requested as, Converted into or Continued as Offshore Rate Loans
without the consent of Requisite Banks and Requisite Banks may demand that any
or all of the then outstanding Offshore Rate Loans be Converted immediately into
Base Rate Loans.

         (e) If a Loan is to be made on the same date that another Loan is due
and payable, Borrower or Banks, as the case may be, shall, unless Agent
otherwise requests, make available to Agent the net amount of funds giving
effect to both such Loans and the effect for purposes of this Agreement shall be
the same as if separate transfers of funds had been made with respect to each
such Loan.

         (f) The failure of any Bank to make any Loan on any date shall not
relieve any other Bank of any obligation to make a Loan on such date, but no
Bank shall be responsible for the failure of any other Bank to so make its Loan.

         2.04 LETTERS OF CREDIT.

         (a) THE LETTER OF CREDIT COMMITMENT. Subject to the terms and
conditions set forth in this Agreement, until the Letter of Credit Expiration
Date, Issuing Bank shall take such Letter of Credit Actions as Borrower may from
time to time request; provided, however, that each Bank's Revolving Credit Loans
and Pro Rata Share of Letter of Credit Usage shall not exceed such Bank's
Revolving Credit Commitment at any time; and provided, further, that at no time
shall any Letter of Credit Action be taken if after giving effect to such Letter
of Credit Action (x) the outstanding principal amount of the Revolving Credit
Loans and Letter of Credit Usage would exceed the Borrowing Base or (y) the
Letter of Credit Usage would exceed the Letter of Credit Sublimit. Subject to
subsection (f) below and unless consented to by Issuing Bank and Requisite
Banks, no Letter of Credit may expire more than 12 months after the date of its
issuance or last

                                       33
<PAGE>   40

renewal; provided, however, that no Letter of Credit shall expire after the
Letter of Credit Expiration Date. If any Letter of Credit Usage remains
outstanding after such date, Borrower shall, not later than such date, deposit
cash in an amount equal to such Letter of Credit Usage in a Letter of Credit
Cash Collateral Account.

         (b) REQUESTING LETTER OF CREDIT ACTIONS. Borrower may irrevocably
request a Letter of Credit Action in a Minimum Amount therefor in United Stated
Dollars by delivering a Letter of Credit Application therefor to Issuing Bank,
with a copy to Agent (who shall notify Banks), by written (not telephonic)
Requisite Notice not later than the Requisite Time therefor. Each Letter of
Credit Action shall be in a form acceptable to Issuing Bank in its sole
discretion. Unless Agent notifies Issuing Bank that such Letter of Credit Action
is not permitted hereunder, or Issuing Bank notifies Agent that it has
determined that such Letter of Credit Action is contrary to any Laws or policies
of Issuing Bank, Issuing Bank shall, upon satisfaction of the applicable
conditions set forth in Section 4.02 with respect to any Letter of Credit Action
constituting an Extension of Credit, effect such Letter of Credit Action. This
Agreement shall control in the event of any conflict with any Letter of Credit
Application. Upon the issuance of a Letter of Credit, each Bank shall be deemed
to have purchased from Issuing Bank a risk participation therein in an amount
equal to such Bank's Pro Rata Share times the amount of such Letter of Credit.

         (c) REIMBURSEMENT OF PAYMENTS UNDER LETTERS OF CREDIT. Borrower shall
reimburse Issuing Bank through Agent for any payment that Issuing Bank makes
under a Letter of Credit on or before the date of such payment; provided,
however, that if the conditions precedent set forth in Section 4.02 can be
satisfied, Borrower may request a Borrowing of Revolving Credit Loans to
reimburse Issuing Bank for such payment pursuant to Section 2.03, or, failing to
make such request, Borrower shall be deemed to have requested a Borrowing of
Base Rate Revolving Credit Loans on such payment date pursuant to subsection (e)
below.

         (d) FUNDING BY BANKS WHEN ISSUING BANK NOT REIMBURSED. Upon any drawing
under a Letter of Credit, Issuing Bank shall notify Agent and Borrower. If
Borrower fails to timely make the payment required pursuant to subsection (c)
above, Issuing Bank shall notify Agent of such fact and the amount of such
unreimbursed payment. Agent shall promptly notify each Bank of its Pro Rata
Share of such amount by Requisite Notice. Each Bank shall make funds in an
amount equal its Pro Rata Share of such amount available to Agent at Agent's
Office not later than the Requisite Time therefor on the Business Day specified
by Agent, Agent shall remit the funds so received to Issuing Bank. The
obligation of each Bank to so reimburse Issuing Bank shall be absolute and
unconditional and shall not be affected by the occurrence of a Default or Event
of Default or any other occurrence or event. Any such reimbursement shall not
relieve or otherwise impair the obligation of Borrower to reimburse Issuing Bank
for the amount of any payment made by Issuing Bank under any Letter of Credit,
together with interest as provided herein.

         (e) NATURE OF BANKS' FUNDING. If the conditions precedent set forth in
Section 4.02 can be satisfied (except for the giving of a Request for Extension
of Credit) on any date Borrower is obligated to, but fails to, reimburse Issuing
Bank for a drawing under a Letter of Credit, the funding by Banks pursuant to
the previous subsection shall be deemed to be a Borrowing of Base

                                       34
<PAGE>   41

Rate Loans (without regard to the Minimum Amount therefor) deemed requested by
Borrower. If the conditions precedent set forth in Section 4.02 cannot be
satisfied on the date Borrower is obligated to, but fails to, reimburse Issuing
Bank for a drawing under a Letter of Credit, the funding by Banks pursuant to
the previous subsection shall be deemed to be a funding by each Bank of its risk
participation in such Letter of Credit, and each Bank making such funding shall
thereupon acquire a pro rata participation, to the extent of its reimbursement,
in the claim of Issuing Bank against Borrower in respect of such payment and
shall share, in accordance with that pro rata participation, in any payment made
by Borrower with respect to such claim. Any amounts made available by a Bank
under its risk participation shall be payable by Borrower upon demand of Agent,
and shall bear interest at a rate per annum equal to the Default Rate.

         (f) SPECIAL PROVISIONS RELATING TO EVERGREEN LETTERS OF CREDIT.
Borrower may request Letters of Credit that have automatic extension or renewal
provisions ("evergreen" Letters of Credit) so long as Issuing Bank consents in
its sole and absolute discretion thereto and has the right to not permit any
such extension or renewal at least annually within a notice period to be agreed
upon at the time each such Letter of Credit is issued. Once an evergreen Letter
of Credit is issued, unless Agent has notified Issuing Bank that Requisite Banks
have elected not to permit such extension or renewal, the Borrower Parties,
Agent and Banks shall be deemed to have authorized (but may not require) Issuing
Bank to, in its sole and absolute discretion, permit the renewal of such
evergreen Letter of Credit at any time to a date not later than the LETTER OF
CREDIT EXPIRATION DATE, and, unless directed by Issuing Bank, Borrower shall not
be required to request such extension or renewal. Issuing Bank may, in its sole
and absolute discretion elect not to permit an evergreen Letter of Credit to be
extended or renewed at any time.

         (g) OBLIGATIONS ABSOLUTE. The obligation of Borrower to pay to Issuing
Bank the amount of any payment made by Issuing Bank under any Letter of Credit
shall be absolute, unconditional, and irrevocable. Without limiting the
foregoing, Borrower's obligation shall not be affected by any of the following
circumstances:

                  (i) any lack of validity or enforceability of such Letter of
         Credit, this Agreement, or any other agreement or instrument relating
         thereto;

                  (ii) any amendment or waiver of or any consent to departure
         from such Letter of Credit, this Agreement, or any other agreement or
         instrument relating hereto or thereto;

                  (iii) the existence of any claim, setoff, defense, or other
         rights which Borrower may have at any time against Issuing Bank, Agent
         or any Bank, any beneficiary of such Letter of Credit (or any Persons
         for whom any such beneficiary may be acting) or any other Person,
         whether in connection with such Letter of Credit, this Agreement, or
         any other agreement or instrument relating thereto, or any unrelated
         transactions;

                  (iv) any demand, statement, or any other document presented
         under such Letter of Credit proving to be forged, fraudulent, invalid,
         or insufficient in any respect or any statement therein being untrue or
         inaccurate in any respect whatsoever so long as any such document
         appeared to comply with the terms of the Letter of Credit;

                                       35
<PAGE>   42

                  (v) payment by Issuing Bank in good faith under such Letter of
         Credit against presentation of a draft or any accompanying document
         which does not strictly comply with the terms of such Letter of Credit;
         or any payment made by Issuing Bank under such Letter of Credit to any
         Person purporting to be a trustee in bankruptcy, debtor-in-possession,
         assignee for the benefit of creditors, liquidator, receiver or other
         representative of or successor to any beneficiary or any transferee of
         such Letter of Credit, including any arising in connection with any
         proceeding under any Debtor Relief Laws;

                  (vi) the existence, character, quality, quantity, condition,
         packing, value or delivery of any property purported to be represented
         by documents presented in connection with such Letter of Credit or for
         any difference between any such property and the character, quality,
         quantity, condition, or value of such property as described in such
         documents;

                  (vii) the time, place, manner, order or contents of shipments
         or deliveries of property as described in documents presented in
         connection with such Letter of Credit or the existence, nature and
         extent of any insurance relative thereto;

                  (viii) the solvency or financial responsibility of any party
         issuing any documents in connection with such Letter of Credit;

                  (ix) any failure or delay in notice of shipments or arrival of
         any property;

                  (x) any error in the transmission of any message relating to
         such Letter of Credit not caused by Issuing Bank, or any delay or
         interruption in any such message;

                  (xi) any error, neglect or default of any correspondent of
         Issuing Bank in connection with such Letter of Credit;

                  (xii) any consequence arising from acts of God, wars,
         insurrections, civil unrest, disturbances, labor disputes, emergency
         conditions or other causes beyond the control of Issuing Bank;

                  (xiii) so long as Issuing Bank in good faith determines that
         the document appears to comply with the terms of the Letter of Credit,
         the form, accuracy, genuineness or legal effect of any contract or
         document referred to in any document submitted to Issuing Bank in
         connection with such Letter of Credit; and

                  (xiv) any other circumstances whatsoever where Issuing Bank
         has acted in good faith.

         In addition, Borrower will promptly examine a copy of each Letter of
Credit and amendments thereto delivered to it and, in the event of any claim of
noncompliance with Borrower's instructions or other irregularity, Borrower will
immediately notify Issuing Bank in writing. Borrower shall be conclusively
deemed to have waived any such claim against Issuing Bank and its correspondents
unless such notice is given as aforesaid.

                                       36
<PAGE>   43

         (h) ROLE OF ISSUING BANK. Each Bank and Borrower Party agree that, in
paying any drawing under a Letter of Credit, Issuing Bank shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. No Agent-Related Person
nor any of the respective correspondents, participants or assignees of Issuing
Bank shall be liable to any Bank for any action taken or omitted in connection
herewith at the request or with the approval of Banks or Requisite Banks, as
applicable; any action taken or omitted in the absence of gross negligence or
willful misconduct; or the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit.
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude Borrower's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. No Agent-Related Person, nor any
of the respective correspondents, participants or assignees of Issuing Bank,
shall be liable or responsible for any of the matters described in subsection
(g) above. In furtherance and not in limitation of the foregoing, Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and Issuing Bank shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

         (i) APPLICABILITY OF ISP98 AND UCP. Unless otherwise expressly agreed
by Issuing Bank and Borrower when a Letter of Credit is issued and subject to
applicable laws, performance under Letters of Credit by Issuing Bank, its
correspondents, and beneficiaries will be governed by (i) with respect to
standby Letters of Credit, the rules of the "International Standby Practices
1998" ("ISP98") or such later revision as may be published by the Institute of
International Banking Law & Practice, subject to applicable laws, and (ii) with
respect to commercial Letters of Credit, the rules of the Uniform Customs and
Practice for Documentary Credits, as published in its most recent version by the
International Chamber of Commerce (the "ICC") on the date any commercial Letter
of Credit is issued, and including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro).

         (j) LETTER OF CREDIT FEES. With respect to commercial Letters of
Credit, Borrower shall pay to Agent on each Applicable Payment Date in arrears,
for the account of each Bank in accordance with its Pro Rata Share, a Letter of
Credit fee equal to the greater of (i) Applicable Amount times the average
maximum amount available to be drawn under each Letter of Credit since the later
of the Effective Date and the previous Applicable Payment Date divided by 360
and (ii) the actual number of days since the later of the Effective Date and the
previous Applicable Payment Date times $300, divided by 360.

         (k) FRONTING FEE AND DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO
ISSUING BANK. Borrower shall pay directly to Issuing Bank for its sole account a
fronting fee in such amounts and at such times as set forth in a separate letter
agreement between Borrower and

                                       37
<PAGE>   44

Agent. In addition, Borrower shall pay directly to Issuing Bank, upon demand,
for its sole account its customary documentary and processing charges in
accordance with its standard schedule, as from time to time in effect, for any
Letter of Credit Action or other occurrence relating to a Letter of Credit for
which such charges are customarily made. Such fees and charges are
nonrefundable.

         2.05 PREPAYMENTS.

         (a) VOLUNTARY PREPAYMENTS

         Upon Requisite Notice to Agent not later than the Requisite Time
therefor, Borrower may at any time and from time to time voluntarily prepay
Loans in part in the Minimum Amount therefor or in full without premium or
penalty. Each such notice of prepayment shall specify (i) the type (i.e., Term
Loan Borrowing or Revolving Credit Borrowings) of Borrowings to be prepaid, (ii)
the aggregate principal amount of Borrowings to be prepaid , and (iii) the date
on which such prepayment is to take place (which date must be a Business Day).
Borrower's notice of such prepayment having been given as aforesaid, the
principal amount of the Loans comprising such Borrowings specified in the
notice, together with interest thereon to the date of prepayment, shall become
due and payable on such prepayment date. Notwithstanding the foregoing, the
Borrower may not prepay any Offshore Rate Loan before the last day of the
Interest Period relating thereto.

         (b) AGGREGATE COMMITMENTS EXCEEDED

                  If for any reason the aggregate outstanding Revolving Credit
Loans plus Letter of Credit Usage exceeds the Aggregate Revolving Credit
Commitments as in effect or as reduced or because of any limitation set forth in
this Agreement or otherwise, Borrower shall immediately prepay Revolving Credit
Loans and/or deposit cash in a Letter of Credit Cash Collateral Account in an
aggregate amount equal to such excess.

         (c) DISPOSITION

                  If on any date the Borrower or any Subsidiary makes any
Disposition, an amount equal to 100% of the Net Cash Proceeds from such
Disposition shall be shall be paid ratably, to the Banks for application to the
principal of the Term Loans, provided, that, if, at the time of such prepayment,
there is no aggregate principal amount outstanding under the Term Loans,
Borrower may prepay the Revolving Credit Loans and the respective Commitment of
each Bank shall be permanently and ratably reduced by the amount of such
prepayment, provided, further, that, if no Default or Event of Default exists at
the time of such Disposition, the Borrower or the Subsidiary making such
Disposition may retain Net Cash Proceeds therefrom in an amount which, when
added to all other amounts retained by any Person pursuant to this proviso, does
not exceed $5,000,000 in the aggregate. Nothing in this subsection shall be
deemed to permit any Disposition not otherwise permitted under this Agreement.

         (d) BORROWING BASE EXCEEDED (NO EVENT OF LOSS)

                                       38
<PAGE>   45

                  If at any time Borrower or any Bank determines the outstanding
principal amount of the Revolving Credit Loans and Letter of Credit Usage
exceeds the Borrowing Base, the Borrower shall, within three (3) Business Days
of such determination, (i) make a prepayment in the amount sufficient to cause
the outstanding principal amount of the Revolving Credit Loans and Letter of
Credit Usage not to exceed the Borrowing Base, which prepayment shall be applied
to the Term Loans to the extent outstanding and, if no Term Loans remain
outstanding to the Revolving Credit Loans (in which case the respective
Commitment of each Bank shall be permanently and ratably reduced by the amount
of Revolving Credit Loans so prepaid), (ii) deposit Investment Securities with
the Agent at its principal office in Houston, Texas pursuant to a Securities
Pledge Agreement in an amount sufficient to cause the outstanding principal
amount of the Revolving Credit Loans and Letter of Credit Usage not to exceed
the Borrowing Base, or (iii) take all the actions described in Section 6.16 for
the purpose and with the effect of subjecting to a valid and perfected first
priority security interest in favor of the Agent one or more Aviation Units
acceptable to the Agent and the Creditors that having an aggregate Appraised
Value sufficient to cause the outstanding principal amount of the Revolving
Credit Loans and Letter of Credit Usage not to exceed the Borrowing Base
(notwithstanding any time periods set forth in Section 6.16, all such actions
must be taken must be taken within 3 Business Days as aforesaid) provided,
however, if the sole reason that the outstanding principal amount of the
Revolving Credit Loans and Letter of Credit Usage exceeds the Borrowing Base is
the occurrence of an Event of Loss and so long as no other Default or any Event
of Default has occurred and is continuing, the Borrower may comply with the
provisions of Section 2.05(e), within the time periods provided therein, further
provided, however, that at no time while the outstanding principal amount of the
Revolving Credit Loans and Letter of Credit Usage exceeds the Borrowing Base may
the Borrower request any Borrowings hereunder.

                                       39
<PAGE>   46

         (e) BORROWING BASE EXCEEDED (EVENT OF LOSS)

                  If, solely as a result of an Event of Loss, the outstanding
principal amount of the Revolving Credit Loans and Letter of Credit Usage
exceeds the Borrowing Base, Borrower may defer the payment required under
Section 2.05(d) so long as no Event or Default has occurred and is continuing;
provided, that (i) within 40 days after the occurrence of such Event of Loss the
Borrower elects to take one or more of the following actions in respect of such
Event of Loss and gives the Agent and each Bank written notice of which action
it has elected to take (said written notice being a "Notice of Election") and
(ii) takes the actions specified in such Notice of Election within the time
periods for such actions specified below:

                           (A) within 30 days after the delivery of the Notice
of Election, deposit Investment Securities with the Agent at its principal
office in Houston, Texas pursuant to a Securities Pledge Agreement in an
aggregate amount equal to the Appraised Value (determined prior to such Event of
Loss) of the Aircraft affected by such Event of Loss;

                           (B) within 45 days after the delivery of the Notice
of Election, subject to a valid and perfected first priority security interest
in favor of the Agent for the ratable benefit of the Creditors one or more
Aviation Units acceptable to the Agent and each Creditor that have an aggregate
Appraised Value (in the case of Aviation Units more than one year old, as
specified by the Independent Appraiser in a written opinion addressed and
delivered to the Agent and each Creditor) at least equal to the Appraised Value
(determined prior to such Event of Loss) of the Aircraft affected by such Event
of Loss (without limitation of the foregoing, the Borrower must take Appropriate
Actions with respect to all such Aviation Units within such 45 day period);

                           (C) within 45 days after the date of the occurrence
of such Event of Loss, prepay principal on the Term Notes in an amount equal to
the Appraised Value (determined prior to such Event of Loss) of the Aircraft
affected by such Event of Loss; provided, however, if, at the time of such
prepayment, there is no aggregate principal amount outstanding under the Term
Loans, the Borrower may prepay the Revolving Credit Loans and the Revolving
Credit Commitment of each Bank shall be permanently and ratably reduced by the
amount of such prepayment; or

                           (D) take any combination of the actions described in
clauses (A)-(C) above within the time periods specified therein.

         (f) PROCEEDS FROM EVENT OF LOSS

                  If on any date the Borrower or any Subsidiary shall receive
any amounts representing payment of insurance proceeds or payment from any
Governmental Authority or other Person with respect to any Event of Loss, an
amount equal to 100% of the Net Cash Proceeds from such Event of Loss shall be
paid ratably, to the Banks for application to the

                                       40
<PAGE>   47

principal installments due under the Term Loans, provided, that, if, at the time
of such prepayment, there is no aggregate principal amount outstanding under the
Term Loans, Borrower shall prepay the Revolving Credit Loans and the respective
Revolving Credit Commitment of each Bank shall be permanently and ratably
reduced by the amount of such prepayment.

         (g) PROVISIONS GENERALLY APPLICABLE TO PREPAYMENTS.

                  (i) Agent will promptly notify each Bank of each prepayment
received by it and of such Bank's Pro Rata Share thereof.

                  (ii) Any prepayment of an Offshore Rate Loan shall be
accompanied by all accrued interest thereon, together with the costs set forth
in Section 3.05.

                  (iii) Any partial prepayments of Term Loans, and on or after
the Conversion Date, any partial prepayments of Revolving Credit Loans, shall be
applied to the principal of such Loans in the inverse order of maturity (the
"Back End Installments") according to each Bank's Pro Rata Share; provided that,
if no Default or Event of Default has occurred and is continuing and the
Borrower so requests in writing at least 5 Business Days prior to such
prepayment, prepayments pursuant to Section 2.05(a) or Section 2.05(c) shall be
applied, according to each Bank's Pro Rata Share, to such installments of
principal as designated by the Borrower in such written request in an aggregate
amount not to exceed, when added to the sum of all other prepayments not applied
to Back End Installments hereunder and for which (as of the date of
determination thereof) the respective due dates of such prepaid principal
installments have not yet passed, the sum of the scheduled principal
installments payable in the four consecutive fiscal quarters of the Company
commencing with the fiscal quarter in which such prepayment is made, and,
provided further that the Borrower may only designate prepayments as not to be
applied to Back End Installments up to twice in any given fiscal quarter.

         2.06 REDUCTION OR TERMINATION OF COMMITMENTS. Upon Requisite Notice to
Agent not later than the Requisite Time therefor, Borrower may at any time and
from time to time, without premium or penalty, permanently and irrevocably
reduce the Revolving Credit Commitments in a Minimum Amount therefor to an
amount not less than the aggregate outstanding Revolving Credit Loans and Letter
of Credit Usage at such time or terminate the Revolving Credit Commitments. Any
such reduction or termination shall be accompanied by payment of all accrued and
unpaid commitment fees with respect to the portion of the Revolving Credit
Commitments being reduced or terminated. Agent shall promptly notify Banks of
any such request for reduction or termination of the Revolving Credit
Commitments. Each Bank's Revolving Credit Commitment shall be reduced by an
amount equal to such Bank's Pro Rata Share times the amount of such reduction.

         2.07 INTEREST.

         (a) Subject to subsection (b) below, and unless otherwise specified
herein, Borrower shall pay interest on the unpaid principal amount of each Loan
(before and after default, before and after maturity, before and after judgment,
and before and after the commencement of any

                                       41
<PAGE>   48

proceeding under any Debtor Relief Laws) from the date borrowed until paid in
full (whether by acceleration or otherwise) on each Applicable Payment Date at a
rate per annum equal to the interest rate determined in accordance with the
definition of such type of Loan, plus, to the extent applicable in each case,
the Applicable Amount for such type of Loan.

         (b) If any amount payable by any Borrower Party under any Loan Document
is not paid when due (without regard to any applicable grace periods), it shall
thereafter bear interest (after as well as before entry of judgment thereon to
the extent permitted by law) at a fluctuating interest rate per annum at all
times equal to the Default Rate to the fullest extent permitted by applicable
Law (in no event to exceed the maximum rate allowed by La. R.S. Section 9:3509.1
if and to the extent applicable). Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be payable upon demand.

         2.08 FEES.

         (a) COMMITMENT FEE. Borrower shall pay to Agent for the account of each
Bank pro rata according to its Pro Rata Share, a commitment fee equal to the
Applicable Amount times the actual daily amount by which the Aggregate Revolving
Credit Commitments exceed the Revolving Credit Loans plus Letter of Credit
Usage. The commitment fee shall accrue at all times from the Effective Date
until the Conversion Date and shall be payable quarterly in arrears on each
Applicable Payment Date. The commitment fee shall be calculated quarterly in
arrears, and if there is any change in the Applicable Amount during any quarter,
the actual daily amount shall be computed and multiplied by the Applicable
Amount separately for each period during such quarter that such Applicable
Amount was in effect. The commitment fee shall accrue at all times, including at
any time during which one or more conditions in Section 4 are not met.

         (b) AGENCY FEES. Borrower shall pay to Agent an agency fee in such
amounts and at such times as set forth in a separate letter agreement between
Borrower and Agent. The agency fee is for the services to be performed by Agent
in acting as Agent and is fully earned on the date paid. The agency fee paid to
Agent is solely for its own account and is nonrefundable.

         2.09 COMPUTATION OF INTEREST AND FEES. Computation of interest on Base
Rate Loans when the Base Rate is determined by Bank of America's "prime rate"
shall be calculated on the basis of a year of 365 or 366 days, as the case may
be, and the actual number of days elapsed. Computation of all other types of
interest and all fees shall be calculated on the basis of a year of 360 days and
the actual number of days elapsed, which results in a higher yield to Banks than
a method based on a year of 365 or 366 days. Interest shall accrue on each Loan
for the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall bear
interest for one day.

         2.10 MAKING PAYMENTS.

         (a) Except as otherwise provided herein, all payments by Borrower or
any Bank hereunder shall be made to Agent at Agent's Office not later than the
Requisite Time for such type of payment. All payments received after such
Requisite Time shall be deemed received on the

                                       42
<PAGE>   49

next succeeding Business Day. All payments shall be made in immediately
available funds in lawful money of the United States of America. All payments by
Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff.

         (b) Upon satisfaction of any applicable terms and conditions set forth
herein, Agent shall promptly make any amounts received in accordance with the
prior subsection available in like funds received as follows: (i) if payable to
Borrower, by crediting a deposit account designated from time to time by
Borrower to Agent by Requisite Notice, and (ii) if payable to any Bank, by wire
transfer to such Bank at its Lending Office. If such conditions are not so
satisfied, Agent shall return any funds it is holding to the Banks making such
funds available, without interest.

         (c) Subject to the definition of "Interest Period," if any payment to
be made by any Borrower Party shall come due on a day other than a Business Day,
payment shall instead be considered due on the next succeeding Business Day, and
such extension of time shall be reflected in computing interest and fees.

         (d) Unless Borrower or any Bank has notified Agent prior to the date
any payment to be made by it is due, that it does not intend to remit such
payment, Agent may, in its sole and absolute discretion, assume that Borrower or
Bank, as the case may be, has timely remitted such payment and may, in its sole
and absolute discretion and in reliance thereon, make available such payment to
the Person entitled thereto. If such payment was not in fact remitted to Agent
in immediately available funds, then:

                  (i) if Borrower failed to make such payment, each Bank shall
         forthwith on demand repay to Agent the amount of such assumed payment
         made available to such Bank, together with interest thereon in respect
         of each day from and including the date such amount was made available
         by Agent to such Bank to the date such amount is repaid to Agent at the
         Federal Funds Rate; and

                  (ii) if any Bank failed to make such payment, Agent shall be
         entitled to recover such corresponding amount on demand from such Bank.
         If such Bank does not pay such corresponding amount forthwith upon
         Agent's demand therefor, Agent promptly shall notify Borrower, and
         Borrower shall pay such corresponding amount to Agent. Agent also shall
         be entitled to recover from such Bank interest on such corresponding
         amount in respect of each day from the date such corresponding amount
         was made available by Agent to Borrower to the date such corresponding
         amount is recovered by Agent, (A) from such Bank at a rate per annum
         equal to the daily Federal Funds Rate. and (B) from Borrower, at a rate
         per annum equal to the interest rate applicable to such Borrowing.
         Nothing herein shall be deemed to relieve any Bank from its obligation
         to fulfill its Commitment or to prejudice any rights which Agent or
         Borrower may have against any Bank as a result of any default by such
         Bank hereunder.

         (e) If Agent or any Bank is required at any time to return to Borrower,
or to a trustee, receiver, liquidator, custodian, or any official under any
proceeding under Debtor Relief Laws, any portion of a payment made by Borrower,
each Bank shall, on demand of Agent, return its

                                       43
<PAGE>   50

share of the amount to be returned, plus interest thereon from the date of such
demand to the date such payment is made at a rate per annum equal to the daily
Federal Funds Rate.

         2.11 FUNDING SOURCES. Nothing in this Agreement shall be deemed to
obligate any Bank to obtain the funds for any Loan in any particular place or
manner or to constitute a representation by any Bank that it has obtained or
will obtain the funds for any Loan in any particular place or manner.

                                   SECTION 3.
                     TAXES, YIELD PROTECTION AND ILLEGALITY

         3.01 TAXES.

         (a) Any and all payments by Borrower to or for the account of Agent or
any Bank under any Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of Agent and each Bank,
taxes imposed on or measured by its net income, and franchise taxes imposed on
it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which Agent or such Bank, as the case may
be, is organized or maintains a lending office (all such non-excluded taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and liabilities being hereinafter referred to as "Taxes"). If Borrower
shall be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to Agent or any Bank, (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section),
Agent and such Bank receives an amount equal to the sum it would have received
had no such deductions been made, (ii) Borrower shall make such deductions,
(iii) Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Laws, and (iv) within
30 days after the date of such payment, Borrower shall furnish to Agent (who
shall forward the same to such Bank) the original or a certified copy of a
receipt evidencing payment thereof.

         (b) In addition, Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").

         (c) If Borrower shall be required to deduct or pay any Taxes or Other
Taxes from or in respect of any sum payable under any Loan Document to Agent or
any Bank, Borrower shall also pay to such Bank or Agent (for the account of such
Bank), at the time interest is paid, such additional amount that the respective
Bank specifies as necessary to preserve the after-tax yield (after factoring in
all taxes, including taxes imposed on or measured by net income) such Bank would
have received if such Taxes or Other Taxes had not been imposed.

         (d) BORROWER AGREES TO INDEMNIFY AGENT AND EACH BANK FOR THE FULL
AMOUNT OF TAXES AND OTHER TAXES (INCLUDING ANY

                                       44
<PAGE>   51

TAXES OR OTHER TAXES IMPOSED OR ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE
UNDER THIS SECTION) PAID BY AGENT AND SUCH BANK, AMOUNTS PAYABLE UNDER SECTION
3.01(c) AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING
THEREFROM OR WITH RESPECT THERETO.

         3.02 ILLEGALITY. If any Bank determines that any Laws have made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Bank or its applicable Lending Office to make, maintain or fund Offshore
Rate Loans, or materially restricts the authority of such Bank to purchase or
sell, or to take deposits of, Dollars in the applicable offshore Dollar market,
or to determine or charge interest rates based upon the Offshore Rate, then, on
notice thereof by such Bank to Borrower through Agent, any obligation of such
Bank to make Offshore Rate Loans shall be suspended until such Bank notifies
Agent and Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, Borrower shall, upon demand from such
Bank (with a copy to Agent), prepay or Convert all Offshore Rate Loans of such
Bank, either on the last day of the Interest Period thereof, if such Bank may
lawfully continue to maintain such Offshore Rate Loans to such day, or
immediately, if such Bank may not lawfully continue to maintain such Offshore
Rate Loans. Each Bank agrees to designate a different Lending Office if such
designation will avoid the need for such notice and will not, in the good faith
judgment of such Bank, otherwise be materially disadvantageous to such Bank.

         3.03 INABILITY TO DETERMINE RATES. If, in connection with any Request
for Extension of Credit involving any Offshore Rate Loan, Agent determines that
(a) Dollar deposits are not being offered to banks in the applicable offshore
dollar market for the applicable amount and Interest Period of the requested
Offshore Rate Loan, (b) adequate and reasonable means do not exist for
determining the underlying interest rate for such Offshore Rate Loan, or (c)
such underlying interest rate does not adequately and fairly reflect the cost to
Banks of funding such Offshore Rate Loan, Agent will promptly notify Borrower
and all Banks. Thereafter, the obligation of Banks to make or maintain such
Offshore Rate Loan shall be suspended until Agent revokes such notice. Upon
receipt of such notice, Borrower may revoke any pending request for a Borrowing
of Offshore Rate Loans or, failing that, be deemed to have converted such
request into a request for a Borrowing of Base Rate Loans in the amount
specified therein.

         3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY.

         (a) If any Bank determines that any Laws:

                  (i) subject such Bank to any tax, duty, or other charge with
         respect to any Offshore Rate Loans or its obligation to make Offshore
         Rate Loans, or change the basis on which taxes are imposed on any
         amounts payable to such Bank under this Agreement in respect of any
         Offshore Rate Loans;

                  (ii) shall impose or modify any reserve, special deposit, or
         similar requirement (other than the reserve requirement utilized in the
         determination of the Offshore Rate)

                                       45
<PAGE>   52

         relating to any extensions of credit or other assets of, or any
         deposits with or other liabilities or commitments of, such Bank
         (including its Commitment); or

                  (iii) shall impose on such Bank or on the offshore interbank
         market any other condition affecting this Agreement or any of such
         extensions of credit or liabilities or commitments;

and the result of any of the foregoing is to increase the cost to such Bank of
making, Converting into, Continuing, or maintaining any Offshore Rate Loans or
to reduce any sum received or receivable by such Bank under this Agreement with
respect to any Offshore Rate Loans, then from time to time upon demand of Bank
(with a copy of such demand to Agent), Borrower shall pay to such Bank such
additional amounts as will compensate such Bank for such increased cost or
reduction.

         (b) If any Bank determines that any change in or the interpretation of
any Laws have the effect of reducing the rate of return on the capital of such
Bank or compliance by such Bank (or its Lending Office) or any corporation
controlling such Bank as a consequence of such Bank's obligations hereunder
(taking into consideration its policies with respect to capital adequacy and
such Bank's desired return on capital), then from time to time upon demand of
such Bank (with a copy to Agent), Borrower shall pay to such Bank such
additional amounts as will compensate such Bank for such reduction.

         3.05 BREAKFUNDING COSTS. Upon demand of any Bank (with a copy to Agent)
from time to time, Borrower shall promptly compensate such Bank for and hold
such Bank harmless from any loss, cost or expense incurred by it as a result of:

         (a) any Continuation, Conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or

         (b) any failure by Borrower (for a reason other than the failure of
such Bank to make a Loan) to prepay, borrow, Continue or Convert any Loan other
than a Base Rate Loan on the date or in the amount notified by Borrower;

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
Borrower shall also pay any customary administrative fees charged by such Bank
in connection with the foregoing.

         3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.

         A certificate of Agent or any Bank claiming compensation under this
Section 3 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of clearly demonstrable error. In
determining such amount, Agent or any Bank may use any reasonable averaging and
attribution methods. For purposes of this Section 3, a Bank shall be deemed to
have funded each Offshore Rate Loan at the Offshore Base Rate used in
determining

                                       46
<PAGE>   53

the Offshore Rate for such Loan by a matching deposit or other borrowing in the
applicable offshore interbank market, whether or not such Offshore Rate Loan was
in fact so funded.

         3.07 RECAPTURE.

                  Notwithstanding anything to the contrary in any Loan Document,
if the rate of interest applicable to any Borrowing or portion thereof (the
"Applicable Rate") would, but for the limitation of the rate herein to the
Maximum Rate, for any period of time exceed the Maximum Rate, the rate of
interest to accrue on such Borrowing or portion thereof during such period shall
be limited to the Maximum Rate, but such Borrowing shall bear interest
thereafter at the Maximum Rate until the total amount of interest accrued
thereon equals the amount of interest which would have accrued thereon if the
Applicable Rate would have at all times been in effect during such period.

         3.08 SURVIVAL. All of Borrower's obligations under this Section 3 shall
survive termination of the Commitments and payment in full of all Obligations.

