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                                                                   EXHIBIT 10.18



                                LEASE AGREEMENT

     THIS LEASE AGREEMENT (the "LEASE") is made and entered into as of December
2, 1998, by Petrie Development Corp., a Minnesota corporation ("LANDLORD"), and
CWC Incorporated, a Minnesota corporation ("TENANT").


                                   RECITALS:

     A. Landlord is the owner of the Project.

     B. Tenant desires to lease from Landlord and Landlord desires to lease to
Tenant the Premises subject to and in accordance with the terms and conditions
set forth herein.


                                  AGREEMENTS:

     NOW, THEREFORE, for good, fair and valuable consideration, the receipt and
sufficiency of which is hereby acknowledge, Landlord and Tenant hereby covenant
and agree as follows as of the Commencement Date:


                                   ARTICLE 1.
                                  DEFINITIONS

     Defined terms utilized in this Lease are set forth on Schedule "1" attached
hereto. As used herein, such terms shall have such meanings to be equally
applicable to both the singular and plural forms of the terms defined.


                                   ARTICLE 2.
                     DEMISE; COMMON AREAS; TERM; LEASE YEAR

     2.1. DEMISE. Subject to the terms and conditions of this Lease, Landlord
leases to Tenant and Tenant hereby leases from Landlord, the Premises. Landlord
reserves unto itself the right to grant easements across, under or through the
Land, which do not materially interfere with Tenant's access to or use of the
Premises. Landlord also reserves unto itself the use of the exterior walls and
the roof and, subject to the provisions of Section 13.19 hereof, the right to
install, maintain, use, repair and replace pipes, ducts, conduits, wires and
appurtenant fixtures existing in or leading through or under the Premises.

     2.2. USE OF COMMON AREAS. Use by Tenant of the Premises shall include the
non-exclusive use, in common with others, of the Common Areas, and such use
shall be subject to the provisions of this Lease.

     2.3. CONTROL OF COMMON AREAS. The Common Areas shall be subject to the
exclusive control and management of Landlord. Landlord shall have the right to
establish, modify and enforce the Rules. Landlord shall have the right to alter
the Common Areas and to construct additions to or additional buildings in the
Project resulting in a diminution of Common Areas.


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Landlord shall have the right to construct and operate lighting and signs on
all the Common Areas and improvements, to police the same, to change the area
and location of parking areas and other common facilities, to restrict parking
by Tenant, its agents and employees, to close temporarily or permanently the
parking areas or facilities, and to perform other acts in and to the areas and
improvements as Landlord may deem advisable in its sole discretion, provided
such actions do not materially interfere with Tenant's access to or use of the
Premises.

     2.4. LEASE TERM. The initial term of this Lease shall be for the Lease
Term, unless terminated sooner pursuant to any of the provisions hereof. The
Lease Term and Tenant's obligation to pay Rent shall commence on the
Commencement Date.

     2.5. LEASE YEAR. The first Lease Year shall begin on the Commencement Date
and shall end on December 31, 1998. The second Lease Year shall begin on
January 1, 1999, and each Lease Year thereafter during the Lease Term shall
consist of a full calendar year, provided that if the Lease Term expires on a
date other than December 31, the period of time from January 1 of that calendar
year until such expiration date shall be construed as a Lease Year.

                                   ARTICLE 3.
                             RENT AND OTHER CHARGES

     3.1. BASE RENT. Tenant shall pay in advance as base rent (the "Base Rent")
the monthly amounts set forth in EXHIBIT "B" attached hereto commencing on the
Commencement Date and continuing thereafter on the first day of each subsequent
calendar month. Base Rent for any period during the Lease Term which is less
than one (1) month shall be a pro-rata portion of the applicable monthly
installment.

     3.2. PAYMENT OF IMPOSITIONS.

          (a)     Tenant shall deposit with Landlord monthly (as a deposit and
          not a payment) commencing on the Commencement Date and continuing
          thereafter on the first day of each subsequent calendar month an
          amount equal to Tenant's Share of one-twelfth of the annual
          Impositions estimated by Landlord and communicated by Landlord to
          Tenant in writing so that Landlord shall have sufficient funds to pay
          the Impositions on the first day of the month preceding the month in
          which they become due. To the extent within Tenant's control, Tenant
          further agrees to cause all bills, statements or other documents
          relating to Impositions to be sent or mailed directly to Landlord.
          Provided Tenant has deposited sufficient funds with Landlord pursuant
          to this Section 3.2(a), Landlord shall pay, when due, such Impositions
          as may be due out of the funds so deposited with Landlord. If at any
          time and for any reason the funds deposited with Landlord are or will
          be insufficient to pay such Impositions as may then or subsequently be
          due, Landlord shall notify Tenant and Tenant shall deposit an amount
          equal to such deficiency with Landlord within seven (7) days after
          such notice. Notwithstanding the foregoing, nothing contained herein
          shall cause Landlord to be obligated to pay any amounts in excess of
          the amount of funds deposited with Landlord pursuant to this Section
          3.2(a). If amounts collected by Landlord under this Section 3.2(a)
          exceed amounts necessary in order to pay

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     Impositions, Landlord shall retain such excess payments and Tenant shall
     receive a credit for such excess amount toward the next payments due for
     such Impositions, unless within 30 days following any Lease Year Tenant
     notifies Landlord to reimburse Tenant for the amount of such excess, in
     which event Landlord, following receipt of such notice, shall promptly
     reimburse such excess to Tenant. Should Tenant fail to deposit with
     Landlord sums sufficient to pay such Impositions in full at least ten (10)
     days before delinquency thereof Landlord may, at Landlord's election, but
     without any obligation so to do, advance any amounts required to make up
     the deficiency, which advances, if any, shall be treated as Additional
     Rent. Upon expiration of the Lease Term or earlier termination of this
     Lease in accordance with Section 13.28 hereof, the sums held by Landlord
     under this Section 3.2(a) shall be allocated between Landlord and Tenant as
     of such expiration date based upon the periods with respect to which such
     sums are due and payable, and Landlord shall be entitled to retain such
     portion as represents amounts due and payable up through such expiration
     date, and the balance shall be returned to Tenant. In the event this Lease
     is terminated due to an Event of Default, all sums held by Landlord under
     this Section 3.2(a) shall be retained by Landlord.


