<PAGE>

                                                                  EXHIBIT 10.12

                                 Anthony & Co.
                            Office Lease Agreement
                                  Cover Page

--------------------------------------------------------------------------------
This Standard Office Lease Agreement has been filled in for submission to your
attorney for legal approval.  No representation or recommendation is made by
Anthony & Co. or its agents or employees as to the legal sufficiency, legal
effect, or tax consequences of this Lease or the transaction relating thereto;
and both Landlord and Tenant shall rely solely upon the advice of their own
legal counsel as to the legal and tax consequences of this lease.
--------------------------------------------------------------------------------

TENANT:   Total Sports, Inc.

DATED:    December 1, 1998

For the purposes of this lease Agreement by and between First Raleigh Telex, LLC
("Landlord"), by its agent, Anthony & Co., and  Total Sports, Inc. ("Tenant"),
the terms set forth below, when preceded by a capital letter, shall have the
meaning set forth in this Cover Page and in the Lease.

I   Tenant and Landlord Information

 A.  Landlord:                First Raleigh Telex, LLC
                              a North Carolina Limited Liability Company

 B.  Tenant:                  Total Sports, Inc.
                              a North Carolina Corporation

 C.  Tenant's Notice Address: 234 Fayetteville Street Mall, Raleigh, NC

 D.  Tenant's Representative: Frank A. Daniels, III

II  Description of Premises

 A.  Building:                Total Sports Building

 B.  Business Hours:          Twenty-four (24) hours a day, seven (7) days a
                              week

 C.  Premises:                234 Fayetteville Street Mall, Raleigh, N.C.
                                  Second Floor = 4,662 square feet
                                  Third floor =  4,670 square feet
                                  Fourth Floor = 4,670 square feet
                                  Fifth Floor =  4,670 square feet
                                  Basement =     4,215 square feet
                                  ----------------------------------
                                  Total =       22,887 square feet

 D.  Permitted Use:           General office use.

III Term

 A.  Commencement Date:       April 1, 1999

 B.  Expiration Date:         June 30, 2009

IV  Rent

 A.  Advance Rent:            Ten Thousand Dollars ($10,000.00) is due upon
                              execution for rent for the early occupancy of
                              floors five and the basement for the period
                              December 18, 1998 through March 31, 1999.

 B.  Base Annual Rent:        Two Hundred Ninety Nine Thousand Seventy Six and
                              72/100 Dollars ($299,076.72).

 C.  Base Rental Rate:        Thirteen and 76/100 Dollars ($13.76) per square
                              foot for the second, third, fourth and fifth
                              floors and Ten Dollars ($10.00) per square foot
                              for the basement space. Total base rent for the
                              first year is Two Hundred Ninety Nine Thousand
                              Seventy Six and 72/100 Dollars ($299,076.72).

 D.  Monthly Installment of
     Base Annual rent:        Twenty-four Thousand Nine Hundred Twenty Three and
                              06/100 Dollars ($24,923.06).

 E.  Security Deposit:        Twenty-four Thousand Nine Hundred Twenty Three and
                              06/100 Dollars (24,923.06).

                                                                               1
<PAGE>

V   Adjustments

 A.  Adjustment Period
     Consumer Price Index:    On January 1 of each year, base rent shall be
                              escalated by a three percent (3%) fixed increase.

 B.  Base Period Consumer
     Price Index:             The Consumer Price Index as established for the
                              month of _____N/A________.

 C.  CPI Escalator:           _______Three__________ Percent (_3_%).

 D.  Base Operating and Real
     Estate Tax Expenses:     To the extent operating and real estate tax
                              expenses exceed $5.50 per square foot, Tenant
                              shall pay its prorata share of the increases.

 E.  Tenant's Pro Rata Share: ______Seventy-nine_______ Percent (_79%) of the
                              Building.  Total rentable square footage is
                              ____28,821.



VI  Miscellaneous

 A.  Broker:                  N/A.

 B.  Special Conditions       None.

 C.  Exclusive Rights         Right of first refusal to lease the first floor of
                              the building.


Tenant:                                      Landlord:

Total Sports, Inc.                           First Raleigh Telex, LLC

By:   /s/ George Schlukbier                  By: /s/  Frank Daniels
      -----------------------                     --------------------------

Name:     George Schlukbier
      -----------------------

Title:    President/COO
        ---------------------

Date:     August 8, 1999
       ----------------------
       (Please Print or Type)

                                                                               2
<PAGE>

                               Table of Contents

<TABLE>
<S>                  <C>
ARTICLE I            PREMISES
ARTICLE II           USE
ARTICLE III          TERM
ARTICLE IV           COMPLETION OF PREMISES
     Section 4.01       Substantial Completion
     Section 4.02       Notice
     Section 4.03       Inspection and Punchlist
     Section 4.04       Delayed Possession
     Section 4.05       Landlord Improvements
ARTICLE V            RENT AND SECURITY
     Section 5.01       Base Rent
     Section 5.02       CPI Adjustment
     Section 5.03       Expense and Tax Escalations
     Section 5.04       Personal Property Tax
     Section 5.05       Security Deposit
ARTICLE VI           AFFIRMATIVE OBLIGATIONS
     Section 6.01       Compliance with Laws
     Section 6.02       Services and Utilities
     Section 6.03       Repairs and Maintenance
ARTICLE VII          NEGATIVE OBLIGATIONS
     Section 7.01       Alterations
     Section 7.02       Assignment and Subleasing
ARTICLE VIII         INSURANCE
     Section 8.01       Insurance
     Section 8.02       Indemnification
     Section 8.03       Limitation of Landlord's Liability
ARTICLE IX           LOSS OF PREMISES
     Section 9.01       Damages
     Section 9.02       Condemnation
ARTICLE X            DEFAULT
     Section 10.01      Tenant's Default
     Section 10.02      Landlord's Remedies
     Section 10.03      Self-Help
     Section 10.04      Survival
ARTICLE XI           NON DISTURBANCE
     Section 11.01      Subordination
     Section 11.02      Estoppel Certificate
     Section 11.03      Quiet Possession
ARTICLE XII          LANDLORD'S RIGHTS
     Section 12.01      Rules
     Section 12.02      Mechanic's Liens
     Section 12.03      Right to Enter
     Section 12.04      Holdover
     Section 12.05      Signs
     Section 12.06      Right to Relocate
ARTICLE XIII         MISCELLANEOUS
     Section 13.01      Broker's Warranty
     Section 13.02      Attorneys' Fees
     Section 13.03      Notices
     Section 13.04      Partial Invalidity
     Section 13.05      Waiver
     Section 13.06      Binding on Successors
     Section 13.07      Governing Law
     Section 13.08      Lease not an Offer
     Section 13.09      Recording
     Section 13.10      Survival of Remedies
     Section 13.11      Authority of Parties
     Section 13.12      Business Days
     Section 13.13      Entire Agreement
     Section 13.14      Definition of Lease
</TABLE>

                                                                               3
<PAGE>

EXHIBITS
     Exhibit A      Floor Plan
     Exhibit B      Building
     Exhibit C      Land
     Exhibit D      Landlord Improvements
     Exhibit E      Rules and Regulations

RIDER A

RIDER B

                                                                               4
<PAGE>

                                 Anthony & Co.
                                 Office Lease

--------------------------------------------------------------------------------
This Standard Office Lease Agreement has been filled in for submission to your
attorney for legal approval.  No representation or recommendation is made by
Anthony & Co. or its agents or employees as to the legal sufficiency, legal
effect, or tax consequences of this Lease or the transaction relating thereto;
and both Landlord and Tenant shall rely solely upon the advice of their own
legal counsel as to the legal and tax consequences of this lease.
--------------------------------------------------------------------------------


     This Lease ("Lease") is made December, 1998, between  First Raleigh Telex,
LLC  ("Landlord") and Total Sports, Inc. ("Tenant").  Landlord is a Limited
Liability Company, organized under the laws of North Carolina, with principal
offices at 702 Oberlin Road, Suite 100, Raleigh, North Carolina  27605.

                                   ARTICLE 1
                                   PREMISES

1.01 Premises.  Landlord leases to Tenant Floors 2, 3, 4 and 5 and the basement
of 234 Fayetteville Street Mall, Raleigh, North Carolina ("Premises") as
outlined on the Floor Plans attached as Exhibit A.  The Premises consists of
approximately 22,887 square feet of rentable space in the building ("Building")
in which the Premises are located.  The Building is shown as Exhibit B and is
located on the land described in Exhibit C ("Land").  The Premises contain the
fixtures, improvements, and other property now installed plus any Landlord
Improvements required by Section 4.05 and Exhibit D.

1.02 Common Areas.  Tenant and its agents, employees, and invitees have the non-
exclusive right with others designated by Landlord to the free use of the common
areas ("Common Areas") in the Building and on the Land for the Common Areas'
intended and normal purpose.  Common Areas include elevators, sidewalks, parking
areas, driveways, hallways, stairways, public bathrooms, common entrances,
lobby, and other similar public areas and access ways.  Landlord may change the
Common Areas if the changes do not materially and unreasonably interfere with
Tenant's access to or use of the Premises.

                                  ARTICLE II
                                      USE

Tenant shall use the Premises for general office use, unless Landlord gives its
advance written consent to another use.  Landlord warrants that applicable laws,
ordinances, regulations, and restrictive covenants permit the Premises to be
used for general offices.  Tenant shall not create a nuisance or use the
Premises for any immoral or illegal purposes.

                                  ARTICLE III
                                     TERM

The Lease begins ("Commencement Date") on the earlier of: April 1, 1999

The Lease ends ("Expiration Date") at 11:59 p.m. on the last day of the calendar
month ten (10) years following the Commencement Date, unless terminated earlier
under this Lease. Within thirty (30) days after the Commencement Date, the
parties shall confirm in writing the Commencement and Expiration Dates.

                                  ARTICLE IV
                            COMPLETION OF PREMISES


                                   ARTICLE V
                               RENT AND SECURITY

5.01 Base Rent.  Tenant shall pay to Landlord Base Rent during the Term, as
follows:

<TABLE>
<CAPTION>
  Months:                                            Annual Base Rent:  Monthly Base Rent:
  <S>                                                <C>                <C>
  April 1, 1999 through December 31, 1999            $299,076.72                $24,923.06
  January 1, 2000 through December 31, 2000          $308,049.02                $25,670.75
  January 1, 2001 through December 31, 2001          $317,290.49                $26,440.87
  January 1, 2002 through December 31, 2002          $326,809.21                $27,234.10
  January 1, 2003 through December 31, 2003          $336,613.48                $28,051.12
  January 1, 2004 through December 31, 2004          $346,711.89                $28,892.66
  January 1, 2005 through December 31, 2005          $357,113.24                $29,759.44
  January 1, 2006 through December 31, 2006          $367,826.64                $30,652.22
  January 1, 2007 through December 31, 2007          $378,861.44                $31,571.79
  January 1, 2008 through December 31, 2008          $390,227.28                $32,518.94
  January 1, 2009 through June 30, 2009              $401,934.10                $33,494.51
</TABLE>

     With _____N/A______(___%) percent annual escalations

                                                                               1
<PAGE>

     The Base Rent shall be paid:

     (a)  without advance notice, demand, offset, or deduction;

     (b)  by the first day of each month during the Term; and

     (c)  to Landlord at its address set forth in Section 13.03 or as Landlord
          may specify in writing to Tenant.