                                   SECTION 4.
                  CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT

         4.01 CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of each
Bank to make its initial Extension of Credit hereunder is subject to
satisfaction of the following conditions precedent:

         (a) Unless waived by all Banks (or by Agent with respect to immaterial
matters or items specified in subsection (iv) or (v) below with respect to which
Borrower has given assurances satisfactory to Agent that they will be delivered
promptly following the Effective Date), Agent's receipt of the following, each
of which shall be originals or facsimiles (followed promptly by originals)
unless otherwise specified, each properly executed by a Responsible Officer of
the signing Borrower Party, each dated on, or in the case of third-party
certificates, recently before the Effective Date and each in form and substance
satisfactory to Agent and its legal counsel:

                  (i) executed counterparts of this Agreement, sufficient in
         number for distribution to Agent, Banks and Borrower;

                  (ii) Term Notes executed by Borrower in favor of each Bank,
         each in a principal amount equal to such Bank's Term Loan Commitment
         and Revolving Credit Notes executed by Borrower in favor of each Bank,
         each in a principal amount equal to such Bank's Revolving Credit
         Commitment;

                  (iii) executed counterparts of the Guaranty Agreement and all
         other Security Documents, sufficient in number for distribution to
         Agent, Banks and the Borrower Parties that are parties thereto;

                                       47
<PAGE>   54

                  (iv) such certificates of resolutions or other action,
         incumbency certificates and/or other certificates of Responsible
         Officers of each Borrower Party as Agent may require to establish the
         identities of and verify the authority and capacity of each Responsible
         Officer thereof authorized to act as a Responsible Officer thereof;

                  (v) such evidence as Agent may reasonably require to verify
         that each Borrower Party is duly organized or formed, validly existing,
         in good standing and qualified to engage in business in each
         jurisdiction in which it is required to be qualified to engage in
         business, including certified copies of each Borrower Party's
         Organization Documents, certificates of good standing and/or
         qualification to engage in business, tax clearance certificates, and
         the like;

                  (vi) a certificate signed by a Responsible Officer of Borrower
         certifying (A) that the conditions specified in Sections 4.01(c) and
         (d) have been satisfied, and (B) that there has been no event or
         circumstance since the date of the Audited Financial Statements which
         has a Material Adverse Effect;

                  (vii) opinions of counsel of Correro Fishman Haygood Phelps
         Walmsley & Castex, L.L.P., counsel for the Borrower Parties, and Lytle,
         Soule & Curlee, a professional corporation, special Federal Aviation
         Act counsel for the Borrower Parties, as to the matters set forth in
         Exhibits F-1 and F-2, respectively, with such changes as approved by
         the Banks in their sole discretion, and as to such other matters as any
         Bank may reasonably require;

                  (viii) evidence satisfactory to Agent and each Bank that (A)
         Borrower has subjected to a valid and perfected first priority security
         interest in favor of the Agent for the ratable benefit of the Creditors
         one or more Aviation Units acceptable to the Agent and each Bank,
         having an aggregate Appraised Value (in the case of any Aviation Units
         more than one year old, as specified by the Independent Appraiser in a
         written opinion addressed and delivered to the Agent and each Creditor)
         at least equal to the $72,000,000, and (B) all Appropriate Actions have
         been taken with respect thereto; and

                  (ix) such other assurances, certificates, documents, consents
         or opinions as Agent, Issuing Bank or Requisite Banks reasonably may
         require.

         (b) Any fees required to be paid on or before the Effective Date shall
have been paid.

         (c) The representations and warranties made by Borrower herein, or
which are contained in any certificate, document or financial or other statement
furnished at any time under or in connection herewith or therewith, shall be
correct on and as of the Effective Date.

         (d) Each Borrower Party shall be in compliance with all the terms and
provisions of the Loan Documents to which it is a party, and no Default or Event
of Default shall have occurred and be continuing.

         (e) Unless waived by Agent, Borrower shall have paid all Attorney Costs
of Agent to the extent invoiced prior to or on the Effective Date, plus such
additional amounts of Attorney

                                       48
<PAGE>   55

Costs as shall constitute its reasonable estimate of Attorney Costs incurred or
to be incurred by it through the closing proceedings (provided that such
estimate shall not thereafter preclude final settling of accounts between
Borrower and Agent).

         4.02 CONDITIONS TO ALL EXTENSIONS OF CREDIT. In addition to any
applicable conditions precedent set forth elsewhere in this Section 4 or in
Section 2, the obligation of each Bank to honor any Request for Extension of
Credit other than a Conversion or Continuation is subject to the following
conditions precedent:

         (a) the representations and warranties of Borrower contained in Section
5, or which are contained in any certificate, document or financial or other
statement furnished at any time under or in connection herewith or therewith,
shall be correct on and as of the date of such Extension of Credit, except to
the extent that such representations and warranties specifically refer to an
earlier date;

         (b) no Default or Event of Default exists, or would result from such
proposed Extension of Credit;

         (c) Agent shall have timely received a Request for Extension of Credit
by Requisite Notice by the Requisite Time therefor;

         (d) Agent and each Bank shall have received a Borrowing Base
Certificate dated as of the date of such Extension of Credit demonstrating that,
after giving effect to such Extension of Credit, the outstanding principal
amount of Revolving Credit Loans and Letter of Credit Usage will not exceed the
Borrowing Base; and

         (e) Agent shall have received, in form and substance satisfactory to
it, such other assurances, certificates, documents or consents related to the
foregoing as Agent or Requisite Banks reasonably may require.

         Each Request for Extension of Credit by Borrower shall be deemed to be
a representation and warranty that the conditions specified in Sections 4.02(a)
and (b) have been satisfied on and as of the date of such Extension of Credit.

                                   SECTION 5.
                         REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants to Agent and Banks that:

         5.01 EXISTENCE AND QUALIFICATION; POWER; COMPLIANCE WITH LAWS. Each
Borrower Party is a corporation duly organized or formed, validly existing and
in good standing under the Laws of the state of its incorporation or
organization, has the power and authority and the legal right to own and operate
its properties, to lease the properties it operates and to conduct its business,
is duly qualified and in good standing under the Laws of each jurisdiction where
its ownership, lease or operation of properties or the conduct of its business
requires such

                                       49
<PAGE>   56

qualification, and is in compliance with all Laws except to the extent that
noncompliance does not have a Material Adverse Effect.

         5.02 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each Borrower Party
has the power and authority and the legal right to make, deliver and perform
each Loan Document to which it is a party and Borrower has power and authority
to borrow hereunder and has taken all necessary action to authorize the
borrowings on the terms and conditions of this Agreement and to authorize the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party. No consent or authorization of, filing with,
or other act by or in respect of any Governmental Authority or any other Person
(including, without limitation any other creditor or supplier), is required in
connection with the Borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the other
Loan Documents. All Loan Documents have been duly executed and delivered by each
Borrower Party, and constitute a legal, valid and binding obligation of each
Borrower Party, enforceable against each Borrower Party in accordance with their
respective terms.

         5.03 NO LEGAL BAR. The execution, delivery, and performance by each
Borrower Party of the Loan Documents to which it is a party and compliance with
the provisions thereof have been duly authorized by all requisite action on the
part of such Borrower Party and do not and will not (a) violate or conflict
with, or result in a breach of, or require any consent under (i) any
Organization Documents of such Borrower Party or any of its Subsidiaries, (ii)
any applicable Laws, rules, or regulations or any order, writ, injunction, or
decree of any Governmental Authority or arbitrator, or (iii) any Contractual
Obligation of such Borrower Party or any of its Subsidiaries or by which any of
them or any of their property is bound or subject, (b) constitute a default
under any such agreement or instrument, or (c) result in, or require, the
creation or imposition of any Lien on any of the properties of such Borrower
Party or any of its Subsidiaries.

         5.04 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.

         (a) The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of Borrower and its Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness in
accordance with GAAP consistently applied throughout the period covered thereby.

         (b) Since the date of the Audited Financial Statements, there has been
no event or circumstance which has a Material Adverse Effect.

         5.05 LITIGATION. No litigation, investigation or proceeding of or
before an arbitrator or Governmental Authority is pending or, to the knowledge
of Borrower after due and diligent investigation, threatened by or against any
Borrower Party or any of its Subsidiaries or against

                                       50
<PAGE>   57

any of their properties or revenues which, if determined adversely, has a
Material Adverse Effect. There are no outstanding judgments or awards against
Borrower or any Subsidiary.

         5.06 NO DEFAULT. Neither any Borrower Party nor any of its Subsidiaries
are in default under or with respect to any Contractual Obligation or any order,
writ, injunction, or decree of any Governmental Authority or arbitrator, which
default might have consequences that could result in a Material Adverse Effect,
and no Default or Event of Default has occurred and is continuing or will result
from the consummation of this Agreement or any of the other Loan Documents, or
the making of the Extensions of Credit hereunder.

         5.07 OWNERSHIP OF PROPERTY; LIENS; WARRANTY OF TITLE; LEASES. Each
Borrower Party and its Subsidiaries have valid fee or leasehold interests in all
real property which they use in their respective businesses, and each Borrower
Party and its Subsidiaries have good and marketable title to all their other
property, and none of such property is subject to any Lien other than Permitted
Liens. Borrower has good and marketable title to all the Collateral and has good
right and full power and authority to subject the Collateral to the Security
Interest. The Collateral is free and clear of all Liens other than Permitted
Liens. The Security Documents do, as of the Effective Date, constitute a first
mortgage on and first priority perfected security interest in the Collateral
subject only to Permitted Liens. There is no financing statement, chattel
mortgage or notice thereof (including FAA Form 905, "Aircraft Chattel Mortgage")
or other security agreement or instrument or notice thereof in which Borrower
(or any predecessor Person) or any Subsidiary is named as debtor or mortgagor,
or which Borrower (or any predecessor Person) or any Subsidiary has signed as
debtor or mortgagor, now on file in any public office (including the Aircraft
Registry) and not canceled covering any of the Collateral other than those
previously filed, the effect of which has been terminated by termination
statements or releases (including FAA Form 8050-41) duly filed prior to the time
of the filing of any of the Security Documents for recordation in the Aircraft
Registry. Borrower and each Subsidiary have the right to, and do, enjoy peaceful
and undisturbed possession under all leases to which any of them is a party or
under which any of them is operating. All such leases are valid and subsisting,
and no default exists under any such lease.

         5.08 TAXES. Each Borrower Party and its Subsidiaries have filed all tax
returns which are required to be filed, and have paid, or made provision for the
payment of, all taxes with respect to the periods, property or transactions
covered by said returns, or pursuant to any assessment received by such Borrower
Party or its respective Subsidiaries, except (a) such taxes, if any, as are
being contested in good faith by appropriate proceedings and as to which
adequate reserves have been established and maintained, and (b) immaterial
taxes; provided, however, that in each case no material item or portion of
property of any Borrower Party or any of its Subsidiaries is in jeopardy of
being seized, levied upon or forfeited. The respective federal income tax
returns of Borrower and each of its Consolidated Subsidiaries have been examined
and reported on by the Internal Revenue Service for all fiscal years to and
including the fiscal year ended April 30, 1995. Borrower and its officers know
of no claims by any Governmental Authority for any unpaid taxes. There are no
tax sharing agreements between Borrower and any of the Subsidiaries.

                                       51
<PAGE>   58

         5.09 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT.

         (a) No Borrower Party is engaged or will engage, principally or as one
of its important activities, in the business of extending credit for the purpose
of "purchasing" or "carrying" "margin stock" within the respective meanings of
each of the quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect. No part
of the proceeds of any Extensions of Credit hereunder will be used for
"purchasing" or "carrying" "margin stock" as so defined or for any purpose which
violates, or which would be inconsistent with, the provisions of Regulations U
or X of such Board of Governors or the Securities Exchange Act of 1934, as
amended, in each case as in effect on the Effective Date or as the same may
hereinafter be in effect on the date of any Borrowing.

         (b) No Borrower Party or any of its Subsidiaries (i) is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, or (ii) is or is
required to be registered as an "investment company" under the Investment
Company Act of 1940.

         5.10 ERISA COMPLIANCE.

         (a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of Borrower, nothing has occurred which would prevent, or cause the
loss of, such qualification. Borrower and each ERISA Affiliate have made all
required contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.

         (b) There are no pending or, to the best knowledge of Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that has a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan that has a Material Adverse Effect.

         (c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither Borrower nor
any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.

                                       52
<PAGE>   59

         5.11 INTANGIBLE ASSETS. Each Borrower Party and its Subsidiaries own,
or possess the right to use, all trademarks, trade names, copyrights, patents,
patent rights, franchises, licenses and other intangible assets that are used in
the conduct of their respective businesses as now operated, and none of such
items, to the best knowledge of Borrower, conflicts with the valid trademark,
trade name, copyright, patent, patent right or intangible asset of any other
Person to the extent that such conflict has a Material Adverse Effect.

         5.12 COMPLIANCE WITH LAWS. Each Borrower Party and its Subsidiaries are
in compliance in all material respects with all Laws that are applicable to it.

         5.13 ENVIRONMENTAL COMPLIANCE. (a) Neither Borrower nor any of the
Subsidiaries has: (i) received any summons, citation, directive, letter, notice,
or other form of communication, or otherwise learned of any claim, demand,
action, event, condition, report, or investigation indicating or concerning any
potential or actual liability which could individually, or in the aggregate,
have a Material Adverse Effect arising in connection with (A) any non-compliance
with, or violation of, the requirements of any Environmental Protection Statute;
(B) the release, or threatened release, of any Hazardous Materials which
Borrower or any Subsidiary would have a duty to report to any governmental
authority under any Environmental Protection Statute; (C) the existence of any
environmental lien on any property of Borrower or any of the Subsidiaries
resulting from the presence of such Hazardous Materials; (ii) obtained knowledge
of any threatened or actual liability in connection with the release or
threatened release of any Hazardous Materials which would individually, or in
the aggregate, have a Material Adverse Effect; (iii) received any notice of, or
otherwise learned of, any federal or state investigation evaluating whether any
remedial action is needed to respond to a release or threatened release of any
Hazardous Materials for which Borrower or any of the Subsidiaries may be liable;
or (iv) received any notice that Borrower or any the Subsidiaries is or may be
liable to any person under any Environmental Protection Statute.

         (b) Borrower and each Subsidiary have obtained all permits, licenses
and authorizations which are required under all Environmental Protection
Statutes, (including, without limitation, laws relating to emissions,
discharges, releases, or threatened releases of Hazardous Materials (including,
without limitation, ambient air, surface water, ground water, or land) or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of Hazardous Materials), except to the
extent that failure to have or obtain any such permit, license or authorization
could not have a Material Adverse Effect. Borrower and each of the Subsidiaries
is in compliance with all terms and conditions of the permits, licenses and
authorizations required to be obtained by it, and is also in compliance with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables contained in all
Environmental Protection Statutes or contained in any plan, order, injunction,
notice, or demand letter issued, entered, promulgated, or approved thereunder,
except to the extent that failure to comply could not have a Material Adverse
Effect.

         5.14 INSURANCE. The properties of each Borrower Party and its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of Borrower, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies

                                       53
<PAGE>   60

engaged in similar businesses and owning similar properties in localities where
such Borrower Party or such Subsidiary operates.

         5.15 DISCLOSURE. No statement, information, report, representation, or
warranty made by any Borrower Party in any Loan Document or furnished to Agent
or any Bank in connection with any Loan Document contains any untrue statement
of a material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading.

         5.16 FRANCHISES, PERMITS, ETC.

         Borrower and each Subsidiary hold free from materially burdensome
restrictions all municipal consents, franchises, permits, licenses,
rights-of-way, easements, consents and other rights which, together with their
respective corporate and charter powers, are sufficient for the proper and
efficient operation as a whole of their respective businesses as presently
conducted and as presently proposed to be conducted.

         5.17 DESCRIPTION OF AND TITLE TO AVIATION UNITS AND ENGINES.

         Schedule 5.17 to this Agreement contains a correct and complete
description of all of the Aviation Units subject to the Security Interest as of
the Effective Date, and a correct and complete description of each aircraft
engine of 750 or more rated takeoff horsepower, or the equivalent of that
horsepower, installed in or attached or appertaining to any such Aviation Units.
Without limiting the generality of the representations and warranties contained
in Sections 5.02 and 5.07, all filings, registrations and recordings (including,
without limitation, the filing for recordation in the Aircraft Registry of FAA
Form 8050-2, "Aircraft Bill of Sale", or other comparable forms, covering each
such Aviation Unit and engine), necessary or advisable in order to establish,
protect and preserve title to and interest in such Aviation Units and engines as
against the respective sellers thereof and all third parties, and each such
Aviation Unit and engine has been duly registered in the name of Borrower or Air
Evac, as applicable, pursuant to the Federal Aviation Act. There are not now any
Liens on such Aviation Units or engines other than Permitted Liens and those
security interests created by the Security Documents in favor of the Agent.
Except for the filing of UCC Continuation Statements in accordance with the
recording provisions of Louisiana, Texas and Arizona law, no further action,
including, without limitation, any filing or recording of any documents (whether
under Article 9 of the Uniform Commercial Code of any applicable jurisdiction,
or otherwise), is necessary or advisable in order to establish, protect, perfect
or preserve Borrower's or Air Evac's title to and interest in such Aviation
Units or engines, and the first priority, perfected, security interest of the
Creditors in such Aviation Units and engines created by the Security Documents
in such Aviation Units and engines (subject only to Permitted Liens), and in the
proceeds thereof as against the respective sellers thereof and all third
parties.

         5.18 REGISTERED OFFICE/CHIEF EXECUTIVE OFFICE.

         The registered office (as shown on the records of the Secretary of
State of the State of Louisiana) and chief executive office of Borrower and Air
Evac is 2121 Airline Highway, Suite 400, Metairie, Louisiana 70001-5979. The
principal place of business of Borrower is 2121

                                       54
<PAGE>   61

Airline Highway, Suite 400, Metairie, Louisiana 70001-5979, and the principal
place of business of Air Evac is 2630 Sky Harbor Boulevard, Phoenix, Arizona
85034.

         5.19 TITLE TO PARTS AND RECEIVABLES.

         There are no Liens on the Parts (except for Permitted Liens) or on
Receivables (except for Permitted Liens of the type described in clause (a) of
the definition of Ordinary Course Liens). Schedule 5.19 contains a complete
listing of all of the locations at which Parts are located in the United States.
Except for the filing of UCC Continuation Statements, in accordance with the
recording provisions of the laws of the States of Louisiana, Texas and Arizona,
no further action, including, without limitation, the filing or recording of any
additional documents (whether under Article 9 of the Uniform Commercial Code of
any applicable jurisdiction, or otherwise), is necessary or advisable in order
to establish, protect or preserve the first priority perfected Security Interest
of the Creditors in the Parts and Receivables created by the Security Documents
as against third parties.

         5.20 SECTION 1110 OF BANKRUPTCY REFORM ACT OF 1978.

         Each of Borrower and Air Evac is "a citizen of the United States of
America holding an air carrier operating certificate issued by the Secretary of
Transportation," within the meaning of the United States Bankruptcy Code, as
amended, and it is the intention of Borrower, Air Evac and the Creditors that
Agent, for the equal and ratable benefit of the Creditors, upon the execution
and delivery of this Agreement, will be a "secured party with a purchase-money
equipment security interest", within the meaning of Section 1110, in the
Aircraft and each portion thereof now or from time to time hereafter subjected
to the Security Interest to the extent that the Security Interest constitutes a
"purchase-money equipment security interest" therein, with the result that the
Agent, for the equal and ratable benefit of the Creditors, may take the full
benefit of the provisions of said Section 1110 with respect to such Aircraft and
each such portion thereof.

         5.21 STATUS AS AIR CARRIER.

         Each of Borrower and Air Evac is a "citizen of the United States"
within the meaning of Section 101(13) of the Federal Aviation Act and is an "air
carrier" duly qualified as an "air taxi commercial operator" within the meaning
of said Act and the regulations issued thereunder.

         5.22 CAPITALIZATION; SUBSIDIARIES.

         (a) The authorized capital stock of Borrower consists of (i) 12,500,000
shares of voting common stock, par value $.10 per share, 2,793,386 shares of
which are outstanding; (ii) 12,500,000 shares of nonvoting common stock, par
value $.10 per share, 2,385,465 shares of which are outstanding and (iii)
10,000,000 shares of preferred stock, no par value, no shares of which are
outstanding.

         (b) The authorized capital stock of Air Evac consists of (i) 7,000
shares of common stock, without par value, 1,000 shares of which are outstanding
and are owned, both beneficially and of record, by PHI Aeromedical Services,
Inc., a Louisiana corporation (all of the issued and

                                       55
<PAGE>   62

outstanding shares of capital stock of which are owned, beneficially and of
record, by Borrower), and (b) 3,000 shares of preferred stock, par value $100
per share, 1,000 shares of which are outstanding and are owned of record and, to
the best knowledge of the Borrower, beneficially by Samaritan.

         (c) The corporations named in Schedule 5.22 are the only Subsidiaries
of Borrower and Air Evac on the Effective Date, and such schedule accurately
reflects the percentage of (x) the issued and outstanding capital stock, and (y)
the Voting Stock of each class of each Subsidiary on the Effective Date and
accurately identifies the Consolidated Subsidiaries and the percentage of
Borrower's, Air Evac's and each other Subsidiary's ownership of the outstanding
Voting Stock of each Subsidiary.

         (d) The shares of capital stock of each Subsidiary owned by Borrower or
Air Evac have been validly issued, are outstanding, fully-paid and
non-assessable shares of such Subsidiary and are owned by such Person free and
clear of all Liens (except statutory liens for taxes not yet due and for
salaries of clerical employees, none of which liens has been filed or
perfected).

         (e) Except as set forth in Schedule 5.22, there are no outstanding
shareholders agreements, voting agreements or other agreements of any nature
which in any way restrict or effect the transfer, pledge or voting of any of the
capital stock of Borrower or Air Evac or subject any of such securities to any
put, call, redemption obligation or similar right or obligation of any nature.

         5.23 EMTALA.

         Air Evac is not subject to Emergency Medical Treatment and Labor Act
requirements.

         5.24 MEDICARE AND MEDICAID PROGRAMS; LICENSURE.

         (a) Air Evac has made all necessary filings and similar applications
that are necessary in order that each of Air Evac and each medical director,
nurse, licensed employee and other individuals providing air ambulance and
patient care services on behalf of Air Evac will become qualified, credentialed
and licensed for participation in the Medicare and Medicaid programs and as
otherwise required under applicable state law, so that each will be so
qualified, credentialed and licensed prior to providing air ambulance and
patient care services on behalf of Air Evac. Air Evac is a party to supplier
agreements under the Medicare and Medicaid programs which are in full force and
effect with no defaults having occurred thereunder. Air Evac has timely filed
all claims or other reports required to be filed with respect to the services
provided to Medicare, Medicaid and third party payors, and all such claims or
reports are complete and accurate, and the Company has no liability to any payor
with respect thereto. There are no pending appeals, overpayment determinations,
adjustments, challenges, audit litigation or notices of intent to open Medicare
or Medicaid, or third party claim determinations or other reports required to be
filed by Air Evac.

         (b) Neither Air Evac, nor any medical director, nurses, licensed
employees or other individuals providing patient care services on behalf of Air
Evac has been convicted of, or pled

                                       56
<PAGE>   63

guilty to nolo contendere to, patient abuse or negligence, or any other Medicare
or Medicaid program related offense and none has committed any offense which may
serve as the basis for suspension or exclusion from the Medicare and Medicaid
programs.

         5.25 FRAUD AND ABUSE AND STARK LAW.

         Neither Air Evac, nor its officers, directors, employees or agents have
engaged in any activities which are prohibited under Section 1320a-7b or Section
1395nn of Title 42 of the United States Code or the regulations promulgated
thereunder, or related state or local statutes or regulations, or which are
prohibited by rules of professional conduct including, but not limited to, the
following: (a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment, (b) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in determining
rights to any benefit or payment, (c) any failure by a claimant to disclose
knowledge of the occurrence of any event affecting the initial or continued
right to any benefit or payment on its own behalf or on behalf of another, with
the intent to fraudulently secure such benefit or payment, and (d) knowingly and
willfully soliciting or receiving any remuneration (including any kickback,
bribe or rebate) directly or indirectly, overtly or covertly, in cash or in
kind, or offering to pay or receive such remuneration (i) in return for
referring an individual to a person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare or Medicaid, or (ii) in return for purchasing, leasing or
ordering or arranging for, or recommending, purchasing, leasing or ordering any
good, facility, service or item for which payment may be made in whole or in
part by Medicare or Medicaid, or (e) referring a patient for designated health
services to or providing designated health services to a patient upon referral
from an entity or person with which the physician or an immediate family member
has a financial relationship, and to which no exception under Section 1395nn of
Title 42 of the United States Code applies.

                                   SECTION 6.
                              AFFIRMATIVE COVENANTS

         So long as any Obligation remains unpaid or unperformed, or any portion
of the Revolving Credit Commitments remains outstanding, Borrower shall, and
shall (except in the case of Borrower's reporting covenants), cause each
Subsidiary to:

         6.01 FINANCIAL STATEMENTS. Deliver to Agent and each Bank:

         (a) as soon as available, but in any event within 120 days after the
end of each fiscal year of Borrower, a copy of (i) a consolidated balance sheet
of Borrower and the Consolidated Subsidiaries as at the end of such fiscal year,
and the related consolidated statements of earnings, stockholder's equity and
cash flows of Borrower and the Consolidated Subsidiaries for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in detail reasonably satisfactory to the Agent, audited and
accompanied by a report and opinion of Deloitte & Touche LLP, Arthur Anderson,
LLP, KPMG Peat Marwick, LLP, PriceWaterhouseCoopers, LLP, Ernst & Young, LLP or
another independent certified public

                                       57
<PAGE>   64

accountant of nationally recognized standing reasonably acceptable to Requisite
Banks, which report and opinion shall be prepared in accordance with GAAP and
shall not be subject to any qualifications or exceptions as to the scope of the
audit nor to any qualifications and exceptions not reasonably acceptable to
Requisite Banks; and (ii) a consolidating balance sheet of Borrower and the
Consolidated Subsidiaries as of the end of such fiscal year and consolidating
statements of earnings, stockholders' equity and changes in the financial
position of Borrower and the Consolidated Subsidiaries for such fiscal year,
setting forth, in each case in comparative form, the figures for the previous
fiscal year, all in reasonable detail and certified as complete and correct by
the principal financial officer of Borrower; and

         (b) as soon as available, but in any event within 60 days after the end
of each of the first three fiscal quarters of each fiscal year of Borrower, a
copy of (i) a consolidated balance sheet of Borrower and its Consolidated
Subsidiaries as at the end of such fiscal quarter, and (ii) the related
consolidated statements of income and cash flows for such fiscal quarter and for
the portion of Borrower's fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
in each case in detail reasonably satisfactory to the Agent, and certified by
the principal financial officer of Borrower as fairly presenting the financial
condition, results of operations and cash flows of Borrower and its Consolidated
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes; and

         (c) within 45 days after the end of each of the first, second, fourth,
fifth, seventh, eighth, tenth and eleventh months of each fiscal year of
Borrower, a copy of (i) a consolidated balance sheet of Borrower and the
Consolidated Subsidiaries as of the end of such month, and (ii) a consolidated
statement of earnings of Borrower and the Consolidated Subsidiaries for such
month and for the portion of the fiscal year ending with such month, setting
forth, in each case in comparative form, the figures for the corresponding
periods in the previous fiscal year, all in detail reasonably satisfactory to
the Agent.

         6.02 CERTIFICATES, NOTICES AND OTHER INFORMATION.

         Deliver to Agent and each Bank, in form and detail satisfactory to
Agent and the Requisite Banks, with sufficient copies for each Bank:

         (a) concurrently with the delivery of the financial statements referred
to in Section 6.01(a), a certificate of its independent certified public
accountants certifying such financial statement and stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default under the financial covenants set forth herein or, if any such
Default or Event of Default shall exist, stating the nature and status of such
event;

         (b) concurrently with the delivery of the financial statements referred
to in Sections 6.01, a duly completed Compliance Certificate signed by the
principal financial officer of Borrower;

         (c) promptly after request by Agent or any Bank, copies of any detailed
audit reports, management letters or recommendations submitted to the board of
directors (or the audit

                                       58
<PAGE>   65

committee of the board of directors) of Borrower by independent accountants in
connection with the accounts or books of Borrower or any Subsidiary, or any
audit of any of them;

         (d) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of Borrower, and copies of all annual, regular, periodic and
special reports and registration statements which Borrower may file or be
required to file with the Securities and Exchange Commission under Sections 13
or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to
be delivered to Agent pursuant hereto;

         (e) promptly after the occurrence thereof, notice of any Default or
Event of Default;

         (f) notice of any material change in accounting policies or financial
reporting practices by Borrower or any Subsidiary;

         (g) promptly after the commencement thereof, notice of any litigation,
investigation or proceeding affecting any Borrower Party where the amount
involved exceeds $100,000, or in which injunctive relief or similar relief is
sought, which relief, if granted, has a Material Adverse Effect;

         (h) promptly after the occurrence thereof, notice of any Reportable
Event with respect to any Plan or the intent to terminate any Plan, or the
institution of proceedings or the taking or expected taking of any other action
to terminate any Plan or withdraw from any Plan;

         (i) promptly after the occurrence thereof, notice of any Material
Adverse Effect (including, without limitation, any downward valuation by
Borrower or any Subsidiary of the Aviation Units or any determination by
Borrower or any Subsidiary that a significant portion of its Receivables is
uncollectible);

         (j) with each set of financial statements delivered pursuant to Section
6.01(a), an Officers' Certificate specifying (i) the insured value of the
Aircraft, (ii) the existence and nature of any changes in the insurance coverage
required to be maintained by Borrower under Section 6.15 and (iii) if any
Aviation Unit constituting a portion of the Aircraft is then being leased by
Borrower to another Person, or operated by Borrower under contract with another
Person, the name of such Person and the term of the relevant lease or contract;

         (k) as soon as available after the end of each fiscal quarter of
Borrower, and in any event within 60 days after the end of each of the first
three fiscal quarters of Borrower and within 120 days after the end of the
fourth fiscal quarter of Borrower (i) a schedule of the Direct Expenses incurred
by Borrower and the Consolidated Subsidiaries during such quarter in such form
and containing such information and detail as the Agent, or any Bank through the
Agent, may request, (ii) a summary description of the Parts, by type of Aviation
Unit to which such Parts are applicable, (iii) a list of the Receivables of
Borrower and Air Evac as at the end of such quarter, (iv) a list of the Trade
Payables of Borrower and the Consolidated Subsidiaries as at the end of such
quarter, each such schedule, description and list to be in such form and contain
such information and detail as the Agent, or any Bank through the Agent, may
reasonably request,

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<PAGE>   66

including, without limitation, as to such Receivables, agings thereof in the
customary manner, identifying each obligor thereon and designating each such
Receivable that is 90 days old, and as to such summary description of the Parts,
the opening balance, withdrawals, additions and closing balance, and as to such
Trade Payables, agings thereof in the customary manner, the supplier and the
designation of each Trade Payable not paid pursuant to its payment terms and
(iv) a written confirmation of the make and model, manufacturer's serial number
and United States registration number of each Aviation Unit constituting a
portion of the Aircraft, the month and year of purchase of each such Aviation
Unit and the parish (or county) and state (or, if such Aviation Unit shall at
the time be situated outside the United States, the country and province) of the
current location of each thereof;

         (l) with each set of financial statements delivered pursuant to Section
6.01(b) with respect to each third fiscal quarter of Borrower, a copy of a pro
forma consolidated balance sheet of Borrower and the Consolidated Subsidiaries
for the next succeeding fiscal year of Borrower and pro forma consolidated
statements of earnings, stockholder's equity and cash flows of Borrower and the
Consolidated Subsidiaries for the next succeeding fiscal year of Borrower;

         (m) within 45 days after the end of each month and within 45 days after
each Event of Loss, a Borrowing Base Certificate;

         (n) promptly after the annual meeting of Borrower's stockholders, an
Officers' Certificate of the election and incumbency of Borrower's officers and
directors;

         (o) promptly (and in any event within 20 days after the occurrence
thereof), notice of any Event of Loss; and

         (p) promptly, such other data and information as from time to time may
be reasonably requested by Agent, or, through Agent, any Bank.

         Each notice pursuant to this Section 6.02 shall be accompanied by a
statement of a Responsible Officer of Borrower setting forth details of the
occurrence referred to therein and stating what action Borrower has taken and
proposes to take with respect thereto.

         6.03 PAYMENT OF TAXES. Pay and discharge when due all taxes,
assessments, and governmental charges, Ordinary Course Liens or levies imposed
on any Borrower Party or its Subsidiaries or on its income or profits or any of
its property, except for any such tax, assessment, charge, or levy which is an
Ordinary Course Lien under subsection (b) of the definition of such term.

         6.04 PRESERVATION OF EXISTENCE. Preserve and maintain its existence,
licenses, permits, rights, franchises and privileges necessary or desirable in
the normal conduct of its business, except where failure to do so does not have
a Material Adverse Effect.

         6.05 MAINTENANCE OF PROPERTIES. Maintain, preserve and protect all of
its material properties and equipment necessary in the operation of its business
in good order and condition, subject to wear and tear in the ordinary course of
business, and not permit any waste of its properties.

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<PAGE>   67

         6.06 MAINTENANCE OF INSURANCE.

         Maintain liability and casualty insurance with financially sound and
reputable insurance companies in such amounts with such deductibles and against
such risks as is customary for similarly situated businesses, and furnish to any
Bank, upon request, an Officers' Certificate containing full information as to
the insurance carried; and promptly after notice in writing from the Agent, or
any Bank through the Agent, obtain such additional insurance as the Agent, or
any Bank through the Agent, may reasonably request and which is customarily
carried on comparable businesses or properties. All policies of insurance
maintained by Borrower or Air Evac on the Parts shall name the Agent as an
additional insured and any payment of claims thereunder shall be made payable to
the Agent (without the necessity for any other Person's joining in endorsing any
check or otherwise accepting any payment) under a standard mortgagee loss
payable clause satisfactory to the Agent and the Banks; provided, however, that
such policies may provide that, with respect to proceeds of any particular
claim, such proceeds not in excess of $500,000 may be paid by the insurers
directly to Borrower or Air Evac rather than to the Agent unless an Event of
Default or Default shall have occurred and is continuing and the Agent shall
have notified the insurer thereof

         6.07 COMPLIANCE WITH LAWS.

         (a) Comply with the requirements of all applicable Laws and orders of
any Governmental Authority, noncompliance with which has a Material Adverse
Effect.

         (b) Conduct its operations and keep and maintain its property in
compliance with all Environmental Protection Statutes, noncompliance with which
has a Material Adverse Effect.

         6.08 INSPECTION RIGHTS. At any time during regular business hours and
as often as reasonably requested, permit Agent or any Bank, or any employee,
agent or representative thereof, to examine, audit and make copies and abstracts
from the Borrower Parties' records and books of account and to visit and inspect
their properties and to discuss their affairs, finances and accounts with any of
their officers and key employees, and, upon request, furnish promptly to Agent
or any Bank true copies of all financial information and internal management
reports made available to their senior management.

         6.09 KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Keep adequate records and
books of account reflecting all financial transactions in conformity with GAAP,
consistently applied, and in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
Borrower or the applicable Subsidiary.

         6.10 COMPLIANCE WITH ERISA. Cause, and cause each of its ERISA
Affiliates to: (a) maintain each Plan in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or state
law; (b) cause each Plan which is qualified under Section 401(a) of the Code to
maintain such qualification; and (c) make all required contributions to any Plan
subject to Section 412 of the Code.

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<PAGE>   68

         6.11 COMPLIANCE WITH AGREEMENTS.

         Promptly and fully comply with all Contractual Obligations to which any
one or more of them is a party, except for any such Contractual Obligations (a)
the performance of which would cause a Default or Event of Default, (b) then
being contested by any of them in good faith by appropriate proceedings, or (c)
if the failure to comply therewith does not have a Material Adverse Effect.

         6.12 USE OF PROCEEDS. Use the proceeds of Extensions of Credit for
lawful general corporate purposes not otherwise in contravention of this
Agreement.

         6.13 CITIZEN; AIR CARRIER.

         Remain a citizen of the United States within the meaning of Section
101(16) of the Federal Aviation Act and an "air carrier" duly qualified as an
"air taxi commercial operator" (or equivalent status permitting such Person to
continue to conduct its business as presently conducted) under said Act.