          (b) Subject to the following conditions, Tenant shall have the right,
     at Tenant's sole cost and expense, to contest or object in good faith to
     any Imposition, but such right shall not be deemed or construed in any way
     as relieving, modifying or extending Tenant's covenant to pay any such
     Imposition at the time and in the manner provided in this Section 3.2: (i)
     Tenant has given prior written notice to Landlord of Tenant's intent so to
     contest or object to an Imposition; (ii) Tenant shall demonstrate to
     Landlord's satisfaction that the legal proceedings shall operate
     conclusively to prevent the sale of the Project, or any part thereof; (iii)
     if Tenant has not deposited with Landlord all amounts required to be
     deposited under Section 3.2(a) hereof, Tenant shall furnish evidence
     reasonably satisfactory to Landlord of Tenant's ability to pay such
     Impositions which are being contested plus any interest and penalty which
     may be imposed thereon and which could become a lien against the Project or
     any part thereof; (iv) no Default or Event of Default has occurred; (v)
     Tenant covenants and agrees that any increase in Impositions resulting from
     such contest or objection shall be paid by Tenant upon demand; and (vi) the
     Premises comprise 100% of the Improvements.


          (c) Subject to any Legal Requirement, Landlord shall use all
     reasonable efforts to obtain the benefit of any statute or ordinance
     permitting all real property assessment for public betterments or
     improvements to be paid over the maximum period of time allowed by the
     relevant taxing authority.
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     3.3 UTILITIES; OPERATING EXPENSES.

          (a) Tenant shall pay or cause to be paid when due, all charges, fees,
     assessments and related costs for public utility services (including,
     without limitation, gas, water, sewer, electricity, light, power,
     telephone, cable and other communication services and refuse and garbage
     collection) used, rendered or supplied in connection with the Premises
     throughout the Lease Term.

          (b) Tenant shall deposit with Landlord monthly (as a deposit and not
     as a payment) an amount equal to Tenant's Share of one-twelfth of the
     annual Operating Expenses estimated by Landlord and communicated by
     Landlord to Tenant in writing so that Landlord will have sufficient funds
     to pay Operating Expenses on the first day of the month preceding the month
     in which they become due. Provided Tenant has deposited sufficient funds
     with Landlord pursuant to this Section 3.3(b), Landlord shall pay, when
     due, Tenant's Share of such Operating Expenses as may be due out of the
     funds so deposited with Landlord. If at any time and for any reason the
     funds deposited with Landlord are or will be insufficient to pay such
     amounts as may then or subsequently be due, Landlord shall notify Tenant
     and Tenant shall within seven (7) days after such notice deposit an amount
     equal to such deficiency with Landlord. Notwithstanding the foregoing,
     nothing contained herein shall cause Landlord to be obligated to pay any
     amounts in excess of the amount of funds deposited with Landlord pursuant
     to this Section 3.3(b). If amounts collected by Landlord under this Section
     3.3(b) exceed amounts necessary in order to pay Operating Expenses,
     Landlord shall retain such excess payments and Tenant shall receive a
     credit for such excess amount toward the next payments due for such
     Operating Expenses, unless within 30 days following any Lease Year Tenant
     notifies Landlord to reimburse Tenant for the amount of such excess, in
     which event Landlord, following receipt of such notice, shall promptly
     reimburse such excess to Tenant. Should Tenant fail to deposit with
     Landlord sums sufficient to pay such Operating Expenses in full at least
     ten (10) days before delinquency thereof Landlord may, at Landlord's
     election, but without any obligation so to do, advance any amounts required
     to make up the deficiency, which advances if any, shall be treated as
     Additional Rent. Upon expiration of the Lease Term or earlier termination
     of this Lease in accordance with Section 13.28 hereof, the sums held by
     Landlord under this Section 3.3(b) shall be allocated between Landlord and
     Tenant as of such date based upon the periods with respect to which such
     sums are incurred, and Landlord shall be entitled to retain such portion as
     represents amounts incurred through such date, and the balance shall be
     returned to Tenant. In the event this Lease is terminated due to an Event
     of Default, all sums held by Landlord under this Section 3.3(b) shall be
     retained by Landlord.