If the Term does not begin on the first day or end on the last day of a month,
the Base Rent for that partial month shall be prorated by multiplying the
monthly Base Rent by a fraction, the numerator of which is the number of days of
the partial month included in the Term and the denominator of which is the total
number of days in the full calendar month.

If Tenant fails to pay part or all of the Base Rent by the fifth (5th) day of
the month due, it is past due, the Tenant shall also pay:

     (a)  a late charge equal to four percent (4%) of the unpaid Base Rent and
          Additional Rent, plus

     (b)  interest at eighteen percent (18%) per annum or the maximum then
          allowed by applicable law, whichever is less, on the remaining unpaid
          past due balance, retroactive to the date originally due until paid.

5.03 Expense and Tax Escalations. Base Rent shall be adjusted on each
anniversary of the Commencement Date by increasing the Base Rent paid during the
preceding year by an amount equal to the Tenant's pro rata share of the increase
of Operating Expenses and Real Estate Taxes as defined hereinafter.

     (a)  Definitions.

               (i)   "Base Operating and Real Estate Tax Expenses" means Five &
                     50/100_($5.50) Dollars per square foot.

               (ii)  "Tenant's Pro Rata Share" means seventy-nine and two-tenths
                     (79.2%) percent, which is calculated by dividing the
                     rentable square footage of the Premises (numerator) by the
                     rentable square footage of the Building (denominator), and
                     expressing the fraction as a percentage.

               (iii) "Property" means the Building and its equipment and
                     systems, and the Land.

               (iv)  "Real Estate Taxes" means real property taxes and currently
                     due installments of assessments, special or otherwise,
                     imposed upon the Property, and reasonable legal fees,
                     costs, and disbursements incurred for proceedings to
                     contest, determine, or reduce Real Estate Taxes, but only
                     to the extent the Real Estate Taxes are reduced, but shall
                     exclude federal, state or local income taxes, franchise,
                     gift, transfer, excise, capital stock, estate, succession,
                     or inheritance taxes, and penalties or interest for late
                     payment of Real Estate Taxes.

               (v)   "Operating Expenses" means Landlord's operating expenses
                     that are reasonable, actual and necessary, out-of-pocket
                     (except Landlord may use its normal accrual method of
                     accounting), obtained at competitive prices, and that are
                     directly attributable to the operation, maintenance,
                     management, and repair of the Property, as determined under
                     generally accepted accounting principles consistently
                     applied, including:

                         (1)  salaries, and other compensation; payroll taxes,
                              vacation, holiday, and other paid absences; and
                              welfare, retirement, and other fringe benefits
                              that are paid to employees, independent
                              contractors, or agents of Landlord engaged in the
                              operation, repair, management, or maintenance of
                              the Property;

                         (2)  repairs and maintenance of the Property and the
                              cost of supplies, tools, materials, and equipment
                              for Property repairs and maintenance, that under
                              generally accepted accounting principles
                              consistently applied, would not be capitalized;

                         (3)  premiums and other charges incurred by Landlord
                              for insurance on the Property and for its
                              employees including:

                                -a-  fire insurance, extended coverage
                                     insurance, and earthquake, windstorm, hail,
                                     and explosion insurance;

                                -b-  public liability and property damage
                                     insurance;

                                -c-  elevator insurance;

                                -d-  workers' compensation insurance;

                                                                               2
<PAGE>

                                -e-  boiler and machinery insurance; sprinkler
                                     leakage, water damage, water damage legal
                                     liability insurance; burglary, fidelity,
                                     and pilferage insurance on equipment and
                                     materials;

                                -f-  insurance Landlord is required to carry
                                     under this Lease; and

                                -g-  other insurance as is customarily carried
                                     by operators of comparable office buildings
                                     in the Raleigh, North Carolina area;

                         (4)  costs incurred for inspection and servicing,
                              including all outside maintenance contracts
                              necessary or proper for the maintenance of the
                              Property, such as janitorial and window cleaning,
                              rubbish removal, exterminating, water treatment,
                              elevator, electrical, plumbing, and mechanical
                              equipment, and the cost of materials, tools,
                              supplies, and equipment used for inspection and
                              servicing;

                         (5)  costs incurred for electricity, water, gas, fuel,
                              or other utilities;

                         (6)  sales, use, and excise taxes on goods and services
                              purchased by Landlord, but Tenant's pro rata share
                              shall exclude prepaid services that are not used
                              by Landlord;

                         (7)  license, permit, and inspection fees;

                         (8)  auditor's fees for public accounting;

                         (9)  legal fees, costs, and disbursements;

                         (10) management fees to a person or entity other than
                              Landlord (provided, such person or entity may be
                              affiliated with Landlord);

                         (11) the annual amortization over its useful life with
                              a reasonable salvage value on a straight-line
                              basis of (i) the costs of any capital improvements
                              made by Landlord and required by any changes in
                              applicable laws, rules, or regulations of any
                              governmental authorities; or (ii) the costs of any
                              equipment or capital improvements made by
                              Landlord, as a labor-saving measure or to
                              accomplish other savings in operating, repairing,
                              managing, or maintaining of the Property, but only
                              to the extent of the savings; or (iii) the costs
                              of any exterior window draperies provided by
                              Landlord and the carpeting in the Common Areas;

                         (12) any costs for substituting work, labor, materials,
                              or services in place of any of the above items, or
                              for any additional work, labor, materials,
                              services or improvements to comply with any
                              governmental laws, rules, regulations, or other
                              requirements applicable to the Property, that, at
                              the time of substitution or addition, are
                              considered operating expenses under generally
                              accepted accounting principles consistently
                              applied;

                         (13) other costs reasonably necessary to operate,
                              repair, manage, and maintain the Property in a
                              manner and condition consistent with comparable
                              office buildings in the Raleigh, North Carolina
                              area; and

                         (14) Operating Expenses exclude:

                                -a-  leasing commissions, costs, disbursements,
                                     and other expenses incurred for leasing,
                                     renovating, or improving space for tenants;

                                -b-  costs incurred by Landlord in discharging
                                     its obligations under Section 4.05 and
                                     Exhibit D;

                                -c-  costs (including permit, license, and
                                     inspection fees) incurred in renovating,
                                     improving, decorating, painting, or
                                     redecorating vacant space or space for
                                     tenants;

                                -d-  Landlord's cost of electricity or other
                                     service sold to tenants for which Landlord
                                     is to be reimbursed as a charge over the
                                     Base Rent and Additional Rent payable under
                                     the lease with that tenant;

                                -e-  depreciation and amortization on the
                                     Building except as expressly permitted
                                     elsewhere in this Lease;

                                -f-  costs of a capital nature including capital
                                     improvements, capital repairs, capital
                                     equipment, and capital tools, as determined
                                     under generally accepted accounting
                                     principles consistently applied, except
                                     that the annual amortization of these costs
                                     shall be included to the extent expressly
                                     permitted elsewhere in this Lease;

                                                                               3
<PAGE>

               -g-  costs incurred because the Landlord or other tenant violated
                    the terms of any lease (including without limitation legal
                    fees and disbursements);

               -h-  interest on debt or amortization payments on mortgages or
                    deeds of trust or any other debt for borrowed money;

               -i-  advertising and promotional expenditures; and

               -j-  repairs or other work needed because of fire, windstorm, or
                    other casualty or cause insured against by Landlord or to
                    the extent Landlord's insurance provided coverage insurance;

               -k-  other expenses that under generally accepted accounting
                    principles consistently applied would not be considered
                    normal maintenance, repair, management, or operation
                    expenses.

               -l-  fines or penalties incurred by Landlord;

               -m-  mortgage or ground rent uses.

          (vi) "Adjustment Period" means each calendar year or partial calendar
               year occurring during the Term.

   (b)  Credits/Reimbursements. Operating Expenses shall be reduced by
        reimbursements, credits, discounts, reductions, or other allowances
        received or receivable by Landlord for items of cost included in
        Operating Expenses, except reimbursements to the Landlord by tenants
        under this Article V.

   (c)  Tax Refund. If Landlord receives a refund of any portion of Real Estate
        Taxes that were included in the Real Estate Taxes paid by Tenant, then
        Landlord shall reimburse Tenant its pro rata share of the refunded
        taxes, less any expenses that Landlord reasonably incurred to obtain the
        refund.

   (d)  Substituted Taxes. If any non-Real Estate Taxes are imposed against the
        Landlord in substitution for any Real Estate Taxes, then the substituted
        tax shall be considered a Real Estate Tax. Conversely, if any additional
        Real Estate Taxes are imposed in substitution for any non-Real Estate
        Taxes (that are not Substituted Taxes) they shall not be considered Real
        Estate Taxes.

   (e)  Payment by Landlord. Subject to reimbursement under this Article V,
        Landlord shall pay the Property's Operating Expenses and Real Estate
        Taxes before delinquency.

   (f)  Payment by Tenant. If the Operating Expenses and Real Estate Taxes, when
        combined for any Adjustment Period, exceed Base Operating and Real
        Estate Tax Expense ("Operating and Real Estate Tax Expense Increase"),
        then Tenant agrees to pay Landlord as Additional Rent, Tenant's Pro Rata
        Share of the Operating and Real Estate Tax Expense Increase.

   (g)  Manner of Payment.

          (i)  Within one hundred twenty (120) days after each Adjustment Period
               ends, or as soon as reasonably practical, Landlord shall give
               Tenant an itemized statement ("Statement") showing in reasonable
               detail the:

                    (1)  actual Operating Expenses and Real Estate Taxes for the
                         Adjustment Period;

                    (2)  the Operating and Real Estate Tax Expense Increase for
                         the Adjustment Period;

                    (3)  the amount of Tenant's Pro Rata Share of the Operating
                         and Real Estate Tax Expense Increase; and

                    (4)  the amount Tenant owes toward the Operating and Real
                         Estate Tax Expense Increase.

             Any Additional Rent due, including interest and penalty, shall
   survive the Expiration Date.

          (ii) During any Adjustment Period that is less than a complete
               calendar year, unless this Lease was terminated because of
               Tenant's default, Tenant's obligation for Additional Rent for
               those Adjustment Periods shall be prorated by multiplying the
               Additional Rent for the Adjustment Period by a fraction expressed
               as a percentage, the numerator of which is the number of days of
               the Adjustment Period included in the Term and the denominator of
               which is 365.

5.04 Personal Property Tax.  Before delinquency Tenant shall pay taxes assessed
during the Term against trade fixtures or personal property placed by Tenant in
the Premises. If these taxes are assessed against the Building, Tenant shall pay
its share of the taxes to Landlord within ten (10) days after receiving
Landlord's written statement setting forth the amount of taxes applicable to
Tenant's property and the basis for the charge to

                                                                               4
<PAGE>
Tenant. Tenant's failure to pay within the ten-day period shall entitle Landlord
to the same remedies it has upon Tenant's failure to pay Base Rent or Additional
Rent.

5.05 Security Deposit. The Tenant has deposited Twenty-four Thousand, Nine
Hundred Twenty Three and 06/100 Dollars ($24,923.06) (Security Deposit) with
Landlord to secure Tenant's performance of its Lease obligations. If Tenant
defaults Landlord may, after giving five) days advance notice to Tenant,
without prejudice to Landlord's other remedies, apply part or all of the
Security Deposit to cure Tenant's default. If Landlord so uses part or all of
the Security Deposit, then Tenant shall within ten (10) days after written
demand, pay Landlord the amount used to restore the Security Deposit to its
original amount. The deposit shall be placed in an escrow account. Interest
shall accrue to Tenant. Any part of the Security Deposit not used by Landlord as
permitted by this paragraph shall be returned to Tenant within thirty (30) days
after the Lease ends.