         6.14 REGISTRATION, MAINTENANCE, OPERATION, FOREIGN OPERATIONS AND
MARKING OF COLLATERAL.

         (a) At its own cost and expense: (i) defend title to the Collateral
against the claims and demands of all Persons other than the Agent and the
Creditors; (ii) forthwith upon the delivery thereof, cause each portion of the
Aircraft to be duly registered, and at all times thereafter to remain duly
registered, in the name of Borrower or such Subsidiary, as applicable, under the
Federal Aviation Act (it being understood and agreed that neither the Borrower
nor any Subsidiary will register any portion of the Aircraft under the laws of
any country other than the United States of America as aforesaid) and cause the
Security Documents to be duly recorded and maintained of record in the Aircraft
Registry and any other appropriate public offices as a first mortgage on, and as
creating a prior perfected security interest in, the Aircraft and each portion
thereof (including each portion which consists of an aircraft engine of 750 or
more rated takeoff horsepower, or the equivalent of that horsepower, or a
propeller capable of absorbing 750 or more rated takeoff shaft horsepower);
(iii) maintain, service, repair, overhaul and test the Aircraft so as to
maintain the Aircraft in such condition as may be necessary to enable the
airworthiness certification of the Aircraft to be maintained in good standing at
all times under the Federal Aviation Act, and, in any event, in good repair,
working order and operating condition, ordinary wear and tear excepted, and in
compliance with any applicable requirements of law and of any Governmental
Authority having jurisdiction (regardless of upon which Person such requirements
shall, by their terms, be nominally imposed), and from time to time make or
cause to be made all necessary or appropriate repairs, restorations,
replacements and renewals thereof and additions or improvements thereto, and in
furtherance thereof (subject to the provisions of this Agreement specifying the
obligations of Borrower upon the occurrence of Events of Loss) promptly replace
aircraft engines and all Parts of whatever nature which, originally or from time
to time, have been incorporated in or installed as part of the Aircraft, or any
portion thereof, and which may from time to time become worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently rendered
unfit for use for any reason whatsoever, and maintain each replacement

                                       62
<PAGE>   69

portion free and clear of all Liens (other than Permitted Liens) and rights of
others and in as good operating condition as, and having a value and utility at
least equal to that of, the replaced portion (assuming that such replaced
portion shall have been in the condition and state of repair required to be
maintained under the terms hereof); (iv) maintain all records, logs and other
materials required by the Federal Aviation Administration, and any other
Governmental Authority having jurisdiction, to be maintained in respect of the
Aircraft, regardless of upon which Person any such requirements shall, by their
terms, be nominally imposed, and comply with all applicable maintenance,
service, repair and overhaul manuals and service bulletins published by or on
behalf of the manufacturers of the Aircraft; (v) at such times as any Bank may
reasonably request, through the Agent, furnish to the Agent, with a copy to each
Bank, statements regarding the condition and state of repair of the Aircraft, in
such detail as such Bank, through the Agent, may reasonably request; and (vi)
procure and pay for all permits, franchises, inspections and licenses necessary
or appropriate in connection with the Aircraft or any repair, restoration,
replacement, renewal, addition or improvement with respect to the Aircraft, the
failure to procure which might have an adverse effect on any Aviation Unit or
Units constituting a portion of the Aircraft, or any interest of the Creditors
therein or in respect thereof. Without limitation of the foregoing, no Aircraft
will be (x) maintained, used or operated in violation of any law or any rule,
regulation or order of any Governmental Authority having jurisdiction, or in
violation of any airworthiness certification, license or registration relating
to the Aircraft issued by any such Governmental Authority or (y) used or
operated at any time that the full amount of insurance required by Section 6.15
to be carried with respect thereto shall not be in effect.

         (b) Cause all Aircraft, the Appraised Value of which is used to
determine the Borrowing Base, to be used, operated and situated solely within
the continental United States, and, with respect to the Aircraft used, operated
or situated outside the continental United States, either (i) maintain hull war
risk insurance (including insurance against war, strikes, riots, civil
commotion, acts of persons for political or terrorist purposes, malicious acts,
acts of sabotage, hijacking, confiscation and nationalization, except
confiscation and nationalization by the United States), extending throughout the
world, which insurance shall be made payable to the Agent, for the benefit of
the Creditors under a standard mortgagee loss payable clause satisfactory to the
Agent and each Creditor, or (ii) have entered into such other protective
arrangements with respect to such Aircraft as the Agent and each Creditor shall
have approved in advance in writing, which approval may be withheld in such
parties' sole discretion.

         (c) At all times affix to and maintain in each portion of the Aircraft
consisting of an Aviation Unit, adjacent to the airworthiness certification
therein, a metal nameplate bearing the following inscription in plain, distinct
and conspicuous lettering:

         "THIS EQUIPMENT IS OWNED BY PETROLEUM HELICOPTERS, INC/AIR EVAC, INC.
SUBJECT TO A MORTGAGE IN FAVOR OF BANK OF AMERICA, N.A., WHITNEY NATIONAL BANK
AND BANK ONE, NA (THE "BANKS"). ANY BUYER OR OTHER ENCUMBRANCER OF THIS
EQUIPMENT IS HEREBY PUT ON NOTICE THAT THE SALE OR CREATION OF AN ENCUMBRANCE BY
PETROLEUM HELICOPTERS, INC/AIR EVAC, INC. TO OR IN FAVOR OF SUCH BUYER OR
ENCUMBRANCER IS IN VIOLATION OF THE AFORESAID MORTGAGE UNLESS AND UNTIL SUCH
BUYER OR ENCUMBRANCER SHALL HAVE RECEIVED FROM SAID BANK OF AMERICA, N.A.,

                                       63
<PAGE>   70

AS AGENT FOR THE BANKS, A WRITTEN STATEMENT TO THE EFFECT THAT SUCH EQUIPMENT
HAS BEEN DULY RELEASED FROM THE SECURITY INTEREST OF SAID MORTGAGE."

         (d) Promptly replace any part of such nameplate which may be removed,
defaced or destroyed, and in the event that any Person shall, in accordance with
the terms of this Agreement, succeed to the position of Borrower, Air Evac or
the Creditors named on any such nameplate, promptly replace such nameplate with
a nameplate inscribed with the name of such successor. Except as above provided,
the Borrower will not permit or suffer, and will cause each Subsidiary not to
permit or suffer the name of any Person other than the Borrower or such
Subsidiary, as applicable, to be placed on any portion of the Aircraft as a
designation that might be interpreted as a claim of ownership or a right to the
possession or use thereof.

         (e) With respect to Borrower, hangar the Aircraft principally in
Lafayette Parish, Louisiana, and although any Aviation Unit of Borrower may from
time to time, and for various periods of time, operate in the normal course of
business outside said parish and state, it is intended and agreed that such
Aviation Unit shall remain principally hangared, and in that sense located, in
Lafayette Parish, Louisiana.

         (f) With respect to Air Evac, hangar the Aircraft principally in
Phoenix Arizona, and although any Aviation Unit of Borrower may from time to
time, and for various periods of time, operate in the normal course of business
outside said county and state, it is intended and agreed that such Aviation Unit
shall remain principally hangared, and in that sense located, in Phoenix
Arizona.

         6.15 INSURANCE WITH RESPECT TO THE AIRCRAFT.

         (a) Without limiting the generality of Section 6.06, at its own cost
and expense, maintain, with insurers of recognized national stature and
responsibility satisfactory to the Agent and the Creditors, insurance policies
insuring against loss or damage to the Aircraft from such risks and in such
amounts as a prudent person would maintain on similar properties; provided,
however, that, without the prior written consent of the Agent and the Creditors,
neither the Borrower nor any Subsidiary will permit or suffer the Aircraft owned
by it to be insured on any basis or to any extent other than that upon which the
other Aviation Units in such Person's fleet shall be insured, and, in any event,
neither the Borrower nor any Subsidiary will permit or suffer the amount of such
insurance for each occurrence, less the deductible, if any, with respect
thereto, at any time to be less than the Appraised Value of such Aircraft. The
policies required by this Section 6.15(a) to be maintained shall name the Agent
as an additional insured with respect to the Aircraft and any payment of claims
thereunder shall be made payable to the Agent (without the necessity for any
other Person's joining in endorsing any check or otherwise accepting any
payment) under a standard mortgagee loss payable clause satisfactory to the
Agent and the Creditors; provided, however, that such policies may provide that,
with respect to proceeds of any particular claim, such proceeds not in excess of
$500,000 may be paid by the insurers directly to Borrower or the Subsidiary that
owns such Aircraft rather than to the Agent unless an Event of Default or
Default shall have occurred and be continuing and the Agent shall have notified
the insurer thereof. To the extent that such insurance coverage shall be
available, such policies shall

                                       64
<PAGE>   71

further provide that (i) in respect of the interest of the Agent and the
Creditors in such policies, the insurance shall not be invalidated by any action
or inaction of the Borrower or such Subsidiary, as applicable, or any other
Person, (ii) the Agent's and Creditors' interest shall be insured regardless of
any breach or violation by Borrower or such Subsidiary, as applicable, of any
warranties, declarations or conditions contained in such policies, (iii) the
insurers waive all rights of subrogation against the Borrower or such
Subsidiary, as applicable, the Agent and each Creditor, (iv) the insurers waive
any right to any set-off, counterclaim or deduction, whether by attachment or
otherwise, in respect of any liability of Borrower or such Subsidiary, as
applicable, and (v) such insurance will not be invalidated by any foreclosure or
other remedial proceedings or notices thereof relating to the Aircraft or any
portion thereof or interest therein, or by any change in the title to or
ownership of the Aircraft or any portion thereof or interest therein, or by the
use or operation of the Aircraft or any portion thereof for purposes more
hazardous, or in a manner more hazardous, than shall have been permitted by such
policies. No such policy shall contain a provision reducing or eliminating the
liability of the insurer thereunder for any loss by reason of the existence of
other insurance policies covering the Aircraft or any portion thereof against
the peril involved, whether collectible or not. As between the Agent, the
Creditors, the Borrower or any Subsidiary, all insurance proceeds received as
the result of the occurrence of an Event of Loss shall be applied in accordance
with Section 2.05(f), and all insurance proceeds received as the result of loss
or damage not constituting an Event of Loss shall be applied in accordance with
Section 6.15(e).

         (b) At its own cost and expense, maintain, with insurers of recognized
national stature and responsibility satisfactory to the Agent and the Creditors,
insurance policies with respect to the Aircraft insuring against loss or damage
to the person and property of others from such risks and in such amounts as a
prudent person would maintain in similar circumstances (including passenger
legal liability insurance); provided, however, that Borrower and Air Evac will
maintain public liability (including passenger legal liability) and property
damage insurance applicable to the Aircraft owned by them in an amount which
shall not be less than $20,000,000 per accident, subject to a deductible not in
excess of $50,000. The policies required by this Section 6.15(b) to be
maintained shall name the Agent for the equal and ratable benefit of the
Creditors as an additional insured with respect to the Aircraft, and, to the
extent available, shall insure the Agent's and Creditors' interest regardless of
any breach of or violation by Borrower or Air Evac of any warranties,
declarations or conditions contained in such policies and shall provide that the
insurers waive all rights of subrogation against Borrower, Air Evac, the Agent
and each Creditor and that the insurers waive any right to any set-off,
counterclaim or deduction, whether by attachment or otherwise, in respect of any
liability of Borrower or Air Evac. No such policy shall contain a provision
reducing or eliminating the liability of the insurer thereunder for any loss by
reason of the existence of other insurance policies covering the Aircraft or any
portion thereof against the peril involved, whether collectible or not. Each
insurance policy required by this subsection (b) to be maintained by Borrower or
Air Evac shall expressly provide that all the provisions thereof, except the
limits of liability (which shall be applicable to all insureds as a group) and
liability for premiums (which shall be solely a liability of Borrower or Air
Evac, as applicable), shall operate in the same manner as if there were a
separate policy covering each insured.

         (c) Upon request, furnish to the Agent, with a copy to each Creditor,
and in any event within 120 days after the end of each fiscal year of Borrower,
a certificate signed by Borrower or

                                       65
<PAGE>   72

Air Evac's (as requested) independent insurance broker or consultant summarizing
the insurance then maintained by Borrower pursuant to this Section 6.15 and
stating that, in the opinion of said broker or consultant, such insurance
complies with the terms hereof.

         (d) Each insurance policy required to be maintained pursuant to this
Section 6.15 shall provide that the insurer will, (i) advise the Agent and each
Creditor in writing promptly of any default in the payment of any premiums or of
any other act or omission on the part of any named insured of which it shall
have knowledge and which might invalidate or render unenforceable, in whole or
in part, any such insurance and (ii) advise the Agent and each Creditor in
writing, at least 30 days prior thereto, of the expiration or cancellation or
any reduction or any material change in the coverage of any such insurance (each
such policy to provide that no such cancellation, reduction or change will be
effective until thirty days after such notice is given). Borrower will advise,
and will cause its Subsidiaries to advise, the Agent and each Creditor in
writing promptly of any notice or other communication received from any insurer
by which such insurer indicates that it may seek to suspend, terminate or change
any insurance required by this Section 6.15.

         (e) If any Aircraft or any portion thereof shall be condemned,
requisitioned, confiscated, stolen, seized, lost or damaged or its title or use
requisitioned, and such action shall not result in an Event of Loss, the
Borrower will promptly take, or cause Air Evac to promptly take, the action
required by Section 6.14 with respect to the repair and replacement thereof,
and, in the event of any such condemnation, requisition, confiscation,
requisition of title or use, the Borrower will promptly (and, in any event, upon
the earlier of the Business Day next preceding the date upon which a Borrowing
Base Certificate is to be delivered hereunder or 10 days after such occurrence)
notify the Banks in writing and, promptly upon receipt by the Borrower or Air
Evac, will deposit or cause to be deposited with the Agent any award or purchase
price received by the Borrower or Air Evac in connection therewith (the Borrower
hereby assigning to the Agent for the equal and ratable benefit of the Creditors
all its rights and interest in and to any and all such awards or purchase price
to which it is entitled and hereby agreeing to execute and deliver, and to cause
Air Evac to execute and deliver, upon the request of the Agent or any Creditor,
any and all assignments and other instruments deemed by the Agent or such
Creditor to be necessary or desirable for the purpose of causing, confirming or
further evidencing the assignment by the Borrower and/or Air Evac of the
aforesaid awards or purchase price to the Agent for the benefit of the Creditors
free and clear of any and all Liens of any kind or nature whatsoever created by
the Borrower or Air Evac). Any amounts received by the Agent representing
payment of insurance proceeds or payment from any Governmental Authority or
other Person with respect to any condemnation, requisition, confiscation, theft
or seizure of, or requisition of title to or use of, or loss or damage to, the
Aircraft or any portion thereof that shall not result in an Event of Loss will
be applied by the Agent to reimburse the Borrower or Air Evac, as applicable,
for (but only after its completion of) the repair or replacement of the affected
portion of the Aircraft, but such reimbursement shall be made only (i) if, at
the time of such reimbursement, the Agent shall not have any knowledge that any
Default or Event of Default shall have occurred and then be continuing, or will
exist immediately after such reimbursement, and (ii) upon receipt by each Bank,
in form and substance satisfactory to such Bank, of an Officers' Certificate
requesting such reimbursement, describing the costs incurred for which
reimbursement is requested and certifying that (A) there is not any outstanding
Indebtedness for the purchase

                                       66
<PAGE>   73

price or construction of said repairs or replacements, or for labor, wages,
materials or supplies in connection with the making thereof, which, if unpaid,
might become the basis for a vendor's, mechanic's, laborer's, materialman's,
statutory or other similar lien upon said repairs or replacements or any portion
thereof, or which might materially impair the security afforded by said repairs
or replacements; (B) no Default or Event of Default has occurred and is then
continuing, or will exist immediately after such reimbursement; (C) no part of
the amount requested for reimbursement has been or is being made the basis, in
any previous or then pending application, for the withdrawal of any other
proceeds under this Section 6.15(e); and (D) the affected portion of the
Aircraft, as so repaired or replaced, is of a value not less than the value
thereof immediately preceding such condemnation, requisition, confiscation,
theft, seizure, requisition of title or use, loss or damage and, in any event,
is in the condition required by Section 6.14 to be maintained. If, with respect
to any particular loss, the Agent shall not have notified the insurers that any
Default or Event of Default has occurred and is continuing, the proceeds
attributable to such loss not in excess of $500,000 may be paid by the insurers
directly to the Borrower or Air Evac, as applicable, provided, such proceeds
shall be applied by the Borrower or Air Evac, as applicable (and the Borrower,
by acceptance of such proceeds, covenants to so apply or cause such proceeds to
be so applied) to the cost of repairing, restoring or replacing the property
destroyed or damaged; and any portion of such proceeds remaining after such
application may be retained by the Borrower or Air Evac, as applicable. All
other proceeds shall be directly paid by the insurers to the Agent for the
ratable benefit of the Creditors and if, notwithstanding such requirement,
Borrower or Air Evac receives such proceeds, Borrower shall promptly surrender
or cause Air Evac to surrender such proceeds, to the Agent for the ratable
benefit of the Creditors.

         6.16 RECORDING, ETC.

         (a) Forthwith upon the execution and delivery of this Agreement with
respect to the Collateral on the Effective Date, and from time to time
thereafter, cause the Security Documents and all other documents and notices
with respect thereto (including financing statements and continuation
statements, if any), to be promptly filed, registered or recorded (and continued
in effect) to such extent, in such manner and in such places (including the
Aircraft Registry) as may be necessary or appropriate under any present or
future law in order to publish notice of and fully to preserve and protect the
validity and priority of the Security Interest, and the interest of the Agent
and the Creditors, in the property comprising or intended to comprise the
Collateral (including any portion of the Aircraft or any Part which consists of
an aircraft engine of 750 or more rated takeoff horsepower, or the equivalent of
that horsepower, or a propeller capable of absorbing 750 or more rated takeoff
shaft horsepower), and from time to time will perform or cause to be performed
any and all other actions, and will execute and deliver or cause to be executed
and delivered and filed, registered or recorded any and all other documents,
that may be required by applicable law or requested by any Creditor for such
publication, preservation and protection. Borrower will pay or cause to be paid
all filing, registration and recording taxes and fees incident to such filing,
registration and recording, and all expenses incident to the preparation,
execution, delivery and acknowledgment of this Agreement, the Security
Documents, financing statements, continuation statements, if any, and other such
documents, and all stamp taxes and other taxes, duties, imposts, assessments and
charges arising out of or in connection

                                       67
<PAGE>   74

with the execution and delivery of this Agreement, the Security Documents,
financing statements, continuation statements and other such documents.

         (b) Deliver to the Agent (i) promptly after the execution and delivery
of any Security Document which subjects additional Aviation Units to the
Security Interest, an opinion of legal counsel satisfactory to the Creditors
stating either (A) that such Security Document and all other documents have been
properly filed, registered and recorded to the extent required by this Section
6.16, and reciting the details of such action or referring to prior opinions of
counsel in which such details are given, or (B) that no such action is necessary
to maintain the Security Interest, as so required, and (ii) within 45 days after
a written request from the Agent or any Creditor, but in no event more than once
during each calendar year, an opinion of legal counsel satisfactory to the
Creditors (A) stating that all action has been taken with respect to the filing,
registration, recording, refiling, re-registration and re-recording of the
Security Documents and all other documents as is necessary to maintain the
Security Interest, as required under this Agreement and the Security Documents
(including the Security Interest on any property acquired after the date of
execution and delivery of the Security Documents and owned on the date of such
request which is intended to be subject to the Security Interest), and reciting
the details of such action or referring to prior opinions of counsel in which
such details are given, and (B) describing what if any action of the foregoing
character may reasonably be expected to become necessary in the future to
maintain the Security Interest, as so required, in the Collateral.

         6.17 FURTHER ASSURANCES.

         At any time and from time to time, promptly, at Borrower's cost and
expense, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, any and all such further acts, instruments,
mortgages, security agreements, financing statements, continuation statements
and assurances as the Agent or any Creditor through the Agent shall reasonably
require to obtain the full benefits of the estates, interests, rights, powers,
privileges, and immunities granted herein and in the Security Documents and for
the better mortgaging, hypothecating, pledging, assuring and confirming to or
with the Creditors, or for the protection or continuance of protection of the
validity and priority of the Security Interest in, all or any portion of the
Collateral by the Security Documents mortgaged, hypothecated or pledged, or
intended hereby or thereby to be mortgaged, hypothecated or pledged, to or with
the Creditors or which Borrower or any other Person may be or may hereafter
become bound to mortgage, hypothecate or pledge to or with the Creditors.

         6.18 LOCATION OF COLLATERAL.

         Notify each Creditor and the Agent promptly in the event that
$5,000,000 of Parts (valued at the lower of average cost or market) are located
at any location other than those enumerated in Schedule 5.19, and take such
actions as the Creditors and the Agent may reasonably request to subject such
Parts to the Security Interest.

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                                   SECTION 7.
                               NEGATIVE COVENANTS

         So long as any Obligations remain unpaid or unperformed, or any portion
of the Revolving Loan Commitments remains outstanding, Borrower shall not, nor
shall it permit any Subsidiary to, directly or indirectly:

         7.01 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:

         (a) Indebtedness under the Loan Documents;

         (b) Ordinary Course Indebtedness;

         (c)      (i) Indebtedness arising from the lease of Aviation Units not
                  exceeding $124,000,000 in the aggregate at any time; provided,
                  that, no such Indebtedness arising from the lease of Aviation
                  Units entered into at any time after March 15, 2001, shall
                  have an actual or implicit interest rate in excess of 10% per
                  annum without the prior written approval of the Requisite
                  Banks, which approval may be withheld in the Requisite Banks'
                  sole discretion;

                  (ii) Indebtedness arising from facilities leases not exceeding
                  $19,000,000 in the aggregate at any time; and

                  (iii) Indebtedness for Borrowed Money representing the
                  purchase price of goods or services acquired from trade
                  creditors in the ordinary course of business (the full payment
                  of the purchase price of which has been deferred for a period
                  exceeding 60 days) not exceeding $4,000,000 in the aggregate
                  at any time;

                  ; provided, however, the Indebtedness permitted to be
                  outstanding at any given time under clauses (c)(i), (c)(ii)
                  and (c)(iii) above shall not exceed (A) from the Effective
                  Date to and including February 1, 2002, $145,000,000 in the
                  aggregate, and (B) after February 1, 2002, $127,000,000 in the
                  aggregate.

         7.02 LIENS AND NEGATIVE PLEDGES. Incur, assume or suffer to exist, any
Lien or Negative Pledge upon any of its property, assets or revenues, whether
now owned or hereafter acquired, except the following (collectively, the
"Permitted Liens"):

         (a) Liens pursuant to any Loan Document;

         (b) Liens and Negative Pledges not affecting the Collateral that exist
on the date hereof and are listed on Schedule 7.02 and any renewals or
extensions thereof, provided that the property covered thereby is not increased
and any renewal or extension of the obligations secured or benefited thereby is
permitted by Section 7.01(c);

         (c) Ordinary Course Liens;

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<PAGE>   76

         (d) leases of Aviation Units that do not constitute part of the
Aircraft and which are permitted by Section 7.01(c)(i) and leases of Aviation
Units that constitute part of the Aircraft and which are permitted by Section
7.19.

         7.03 FUNDAMENTAL CHANGES. Merge or consolidate with or into any Person
or liquidate, wind-up or dissolve itself, or permit or suffer any liquidation or
dissolution or sell or otherwise transfer all or substantially all of its
assets, except, that so long as no Default or Event of Default exists or would
result therefrom:

         (a) any Subsidiary other than Air Evac may merge with (i) Borrower if
Borrower is the continuing or surviving corporation, (ii) any one or more
Wholly-Owned Subsidiaries of the Borrower, so long as the continuing or
surviving corporation is a Wholly-Owned Subsidiary, and (iii) any joint venture,
partnership or other Person, so long as such joint venture, partnership and
other Person will, as a result of making such merger and all other
contemporaneous related transactions, become a Wholly-Owned Subsidiary of the
Borrower; and

         (b) any Subsidiary other than Air Evac may sell or transfer all or
substantially all of its assets (upon voluntary liquidation or otherwise), to
Borrower or to a Wholly-Owned Subsidiary of the Borrower.

         7.04 DISPOSITIONS. Make any Dispositions, except:

         (a) Ordinary Course Dispositions;

         (b) Dispositions permitted by Section 7.03; and

         (c) Dispositions by Borrower of Aviation Units; provided that (i) no
Default or Event of Default has occurred and is continuing or would result from
such Disposition, (ii) the sum of (A) any cash to be received by Borrower as
consideration for the Aviation Unit subject to such Disposition, plus (B) the
Appraised Value of any Aviation Unit(s) received in any such Disposition (as
reflected on a certificate of an Independent Appraiser, in form and substance
acceptable to the Agent) shall be greater than or equal to the Appraised Value
Disposition (as reflected on a certificate of an Independent Appraiser, in form
and substance acceptable to the Agent) of the Aviation Unit to be released,
(iii) if such Disposition is in part or in whole for cash, concurrently with
such Disposition, 100% of the Net Cash Proceeds therefrom is applied to prepay
the Term Loans to the extent required by Section 2.05(c); (iv) if such
Disposition is whole or in part in exchange for other Aviation Units, within 30
days of such purchase, Borrower shall (A) execute and deliver to Agent Security
Documents, satisfactory to Agent, to subject such Aviation Units to a valid and
perfected first priority security interest in favor of the Agent for the ratable
benefit of the Creditors, (B) complete the Appropriate Actions, and (C) complete
any other actions or filings required by Section 6.16; (v) Borrower shall have
delivered to the Agent an Officers' Certificate in the form of Exhibit I to this
Agreement.

         7.05 INVESTMENTS. Make any Investments, except:

         (a) Investments existing on the date hereof and described on Schedule
7.05;

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<PAGE>   77

         (b) Ordinary Course Investments;

         (c) Investments permitted by Section 7.03; and

         (d) Investments by Borrower in any joint venture in which (i) 50% or
more of the capital stock (or comparable equity or partnership interests) is
owned by Borrower and (ii) the aggregate book value of all such Investments,
shall not at any time exceed 3% of the Consolidated Tangible Net Worth of
Borrower at such time.

         7.06 LEASE OBLIGATIONS. Create or suffer to exist any obligations for
the payment of rent for any property under lease or agreement to lease, except:

         (a) obligations permitted by clauses (i) and (ii) of Section 7.01(c);

         (b) obligations not included in the definition of Indebtedness with
respect to leases in existence on the date hereof and any renewal, extension or
refinancing thereof; and

         (c) obligations not included in the definition of Indebtedness with
respect to Operating Leases entered into or assumed by Borrower or any
Subsidiary after the date hereof in the ordinary course of business.

         7.07 RESTRICTED PAYMENTS. Make any Restricted Payments provided,
however, Borrower may, so long as no Default or Event of Default has occurred
and is continuing or would result from the making of such Restricted Payment
(unless any such Default or Event of Default has been waived in the manner
required by Section 10.01) (a) pay or declare cash dividends in an aggregate
amount not in excess of 20% of the average of the quarterly Consolidated Net
Income after taxes (excluding from the computation of Consolidated Net Income
extraordinary gains) for the immediately preceding four consecutive fiscal
quarters of Borrower, and (b) acquire its stock from its employees who are
leaving the employ of Borrower, provided that the aggregate purchase price of
all such stock acquired by Borrower during any fiscal year of Borrower shall not
exceed $50,000.

         7.08 ERISA. At any time engage in a transaction which could be subject
to Sections 4069 or 4212(c) of ERISA, or permit any Pension Plan to (a) engage
in any non-exempt "prohibited transaction" (as defined in Section 4975 of the
Code); (b) fail to comply with ERISA or any other applicable Laws; or (c) incur
any material "accumulated funding deficiency" (as defined in Section 302 of
ERISA), which, with respect to each event listed above, has a Material Adverse
Effect.

         7.09 CHANGE IN NATURE OF BUSINESS. Make any change in the nature of the
business of any Borrower Party as conducted and as proposed to be conducted as
of the date hereof or engage in any line of business materially different from
any line of business carried on as of the date hereof.

         7.10 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of any
kind with any Affiliate of Borrower other than arm's-length transactions with
Affiliates that are otherwise permitted hereunder.

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<PAGE>   78

         7.11 CAPITAL EXPENDITURES. Make, or become legally obligated to make,
any capital expenditures, except capital expenditures in any fiscal year of
Borrower in the aggregate not exceeding the sum of (i) $25,000,000 and (ii) the
amount of cash proceeds, net of direct selling expenses, received by from the
sale of any plant, property, equipment or other capital asset during such fiscal
year. Notwithstanding any of the foregoing, neither Borrower, nor any Subsidiary
may approve, incur or commit to incur, any capital expenditures during the
continuance of an Event of Default.

         7.12 LIMITATIONS ON UPSTREAMING. Agree to any restriction or limitation
on the making of Restricted Payments or transferring of assets from any
Subsidiary to Borrower.

         7.13 MARGIN REGULATIONS. No Borrower Party shall use the proceeds of
any Extensions of Credit hereunder for "purchasing" or "carrying" "margin stock"
as so defined or for any purpose which violates, or which would be inconsistent
with, the provisions of Regulations U or X of such Board of Governors.

         7.14 FINANCIAL COVENANTS.

         (a) CURRENT RATIO.

         At the end of any fiscal quarter of Borrower, permit the Consolidated
Current Ratio to be less than 1.75 to 1.00

         (b) CONSOLIDATED TANGIBLE NET WORTH.

         At the end of any fiscal quarter of Borrower, permit the Consolidated
Tangible Net Worth to be less than an amount equal to the greater of (i)
$85,000,000, or (ii) the sum of $85,000,000 plus 50% of Consolidated Net Income
for the period commencing on December 31, 2000 and terminating at the end of the
fiscal quarter most recently ended.

         (c) MODIFIED CASH FLOW COVERAGE.

         Permit Modified Cash Flow Coverage for any four consecutive fiscal
quarters of Borrower to be less than (a) for any such period of four consecutive
fiscal quarters ending during the period from the Effective Date to and
including June 30, 2001, 1.10 and (b) for any such period of four consecutive
fiscal quarters ending after June 30, 2001, 1.25.

         7.15 CHANGE IN AUDITORS. Intentionally deleted.

         7.16 CHANGE IN ACCOUNTING METHOD.

         Intentionally deleted.

         7.17 TAX CONSOLIDATION.

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<PAGE>   79

         File or permit or suffer to be filed any consolidated income tax return
with any Person other than a Subsidiary.

         7.18 CHIEF EXECUTIVE OFFICE; REGISTERED OFFICE; JURISDICTION OF
INCORPORATION.

         Move its chief executive office, registered office or jurisdiction of
incorporation from the location set forth in Section 5.18.

         7.19 LEASING.

         Lease, or permit or suffer to be leased, any portion of the Aircraft
except pursuant to a written lease which shall contain terms expressly
subjecting and subordinating the leasehold interest to the Security Interest and
to the rights of the Agent and the Banks hereunder (a copy of which lease
agreement shall have been furnished to each Bank), or assign or otherwise
transfer to any Person any of its rights under any such lease. Flight service
agreements between Borrower (alone or together with one or more Subsidiaries)
and its customers, pursuant to which a crew, as well as a helicopter, is
furnished, shall not be considered "leases" for purposes of this Section 7.19.

         7.20 HAZARDOUS MATERIALS.

         Cause, permit or allow to exist (a) any Hazardous Materials to be
placed, held, used, located or disposed of on, under or at any of such Person's
property or any part thereof by any Person in a manner which could have a
Material Adverse Effect, (b) any part of any of such Person's property to be
used as a manufacturing, storage or dump site for Hazardous Materials, where
such action could have a Material Adverse Effect, (c) any Lien to be recorded
against any of such Person's property as a consequence of, or in any way related
to, the presence, remediation, or disposal of Hazardous Materials in or about
any of such Person's property, including any so-called state, federal or local
"superfund" Lien relating to such matters, which, together with all other such
Liens, secures obligations which in the aggregate exceed $500,000.

         7.21 IMPAIRMENT OR DISPOSITION OF COLLATERAL.

         Except as expressly permitted by this Agreement, take, suffer or omit
to take any action, or permit Air Evac to take, suffer or omit to take any
action, the taking, suffering or omission of which might result in an impairment
of the Collateral or any portion thereof, or the Security Interest therein.
Without limiting the generality of the foregoing, Borrower agrees that it will
not, and will not permit Air Evac, to Dispose of or create or suffer to exist
any Lien on, all or any portion of the Collateral except as and to the extent
permitted by the express terms of this Agreement.

         7.22 VALUATION OF AIRCRAFT, ETC.

         On or before June 15 in each calendar year, commencing on June 15,
2001, to deliver or cause the following to be delivered to the Agent and each
Bank:

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<PAGE>   80

         (a) with respect to any Aircraft that are less than one year old at
such time, an Officers' Certificate certifying the purchase price thereof, and
having attached thereto a schedule of all the Aircraft showing the Appraised
Value of each Aviation Unit constituting a portion thereof for that year and the
immediately prior year; and

         (b) with respect to any Aircraft that are more than one year old at
such time, a written opinion of the Independent Appraiser, dated as of a date
after April 30 of that year and addressed to the Agent and each Bank, specifying
the "purchase price" (as referred to in and determined in accordance with clause
(ii) of the definition of "Appraised Value" set forth below) of such Aircraft as
of such date. Each such written opinion shall (i) state that the Independent
Appraiser has, on or after April 30 of that year, made such a physical
inspection, if any, of each Aviation Unit covered by said written opinion as he
deems necessary or appropriate for the purposes of such opinion, (ii) and
indicate the following information for each such Aviation Unit: (A) the make and
model, manufacturer's serial number and the United States registration number
thereof, (B) the month and year of purchase thereof by Borrower, (B) the
original purchase price thereof and (C) the "purchase price" thereof referred to
in and determined in accordance with clause (ii) of the definition of "Appraised
Value" set forth herein; and (iii) be otherwise in form and substance
satisfactory to the Agent and each Bank.

In the event that, after receiving any written opinion pursuant to clause (b)
above, any Bank delivers to Borrower and the Agent a written request for a new
written opinion and a written statement of the reasons for its objection to the
annual opinion, Borrower shall cause the Independent Appraiser to deliver to the
Agent, with a copy to each Bank, within 30 days after the receipt by Borrower of
such written request, a new written opinion, dated as of a date within such
30-day period, with respect to the matters referred to in clause (b). If
Borrower has not, within 45 days after the delivery to the Agent and the Banks
of any annual written opinion required pursuant clause (b), received a written
request for a new written opinion pursuant to this paragraph, the Agent and the
Banks shall be deemed to have permitted Borrower to use such written opinion as
the basis for determining the "Appraised Value" of the Aircraft described
therein as of the date thereof for purposes of this Agreement, including,
without limitation, as the basis for complying with its obligations under
Section 2.05(d). If any Bank requests a new written opinion pursuant to this
paragraph, the Agent and the Banks shall be deemed to have permitted Borrower to
use the most recent written opinion delivered by the Independent Appraiser as
the basis for determining the "Appraised Value" of Aircraft for purposes of this
Agreement until the earlier of (i) 30 days after receipt by the Borrower of such
written request and (ii) the date such new written opinion is delivered.

                                   SECTION 8.
                         EVENTS OF DEFAULT AND REMEDIES

         8.01 EVENTS OF DEFAULT. Any one or more of the following events shall
constitute an Event of Default:

         (a) Borrower fails to pay any principal on any Outstanding Obligation
(other than fees) as and on the date when due; or

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<PAGE>   81

         (b) Borrower fails to pay any interest on any Outstanding Obligation,
or any commitment fees due hereunder within three days after the date when due;
or fails to pay any other fees or amount payable to Agent or any Bank under any
Loan Document within five days after the date due; or

         (c) Any default occurs in the observance or performance of any
agreement contained in Section 6.01, 6.02, 6.04, 6.08 or 7; or

         (d) The occurrence of an Event of Default (as such term is or may
hereafter be specifically defined in any other Loan Document) under any other
Loan Document; or any Borrower Party fails to perform or observe any other
covenant or agreement (not specified in subsections (a), (b) or (c) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days; or

         (e) Any representation or warranty in any Loan Document or in any
certificate, agreement, instrument or other document made or delivered by any
Borrower Party pursuant to or in connection with any Loan Document proves to
have been incorrect when made or deemed made; or

         (f) (i) Any Borrower Party (x) defaults in any payment when due of
principal of or interest on any Indebtedness (other than Indebtedness hereunder)
having an aggregate principal amount in excess of $100,000 or (y) defaults in
the observance or performance of any other agreement or condition relating to
any Indebtedness (other than Indebtedness hereunder) or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, Indebtedness having an aggregate principal
amount in excess of $100,000 to be demanded or become due (automatically or
otherwise) prior to its stated maturity, or any Guaranty Obligation in such
amount to become payable or cash collateral in respect thereof to be demanded,
or any Borrower Party is unable or admits in writing its inability to pay its
debts as they mature; or (ii) the occurrence under any Swap Agreement of an
Early Termination Date (as defined in such Swap Agreement) resulting from (x)
any event of default under such Swap Agreement as to which Borrower or any
Subsidiary is the Defaulting Party (as defined in such Swap Agreement) or (y)
the occurrence of any Termination Event under such Swap Agreement (as defined
therein) as to which Borrower or any Subsidiary is an Affected Party (as so
defined) as a result of which, in either event, the Swap Termination Value owed
by Borrower or such Subsidiary is greater than $100,000; or

         (g) Any Loan Document, at any time after its execution and delivery and
for any reason other than the agreement of all Banks or satisfaction in full of
all the Obligations, ceases to be in full force and effect or is declared by a
court of competent jurisdiction to be null and void, invalid or unenforceable in
any respect; or any Borrower Party denies that it has any or further liability
or obligation under any Loan Document, or purports to revoke, terminate or
rescind any Loan Document; or

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<PAGE>   82

         (h) (i) A final judgment against any Borrower Party is entered for the
payment of money in excess of $1,000,000, or any non-monetary final judgment is
entered against any Borrower Party which has a Material Adverse Effect and, in
each case, if such judgment remains unsatisfied without procurement of a stay of
execution within (A) 30 calendar days after the date of entry of judgment or,
(B) if earlier, five days prior to the date of any proposed sale, or (ii) any
writ or warrant of attachment or execution or similar process is issued or
levied against all or any material part of the property of any such Person and
is not released, vacated or fully bonded within 30 calendar days after its issue
or levy; or

         (i) Any Borrower Party or any of its Subsidiaries institutes or
consents to the institution of any proceeding under Debtor Relief Laws, or makes
an assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of that Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under Debtor Relief Laws relating to any such
Person or to all or any part of its property is instituted without the consent
of that Person and continues undismissed or unstayed for 60 calendar days, or an
order for relief is entered in any such proceeding; or

         (j) (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $500,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds the Threshold Amount; or (iii) Borrower or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable grace
period, any installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of the Threshold Amount.