          (c) Within one hundred twenty (120) days after the end of each Lease
     Year, Landlord shall provide Tenant with a detailed statement of the actual
     Operating Expenses for the preceding Lease Year, and if Tenant has overpaid
     or underpaid its share of the actual Operating Expenses for the preceding
     Lease Year, Tenant or Landlord shall pay the other, as appropriate, the
     amount of such overpayment or underpayment, as the case may be, within
     thirty (30) days after the statement of actual Operating Expenses is
     delivered.
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          (d) After Landlord has provided Tenant with a statement of the actual
     Operating Expenses for any calendar year, Tenant, at its expense, shall
     have the right for a period of 180 days after receipt of such statement, to
     audit Landlord's books and records relating to the actual Operating
     Expenses for the period covered by such statement. If Tenant fails to
     exercise its audit rights within said 180 day period, Landlord's statement
     of actual Operating Expenses shall be deemed binding on Tenant. Any such
     audit shall be concluded by Tenant within 60 days following the
     commencement thereof. If any audit shall prove that Tenant has overpaid its
     share of Operating Expenses, the amount of such overpayment shall be
     promptly refunded to Tenant. Tenant shall bear the costs of any audit
     conducted for or by it. Tenant may not request such an audit more than once
     for any Lease Year. If such audit determines that Landlord has overstated
     Operating Expenses by more than 3%, Landlord agrees to pay the costs of
     Tenant's audit.

     3.4. SALES TAXES. Tenant shall also pay directly or reimburse to Landlord,
upon demand, for the full amount of any and all taxes, assessments, fees and
other governmental charges, general and special, ordinary or extraordinary, of
every kind and nature whatsoever (other than Landlord's income taxes), levied,
assessed, imposed or otherwise payable with respect to Base Rent or Additional
Rent. The provisions of this Section shall survive the expiration of the Lease
Term or the earlier termination hereof.

     3.5. PERSONAL PROPERTY TAXES. Tenant shall pay before delinquency, any and
all taxes levied or assessed during the Lease Term upon Tenant's personal
property. In the event any or all of the personal property shall be assessed and
taxed with the real property, Tenant shall pay to Landlord such taxes within
thirty (30) days after written notice from Landlord setting forth the amount of
such taxes applicable to personal property together with a copy of the tax bill
and other evidence documenting that such tax is properly payable by Tenant.

     3.6. LOCATION OF PAYMENTS. Tenant shall for the entire Lease Term pay Rent
to Landlord as herein provided at the address for Landlord set forth in Section
13.8 hereof or at such other place as Landlord may from time to time in writing
designate.

     3.7. NO SETOFF. All amounts due by Tenant to Landlord hereunder, including
Base Rent and Additional Rent, shall be paid without any setoff, counterclaim or
deduction whatsoever or any prior demand. The covenant to pay Rent, whether Base
Rent or Additional Rent, is hereby declared to be an independent covenant on the
part of Tenant to be kept and performed and no act or circumstance whatsoever
shall release, relieve or otherwise excuse Tenant of the obligation to pay Rent.


                                   ARTICLE 4.
                           ALTERATIONS AND ADDITIONS


     4.1. ALTERATIONS.

          (a) Tenant will not make or allow to be made any alterations,
     additions or deletions in or to the Premises without the prior written
     consent of Landlord, which consent shall not

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     be unreasonably withheld by Landlord, except as set forth in Section 4.1(b)
     hereof. Such alterations, physical additions, or improvements shall become
     part of the Premises and the property of the Landlord.

          (b) Tenant may, at its sole cost and expense, make alterations or
     additions to the Premises without Landlord's prior consent, provided (i)
     such alterations or additions do not affect the structural integrity of
     the Improvements comprising the Premises, adversely affect any of the
     mechanical or electrical systems of the Improvements comprising the
     Premises, or alter in any way the intended or current use of the Premises;
     (ii) the cost of any such alteration or addition does not exceed $50,000 in
     any one instance or $100,000 in any single Lease Year; (iii) such
     alterations or additions are performed by duly licensed and qualified
     contractors in accordance with all Legal Requirements and in a good and
     workmanlike manner; (iv) such alterations or additions are completed prior
     to the expiration of the Lease Term; (v) such alterations or improvements
     do not reduce the value of the Project or the Premises; (vi) such
     alterations and improvements are made pursuant to plans and specifications
     delivered to Landlord in advance; (vii) no Default or Event of Default has
     occurred and is continuing, and (viii) no such alteration or addition is
     made or commenced within the last twelve (12) months of the Lease Term.

     4.2. CONSTRUCTION LIENS. Tenant shall pay when due, and indemnify, protect,
defend and hold Landlord harmless from, all claims for labor or materials
furnished or alleged to have been furnished to Tenant for use in the Premises,
which claims are or may be secured by any lien against the Premises or any
interest therein in accordance with applicable law. Tenant shall not permit any
liens to be filed against the Premises or any interest therein and shall
immediately obtain a release from any lien so filed or remove the same by bond
in form and content satisfactory to Landlord. Nothing in the Lease shall be
construed in any way as constituting the consent or request of Landlord to any
contractor, subcontractor, laborer, or materialman for the performance of any
labor or the furnishing of any materials for any alteration, addition,
improvement or repair to the Premises, nor as giving Tenant any right, power or
authority to contract for or permit the rendering of services or the furnishing
of materials that would give rise to the filing of a lien against the Premises.

     4.3. REMOVAL OF IMPROVEMENTS. All alterations, additions and other
improvements by Tenant shall become the property of Landlord and shall not be
removed from the Premises, unless request is made by Landlord to Tenant to
remove those alterations, additions and other improvements which were made
without Landlord's approval where such approval was required under this Lease.
All moveable trade fixtures, furniture, furnishings and signs installed in the
Premises by Tenant and paid for by Tenant, shall remain the property of Tenant
and may be removed upon the expiration of the term of this Lease, provided that
any of such items as are affixed to the Premises and require severance may be
removed only if Tenant repairs any damage caused by such removal and that Tenant
shall otherwise comply with all of the terms, conditions and covenants to be
performed by Tenant under this Lease with respect to such removal. If Tenant
fails to remove such items from the Premises by the expiration of the Lease Term
or earlier termination of this Lease, all such trade fixtures, furniture,
furnishings and signs shall become the property of Landlord, unless Landlord
elects to require their removal, in which case Tenant shall, at its sole cost
and expense, promptly remove the same and restore the Premises to
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its condition on the date of this Lease. The covenants contained in this
Section shall survive the expiration of the Lease Term or earlier termination
hereof.