                                  ARTICLE VI
                            AFFIRMATIVE OBLIGATIONS

6.01 Compliance with Laws.
     (a)  Landlord's Compliance. Landlord warrants, that on the Commencement
          Date, the Premises will comply with all applicable laws, ordinances,
          rules, and regulations of governmental authorities ("Applicable
          Laws"). During the Term, Landlord shall comply with all Applicable
          Laws regarding the Premises and Building except to the extent Tenant
          must comply under Section 6.01(b).

     (b)  Tenant's Compliance. Tenant shall comply with all Applicable Laws (i)
          regarding the physical condition of the Premises, but only to the
          extent the Applicable Laws pertain to the particular manner in which
          Tenant uses the Premises; or (ii) that do not relate to the physical
          condition of the Premises but relate to the lawful use of the Premises
          and with which only the occupant can comply, such as laws governing
          maximum occupancy, workplace smoking, and illegal business operations,
          such as gambling. Notwithstanding the foregoing, Tenant shall comply
          with any requirements imposed under the Americans with Disabilities
          Act of 1990 ("ADA") which relate exclusively to the Premises.

6.02 Services and Utilities.
     (a)  Services. Landlord shall provide at its expense, subject to
          reimbursement under Section 5.03:

            (i)    Heating, ventilation, and air conditioning ("HVAC") for the
                   Premises during business hours to maintain temperatures for
                   comfortable use and occupancy;

            (ii)   Automatic passenger elevators providing adequate service
                   leading to the floor on which the Premises are located;

            (iii)  Janitorial services to the Premises (all business days,
                   Monday through Friday);

            (iv)   Hot and cold water sufficient for drinking, lavatory, toilet,
                   and ordinary cleaning purposes;

            (v)    Electricity to the Premises at all times that provides
                   electric current in reasonable amounts necessary for normal
                   office use, lighting, and HVAC;

            (vi)   Replacement of lighting tubes, lamp ballasts, and bulbs;

            (vii)  Extermination and pest control when necessary; and

            (viii) Maintenance of Common Areas in a manner consistent with other
                   comparable office buildings in the Raleigh, North Carolina
                   area. The maintenance shall include cleaning, HVAC,
                   illumination, snow shoveling, deicing, repairs, replacements,
                   lawn care, and landscaping.

     (b)  Business Hours. "Business Hours" means: twenty-four (24) hours a day,
          seven (7) days a week.

     (c)  24 Hour Access. Tenant, its employees, agents, and invitees shall have
          access to the Premises, twenty-four (24) hours a day, seven (7) days a
          week. During non business hours Landlord may restrict access by
          requiring persons to show a badge or identification card issued by
          Landlord. Landlord shall not be liable for denying entry to any person
          unable to show the proper identification. Landlord may temporarily
          close the Building if required in an emergency. Landlord shall use its
          best efforts to close the Building during non business hours only. If,
          however, the Building must be closed during business hours, then the
          Base Rent and Additional Rent shall abate during any closing that
          lasts more than twenty-four (24) hours.

     (d)  Extra Services. Landlord, shall have the right to monitor the Tenant's
          use of electricity consumption within the Premises. Whenever Landlord
          knows that any tenant (including Tenant) is using extra services
          because of either non business-hours use or high electricity
          consumption installations, Landlord may directly charge that tenant
          for the extra use and exclude those charges from Operating Expenses.
          Extra services include:
                                                                               5
<PAGE>
          (i)   Excess Utility Use. Tenant shall not place or operate in the
                Premises any electrically operated equipment or other machinery,
                other than typewriters, personal computers, adding machines,
                reproduction machines, and other machinery and equipment
                normally used in offices, unless Tenant receives Landlord's
                advance written consent. Landlord shall not unreasonably
                withhold or delay its consent, but Landlord may require payment
                for the extra use of electricity caused by operating this
                equipment or machinery. Landlord may require that special, high
                electricity consumption installations of Tenant such as computer
                or reproduction facilities (except personal computers or normal
                office photocopy machines) be separately sub-metered for
                electrical consumption at Tenant's cost.

          (ii)  Payment. Tenant's charges for the utilities provided under (i)
                and (ii) above shall be one hundred and ten percent (110%) of
                Landlord's actual cost of labor and utilities and shall be
                Additional Rent.

                Tenant's failure to pay the charges in (i) and (ii) above within
                thirty (30) days of receiving a proper and correct invoice shall
                entitle Landlord to the same remedies it has upon Tenant's
                failure to pay Base Rent.

     (e)  Interruption of Services. Landlord does not warrant that any services
          Landlord supplies will not be interrupted. Services may be interrupted
          because of accidents, repairs, alterations, improvements, or any
          reason beyond the reasonable control of Landlord, and such an
          interruption shall not:
            (i)   be considered an eviction or disturbance of Tenant's use and
                  possession of the Premises;

            (ii)  relieve Tenant from performing Tenant's Lease obligations.

6.03 Repairs and Maintenance.
     (a)  Tenant's Care of Premises.  Tenant shall:

            (i)   keep the Premises and fixtures in good order;

            (ii)  make repairs or replacements to the Premises or Building
                  needed because of Tenant's misuse or negligence, except to the
                  extent that the repairs or replacements are covered by
                  Landlord's insurance or the insurance Landlord is required to
                  carry under this Lease, whichever is greater;

            (iii) repair and replace special equipment or decorative treatments
                  installed by or at Tenant's request and that serve the
                  Premises only, except

                    (1)  to the extent the repairs or replacements are needed
                         because of Landlord's misuse or primary negligence, and
                         are not covered by Tenant's insurance or the insurance
                         Tenant is required to carry under this Lease, whichever
                         is greater; or

                    (2)  if the Lease is terminated under Article IX (Loss of
                         Premises); and

            (iv)  not commit waste.

     (b)  Landlord's Repairs. Except for repairs and replacements that Tenant
          must make under paragraph 6.03(a), Landlord shall pay for and make all
          other repairs and replacements to the Premises, Common Areas and
          Building (including Building fixtures and equipment). Landlord shall
          make the repairs and replacements to maintain the Building in a
          condition consistent with other comparable office buildings in the
          Raleigh, North Carolina area. This maintenance shall include the roof,
          foundation, exterior walls, interior structural walls, all structural
          components, and all systems, such as mechanical, electrical, HVAC, and
          plumbing.

     (c)  Time for Repairs. Repairs or replacements required under Sections
          6.03(a) or 6.03(b) shall be made within a reasonable time (depending
          on the nature of the repair or replacement needed) after receiving
          notice or having actual knowledge of the need for a repair or
          replacement. Failure of Landlord to make repairs within a reasonable
          time (normal maintenance versus emergency) shall be considered a
          Landlord default.

     (d)  Surrendering the Premises. Upon the Expiration Date or earlier
          termination of this Lease, Tenant shall surrender the Premises to
          Landlord in the same condition that the Premises were in on the
          Commencement Date except for:
            (i)   ordinary wear and tear;

            (ii)  damage by the elements, fire, and other casualty unless Tenant
                  would be required to repair under paragraph 6.03(a);

            (iii) condemnation;

            (iv)  damage arising from any cause not required to be repaired or
                  replaced by Tenant; and
                                                                               6
<PAGE>

            (v)  alterations as permitted by this Lease unless consent was
                 conditioned on their removal.

        On surrender Tenant shall remove from the Premises its personal
        property, trade fixtures, and any alterations required to be removed
        under Section 7.01 and repair any damage to the Premises caused by the
        removal. Any items not removed by Tenant as required above shall be
        considered abandoned. Landlord may dispose of abandoned items as
        Landlord chooses and bill Tenant for the cost of their disposal, minus
        any revenues received by Landlord for their disposal.


                                  ARTICLE VII
                             NEGATIVE OBLIGATIONS

7.01 Alterations.

     (a)  Definitions. "Alterations" means alterations, additions,
          substitutions, installations, changes, and improvements, but excludes
          minor decorations and the Improvements Landlord is to make under
          Section 4.04 and Exhibit D.

     (b)  Consent. Tenant shall not make Alterations without the Landlord's
          advance written consent. Landlord's consent shall not be unreasonably
          withheld or unduly conditioned or delayed for nonstructural interior
          Alterations to the Premises that do not adversely affect the
          Building's appearance, value, and structural strength.

     (c)  Conditions of Consent. Landlord may condition its consent in Section
          7.01(b) on all or any part of the following:

            (i)    Tenant shall furnish Landlord with reasonably detailed plans
                   and specifications of the Alterations as requested by Tenant.

            (ii)   The Alterations shall be performed and completed-

                    (1)  in accord with the submitted plans and specifications
                         approved by Tenant and Landlord.

                    (2)  in a workmanlike manner,

                    (3)  in compliance with all applicable laws, regulations,
                         rules, ordinances, and other requirements of
                         governmental authorities,

                    (4)  using new materials and installations at least equal in
                         quality to the original Building materials and
                         installations,

                    (5)  by not disturbing the quiet possession of the other
                         tenants,

                    (6)  by not interfering with the construction, operation, or
                         maintenance of the Building, and

                    (7)  with due diligence;

            (iii)  Tenant shall use workers and contractors who Landlord employs
                   or approves in writing, which approval shall not be
                   unreasonably withheld or unduly conditioned or delayed;

            (iv)   Tenant shall modify plans and specifications because of
                   reasonable conditions set by Landlord after reviewing the
                   plans and specifications;

            (v)    Tenant's contractors shall carry builder's risk insurance in
                   an amount then customarily carried by prudent contractors and
                   workers' compensation insurance for its employees in
                   statutory limits, naming Landlord as an additional insured,
                   to the extent its interest may appear;

            (vi)   Tenant's workers or contractors shall work in harmony and not
                   unreasonably interfere with Landlord's workers or contractors
                   or other tenants and their workers or contractors;

            (vii)  For alterations in excess of Five Thousand Dollars
                   ($5,000.00) Tenant shall, at Landlord's sole option, supply a
                   lien and completion bond, bank letter of credit, or other
                   security satisfactory to Landlord, in an amount equal to the
                   estimated cost to insure Landlord against materials and
                   mechanics' liens and against completion of the Alterations;

            (viii) Tenant shall give Landlord at least fifteen (15) days advance
                   notice before beginning any alterations so that Landlord may
                   post or record notices of nonresponsibility;

            (ix)   Upon demand Tenant shall give Landlord evidence that it
                   complied with any condition set by Landlord;

                                                                               7
<PAGE>

               (x)   If Tenant completes alterations, Tenant shall give Landlord
                     complete as-built mylar drawings, if any, of the
                     Alterations after they are finished; and

               (xi)  Upon the request of Landlord, which request must be given
                     at the time of consent to the Alterations, Tenant shall
                     remove any unusual additions, alterations and repair any
                     damage from their removal by the Expiration Date.

     (d)  Payment and Ownership of the Alterations. Alterations made under this
          paragraph shall be at Tenant's expense. The Alterations shall belong
          to Landlord when this Lease ends except for those Alterations required
          by Landlord to be removed by Tenant, if any, under Section
          7.01(c)(xi). Nevertheless, Tenant may remove its furniture and other
          personal property (unless same is affixed to the premises or is
          otherwise a fixture) if Tenant promptly repairs all damage caused by
          their removal.