         8.02 REMEDIES UPON EVENT OF DEFAULT. Without limiting any other rights
or remedies of Agent or Banks provided for elsewhere in this Agreement, or the
other Loan Documents, or by applicable Law, or in equity, or otherwise:

         (a) Upon the occurrence, and during the continuance, of any Event of
Default other than an Event of Default described in Section 8.01(i):

                  (i) Requisite Banks may request Agent to, and Agent thereupon
         shall, terminate the Revolving Credit Commitments and/or declare all or
         any part of the unpaid principal of all Loans, all interest accrued and
         unpaid thereon and all other amounts payable under the Loan Documents
         to be immediately due and payable, whereupon the same shall become and
         be immediately due and payable, without protest, presentment, notice of
         dishonor, demand or further notice of any kind, all of which are
         expressly waived by Borrower; and

                  (ii) Issuing Bank may, with the approval of Agent on behalf of
         Requisite Banks, demand immediate payment by Borrower of an amount
         equal to the aggregate

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<PAGE>   83

         amount of all outstanding Letter of Credit Usage to be held in a Letter
         of Credit Cash Collateral Account.

         (b) Upon the occurrence of any Event of Default described in Section
8.01(i):

                  (i) the Revolving Credit Commitments and all other obligations
         of Agent or Banks shall automatically terminate without notice to or
         demand upon Borrower, which are expressly waived by Borrower;

                  (ii) the unpaid principal of all Loans, all interest accrued
         and unpaid thereon and all other amounts payable under the Loan
         Documents shall be immediately due and payable, without protest,
         presentment, notice of dishonor, demand or further notice of any kind,
         all of which are expressly waived by Borrower; and

                  (iii) an amount equal to the aggregate amount of all
         outstanding Letter of Credit Usage shall be immediately due and payable
         to Issuing Bank without notice to or demand upon Borrower, which are
         expressly waived by Borrower, to be held in a Letter of Credit Cash
         Collateral Account.

         (c) Upon the occurrence of any Event of Default, Banks and Agent, or
any of them, without notice to (except as expressly provided for in any Loan
Document) or demand upon Borrower, which are expressly waived by Borrower
(except as to notices expressly provided for in any Loan Document), may proceed
to (but only with the consent of Requisite Banks) protect, exercise and enforce
their rights and remedies under the Loan Documents against any Borrower Party
and such other rights and remedies as are provided by Law or equity.

         (d) Except as permitted by Section 10.05, no Bank may exercise any
rights or remedies with respect to the Obligations without the consent of
Requisite Banks in their sole and absolute discretion. The order and manner in
which Agent's and Banks' rights and remedies are to be exercised shall be
determined by Requisite Banks in their sole and absolute discretion. No
application of payments will cure any Event of Default, or prevent acceleration,
or continued acceleration, of amounts payable under the Loan Documents, or
prevent the exercise, or continued exercise, of rights or remedies of Agent and
Banks hereunder or thereunder or at Law or in equity.

         8.03 APPLICATION OF PROCEEDS OF COLLATERAL.

         (a) All moneys received by the Agent as a result of the enforcement of
the rights and remedies of the Agent or the Creditors pursuant to the Security
Documents and otherwise in respect of the Collateral shall be distributed by the
Agent on the dates fixed by the Agent (individually a "Distribution Date" and
collectively, the "Distribution Dates") as follows:

         FIRST:   to the Agent in payment of the amount of any and all
                  unreimbursed expenses of the Agent, including, without
                  limitation, the fees and disbursements of its counsel and of
                  any agents and experts employed by the Agent, incurred by the
                  Agent prior to the relevant Distribution Date in connection
                  with (w) the administration of this Agreement and the Security

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<PAGE>   84

                  Documents, (x) the custody, preservation, use or operation of,
                  or the sale of, collection from, or other realization upon any
                  assets of Borrower pursuant to the Security Documents (y) the
                  exercise or enforcement of any of the rights of the Agent
                  hereunder or under the Security Documents or (z) the failure
                  by Borrower to perform or observe any of the provisions of
                  this Agreement or any Security Document;

         SECOND:  to the Banks in an amount equal to the sum of the unpaid
                  principal of and interest on the Notes plus the Letter of
                  Credit Usage, and accrued interest thereon, if any, and to the
                  Swap Providers in an amount equal to the obligations of
                  Borrower (calculated, if the Swap Agreement is an ISDA Master
                  Agreement (Multicurrency-Cross Border) ("ISDA Agreement"),
                  pursuant to Section 6(e) thereof, or, if the Swap Agreement is
                  not an ISDA Agreement, pursuant to the provisions of such Swap
                  Agreement substantially similar to Section 6(e) of the ISDA
                  Agreement) under the Swap Agreements and any accrued interest
                  thereon, if any, and, in the event such moneys shall be
                  insufficient to pay in full such amounts, then to the payment
                  thereof ratably to each Creditor in the same proportion which
                  (x) the sum of aggregate unpaid principal of and interest on
                  the Notes held by such Bank plus Letter of Credit Usage and
                  accrued interest thereon (excluding therefrom an amount equal
                  to that portion of such interest calculated at a rate per
                  annum in excess of the rate per annum provided for under
                  Section 2.07(b), such excluded amount being the "Excess
                  Interest"), if any, in respect of Permitted Letters of Credit
                  issued by such Bank or the sum of the obligations of Borrower
                  (calculated as described above) to such Swap Provider under
                  the applicable Swap Agreement and any accrued interest
                  thereon, as the case may be, bears to (y) the sum of the
                  aggregate unpaid principal of and interest on the Notes plus
                  Letter of Credit Usage and accrued interest thereon (excluding
                  therefrom an amount equal to the aggregate Excess Interest),
                  if any, plus an amount equal to the obligations of Borrower
                  (calculated as described above) under the Swap Agreements and
                  any accrued interest thereon, if any, on the relevant
                  Distribution Date (all such prepayments to be applied by each
                  Creditor first to the payment of accrued and unpaid interest,
                  if any, owing by Borrower to such Creditor, then to the
                  payment of principal on the Notes or the obligations of
                  Borrower (calculated as described above) under the Swap
                  Agreements, as the case may be, and finally pursuant to the
                  Letter of Credit Applications); provided, however, in the
                  event any Bank that has issued a Letter of Credit does not for
                  any reason apply its portion of the proceeds of the Collateral
                  as provided herein within 30 days after the expiration date of
                  such Letter of Credit, such Bank shall return all such
                  unapplied proceeds to the Agent for distribution to the Banks
                  for the ratable application to any unpaid obligations held by
                  the Banks in respect of the Notes and any other Letters of
                  Credit;

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<PAGE>   85

         THIRD:   to the Creditors in an amount equal to the sum of unpaid
                  commitment and agent's fees payable under this Agreement plus
                  the fees, if any, due in respect of any Permitted Letters of
                  Credit plus the fees, if any, due in respect of any Swap
                  Agreements (collectively the "Fees"), whether matured or
                  unmatured, and, in the event such moneys shall be insufficient
                  to pay in full such amount, then to the payment thereof
                  ratably to each Creditor in the same proportion which the
                  aggregate amount of Fees due to such Creditor bears to the
                  aggregate unpaid Fees due to all the Creditors on the relevant
                  Distribution Date;

         FOURTH:  to the Banks in an amount equal to the aggregate Excess
                  Interest plus all other amounts due under this Agreement and
                  the Security Documents and to the Swap Providers, in an amount
                  equal to all other amounts, due under the Swap Agreements,
                  this Agreement and the Security Documents (collectively the
                  "Other Amounts"), and in the event such moneys shall be
                  insufficient to pay in full such amount, then to the payment
                  thereof ratably to each Creditor in the same proportion which
                  the aggregate amount of Other Amounts due such Creditor to the
                  aggregate unpaid Other Amounts due to all the Creditors on the
                  relevant Distribution Date; and

         FIFTH:   any surplus then remaining shall be paid to Borrower, or to
                  its successors and assigns, or to whomsoever may be lawfully
                  entitled to receive the same, or as a court of competent
                  jurisdiction may direct.

         (b) The term "unpaid" as used in this Section 8.03 shall mean all
obligations outstanding as of a Distribution Date as to which prior
distributions have not been made, after giving effect to any adjustments which
are made pursuant to Section 10.06 and of which the Agent shall have been
notified.

                                   SECTION 9.
                                      AGENT

         9.01 APPOINTMENT AND AUTHORIZATION OF AGENT.

         (a) Each Bank hereby irrevocably (subject to Section 9.09) appoints,
designates and authorizes Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship
with any Bank or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Agent. Without
limiting the generality of the foregoing sentence, the use of the term "agent"
in this Agreement with reference to Agent is not

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<PAGE>   86

intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties.

         (b) Issuing Bank shall act on behalf of Banks with respect to any
Letters of Credit issued by it and the documents associated therewith until such
time and except for so long as Agent may agree at the request of Requisite Banks
to act for such Issuing Bank with respect thereto; provided, however, that
Issuing Bank shall have all of the benefits and immunities (i) provided to Agent
in this Section 9 with respect to any acts taken or omissions suffered by
Issuing Bank in connection with Letters of Credit issued by it or proposed to be
issued by it and the application and agreements for letters of credit pertaining
to the Letters of Credit as fully as if the term "Agent" as used in this Section
9 included Issuing Bank with respect to such acts or omissions, and (ii) as
additionally provided in this Agreement with respect to Issuing Bank.

         9.02 DELEGATION OF DUTIES. Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct.

         9.03 LIABILITY OF AGENT. No Agent-Related Person shall (i) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (ii) be
responsible in any manner to any Bank or participant for any recital, statement,
representation or warranty made by any Borrower Party or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Borrower Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Bank or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Borrower Party or any Subsidiary or Affiliate thereof.

         9.04 RELIANCE BY AGENT.

         (a) Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, communication, signature, resolution, representation,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to any Borrower Party), independent accountants and other experts
selected by Agent. Agent shall be fully justified in failing or refusing to take
any action under any Loan Document unless it shall

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<PAGE>   87

first receive such advice or concurrence of Requisite Banks as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of Requisite Banks or all Banks, if required hereunder, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of Banks and participants. Where this Agreement expressly permits or
prohibits an action unless Requisite Banks otherwise determine, Agent shall, and
in all other instances, Agent may, but shall not be required to, initiate any
solicitation for the consent or a vote of Banks.

         (b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Bank and participant shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter either sent by Agent to each Bank for consent, approval, acceptance
or satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to a Bank.

         (c) The Agent shall be absolutely entitled to rely on the Officers'
Certificates and certificates of Independent Appraisers and opinions of counsel
referred to in the definition of "Appropriate Actions" and for the veracity of
each of the statements made therein absent actual knowledge to the contrary on
the part of the Agent . The Agent shall not be required to investigate or verify
any statement made in such Officers' Certificates and certificates of
Independent Appraisers and opinions of counsel and any investigation that the
Agent shall elect to undertake shall not affect its ability to rely on such
Officers' Certificates and Certificates of Independent Appraisers and opinions
of counsel.

         9.05 NOTICE OF DEFAULT. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to Agent for the account of Banks, unless Agent shall have received written
notice from a Bank or Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". Agent will notify Banks of its receipt of any such notice. Agent shall
take such action with respect to such Default or Event of Default as may be
directed by Requisite Banks in accordance with Section 8; provided, however,
that unless and until Agent has received any such direction, Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable or
in the best interest of Banks.

         9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY AGENT. Each Bank and
participant acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by Agent hereinafter taken,
including any consent to and acceptance of any assignment or review of the
affairs of any Borrower Party or any of its Subsidiaries or Affiliates, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Bank or participant as to any matter, including whether Agent-Related
Persons have disclosed material information in their possession. Each Bank,
including any Bank by assignment, and each participant represents to Agent that
it has, independently and without reliance upon any

                                       81
<PAGE>   88

Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of any Borrower Party and its Subsidiaries and Affiliates, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to any Borrower Party hereunder. Each Bank and participant also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of any Borrower Party and its
Subsidiaries and Affiliates. Except for notices, reports and other documents
expressly required to be furnished to Banks by Agent herein, Agent shall not
have any duty or responsibility to provide any Bank or participant with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any Borrower
Party or any of its Subsidiaries or Affiliates which may come into the
possession of any Agent-Related Person.

         9.07 INDEMNIFICATION OF AGENT. WHETHER OR NOT THE TRANSACTIONS
CONTEMPLATED HEREBY ARE CONSUMMATED, BANKS SHALL INDEMNIFY UPON DEMAND EACH
AGENT-RELATED PERSON (TO THE EXTENT NOT REIMBURSED BY OR ON BEHALF OF ANY
BORROWER PARTY AND WITHOUT LIMITING THE OBLIGATION OF ANY BORROWER PARTY TO DO
SO), PRO RATA, AND HOLD HARMLESS EACH AGENT-RELATED PERSON FROM AND AGAINST ANY
AND ALL INDEMNIFIED LIABILITIES INCURRED BY IT, EVEN IF SUCH INDEMNIFIED
LIABILITIES ARISE IN WHOLE OR IN PART FROM THE NEGLIGENCE OF ANY AGENT-RELATED
PERSON; PROVIDED, HOWEVER, THAT NO BANK SHALL BE LIABLE FOR THE PAYMENT TO ANY
AGENT-RELATED PERSON OF ANY PORTION OF SUCH INDEMNIFIED LIABILITIES RESULTING
FROM SUCH PERSON'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; PROVIDED, HOWEVER,
THAT NO ACTION TAKEN IN ACCORDANCE WITH THE DIRECTIONS OF REQUISITE BANKS SHALL
BE DEEMED TO CONSTITUTE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT FOR PURPOSES OF
THIS SECTION. WITHOUT LIMITATION OF THE FOREGOING, EACH BANK SHALL REIMBURSE
AGENT UPON DEMAND FOR ITS RATABLE SHARE OF ANY COSTS OR OUT-OF-POCKET EXPENSES
(INCLUDING ATTORNEY COSTS) INCURRED BY AGENT IN CONNECTION WITH THE PREPARATION,
EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT OR ENFORCEMENT
(WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS OR OTHERWISE) OF, OR LEGAL
ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT, ANY OTHER
LOAN DOCUMENT, OR ANY DOCUMENT CONTEMPLATED BY OR REFERRED TO HEREIN, TO THE
EXTENT THAT AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY OR ON BEHALF OF ANY

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<PAGE>   89

BORROWER PARTY. THE UNDERTAKING IN THIS SECTION SHALL SURVIVE THE PAYMENT OF ALL
OBLIGATIONS HEREUNDER AND THE RESIGNATION OR REPLACEMENT OF AGENT.

         9.08 AGENT IN INDIVIDUAL CAPACITY. Bank of America and its Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with any Borrower
Party and its Subsidiaries and Affiliates as though Bank of America were not
Agent or Issuing Bank hereunder and without notice to or consent of Banks. Banks
and participants acknowledge that, pursuant to such activities, Bank of America
or its Affiliates may receive information regarding any Borrower Party or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of any Borrower Party or such Affiliate) and acknowledge
that Agent shall be under no obligation to provide such information to them.
With respect to its Loans, Bank of America shall have the same rights and powers
under this Agreement as any other Bank and may exercise the same as though it
were not Agent or Issuing Bank.

         9.09 SUCCESSOR AGENT. Agent may resign as Agent upon 30 days' notice to
Banks. If Agent resigns under this Agreement, Requisite Banks shall appoint from
among Banks a successor Agent for Banks which successor Agent shall be consented
to by Borrower at all times other than during the existence of an Event of
Default (which approval of Borrower shall not be unreasonably withheld or
delayed). If no successor Agent is appointed prior to the effective date of the
resignation of Agent, Agent may appoint, after consulting with Banks and
Borrower, a successor Agent from among Banks. Upon the acceptance of its
appointment as successor Agent hereunder, such successor Agent shall succeed to
all the rights, powers and duties of the retiring Agent and the term "Agent"
shall mean such successor Agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 9 and Sections 10.03 and
10.13 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement. If no successor Agent has
accepted appointment as Agent by the date which is 30 days following a retiring
Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and Banks shall perform all of the
duties of Agent hereunder until such time, if any, as Requisite Banks appoint a
successor agent as provided for above.

         9.10 RELEASES OF COLLATERAL.

         Each of the Creditors hereby authorizes the Agent to execute and
deliver (and, where appropriate, as determined by the Agent in its sole and
independent discretion, to authorize others to execute and deliver on its
behalf) on behalf of the Creditors, all documents required to effect the release
of any Aviation Unit from the Security Interest in connection with any
Disposition permitted hereby.

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<PAGE>   90

                                   SECTION 10.
                                  MISCELLANEOUS

         10.01 AMENDMENTS; CONSENTS. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by any Borrower Party therefrom shall be effective unless in writing
signed by Requisite Banks and acknowledged by Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. Except as otherwise expressly provided herein, without
the approval in writing of Agent and all Banks, no amendment, modification,
supplement, termination, waiver or consent may be effective to:

         (a) Reduce the amount of principal or required principal payments or
prepayments of any Outstanding Obligations; provided, however, that only the
consent of Requisite Banks shall be required in any instance where Banks have
the right to consent to the release price of any property or Persons being
Disposed of;

         (b) Reduce the rate of interest payable on any Outstanding Obligations
or the amount of any fee or other amount payable to any Bank under the Loan
Documents (unless consented to by each Bank entitled to receive such fee or
other amount), including in each case, any change in the way any financial
covenant used to determine the Applicable Amount is calculated;

         (c) Waive an Event of Default consisting of the failure of Borrower to
pay when due principal, interest or any commitment fee;

         (d) Postpone any date fixed for any payment of principal of, prepayment
of principal of, or any installment of interest on, any Loan or any installment
of any commitment fee, to extend the term of, or increase the amount of, any
Bank's Revolving Credit Commitment or Term Loan Commitment (it being understood
that a waiver of any Event of Default not referred to in subsection (c) above
shall require only the consent of Requisite Banks) or modify the Pro Rata Share
of any Bank;

         (e) Amend the definition of "Requisite Banks" or the provisions of
Section 4, Section 9, this Section 10.01 or Section 10.06; or

         (f) Amend any provision of this Agreement that expressly requires the
consent or approval of all Banks;

provided, however, that (i) no amendment, waiver or consent shall, unless in
writing and signed by Issuing Bank in addition to Requisite Banks or all Banks,
as the case may be, affect the rights or duties of Issuing Bank, (ii) no
amendment, waiver or consent shall, unless in writing and signed by Agent in
addition to Requisite Banks or all Banks, as the case may be, affect the rights
or duties of Agent, and (iii) any fee letters may be amended, or rights or
privileges thereunder waived, in a writing executed by the parties thereto. Any
amendment, modification, supplement, termination, waiver or consent pursuant to
this Section shall apply equally to, and shall be binding upon, all Banks and
Agent.

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<PAGE>   91

         10.02 REQUISITE NOTICE; EFFECTIVENESS OF SIGNATURES AND ELECTRONIC
MAIL.

         (a) REQUISITE NOTICE. Notices given in connection with any Loan
Document shall be delivered to the intended recipient at the number and/or
address set forth on Schedule 10.02 (or as otherwise specified from time to time
by such recipient in writing to Agent) and shall be given by (i) irrevocable
written notice or (ii) except as otherwise provided, irrevocable telephonic (not
voicemail) notice. Such notices may be delivered, must be confirmed and shall be
effective as follows:

<Table>
<Caption>
             MODE OF DELIVERY                  EFFECTIVE ON EARLIER OF ACTUAL RECEIPT, AND:
         -------------------------- -------------------------------------------------------------------

<S>                                 <C>
         Mail                       Fourth Business Day after deposit in U.S. mail, first class
                                    postage pre-paid

         Courier or hand delivery   When signed for by recipient

         Telephone (not voicemail)  When conversation completed (must be confirmed in writing)

         Facsimile                  When confirmed by telephone (not voicemail)

         Electronic Mail            When delivered (usage subject to subsection (c) below)
</Table>

provided, however, that notices delivered to Agent pursuant to Section 2 shall
not be effective until actually received by Agent; provided, further, that Agent
may require that any notice be confirmed or followed by a manually-signed
hardcopy thereof. Notices shall be in any form prescribed herein and, if sent by
a Borrower Party, shall be made by a Responsible Officer of such Borrower Party.
Notices delivered and, if required, confirmed in accordance with this subsection
shall be deemed to have been delivered by Requisite Notice.

         (b) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed hardcopies and shall be binding on all Borrower
Parties, Agent and Banks. Agent may also require that any such documents and
signatures be confirmed by a manually-signed hardcopy thereof; provided,
however, that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.

         (c) LIMITED USAGE OF ELECTRONIC MAIL. Electronic mail and internet and
intranet websites may be used to distribute routine communications, such as
financial statements and other information, and to distribute agreements and
other documents to be signed by Agent, Banks and Borrower Parties. No other
legally-binding and/or time-sensitive communication or Request for Extension of
Credit may be sent by electronic mail without the consent of, or confirmation
to, the intended recipient in each instance.

         (d) RELIANCE BY AGENT AND BANKS. Agent and Banks shall be entitled to
rely and act upon any notices purportedly given by or on behalf of any Borrower
Party even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed

                                       85
<PAGE>   92

by any other notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof. BORROWER SHALL INDEMNIFY
AGENT-RELATED PERSONS AND BANKS FROM ANY LOSS, COST, EXPENSE OR LIABILITY AS A
RESULT OF RELYING ON ANY NOTICES PURPORTEDLY GIVEN BY OR ON BEHALF OF ANY
BORROWER PARTY EVEN IF SUCH LOSS, COST, EXPENSE OR LIABILITY ARISES IN WHOLE OR
IN PART FROM THE NEGLIGENCE OF SUCH AGENT-RELATED PERSONS OR BANKS.

         10.03 ATTORNEY COSTS, EXPENSES AND TAXES. Borrower agrees (a) to pay or
reimburse Agent for all costs and expenses incurred in connection with the
development, preparation, negotiation and execution of the Loan Documents, and
the development, preparation, negotiation and execution of any amendment,
waiver, consent, supplement or modification to, any Loan Documents, and any
other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse Agent and
each Bank for all costs and expenses incurred in connection with any
refinancing, restructuring, reorganization (including a bankruptcy
reorganization) and enforcement or attempted enforcement, or preservation of any
rights under any Loan Documents, and any other documents prepared in connection
herewith or therewith, or in connection with any refinancing, or restructuring
of any such documents in the nature of a "workout" or of any insolvency or
bankruptcy proceeding, including Attorney Costs. The foregoing costs and
expenses shall include all search, filing, recording, title insurance and
appraisal charges and fees and taxes related thereto, and other out-of-pocket
expenses incurred by Agent and the cost of independent public accountants and
other outside experts retained by Agent or any Bank. The agreements in this
Section shall survive repayment of all Obligations.

         10.04 BINDING EFFECT; ASSIGNMENT.

         (a) This Agreement and the other Loan Documents to which Borrower is a
party will be binding upon and inure to the benefit of Borrower, Agent, Banks
and their respective successors and assigns, except that, Borrower may not
assign its rights hereunder or thereunder or any interest herein or therein
without the prior written consent of all Banks and any such attempted assignment
shall be void. Any Bank may at any time pledge its Note or any other instrument
evidencing its rights as a Bank under this Agreement to a Federal Reserve Bank,
but no such pledge shall release such Bank from its obligations hereunder or
grant to such Federal Reserve Bank the rights of a Bank hereunder absent
foreclosure of such pledge.

         (b) From time to time following the Effective Date, each Bank may
assign to one or more Eligible Assignees all or any portion of its Commitment
and/or Extensions of Credit; provided that (i) such assignment, if not to a Bank
or an Affiliate of the assigning Bank, shall be consented to by Borrower at all
times other than during the existence of a Default or Event of Default and by
Agent and Issuing Bank (which approvals of Borrower, Agent and Issuing Bank
shall not be unreasonably withheld or delayed), (ii) a copy of a duly signed and
completed Assignment and Acceptance shall be delivered to Agent, (iii) except in
the case of an assignment (A) to an Affiliate of the assigning Bank or to
another Bank or (B) of the entire remaining Commitment of the assigning Bank,
the portion of the Commitment assigned shall not be less than

                                       86
<PAGE>   93

the Minimum Amount therefor, and (iv) the effective date of any such assignment
shall be as specified in the Assignment and Acceptance, but not earlier than the
date which is five Business Days after the date Agent has received the
Assignment and Acceptance. Upon obtaining any consent required as set forth in
the prior sentence, any forms required by Section 10.21 and payment of the
requisite fee described below, the assignee named therein shall be a Bank for
all purposes of this Agreement to the extent of the Assigned Interest (as
defined in such Assignment and Acceptance), and the assigning Bank shall be
released from any further obligations under this Agreement to the extent of such
Assigned Interest. Upon request, Borrower shall execute and deliver new or
replacement Notes to the assigning Bank and the assignee Bank to evidence Loans
made by them. Agent's consent to any assignment shall not be deemed to
constitute any representation or warranty by any Agent-Related Person as to any
matter. For purposes hereof, each mutual fund that is an Affiliate of a Bank
shall be deemed to be a single Eligible Assignee, whether or not such fund is
managed by the same fund manager as other mutual funds that are Affiliates of
the same Bank.

         (c) After receipt of a completed Assignment and Acceptance, and receipt
of an assignment fee of $3,500 from such Eligible Assignee and/or such assigning
Bank (including in the case of assignments to Affiliates of assigning Banks),
Agent shall, promptly following the effective date thereof, provide to Borrower
and Banks a revised Schedule 10.02 giving effect thereto.

         (d) Each Bank may from time to time, without the consent of any other
Person, grant participations to one or more other Person (including another
Bank) all or any portion of its Pro Rata Share of its Commitment and/or
Extensions of Credit; provided, however, that (i) such Bank's obligations under
this Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other financial institutions shall not be a
Bank hereunder for any purpose except, if the participation agreement so
provides, for the purposes of Section 3 (but only to the extent that the cost of
such benefits to Borrower does not exceed the cost which Borrower would have
incurred in respect of such Bank absent the participation) and subject to
Sections 10.05 and 10.06, (iv) Borrower, Agent and the other Banks shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement, (v) the participation
agreement shall not restrict an increase in the Total Commitments or in the
granting Bank's Commitment or Pro Rata Share, so long as the amount of the
participation interest is not increased, and (vi) the consent of the holder of
such participation interest shall not be required for amendments or waivers of
provisions of the Loan Documents; provided, however, that the assigning Bank
may, in any agreement with a participant, give such participant the right to
consent to any matter which (A) extends the Maturity Date as to such participant
or any other date upon which any payment of money is due to such participant,
(B) reduces the rate of interest owing to such participant, any fee or any other
monetary amount owing to such participant, or (C) reduces the amount of any
installment of principal owing to such participant. Any Bank that sells a
participation to any Person that is a "foreign corporation, partnership or
trust" within the meaning of the Code shall include in its participation
agreement with such Person a covenant by such Person that such Person will
comply with the provisions of Section 10.21 as if such Person were a Bank and
provide that Agent and Borrower shall be third party beneficiaries of such
covenant.

                                       87
<PAGE>   94

         10.05 SET-OFF. In addition to any rights and remedies of Agent and
Banks or any assignee or participant of any Bank or any Affiliate thereof (each,
a "Proceeding Party") provided by law, upon the occurrence and during the
continuance of any Event of Default, each Proceeding Party is authorized at any
time and from time to time, without prior notice to Borrower, any such notice
being waived by Borrower to the fullest extent permitted by law, to proceed
directly, by right of set-off, banker's lien, or otherwise, against any assets
of the Borrower Parties which may be in the hands of such Proceeding Party
(including all general or special, time or demand, provisional or other deposits
and other indebtedness owing by such Proceeding Party to or for the credit or
the account of Borrower) and apply such assets against the Obligations,
irrespective of whether such Proceeding Party shall have made any demand
therefor and although such Obligations may be unmatured. Each Bank agrees
promptly to notify Borrower and Agent after any such set-off and application
made by such Bank; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application.

         10.06 SHARING OF PAYMENTS. Each Bank severally agrees that if it,
through the exercise of any right of setoff, banker's lien or counterclaim
against Borrower or otherwise, receives payment of the Obligations held by it of
a type owed ratably to the various Banks that is ratably more than any other
Bank receives in payment of those Obligations held by such other Bank, then,
subject to applicable Laws: (a) such Bank exercising the right of setoff,
banker's lien or counterclaim or otherwise receiving such payment shall
purchase, and shall be deemed to have simultaneously purchased, from the other
Bank a participation in the Obligations held by the other Bank and shall pay to
the other Bank a purchase price in an amount so that the share of the
Obligations held by each Bank after the exercise of the right of setoff,
banker's lien or counterclaim or receipt of payment shall be in the same
proportion that existed prior to the exercise of the right of setoff, banker's
lien or counterclaim or receipt of payment; and (b) such other adjustments and
purchases of participations shall be made from time to time as shall be
equitable to ensure that all Banks share any payment obtained in respect of the
Obligations ratably in accordance with each Bank's share of the Obligations
immediately prior to, and without taking into account, the payment; provided
that, if all or any portion of a disproportionate payment obtained as a result
of the exercise of the right of setoff, banker's lien, counterclaim or otherwise
is thereafter recovered from the purchasing Bank by Borrower or any Person
claiming through or succeeding to the rights of Borrower, the purchase of a
participation shall be rescinded and the purchase price thereof shall be
restored to the extent of the recovery, but without interest. Each Bank that
purchases a participation in the Obligations pursuant to this Section shall from
and after the purchase have the right to give all notices, requests, demands,
directions and other communications under this Agreement with respect to the
portion of the Obligations purchased to the same extent as though the purchasing
Bank were the original owner of the Obligations purchased. Borrower expressly
consents to the foregoing arrangements and agrees that any Bank holding a
participation in an Obligation so purchased may exercise any and all rights of
setoff, banker's lien or counterclaim with respect to the participation as fully
as if Bank were the original owner of the Obligation purchased.

         10.07 NO WAIVER; CUMULATIVE REMEDIES.

         (a) No failure by any Bank or Agent to exercise, and no delay by any
Bank or Agent in exercising, any right, remedy, power or privilege hereunder,
shall operate as a waiver thereof;

                                       88
<PAGE>   95

nor shall any single or partial exercise of any right, remedy, power or
privilege under any Loan Document preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or privilege.

         (b) The rights, remedies, powers and privileges herein or therein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by Law. Any decision by Agent or any Bank not to require
payment of any interest (including Default Interest), fee, cost or other amount
payable under any Loan Document or to calculate any amount payable by a
particular method on any occasion shall in no way limit or be deemed a waiver of
Agent's or such Bank's right to require full payment thereof, or to calculate an
amount payable by another method that is not inconsistent with this Agreement,
on any other or subsequent occasion.

         (c) Except with respect to Section 9.09, the terms and conditions of
Section 9 are for the sole benefit of Agent and Banks.

         10.08 USURY. Notwithstanding anything to the contrary contained in any
Loan Document, the interest paid or agreed to be paid under the Loan Documents
shall not exceed the maximum rate of non-usurious interest permitted by
applicable Law (the "Maximum Rate"). If Agent or any Bank shall receive interest
in an amount that exceeds the Maximum Rate, the excessive interest shall be
applied to the principal of the Outstanding Obligations or, if it exceeds the
unpaid principal, refunded to Borrower. In determining whether the interest
contracted for, charged, or received by Agent or a Bank exceeds the Maximum
Rate, such Person may, to the extent permitted by applicable Law, (a)
characterize any payment that is not principal as an expense, fee, or premium
rather than interest, (b) exclude voluntary prepayments and the effects thereof,
and (c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the Obligations.

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

         10.10 INTEGRATION. This Agreement, together with the other Loan
Documents and any letter agreements referred to herein, comprises the complete
and integrated agreement of the parties on the subject matter hereof and
supersedes all prior agreements, written or oral, on the subject matter hereof.
In the event of any conflict between the provisions of this Agreement and those
of any other Loan Document, the provisions of this Agreement shall control and
govern; provided that the inclusion of supplemental rights or remedies in favor
of Agent or Banks in any other Loan Document shall not be deemed a conflict with
this Agreement. Each Loan Document was drafted with the joint participation of
the respective parties thereto and shall be construed neither against nor in
favor of any party, but rather in accordance with the fair meaning thereof.

         10.11 NATURE OF BANKS' OBLIGATIONS. Nothing contained in this Agreement
or any other Loan Document and no action taken by Agent or Banks or any of them
pursuant hereto or thereto may, or may be deemed to, make Banks a partnership,
an association, a joint venture or other entity, either among themselves or with
Borrower or any Affiliate of Borrower. Each Bank's obligation to make any
Extension of Credit pursuant hereto is several and not joint or joint and

                                       89
<PAGE>   96

several. A default by any Bank will not increase the Pro Rata Share attributable
to any other Bank.

         10.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any other Loan Document, certificate or
statement delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery thereof, and will bind and
inure to the benefit of the respective successors and assigns of the Agent and
each Bank, whether so expressed or not. Such representations and warranties have
been or will be relied upon by Agent, each Bank and their respective successors
and assigns, notwithstanding any investigation made by Agent or any Bank or on
their behalf.

         10.13 INDEMNITY BY BORROWER. WHETHER OR NOT THE TRANSACTIONS
CONTEMPLATED HEREBY ARE CONSUMMATED, BORROWER AGREES TO INDEMNIFY, SAVE AND HOLD
HARMLESS EACH AGENT-RELATED PERSON AND EACH BANK AND THEIR RESPECTIVE
AFFILIATES, DIRECTORS, OFFICERS, AGENTS, ATTORNEYS AND EMPLOYEES (COLLECTIVELY
THE "INDEMNITEES") FROM AND AGAINST: (a) ANY AND ALL CLAIMS, DEMANDS, ACTIONS OR
CAUSES OF ACTION THAT ARE ASSERTED AGAINST ANY INDEMNITEE BY ANY PERSON (OTHER
THAN AGENT OR ANY BANK) RELATING DIRECTLY OR INDIRECTLY TO A CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION THAT SUCH PERSON ASSERTS OR MAY ASSERT AGAINST ANY
BORROWER PARTY, ANY OF THEIR AFFILIATES OR ANY OF THEIR OFFICERS OR DIRECTORS;
(b) ANY AND ALL CLAIMS, DEMANDS, ACTIONS OR CAUSES OF ACTION ARISING OUT OF OR
RELATING TO, THE LOAN DOCUMENTS, ANY PREDECESSOR LOAN DOCUMENTS, THE
COMMITMENTS, THE USE OR CONTEMPLATED USE OF THE PROCEEDS OF ANY LOAN, OR THE
RELATIONSHIP OF ANY BORROWER PARTY, AGENT AND BANKS UNDER THIS AGREEMENT; (c)
ANY ADMINISTRATIVE OR INVESTIGATIVE PROCEEDING BY ANY GOVERNMENTAL AUTHORITY
ARISING OUT OF OR RELATED TO A CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
DESCRIBED IN SUBSECTION (a) OR (b) ABOVE; AND (d) ANY AND ALL LIABILITIES
(INCLUDING LIABILITIES UNDER INDEMNITIES), LOSSES, COSTS OR EXPENSES (INCLUDING
ATTORNEY COSTS) THAT ANY INDEMNITEE SUFFERS OR INCURS AS A RESULT OF THE
ASSERTION OF ANY FOREGOING CLAIM, DEMAND, ACTION, CAUSE OF ACTION OR PROCEEDING,
OR AS A RESULT OF THE PREPARATION OF ANY DEFENSE IN CONNECTION WITH ANY
FOREGOING CLAIM, DEMAND, ACTION, CAUSE OF ACTION OR PROCEEDING, IN ALL CASES,
WHETHER OR NOT ARISING OUT OF THE NEGLIGENCE OF AN INDEMNITEE, WHETHER OR NOT AN
INDEMNITEE IS A PARTY TO SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION OR
PROCEEDING (ALL THE FOREGOING, COLLECTIVELY, THE "INDEMNIFIED LIABILITIES");
PROVIDED THAT NO INDEMNITEE SHALL BE ENTITLED TO INDEMNIFICATION FOR ANY LOSS
CAUSED BY ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR FOR ANY LOSS
ASSERTED AGAINST IT BY ANOTHER INDEMNITEE.