     4.4. SIGNS. Tenant covenants and agrees that it shall not, without the
prior written consent of Landlord, paint, erect or install any signs,
lettering or placards or make any additions, alternations or changes to the
exterior of the Premises. Landlord hereby consents to all signs identifying
Tenant and currently located on the Premises. Upon expiration of the Lease
Term, the earlier termination of the Lease, a Put Date or a Recapture Date,
Tenant shall at the request of Landlord remove such signs and shall promptly
restore the surfaces to which the signs were affixed to their former
condition, except with regard to the Put Premises or Recapture Premises, and
any awnings on the Building. The obligation set forth in the preceding sentence
shall survive the expiration of the Lease Term or the earlier termination
hereof.

                                   ARTICLE 5.
                            REPAIRS AND MAINTENANCE

     5.1. LANDLORD'S OBLIGATIONS. From and after the earlier to occur of a Put
Date or a Recapture Date, Landlord shall:

          (a)     maintain, repair and replace as needed all heating,
          ventilating, air conditioning, mechanical, electrical and plumbing
          systems, facilities and equipment which are located in or serve the
          Premises;

          (b)     replace Project standard fluorescent electric lamps and
          ballasts used in the Premises;

          (c)     furnish Tenant: (i) hot and cold water, at those points of
          supply provided for general use of tenants; (ii) heat and
          refrigerated air conditioning in season at such times as Landlord
          normally furnishes these services to all tenants of the Project, and
          at such temperatures and in such amounts as are in accordance with any
          applicable statutes, rules or regulations and are considered to be
          standard, including the standard for computer rooms, such service at
          other times and on Saturdays, Sundays, and holidays ("Additional
          Service") to be made available from Landlord (Landlord hereby reserves
          the right to charge Tenant for any such Additional Service requested
          by Tenant at Landlord's cost). If any repairs are needed to the
          heating, air conditioning and ventilation system servicing Tenant's
          system network room, Landlord hereby agrees that Tenant may contact
          Landlord's service provider directly for such service and Landlord
          shall pay the cost thereof; (iii) janitor service to the Premises on
          weekdays other than holidays; and (iv) such window washing as may from
          time to time in the Landlord's judgment be reasonably required;

          (d) operate, maintain, repair and replace the Common Areas in a
          clean, safe and sanitary condition and state of repair in accordance
          with all Legal Requirements; and

          (e) keep the parking lot, driveways and sidewalks within the Common
          Areas free from snow, ice and debris.

<PAGE>


     Failure to any extent to furnish, or any stoppage or interruption of these
     defined services, shall not render Landlord liable in any respect for
     damages to any person, property, or business, nor be construed as an
     eviction of Tenant or work an abatement of Rent, nor relieve Tenant from
     fulfillment of any covenant or agreement hereof unless caused by the
     negligent or intentional acts or omissions of Landlord. Should any
     equipment or machinery furnished by Landlord cease to function properly,
     Landlord shall use reasonable diligence to repair the same promptly upon
     receipt of notice of the same, but Tenant shall have no claim for an
     abatement of Rent or damages on account of any interruptions in service
     occasioned thereby or resulting therefrom unless caused by the negligent or
     intentional acts or omissions of Landlord. Whenever heat generating
     machines or equipment are used by Tenant in the Premises which
     disproportionately affect the temperature otherwise maintained by the air
     conditioning equipment, Landlord reserves the right to install
     supplementary air conditioning units in the Premises (or for the use of the
     Premises) and the reasonable expense of such purchase, installation,
     maintenance, operation and repair shall be paid by Tenant upon 15 days
     prior notice as Additional Rent.

     5.2. TENANT'S OBLIGATIONS. Except to the extent Landlord is specifically
responsible therefor under Section 5.1 hereof, Tenant is solely responsible for
causing the Premises to be kept in a clean, safe, sanitary and first class
condition and state of repair in accordance with all Legal Requirements required
as a result solely of Tenant's specific use. As used in this Section, the term
"REPAIRS" shall include replacements and other improvements as are necessary to
maintain the Premises as is required under this Lease. If Landlord is required
to make repairs by reason of Tenant's acts or omissions or those of Tenant's
employees, agents, invitees, licensees or contractors, Landlord shall have the
right, but shall not be obligated, to make such repairs or replacements on
behalf of and for the account of Tenant. In such event, such work shall be paid
for in full by Tenant as Additional Rent. Notwithstanding any provision in this
Lease to the contrary, throughout the term of this Lease, Landlord shall be
responsible for any and all necessary major repairs (major is defined as cost of
$10,000.00 or more in the aggregate for one project or series of projects) or
replacements of the roof, or any other components or systems of the Project
and/or parking lot, driveways and landscaping, including but not limited to
repaving of the parking lot, replacement of HVAC systems or roof. To the extent
allowed under Section 3.3 hereof, Landlord may charge Tenant a portion of such
costs, as amortized over the useful life of the improvement or replacement as
Operating Expenses, but only to the extent allowed under Section 3.3 hereof.
Notwithstanding any provision in this Lease to the contrary, throughout the term
of this Lease, all repairs, replacements and improvements to the structural
components of the Project and all improvements to the Project shall be made by
Landlord, at Landlord's sole cost and expense and not be charged to Tenant.