7.02 Assignment and Subleasing.

     (a)  Consent Required. Tenant shall not transfer, mortgage, encumber,
          assign, or sublease all or part of the Premises without Landlord's
          advance written consent. Landlord's consent to any assignment or
          sublease shall not be unreasonably withheld or unduly conditioned or
          delayed.

     (b)  Reasonableness.  The Landlord's consent shall not be considered
          unreasonably withheld if:

               (i)   the proposed subtenant's or assignee's financial
                     responsibility does not meet the same criteria Landlord
                     uses to select comparable Building tenants;

               (ii)  the proposed subtenant's or assignee's business is not
                     suitable for the Building considering the business of the
                     other tenants and the Building's prestige; or

               (iii) the proposed use is inconsistent with the use permitted by
                     Article II.

     (c)  Procedure.

               (i)   Tenant must provide Landlord in writing:

                         (1)  the name and address of the proposed subtenant or
                              assignee;

                         (2)  the nature of the proposed subtenant's or
                              assignee's business it will operate in the
                              Premises;

                         (3)  the terms of the proposed sublease or assignment;
                              and

                         (4)  reasonable financial information so that Landlord
                              can evaluate the proposed subtenant or assignee.

               (ii)  Landlord shall, within ten (10) business days after
                     receiving the information under Section 7.02(c)(i), give
                     notice to Tenant to permit or deny the proposed sublease or
                     assignment. If Landlord denies consent, it must explain the
                     reasons for the denial. If Landlord does not give notice
                     within the ten (10) business-day period, then Tenant may
                     sublease or assign part or all of the Premises upon the
                     terms described in the information submitted by Tenant
                     under Section 7.02(c)(i).

     (d)  Affiliates. Notwithstanding Section 7.02(a), (b), and (c), Tenant may
          assign or sublease part or all of the Premises without Landlord's
          consent to:

               (i)   any corporation or partnership that controls, is controlled
                     by, or is under common control with, Tenant; or

               (ii)  any corporation resulting from the merger or consolidation
                     with Tenant or to any entity that acquires all of Tenant's
                     assets or stock as a going concern of the business that is
                     being conducted on the Premises, as long as the assignee or
                     sublessee is a bona fide entity and assumes the obligations
                     of Tenant.

     (e)  Conditions. Any subleases and assignments by Tenant are also subject
          to the following:

               (i)   The terms of this Lease;

               (ii)  The term of any sublease shall not extend beyond the Term;

               (iii) Tenant shall remain liable for all Lease obligations;

               (iv)  Consent to one sublease or assignment does not waive the
                     consent requirements for future assignments or subleases;
                     and

               (v)   Any consideration ("Excess Consideration") received by
                     Tenant from an assignment or sublease that exceeds the
                     amount Tenant must pay Landlord, which amount is to be
                     prorated where a part of the Premises is subleased or
                     assigned, shall also be paid to

                                                                               8
<PAGE>

                     Landlord. Tenant shall pay fifty percent (50%) of this
                     Excess Consideration to Landlord at the end of each
                     calendar month during which Tenant collects any Excess
                     Consideration. Each payment shall be sent with a detailed
                     statement showing the total consideration paid by the
                     subtenant or assignee. Landlord shall have the right to
                     audit Tenant's books and records to verify the accuracy of
                     the detailed statement.

                                 ARTICLE VIII
                                   INSURANCE

8.01 Insurance.

     (a)  Landlord's Building Insurance. Landlord shall keep the Building,
          including the Landlord Improvements insured against damage and
          destruction by fire, earthquake, vandalism, and other perils in the
          amount of the full replacement value of the Building, as the value may
          exist from time to time.

     (b)  Property Insurance. Each party shall keep its personal property and
          trade fixtures in the Premises and Building insured with "all risks"
          insurance in an amount to cover one hundred percent (100%) of the
          replacement cost of the property and fixtures. Tenant shall also keep
          any non-Building-standard improvements made to the Premises at
          Tenant's request insured to the same degree as Tenant's personal
          property. Tenant's property insurance shall also provide for business
          interruption/extra expense coverage in sufficient amounts.

     (c)  Liability Insurance. Each party shall maintain contractual and
          comprehensive general liability insurance, including limits of no less
          than $1,000,000 per occurrence/$2,000,000 aggregate per location
          subject to 1,000 deductible contractual liability covering the
          indemnities specified herein. This policy must be written on an
          occurrence basis.

          Policy shall be endorsed to name Landlord as additional insured.
          Definition of additional insured shall include all Partners, Officers,
          Directors, Employees, agents and representatives of the named entity
          including its managing agent. Further, coverage for the additional
          insured shall apply on a primary basis irrespective of any other
          insurance, whether collectible or not.

     (d)  Workers Compensation and Employee Liability Insurance. Affording
          coverage under the Workers Compensation laws of the State of North
          Carolina and Employers Liability coverage subject to a limit of no
          less than $100,000 each employee, $100,000 each accident, $500,000
          policy limit.

     (e)  Umbrella Liability Insurance. Tenant shall maintain umbrella liability
          insurance at not less than a $2,000,000 limit providing excess
          coverage over all limits and coverage noted in Sections 8.01.c and
          8.01.d above. This policy shall be written on an occurrence basis.

     (f)  Waiver of Subrogation. Anything in this Lease to the contrary
          notwithstanding, Landlord and Tenant hereby waive and release each
          other of and from any and all right of recovery, claim, action or
          cause of action, against each other, their agents, officers and
          employees, for any loss or damage that may occur to the Premises,
          improvements to the Building, or personal property within the
          Building, by reason of fire or the elements, regardless of cause or
          origin, including negligence of Landlord or Tenant and their agents,
          officers and employees. Landlord and Tenant agree immediately to give
          their respective insurance companies which have issued policies of
          insurance covering all risk of direct physical loss, written notice of
          the terms of the mutual waivers contained in this Section, and to have
          the insurance policies properly endorsed, if necessary, to prevent the
          invalidation of the insurance coverage by reason of the mutual
          waivers. The waiver does not apply to claims caused by a party's
          willful misconduct.

          If despite a party's best efforts it cannot find an insurance company
          meeting the criteria in Section 8.01(f) that will give the waiver at
          reasonable commercial rates, then it shall give notice to the other
          party within thirty (30) days after the Commencement Date. The other
          party shall then have thirty (30) days to find an insurance company
          that will issue the waiver. If the other party also cannot find such
          an insurance company, then both parties shall be released from their
          obligations to obtain the waiver.

     (g)  Increase in Insurance. If due to Tenant's particular use of the
          Premises, Landlord's insurance rates are increased, Tenant shall pay
          the increase. In addition, the amounts of coverage required by this
          Lease are subject to review by Landlord at the end of each Adjustment
          Period. At each review, if necessary to maintain the same level of
          coverage that existed on the Commencement Date, the amounts of
          coverage shall be increased to the lesser of:

               (i)   the amounts of coverage carried by prudent landlords and
                     tenants of comparable office buildings in the Raleigh,
                     North Carolina area; or

               (ii)  twenty-five percent (25%) higher than the previous
                     insurance amounts.

     (h)  Insurance Criteria.  Insurance policies required by this Lease shall:

                                                                               9
<PAGE>
               (i)   be issued by insurance companies licensed to do business in
                     the state of North Carolina with general policyholder's
                     ratings of at least A and a financial rating of at least XI
                     in the most current Best's Insurance Reports available on
                     the date of this Lease;

               (ii)  name the non procuring party as an additional insured as
                     its interest may appear (other landlords or tenants may
                     also be added as additional insureds in a blanket policy);

               (iii) provide that the insurance not be canceled or materially
                     changed in the scope or amount of coverage unless thirty
                     (30) days' advance notice is given to the non procuring
                     party;

               (iv)  be primary policies - not as contributing with, or in
                     excess of, the coverage that the other party may carry;

               (v)   be permitted to be carried through a "blanket policy" or
                     "umbrella" coverage;

               (vi)  have property deductibles not greater than $5,000; and

               (vii) be maintained during the entire Term.

     (i)  Evidence of Insurance. By the Commencement Date and upon each renewal
          of its insurance policies, Tenant shall give copies of certificates of
          insurance to Landlord. The certificate shall specify amounts, types of
          coverage, the waiver of subrogation, and the insurance criteria listed
          in Section 8.01(f). The policies shall be renewed or replaced and
          maintained by Tenant. If Tenant fails to give the required certificate
          within thirty (30) days after the notice of demand for it, Landlord
          may obtain and pay for that insurance, but is not obligated to do so,
          and receive reimbursement from the party required to have the
          insurance.

8.02 Indemnification.
     (a)  Tenant's Indemnity. Tenant indemnifies, defends, and holds Landlord
          harmless from claims, including but not limited to claims:
               (i)   for personal injury, death, or property damage;

               (ii)  for incidents occurring in or about the Premises or
                     Building; and

               (iii) caused by the negligence or willful misconduct of Tenant,
                     its agents, employees, or invitees.

          When the claim is caused by the joint negligence or willful misconduct
          of Tenant and Landlord or Tenant and a third party unrelated to
          Tenant, except Tenant's agents, employees, or invitees, Tenant's duty
          to defend, indemnify, and hold Landlord harmless shall be in
          proportion to Tenant's allocable share of the joint negligence or
          willful misconduct.

     (b)  Landlord's Indemnity.  Landlord indemnifies, defends, and holds Tenant
          harmless from claims:
               (i)   for personal injury, death, or property damage;

               (ii)  for incidents occurring in or about the Premises or
                     Building; and

               (iii) caused by the negligence or willful misconduct of Landlord,
                     its agents, employees, or invitees.

          When the claim is caused by the joint negligence or willful misconduct
          of Landlord and Tenant or Landlord and a third party unrelated to
          Landlord, except Landlord's agents, employees, or invitees, Landlord's
          duty to defend, indemnify, and hold Tenant harmless shall be in
          proportion to Landlord's allocable share of the joint negligence or
          willful misconduct.

     (c)  Release of Claims. Notwithstanding Section 8.02(a) and (b), the
          parties release each other from any claims either party ("Injured
          Party") has against the other to the extent the claim is covered by
          the Injured Party's insurance.

8.03 Limitation of Landlord's Liability.
     (a)  Transfer of Premises. If the Building is sold or transferred,
          voluntarily or involuntarily, Landlord's Lease obligations and
          liabilities accruing after the transfer shall be the sole
          responsibility of the new owner, and if
               (i)   the new owner expressly agrees in writing to assume
                     Landlord's obligations; and

               (ii)  the Tenant's funds in the hands of Landlord, such as the
                     Security Deposit, shall be given to the new owner.

     (b)  Liability for Money Judgment. If Landlord, its employees, officers,
          directors or partners are ordered to pay Tenant a money judgment
          because of Landlord's default, Tenant's sole remedy to satisfy the
          judgment shall be to execute against Landlord's interest in the
          Building and Land,

                                                                             10
<PAGE>

          including the rents and profits therefrom. Under no circumstance will
          Landlord, or its officers, directors, partners or employees be
          personally liable for any money judgment.

                                  ARTICLE IX
                               LOSS OF PREMISES
9.01 Damages.
     (a)  Definition.  "Relevant Space" means:
               (i)   the Premises, excluding Tenant's fixtures installed by or
                     at the request of Tenant;

               (ii)  access to the Premises; and

               (iii) any part of the Building that provides essential services
                     to the Premises.