                                       90
<PAGE>   97

THE AGREEMENTS IN THIS SECTION SHALL SURVIVE REPAYMENT OF ALL OBLIGATIONS.

         10.14 NONLIABILITY OF BANKS. Borrower acknowledges and agrees that:

         (a) Any inspections of any property of Borrower made by or through
Agent or Banks are for purposes of administration of the Loan Documents only,
and Borrower is not entitled to rely upon the same (whether or not such
inspections are at the expense of Borrower);

         (b) By accepting or approving anything required to be observed,
performed, fulfilled or given to Agent or Banks pursuant to the Loan Documents,
neither Agent nor Banks shall be deemed to have warranted or represented the
sufficiency, legality, effectiveness or legal effect of the same, or of any
term, provision or condition thereof, and such acceptance or approval thereof
shall not constitute a warranty or representation to anyone with respect thereto
by Agent or Banks;

         (c) The relationship between Borrower and Agent and Banks is, and shall
at all times remain, solely that of borrower and lenders; neither Agent nor any
Bank shall under any circumstance be deemed to be in a relationship of
confidence or trust or a fiduciary relationship with Borrower or its Affiliates,
or to owe any fiduciary duty to Borrower or its Affiliates; neither Agent nor
any Bank undertakes or assumes any responsibility or duty to Borrower or its
Affiliates to select, review, inspect, supervise, pass judgment upon or inform
Borrower or its Affiliates of any matter in connection with their property or
the operations of Borrower or its Affiliates; Borrower and its Affiliates shall
rely entirely upon their own judgment with respect to such matters; and any
review, inspection, supervision, exercise of judgment or supply of information
undertaken or assumed by Agent or any Bank in connection with such matters is
solely for the protection of Agent and Banks and neither Borrower nor any other
Person is entitled to rely thereon; and

         (d) NEITHER AGENT NOR ANY BANK SHALL BE RESPONSIBLE OR LIABLE TO ANY
PERSON FOR ANY LOSS, DAMAGE, LIABILITY OR CLAIM OF ANY KIND RELATING TO INJURY
OR DEATH TO PERSONS OR DAMAGE TO PROPERTY CAUSED BY THE ACTIONS, INACTION OR
NEGLIGENCE OF BORROWER AND/OR ITS AFFILIATES AND BORROWER HEREBY AGREES TO
INDEMNIFY AND HOLD AGENT AND BANKS HARMLESS FROM ANY SUCH LOSS, DAMAGE,
LIABILITY OR CLAIM EVEN IF SUCH LOSS, DAMAGE, LIABILITY OR CLAIM ARISES IN WHOLE
OR IN PART FROM THE NEGLIGENCE OF SUCH AGENT-RELATED PERSONS OR BANKS.

                                       91
<PAGE>   98

         10.15 NO THIRD PARTIES BENEFITED. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrower, Agent and Banks in connection with the Extensions of Credit, and is
made for the sole benefit of Borrower, Agent and Banks, and Agent's and Banks'
successors and assigns. Except as provided in Sections 10.04 and 10.13, no other
Person shall have any rights of any nature hereunder or by reason hereof.

         10.16 SEVERABILITY. Any provision of the Loan Documents that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions thereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         10.17 CONFIDENTIALITY. Agent, each Bank and each participant shall use
any confidential non-public information concerning the Borrower Parties and
their Subsidiaries that is furnished to Agent or such Bank by or on behalf of
the Borrower Parties and their Subsidiaries in connection with the Loan
Documents (collectively, "Confidential Information") solely for the purpose of
evaluating and providing products and services to them and administering and
enforcing the Loan Documents, and it will hold the Confidential Information in
confidence. Notwithstanding the foregoing, Agent and each Bank may disclose
Confidential Information (a) to their affiliates or any of their or their
affiliates' directors, officers, employees, auditors, counsel, advisors, or
representatives (collectively, the "Representatives") whom it determines need to
know such information for the purposes set forth in this Section; (b) to any
bank or financial institution or other entity to which such Bank has assigned or
desires to assign an interest or participation in the Loan Documents or the
Obligations, provided that any such foregoing recipient of such Confidential
Information agrees to keep such Confidential Information confidential as
specified herein; (c) to any governmental agency or regulatory body having or
claiming to have authority to regulate or oversee any aspect of Agent's or such
Bank's business or that of their Representatives in connection with the exercise
of such authority or claimed authority; (d) to the extent necessary or
appropriate to effect or preserve Agent's or such Bank's or any of their
Affiliates' security (if any) for any Obligation or to enforce any right or
remedy or in connection with any claims asserted by or against Agent or such
Bank or any of their Representatives; and (e) pursuant to any subpoena or any
similar legal process. For purposes hereof, the term "Confidential Information"
shall not include information that (x) is in Agent's or a Bank's possession
prior to its being provided by or on behalf of the Borrower Parties, provided
that such information is not known by Agent or such Bank to be subject to
another confidentiality agreement with, or other legal or contractual obligation
of confidentiality to, a Borrower Party, (y) is or becomes publicly available
(other than through a breach hereof by Agent or such Bank), or (z) becomes
available to Agent or such Bank on a nonconfidential basis, provided that the
source of such information was not known by Agent or such Bank to be bound by a
confidentiality agreement or other legal or contractual obligation of
confidentiality with respect to such information.

         10.18 FURTHER ASSURANCES. Each Borrower Party shall, and shall cause
its Subsidiaries to, at their expense and without expense to Banks or Agent, do,
execute and deliver such further acts and documents as any Bank or Agent from
time to time reasonably requires for the assuring and confirming unto Banks or
Agent of the rights hereby created or intended now or hereafter so

                                       92
<PAGE>   99

to be, or for carrying out the intention or facilitating the performance of the
terms of any Loan Document.

         10.19 HEADINGS. Section headings in this Agreement and the other Loan
Documents are included for convenience of reference only and are not part of
this Agreement or the other Loan Documents for any other purpose.

         10.20 TIME OF THE ESSENCE. Time is of the essence of the Loan
Documents.

         10.21 FOREIGN BANKS. Each Bank that is a "foreign corporation,
partnership or trust" within the meaning of the Code shall deliver to Agent,
prior to receipt of any payment subject to withholding under the Code (or after
accepting an assignment of an interest herein), two duly signed completed copies
of either IRS Form W-8BEN or any successor thereto (relating to such Person and
entitling it to an exemption from, or reduction of, withholding tax on all
payments to be made to such Person by Borrower pursuant to this Agreement) or
IRS Form W-8ECI or any successor thereto (relating to all payments to be made to
such Person by Borrower pursuant to this Agreement) or such other evidence
satisfactory to Borrower and Agent that such Person is entitled to an exemption
from, or reduction of, U.S. withholding tax. Thereafter and from time to time,
each such Person shall (a) promptly submit to Agent such additional duly
completed and signed copies of one of such forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to Borrower and Agent
of any available exemption from or reduction of, United States withholding taxes
in respect of all payments to be made to such Person by Borrower pursuant to
this Agreement, (b) promptly notify Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and (c) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Bank, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Laws that Borrower make any deduction or withholding for taxes from amounts
payable to such Person. If such Person fails to deliver the above forms or other
documentation, then Agent may withhold from any interest payment to such Person
an amount equivalent to the applicable withholding tax imposed by Sections 1441
and 1442 of the Code, without reduction. IF ANY GOVERNMENTAL AUTHORITY ASSERTS
THAT AGENT DID NOT PROPERLY WITHHOLD ANY TAX OR OTHER AMOUNT FROM PAYMENTS MADE
IN RESPECT OF SUCH PERSON, SUCH PERSON SHALL INDEMNIFY AGENT THEREFOR, INCLUDING
ALL PENALTIES AND INTEREST, ANY TAXES IMPOSED BY ANY JURISDICTION ON THE AMOUNTS
PAYABLE TO THE AGENT UNDER THIS SECTION, AND COSTS AND EXPENSES (INCLUDING
ATTORNEY COSTS) OF AGENT. THE OBLIGATION OF BANKS UNDER THIS SECTION SHALL
SURVIVE THE PAYMENT OF ALL OBLIGATIONS AND THE RESIGNATION OR REPLACEMENT OF
AGENT.

         10.22 GOVERNING LAW.

         (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF TEXAS APPLICABLE TO

                                       93
<PAGE>   100

AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT
AGENT AND EACH BANK SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. Without
limitation of the foregoing, nothing in this Agreement or in the Notes shall be
deemed to constitute a waiver of any rights which any Bank may have under
applicable federal legislation relating to the rate of interest which such Bank
may contract for, take, reserve, receive or charge in respect of any borrowing.
Chapter 346 of the Texas Finance Code, as amended (relating to revolving loan
and revolving triparty accounts), shall not apply to this Agreement or the Notes
hereunder or the transactions contemplated hereby.

         (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS
SITTING IN DALLAS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF SUCH
STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH BORROWER PARTY,
AGENT AND EACH BANK CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH BORROWER PARTY, AGENT AND EACH
BANK IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. EACH BORROWER
PARTY, AGENT AND EACH BANK WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.

         10.23 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

         10.24 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE

                                       94
<PAGE>   101

PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

                                       95
<PAGE>   102

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                      PETROLEUM HELICOPTERS, INC.

                      By:
                           ---------------------------------------------------
                      Name:
                             -------------------------------------------------
                      Title:
                            --------------------------------------------------

                      BANK OF AMERICA, N.A., as Agent

                      By:
                           ---------------------------------------------------
                      Name:
                             -------------------------------------------------
                      Title:
                            --------------------------------------------------

                      BANK OF AMERICA, N.A., as a Bank, and Issuing Bank

                      By:
                           ---------------------------------------------------
                      Name:
                             -------------------------------------------------
                      Title:
                            --------------------------------------------------

                      WHITNEY NATIONAL BANK, as a Bank

                      By:
                           ---------------------------------------------------
                      Name:
                             -------------------------------------------------
                      Title:
                            --------------------------------------------------

                      BANK ONE, NA, as a Bank

                      By:
                           ---------------------------------------------------
                      Name:
                             -------------------------------------------------
                      Title:
                            --------------------------------------------------

                                      S-1
<PAGE>   103

                                   EXHIBIT A-1

                                    TERM NOTE

                                [To be attached]

<PAGE>   104

                                   EXHIBIT A-2

                              REVOLVING CREDIT NOTE

                                [To be attached]

<PAGE>   105

                                    EXHIBIT B

                         REQUEST FOR EXTENSION OF CREDIT

                                [To be attached]

<PAGE>   106

                                    EXHIBIT C

                           BORROWER SECURITY AGREEMENT

                                [To be attached]

<PAGE>   107

                                    EXHIBIT D

                           AIR EVAC SECURITY AGREEMENT

                                [To be attached]

<PAGE>   108

                                    EXHIBIT E

                               GUARANTY AGREEMENT

                                [To be attached]

<PAGE>   109

                                   EXHIBIT F-1

                      OPINION OF COUNSEL (BORROWER PARTIES)

                                [To be attached]

<PAGE>   110

                                   EXHIBIT F-2

                            OPINION OF COUNSEL (FAA)

                                [To be attached]

<PAGE>   111

                                    EXHIBIT G

                           BORROWING BASE CERTIFICATE

                                [To be attached]

<PAGE>   112

                                    EXHIBIT H

                             COMPLIANCE CERTIFICATE

                                [To be attached]

<PAGE>   113

                                  SCHEDULE 2.01

                         COMMITMENTS AND PRO-RATA SHARES

<Table>
<Caption>
              BANK                             TERM                   REVOLVING CREDIT LOAN             PRO RATA SHARE
                                            COMMITMENT                     COMMITMENT
---------------------------------- ------------------------------ ------------------------------ -----------------------------

<S>                                <C>                            <C>                            <C>
Bank of America, N.A.                      $9,562,500.00                 $16,875,000.00                 37.500000000%

Whitney National Bank                      $9,562,500.00                 $16,875,000.00                 37.500000000%

Bank One, NA                               $6,375,000.00                 $11,250,000.00                 25.000000000%

Total                                      25,500,000.00                 $45,000,000.00                100.000000000%
</Table>

<PAGE>   114

                                  SCHEDULE 5.17

                           AVIATION UNITS AND ENGINES

                                [To be attached]

<PAGE>   115

                                  SCHEDULE 5.19

                                LOCATION OF PARTS

                                [To be attached]

<PAGE>   116

                                  SCHEDULE 5.22

                                  SUBSIDIARIES

                                [To be attached]

<PAGE>   117

                                  SCHEDULE 7.02

                                 EXISTING LIENS

                                [To be attached]

<PAGE>   118

                                  SCHEDULE 7.05

                                   INVESTMENTS

                                [To be attached]

<PAGE>   119

                                 SCHEDULE 10.02

          OFFSHORE AND DOMESTIC LENDING OFFICES, ADDRESSES FOR NOTICES

PETROLEUM HELICOPTERS, INC.

113 Borman Drive
Municipal Airport
Lafayette, LA 70508
Attn:    Michael McCann
         Telephone:  (337) 272-4427
         Facsimile:  (337) 235-1357
         Electronic mail:  mmccann@phihelico.com

BANK OF AMERICA, N.A.

Agent's Office and Bank of America's Lending Office (for payments and Requests
for Extensions of Credit):

Bank of America, N.A.
901 Main Street
Dallas, TX 75202-3714
Attention:        Renita Cummings
                  Telephone:        (214) 209-1233
                  Facsimile:        (214) 290-8371
                  Electronic Mail:  renita.cummings@bankofamerica.com
                  Account No.:      1292000882
                  Ref:              Petroleum Helicopters
                  ABA#              111000012
                  Attention:        Corporate Loan Funds

with copy to:

Bank of America, N.A.
333 Clay Street, Suite 4550
Houston, TX 77002

Attention:        Pamela K. Rodgers
                  Telephone:        (713) 651-4880
                  Facsimile:        (713) 651-4904
                  Electronic Mail:  pamela.rodgers@bankofamerica.com

<PAGE>   120

Issuing Bank:

Bank of America, N.A.
Trade Operations-Los Angeles #22621
333 S. Beaudry Avenue, 19th Floor
Mail Code:  CA9-703-19-23
Los Angeles, CA 90017-1466
Attention:        Bolivar Carrillo
                  Vice President
                  Telephone:  213.345.0084
                  Facsimile:  213.345.6694
                  Electronic Mail:  bolivar.carrillo@bankofamerica.com

with copy to:

Bank of America, N.A.
333 Clay Street, Suite 4550
Houston, TX 77002

Attention:        Pamela K. Rodgers
                  Telephone:        (713) 651-4880
                  Facsimile:        (713) 651-4904
                  Electronic Mail:  pamela.rodgers@bankofamerica.com

Other Notices as Agent:

Bank of America, N.A.
333 Clay Street, Suite 4550
Houston, TX 77002

Attention:        Paul Squires
                  Managing Director
                  Telephone:        (713) 651-4812
                  Facsimile:        (713) 651-4880

with copy to:

Bank of America, N.A.
333 Clay Street, Suite 4550
Houston, TX 77002

Attention:        Pamela K. Rodgers
Telephone:        (713) 651-4880
Facsimile:        (713) 651-4904
Electronic Mail:  pamela.rodgers@bankofamerica.com

<PAGE>   121

WHITNEY NATIONAL BANK

Requests for Extensions of Credit:

228 St. Charles Avenue
New Orleans, LA  70130
Attn:    Mr. Harry Stahel
         Senior Vice President
         Telephone:        (504) 586-7206
         Facsimile:        (504) 586-3409
         Electronic Mail:  hstahel@whitneybank.com
         Ref:              Petroleum Helicopters
         ABA#              065000171
         Attention:        Commercial Loan Department

BANK ONE, NA

DOMESTIC LENDING OFFICE:
Institution Name: Bank One, NA
Street Address:   1717 Main - 4th Floor, TX1-2454
City/State/Zip:            Dallas, TX 75201

EURODOLLAR LENDING OFFICE:
Institution Name: Bank One, NA
Street Address:   1717 Main Street - 4th Floor, TX1-2454
City/State/Zip:            Dallas, TX 75201

ADMINISTRATIVE CONTACTS - BORROWINGS, PAYMENTS, INTERESTS, ETC.
Name:                      Dorothy Moravek
Street Address:   1717 Main
                           4th Floor, TX1-2454
City/State/Zip:            Dallas, TX 75201
Phone No.:                 (214) 290-3442
Fax No.:          (214) 290-2930

REMITTANCE INSTRUCTIONS:
Name of Bank where funds are to be transferred:
                           Bank One, NA
ABA Transit Number:        111000614
Name of Account:           LSII (Large Corporate Loan Services) Incoming
                           Clearing A/C
Account Number:            2453265212
                           Attn:  Dorothy Morovek
                           Re:  Petroleum Helicopters, Inc.

<PAGE>   122

CREDIT CONTACTS (FINANCIALS, COVENANT COMPLIANCE, ETC.):
Name:             Dianne Russell
Street Address:   Bank One Center
                  910 Travis, 6th Floor
City/State/Zip:   Houston, TX 77002
Fax No.:          (713) 751-3982
Telephone:        (713) 751-3679

<PAGE>   123

                                   EXHIBIT A-1

                                FORM OF TERM NOTE

                           PETROLEUM HELICOPTERS, INC.

                                    Term Note

$                                                                 July ___, 2001
 --------------

                  FOR VALUE RECEIVED, the undersigned, Petroleum Helicopters,
Inc., a Louisiana corporation ("Borrower")(successor by merger to Petroleum
Helicopters, Inc., a Delaware corporation), hereby promises to pay to the order
of __________________________________________________________________ ("Bank"),
on the Term Loan Maturity Date (as defined in, and from time to time extended in
accordance with, the Agreement referred to below) the principal amount of
_______________________________________________________Dollars ($____________),
or such lesser principal amount thereof as remains unpaid on such date under
that certain Second Amended and Restated Loan Agreement dated as of July ___,
2001, among Borrower, the Banks from time to time party thereto, and Bank of
America, N.A., as Agent and Issuing Bank (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined).

                  Borrower promises to pay interest on the unpaid principal
amount of the Term Loan from the date hereof until such principal amount is paid
in full, at such interest rates, and payable at such times as are specified in
the Agreement. All payments of principal and interest shall be made to Agent for
the account of Bank in United States dollars in immediately available funds at
Agent's Office. If any amount is not paid in full when due hereunder, such
unpaid amount shall bear interest, to be paid upon demand, from the due date
thereof until the date of actual payment (and before as well as after judgment)
computed at the per annum rate set forth in the Agreement.

                  This Term Note is one of the "Notes" referred to in the
Agreement and is secured by and entitled to the benefits of the Security
Documents. Reference is hereby made to the Agreement for rights and obligations
of payment and prepayment, events of default and the right of Bank to accelerate
the maturity hereof upon the occurrence of such events. The Term Loan made by
Bank shall be evidenced by one or more loan accounts or records maintained by
Bank in the ordinary course of business. Bank may also attach schedules to this
Term Note and endorse thereon the date, amount and maturity of its Term Loan and
payments with respect thereto.

                  This Term Note does not effect a novation but is given, to the
fullest extent applicable, in modification, renewal, extension, rearrangement
and replacement of the aggregate principal amount outstanding under that certain
Term Note dated March 31, 1997, in the

                                     A-1-1
<PAGE>   124

principal face amount of $_____________, executed by the Borrower, payable to
the order of the Bank (the "1997 Note") pursuant to that certain Amended and
Restated Loan Agreement among the Borrower, Whitney National Bank, First
National Bank of Commerce, NationsBank of Texas, N.A., and NationsBank of Texas,
N.A., as Agent (the "1997 Loan Agreement"), which 1997 Note and 1997 Loan
Agreement modified, renewed, extended, rearranged and replaced certain
indebtedness outstanding pursuant to that certain Loan Agreement originally
dated as of January 31, 1986 among the Borrower, Texas Commerce Bank National
Association, Hibernia National Bank of New Orleans and RepublicBank Houston,
N.A. (as amended and restated in its entirety as of August 1, 1988, as further
amended and restated in its entirety as of December 28, 1990, as further amended
and restated in its entirety as of July 9, 1993, as further amended and restated
in its entirety as of August 13, 1996, and as most recently amended and restated
by the 1997 Loan Agreement, the "Original Loan Agreement") and of which Original
Loan Agreement the Agreement is an amendment and restatement in its entirety.
All liens and security interests securing the Original Loan Agreement
(including, without limitation, all liens and security interests securing the
1997 Loan Agreement) are hereby collectively renewed, extended, rearranged,
ratified and brought forward as security for the payment and performance of this
note. The Borrower hereby agrees that this modification, renewal, extension,
rearrangement, and replacement shall in no manner affect, release, cancel,
terminate, extinguish or otherwise impair the liens and security interests
securing the Original Loan Agreement (including, without limitation, all liens
and security interests securing the 1997 Loan Agreement) and that said liens and
security interests shall not in any manner be waived.

                  Borrower agrees to pay all collection expenses, court costs
and Attorney Costs (whether or not litigation is commenced) which may be
incurred by Bank in connection with the collection or enforcement of this Term
Note.

                  THE BORROWER, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, AND
ANY AND ALL ENDORSERS, GUARANTORS AND SURETIES SEVERALLY WAIVE GRACE, DEMAND,
PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, DISHONOR OR DEFAULT, PROTEST,
NOTICE OF INTENT TO ACCELERATE, NOTICE OF ACCELERATION, NOTICE OF PROTEST AND
DILIGENCE IN COLLECTING AND BRINGING OF SUIT AGAINST ANY PARTY HERETO AND ANY
OTHER NOTICES OR OTHER ACTION, AND AGREE TO ALL MODIFICATIONS, RENEWALS,
EXTENSIONS OR PARTIAL PAYMENTS HEREON, IN WHOLE OR IN PART, WITH OR WITHOUT
NOTICE, BEFORE OR AFTER MATURITY.

                  THIS NOTE SHALL BE INTERPRETED AND GOVERNED BY, AND THE
RIGHTS, OBLIGATIONS AND LIABILITIES OF THE PARTIES HERETO SHALL BE DETERMINED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.

                                     A-1-2
<PAGE>   125

                  IN WITNESS WHEREOF, the undersigned has duly executed this
Term Note as of the date first written above.

                                        PETROLEUM HELICOPTERS, INC.

                                        By:
                                           ------------------------------------
                                        Name:
                                        Title:

                                     A-1-3
<PAGE>   126
                                   EXHIBIT A-2

                          FORM OF REVOLVING CREDIT NOTE

                           PETROLEUM HELICOPTERS, INC.

                              Revolving Credit Note

$                                                                 July ___, 2001
 -----------------------

                  FOR VALUE RECEIVED, the undersigned, Petroleum Helicopters,
Inc., a Louisiana corporation ("Borrower")(successor by merger to Petroleum
Helicopters, Inc., a Delaware corporation), hereby promises to pay to the order
of _____________________________ ("Bank"), on the Revolving Loan Maturity Date
(as defined in, and from time to time extended in accordance with, the Loan
Agreement referred to below) the principal amount of
_____________________Dollars ($____________), or such lesser principal amount of
Loans (as defined in the Loan Agreement referred to below) payable by Borrower
to Bank on such Revolving Loan Maturity Date under that certain Second Amended
and Restated Loan Agreement dated as of July ___, 2001, among Borrower, the
Banks from time to time party thereto Bank of America, N.A., as Agent and
Issuing Bank (as amended, restated, extended, supplemented or otherwise modified
in writing from time to time, the "Agreement;" the terms defined therein being
used herein as therein defined).

                  Borrower promises to pay interest on the unpaid principal
amount of each Revolving Credit Loan from the date of such Revolving Credit Loan
until such principal amount is paid in full, at such interest rates, and payable
at such times as are specified in the Agreement. All payments of principal and
interest shall be made to Agent for the account of Bank in United States dollars
in immediately available funds at Agent's Office. If any amount is not paid in
full when due hereunder, such unpaid amount shall bear interest, to be paid upon
demand, from the due date thereof until the date of actual payment (and before
as well as after judgment) computed at the per annum rate set forth in the
Agreement.

                  This Revolving Credit Note is one of the "Notes" referred to
in the Agreement and is secured by and entitled to the benefits of the Security
Documents. Reference is hereby made to the Agreement for rights and obligations
of payment and prepayment, events of default and the right of Bank to accelerate
the maturity hereof upon the occurrence of such events. Revolving Credit Loans
made by Bank shall be evidenced by one or more loan accounts or records
maintained by Bank in the ordinary course of business. Bank may also attach
schedules to this Revolving Credit Note and endorse thereon the date, amount and
maturity of its Revolving Credit Loans and payments with respect thereto.

                  This Revolving Credit Note does not effect a novation but is
given, to the fullest extent applicable, in modification, renewal, extension,
rearrangement and replacement of the aggregate principal amount outstanding
under that certain Revolving Credit Note dated March

                                     A-2-1
<PAGE>   127

31, 1997, in the principal face amount of $_____________, executed by the
Borrower, payable to the order of the Bank (the "1997 Note") pursuant to that
certain Amended and Restated Loan Agreement among the Borrower, Whitney National
Bank, First National Bank of Commerce, NationsBank of Texas, N.A., and
NationsBank of Texas, N.A., as Agent (the "1997 Loan Agreement"), which 1997
Note and 1997 Loan Agreement modified, renewed, extended, rearranged and
replaced certain indebtedness outstanding pursuant to that certain Loan
Agreement originally dated as of January 31, 1986 among the Borrower, Texas
Commerce Bank National Association, Hibernia National Bank of New Orleans and
RepublicBank Houston, N.A. (as amended and restated in its entirety as of August
1, 1988, as further amended and restated in its entirety as of December 28,
1990, as further amended and restated in its entirety as of July 9, 1993, as
further amended and restated in its entirety as of August 13, 1996, and as most
recently amended and restated by the 1997 Loan Agreement, the "Original Loan
Agreement") and of which Original Loan Agreement the Agreement is an amendment
and restatement in its entirety. All liens and security interests securing the
Original Loan Agreement (including, without limitation, all liens and security
interests securing the 1997 Loan Agreement) are hereby collectively renewed,
extended, rearranged, ratified and brought forward as security for the payment
and performance of this note. The Borrower hereby agrees that this modification,
renewal, extension, rearrangement, and replacement shall in no manner affect,
release, cancel, terminate, extinguish or otherwise impair the liens and
security interests securing the Original Loan Agreement (including, without
limitation, all liens and security interests securing the 1997 Loan Agreement)
and that said liens and security interests shall not in any manner be waived.

                  Borrower agrees to pay all collection expenses, court costs
and Attorney Costs (whether or not litigation is commenced) which may be
incurred by Bank in connection with the collection or enforcement of this
Revolving Credit Note.

                  THE BORROWER, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, AND
ANY AND ALL ENDORSERS, GUARANTORS AND SURETIES SEVERALLY WAIVE GRACE, DEMAND,
PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, DISHONOR OR DEFAULT, PROTEST,
NOTICE OF INTENT TO ACCELERATE, NOTICE OF ACCELERATION, NOTICE OF PROTEST AND
DILIGENCE IN COLLECTING AND BRINGING OF SUIT AGAINST ANY PARTY HERETO AND ANY
OTHER NOTICES OR OTHER ACTION, AND AGREE TO ALL MODIFICATIONS, RENEWALS,
EXTENSIONS OR PARTIAL PAYMENTS HEREON, IN WHOLE OR IN PART, WITH OR WITHOUT
NOTICE, BEFORE OR AFTER MATURITY.

                  THIS NOTE SHALL BE INTERPRETED AND GOVERNED BY, AND THE
RIGHTS, OBLIGATIONS AND LIABILITIES OF THE PARTIES HERETO SHALL BE DETERMINED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.

                                     A-2-2
<PAGE>   128

                  IN WITNESS WHEREOF, the undersigned has duly executed this
Revolving Credit Note as of the date first written above.

                                                   PETROLEUM HELICOPTERS, INC.

                                                   By:
                                                      --------------------------
                                                   Name:
                                                   Title:

                                     A-2-3
<PAGE>   129

                                    EXHIBIT B

                     FORM OF REQUEST FOR EXTENSION OF CREDIT

                           PETROLEUM HELICOPTERS, INC.

                         Request for Extension of Credit

                                                         Date:
                                                              -----------------

To: Bank of America, N.A., as Agent

Ladies and Gentlemen:

Reference is made to that certain Second Amended and Restated Loan Agreement
dated as of July ___, 2001, among Petroleum Helicopters, Inc., a Louisiana
corporation ("Borrower"), the Banks from time to time party thereto, Bank of
America, N.A., as Agent and Issuing Bank (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined).

The undersigned hereby requests (select one):

[ ]  A Borrowing of Loans              [ ] A Conversion or Continuation of Loans

1.       On                                                    (a Business Day).
           --------------------------------------------------

2.       In the amount of $                                  .
                           ----------------------------------

3.       Comprised of                                        .
                     ---------------------------------------
                           [type of Loans requested]

4.       For Offshore Rate Loans:  with an Interest Period of           months.
                                                              ---------

The foregoing request complies with the requirements of Section 2.03 of the
Agreement. The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the above date, before and after
giving effect and to the application of the proceeds therefrom:

         (a) The representations and warranties made by Borrower in the
Agreement, or which are contained in any certificate, document or financial or
other statement furnished at any time under or in connection therewith, are and
will be correct on and as of the date of this Extension of Credit, except to the
extent that such representations and warranties specifically refer to any
earlier date; and

                                      B-1
<PAGE>   130

         (b) no Default or Event of Default has occurred and is continuing on
the date hereof or after giving effect to this Extension of Credit.

                                                     PETROLEUM HELICOPTERS, INC.

                                                     By:
                                                        ------------------------
                                                     Name:
                                                     Title:

                                      B-2
<PAGE>   131

                                    EXHIBIT C

                         FORM OF PHI SECURITY AGREEMENT

                 SECOND AMENDED AND RESTATED SECURITY AGREEMENT

                  This SECOND AMENDED AND RESTATED SECURITY AGREEMENT (the
"Agreement"), dated as of July 3, 2001, made by PETROLEUM HELICOPTERS, INC., a
Louisiana corporation ("Grantor") to BANK OF AMERICA, N.A. ("Bank of America"),
as Agent (together with its successors and assigns in such capacity, the
"Secured Party").

                                    RECITALS

                  A. Grantor, NationsBank of Texas, N.A. ("NationsBank"),
Whitney National Bank ("Whitney"), First National Bank of Commerce ("FNBC"), and
NationsBank, as Agent, entered into that certain Loan Agreement, originally
dated as of January 31, 1986, as amended and restated in its entirety as of
March 31, 1997, and as further amended by that certain First Amendment to
Amended and Restated Loan Agreement, dated as of December 31, 1997, that certain
Second Amendment to Amended and Restated Loan Agreement, dated as of November
30, 1998, that certain Limited Waiver and Third Amendment to Amended and
Restated Loan Agreement, dated as of June 30, 1999, that certain Fourth
Amendment to Amended and Restated Loan Agreement, dated as of June 30, 2000,
that certain Fifth Amendment to Amended and Restated Loan Agreement, dated as of
October 30, 2000, that certain Sixth Amendment to Amended and Restated Loan
Agreement, dated as of November 30, 2000, that certain Seventh Amendment to
Amended and Restated Loan Agreement, dated as of December 29, 2000, that certain
Eighth Amendment to Amended and Restated Loan Agreement and Limited Waiver dated
as of March 29, 2001, and that certain Ninth Amendment to Amended and Restated
Loan Agreement dated as of April 30, 2001 (as so amended, the "Existing Loan
Agreement").

                  B. The obligations of Grantor under the Existing Loan
Agreement are secured, in part, by that certain Amended and Restated Security
Agreement dated March 31, 1997 by Grantor in favor of the NationsBank, as Agent
(as amended from time to time, the "Existing Security Agreement"), which
Security Agreement was recorded at 1:53 p.m. on May 12, 1997 as conveyance
number YY018504 with the Federal Aviation Administration and amended and
supplemented as reflected on Schedule III attached hereto.

                  C. Grantor, Bank of America (successor by merger to
NationsBank), Whitney and Bank One, NA (successor by merger to FNBC) are
entering into that certain Second Amended and Restated Loan Agreement dated as
of even date herewith (as the same may be amended, supplemented or otherwise
modified from time to time, including, without limitation, all extensions,
renewals, restatements, rearrangements and refundings thereof, the "Loan
Agreement"), pursuant to which, among other things, the term and revolving loans
under the Existing Loan Agreement are being extended, renewed and increased.

                  D. It is a condition precedent to the effectiveness of the
Loan Agreement and the transactions contemplated thereby that Grantor shall have
amended and restated the Existing Security Agreement.

                                      C-1
<PAGE>   132

                  NOW, THEREFORE, in consideration of the mutual premises herein
contained and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Grantor and the Secured Party hereby agree as
follows:

                  SECTION 1. Defined Terms and Related Matters.

         (a) Unless otherwise defined herein, the terms defined in Article 9 of
the Uniform Commercial Code as enacted in the State of Louisiana (as the same
may from to time be amended, modified or in effect, the "Code") are used herein
as defined therein.

         (b) As used herein the terms set forth below have the meanings set
forth below.

                  "Banks" means, collectively, Bank of America, Whitney, Bank
One, NA and each other lender from time to time party to the Loan Agreement.

                  "Base Rate" means for any day a fluctuating rate per annum
equal to the higher of (i) the Federal Funds Rate plus 1/2 of 1% and (ii) the
rate of interest in effect for such day as publicly announced from time to time
by Bank of America as its "prime rate." Such rate is a rate set by Bank of
America based upon various factors including such bank's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.

                  "Borrower Parties" means the Grantor, Air Evac Services, Inc.
and any other Persons (except Agent, the Creditors and any of their respective
affiliates) from time to time party to a Loan Document.

                  "Business Day" means any day other than a Saturday, Sunday, or
other day on which commercial banks are authorized to close under the laws of,
or are in fact closed in, the state where Agent's Office is located or New
Orleans, Louisiana.

                  "Capital Lease" means with respect to any Person any lease
which should, in accordance with GAAP, be required to be capitalized on a
balance sheet of the lessee or, if not so capitalized, for which the amounts of
the asset and liability (had such lease been capitalized) be required to be
disclosed in a note to such a balance sheet.

                  "Creditors" means the Banks and any and all Swap Providers.

                  "Event of Default" means any of the events specified in
Section 8.01 of the Loan Agreement.

                  "Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards to the nearest 1/100 of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank on the Business Day next succeeding such day; provided
that (i) if such day is not a Business Day, the Federal Funds Rate for such day

                                      C-2
<PAGE>   133

shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Bank of America on such day on such
transactions as determined by Agent.

                  "Governmental Authority" means (i) any international, foreign,
federal, state, county or municipal government, or political subdivision
thereof, (ii) any governmental or quasi-governmental agency, authority, board,
bureau, commission, department, instrumentality, central bank or public body, or
(iii) any court, administrative tribunal or public utility.

                  "Guaranty Agreement" means that certain Guaranty Agreement, of
even date herewith, executed by Air Evac Services, Inc. in favor of Agent.

                  "Guaranty Obligation" means, as to any Person, any (i)
guaranty by such Person of Indebtedness of, or other obligation payable or
performable by, any other Person or (ii) assurance, agreement, letter of
responsibility, letter of awareness, undertaking or arrangement given by such
Person to an obligee of any other Person with respect to the payment or
performance of an obligation by, or the financial condition of, such other
Person, whether direct, indirect or contingent, including any purchase or
repurchase agreement covering such obligation or any collateral security
therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to support the
solvency or level of any balance sheet item of such other Person or any
"keep-well" or other arrangement of whatever nature given for the purpose of
assuring or holding harmless such obligee against loss with respect to any
obligation of such other Person; provided, however, that the term Guaranty
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business.