     5.3. SURRENDER. On the last day of the Lease Term, or on any sooner
termination of this Lease, Tenant shall surrender the Premises in the same
condition as the Premises existed on the Commencement Date, ordinary wear and
tear and damage by an Insured Casualty excepted, with such additions,
replacements, betterments, alterations and improvements thereto as permitted or
required hereunder, broom clean, and shall surrender all keys and access cards,
to Landlord in the

<PAGE>


condition required to be maintained by Tenant under this Lease. The covenants
contained in this Section shall survive the expiration of the Lease Term or
earlier termination hereof.

     5.4. RIGHT OF ENTRY. Landlord and its authorized representatives shall have
the right to enter the Premises (a) upon at least 48 hours prior written notice
to Tenant at all reasonable times to inspect the Project or to show the Premises
to prospective lenders, purchasers or tenants, provided any such entry is done
in a manner such as to avoid interference with the operation of the Premises,
and, (b) in the event of the existence of an Event of Default hereunder, to
conduct testing and to make repairs, alterations, improvements or additions as
Landlord may reasonably deem necessary, including those to be performed by
Tenant, without the same constituting an eviction of Tenant in whole or in part,
and Rent shall not abate as a result of such entry. Nothing herein shall imply
any duty upon the part of Landlord to conduct any test or do any work which the
Tenant may be required to perform under this Lease, and the performance thereof
by Landlord shall not constitute a waiver of Tenant's default in failing to
perform it. If Tenant is not present to permit entry into the Premises, Landlord
may, in case of emergency, enter by master key. Landlord may place upon the
Premises "For Rent" signs and notices, specifying the portion of the Building
that is for rent.

                                   ARTICLE 6.
                              HAZARDOUS SUBSTANCES

     6.1. NO HAZARDOUS SUBSTANCES. Tenant shall not bring into or permit the
existence of any Hazardous Substance on the Premises other than as permitted by
applicable Environmental Regulations. If Tenant discovers the presence of any
Hazardous Substance on or in the Premises which is in violation of any
Environmental Regulation, Tenant shall promptly give Landlord notice thereof. If
during Tenant's occupancy or at any time throughout the Lease Term the existence
of a Hazardous Substance in violation of any Environmental Regulation exists
within the Premises or, as a result of any action or inaction by Tenant, within
the Project, (a) Tenant shall remove such Hazardous Substance and dispose of it
as required by any and all applicable Environmental Regulations, or (b)
Landlord, if it is advised to remove such Hazardous Substance itself to protect
or minimize against any liability to Landlord as a result of the presence of any
Hazardous Substance by no less than five (5) days' notice to Tenant, may elect
to remove any Hazardous Substance and dispose of it as required by any
Environmental Regulation, in which case Tenant shall pay the entire cost of such
disposal within ten (10) days after receipt of a statement for such cost by
Landlord, such amount to be treated as Additional Rent. If any Governmental
Authority shall require any remedial action or other response with respect to
the Project as the result of any Hazardous Substance brought into or permitted
by Tenant on or in the Project, Tenant shall notify Landlord of such action or
response and shall, with the prior written approval of Landlord, be responsible
for satisfying the requirements of the applicable Governmental Authority.

     6.2. TENANT INDEMNITY. Tenant shall indemnify, defend (with counsel
satisfactory to Landlord), protect and hold Landlord and its members, managers,
officers, employees and agents harmless from and against any and all claims,
causes of action, damages, penalties, costs and expenses (including attorneys'
fees, consultant fees and related expenses) which may be asserted against or
incurred by Landlord and its members, managers, officers, employees and agents,
or
<PAGE>
any of them, resulting from the failure by Tenant to fulfill its obligations
under Section 6.1 hereof or resulting from the presence of Hazardous Substances
within the Premises or, as a result of any action or inaction by Tenant, within
the Project. Tenant's duty to indemnify, defend, protect and hold harmless
includes, but is not limited to, proceedings or actions commenced by any
Governmental Authority.

     6.3. SURVIVAL. The foregoing covenants and indemnifications shall be
deemed continuing covenants and indemnifications for the benefit of Landlord
and its successors and assigns and shall survive the expiration of the Lease
Term or earlier termination of this Lease.

                                   ARTICLE 7.
                              COVENANTS OF TENANT

     7.1. USE OF PREMISES. Tenant covenants and agrees that from and after the
Commencement Date, it shall use and occupy the Premises solely for the purpose
of the Permitted Use and for no other purpose.

     7.2. CONTINUING COVENANTS. Tenant covenants and agrees with Landlord to:

          (a)  maintain the Premises in a good condition and state of repair;

          (b)  promptly make all of repairs, renewals, replacements and
               additions, to the Premises which may be necessary, required under
               any Legal Requirement or otherwise required under the terms of
               this Lease;

          (c)  not commit or suffer waste with respect to the Premises;

          (d)  not remove, demolish or in any respect alter any of the
               Improvements comprising the Premises, provided that Tenant may
               make alterations in accordance with Section 4.1 hereof;

          (e)  subject to any Legal Requirement, not make, install or permit to
               be made or installed, any alterations or additions to the
               Premises if doing so will violate the terms and conditions of
               this Lease unless approved by Landlord in writing;

          (f)  not make, suffer or permit any nuisance to exist on the Premises;

          (g)  keep the Premises neat and clean at all times and to keep any
               refuse in proper containers out of sight until the same is
               removed;

          (h)  neither do nor suffer anything to be done or kept in or about
               the Premises which contravenes Landlord's insurance policies or
               increases the premiums therefor;

<PAGE>
          (i)  promptly comply with, or cause to be complied with, and conform
               to all Legal Requirements with regard to Tenant's specific use
               solely; and

          (j)  from and after the earlier of a Put Date or a Recapture Date,
               comply with all of the Rules.