     (b)  Repair of Damage. If the Relevant Space is damaged in part or whole
          from any cause and the Relevant Space can be substantially repaired
          and restored within one hundred eighty (180) days from the date of the
          damage using standard working methods and procedures, Landlord shall
          at its expense promptly and diligently repair and restore the Relevant
          Space to substantially the same condition as existed before the
          damage. This repair and restoration shall be made within one hundred
          eighty (180) days from the date of the damage unless the delay is due
          to causes beyond Landlord's reasonable control.

          If the Relevant Space cannot be repaired and restored within the one
          hundred eighty (180) day period, then either party, may, within thirty
          (30) days after determining that the repairs and restoration cannot be
          made within one hundred eighty (180) days, terminate the Lease by
          giving notice to the other party. Nevertheless, if the Relevant Space
          is not repaired and restored within one hundred eighty (180) days from
          the date of the damage, then Tenant may terminate the Lease at any
          time within thirty (30) days after the one hundred eightieth (180th)
          day. Tenant shall not be able to terminate this Lease if its willful
          misconduct causes the damage unless Landlord is not promptly and
          diligently repairing and restoring the Relevant Space.

     (c)  Determining the Extent of Damage. If the parties cannot agree in
          writing whether the repairs and restoration will take more than one
          hundred eighty (180) days to make, then the determination will be
          reasonably made by Landlord's architect.

     (d)  Abatement. Unless the damage is caused by Tenant's willful misconduct,
          the Base Rent and Additional Rent shall abate in proportion to that
          part of the Premises that is unfit for use in Tenant's business. The
          abatement shall consider the nature and extent of interference to
          Tenant's ability to conduct business in the Premises and the need for
          access and essential services. The abatement shall continue from the
          date the damage occurred until ten (10) business days after Landlord
          completes the repairs and restoration to the Relevant Space or the
          part rendered unusable and notice to Tenant that the repairs and
          restoration are completed, or until Tenant again uses the Premises or
          the part rendered unusable, whichever is first.

     (e)  Tenant's Property. Notwithstanding anything else in this Article IX,
          Landlord is not obligated to repair or restore damage to Tenant's
          trade fixtures, furniture, equipment, or other personal property, or
          any Tenant improvements.

     (f)  Damage to Building.  If:
               (i)   more than twenty percent (20%) of the Building is damaged
                     and the Landlord decides not to repair and restore the
                     Building;

               (ii)  any mortgagee of the Building shall not allow adequate
                     insurance proceeds for repair and restoration;

               (iii) the damage is not covered by Landlord's insurance; or

               (iv)  the Lease is in the last twelve (12) months of its Term,
                     then Landlord may terminate this Lease. To terminate,
                     Landlord must give notice to Tenant within thirty (30) days
                     after the Landlord knows of the damage. The notice must
                     specify the termination date, which shall be at least
                     thirty (30) but not more than sixty (60) days after the
                     date notice is given.

     (g)  Termination. If either party terminates this Lease as permitted above,
          then this Lease shall end on the day specified in the termination
          notice. The Base Rent, Additional Rent, and other charges shall be
          payable up to the termination date and shall account for any
          abatement. Landlord shall promptly refund to Tenant any prepaid,
          unaccrued Base Rent and Additional Rent, accounting for any abatement,
          plus Security Deposit, if any, less any sum then owing by Tenant to
          Landlord.

9.02 Condemnation.
     (a)  Definitions. The terms "eminent domain," "condemnation," "taken," and
          the like in Section 9.02 include takings for public or quasi-public
          use and private purchases in place of condemnation by any authority
          authorized to exercise the power of eminent domain.

                                                                              11
<PAGE>

     (b)  Entire Taking. If the entire Premises or the portions of the Building
          required for reasonable access to, or the reasonable use of, the
          Premises are taken by eminent domain, this Lease shall automatically
          end on the earlier of:

               (i)   the date title vests; or

               (ii)  the date Tenant is dispossessed by the condemning
                     authority.

     (c)  Partial Taking. If the taking of a part of the Premises materially
          interferes with Tenant's ability to continue its business operations
          in substantially the same manner and space then Tenant may terminate
          this Lease on the earlier of:

               (i)   the date when title vests;

               (ii)  the date Tenant is dispossessed by the condemning
                     authority; or

               (iii) sixty (60) days following notice to Tenant of the date when
                     vesting or dispossession is to occur.

          If there is a partial taking and this Lease continues, then the Lease
          shall end as to the part taken and the Base Rent and Additional Rent
          shall abate in proportion to the part of the Premises taken and
          Tenant's pro rata share shall be equitably reduced.

     (d)  Termination by Landlord. If title to a part of the Building other than
          the Premises is condemned, and in the Landlord's reasonable opinion,
          the Building should be restored in a manner that materially alters the
          Premises, Landlord may terminate this Lease by giving notice to
          Tenant. Termination notice shall be given within sixty (60) days
          following the date title vested. This Lease shall end on the date
          specified in the termination notice, which date shall be at least
          thirty (30) days but not more than ninety (90) days after the notice
          is given.

     (e)  Rent Adjustment. If the Lease is terminated as provided in Sections
          9.02(b), (c), or (d), then the Base Rent, Additional Rent, and other
          charges shall be payable up to the date, and shall account for any
          abatement. Landlord, considering any abatement, shall promptly refund
          to Tenant any prepaid, unaccrued Base Rent and Additional Rent plus
          Security Deposit, if any, less any sum then owing by Tenant to
          Landlord.

     (f)  Repair. If the Lease is not terminated as provided for in Sections
          9.02(b), (c), or (d), then Landlord at its expense shall promptly
          repair and restore the Premises to the condition that existed
          immediately before the taking, except for the part taken, to render
          the Premises a complete architectural unit, but only to the extent of
          the:

               (i)   condemnation award received for the damage; and

               (ii)  the Landlord's original obligation under Section 4.05 and
                     Exhibit D.

     (g)  Awards and Damages. Landlord reserves all rights to damages paid
          because of any partial or entire taking of the Premises. Tenant
          assigns to Landlord any right Tenant may have to the damages or award.
          Tenant may make claim for, and shall be entitled to retain, any award
          for the value of the leasehold estate. Notwithstanding anything else
          in this Paragraph 9.02(g), Tenant may claim and recover from the
          condemning authority a separate award for Tenant's moving expenses,
          business dislocation damages, Tenant's personal property and fixtures,
          the unamortized costs of leasehold improvements paid for by Tenant,
          excluding the Landlord's Improvements, and any other award that would
          not substantially reduce the award payable to Landlord. Each party
          shall seek its own award, as limited by this provision, at its own
          expense, and neither shall have any right to the award made to the
          other.

     (h)  Temporary Condemnation. If part or all of the Premises are condemned
          for a limited period of time not to exceed 90 days ("Temporary
          Condemnation"), this Lease shall remain in effect. The Base Rent and
          Additional Rent and Tenant's obligations for the part of the Premises
          taken shall abate during the Temporary Condemnation in proportion to
          the part of the Premises that Tenant is unable to use in its business
          operations as a result of the Temporary Condemnation. Landlord shall
          receive the entire award for any Temporary Condemnation.


                                   ARTICLE X
                                    DEFAULT

10.01 Tenant's Default.

     (a)  Defaults.  Each of the following constitutes a default ("Default"):

                                                                              12
<PAGE>

               (i)   Tenant's failure to pay Base Rent or Additional Rent within
                     five (5) days after written notice from Landlord that the
                     rent is past due and payable;

               (ii)  Tenant's failure to pay Base Rent or Additional Rent within
                     five (5) days after the due date, at any time during a
                     calendar year in which Tenant has already received two (2)
                     notices of its failure to pay Base Rent or Additional Rent
                     by the due date;

               (iii) Tenant's failure to perform or observe any other Tenant
                     obligation after a period of thirty (30) business days or
                     the additional time, if any, that is reasonably necessary
                     to promptly and diligently cure the failure, after it
                     receives notice from Landlord setting forth in reasonable
                     detail the nature and extent of the failure and identifying
                     the applicable Lease provision(s);

               (iv)  Tenant's abandoning or vacating the Premises;

               (v)   Tenant's failure to vacate or stay any of the following
                     within sixty (60) days after they occur:

                         (1)  a petition in bankruptcy is filed by or against
                              Tenant;

                         (2)  Tenant is adjudicated as bankrupt or insolvent;

                         (3)  a receiver, trustee, or liquidator is appointed
                              for all or a substantial part of Tenant's
                              property; or

                         (4)  Tenant makes an assignment for the benefit of
                              creditors.

10.02 Landlord's Remedies.

      (a)  Remedies. Landlord in addition to the remedies given in this Lease or
           under the law, may do any one or more of the following if Tenant
           commits a Default under Section 10.01:

               (i)   end this Lease, and Tenant shall then surrender the
                     Premises to Landlord; or

               (ii)  enter and take possession of the Premises pursuant to
                     summary process of law and remove Tenant, with or without
                     having ended the Lease.

      (b)  No Surrender. Landlord's exercise of any of its remedies or its
           receipt of Tenant's keys shall not be considered an acceptance or
           surrender of the Premises by Tenant. A surrender must be agreed to in
           writing signed by both parties.

      (c)  Rent. If Landlord terminates this Lease or Tenant's right to possess
           the Premises because of a Default, Landlord may hold Tenant liable
           for Base Rent, Additional Rent, and other indebtedness accrued to the
           date the Lease expires or is terminated. Tenant shall also be liable
           for the Base Rent, Additional Rent and other indebtedness that
           otherwise would have been payable by Tenant during the remainder of
           the Term had there been no default, reduced by any sums Landlord
           receives by reletting the Premises during the Term. Landlord must use
           commercially reasonable efforts to re-let the Premises during the
           remainder of the term.

      (d)  Other Expenses. Tenant shall also be liable for that part of the
           following sums paid by Landlord and attributable to that part of the
           Term ended due to Tenant's Default:

               (i)   reasonable broker's fees incurred by Landlord for reletting
                     part or all of the Premises prorated for that part of the
                     reletting Term ending concurrently with the then current
                     Term of this Lease;

               (ii)  the cost of removing and storing Tenant's property;

               (iii) the cost of repairs, alterations, and remodeling necessary
                     to put the Premises in a condition reasonably acceptable to
                     a new Tenant; provided, however, landlord shall reasonably
                     attempt to negotiate for reimbursement of tenant
                     improvements for new tenant within new lease; and

               (iv)  other necessary and reasonable expenses incurred by
                     Landlord in enforcing its remedies, including, without
                     limitation, reasonable attorneys fees.

      (e)  Payment. Tenant shall pay the sums due in Sections 10.02(c) and (d)
           within thirty (30) days of receiving Landlord's proper and correct
           invoice for the amounts.

      (f)  Reletting. Landlord may reasonably relet for a shorter or longer
           period of time than the Lease Term and make any necessary repairs or
           alterations. Landlord may relet on any reasonable terms including a
           reasonable amount of free rent.

                                                                              13
<PAGE>

10.03 Self-Help. If Tenant defaults, Landlord may, without being obligated and
without waiving the Default, cure the Default, and may enter the Premises to do
so. Tenant shall pay Landlord, upon demand, as Additional Rent, all costs,
expenses and disbursements incurred by Landlord.