                  "Indebtedness" means, as to any Person at a particular time,
all items (other than capital stock and surplus) which, in accordance with GAAP,
would be shown on the liability side of a balance sheet of such Person as of the
date on which Indebtedness is to be determined. Except as otherwise agreed in
writing by the Requisite Banks, "Indebtedness" shall also mean, whether or not
so reflected, (i) all debt, obligations and liabilities secured by any Lien
existing on property owned by such Person if such property shall be subject to
such Lien, whether or not the debt, obligations or liabilities secured thereby
shall have been assumed; (ii) all obligations of such Person under any lease
which is a Capital Lease or any lease which, whether or not such lease is a
Capital Lease, contains terms that require the payment of lease rentals whether
or not the property leased thereunder shall exist or can be used for the purpose
for which it shall have been leased, or provide for a termination payment
calculated to be sufficient to retire any debt, obligations or liabilities
secured by a Lien on such lease or on the property leased thereunder; (iii) all
Guaranty Obligations of such Person; (iv) all obligations of such Person to
purchase any materials, supplies or other property, or to obtain the services of
any other Person, if the relevant contract or other related document requires
that payment for such materials, supplies or other property, or for such
services, shall be made regardless of whether or not delivery of such materials,
supplies or other property is ever made or tendered or such services are ever
performed or tendered; and (v) all obligations of such Person (contingent or
direct) in respect of letters of credit issued for the account of such Person or
other extensions of credit to such Person.

                                      C-3
<PAGE>   134

                  "Letter of Credit Application" means an application with
regard to a letter of credit issued under the Loan Agreement.

                  "Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement (in the nature of compensating balances, cash collateral
accounts or security interests), encumbrance, lien (statutory or other), charge,
or preference, priority or other security interest or preferential arrangement
of any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable laws of any jurisdiction), including
the interest of a purchaser of accounts receivable.

                  "Loan Documents" means the Loan Agreement and each Note, each
Security Document, each Letter of Credit Application, each request for extension
of credit, each compliance certificate, each certificate, each fee letter, and
each other instrument, document and agreement from time to time delivered in
connection with the Loan Agreement.

                  "Maximum Rate" means the maximum rate of non-usurious interest
permitted by applicable law.

                  "Notes" means all Term Notes and Revolving Credit Notes made
by Grantor in favor of the Banks.

                  "Permitted Liens" means Liens expressly permitted under
Section 7.02 of the Loan Agreement.

                  "Person" means any individual, trustee, corporation, general
partnership, limited partnership, limited liability company, joint stock
company, trust, unincorporated organization, bank, business association, firm,
joint venture, Governmental Authority, or otherwise.

                  "Requisite Banks" has the meaning set forth in the Loan
Agreement.

                  "Revolving Credit Note" means a note evidencing revolving
credit loans made by a Bank, pursuant to the Loan Agreement, including all
renewals, extensions, modifications, amendments, rearrangements and replacements
thereof.

                  "Security Agreements" means collectively (i) this Amended and
Restated Security Agreement, (ii) the Security Agreement, dated as of even date
herewith executed by Air Evac Services, Inc. in favor of Agent, and (iii) all
other security agreements executed on or after the date hereof by any of the
Borrower Parties and (iv) any and all supplements, modifications or amendments
or restatements of the foregoing.

                  "Security Documents" means the Security Agreements, the
Guaranty Agreement, and all other documents, agreements, instruments, financing
statements, financing statement changes and continuation statements heretofore,
now or hereafter executed or delivered by any Person in connection with, or as
security for the payment of the credit extended under the Loan Documents.

                                      C-4
<PAGE>   135

                  "Swap Agreement" means any interest rate protection agreement,
interest rate futures contract, interest rate option, interest rate cap or other
interest rate hedge arrangement, interest rate futures contract, interest rate
option, interest rate cap or other interest rate hedge arrangement, to or which
Grantor is a party or a beneficiary, together with all schedules thereto and the
confirmations thereunder, as may be further amended, modified, restated or
supplemented (including, without limitation, amendments, modifications,
restatements or supplements which have the effect of increasing the notional
amount, liabilities or obligations thereunder).

                  "Swap Provider" means any Bank, or any affiliate of such Bank
which is a party to a Swap Agreement, as permitted by the Loan Agreement, and
has agreed in writing to be bound by the terms of the Loan Agreement.

                  "Term Note" a note evidencing term loans made by a Bank,
pursuant to the Loan Agreement, including all renewals, extensions,
modifications, amendments, rearrangements and replacements thereof.

         SECTION 2. Grant of Security Interest. Grantor hereby collaterally
assigns and pledges to the Secured Party for the equal and ratable benefit of
the Creditors, and hereby reconfirms its collateral assignment and pledge to the
Secured Party for the equal and ratable benefit of the Creditors under the
Existing Security Agreement of, and hereby grants to the Secured Party for the
equal and ratable benefit of the Creditors, and hereby reconfirms its grant to
the Secured Party for the equal and ratable benefit of the Creditors under the
Existing Security Agreement of, a security interest in all of Grantor's right,
title and interest in and to the following (the "Collateral"):

I.       All aircraft engines, propellers, rotors, appliances, tires, airframes,
         spare parts, radios and other communication equipment, together with
         all other aircraft appliances, instruments, mechanisms, apparatus,
         appurtenances, accessories and parts or components thereof of Grantor
         maintained at the locations described in Schedule I attached hereto and
         made a part hereof, now or hereafter existing, whether acquired by
         purchase or otherwise and whether held by Grantor for use in its
         business or held by Grantor for sale or lease or to be furnished by
         Grantor under contracts of services and all proceeds and products
         thereof and accessories thereto together with the right to receive
         proceeds attributable to the sale, lease, insurance loss, or
         condemnation of such property; rights under service, maintenance, or
         warranty contracts with regard to such property; and rights under trade
         names, patents, or copyrights that are subject to use in connection
         with the property (excluding, however, all such parts or products
         installed in any engine-powered device that is used or intended to be
         used for flight in the air which are not otherwise covered by paragraph
         II hereof).

II.      All aircraft engines, propellers, rotors, appliances, tires, airframes,
         spare parts, radios and other communication equipment, together with
         all other aircraft appliances, instruments, mechanisms, apparatus,
         appurtenances, accessories and parts or components thereof of Grantor
         wherever maintained, other than at the locations described in Schedule
         I attached hereto and made a part hereof, now or hereafter existing,
         whether acquired by purchase or

                                      C-5
<PAGE>   136

         otherwise and whether held by Grantor for use in its business or held
         by Grantor for sale or lease or to be furnished by Grantor under
         contracts of services and all proceeds and products thereof and
         accessories thereto together with the right to receive proceeds
         attributable to the sale, lease, insurance loss, or condemnation of
         such property; rights under service, maintenance, or warranty contracts
         with regard to such property; and rights under trade names, patents, or
         copyrights that are subject to use in connection with the property
         (excluding, however, all such parts or products installed in any
         engine-powered device that is used or intended to be used for flight in
         the air which are not otherwise covered by paragraph III hereof).

III.     The helicopters, fixed-wing or other aircraft described in Schedule II
         attached hereto and made a part hereof, together with all aircraft
         engines, airframes, propellers, rotors, appliances, instruments,
         mechanisms, equipment (including communication equipment), parts,
         apparatus, appurtenances and accessories, now or from time to time
         hereafter incorporated or installed in or attached to or appertaining
         to one or more of said helicopters or aircraft, including without
         limitation those aircraft engines described in Schedule II attached
         hereto and made a part hereof, together with the right to receive
         proceeds attributable to the sale, lease, insurance loss, or
         condemnation of such property; rights under service, maintenance, or
         warranty contracts with regard to such property; and rights under trade
         names, patents, or copyrights that are subject to use in connection
         with the property, together with all proceeds and products thereof.

IV.      All of Grantor's "accounts" and "general intangibles" giving rise to
         such "accounts," as each such term is defined in the Code, now owned or
         hereafter acquired by Grantor, including, without limitation, all
         accounts receivable, book debts and other forms of obligations now
         owned or hereafter received or acquired by or belonging or owing to
         Grantor (including, without limitation, under any trade names, styles
         or divisions thereof), whether arising out of goods sold or services
         rendered by Grantor or from any other transaction, whether or not the
         same involves the sale of goods or services by Grantor, and all of
         Grantor's rights in, to and under all purchase orders or receipts now
         owned or hereafter acquired by it for goods or services, and all of
         Grantor's rights to any goods represented by any of the foregoing
         (including, without limitation, unpaid seller's rights of rescission,
         replevin, reclamation and stoppage in transit and rights to returned,
         reclaimed or repossessed goods), and all moneys due or to become due to
         Grantor under all contracts for the sale of goods or the performance of
         services or both by Grantor (whether or not yet earned by performance
         on the part of Grantor or in connection with any other transaction),
         now in existence or hereafter occurring, including, without limitation,
         the right to receive the proceeds of said purchase orders and
         contracts, as well as to enforce all collateral security and guaranties
         of any kind given by any Person with respect to any of the foregoing,
         and all present and future general intangibles of Grantor in any way
         related or pertaining to the foregoing, including, without limitation,
         Grantor's books, records, files, computer discs and software relating
         to the foregoing.

The inclusion of proceeds in this Agreement does not authorize Grantor to sell,
dispose of or otherwise use the Collateral in any manner not specifically
authorized hereby or by the Loan Agreement.

                                      C-6
<PAGE>   137

Grantor will maintain the Collateral described in paragraph I above at the
locations specified in Schedule I attached hereto and made a part hereof.

                  SECTION 3. Security for Obligations. This Agreement secures
the prompt and complete (a) payment of all debts, liabilities and obligations of
Grantor to the Secured Party or any of the Creditors, now existing or hereafter
incurred, due or to become due, under the Existing Loan Agreement, the Loan
Agreement, any and all Swap Agreements, the Notes, the Existing Security
Agreement, the Security Documents, each Letter of Credit Application and any
other Loan Document, and (b) performance of all covenants and conditions by
Grantor contained in the Loan Documents (including, without limitation, the
covenants and conditions contained herein) and any Swap Agreement (all such
obligations, covenants and conditions described in the foregoing clauses (a) and
(b) being hereinafter collectively referred to as the "Secured Obligations"),
regardless of whether such obligations be direct or indirect, primary or
secondary, joint or several, absolute or contingent, together with any and all
renewals, modifications or extensions of such debts, obligations and
liabilities, or any part thereof, whether for principal, interest, attorneys'
fees, costs or otherwise (including obligations which, but for the automatic
stay under Section 362(a) of the Bankruptcy Code, would become due).

                  SECTION 4. Grantor Remains Liable. Anything herein to the
contrary notwithstanding, (a) Grantor shall remain liable under any contracts
and agreements included in the Collateral to the extent set forth therein to
perform all of its respective duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Secured Party or any Creditor of any of the rights hereunder shall not release
Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) neither the Secured Party nor any Creditor
shall have any obligation or liability under any contracts and agreements
included in the Collateral by reason of this Agreement, nor shall the Secured
Party or any Creditor be obligated to perform any of the obligations or duties
of Grantor thereunder or to take any action to collect or enforce any claim for
payment in respect of which a security interest is granted hereunder.

                  SECTION 5. Representations and Warranties. Grantor hereby
represents and warrants as follows:

                  (a) Upon the making of all filings and the taking of all other
         actions necessary to perfect the security interests created hereby,
         including, without limitation, those actions specified in Section 6(a)
         below, this Agreement will create valid first priority security
         interests in the Collateral (subject only to Permitted Liens) securing
         the payment of the Secured Obligations.

                  (b) Other than the filings and other actions described in
         Section 5.17 of the Loan Agreement and in Section 6 below, to perfect
         the security interests created by this Agreement, no authorization,
         approval or other action by, and no notice to or filing with, any
         Governmental Authority, is required for the perfection of or the
         exercise by the Secured Party of the rights and remedies of the
         Creditors and the Secured Party hereunder.

                                      C-7
<PAGE>   138

                  (c) Grantor's only taxpayer identification number is
         72-0395707. Grantor will not change its taxpayer identification number
         unless it has given the Secured Party prior written notice and has
         taken such action as is necessary to cause the security interest of the
         Secured Party in the Collateral to continue to be perfected. If
         Grantor's taxpayer identification number is changed by an entity other
         than Grantor, then Grantor will give the Secured Party written notice
         within one month thereafter and will take such action as is necessary
         to cause the security interest of the Creditors and the Secured Party
         in the Collateral to continue to be perfected.

                  (d) Grantor is an "air carrier" holding a certificate under 49
         U.S.C.A. Section 44705 and the regulations promulgated thereunder.

                  SECTION 6. Further Assurances.

                  (a) Grantor authorizes the Secured Party to file financing
         statements (Form UCC-1), and any necessary amendments thereto or
         continuations thereof, and other security documents executed by Grantor
         in those offices and locations necessary in the opinion of the Secured
         Party to perfect the security interests granted herein. Grantor further
         agrees that from time to time, at the expense of Grantor, Grantor will
         promptly execute and deliver all further instruments and documents, and
         take all further action that may be necessary or desirable, or that the
         Secured Party may reasonably request, in order to perfect and protect
         any security interests granted or purported to be granted hereby or to
         enable the Secured Party to exercise and enforce the Creditors' rights
         and remedies hereunder with respect to any of the Collateral. Without
         limiting the generality of the foregoing, Grantor will execute and file
         such financing or continuation statements, or amendments thereto, and
         such other instruments or notices, as may be necessary or desirable, or
         as the Secured Party may reasonably request, in order to perfect and
         preserve the security interests granted or purported to be granted
         hereby.

                  (b) Grantor authorizes the Secured Party to file a carbon,
         photographic or other reproduction of this Agreement as a financing
         statement or to file one or more financing or continuation statements,
         and amendments thereto, relative to all or any part of the Collateral
         without the signature of Grantor where permitted by law.

                  SECTION 7. Insurance. Grantor shall at its own expense
maintain insurance with respect to the Collateral required by the terms of the
Loan Agreement.

                  SECTION 8. Transfers and Other Liens. Except as permitted by
the Loan Agreement, Grantor shall not:

                  (a) sell, assign (by operation of law or otherwise) or
         otherwise dispose of any of the Collateral, and

                  (b) create or suffer to exist any Lien upon or with respect to
         any of the Collateral to secure the Indebtedness of any Person.

                                      C-8
<PAGE>   139

                  SECTION 9. Secured Party Appointed Attorney-in-Fact. Grantor
hereby irrevocably appoints the Secured Party, effective upon the occurrence of
an Event of Default and the acceleration of the Secured Obligations, Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, the Secured Party or otherwise, from time to time in the
Secured Party's discretion, to take any action and to execute any instrument
which the Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:

                  (a) to ask, demand, collect, sue for, recover, compound,
         receive and give acquittance and receipts for moneys due and to become
         due under or in respect of any of the Collateral,

                  (b) to receive, endorse and collect any drafts or other
         instruments, documents and chattel paper in connection with clause (a)
         above, and

                  (c) to file any claims or take any action or institute any
         proceedings which the Secured Party may deem necessary or desirable for
         the collection of any of the Collateral or otherwise to enforce the
         rights of the Creditors and the Secured Party.

                  SECTION 10. Secured Party May Perform. If Grantor fails to
perform any agreement contained herein and such violation shall not have been
remedied within 30 days, the Secured Party may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Secured Party
(including reasonable attorneys' fees) incurred in connection therewith shall be
payable by Grantor under Section 13.

                  SECTION 11. The Secured Party's Duties. The powers conferred
on the Secured Party and the Creditors hereunder are solely to protect their
interest in the Collateral and shall not impose any duty upon the Secured Party
or any Creditor to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, neither the Secured Party nor any Creditor shall have any duty as
to any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral.

                  SECTION 12. Remedies. Upon the occurrence of any Event of
Default and the acceleration of any of the Secured Obligations:

                  (a) The Secured Party may exercise in respect of the
         Collateral, in addition to other rights and remedies provided for
         herein or otherwise available to it, all the rights and remedies of a
         secured party on default under Chapter 9 of the Code (whether or not
         the Code applies to the affected Collateral) and in addition thereto
         and cumulative thereof, the following rights (to the extent allowed by
         the Code): the right to sell, lease or otherwise dispose of the
         Collateral and the right to take possession of the Collateral, and for
         that purpose, the Secured Party may enter upon any premises on which
         the Collateral may be situated and remove the same therefrom and/or may
         render the Collateral inoperable; the Secured Party may require Grantor
         to, and Grantor hereby agrees that it will, at its expense and upon the
         request of the Secured Party, forthwith assemble all or part of the
         Collateral and all documents relating to the Collateral as directed by
         the

                                      C-9
<PAGE>   140

         Secured Party and make the Collateral available to the Secured Party at
         a place to be designated by the Secured Party; without notice except as
         specified below, sell the Collateral in one or more parcels at public
         or private sale, at any of the Secured Party's offices or elsewhere,
         for cash, on credit or for future delivery, and, to the extent
         permitted by law, upon such other terms as the Secured Party may deem
         commercially reasonable. Grantor agrees that, to the extent notice of
         sale shall be required by law, at least ten days' notice to Grantor of
         the time and place of any public sale or the time after which any
         private sale is to be made shall constitute reasonable notification.
         The Secured Party shall not be obligated to make any sale of Collateral
         regardless of notice of sale having been given. The Secured Party may
         adjourn any public or private sale from time to time by announcement at
         the time and place fixed therefor, and such sale may, without further
         notice, be made at the time and place to which it was so adjourned.

                  (b) All cash proceeds received by the Secured Party in respect
         of any sale of, collection from, or other realization upon all or any
         part of the Collateral may, in the discretion of the Secured Party, be
         held by the Secured Party as collateral for, and/or then or at any time
         thereafter applied in whole or in part by the Secured Party against,
         the Secured Obligations in the order provided in Section 8.03 of the
         Loan Agreement.

                  (c) Additionally, and not by way of limitation: Grantor hereby
         acknowledges the Secured Obligations secured hereby whether now
         existing or hereafter arising, and confesses judgment in favor of the
         Creditors and does by these presents agree and stipulate that, upon the
         occurrence of an Event of Default, the entire Secured Obligations
         whatever the form thereof, shall at the option of the Creditors
         pursuant to the terms of the Loan Agreement, become due and payable
         immediately, without presentment, demand for payment, protest or notice
         of nonpayment, dishonor or protest or any other notice or demand of any
         kind and the Secured Party may, without making demand and without
         notice of or putting in default, all the same being hereby expressly
         waived, enforce payment in full of all the Secured Obligations, and
         cause all and singular the Collateral to be seized and sold by
         executory process under the laws of the State of Louisiana issued by
         any competent court, and to proceed with the enforcement of this
         Agreement in any manner prescribed by law. Grantor hereby waives the
         benefit of any laws or parts of laws relating to the appraisement of
         the property seized and sold under executory process or other legal
         process and consents that the Collateral be sold without appraisement
         at public or private sale. Grantor further consents to any of the
         Creditors purchasing the Collateral at such sale.

         Grantor hereby expressly waives:

         (1)      The benefit of appraisement, as provided in Articles 2332,
                  2336, 2723 and 2724, Louisiana Code of Civil Procedure, and
                  all other laws conferring the same;

         (2)      The demand and three (3) days delay accorded by Articles 2639
                  and 2721, Louisiana Code of Civil Procedure;

                                      C-10
<PAGE>   141

         (3)      The notice of seizure required by Articles 2293 and 2721,
                  Louisiana Code of Civil Procedure;

         (4)      The three (3) days delay provided by Articles 2331 and 2722,
                  Louisiana Code of Civil Procedure; and

         (5)      The benefit of the other provisions of Articles 2331, 2722 and
                  2733, Louisiana Code of Civil Procedure and the benefit of any
                  other articles or laws relating to rights or appraisement,
                  notice, or delay not specifically mentioned above and Grantor
                  hereby expressly agrees to the immediate seizure of the
                  Collateral in the event of suit thereon.

                  (d) All rights and remedies of the Secured Party and the
         Creditors expressed herein are in addition to all other rights and
         remedies possessed by the Secured Party and the Creditors in the Loan
         Documents and the Swap Agreements.

                  SECTION 13. Indemnity, Expenses and Interest.

                  (a) Grantor agrees upon demand to pay to the Secured Party the
         amount of any and all reasonable costs and expenses, including the
         reasonable fees and disbursements of its counsel and of any experts and
         agents, which the Secured Party may incur in connection with (i) the
         administration of this Agreement, (ii) the custody, preservation, use
         or operation of, or the sale of, collection from, or other realization
         upon, any of the Collateral, (iii) the exercise or enforcement of any
         of the rights of the Secured Party hereunder or (iv) the failure by
         Grantor to perform or observe any of the provisions hereof provided
         such failure shall not have been remedied within 30 days.

                  (b) Grantor agrees to pay interest on any expenses or other
         sums due to the Secured Party hereunder that are not paid when due at a
         rate per annum equal to the lesser of (i) the Maximum Rate or (ii) 3%
         above the Base Rate.

                  SECTION 14. Amendments, Etc. Subject to any provision in the
Loan Agreement to the contrary, no amendment or waiver of any portion of this
Agreement nor consent to any departure by Grantor herefrom shall in any event be
effective unless the same shall be in writing and signed by the Creditors, and
then such waiver or consent shall be effective only in the specific instance for
the specific purpose for which given.

                  SECTION 15. Addresses for Notices. Except as otherwise
expressly provided herein, all notices and other communications provided for
hereunder shall be given in accordance with the terms of the Loan Agreement.

                  SECTION 16. Security Interests Absolute. All rights of the
Secured Party and the Creditors, all obligations of Grantor hereunder and the
security interests hereunder, shall, to the extent permitted by applicable law,
be absolute and unconditional, irrespective of:

                  (a) any lack of validity or enforceability of the Loan
         Agreement, any Swap Agreement or any of the other Loan Documents or any
         other agreement or security

                                      C-11
<PAGE>   142

         document relating thereto or executed in connection with or pursuant to
         the Existing Loan Agreement, the Loan Agreement, any Swap Agreement,
         the Existing Security Agreement or any other Loan Document;

                  (b) any change in the time, manner or place of payment of, or
         in any other term of, all or any of the Secured Obligations or any
         other amendment or waiver of or any consent to any departure from the
         Loan Agreement, any Swap Agreement or any other Loan Document;

                  (c) any exchange, release or non-perfection of any other
         collateral, or any release or amendment or waiver of or consent to
         departure from any guaranty, for all or any of the Secured Obligations;
         or

                  (d) any other circumstance which might otherwise constitute a
         defense available to, or a discharge of, Grantor in respect of the
         Secured Obligations or in respect of this Agreement.

                  SECTION 17. Continuing Security Interests. This Agreement
creates a continuing security interest in the Collateral and shall (a) remain in
full force and effect until (i) termination of the obligations of the Banks to
make Loans and termination of any and all Swap Agreements, and (ii) payment in
full thereafter of the Secured Obligations, (b) be binding upon Grantor, its
successors and assigns and (c) inure to the benefit of the Secured Party, the
Creditors and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), the Secured Party and the
Creditors may assign or otherwise transfer any of their respective rights under
this Agreement to any other Person, and such Person shall thereupon become
vested with all the benefits in respect thereof granted herein or otherwise to
the Secured Party or the Creditors, as the case may be. Upon the payment in full
of the Secured Obligations and the termination of any commitments to make any
extensions of credit with respect to the Loan Documents, Grantor shall be
entitled to the return, upon its request and at its expense, of such of the
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.

                  SECTION 18. Waiver of Marshaling. All rights of marshaling of
assets of Grantor, including any such right with respect to the Collateral, are
hereby waived by Grantor.

                  SECTION 19. Limitation by Law. All rights, remedies and powers
provided in this Agreement may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the provisions
of this Agreement are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement invalid, unenforceable, in
whole or in part, or not entitled to be recorded, registered or filed under the
provisions of any applicable law.

                  SECTION 20. Termination of Agreement; Release of Security
Interests. Upon the payment in full of the Secured Obligations and the
termination of any commitments to make any extensions of credit with respect to
the Loan Documents, this Agreement shall terminate and be of no further force
and effect and the Secured Party shall, at the expense of Grantor, execute

                                      C-12
<PAGE>   143

and deliver to Grantor such documents and instruments reasonably requested by
Grantor to evidence the release of the security interests created by this
Agreement; provided, however, notwithstanding the termination of, and the
release of the security interests created by, this Agreement, the obligations of
Grantor and the rights of the Secured Party and the Creditors under Sections 4
and 13 shall survive such termination and release.

                  SECTION 21. Survival of Representations and Warranties. All
representations and warranties contained in this Agreement or made in writing by
or on behalf of Grantor in connection herewith shall survive the execution and
delivery of this Agreement and repayment of the Secured Obligations. Any
investigation by the Creditors shall not diminish in any respect whatsoever
their rights to rely on such representations and warranties.

                  SECTION 22. Separability. Should any clause, sentence,
paragraph, subsection or Section of this Agreement be judicially declared to be
invalid, unenforceable or void, such decision will not have the effect of
invalidating or voiding the remainder of this Agreement, and Grantor agrees that
the part or parts of this Agreement so held to be invalid, unenforceable or void
will be deemed to have been stricken herefrom by the parties hereto, and the
remainder will have the same force and effectiveness as if such stricken part or
parts had never been included herein.

                  SECTION 23. Captions. The captions in this Agreement have been
inserted for convenience only and shall be given no substantive meaning or
significance whatsoever in construing the terms and provisions of this
Agreement.

                  SECTION 24. Amendment and Restatement; Confirmation of Liens.
This Agreement amends and restates the Existing Security Agreement in its
entirety and shall not affect a novation of, but shall be, to the fullest extent
applicable, in modification, renewal, confirmation and extension of the Liens
created by the Existing Security Agreement. Grantor agrees that the execution of
this Agreement, the Loan Agreement and the other documents relating thereto
shall not in any way release, diminish, impair, reduce or otherwise affect the
Liens created by the Existing Security Agreement.

                  SECTION 25. No Waiver; Remedies. No failure on the part of the
Secured Party or any Creditor to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

                  SECTION 26. Governing Law; Terms. This Agreement shall be
governed by and construed in accordance with the laws of the State of Louisiana,
except as required by mandatory provisions of law and except to the extent that
remedies hereunder in respect of any particular Collateral are governed by the
laws of a jurisdiction other than the State of Louisiana.

                  SECTION 27. INTEGRATION. THIS AGREEMENT, TOGETHER WITH THE
OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,

                                      C-13
<PAGE>   144

CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

                  SECTION 28. Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.

                            [REMAINDER OF PAGE BLANK.
                            SIGNATURE PAGE FOLLOWS.]

                                      C-14
<PAGE>   145

                  IN WITNESS WHEREOF, the undersigned have caused this Second
Amended and Restated Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.

                                              GRANTOR:

                                              PETROLEUM HELICOPTERS, INC.

                                              By:
                                                 -------------------------------
                                              Name:
                                              Title:

                                              SECURED PARTY:

                                              BANK OF AMERICA, N.A., AS AGENT

                                              By:
                                                 -------------------------------
                                              Name:
                                              Title:

<PAGE>   146

                                   SCHEDULE I

                              COLLATERAL LOCATIONS

                                [To be attached]

<PAGE>   147

                                   SCHEDULE II

                            HELICOPTERS AND AIRCRAFT

                                     ENGINES

                                [To be attached]

<PAGE>   148

                                  Schedule III

                           AMENDMENTS AND SUPPLEMENTS

                                [To be attached]
<PAGE>   149

                                    EXHIBIT D

                       FORM OF AIR EVAC SECURITY AGREEMENT

                               SECURITY AGREEMENT

                  This SECURITY AGREEMENT (the "Agreement"), dated as of July 3,
2001, made by AIR EVAC SERVICES, INC., a Louisiana corporation ("Grantor") to
BANK OF AMERICA, N.A. ("Bank of America"), as Agent (together with its
successors and assigns in such capacity, the "Secured Party").

                                    RECITALS

                  A. Petroleum Helicopters, Inc. (the "Borrower"), Bank of
America, Whitney National Bank and Bank One, NA have entered into that certain
Second Amended and Restated Loan Agreement, dated as of even date herewith (as
the same may be amended, supplemented or otherwise modified from time to time,
including, without limitation, all extensions, renewals, restatements,
rearrangements and refundings thereof, the "Loan Agreement").

                  B. The Grantor is a wholly-owned subsidiary of the Borrower
has guaranteed certain obligations and liabilities of the Borrower pursuant to
that certain Guaranty Agreement dated as of even date herewith (the "Guaranty
Agreement"), made by Grantor to and in favor of the Guaranteed Parties (as
defined therein).

                  C. It is a condition precedent to the extensions of credit
pursuant to the Loan Agreement and the transactions contemplated thereby that
Grantor shall have executed and delivered this Agreement to the Secured Party
for its benefit and the benefit of the Creditors (as defined in the Loan
Agreement).

                  D. Accordingly, Grantor desires to execute this Agreement in
order to satisfy such condition.

                  NOW, THEREFORE, in consideration of the mutual premises herein
contained and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Grantor and the Secured Party hereby agree as
follows:

                  SECTION 1. Defined Terms and Related Matters.

         (a) Unless otherwise defined herein, the terms defined in Article 9 of
the Uniform Commercial Code as enacted in the State of Louisiana (as the same
may from to time be amended, modified or in effect, the "Code") are used herein
as defined therein.

         (b) As used herein the terms set forth below have the meanings set
forth below.

                  "Banks" means, collectively, Bank of America, Whitney National
Bank, Bank One, NA and each other lender from time to time party to the Loan
Agreement.

                                      D-1
<PAGE>   150

                  "Base Rate" means for any day a fluctuating rate per annum
equal to the higher of (i) the Federal Funds Rate plus 1/2 of 1% and (ii) the
rate of interest in effect for such day as publicly announced from time to time
by Bank of America as its "prime rate." Such rate is a rate set by Bank of
America based upon various factors including such bank's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.

                  "Borrower Parties" means the Borrower, the Grantor and any
other Persons (except Agent, the Creditors and any of their respective
affiliates) from time to time party to a Loan Document.

                  "Business Day" means any day other than a Saturday, Sunday, or
other day on which commercial banks are authorized to close under the laws of,
or are in fact closed in, the state where Agent's Office is located or New
Orleans, Louisiana.

                  "Capital Lease" means with respect to any Person any lease
which should, in accordance with GAAP, be required to be capitalized on a
balance sheet of the lessee or, if not so capitalized, for which the amounts of
the asset and liability (had such lease been capitalized) be required to be
disclosed in a note to such a balance sheet.

                  "Creditors" means the Banks and any and all Swap Providers.

                  "Event of Default" means any of the events specified in
Section 8.01 of the Loan Agreement.

                  "Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards to the nearest 1/100 of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank on the Business Day next succeeding such day; provided
that (i) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Bank of America on such day on such
transactions as determined by Agent.

                  "Government Receivables" shall mean Receivables now or
hereafter owing from the United States or from State Medicaid programs.

                  "Governmental Authority" means (i) any international, foreign,
federal, state, county or municipal government, or political subdivision
thereof, (ii) any governmental or quasi-governmental agency, authority, board,
bureau, commission, department, instrumentality, central bank or public body, or
(iii) any court, administrative tribunal or public utility.

                  "Guaranty Obligation" means, as to any Person, any (i)
guaranty by such Person of Indebtedness of, or other obligation payable or
performable by, any other Person or (ii) assurance, agreement, letter of
responsibility, letter of awareness, undertaking or arrangement given by such
Person to an obligee of any other Person with respect to the payment or
performance of an obligation by, or the financial condition of, such other
Person, whether direct, indirect or contingent, including any purchase or
repurchase agreement covering such obligation or any collateral security
therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to support the
solvency or level

                                      D-2
<PAGE>   151

of any balance sheet item of such other Person or any "keep-well" or other
arrangement of whatever nature given for the purpose of assuring or holding
harmless such obligee against loss with respect to any obligation of such other
Person; provided, however, that the term Guaranty Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.

                  "Indebtedness" means, as to any Person at a particular time,
all items (other than capital stock and surplus) which, in accordance with GAAP,
would be shown on the liability side of a balance sheet of such Person as of the
date on which Indebtedness is to be determined. Except as otherwise agreed in
writing by the Requisite Banks, "Indebtedness" shall also mean, whether or not
so reflected, (i) all debt, obligations and liabilities secured by any Lien
existing on property owned by such Person if such property shall be subject to
such Lien, whether or not the debt, obligations or liabilities secured thereby
shall have been assumed; (ii) all obligations of such Person under any lease
which is a Capital Lease or any lease which, whether or not such lease is a
Capital Lease, contains terms that require the payment of lease rentals whether
or not the property leased thereunder shall exist or can be used for the purpose
for which it shall have been leased, or provide for a termination payment
calculated to be sufficient to retire any debt, obligations or liabilities
secured by a Lien on such lease or on the property leased thereunder; (iii) all
Guaranty Obligations of such Person; (iv) all obligations of such Person to
purchase any materials, supplies or other property, or to obtain the services of
any other Person, if the relevant contract or other related document requires
that payment for such materials, supplies or other property, or for such
services, shall be made regardless of whether or not delivery of such materials,
supplies or other property is ever made or tendered or such services are ever
performed or tendered; and (v) all obligations of such Person (contingent or
direct) in respect of letters of credit issued for the account of such Person or
other extensions of credit to such Person.

                  "Letter of Credit Application" means an application with
regard to a letter of credit issued under the Loan Agreement.

                  "Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement (in the nature of compensating balances, cash collateral
accounts or security interests), encumbrance, lien (statutory or other), charge,
or preference, priority or other security interest or preferential arrangement
of any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable laws of any jurisdiction), including
the interest of a purchaser of accounts receivable.

                  "Loan Documents" means the Loan Agreement and each Note, each
Security Document, each Letter of Credit Application, each request for extension
of credit, each compliance certificate, each certificate, each fee letter, and
each other instrument, document and agreement from time to time delivered in
connection with the Loan Agreement.

                  "Maximum Rate" means the maximum rate of non-usurious interest
permitted by applicable law.

                                      D-3
<PAGE>   152

                  "Notes" means all Term Notes and Revolving Credit Notes made
by the Borrower in favor of the Banks.

                  "Permitted Liens" means Liens expressly permitted under
Section 7.02 of the Loan Agreement.

                  "Person" means any individual, trustee, corporation, general
partnership, limited partnership, limited liability company, joint stock
company, trust, unincorporated organization, bank, business association, firm,
joint venture, Governmental Authority, or otherwise.

                  "Receivables" means, with respect to any Person, all
Indebtedness presently existing or hereafter owing to such Person in connection
with such Person's business, profession, occupation, or undertaking, including,
but not limited to the sale of goods or the performance of services or the
leasing of property, together with all proceeds thereof; excluding, however any
indebtedness due to or arising out of claims in tort and indebtedness evidenced
by a promissory note or a negotiable instrument.

                  "Requisite Banks" has the meaning set forth in the Loan
Agreement.

                  "Revolving Credit Note" means a note evidencing revolving
credit loans made by a Bank, pursuant to the Loan Agreement, including all
renewals, extensions, modifications, amendments, rearrangements and replacements
thereof.

                  "Security Agreements" means collectively (i) this Amended and
Restated Security Agreement, (ii) the Security Agreement, dated as of even date
herewith executed by Air Evac Services, Inc. in favor of Agent, and (iii) all
other security agreements executed on or after the date hereof by any of the
Borrower Parties and (iv) any and all supplements, modifications or amendments
or restatements of the foregoing.

                  "Security Documents" means the Security Agreements, the
Guaranty Agreement, and all other documents, agreements, instruments, financing
statements, financing statement changes and continuation statements heretofore,
now or hereafter executed or delivered by any Person in connection with, or as
security for the payment of the credit extended under the Loan Documents.

                  "Swap Agreement" means any interest rate protection agreement,
interest rate futures contract, interest rate option, interest rate cap or other
interest rate hedge arrangement, interest rate futures contract, interest rate
option, interest rate cap or other interest rate hedge arrangement, to or which
the Borrower is a party or a beneficiary, together with all schedules thereto
and the confirmations thereunder, as may be further amended, modified, restated
or supplemented (including, without limitation, amendments, modifications,
restatements or supplements which have the effect of increasing the notional
amount, liabilities or obligations thereunder).

                  "Swap Provider" means any Bank, or any affiliate of such Bank
which is a party to a Swap Agreement, as permitted by the Loan Agreement, and
has agreed in writing to be bound by the terms of the Loan Agreement.