                                   ARTICLE 8.
                           INSURANCE AND INDEMNITIES

     8.1  INSURANCE COVERAGE.

          (a)  Landlord shall obtain beginning on the Commencement Date and
     shall maintain throughout the Lease Term, as an Operating Expense, the
     following insurance coverages:

               (i)  A policy of commercial general liability insurance
                    (including "Insurance Service Office" (ISO) forms and
                    endorsements or their equivalent) to insure against injury
                    to property, person or loss of life arising out of the
                    ownership, use, occupancy or maintenance of the Project with
                    limits of general liability not less than $10,000,000 for
                    death and/or bodily injury, personal injury, advertising
                    injury and property damage. The policy shall contain
                    supplemental endorsements covering contractual liability as
                    provided in an ISO liability policy under the definition of
                    insured contract.

               (ii) A policy providing commercial property insurance on the
                    entire Project for the full replacement cost of the Project.
                    An "Agreed Amount Clause" waiving the coinsurance clause
                    must be included, as well as flood and earthquake coverage,
                    to the extent available, at limits equal to the maximum
                    foreseeable loss at the location of the Premises. Coverage
                    must also include an "Ordinances or Law Regulations"
                    insuring agreement governing the construction, use or repair
                    of property. Such coverage must include the expense of
                    tearing down any property, including the cost of removing
                    its debris. Increased cost of construction coverage must
                    also be included.

          (b)  Tenant shall obtain, at Tenant's expense, beginning on the
     Commencement Date and shall maintain through the Lease Term, the following
     insurance coverages:

               (i)  A policy of commercial general liability insurance
                    (including "Insurance Service Office" (ISO) forms and
                    endorsements or their equivalent) naming Landlord, Tenant
                    and any other party designated by Landlord as an additional
                    insured, to insure against injury to property, person or
                    loss of life arising out of the ownership, use, occupancy or
                    maintenance of the Premises with limits of general liability
                    not less than $10,000,000 for death and/or bodily injury,
                    personal injury, advertising injury and property damage. The
                    policy shall contain supplemental endorsements covering
<PAGE>


                     contractual liability as provided in an ISO liability
                     policy under the definition of insured contract.

               (ii)  A policy providing commercial property insurance containing
                     the insuring agreement "Cause of Loss-Special Form" or its
                     equivalent, together with such endorsements as may be
                     deemed advisable by Landlord to insure the Improvements
                     comprising the Premises, Tenant's leasehold improvements,
                     merchandise, trade fixtures, furnishings, equipment and
                     personal property. Such policy shall provide coverage in an
                     amount not less than the full replacement cost of the
                     Improvements comprising the Premises. An "Agreed Amount
                     Clause" waiving the coinsurance clause must be included, as
                     well as flood and earthquake coverage, to the extent
                     available, at limits equal to the maximum foreseeable loss
                     at the location of the Premises. Coverage must also include
                     an "Ordinances or Law Regulations" insuring agreement
                     governing the construction, use or repair of property. Such
                     coverage must include the expense of tearing down any
                     property, including the cost of removing its debris.
                     Increased cost of construction coverage must also be
                     included.


               (iii) A policy of workers' compensation insurance must be
                     provided that insures the benefits required by the State
                     law and includes coverage B Employer's Liability. The
                     Employer's liability limits must be:

                     Bodily Injury By Accident -- $1,000,000 Each Accident
                     Bodily Injury By Disease -- $1,000,000 Policy Limit
                     Bodily Injury By Disease -- $1,000,000 Each Employee

               Landlord does not, by requiring such insurance or by any other
               act or event, assume or undertake liability for any work-related
               injuries or death to Tenant or Tenant's employees.

               (iv)  If Tenant commits or permits any activity or the placing or
                     operation of any equipment on or about the Premises
                     creating unusual hazards, Tenant shall promptly upon notice
                     or demand from Landlord, procure and maintain in force,
                     during such activity or operation, insurance sufficient to
                     cover the risks created thereby. Landlord's demand for
                     unusual hazard insurance shall not constitute a waiver of
                     any right Landlord may have to demand the removal or
                     cessation of such activity or operation.

               (v)   A policy of business interruption insurance with an "Extra
                     Expense" insuring agreement naming Landlord and any other
                     party designated by Landlord as an additional insured
                     providing coverage of not less than twelve (12) months of
                     Rent and other business income. Such policy must include an
                     endorsement providing an extended period of indemnity for
                     180 days.

<PAGE>
               (vi) All other insurance, if any, customarily maintained by
                    businesses of like type, or required by any Legal
                    Requirement to be carried or maintained by Tenant.