10.04 Survival. The remedies permitted by this Article X and the parties'
indemnities in Section 8.02 shall survive the Expiration Date or earlier
termination of this Lease.

                                  ARTICLE XI
                                NON DISTURBANCE

11.01 Subordination.

      (a)  Mortgages. Subject to Section 11.01(b), this Lease is subordinate to
           prior or subsequent mortgages covering the Building contingent upon
           execution of a non-disturbance agreement by mortagee. Landlord shall
           obtain a non-disturbance agreement from subsequent lienholders in
           favor of Tenant.

      (b)  Foreclosures.  If any mortgage is foreclosed, then:

               (i)   This Lease shall continue;

               (ii)  Tenant's quiet possession shall not be disturbed if Tenant
                     is not in Default;

               (iii) Tenant will attorn to and recognize the mortgagee or
                     purchaser at foreclosure sale (Successor Landlord) as
                     Tenant's landlord for the remaining Term; and

               (iv)  The Successor Landlord shall not be bound by:

                         (1)  any payment of Base Rent or Additional Rent for
                              more than one month in advance, except the
                              Security Deposit and free rent, if any, specified
                              in the Lease,

                         (2)  any amendment, modification, or ending of this
                              Lease without Successor Landlord's consent after
                              the Successor Landlord's name is given to Tenant
                              unless the amendment, modification, or ending is
                              specifically authorized by the original Lease and
                              does not require Landlord's prior agreement or
                              consent, and

                         (3)  any liability for any act or omission of a prior
                              Landlord.

      (c)  Self-Operating. This Section 11.01 is self-operating. However,
           Landlord and Tenant shall promptly execute and deliver any documents
           needed to confirm this arrangement.

11.02 Estoppel Certificate.

      (a)  Obligation. Tenant shall from time to time, within ten (10) business
           days after receiving a written request from Landlord, execute and
           deliver to Landlord a written statement which may be relied upon by
           Landlord and any third party with whom the Landlord is dealing and
           which shall certify:

               (i)   the accuracy of the Lease document;

               (ii)  the Commencement and Expiration Dates of the Lease;

               (iii) that the Lease is unmodified and in full effect or in full
                     effect as modified, stating the date and nature of the
                     modification;

               (iv)  whether to the Tenant's knowledge the Landlord is in
                     default or whether the Tenant has any claims or demands
                     against Landlord, and, if so, specifying the Default,
                     claim, or demand; and

               (v)   to other correct and reasonably ascertainable facts that
                     are covered by the Lease terms.

      (b)  Remedy. The Tenant's failure to comply with its obligations in
           Section 11.02(a) shall be a Default, except that the cure period for
           this Default shall be five (5) business days after the Tenant
           receives notice of the Default.

11.03 Quiet Possession. If Tenant is not in default, and subject to the Lease
terms, Landlord warrants that Tenant's peaceable and quiet enjoyment of the
Premises shall not be disturbed by anyone claiming by or through Landlord.


                                  ARTICLE XII
                               LANDLORD'S RIGHTS

12.01 Rules                                                                   14
<PAGE>

      (a) Rules. Tenant, its employees and invitees, shall comply with:

               (i)  the Rules attached as Exhibit E; and

               (ii) reasonable modifications and additions to the Rules adopted
                    by Landlord.

      (b) Conflict with Lease. If a Rule issued under Section 12.01(a) conflicts
          with or is inconsistent with any Lease provision, the Lease provision
          controls.

      (c) Enforcement. Although Landlord is not responsible for another tenant's
          failure to observe the Rules, Landlord shall not unreasonably enforce
          the Rules against Tenant.

12.02 Mechanic's Liens.

      (a) Discharge Lien. Tenant shall, within twenty (20) days after receiving
          notice of any mechanic's lien for material or work claimed to have
          been furnished to the Premises on Tenant's behalf and at Tenant's
          request:

               (i)  discharge the lien; or

               (ii) post a bond equal to the amount of the disputed claim with
                    companies reasonably satisfactory to Landlord.

          If Tenant posts a bond, it shall contest the validity of the lien.
          Tenant shall indemnify, defend, and hold Landlord harmless from losses
          incurred from these liens.

      (b) Landlord's Discharge. If Tenant does not discharge the lien or post
          the bond within the twenty (20) day period, Landlord may pay any
          amounts, including interest and legal fees, to discharge the lien.
          Tenant shall then be liable to Landlord for the amounts paid by
          Landlord as Additional Rent.

      (c) Consent not Implied. This Section 12.02 is not a consent to subject
          Landlord's property to these liens.

12.03 Right to Enter.

      (a) Permitted Entries. Landlord and its agents, servants, and employees
          may enter the Premises at reasonable times, and at any time if an
          emergency, without charge, liability, or abatement of Base Rent, to:

               (i)    examine the Premises;

               (ii)   make repairs, alterations, improvements, and additions
                      either required by the Lease or advisable to preserve the
                      integrity, safety, and good order of part or all of the
                      Premises or Building;

               (iii)  provide janitorial and other services required by the
                      Lease;

               (iv)   comply with Applicable Laws;

               (v)    show the Premises to prospective lenders or purchasers;

               (vi)   post notices of non responsibility;

               (vii)  remove any Alterations made by Tenant in violation of
                      Section 7.01; and

               (viii) post "For Sale" signs and, during the one hundred twenty
                      (120) days immediately before this Lease ends, post "For
                      Lease" signs.

      (b)  Entry Conditions. Notwithstanding Section 12.03(a), entry is
           conditioned upon Landlord:

               (i)    giving Tenant at least twenty-four (24) hours advance
                      notice, except in an emergency;

               (ii)   promptly finishing any work for which it entered; and

               (iii)  causing the least practical interference to Tenant's
                      business.

12.04 Holdover.

      (a) Holdover Status. If Tenant continues occupying the Premises after the
          Term ends ("Holdover") then:

               (i)    if the Holdover is with Landlord's written consent, it
                      shall be a month-to-month tenancy, terminable on thirty
                      (30) days advance notice by either party. Tenant shall pay
                      at the beginning of each month Base Rent and Additional
                      Rent that is five percent (5%) higher

                                                                              15
<PAGE>

                       than the amount due in the last full month immediately
                       preceding the Holdover period unless Landlord specifies a
                       lower or higher Rent and Additional Rent in the written
                       consent;

               (ii)    if the Holdover is without Landlord's written consent,
                       then Tenant shall be a tenant-at-sufferance. Tenant shall
                       pay by the first day of each month twice the amount of
                       Base Rent and Additional Rent due in the last full month
                       immediately preceding the Holdover period and shall be
                       liable for any damages suffered by Landlord because of
                       Tenant's Holdover, Landlord shall retain its remedies
                       against Tenant who holds over without written consent.

       (b)  Holdover Terms. The Holdover shall be on the same terms and
            conditions of the Lease except:

               (i)     the Term;

               (ii)    Base Rent and Additional Rent;

               (iii)   the extension Term is deleted;

               (iv)    the Quiet Possession provision is deleted;

               (v)     Landlord's obligation for services and repairs is
                       deleted; and

               (vi)    consent to an assignment or sublease may be unreasonably
                       withheld and delayed.

12.05  Signs.  Tenant shall not place or have placed any other signs, listings,
advertisements, or any other notices anywhere in the Building without Landlord's
prior written consent.

                                 ARTICLE XIII
                                 MISCELLANEOUS

13.02  Attorney's Fees. In any litigation between the parties regarding this
Lease, the losing party shall pay to the prevailing party all reasonable
expenses and court costs including attorneys' fees incurred by the prevailing
party. A party shall be considered the prevailing party if:

       (a)  it initiated the litigation and substantially obtains the relief it
            sought, either through a judgment or voluntary action before (after
            it is scheduled) trial or judgment;

       (b)  the other party withdraws its action without substantially obtaining
            the relief it sought; or

       (c)  it did not initiate the litigation and judgment is entered for
            either party, but without substantially granting the relief sought.

13.03  Notices. Unless a Lease provision expressly authorizes verbal notice,
all notices under this Lease shall be in writing and sent by registered or
certified mail, postage prepaid, or by overnight delivery as follows:

       To Tenant:    Total Sports, Inc.
                     234 Fayetteville Street Mall
                     Suite 300
                     Raleigh, NC 27601

                                      and

       To Landlord:  First Raleigh Telex, LLC and   Frank A. Daniels, Jr.,
                     c/o Anthony & Co.              Manager
                     702 Oberlin Road               First Raleigh Telex
                     Suite 100                      234 Fayetteville Street Mall
                     Raleigh, NC 27605              Suite 600
                     (919) 832-1110                 Raleigh, NC 27601

                     Post Office Box 10810
                     Raleigh, NC 27605
                     Attn: Property Management

Either party may change these persons or addresses by giving notice as provided
above. Tenant shall also give required notices to Landlord's mortgagee after
receiving notice from Landlord of the mortgagee's name and address.  Notice
shall be considered and three business days after deposit in the mail.

13.04  Partial Invalidity. If any Lease provision is invalid or unenforceable to
any extent, then except that provision, the remainder of this Lease shall
continue in effect and be enforceable to the fullest extent permitted by law.

                                                                              16
<PAGE>

3.05   Waiver.  The failure of either party to exercise any of its rights is not
a waiver of those rights.  A party waives only those rights specified in writing
and signed by the party waiving its rights.

13.06  Binding on Successors.  This Lease shall bind the parties' heirs,
successors, representatives, and permitted assigns.

13.07  Governing Law.  This Lease shall be governed by the laws of the state in
which the Building is located.

13.08  Lease Not an Offer. Landlord gave this Lease to Tenant for review. It is
not an offer to lease. This Lease shall not be binding unless signed by both
parties and an originally signed counterpart is delivered to Tenant by July 31,
1999.

13.09  Recording.  Recording of this Lease is prohibited except as allowed in
this paragraph.  At the request of either party, the parties shall promptly
execute and record, at the cost of the requesting party, a short form memorandum
describing the Premises and stating this Lease's Term, its Commencement and
Expiration Dates, and other information the parties agree to include.

13.10  Survival of Remedies.  The parties' remedies shall survive the expiration
or termination of this Lease when caused by the Default of the other party.

13.11  Authority of Parties.  Each party warrants that it is authorized to enter
into the Lease, that the person signing on its behalf is duly authorized to
execute the Lease, and that no other signatures are necessary.

13.12  Business Days.  Business day means Monday through Friday inclusive,
excluding holidays identified at Section 6.02(b).  Throughout this Lease,
wherever "days" are used the term shall refer to calendar days.  Wherever the
term "business days" is used the term shall refer to business days.

13.13  Entire Agreement.  This Lease contains the entire agreement between the
parties about the Premises and Building.  Except for the Rules for which Section
12.01(a) controls, this Lease shall be modified only by a writing signed by both
parties.

13.14  Definition of Lease.  This Lease consists of the following:

      (a)  Title Page;

      (b)  Table of Contents;

      (c)  Articles I through XIII;

      (d)  Signature Page;

      (e)  Rider containing Option To Extend
           Rider B containing Guarantee of Lease Obligations

      (f)  Exhibits A through E.

                                                                              17
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have duly executed this Lease the
day and year first above written.