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                  "Term Note" a note evidencing term loans made by a Bank,
pursuant to the Loan Agreement, including all renewals, extensions,
modifications, amendments, rearrangements and replacements thereof.

                  SECTION 2. Grant of Security Interest. Grantor hereby
collaterally assigns and pledges to the Secured Party for the equal and ratable
benefit of the Creditors, and hereby grants to the Secured Party for the equal
and ratable benefit of the Creditors, a security interest in all of Grantor's
right, title and interest in and to the following (the "Collateral"):

I.       All aircraft engines, propellers, rotors, appliances, tires, airframes,
         spare parts, radios and other communication equipment, together with
         all other aircraft appliances, instruments, mechanisms, apparatus,
         appurtenances, accessories and parts or components thereof of Grantor
         maintained at the locations described in Schedule I attached hereto and
         made a part hereof, now or hereafter existing, whether acquired by
         purchase or otherwise and whether held by Grantor for use in its
         business or held by Grantor for sale or lease or to be furnished by
         Grantor under contracts of services and all proceeds and products
         thereof and accessories thereto together with the right to receive
         proceeds attributable to the sale, lease, insurance loss, or
         condemnation of such property; rights under service, maintenance, or
         warranty contracts with regard to such property; and rights under trade
         names, patents, or copyrights that are subject to use in connection
         with the property (excluding, however, all such parts or products
         installed in any engine-powered device that is used or intended to be
         used for flight in the air which are not otherwise covered by paragraph
         II hereof).

II.      All aircraft engines, propellers, rotors, appliances, tires, airframes,
         spare parts, radios and other communication equipment, together with
         all other aircraft appliances, instruments, mechanisms, apparatus,
         appurtenances, accessories and parts or components thereof of Grantor
         wherever maintained, other than at the locations described in Schedule
         I attached hereto and made a part hereof, now or hereafter existing,
         whether acquired by purchase or otherwise and whether held by Grantor
         for use in its business or held by Grantor for sale or lease or to be
         furnished by Grantor under contracts of services and all proceeds and
         products thereof and accessories thereto together with the right to
         receive proceeds attributable to the sale, lease, insurance loss, or
         condemnation of such property; rights under service, maintenance, or
         warranty contracts with regard to such property; and rights under trade
         names, patents, or copyrights that are subject to use in connection
         with the property (excluding, however, all such parts or products
         installed in any engine-powered device that is used or intended to be
         used for flight in the air which are not otherwise covered by paragraph
         III hereof).

III.     The helicopters, fixed-wing or other aircraft described in Schedule II
         attached hereto and made a part hereof, together with all aircraft
         engines, airframes, propellers, rotors, appliances, instruments,
         mechanisms, equipment (including communication equipment), parts,
         apparatus, appurtenances and accessories, now or from time to time
         hereafter incorporated or installed in or attached to or appertaining
         to one or more of said helicopters or aircraft, including without
         limitation those aircraft engines described in Schedule II attached
         hereto and made a part hereof, together with the right to receive
         proceeds attributable to the sale, lease, insurance loss, or
         condemnation of such property;

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<PAGE>   154

         rights under service, maintenance, or warranty contracts with regard to
         such property; and rights under trade names, patents, or copyrights
         that are subject to use in connection with the property, together with
         all proceeds and products thereof.

IV.      All of Grantor's "accounts" and "general intangibles" giving rise to
         such "accounts," as each such term is defined in the Code, now owned or
         hereafter acquired by Grantor, and, in any event, all accounts
         receivable (including, without limitation, all health-care-insurance
         receivables and all Government Receivables, including without
         limitation, those arising pursuant to supplier agreements under the
         Medicare and Medicaid programs or otherwise arising out of services for
         which payment or reimbursement is made under the Medicare and Medicaid
         programs or by third party payors), book debts and other forms of
         obligations now owned or hereafter received or acquired by or belonging
         or owing to Grantor (including, without limitation, under any trade
         names, styles or divisions thereof), whether arising out of goods sold
         or services rendered by Grantor or from any other transaction, whether
         or not the same involves the sale of goods or services by Grantor, and
         all of Grantor's rights in, to and under all purchase orders or
         receipts now owned or hereafter acquired by it for goods or services,
         and all of Grantor's rights to any goods represented by any of the
         foregoing (including, without limitation, unpaid seller's rights of
         rescission, replevin, reclamation and stoppage in transit and rights to
         returned, reclaimed or repossessed goods), and all moneys due or to
         become due to Grantor under all contracts for the sale of goods or the
         performance of services or both by Grantor (whether or not yet earned
         by performance on the part of Grantor or in connection with any other
         transaction), now in existence or hereafter occurring, including,
         without limitation, the right to receive the proceeds of said purchase
         orders and contracts, as well as to enforce all collateral security and
         guaranties of any kind given by any Person with respect to any of the
         foregoing, and all present and future general intangibles of Grantor in
         any way related or pertaining to the foregoing (excluding, however,
         licenses, permits and Medicare and Medicaid supplier agreements that by
         the terms thereof or applicable law may not be encumbered, assigned or
         otherwise transferred), including, without limitation, Grantor's books,
         records (except medical records), files, computer discs and software
         relating to the foregoing but subject to any applicable state or
         federal record retention requirements.

V.       All of Grantor's rights under the Asset Purchase Agreement, the
         Services Agreement, effective as of January 1, 1998, between Samaritan
         Health System, an Arizona non-profit corporation, and Grantor, and all
         documents and instruments executed in connection with either of the
         foregoing agreements, together with all proceeds of any of the
         foregoing.

VI.      All "deposit accounts" as such term is defined in the Code, including,
         without limitation, Account number 710786204 maintained by Grantor at
         Whitney National Bank, any other bank account (wherever located) into
         which proceeds of Receivables may at any time or from time to time be
         deposited, any lockbox, post office box or similar collection or cash
         management device or arrangement relating thereto, all checks and other
         items deposited from time to time therein, and the balance of all
         amounts from time to time on deposit therein, together with all
         proceeds of any of the foregoing.

                                      D-6
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The inclusion of proceeds in this Agreement does not authorize Grantor to sell,
dispose of or otherwise use the Collateral in any manner not specifically
authorized hereby or by the Loan Agreement.

Grantor will maintain the Collateral described in paragraph I above at the
locations specified in Schedule I attached hereto and made a part hereof.

                  SECTION 3. Security for Obligations. This Agreement secures
the prompt and complete (a) payment of all Guaranteed Obligations (as defined in
the Guaranty Agreement) and (b) performance of all other obligations, covenants
and conditions by Grantor contained in any other Loan Documents to which the
Grantor is or becomes a party (including, without limitation, the covenants and
conditions contained herein) (all such obligations, covenants and conditions
described in the foregoing clauses (a) and (b) being hereinafter collectively
referred to as the "Secured Obligations"), regardless of whether such
obligations be direct or indirect, primary or secondary, joint or several,
absolute or contingent, together with any and all renewals, modifications or
extensions of such debts, obligations and liabilities, or any part thereof,
whether for principal, interest, attorneys' fees, costs or otherwise (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due).

                  SECTION 4. Grantor Remains Liable. Anything herein to the
contrary notwithstanding, (a) Grantor shall remain liable under any contracts
and agreements included in the Collateral to the extent set forth therein to
perform all of its respective duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Secured Party or any Creditor of any of the rights hereunder shall not release
Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) neither the Secured Party nor any Creditor
shall have any obligation or liability under any contracts and agreements
included in the Collateral by reason of this Agreement, nor shall the Secured
Party or any Creditor be obligated to perform any of the obligations or duties
of Grantor thereunder or to take any action to collect or enforce any claim for
payment in respect of which a security interest is granted hereunder.

                  SECTION 5. Representations and Warranties. Grantor hereby
represents and warrants as follows:

                  (a) Upon the making of all filings and the taking of all other
         actions necessary to perfect the security interests created hereby,
         including, without limitation, those actions specified in Section 6(a)
         below, this Agreement will create valid first priority security
         interests in the Collateral (subject only to Permitted Liens and other
         than Collateral consisting of Receivables under private insurance
         policies) securing the payment of the Secured Obligations. In the case
         of Collateral consisting of Receivables under private insurance
         policies, upon compliance by the parties with the provisions of such
         policies and any applicable state common law requirements, this
         Agreement will create valid security interests in such Collateral,
         securing the payment of the Secured Obligations.

                  (b) Other than the filings and other actions described in
         Section 5.17 of the Loan Agreement and in Section 6 below, to perfect
         the security interests created by this Agreement, no authorization,
         approval or other action by, and no notice to or filing with,

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<PAGE>   156

         any Governmental Authority, is required for the perfection of or the
         exercise by the Secured Party of the rights and remedies of the
         Creditors and the Secured Party hereunder, except that in the case of
         Government Receivables the Secured Party must obtain a court order in
         compliance with federal and state anti-assignment laws in order to
         enforce the obligations of the account debtors in respect of such
         Government Receivables. Grantor has not assigned to others its rights
         with respect to Receivables under policies or contracts of insurance..

                  (c) Grantor's only taxpayer identification number is
         72-1404705. Grantor will not change its taxpayer identification number
         unless it has given the Secured Party prior written notice and has
         taken such action as is necessary to cause the security interest of the
         Secured Party in the Collateral to continue to be perfected. If
         Grantor's taxpayer identification number is changed by an entity other
         than Grantor, then Grantor will give the Secured Party written notice
         within one month thereafter and will take such action as is necessary
         to cause the security interest of the Creditors and the Secured Party
         in the Collateral to continue to be perfected.

                  (d) Grantor is an "air carrier" holding a certificate under 49
         U.S.C.A. Section 44705 and the regulations promulgated thereunder.

                  SECTION 6. Further Assurances.

                  (a) Grantor authorizes the Secured Party to file financing
         statements (Form UCC-1), and any necessary amendments thereto or
         continuations thereof, and other security documents executed by Grantor
         in those offices and locations necessary in the opinion of the Secured
         Party to perfect the security interests granted herein, including all
         such documents and agreements as may be required from time to time to
         comply with the Assignment of Claims Act of 1940, as in effect from
         time to time and the rules and regulations issued or promulgated
         thereunder (the "Assignment of Claims Act"), to the extent the
         Assignment of Claims Act is applicable to any of the Collateral, and to
         comply with state and federal statutes and regulations relating to the
         creation and perfection of security interests in Government Receivables
         and the proceeds thereof. Grantor further agrees that from time to
         time, at the expense of Grantor, Grantor will promptly execute and
         deliver all further instruments and documents, and take all further
         action that may be necessary or desirable, or that the Secured Party
         may reasonably request, in order to perfect and protect any security
         interests granted or purported to be granted hereby or to enable the
         Secured Party to exercise and enforce the Creditors' rights and
         remedies hereunder with respect to any of the Collateral. Without
         limiting the generality of the foregoing, Grantor will execute and file
         such financing or continuation statements, or amendments thereto, and
         such other instruments or notices, as may be necessary or desirable, or
         as the Secured Party may reasonably request, in order to perfect and
         preserve the security interests granted or purported to be granted
         hereby.

                  (b) Grantor authorizes the Secured Party to file a carbon,
         photographic or other reproduction of this Agreement as a financing
         statement or to file one or more financing or continuation statements,
         and amendments thereto, relative to all or any part of the Collateral
         without the signature of Grantor where permitted by law.

                                      D-8
<PAGE>   157

                  SECTION 7. Insurance. Grantor shall at its own expense
maintain insurance with respect to the Collateral required by the terms of the
Loan Agreement.

                  SECTION 8. Transfers and Other Liens. Except as permitted by
the Loan Agreement, Grantor shall not:

                  (a) sell, assign (by operation of law or otherwise) or
         otherwise dispose of any of the Collateral, and

                  (b) create or suffer to exist any Lien (other than federal and
         state government rights of offset with respect to Government
         Receivables, to the extent that such rights may be characterized as
         constituting a Lien) upon or with respect to any of the Collateral to
         secure the Indebtedness of any Person.

                  SECTION 9. Secured Party Appointed Attorney-in-Fact. Grantor
hereby irrevocably appoints the Secured Party (other than with respect to
Government Receivables, in which case such appointment shall be revocable),
effective upon the occurrence of an Event of Default and the acceleration of the
Secured Obligations, Grantor's attorney-in-fact, with full authority in the
place and stead of Grantor and in the name of Grantor, the Secured Party or
otherwise, from time to time in the Secured Party's discretion, to take any
action and to execute any instrument which the Secured Party may deem necessary
or advisable to accomplish the purposes of this Agreement, including, without
limitation:

                  (a) to ask, demand, collect, sue for, recover, compound,
         receive and give acquittance and receipts for moneys due and to become
         due under or in respect of any of the Collateral,

                  (b) to receive, endorse and collect any drafts or other
         instruments, documents and chattel paper in connection with clause (a)
         above,

                  (c) to apply funds deposited to any lockbox or deposit account
         to the payment of the Secured Obligations, and

                  (d) to file any claims or take any action or institute any
         proceedings which the Secured Party may deem necessary or desirable for
         the collection of any of the Collateral or otherwise to enforce the
         rights of the Creditors and the Secured Party.

                  SECTION 10. Secured Party May Perform. If Grantor fails to
perform any agreement contained herein and such violation shall not have been
remedied within 30 days, the Secured Party may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Secured Party
(including reasonable attorneys' fees) incurred in connection therewith shall be
payable by Grantor under Section 13.

                  SECTION 11. The Secured Party's Duties. The powers conferred
on the Secured Party and the Creditors hereunder are solely to protect their
interest in the Collateral and shall not impose any duty upon the Secured Party
or any Creditor to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, neither the Secured Party nor any Creditor shall have any duty as
to any

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Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.

                  SECTION 12. Remedies. Upon the occurrence of any Event of
Default and the acceleration of any of the Secured Obligations:

                  (a) Except with respect to Government Receivables as to which
         notice must be provided by the Secured Party to the applicable
         governmental or public authority or agency and a court order must be
         obtained by the Secured Party in order for it to enforce the
         obligations of the account debtor thereunder, the Secured Party may
         exercise in respect of the Collateral, in addition to other rights and
         remedies provided for herein or otherwise available to it, all the
         rights and remedies of a secured party on default under Chapter 9 of
         the Code (whether or not the Code applies to the affected Collateral,
         except that the Secured Party shall not have the right, absent a valid
         court order to such effect, to notify account debtors in respect of
         Government Receivables to make payments other than to Grantor) and in
         addition thereto and cumulative thereof, the following rights (to the
         extent allowed by the Code): the right to sell, lease or otherwise
         dispose of the Collateral and the right to take possession of the
         Collateral, and for that purpose, the Secured Party may enter upon any
         premises on which the Collateral may be situated and remove the same
         therefrom and/or may render the Collateral inoperable; the Secured
         Party may require Grantor to, and Grantor hereby agrees that it will,
         at its expense and upon the request of the Secured Party, forthwith
         assemble all or part of the Collateral and all documents relating to
         the Collateral as directed by the Secured Party and make the Collateral
         available to the Secured Party at a place to be designated by the
         Secured Party; without notice except as specified below and, except as
         may be required by the terms of the applicable policies or contracts in
         the case of private insurance Receivables, sell the Collateral in one
         or more parcels at public or private sale, at any of the Secured
         Party's offices or elsewhere, for cash, on credit or for future
         delivery, and, to the extent permitted by law, upon such other terms as
         the Secured Party may deem commercially reasonable. Grantor agrees
         that, to the extent notice of sale shall be required by law, at least
         ten days' notice to Grantor of the time and place of any public sale or
         the time after which any private sale is to be made shall constitute
         reasonable notification. The Secured Party shall not be obligated to
         make any sale of Collateral regardless of notice of sale having been
         given. The Secured Party may adjourn any public or private sale from
         time to time by announcement at the time and place fixed therefor, and
         such sale may, without further notice, be made at the time and place to
         which it was so adjourned.

                  (b) All cash proceeds received by the Secured Party in respect
         of any sale of, collection from, or other realization upon all or any
         part of the Collateral may, in the discretion of the Secured Party, be
         held by the Secured Party as collateral for, and/or then or at any time
         thereafter applied in whole or in part by the Secured Party against,
         the Secured Obligations in the order provided in Section 8.03 of the
         Loan Agreement.

                  (c) Additionally, and not by way of limitation: Grantor hereby
         acknowledges the Secured Obligations secured hereby whether now
         existing or hereafter arising, and confesses judgment in favor of the
         Creditors (but only to the extent permitted by law in the case of
         Government Receivables) and does by these presents agree and stipulate
         that,

                                      D-10
<PAGE>   159

         upon the occurrence of an Event of Default, the entire Secured
         Obligations whatever the form thereof, shall at the option of the
         Creditors pursuant to the terms of the Loan Agreement, become due and
         payable immediately, without presentment, demand for payment, protest
         or notice of nonpayment, dishonor or protest or any other notice or
         demand of any kind and the Secured Party may, without making demand and
         without notice of or putting in default, all the same being hereby
         expressly waived, enforce payment in full of all the Secured
         Obligations, and cause all and singular the Collateral to be seized and
         sold by executory process under the laws of the State of Louisiana
         issued by any competent court, and to proceed with the enforcement of
         this Agreement in any manner prescribed by law. Grantor hereby waives
         the benefit of any laws or parts of laws relating to the appraisement
         of the property seized and sold under executory process or other legal
         process and consents that the Collateral be sold without appraisement
         at public or private sale. Grantor further consents to any of the
         Creditors purchasing the Collateral at such sale.

         Grantor hereby expressly waives:

         (1)      The benefit of appraisement, as provided in Articles 2332,
                  2336, 2723 and 2724, Louisiana Code of Civil Procedure, and
                  all other laws conferring the same;

         (2)      The demand and three (3) days delay accorded by Articles 2639
                  and 2721, Louisiana Code of Civil Procedure;

         (3)      The notice of seizure required by Articles 2293 and 2721,
                  Louisiana Code of Civil Procedure;

         (4)      The three (3) days delay provided by Articles 2331 and 2722,
                  Louisiana Code of Civil Procedure; and

         (5)      The benefit of the other provisions of Articles 2331, 2722 and
                  2733, Louisiana Code of Civil Procedure and the benefit of any
                  other articles or laws relating to rights or appraisement,
                  notice, or delay not specifically mentioned above and Grantor
                  hereby expressly agrees to the immediate seizure of the
                  Collateral in the event of suit thereon.

                  (d) All rights and remedies of the Secured Party and the
         Creditors expressed herein are in addition to all other rights and
         remedies possessed by the Secured Party and the Creditors in the Loan
         Documents and the Swap Agreements.

                  SECTION 13. Indemnity, Expenses and Interest.

                  (a) Grantor agrees upon demand to pay to the Secured Party the
         amount of any and all reasonable costs and expenses, including the
         reasonable fees and disbursements of its counsel and of any experts and
         agents, which the Secured Party may incur in connection with (i) the
         administration of this Agreement, (ii) the custody, preservation, use
         or operation of, or the sale of, collection from, or other realization
         upon, any of the Collateral, (iii) the exercise or enforcement of any
         of the rights of the Secured Party

                                      D-11
<PAGE>   160

         hereunder or (iv) the failure by Grantor to perform or observe any of
         the provisions hereof provided such failure shall not have been
         remedied within 30 days.

                  (b) Grantor agrees to pay interest on any expenses or other
         sums due to the Secured Party hereunder that are not paid when due at a
         rate per annum equal to the lesser of (i) the Maximum Rate or (ii) 3%
         above the Base Rate.

                  SECTION 14. Amendments, Etc. Subject to any provision in the
Loan Agreement to the contrary, no amendment or waiver of any portion of this
Agreement nor consent to any departure by Grantor herefrom shall in any event be
effective unless the same shall be in writing and signed by the Creditors, and
then such waiver or consent shall be effective only in the specific instance for
the specific purpose for which given.

                  SECTION 15. Addresses for Notices. Except as otherwise
expressly provided herein, all notices and other communications provided for
hereunder shall be given in accordance with the terms of the Guaranty Agreement.

                  SECTION 16. Security Interests Absolute. All rights of the
Secured Party and the Creditors, all obligations of Grantor hereunder and the
security interests hereunder, shall, to the extent permitted by applicable law,
be absolute and unconditional, irrespective of:

                  (a) any lack of validity or enforceability of the Loan
         Agreement, any Swap Agreement or any of the other Loan Documents;

                  (b) any change in the time, manner or place of payment of, or
         in any other term of, all or any of the Secured Obligations or any
         other amendment or waiver of or any consent to any departure from the
         Loan Agreement, any Swap Agreement or any other Loan Document;

                  (c) any exchange, release or non-perfection of any other
         collateral, or any release or amendment or waiver of or consent to
         departure from any guaranty, for all or any of the Secured Obligations;
         or

                  (d) any other circumstance which might otherwise constitute a
         defense available to, or a discharge of, Grantor in respect of the
         Secured Obligations or in respect of this Agreement.

                  SECTION 17. Continuing Security Interests. This Agreement
creates a continuing security interest in the Collateral and shall (a) remain in
full force and effect until (i) termination of the obligations of the Banks to
make Loans and termination of any and all Swap Agreements, and (ii) payment in
full thereafter of the Secured Obligations, (b) be binding upon Grantor, its
successors and assigns and (c) inure to the benefit of the Secured Party, the
Creditors and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), the Secured Party and the
Creditors may assign or otherwise transfer any of their respective rights under
this Agreement to any other Person, and such Person shall thereupon become
vested with all the benefits in respect thereof granted herein

                                      D-12
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or otherwise to the Secured Party or the Creditors, as the case may be. Upon the
payment in full of the Secured Obligations and the termination of any
commitments to make any extensions of credit with respect to the Loan Documents,
Grantor shall be entitled to the return, upon its request and at its expense, of
such of the Collateral as shall not have been sold or otherwise applied pursuant
to the terms hereof.

                  SECTION 18. Waiver of Marshaling. All rights of marshaling of
assets of Grantor, including any such right with respect to the Collateral, are
hereby waived by Grantor.

                  SECTION 19. Limitation by Law. All rights, remedies and powers
provided in this Agreement may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the provisions
of this Agreement are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement invalid, unenforceable, in
whole or in part, or not entitled to be recorded, registered or filed under the
provisions of any applicable law.

                  SECTION 20. Termination of Agreement; Release of Security
Interests. Upon the payment in full of the Secured Obligations and the
termination of any commitments to make any extensions of credit with respect to
the Loan Documents, this Agreement shall terminate and be of no further force
and effect and the Secured Party shall, at the expense of Grantor, execute and
deliver to Grantor such documents and instruments reasonably requested by
Grantor to evidence the release of the security interests created by this
Agreement; provided, however, notwithstanding the termination of, and the
release of the security interests created by, this Agreement, the obligations of
Grantor and the rights of the Secured Party and the Creditors under Sections 4
and 13 shall survive such termination and release.

                  SECTION 21. Survival of Representations and Warranties. All
representations and warranties contained in this Agreement or made in writing by
or on behalf of Grantor in connection herewith shall survive the execution and
delivery of this Agreement and repayment of the Secured Obligations. Any
investigation by the Creditors shall not diminish in any respect whatsoever
their rights to rely on such representations and warranties.

                  SECTION 22. Separability. Should any clause, sentence,
paragraph, subsection or Section of this Agreement be judicially declared to be
invalid, unenforceable or void, such decision will not have the effect of
invalidating or voiding the remainder of this Agreement, and Grantor agrees that
the part or parts of this Agreement so held to be invalid, unenforceable or void
will be deemed to have been stricken herefrom by the parties hereto, and the
remainder will have the same force and effectiveness as if such stricken part or
parts had never been included herein.

                  SECTION 23. Captions. The captions in this Agreement have been
inserted for convenience only and shall be given no substantive meaning or
significance whatsoever in construing the terms and provisions of this
Agreement.

                  SECTION 24. No Waiver; Remedies. No failure on the part of the
Secured Party or any Creditor to exercise, and no delay in exercising, any right
hereunder shall operate as a

                                      D-13
<PAGE>   162

waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

                  SECTION 25. No Absolute Assignment of Government Receivables.
In order to prevent possible violations of, among other statutes and regulations
relating to Government Receivables, the Assignment of Claims Act and 42 U.S.C.
Section 1395u(b)(6), 42 U.S.C. Section 1396a(a)(32), 32 C.F.R. Section 199.7(j),
38 U.S.C. Section 1713, LSA-R.S. 46:111, Arizona Administrative Code Section R
9-22-704 and Texas Human Resources Code Ann. Section 32.036, this Agreement is
not intended to be an absolute assignment of any Government Receivable.

                  SECTION 26. Governing Law; Terms. This Agreement shall be
governed by and construed in accordance with the laws of the State of Louisiana,
except as required by mandatory provisions of law and except to the extent that
remedies hereunder in respect of any particular Collateral are governed by the
laws of a jurisdiction other than the State of Louisiana.

                  SECTION 27. INTEGRATION. THIS AGREEMENT, TOGETHER WITH THE
OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

                  SECTION 28. Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.

                            [REMAINDER OF PAGE BLANK.
                            SIGNATURE PAGE FOLLOWS.]

                                      D-14
<PAGE>   163

                  IN WITNESS WHEREOF, Grantor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.

                                              GRANTOR:

                                              AIR EVAC SERVICES, INC.

                                              By:
                                                 -------------------------------
                                                  Name:
                                                  Title:

                                              SECURED PARTY:

                                              BANK OF AMERICA, N.A., AS AGENT

                                              By:
                                                 -------------------------------
                                                  Name:
                                                  Title:

<PAGE>   164

                                   SCHEDULE I

                              COLLATERAL LOCATIONS

                                [To be attached]

<PAGE>   165

                                   SCHEDULE II

                            HELICOPTERS AND AIRCRAFT

                                     ENGINES

                                [To be attached]

<PAGE>   166

                                    EXHIBIT E

                           FORM OF GUARANTY AGREEMENT

                               GUARANTY AGREEMENT

                  This GUARANTY AGREEMENT, dated as of July 3, 2001, is made by
Air Evac Services, Inc., a Louisiana corporation (the "Guarantor"), in favor of
the Guaranteed Parties (as hereinafter defined).

                                    RECITALS:

         A. Petroleum Helicopters, Inc. (the "Borrower"), Bank of America, N.A.
("Bank of America"), Whitney National Bank ("Whitney"), Bank One, NA ("Bank One"
and, together, with Bank of America, Whitney and the other lenders from time to
time parties to the Loan Agreement, collectively, the "Banks"), Bank of America,
as Issuing Bank, and Bank of America, as Agent, have entered into that certain
Second Amended and Restated Loan Agreement, dated as of even date herewith (as
the same may be amended, supplemented or otherwise modified from time to time,
including, without limitation, all extensions, renewals, restatements,
rearrangements and refundings thereof, the "Loan Agreement"). Capitalized terms
used but not defined herein have the meanings assigned to such terms in such
Loan Agreement.

         B. As a condition precedent to the extensions of credit under the Loan
Agreement and under certain Swap Agreements that the Borrower may enter from
time to time with the Swap Providers (together with the Banks, collectively, the
"Creditors"), the Creditors have required that the Guarantor execute and deliver
this Guaranty Agreement in favor of the Creditors, the Issuing Bank and the
Agent (collectively, the "Guaranteed Parties").

         C. The Guarantor is a wholly owned subsidiary of the Borrower and will
derive substantial direct and indirect benefit from the extensions of credit
under the Loan Agreement and the financial accommodations under the Swap
Agreements.

         D. Accordingly, the Guarantor desires to execute this Guaranty in order
to satisfy the condition described above in Recital B.

                  NOW, THEREFORE, for and in consideration of the premises and
to induce the Banks to make Loans and the Issuing Bank to issue Letters of
Credit to the Borrower pursuant to the Loan Agreement, and in order to induce
the Swap Providers to execute, deliver and perform the Swap Agreements, the
Guarantor hereby agrees with the Agent and the Guaranteed Parties as follows:

                  1. Defined Terms.

                  (a) As used herein, "Borrower Obligations" means the
collective reference to the unpaid principal of and accrued and unpaid interest
on the Loans and all other obligations

                                      E-1
<PAGE>   167

and liabilities of the Borrower (including, without limitation, interest
accruing at the then applicable rate provided in the Loan Agreement after the
maturity of the Loans and interest accruing at the then applicable rate provided
in the Loan Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) to any Guaranteed Party, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, the
Loan Agreement, any other Loan Document or any Swap Agreement entered into by
the Borrower for the benefit of any Guaranteed Party, or any other document
made, delivered or given in connection with any of the foregoing, in each case
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees, charges and disbursements of counsel to Agent and/or to any Bank that are
required to be paid by the Borrower pursuant to the terms of any Loan Document).

                  (b) As used herein, "Guaranteed Obligations" means the
collective reference to (i) the Borrower Obligations, (ii) all obligations and
liabilities of the Guarantor which may arise under or in connection with this
Guaranty Agreement, any other Loan Document or any Swap Agreement to which the
Guarantor is a party, in each case, whether on account of direct obligations,
Guaranty Obligations, reimbursement obligations, principal, interest (including,
without limitation, interest accruing at the then applicable rate provided in
the Loan Agreement after the maturity of the Loans and interest accruing at the
then applicable rate provided in the Loan Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding relating to the Guarantor or the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in any such
proceeding), fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees, charges and disbursements of counsel to the Agent and/or
to any Bank that are required to be paid by the Guarantor pursuant to the terms
of this Guaranty Agreement or any other Loan Document to which it is a party)
and (iii) all renewals, refundings, restructures and other refinancings of any
thereof, including increases in the amount thereof.

                  (c) As used herein, "Guaranty Agreement" means this Guaranty
Agreement, as amended, supplemented and otherwise modified from time to time.

                  (d) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Guaranty Agreement shall refer to this Guaranty
Agreement as a whole and not to any particular provision of this Guaranty
Agreement, and paragraph references are to this Guaranty Agreement unless
otherwise specified.

                  (e) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

                  2. Guarantee.

                                      E-2
<PAGE>   168

                  (a) This Guaranty Agreement constitutes a guaranty of payment
and not of collection and is intended to be an absolute, irrevocable and
unconditional guaranty of payment and performance, and the Guarantor shall be
liable for the payment and performance of the Guaranteed Obligations as a
primary obligor. In furtherance thereof, but subject to the provisions of the
last sentence of this paragraph 2(a) and the provisions of paragraph 2(b), the
Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the
Agent for the benefit of itself and the Guaranteed Parties and their respective
successors, endorsees, transferees and assigns, the prompt and complete payment
and performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Guaranteed Obligations.

                  (b) Anything herein, in the Loan Agreement, any Swap Agreement
or in any other Loan Document to the contrary notwithstanding, the maximum
liability of the Guarantor hereunder shall in no event exceed the amount which
can be guaranteed by the Guarantor under applicable laws relating to the
insolvency of debtors.

                  (c) The Guarantor further agrees to pay any and all reasonable
expenses (including, without limitation, all reasonable fees and disbursements
of counsel) which may be paid or incurred by any Guaranteed Party in enforcing,
or obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Guaranteed Obligations and/or enforcing any rights
with respect to, or collecting against, the Guarantor under this Guaranty
Agreement. This Guaranty Agreement shall remain in full force and effect until
the Guaranteed Obligations are indefeasibly paid in full and the Loan Agreement
and the other Loan Documents are terminated, notwithstanding that from time to
time prior thereto the Borrower may be free from any Borrower Obligations.

                  (d) The Guarantor agrees that the Borrower Obligations may at
any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing this Guaranty Agreement or affecting the
rights and remedies of the Agent hereunder.

                  (e) No payment or payments made by the Borrower, the
Guarantor, any other guarantor or any other person or entity or received or
collected by the Agent or any Guaranteed Party from the Borrower, the Guarantor,
any other guarantor or any other person or entity by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Guaranteed Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of the
Guarantor hereunder, which shall, notwithstanding any such payment or payments,
remain liable for the Guaranteed Obligations up to the maximum liability of the
Guarantor until the Guaranteed Obligations are indefeasibly paid in full and the
Loan Agreement and the other Loan Documents are terminated.

                  3. Right of Contribution. The Guarantor shall be entitled to
seek and receive contribution from and against any other guarantor of the
Borrower Obligations. The Guarantor reserves its right of contribution which
shall be subject to the terms and conditions of paragraph 5. The provisions of
this paragraph 3 shall in no respect limit the obligations and liabilities of
the Guarantor to the Agent and the Guaranteed Parties, and the Guarantor shall
remain liable to the Agent and the Guaranteed Parties for the full amount
guaranteed by the Guarantor hereunder.

                                      E-3
<PAGE>   169

                  4. Right of Set-off. On the occurrence and during the
continuance of any default by the Guarantor under this Guaranty Agreement, any
Loan Document or any Swap Agreement to which the Guarantor is a party or by the
Borrower or any other person or entity obligated to the Agent or any Guaranteed
Party under the Loan Agreement, any other Loan Document or any Swap Agreement,
to the maximum extent permitted by applicable law, the Guarantor hereby
irrevocably authorizes the Agent and each Guaranteed Party at any time and from
time to time without notice to the Guarantor or any other guarantor of the
Borrower Obligations, any such notice being expressly waived by the Guarantor,
to set-off and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured at any time held or owing
by the Agent or any Guaranteed Party to or for the credit or the account of the
Guarantor, or any part thereof in such amounts as the Agent or such Bank may
elect, against and on account of the Guaranteed Obligations, whether or not the
Agent or any such Guaranteed Party has made any demand for payment and although
all or any part of the Guaranteed Obligations may be contingent or unmatured.
The Agent will notify the Guarantor promptly of any such set-off (or if any
Guaranteed Party has set-off, such Guaranteed Party will notify the Agent and
the Guarantor thereof) and the application of the funds obtained thereby;
provided, that, to the extent permitted by applicable law, the failure to give
such notice shall not affect the validity of such set-off or such application.
The rights of the Agent and the Guaranteed Parties under this paragraph 4 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Agent and the Guaranteed Parties may have.

                  5. Subrogation. The Guarantor will not exercise any rights
which it may acquire by way of subrogation under this Guaranty Agreement, by any
payment made hereunder or otherwise, nor shall the Guarantor seek or be entitled
to seek any contribution or reimbursement from the Borrower or any other
guarantor in respect of payments made by the Guarantor hereunder, until all
amounts owing by the Borrower on account of the Borrower Obligations are
indefeasibly paid in full and the Loan Agreement, the other Loan Documents and
the Swap Agreements are terminated. If any amount shall be paid to the Guarantor
on account of such subrogation, contribution or reimbursement rights at any time
when all of the Borrower Obligations have not been indefeasibly paid in full and
the Loan Agreement, the other Loan Documents and the Swap Agreements have not
been terminated, that amount shall be held by the Guarantor in trust for the
Agent and the Guaranteed Parties, segregated from other funds of the Guarantor,
and shall, forthwith upon receipt by the Guarantor, be turned over to the Agent
in the exact form received by the Guarantor (duly endorsed by the Guarantor to
the Agent, if required), to be applied against the Guaranteed Obligations,
whether matured or unmatured, in such order and manner as the Agent may
determine in its sole discretion.

                  6. Amendments, etc. with Respect to the Guaranteed
Obligations; Waiver of Rights. The Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against the Guarantor
and without notice to or further assent by the Guarantor, any demand for payment
of any of the Guaranteed Obligations made by the Agent or any Guaranteed Party
may be rescinded by the Agent or such Guaranteed Party and any of the Guaranteed
Obligations continued, and the Guaranteed Obligations, or the liability of any
other party upon or for any part thereof, or any collateral security or other
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended,

                                      E-4
<PAGE>   170

amended, modified, accelerated, compromised, waived, surrendered or released,
and the Loan Agreement, any other Loan Document and any Swap Agreement may be
amended modified, supplemented or terminated, in whole or in part, from time to
time, and any collateral security, guarantee or right of offset at any time
existing for the payment of the Guaranteed Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Agent nor any Guaranteed Party
shall have any obligation to protect, secure, perfect or insure any lien or
security interest at any time held by it as security for the Guaranteed
Obligations or for this Guaranty Agreement or any property subject thereto, and
the Guarantor hereby expressly waives any defense it may have to its obligations
and liabilities hereunder, under any other Loan Document or under any Swap
Agreement as a result of any failure by the Agent or any Guaranteed Party to so
protect, secure, perfect or insure any such lien or secured interest. When
making any demand hereunder against the Guarantor, the Agent may, but shall be
under no obligation to, make a similar demand on the Borrower or any other
guarantor, and any failure by the Agent to make any such demand or to collect
any payments from the Borrower or any such other guarantor or any release of the
Borrower or such other guarantor shall not relieve the Guarantor of any of its
obligations or liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of the Agent or any
Guaranteed Party against the Guarantor. For the purposes hereof, "demand" shall
include the commencement and continuance of any legal proceedings.