     8.2. INSURANCE POLICIES. Insurance required under Section 8.1 shall be
written by companies duly qualified to do business in the State and shall be
satisfactory in all respects to Landlord and the holder of any mortgage against
the Project. The companies providing such insurance shall deliver to Tenant and
Landlord copies of such policies or certificates evidencing the existence and
amount of such insurance with loss payable clauses satisfactory to Landlord,
including, specifically, the holder of the first mortgage on the Project as a
loss payee. No such policy shall be cancelable or subject to reduction of
coverage or modification except after thirty (30) days prior written notice to
Landlord and such other persons designated by Landlord. At least ten (10) days
prior to the expiration of such policies, Landlord may order such insurance and
charge the cost to Tenant as Additional Rent. Tenant shall not do or permit
anything to be done which will invalidate the insurance policies furnished
pursuant to Section 8.1 or otherwise by Landlord and shall comply with all
requirements imposed by such insurers, unless such compliance is expressly
waived in writing by Landlord. Landlord may from time to time reasonably require
that the policy limits of any or all such insurance be increased to reflect the
effects of inflation and changes in normal commercial insurance practices.
Landlord agrees that Tenant may carry the above-described insurance in the form
of a blanket policy covering the Premises and other properties.

     8.3. EXEMPTION OF LANDLORD FROM LIABILITY. Tenant hereby agrees that
Landlord shall not be liable and Tenant hereby waives all claims against
Landlord for injury to Tenant's business or any loss of income or other
consequential damages or for damage to the inventory, fixtures, furnishings,
improvements or other property of Tenant, Tenant's employees, invitees,
customers, sublessees, agents, occupants, contractors, or injury to the person
of Tenant, Tenant's employees, agents, contractors, occupants, invitees,
customers, sublessees, or any other person in or about the Premises, whether
such damage or injury is caused by or results from fire, steam, electricity,
gas, water or rain, or from the breakage, leakage, obstruction or other defects
of pipes, sprinklers, wires, appliances, plumbing, air-conditioning or lighting
fixtures, or from any other cause whatsoever, whether said damage or injury
results from conditions arising upon the Premises, or from other sources or
places, and regardless of whether the cause of such damage or injury or the
means of repairing the same is inaccessible to Tenant unless caused by the
negligent or intentional acts or omissions of Landlord. Landlord shall not be
liable to Tenant for any damages arising from any act or neglect of any other
tenant of the Project.

     8.4. INDEMNIFICATION. Tenant shall indemnify, defend, protect and hold
harmless Landlord from and against any and all claims arising from Tenant's use
of the Premises, or from the conduct of Tenant's business or from any activity,
work or things done, permitted or suffered by Tenant in or about the Premises
or elsewhere unless caused by the negligent or intentional acts or omissions of
Landlord, and shall further indemnify, defend, protect and hold harmless
Landlord from and against any and all claims arising from any breach or default
in the performance of any obligation on Tenant's part to be performed under the
terms of this Lease, or arising from any negligence of the Tenant, or any of
Tenant's sublessees, agents, customers, invitees, contractors, occupants, or
employees, and from and against all costs, attorneys' fees,
<PAGE>

expenses and liabilities incurred in the defense of any such claim or any
action or proceeding brought thereon; and in case any action or proceeding be
brought against Landlord by reason of any such claim, Tenant, upon notice from
Landlord, shall defend the same at Tenant's expense by counsel reasonably
satisfactory to Landlord. Tenant, as a material part of the consideration to
Landlord, hereby assumes all risk of damage to property or injury to persons,
in, upon or about the Premises, and Tenant hereby waives all claims in respect
thereof against Landlord unless caused by the negligent or intentional acts or
omissions of Landlord. The provisions of this Section shall survive expiration
of the Lease Term or the earlier termination hereof.

     8.5. MUTUAL WAIVER OF SUBROGATION. Nothing in this Lease shall be
construed so as to authorize or permit any insurer of Landlord or Tenant to be
subrogated to any right of Landlord or Tenant against the other party arising
under this Lease. Landlord and Tenant each hereby release the other to the
extent of any loss required to be insured against by either of the parties
under the terms of this Lease, whether or not such insurance has actually been
secured, to the extent such loss is insurable, whether or not such insurance
has actually been secured, even if such incidents shall be brought about by the
fault or negligence of either party or persons for whose acts or negligence
the other party is responsible. Landlord and Tenant shall, to the extent
permitted by their respective insurers, each obtain appropriate waivers of
subrogation from their respective insurance carriers giving effect to this
Section.

                                   ARTICLE 9.
                             DAMAGE OR DESTRUCTION

     In the event (a) the Improvement are damaged by fire, explosion or other
casualty insured under the fire and extended coverage insurance policy required
hereunder (an "INSURED CASUALTY") to the extent of fifty percent (50%) or more
of the insurable value thereof immediately preceding the casualty, (b) the
Improvements are damaged by a casualty or occurrence other than an Insured
Casualty, (c) such damage occurs at anytime within the last twelve (12) months
of the Lease Term, or (d) the Premises or any portion thereof is damaged by
fire, explosion or other casualty and the Premises cannot be repaired, rebuilt
or restored to substantially the same condition, under any Legal Requirement or
other governmental order or under any other agreement to which the Premises is
subject (a "PROHIBITED CASUALTY"), then in such event Landlord may terminate
this Lease by giving Tenant written notice of termination within thirty (30)
days after the happening of the event causing the damage. In the event the
damage is not extensive enough to give rise to Landlord's option to terminate
this Lease, a Prohibited Casualty has not occurred, or Landlord does not elect
to terminate this Lease, Landlord shall promptly and with all due diligence
repair and replace the damage to the Improvements to the condition that existed
immediately preceding such fire, explosion or other casualty. Upon completion
of such repairs and replacements by Landlord, Tenant shall promptly repair or
replace all portions of the Premises not repaired or replaced by Landlord to
the condition existing immediately preceding such fire, explosion or other
casualty. All work by Tenant shall comply with the requirements and limitations
imposed by Landlord. During any period of reconstruction or repair of the
Premises, Tenant shall operate its business in the Premises to the extent
practicable. Base Rent shall be abated during the period of such repair and
restoration to the extent the Premises is not tenantable. If such damage or
destruction cannot be

<PAGE>
repaired or completed within one year after the date such damage or destruction
occurred, Tenant shall have the right to terminate this Lease by giving notice
to Landlord.