LANDLORD:                     First Raleigh Telex, LLC  (SEAL)

                              SIGNATURE:

                                         /s/ Frank Daniels           (SEAL)
                              ------------------------------------

                              DATE:      August 8, 1999
                                    ------------------------------


WITNESS:                      BY:        /s/ Beth Ames
                                  --------------------------------

                              NAME:      Beth Ames
                                    ------------------------------

                              TITLE:     Executive Assistant
                                     -----------------------------

                              DATE:      August 8, 1999
                                    ------------------------------


TENANT:                       Total Sports, Inc.

                              SIGNATURE:

                              BY:        /s/ George Schlukbier
                                  --------------------------------

                              NAME:      George Schlukbier
                                    ------------------------------

                              TITLE:     President/COO
                                     -----------------------------

                              DATE:      August 8, 1999
                                    ------------------------------


ATTEST                        BY:_________________________________

                              NAME:_______________________________

                              TITLE:______________________________

                              DATE:_______________________________


                                        [AFFIX CORPORATE SEAL]

                                                                              18
<PAGE>

                                     RIDER

     THIS RIDER constitutes a part of the Lease to which it is attached.  In the
event of a conflict between this Rider and the provisions of the Lease, the
Rider will govern and control.

Right of First Refusal

Tenant shall have the first right of refusal to lease any space in the building
that shall become available for lease subsequent to the commencement of this
Lease.  In the event Landlord receives a bona fide offer to lease space in the
building from a third party tenant, Landlord shall promptly notify Tenant in
writing of such offer, and then Tenant shall have the right to match the terms
of the proposed third party lease by giving written notice to Landlord of
Tenant's intent to lease the premised not later than five business days from the
date Tenant is notified of the third party lease proposal.  In the event Tenant
refuses to lease the space offered then Landlord may lease the space to the
third party tenant, but Tenant shall have the ongoing right of first refusal in
the future.

                                                                              19
<PAGE>

                                   Exhibit A

                             Figure 1.  Floorplan

                  234 Fayetteville Street Mall, Second Floor



                           [Schematic of Floorplan]



                                                                              20
<PAGE>

                                   Exhibit A

                             Figure 2.  Floorplan

                   234 Fayetteville Street Mall, Third Floor



                           [Schematic of Floorplan]

                                                                              21
<PAGE>

                                   Exhibit A

                             Figure 3.  Floorplan

                  234 Fayetteville Street Mall, Fourth Floor



                           [Schematic of Floorplan]


                                                                              22
<PAGE>

                                   Exhibit A

                             Figure 4.  Floorplan

                   234 Fayetteville Street Mall, Fifth Floor

                           [Schematic of Floorplan]

                                                                              23
<PAGE>

                                   Exhibit A

                             Figure 5.  Floorplan

                    234 Fayetteville Street Mall, Basement


                           [Schematic of Floorplan]


                                                                              24
<PAGE>

                                  Exhibit  B

                                   BUILDING

                         234 Fayetteville Street Mall


                            [Schematic of Building]


                                                                              25
<PAGE>

                                  Exhibit  C
                                     Land

BEGINNING at a point, said point being the control of a brick building, said
point having N.C. Grid Coordinates of Y=737,930.371 X=2,106,947.179, said point
located North 78 (degrees) 43' 09" West a distance of 372.31 feet from a brass
plug located at the northeast corner of the intersection of East Martin Street
and Wilmington Street, and said point being the northwest corner of the
technical rights of way of Fayetteville Street and West Martin Street; then
running with the wall line of the brick building the following courses: North 87
(degrees) 46' 12" West a distance of 82.17 feet to a point; North 02 (degrees)
13'48" East a distance of 67.5 feet to a point; South 87 (degrees) 46' 12" East
a distance of 82.17 feet to a point; then South 02 (degrees) 13'48" West a
distance of 67.5 feet to the point and place of BEGINNING, having 5,546.5 square
feet (0.1273 acres) and being the property located at 234 Fayetteville Street in
Raleigh, Wake County, North Carolina, as shown on survey dated September 16,
1998 by Al Prince & Associates, P.A. This property is the same property
described in a Deed dated January 1, 1973 from First Union National Bank North
Carolina to National Investment Company, recorded at Book 2164, Page 231, Wake
County Registry.

Save and except that portion of the above referenced property previously
conveyed by Special Warranty Deed dated May 21, 1998 and recorded in Book 8067,
Page 116, Wake County Registry.

Together with all of the land conveyed by First Union National Bank of North
Carolina to National Investment Company by Deed dated January 1, 1973 and
recorded in book 2164, Page 228, Wake County Registry.

Together with all rights and subject to those certain party wall agreements
recorded in:

     (1)      Book 147, Page 462
     (ii)     Book 151, Page 229
     (iii)    Book 391, Page 517
     (iv)     Book 438, Page 204
     (v)      Book 561, Page 111

                                                                              26
<PAGE>

                                   Exhibit D
                             LANDLORD IMPROVEMENTS

Landlord shall provide to Tenant a Tenant Improvement Allowance as follows:

     Basement:        $10.00 per square foot or  $ 42,150.00
     Second Floor:    $10.00 per square foot or  $ 46,620.00
     Third Floor      $10.00 per square foot or  $ 46,700.00
     Fourth Floor     $10.00 per square foot or  $ 46,700.00
     Fifth Floor      $10.00 per square foot or  $ 46,700.00

     Total Allowance Amount:                     $228,870.00

The Tenant shall be solely responsible for all costs associated with Tenant
Improvement in the Premises above and beyond the above Total Amount.  Landlord
at is option may amortize the excess expenditures over the lease term at an
interest rate of ten percent (10%) per annum, with payments made monthly to
Landlord by Tenant.

                                                                              27
<PAGE>

                                   Exhibit E
                             RULES AND REGULATIONS

(1)  Access to Common Areas of the Property.  Landlord may from time to time
     establish security controls for the purpose of regulating access to the
     common areas of the property. Tenant shall abide by all such security
     regulations so established and agrees to always leave clear access for
     vehicular traffic through all parking lots, loading areas and driveways.

(2)  Protecting Demised Premises. Before leaving the Demised Premises
     unattended, Tenant shall close and securely lock all doors or other means
     of entry to the Demised Premises.

(3)  Building Directories. The directories of the building shall be used
     exclusively for the display of the name and location of tenants only and
     will be provided at the expense of Landlord. Any company names and/or name
     changes requested by Tenant to be displayed in the directories must be
     approved by Landlord and, if approved, will be provided at the sole expense
     of Tenant.

(4)  Large Articles. Furniture, freight and other large or heavy articles may be
     brought into the building in a manner so as to not damage the property and
     always at Tenant's sole responsibility. All damage done to the building,
     its furnishings, fixtures or equipment by moving or maintaining such
     furniture, freight or articles shall be repaired at the expense of Tenant.

(5)  Signs. Tenant shall not paint, display, inscribe, maintain or affix any
     sign, placard, picture, advertisement, name, notice, lettering or direction
     on any part of the outside or inside of the building, or on any part of the
     inside of the Demised Premises which can be seen from the outside of the
     Demised Premises, without the written consent of Landlord, and then only
     such name or names or matter and in such color, size, style, character and
     material as shall be first approved by Landlord in writing. Landlord
     reserves the right to remove at Tenant's expense all matter other than that
     above provided for without notice to Tenant.

(6)  Compliance with Laws. Tenant shall comply with all applicable laws,
     ordinances, governmental orders or regulations and applicable orders or
     directions from any public office or body having jurisdiction, whether now
     existing or hereinafter enacted with respect to the Demised Premises and
     the use or occupancy thereof. Tenant shall not make or permit any use of
     the Demised Premises which directly or indirectly is forbidden by law,
     ordinance, governmental regulations or order or direction of applicable
     public authority, or which may be dangerous to person or property.

(7)  Hazardous Materials. Tenant shall not use or permit to be brought into the
     Demised Premises or the building any flammable oils or fluids, or any
     explosive or other articles deemed hazardous to persons or property, or do
     or permit to be done any act or thing which will invalidate or which if
     brought in would be in conflict with any insurance policy covering the
     building or its operation, or the Demised Premises, or any part of either,
     and will not do or permit to be done anything in or upon the Demised
     Premises, or bring or keep anything therein, which shall not comply with
     all rules, orders, regulations or requirements of any organization,
     bureaus, department or body having jurisdiction with respect thereto (and
     Tenant shall at all times comply with all such rules, orders, regulations
     or requirements), or which shall increase the rate of insurance on the
     building, its appurtenances, contents or operation.

(8)  Defacing Demised Premises and Overloading. Tenant shall not place anything
     or allow anything to be placed in the Demised Premises near the glass or
     any door, partition, wall or window which may be unsightly from outside the
     Demised Premises. Tenant shall not place or permit to be placed any article
     of any kind on any window ledge or on the exterior walls; blinds, shades,
     awnings or other forms of inside or outside window ventilators or similar
     devices shall not be placed in or about the outside windows in the Demised
     Premises except to the extent that the character, shape, color material and
     make thereof is approved by Landlord. Tenant shall not do any painting or
     decorating in the Demised Premises or install any floor coverings in the
     Demised Premises or make, paint, cut or drill into, or in any way deface
     any part of the Demised Premises or building without in each instance
     obtaining the prior written consent of Landlord. Tenant shall not overload
     any floor or part thereof in the Demised Premises, or any facility in the
     building or any public corridors or elevators therein by bringing in or
     removing any large or heavy articles and, Landlord may direct and control
     the location of safes, files, and all other heavy articles and, if
     considered necessary by Landlord, require supplementary supports at
     Tenant's expense of such material and dimensions necessary to properly
     distribute the weight.

(9)  Obstruction of Public Areas. Tenant shall not, whether temporarily,
     accidentally or otherwise, allow anything to remain in, place or store
     anything in, or obstruct in any way, any sidewalk, court, passageway,
     entrance, or shipping area. Tenant shall lend its full cooperation to keep
     such areas free from all obstruction and in a clean and sightly condition,
     and move all supplies, furniture and equipment as soon as received directly
     to the Demised Premises, and shall move all such items and waste (other
     than waste customarily removed by building employees) that are at any time
     being taken from the Demised Premises directly to the areas designated for
     disposal. All courts, passageways, entrances, exits, elevators, escalators,
     stairways, corridors, halls and roofs are not for the use of the general
     public and Landlord shall in all cases retain the right to control and
     prevent access thereto by all persons whose presence in the judgment of
     Landlord shall be prejudicial to the safety, character, reputation and
     interest of the building and its tenants provided, however, that nothing
     herein contained shall be construed to prevent such access to persons with
     whom Tenant deals within the normal course of Tenant's business unless such
     persons are engaged in illegal activities.

(10) Additional Locks. Tenant shall not attach or permit to be attached
     additional locks or similar devices to any door or window, change any
     existing locks or the mechanism thereof, or make or permit to be made any
     keys for any door other than those provided by Landlord. Upon termination
     of this lease or of Tenant's possession, Tenant shall surrender all keys to
     the Demised Premises. Tenant shall be solely responsible for the costs of
     all locks and keys other than the original set in the premises as of the
     date of occupancy.

                                                                              28
<PAGE>

(11) Communications or Utility Connections. If Tenant desires signal, alarm or
     other utility or similar service connections installed or changed, Tenant
     may install or change the same without the approval of Landlord, but at
     Tenant's expense. Tenant shall not install in the Demised Premises any
     equipment which requires a substantial amount of electrical current without
     the advance written consent of Landlord. Tenant shall ascertain from
     Landlord the maximum amount of load or demand for or use of electrical
     current which can safely be permitted in the Demised Premises, taking into
     account the capacity of the electric wiring in the building and the Demised
     Premises, taking into account the capacity of the electric wiring in the
     building and the Demised Premises and the needs of other tenants in the
     building, and shall not in any event connect a greater load than that which
     is safe.