                  7. Guaranty Agreement Absolute and Unconditional. The
Guarantor hereby expressly waives any and all notice of the creation, renewal,
extension or accrual of any of the Guaranteed Obligations and notice of or proof
of reliance by the Agent or any Guaranteed Party on this Guaranty Agreement or
acceptance of this Guaranty Agreement, and the Guaranteed Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guaranty Agreement, and all dealings between the Borrower and the Guarantor, on
the one hand, and the Agent and the Guaranteed Parties, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guaranty Agreement. The Guarantor hereby expressly waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or on the Borrower or any other guarantor with respect to the
Guaranteed Obligations. The Guarantor understands and agrees that this Guaranty
Agreement shall be construed as a continuing, absolute and unconditional
guaranty of payment and performance without regard to, and hereby knowingly,
intentionally and irrevocably waives any defenses it may now or hereafter have
in any way relating to, any of the following: (a) the validity, regularity or
enforceability of the Loan Agreement, any other Loan Document or any Swap
Agreement, any of the Guaranteed Obligations or any collateral security therefor
or guarantee or right of offset with respect thereto at any time or from time to
time held by the Agent or any Guaranteed Party; (b) any defense, set-off or
counterclaim (other than a defense of indefeasible payment) which may at any
time be available to or be asserted by the Borrower or any other guarantor
against the Agent or any Guaranteed Party; or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower or the
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower for the Borrower Obligations, or of the
Guarantor under this Guaranty Agreement, in bankruptcy or in any other instance.
When pursuing its rights and remedies hereunder against the Guarantor, the Agent
may, but shall be under no obligation to, pursue such rights and remedies as it
may have against the Borrower or any other person or entity, against any
collateral security or guaranty for the Borrower Obligations or any right of
offset with respect thereto, and any failure by the Agent to pursue

                                      E-5
<PAGE>   171

such other rights or remedies or to collect any payments from the Borrower, any
other guarantor or any such other person or entity or to realize upon any such
collateral security or guaranty or to exercise any such right of offset, or any
release of the Borrower, any other guarantor or any such other person or entity
or any such collateral security, guaranty or right of offset, shall not relieve
the Guarantor of any liability hereunder, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter of law,
of the Agent against the Guarantor. This Guaranty Agreement shall be effective
as a waiver of, and the Guarantor hereby expressly waives, any and all rights to
which the Guarantor may otherwise have been entitled under any suretyship laws
of the State of Texas in effect from time to time, including, without
limitation, any rights pursuant to Rule 31 of the Texas Rules of Civil
Procedure, Section 17.001 of the Texas Civil Practice and Remedies Code and
Chapter 34 of the Texas Business and Commerce Code. This Guaranty Agreement
shall remain in full force and effect and be binding in accordance with and to
the extent of its terms upon the Guarantor and the successors and assigns
thereof and shall inure to the benefit of the Agent and the Guaranteed Parties
and their respective successors, endorsees, transferees and assigns, until all
the Guaranteed Obligations are satisfied by indefeasible payment in full and the
Loan Agreement, the other Loan Documents and the Swap Agreements are terminated,
notwithstanding that from time to time during the term of the Loan Agreement the
Borrower may be free from any Borrower Obligations.

                  8. Reinstatement. This Guaranty Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by the Agent or any Guaranteed Party on the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or the Guarantor, or on or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or the Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.

                  9. Payments. The Guarantor hereby guarantees that payments
hereunder will be paid to the Agent without set-off or counterclaim in United
States dollars and in immediately available funds at the Agent's Office.

                  10. Representations and Warranties. The Guarantor hereby
represents and warrants that:

                  (a) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has the
power and authority and the legal right to own and operate its properties, to
lease and operate the properties it leases, to conduct the business in which it
is currently engaged, is duly qualified and in good standing under the Laws of
each jurisdiction where its business requires such qualification, and is in
compliance with all Laws except to the extent that noncompliance does not have a
Material Adverse Effect;

                  (b) it has the power and authority and the legal right to
execute and deliver, and to perform its obligations under, this Guaranty
Agreement and the other Loan Documents to which it is a party, and has taken all
necessary action to authorize the execution, delivery and performance of this
Guaranty Agreement and each of the other Loan Documents to which it is a party;

                                       E-6
<PAGE>   172

                  (c) this Guaranty Agreement and each of the other Loan
Documents to which it is a party constitutes a legal, valid and binding
obligation of the Guarantor enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles (whether
enforcement is sought by proceedings in equity or at law);

                  (d) the execution, delivery and performance of this Guaranty
Agreement and the other Loan Documents to which it is a party will not violate
any provision of any applicable law, rule or regulation or any contractual
obligation of the Guarantor and will not result in or require the creation or
imposition of any lien, security interest or other encumbrance of any kind on
any of the properties or revenues of the Guarantor pursuant to any requirement
of any applicable law, rule or regulation or any court order or decree
applicable to the Guarantor or any of its properties or any contractual
obligation of the Guarantor;

                  (e) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority and no consent of
any other person or entity (including, without limitation, any stockholder or
creditor of the Guarantor) is required in connection with the execution,
delivery, performance, validity or enforceability of this Guaranty Agreement or
(except in the case of the collection under the Security Agreement from the
account debtor in respect of Government Receivables, which requires a court
order in compliance with applicable federal or state anti-assignment laws) any
other Loan Document to which it is a party;

                  (f) there are no actions, suits or proceedings, claims or
disputes pending, or to the best knowledge of the Guarantor, threatened at law,
in equity, or in arbitration before any Governmental Authority, against the
Guarantor or any of its properties or assets which (i) purport to affect or
pertain to this Guaranty Agreement or any other Loan Document to which the
Guarantor is a party, or any of the transactions contemplated hereby, or (ii)
would reasonably be expected to have a Material Adverse Effect; and

                  (g) no injunction, writ, temporary restraining order of any
nature has been issued by any court or other Governmental Authority purporting
to enjoin or restrain the execution, delivery or performance of this Guaranty,
or directing that any other transaction provided for herein not be consummated
as herein provided.

The Guarantor hereby agrees that the foregoing representations and warranties
shall be deemed to have been made by the Guarantor on the date each Loan is made
and the date of each Letter of Credit Action under the Loan Agreement on and as
of such date of that Loan or Letter of Credit Action, as applicable, as though
made hereunder on and as of that date.

                  11. Notices. All notices, requests and demands to or upon the
Agent or any Guaranteed Party or the Guarantor to be effective shall be in
writing (including by facsimile) and shall be deemed to have been duly given or
made (i) when delivered by hand and signed for by recipient or (ii) four
business days after being deposited in the mail, first class postage prepaid or
(iii) one business day after being sent by priority overnight mail with a
nationally recognized overnight delivery carrier or (iv) if by facsimile, when
confirmed by telephone (not voicemail):

                                      E-7
<PAGE>   173

                  (a) if to the Agent or any Guaranteed Party, at its address or
facsimile number for notices set forth in the Loan Agreement; and

                  (b) if to the Guarantor, at its address or facsimile number
for notices set forth under its signature below.

The Agent, the Guaranteed Parties and the Guarantor may change their respective
addresses and facsimile numbers for notices by notice in the manner provided in
this paragraph 11.

                  12. Severability. Any provision of this Guaranty Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

                  13. INTEGRATION. THIS GUARANTY AGREEMENT, TOGETHER WITH THE
OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

                  14. Amendments in Writing; No Waiver; Cumulative Remedies.

                  (a) None of the terms or provisions of this Guaranty Agreement
may be waived, amended, supplemented or otherwise modified except by a written
instrument executed by the Guarantor and the Agent.

                  (b) Neither the Agent nor any Guaranteed Party shall by any
act (except by a written instrument pursuant to paragraph 14(a)), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Agent or any Guaranteed Party, any right, power
or privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Agent of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Agent would otherwise
have on any future occasion.

                  (c) The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.

                  15. Section Headings. The Section headings used in this
Guaranty Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.

                  16. Successors and Assigns. This Guaranty Agreement shall be
binding upon the successors and assigns of the Guarantor and shall inure to the
benefit of the Agent and the

                                      E-8
<PAGE>   174

Guaranteed Parties and their respective successors and assigns; provided, that
the Guarantor may not assign any of its rights or obligations under this
Guaranty Agreement without the prior written consent of the Agent and each
Guaranteed Party and any such purported assignment shall be null and void.

                  17. SUBMISSION TO JURISDICTION; WAIVERS.

                  (a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY AGREEMENT OR ANY OTHER LOAN DOCUMENT TO WHICH THE GUARANTOR IS A PARTY
MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS SITTING IN DALLAS OR OF THE
UNITED STATES FOR THE NORTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND
DELIVERY OF THIS GUARANTY AGREEMENT THE GUARANTOR CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE
GUARANTOR IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS GUARANTY AGREEMENT, ANY OTHER LOAN DOCUMENT TO
WHICH THE GUARANTOR IS A PARTY OR OTHER DOCUMENT RELATED THERETO. THE GUARANTOR
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

                  (b) THE GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER OR IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THIS GUARANTY AGREEMENT, ANY OF
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND THE GUARANTOR HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THE LOAN DOCUMENTS MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE GUARANTOR TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

                  (c) THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT
SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
ANY OTHER LOAN DOCUMENT MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED
OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID,
TO THE GUARANTOR AT ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH
OTHER ADDRESS OF WHICH THE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT TO PARAGRAPH
11.

                                      E-9
<PAGE>   175

                  (d) THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT
NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OR PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER
JURISDICTION.

                  (e) THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS PARAGRAPH 17 ANY
SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES.

                  18. [INTENTIONALLY DELETED.]

                  19. GOVERNING LAW. THIS GUARANTY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF TEXAS.

                  20. COUNTERPARTS. THIS GUARANTY AGREEMENT MAY BE EXECUTED IN
ANY NUMBER OF COUNTERPARTS AND BY THE DIFFERENT PARTIES HERETO ON SEPARATE
COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED AND DELIVERED SHALL BE DEEMED TO BE
AN ORIGINAL AND ALL OF WHICH TAKEN TOGETHER SHALL CONSTITUTE BUT ONE AND THE
SAME INSTRUMENT.

                  21. Security Documents. The obligations of the Guarantor are
secured by certain of the Security Documents. The Guarantor shall comply with
all terms and conditions of the Security Documents to which such Guarantor is a
party, as the same may be amended, restated, supplemented or otherwise modified
from time to time.

                  22. Stay of Acceleration. In the event that acceleration of
the time for payment of any of the Guaranteed Obligations is stayed, upon the
insolvency, bankruptcy or reorganization of the Borrower or any other Person, or
otherwise, all such amounts shall nonetheless be payable by the Guarantor
immediately upon demand by the Guaranteed Parties.

                  23. Credit Agreement Covenants. The Guarantor covenants and
agrees that on and after the date hereof and until the Commitment and all Swap
Agreements have been terminated and no Loan or Letter of Credit remains
outstanding (other than Letters of Credit, together with all fees that have
accrued and will accrue thereon through the stated termination date of such
Letters of Credit, which have been supported in a manner satisfactory to the
Issuing Bank in its sole and absolute discretion) and all Guaranteed Obligations
have been paid in full (other than indemnities described in Section 10.13 of the
Loan Agreement and analogous provisions in the Security Documents which are not
then due and payable), the Guarantor shall take, or will refrain from taking, as
the case may be, all actions that are necessary to be taken or not taken so that
no violation of any provision, covenant or agreement contained in Section 6 or
Section 7 of the Loan Agreement, and so that no Default or Event of Default is
caused by the actions of the Guarantor or any of its Subsidiaries.

                                      E-10
<PAGE>   176

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

                                      E-11
<PAGE>   177

                  IN WITNESS WHEREOF, each of the undersigned has caused this
Guaranty Agreement to be duly executed and delivered by its duly authorized
officer as of the day and year first above written.

                                  AIR EVAC SERVICES, INC.

                                  By:
                                     -----------------------------------------
                                  Name:
                                  Title:

                                  Address for Notices:
                                  113 Borman Drive
                                  Municipal Airport
                                  Lafayette, LA 70508
                                  Attention:  Michael J. McCann
                                  Telephone:  (337) 272-4427
                                  Facsimile:  (337) 235-1357

<PAGE>   178

                                   EXHIBIT H

                         FORM OF COMPLIANCE CERTIFICATE

                                       Financial Statement Date:
                                                                --------------

To:      Bank of America, N.A., as Agent

Ladies and Gentlemen:

         Reference is made to that certain Second Amended and Restated Loan
Agreement dated as of July ___, 2001 among Petroleum Helicopters, Inc., a
Louisiana corporation ("Borrower"), Banks from time to time party thereto, Bank
of America, N.A., as Agent and Issuing Bank (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined).

         The undersigned Responsible Officer hereby certifies as of the date
hereof that he is the [________________] of Borrower, and that, as such, he is
authorized to execute and deliver this Certificate to Agent on the behalf of
Borrower, and that:

            [Use following for fiscal YEAR-END financial statements]

         1. Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.01(a) of the Agreement for the fiscal year of
Borrower ended as of the above date, together with the report and opinion of an
independent certified public accountant required by such section.

           [Use following for fiscal QUARTER-END financial statements]

         1. Attached hereto as Schedule 1 are the unaudited financial statements
required by Section 6.01(b) of the Agreement for the fiscal quarter of Borrower
ended as of the above date. Such financial statements fairly present the
financial condition, results of operations and changes in financial position of
Borrower and its Subsidiaries in accordance with GAAP as at such date and for
such periods, subject only to normal year-end audit adjustments and the absence
of footnotes.

         2. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his supervision, a
detailed review of the transactions and conditions (financial or otherwise) of
Borrower during the accounting period covered by the attached financial
statements.

         3. A review of the activities of the Borrower Parties during such
fiscal period has been made under my supervision with a view to determining
whether during such fiscal period the Borrower Parties performed and observed
all their respective Obligations under the Loan Documents, and

                                  [SELECT ONE:]

                                      H-1
<PAGE>   179

[TO THE BEST KNOWLEDGE OF THE UNDERSIGNED DURING SUCH FISCAL PERIOD, BORROWER
PERFORMED AND OBSERVED EACH COVENANT AND CONDITION OF THE LOAN DOCUMENTS
APPLICABLE TO IT.]

                                     --OR--

         [THE FOLLOWING COVENANTS OR CONDITIONS HAVE NOT BEEN PERFORMED OR
OBSERVED AND THE FOLLOWING IS A LIST OF EACH SUCH DEFAULT OR EVENT OF DEFAULT
AND ITS NATURE AND STATUS:]

         4. The financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
Certificate.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of                    ,             .
   -------------------  ------------

                                          PETROLEUM HELICOPTERS, INC.

                                          By:
                                             ----------------------------------

                                          Name:
                                               --------------------------------

                                          Title:
                                                -------------------------------

                                      H-2
<PAGE>   180

        For the Quarter/Year ended ___________________("Statement Date")

                                   SCHEDULE 2
                          to the Compliance Certificate
                                  ($ in 000's)

I.   SECTION 7.12 -- CAPITAL EXPENDITURES.

     A.   Capital expenditures made during fiscal year to date:   $
                                                                   -------

     B.   Cash proceeds, net of direct selling expenses,
          received from the sale of any plant, property,
          equipment or other capital asset during such
          fiscal year                                             $
                                                                   -------

     C.   Maximum permitted capital expenditures
          ($25,000,000 + Line I.B.):                              $
                                                                   -------

     D.   Excess (deficient) for covenant compliance
          (Lines I.C - I.A):                                      $
                                                                   -------

II.  SECTION 7.14(A) - CONSOLIDATED CURRENT RATIO.

     A.   [TOTAL ASSETS OF THE BORROWER AND CONSOLIDATED
          SUBSIDIARIES WHICH WOULD BE SHOWN AS CURRENT
          ASSETS ON THE BALANCE SHEET OF THE BORROWER
          AND CONSOLIDATED SUBSIDIARIES PREPARED IN
          ACCORDANCE WITH GAAP](1) [CONSOLIDATED CURRENT
          ASSETS](2) for applicable measurement period:           $
                                                                   -------

     B.   [TOTAL LIABILITIES OF THE BORROWER AND
          CONSOLIDATED SUBSIDIARIES WHICH WOULD BE
          SHOWN AS CURRENT LIABILITIES ON THE
          BALANCE SHEET OF THE BORROWER AND CONSOLIDATED
          SUBSIDIARIES PREPARED AT SUCH TIME IN ACCORDANCE
          WITH GAAP](3)[CONSOLIDATED CURRENT LIABILITIES](4)
          for applicable measurement period:                      $
                                                                   -------

     C.   Consolidated Current Ratio (Line II.A /
          Line II.B):                                                to 1.00
                                                              ------

     Maximum permitted (1.75 to 1.00)

----------

(1)  Through and including the fiscal quarter ended September 30, 2001.

(2)  After fiscal quarter ended September 30, 2001.

(3)  Through and including the fiscal quarter ended September 30, 2001

(4)  After fiscal quarter ended September 30, 2001.

                                       H-3
<PAGE>   181

III. SECTION 7.14(B) - CONSOLIDATED TANGIBLE NET WORTH.

     A.   Consolidated Tangible Net Worth at Statement Date:

          1.   Par value (or value stated on the books
               of the Borrower) of all classes of the
               capital stock of the Borrower determined in
               accordance with GAAP:                              $
                                                                   -------

          2.   The amount of the consolidated surplus,
               whether capital or earned, of the Borrower
               and Consolidated Subsidiaries determined
               in accordance with GAAP:                           $
                                                                   -------

          3.   All deferred charges, patents, trade names,
               copyrights, licenses, franchises, goodwill,
               acquisition expenses, unamortized debt discount
               and expense and other intangible items
               determined in accordance with GAAP:                $
                                                                   -------

          4.   Consolidated Tangible Net Worth (Line III.A.1
               plus Line III.A.2 less Line III.A.3 ):             $
                                                                   -------

     B.   50% of Consolidated Net Income for each fiscal
          quarter ending after December 31, 2001
          (no reduction for losses):                              $
                                                                   -------

     C.   Minimum required Consolidated Tangible Net
          Worth (Line III.B plus $85,000,000):                    $
                                                                   -------

     D.   Excess (deficient) for covenant compliance
          (Line III.A.4. less Line III.C):                        $
                                                                   -------

                                      H-4
<PAGE>   182

IV.  SECTION 7.14(C) - MODIFIED CASH FLOW COVERAGE.

     A.   Consolidated Net Income for applicable
          measurement period:                                     $
                                                                   -------

     B.   Federal and state taxes measured on income
          of the Borrower and Consolidated Subsidiaries
          for applicable measurement period:                      $
                                                                   -------

     C.   Consolidated Interest Charges for applicable
          measurement period:                                     $
                                                                   -------

     D.   Rent Expense for applicable measurement period:         $
                                                                   -------

     E.   Depreciation and amortization of the
          Borrower and Consolidated Subsidiaries,
          for applicable measurement period                       $
                                                                   -------

     F.   Non-recurring significant charge the addition
          of which has been approved in writing by each
          of the Banks for applicable measurement
          period(5)                                               $
                                                                   -------

     G.   Line IV.A plus Line IV.B plus Line IV.C plus
          Line IV.D plus Line IV.E plus Line IV.F                 $
                                                                   -------

     H.   All payments of principal on Consolidated
          Indebtedness required to be paid during
          applicable measurement period under the
          terms governing such Consolidated Indebtedness          $
                                                                   -------

     I.   Consolidated Interest Charges required to
          be paid during applicable measurement period            $
                                                                   -------

     J.   Rent Expense required to be paid during
          applicable measurement period                           $
                                                                   -------

     K.   Line IV.H plus Line IV.I plus Line IV.J                 $
                                                                   -------

     L    Modified Cash Flow Coverage (Line IV.G /
          Line IV.K):                                            to 1.00
                                                         --------

         Minimum Required:

<Table>
<Caption>
                                                       MINIMUM MODIFIED CASH
           FOUR CONSECUTIVE FISCAL QUARTERS ENDING          FLOW COVERAGE
          ----------------------------------------     ---------------------
<S>                                                    <C>
          Through and including June 30, 2001              1.10 to 1.00
          Thereafter                                       1.25 to 1.00
</Table>

----------

(5) From and including the four consecutive fiscal quarters ending December 31,
2000, through and including the four consecutive fiscal quarters of Borrower
ending September 30, 2001, the Borrower may, to the extent the Non-Recurring
Charges are included in determining Consolidated Net Income in accordance with
GAAP and without duplication, add such Non-Recurring Charges to Consolidated Net
Income in calculating the Modified Cash Flow Coverage for such accounting period

                                      H-5
<PAGE>   183
                                    EXHIBIT I

            FORM OF OFFICER'S CERTIFICATE AS TO RELEASE OF COLLATERAL

         The undersigned [CARROLL W. SUGGS/LANCE BOSPFLUG/MICHAEL MCCANN] the
[CHAIRMAN OF THE BOARD/PRESIDENT/CHIEF FINANCIAL OFFICER] of Petroleum
Helicopters, Inc., a Louisiana corporation (the "Company"), on my behalf and on
behalf of the Company, hereby certifies as to the matters set forth in the
numbered paragraphs below. The capitalized terms used and not defined herein are
used with the same meaning assigned thereto in that certain Second Amended and
Restated Loan Agreement, dated as of July ___, 2001 among the Company, Banks
from time to time party thereto, and Bank of America, N.A., as Agent and issuing
bank (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement").

1.       The Company is currently and will be, immediately after giving effect
         to Amendment No. ____ dated ________, ____, to the Security Agreement
         relating to the Aviation Unit to be released (the "Amendment"), in full
         compliance with all of the provisions of the Agreement.

2.       The helicopters or fixed-wing aircraft to be released consist of one or
         more complete Aviation Units.

3.       The portion of the Aircraft remaining subject to the Security Interest
         consists of complete Aviation Units in the operating condition required
         by Section 6.14 of the Agreement to be maintained by the Company.

4.       The Company has satisfied, or promptly hereafter will satisfy, the
         requirements of the proviso of Section 7.04(c) of the Agreement.

5.       There is currently no Default or Event of Default under the Agreement,
         no such Default or Event of Default is imminent and no such Default or
         Event of Default will be precipitated or continued by the transactions
         contemplated herein. The Company is currently, and immediately after
         giving effect to the Amendment will be, in full compliance with each of
         the Security Documents.

                  IN TESTIMONY WHEREOF, I hereunto set over my hand and affix
the corporate seal of the Company on this ___ day of _____________, ____.

                       ---------------------------------------------------------
                       [CARROLL W. SUGGS/LANCE BOSPFLUG/MICHAEL MCCANN]
                       [CHAIRMAN OF THE BOARD/PRESIDENT/CHIEF FINANCIAL OFFICER]

                                      I-1
<PAGE>   184
                                    EXHIBIT J

                        FORM OF ASSIGNMENT AND ACCEPTANCE
                                                                        ,
                                                               --------- -------

         Reference is made to that certain Second Amended and Restated Loan
Agreement dated as of July ___, 2001, among Petroleum Helicopters, Inc., a
Louisiana corporation ("Borrower"), Banks from time to time party thereto, and
Bank of America, N.A., as Agent and Issuing Bank (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined).

         The assignor identified on the signature page hereto ("Assignor") and
the assignee identified on the signature page hereto ("Assignee") agree as
follows:

         1. (a) Subject to paragraph 11 below, effective as of the date written
on Schedule 1 hereto (the "Effective Date"), Assignor irrevocably sells and
assigns to Assignee without recourse to Assignor, and Assignee hereby
irrevocably purchases and assumes from Assignor without recourse to Assignor,
the interest described on Schedule 1 hereto (the "Assigned Interest") in and to
Assignor's rights and obligations under the Agreement.

                  (b) From and after the Effective Date, (i) Assignee shall be a
party under the Agreement and will have all the rights and obligations of a Bank
for all purposes under the Loan Documents to the extent of the Assigned Interest
and be bound by the provisions thereof, and (ii) Assignor shall relinquish its
rights and be released from its obligations under the Agreement to the extent of
the Assigned Interest. Assignor and/or Assignee, as agreed by Assignor and
Assignee, shall deliver, in immediately available funds, any applicable
assignment fee required under Section 10.04(c) of the Agreement.

         2. On the Effective Date, Assignee shall pay to Assignor, in
immediately available funds, an amount equal to the purchase price of the
Assigned Interest as agreed upon by Assignor and Assignee.

         3. Assignor and Assignee agree that all payments of principal,
interest, fees and other amounts in respect of the Assigned Interest accruing
from and after the Effective Date shall be for the account of Assignee, and all
payments of such amounts in respect of the Assigned Interest accruing prior to
the Effective Date shall remain for the account of Assignor. Assignor and
Assignee hereby agree that if either receives any payment of such amounts which
is for the account of the other, it shall hold the same in trust for such party
and shall promptly pay the same to such party.

         4. Assignor represents and warrants to Assignee that:

                  (a) Assignor is the legal and beneficial owner of the Assigned
         Interest, and the Assigned Interest is free and clear of any adverse
         claim;

                  (b) the Assigned Interest listed on Schedule 1 accurately and
         completely sets forth the amount of all Outstanding Obligations
         relating to the Assigned Interest as of the Effective Date;

                                      J-1
<PAGE>   185

                  (c) it has the power and authority and the legal right to
         make, deliver and perform, and has taken all necessary action, to
         authorize the execution, delivery and performance of this Assignment
         and Acceptance, and any and all other documents delivered by it in
         connection herewith and to fulfill its obligations under, and to
         consummate the transactions contemplated by, this Assignment and
         Acceptance and the Loan Documents, and no consent or authorization of,
         filing with, or other act by or in respect of any Governmental
         Authority, is required in connection in connection herewith or
         therewith; and

                  (d) this Assignment and Acceptance constitutes the legal,
         valid and binding obligation of Assignor.

Assignor makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Borrower Parties or the performance by any
Borrower Party of its obligations under the Loan Documents, and assumes no
responsibility with respect to any statements, warranties or representations
made under or in connection with any Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Loan Document
other than as expressly set forth above.

         5. Assignee represents and warrants to Assignor and Agent that:

                  (a) it is an Eligible Assignee;

                  (b) it has the power and authority and the legal right to
         make, deliver and perform, and has taken all necessary action, to
         authorize the execution, delivery and performance of this Assignment
         and Acceptance, and any and all other documents delivered by it in
         connection herewith and to fulfill its obligations under, and to
         consummate the transactions contemplated by, this Assignment and
         Acceptance and the Loan Documents, and no consent or authorization of,
         filing with, or other act by or in respect of any Governmental
         Authority, is required in connection in connection herewith or
         therewith;

                  (c) this Assignment and Acceptance constitutes the legal,
         valid and binding obligation of Assignee;

                  (d) under applicable Laws no tax will be required to be
         withheld by Agent or Borrower with respect to any payments to be made
         to Assignee hereunder or under any Loan Document, and prior to or
         concurrently with Agent's receipt of this Assignment and Acceptance,
         Assignee has delivered to Agent any tax forms required by Section 10.21
         of the Agreement; and

                  (e) Assignee has received a copy of the Agreement, together
         with copies of the most recent financial statements delivered pursuant
         thereto, and such other documents and information as it has deemed
         appropriate to make its own credit analysis and decision to enter into
         this Assignment and Acceptance. Assignee has independently and without

                                      J-2
<PAGE>   186

         reliance upon Assignor or Agent and based on such information as
         Assignee has deemed appropriate, made its own credit analysis and
         decision to enter into this Agreement. Assignee will, independently and
         without reliance upon Agent or any Bank, and based upon such documents
         and information as it shall deem appropriate at the time, continue to
         make its own credit decisions in taking or not taking action under the
         Agreement.

         6. Assignee appoints and authorizes Agent to take such action as agent
on its behalf and to exercise such powers and discretion under the Agreement,
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto as are delegated to Agent by the terms thereof, together with
such powers as are incidental thereto.

         7. Assignee and assignor hereby request that the Agent request from the
Borrower such replacement note(s) as are appropriate to reflect the transfer
effected hereby.

         8. Assignor and Assignee agree to execute and deliver such other
instruments, and take such other action, as either party may reasonably request
in connection with the transactions contemplated by this Assignment and
Acceptance.

         9. This Assignment and Acceptance shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns;
provided, however, that Assignee shall not assign its rights or obligations
hereunder without the prior written consent of Assignor and any purported
assignment, absent such consent, shall be void.

         10. This Assignment and Acceptance may be executed by facsimile
signatures with the same force and effect as if manually signed and may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. This
Assignment and Acceptance shall be governed by and construed in accordance with
the laws of the state specified in the Agreement.

         11. The effectiveness of the assignment described herein is subject to:

                  (a) if such consent is required by the Agreement, Assignor and
Assignee obtaining the consent of Agent, Issuing Bank and/or Borrower to the
assignment described herein. By delivering a duly executed and delivered copy of
this Assignment and Acceptance to Agent, Assignor and Assignee hereby request
any such required consent and request that Agent register Assignee as a Bank
under the Agreement effective as of the Effective Date.

                  (b) receipt by Agent of (or other arrangements acceptable to
Agent with respect to) any applicable assignment fee referred to in Section
10.04(c) of the Agreement and any tax forms required by Section 10.21 of the
Agreement.

         By signing below, Agent agrees to register Assignee as a Bank under the
Agreement, effective as of the Effective Date with respect to the Assigned
Interest and will adjust the registered Pro Rata Share of Assignor under the
Agreement to reflect the assignment of the Assigned Interest.

         12. Attached hereto as Schedule 2 is all contact, address, account and
other administrative information relating to Assignee.

                                      J-3
<PAGE>   187

                  IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written by
their respective duly authorized officers.

                                         ASSIGNOR:

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

                                         By:
                                            ------------------------------------

                                         Name:
                                              ----------------------------------

                                         Title:
                                               ---------------------------------

                                         ASSIGNEE:

[ ]   Tax forms required by
      Section 10.21 of the Agreement
      included
                                         By:
                                            ------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

(Signatures continue)

                                      J-4
<PAGE>   188

In accordance with and subject to Section 10.04 of
the Loan Agreement, the undersigned consent to
the foregoing assignment as of the Effective Date:

[BORROWER]

By:
   ----------------------------------
Name:
     --------------------------------
Title:
      -------------------------------

BANK OF AMERICA, N.A.,
as Agent

By:
   ----------------------------------
   Name:
        -----------------------------
   Title:
         ----------------------------

                                      J-5
<PAGE>   189

                     SCHEDULE 1 TO ASSIGNMENT AND ASSIGNMENT

                              THE ASSIGNED INTEREST

EFFECTIVE DATE:
               ------------------

<Table>
<Caption>

                               TYPE AND AMOUNT OF OUTSTANDING          ASSIGNED PRO RATA
  ASSIGNED COMMITMENT                OBLIGATIONS ASSIGNED                    SHARE
  -------------------          ------------------------------          -----------------
<S>                            <C>                                     <C>

 $                             [type] $                                                   %
  ------------------                   ----------------------          ------------------
</Table>

                                      J-1
<PAGE>   190

                     SCHEDULE 2 TO ASSIGNMENT AND ASSIGNMENT

                             ADMINISTRATIVE DETAILS

        (Assignee to list names of credit contacts, addresses, phone and
            facsimile numbers, electronic mail addresses and account
                            and payment information)

                                      J-2

<PAGE>   191

                                  SCHEDULE 5.19

                                LOCATION OF PARTS

I.       PHI

<Table>
<Caption>
             BASE                             P.O. BOX ADDRESS                            PHYSICAL ADDRESS
-------------------------------- -------------------------------------------- ------------------------------------------
<S>                              <C>                                          <C>
Alexandria, LA                                                                Petroleum Helicopters, Inc.
                                                                              c/o Rapides Regional Hospital
                                                                              211 4th street
                                                                              Alexandria, LA 71301

Baton Rouge, LA                                                               Petroleum Helicopters, Inc.
                                                                              4343 Chuck Yeager Ave.
                                                                              Baton Rouge, LA 70807

Cameron, LA                      Petroleum Helicopters, Inc.                  Petroleum Helicopters, Inc.
                                 Post Office Box 386                          295 Beach Road
                                 Cameron, LA 70631                            Cameron, LA 70631

Fixed Wing Hangar, LA                                                         Petroleum Helicopters, Inc.
                                                                              119 Shepard Drive
                                                                              Lafayette, LA 70508-1073

Fourchon, LA                                                                  Petroleum Helicopters, Inc.
                                                                              318 A.J. Estay Road
                                                                              Port Fourchon, LA 70357

Galveston, TX                                                                 Mailing:
                                                                              Petroleum Helicopters, Inc.
                                                                              Galveston Airport
                                                                              2115 Terminal Drive #19
                                                                              Galveston Airport 77554

                                                                              Physical:
                                                                              2215 Terminal Drive
                                                                              Galveston, TX 77554

Houma, LA                                                                     Petroleum Helicopters, Inc.
                                                                              3650 Taxi Road
                                                                              Houma Air Base
                                                                              Houma, LA 70383

IHTI Grand Isle, LA              IHTI                                         INTI
                                 Post Office Box 760                          Hwy. 1
                                 Grand Isle, LA 70358                         Grand Isle, LA 70358

IHTI Intracoastal, LA                                                         IHTI
                                                                              Hwy. 333
                                                                              9701 Exxon (pvt) Rd.
                                                                              Abbeville, LA 70510

Intracoastal City, LA                                                         Petroleum Helicopters, Inc.
                                                                              24836 La. Hwy. 333
                                                                              Abbeville, LA 70510
</Table>

<PAGE>   192

<Table>
<S>                              <C>                                          <C>
Lafayette, LA                                                                 Petroleum Helicopters, Inc.
(Heliport)                                                                    203 Tower Drive (Heliport)
                                                                              Lafayette LA 70508-2149

Lafayette, LA (Plant 1)                                                       Mailing:
                                                                              Petroleum Helicopters, Inc.
                                                                              113 Borman Drive
                                                                              Lafayette, LA 70508-1073

                                                                              Physical:
                                                                              2001 SE Evangeline Thruway
                                                                              Lafayette, LA 70508

Lafayette, LA (Plant 2)                                                       Petroleum Helicopters, Inc.
                                                                              118 Shepard Drive
                                                                              Lafayette, LA 70508-1073

Lafayette, LA                                                                 Petroleum Helicopters, Inc.
(Warehouse)                                                                   114 Chaplin
                                                                              Lafayette, LA 70508-1073

Lake Charles, LA                 Petroleum Helicopters, Inc.                  Petroleum Helicopters
                                 Post Office Box 5908                         500 Airport Boulevard
                                 Lake Charles, LA 70606-5908                  Lake Charles, LA 70605

Morgan City, LA                  Petroleum Helicopters, Inc.                  Petroleum Helicopters, Inc.
                                 Post Office Box 599                          4008 Lake Palourde Rd.
                                 Amelia, LA 70430                             Morgan City, LA 70380

New Orleans (Heliport)           Petroleum Helicopters, Inc.                  Petroleum Helicopters, Inc.
                                 Post Office Box 23502                        5802 River Road
                                 Harahan, LA 70183                            Harahan, LA 70123

Port O'Connor, TX                Petroleum Helicopters, Inc.                  Petroleum Helicopters, Inc.
                                 Post Office Box 369                          Monroe Street
                                 Port O'Connor, TX 77982                      Port O'Connor, TX 77982

Rockport, TX                     Petroleum Helicopters, Inc.                  Petroleum Helicopters, Inc.
                                 Post Office Box 430                          225 John P. Wendell Road
                                 Fulton, TX 78358                             Aransas County Airport
                                                                              Fulton, TX 78358

Sabine, TX                       Petroleum Helicopters, Inc.                  Petroleum Helicopters, Inc.
                                 Post Office Box 1085                         10600 Gulfway Drive
                                 Sabine, TX 77655                             Sabine, TX 77655

Tennessee Gas                                                                 Petroleum Helicopters, Inc.
Pipeline, LA                                                                  El Paso Gas
                                                                              225 Aviation Road
                                                                              Houma, LA

Boothville, LA                                                                Mailing:
                                                                              38963 Highway 23
                                                                              Burns, LA 70041

                                                                              Physical:
                                                                              38963 Highway 23
                                                                              Boothville, LA 70038
</Table>

<PAGE>   193

II.      AIR EVAC

2630 Sky Harbor Blvd.
Phoenix, AZ 85034

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