(12) Office of the Building. Service requirements of Tenant will be attended to
     only upon application at the office of Anthony & Co. Employees of Landlord
     shall not perform any work outside of their duties unless under special
     instructions from Landlord.

(13) Restrooms. The restrooms, toilets, urinals, vanities and the other
     apparatus shall not be used for any purpose other than that for which they
     were constructed and no foreign substance of any kind whatsoever shall be
     thrown therein and the expense of any breakage, stoppage or damage
     resulting from the violation of this rule shall be borne by Tenant who, or
     whose employees or invitees, shall have caused it.

(14) Intoxication. Landlord reserves the right to exclude or expel from the
     building 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 any of the rules and regulations of the building.

(15) Nuisances and Certain Other Prohibited Uses. Tenant shall not (a) install
     or operate any internal combustion engine, boiler, machinery,
     refrigerating, heating or air conditioning apparatus in or about the
     Demised Premises; (b) engage in any mechanical business, utilize any
     article or thing, or engage in any service in or about the Demised Premises
     or building, except those ordinarily embraced within the permitted use of
     the Demised Premises specified in Article 7; (c) use the Demised Premises
     for housing, lodging, or sleeping purposes; (d) place any antennae on the
     roof or on or in any part of the inside or outside of the building other
     than the inside of the Demised Premises, or place a musical or sound
     producing instrument or device inside or outside the Demised Premises which
     may be heard outside the Demised Premises; (e) use any illumination or
     power for the operation of any equipment or device other than electricity;
     (f) 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 elsewhere; (g) bring or permit to be
     in the building complex any bicycle or other vehicle, or dog (except in the
     company of a blind person) or other animal or bird; (h) make or permit any
     objectionable noise or odor to emanate from the Demised Premises; (i)
     disturb, solicit or canvass any occupant of the building; (j) do anything
     in or about the Demised Premises tending to create or maintain a nuisance
     or do any act tending to injure the reputation of the building.

(16) Solicitation. Tenant shall not make any room-to-room canvass to solicit
     business from other tenants in the building and shall not exhibit, sell or
     offer to sell, use, rent or exchange any products or services in or from
     the Demised Premises unless ordinarily embraced within the Tenant's use of
     the Demised Premises specified herein and specific authority granted in the
     lease agreement.

(17) Energy Conservation.  Tenant shall not waste electricity, water, heat or
     air conditioning and agrees to cooperate fully with Landlord to assure the
     most effective operation of the building's heating and air conditioning,
     and shall not allow the adjustment (except by Landlord's authorized
     building personnel) or any controls.

(18) Building Security.  Upon entry to or exit from the building the exterior
     building doors and suite entry door(s) should be kept locked at all times
     to assist in security.  The janitorial service (if any) shall, upon
     completion of its duties, lock all building doors.  Problems in building
     and suite security should be directed to Anthony & Co.

(19) Parking. Parking is in designated parking areas only. There should be no
     vehicles in "no parking" zones or at curbs. Handicapped spaces are for
     handicapped persons and the Police Department will ticket unauthorized
     (unidentified) cars in handicapped spaces. No vehicles may be abandoned or
     repaired on the property, and vehicles requiring extended parking should be
     identified to Landlord.

(20) Janitorial Service. Tenants will remove excessive trash from inside and
     outside their premises and shall deposit same in the dumpsters provided by
     Landlord. Any large volume of trash resulting from delivery of furniture,
     equipment, etc., should be removed by the delivery company, Tenant, or
     Landlord at Tenant's expense. Any requests for extraordinary trash removal
     should be directed to Anthony & Co. at 832-1110.

(21) Landlord reserves the right to make such other reasonable Rules and
     Regulations as in its judgment may from time to time be needed for the
     safety, care and cleanliness of the Building and the Land, and for the
     preservation of good order therein.

                                                                              29
<PAGE>

                      FIRST AMENDMENT TO LEASE AGREEMENT

To Lease Dated: December 1, 1998

     AGREEMENT, made this 16th day of July, 1999, by and between FIRST RALEIGH
TELEX, LLC (hereinafter called Landlord) and TOTAL SPORTS, INC. (hereinafter
called Tenant).

                             W I T N E S S E T H:

     WHEREAS, Landlord and Tenant entered into a written agreement of Lease
bearing date of December 1, 1998 (hereinafter called The Lease Agreement),
whereby Landlord leased to Tenant and Tenant hired from Landlord approximately
22,887 square feet known as FIRST RALEIGH TELEX BUILDING, 234 Fayetteville
Street Mall, located in the City of Raleigh, Wake County, North Carolina, for
the term of ten (10) years three (3) months from April 1, 1999 and ending June
30, 2009.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto with the intent
to be legally bound, hereby agree as follows:

1.   Premises:  the premises shall be expanded in size to include the first
     --------
     floor space of the building containing approximately 4,123 rentable square
     feet.  Tenant's prorata share of the building will be ninety five percent
     (95%).

2.   Commencement Date: the rent on the expansion space on the first floor will
     -----------------
     commence on the date Tenant takes possession of the expansion space or
     November 1, 1999, whichever occurs first. Partial month occupancy shall be
     prorated

3.   Tenant Improvements:  Landlord shall provide Tenant an upfit allowance of
     -------------------
     Forty One Thousand Two Hundred Thirty & no/100 Dollars ($41,230.00) , or
     Ten Dollars per square foot, for the renovation of the expansion space.
     Landlord will pay up to the allowance amount for costs and expenses
     incurred by Tenant for Tenant's work in the expansion space. Reimbursements
     to Tenant will be made within fifteen (15) days of receipt of valid
     invoices from contractors, subcontractors or service providers.

4.   Rent:  To incorporate the expansion space, Tenant's rent shall be increased
     ------
     by $4,810.17 per month or $57,722.00 per year. Escalations in rent shall
     occur at the same rate (three percent (3%) and on the same schedule as
     stated in the Lease.

5.   Term:  The term for the 4,123 square foot expansion space shall be from the
     -----
     commencement date defined above until June 30, 2009.

6.   Option to Purchase:
     ------------------

     (a)  Landlord does hereby grant to Tenant or Tenant's assignee an option to
          purchase the Building and the Landlord's interest under this Lease,
          upon the terms and conditions herein set forth.

     (b)  Tenant must exercise the option to purchase, if it is to be exercised
          at all, during the period from July 1, 1999 to June 30, 2000,
          hereinafter referred to as the "Option Period."

     (c)  In order to exercise the option to purchase herein granted, Tenant
          must give written notice of the exercise of the option to Landlord and
          Landlord must receive the same during the Option Period, time being of
          the essence, and if not so given and received, this option shall
          automatically expire. At the same time the option is exercised, Tenant
          must deliver to Landlord a proposed purchase and sale agreement for
          the Building (a "Purchase Agreement") executed by Tenant, together
          with an earnest money deposit ("Earnest Money") in the form of a
          cashier's check for Fifty Thousand and 00/100 Dollars ($50,000.00)
          made payable to Landlord. Upon execution of the Purchase Agreement by
          Landlord, Landlord may deposit the Earnest Money into its account. The
          Earnest Money shall be applied to the purchase price at the time of
          closing and shall be refundable to Tenant only upon default by
          Landlord and proper termination of the Purchase Agreement by Tenant.

     (d)  The provisions of Article X, including the provision relating to
          default of Tenant set forth in Section 10.01 of this Lease are
          conditions of this option.

     (e)  If Tenant shall exercise the option to purchase during the Option
          Period, the transfer of title to Tenant and the payment of the
          purchase price to Landlord shall occur within forty-five (45) days of
          the date of notice, and until that time the terms of the Lease shall
          remain in full force and effect.

                                                                              1
<PAGE>

     (f)  The purchase price to be paid by Tenant to Landlord for the Premises,
          if Tenant exercises its option to purchase, shall be the fair market
          value of the property as determined by mutual agreement or, in the
          event Tenant and Landlord are unable to agree upon fair market value,
          by the "three appraiser method." The "three appraiser method" means
          that fair market value shall be determined by an appraiser mutually
          agreed upon by Landlord and Tenant and having at least five (5) years
          experience in performing commercial real estate appraisals of office
          buildings in the Raleigh, North Carolina market. In the event Landlord
          and Tenant are unable to agree upon an appraiser or disagree as to the
          value of the first appraisal obtained, then each party shall then
          select and pay for its own commercial real estate appraiser with at
          least five (5) years experience in appraising office buildings in the
          Raleigh, North Carolina market. If the lower appraisal is not within
          ten percent (10%) of the higher appraisal, the two appraisers shall
          then jointly select a third commercial real estate appraiser having at
          least five (5) years experience in appraisal of office buildings in
          the Raleigh, North Carolina market, whose appraisal shall conclusively
          be deemed the fair market value of the Building. The cost of the third
          appraisal shall be borne equally by Landlord and Tenant.

     (g)  Within ten (10) days of the date the option to purchase is exercised,
          Landlord and Tenant shall give instructions to consummate the sale to
          Wyrick Robbins Yates and Ponton who shall act as escrow holder, on the
          normal and usual escrow forms then used by such escrow holder, as
          follows:

          (i)    Escrow shall close on the date previously called for in
                 paragraph (e) of this Addendum;

          (ii)   Landlord shall deposit the check referred to in paragraph (C)
                 of this Addendum into escrow upon opening thereof, with the
                 balance of the purchase price to be deposited into escrow one
                 day prior to the close of escrow;

          (iii)  Landlord shall convey to Tenant title to the Premises subject
                 only to mortgages and deeds of trust of record (the debt that
                 such instruments secure shall constitute a credit against the
                 purchase price), and easements, subsurface mineral rights and
                 restrictions of record. Any other liens and encumbrances shall
                 be removed prior to close of escrow at the expense of Landlord;

          (iv)   Escrow fees shall be shared equally;

          (v)    Interest, if any, operating expenses and rents will be prorated
                 to the close of escrow;

          (vi)   The cost of a standard title insurance policy to be issued to
                 Tenant shall be paid by Tenant;

          (vii)  The parties agree to execute any additional instructions as are
                 normal and usual;

          (viii) All real estate transfer taxes shall be paid by Landlord;

          (ix)   All other expenses of the conveyance shall be apportioned
                 according to custom in the area.

     Except as expressly modified by this Amendment and as heretofore modified,
all terms and provisions of the Lease Agreement are hereby ratified and
confirmed and shall remain in full force and effect through the term of the
Lease.

                                                                              2
<PAGE>

     IN WITNESS WHEREOF, Landlord and Tenant have hereunto set their respective
hands and seals the day and year first above written.



WITNESS                            Landlord: FIRST RALEIGH TELEX, LLC

/s/ Beth Ames                      By:     /s/ Frank Daniels
----------------------------           --------------------------------
                                   Title:


Attest:                            Tenant: TOTAL SPORTS, INC.

                                   By:     /s/ George Schlukbier
                                       --------------------------------
/s/ Petra Weishaupt
----------------------------
                                   Name:   George Schlukbier
                                         ------------------------------
Assistant (Corporate Secretary)
---------
                                   Title:  President/COO
                                          -----------------------------


(AFFIX CORPORATE SEAL)


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