                                  ARTICLE 10.
                                  CONDEMNATION

     10.1.  TAKING OF WHOLE. In the event (a) the whole of the Premises shall be
taken or condemned for a public or quasi-public use or purpose by a competent
authority or sold by Landlord in lieu thereof, (b) such a portion of the
Premises shall be taken, condemned or sold in lieu thereof so that the balance
cannot be used for the same purpose and with substantially the same utility to
Tenant as immediately prior to such taking, or (c) the Premises or any portion
thereof shall be taken or condemned for a public or quasi-public use or purpose
by a competent authority or sold by Landlord in lieu thereof and Landlord is
unable to repair, rebuild or restore the same under the terms of any agreement
to which it is a party, or under any Legal Requirement or other governmental
order to which Landlord or the Premises is subject (a "PROHIBITED TAKING"), this
Lease shall terminate upon delivery of possession to the condemning authority or
its assignee, and, subject to the provisions of Section 10.3 hereof, any award,
compensation or damage (the "AWARD") shall be paid to and be the sole property
of Landlord whether the Award shall be made as compensation for diminution of
the value of the leasehold estate or the fee of the Land or otherwise, and
Tenant hereby assigns to Landlord all of Tenant's right, title and interest in
and to any and all of the Award. Tenant shall have no claim against Landlord by
reason of such taking or termination and, subject to the provisions of Section
10.3 hereof, shall not have any claim or right to any portion of the Award to be
paid to Landlord. Tenant shall continue to pay Rent and other charges hereunder
until the Lease is terminated.

     10.2.  PARTIAL TAKING. In the event (a) only a part of the Premises is
taken or condemned but the Premises or the part remaining can still be used for
the same purpose and with substantially the same utility to Tenant as
immediately prior to such taking, or (b) a Prohibited Taking has not occurred,
this Lease shall not terminate and Landlord shall repair and restore the
remaining Improvements comprising the Premises provided the cost and expense of
such repair and restoration does not exceed the amount of the Award. If the cost
of such repair and restoration exceeds the amount of the Award, Landlord may
terminate this Lease by giving Tenant written notice of termination to Tenant
within thirty (30) days of the delivery of possession to the condemning
authority. If Landlord is obligated to repair and restore the remaining
Improvements comprising the Premises, as herein provided, there shall be no
abatement or reduction in any Rent or other charges payable by Tenant under this
Lease because of such taking or condemnation, provided however that all Rent
payable or other charges hereunder shall be abated during the period of such
repair and restoration to the extent the Premises is not tenantable.

     10.3.  TENANT'S AWARD. Subject to the rights of Landlord's lenders,
termination of this Lease because of condemnation shall be without prejudice to
the rights of either Landlord or Tenant to recover from the condemning authority
compensation and damages for the injury and loss sustained by them as a result
of the taking, and Tenant shall have the right to make a claim against the
condemning authority of the unamortized value of Tenant's leasehold
improvements; interruption or dislocation of business in the Premises; loss of
good will and for moving and
<PAGE>
remodeling expenses. Tenant shall not have the right to make a claim for
diminution in value of Tenant's leasehold estate. If this Lease is terminated as
a result of a condemnation, Tenant shall, subject to the rights of Landlord's
lenders, make a separate claim to the condemning authority for the
above-mentioned items. If the condemning authority refuses to allocate the award
between Landlord's and Tenant's claims for damages and instead grants a single,
lump sum award to Landlord, Landlord and Tenant shall use reasonable, good-faith
efforts to determine that portion of the award which is attributable to Tenant's
leasehold improvements (but only the extent such leasehold improvements were
paid for by Tenant).

                                  ARTICLE 11.
                               DEFAULTS; REMEDIES

     11.1. DEFAULTS. The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant and each such
event shall be referred to herein as an "EVENT OF DEFAULT":

          (a)  The failure of Tenant to make any payment of Rent or any other
               payment required to be made by Tenant under this Lease, within
               ten (10) days after written notice from Landlord, provided that
               Landlord shall not be required to provide written notice of such
               non-payment more than twice in any Lease Year.

          (b)  The failure by Tenant to observe or perform any of the terms,
               covenants or conditions of this Lease to be observed or performed
               by Tenant (other than those described in Sections 11.1(a), (c),
               (d) or (e) hereof) where such failure shall continue for a period
               of thirty (30) days after written notice thereof from Landlord to
               Tenant; provided, however, that if the nature of such default is
               such that more than 30 days are required for its cure, then
               Landlord shall not be in default if Tenant commences performance
               within said 30 day period and thereafter diligently prosecutes
               the same to completion within 90 days after such notice.

          (c)  (i) The making by Tenant or any entity holding a controlling
               interest in Tenant of any general assignment, or general
               arrangement for the benefit of creditors; (ii) the filing by or
               against Tenant or any entity holding a controlling interest in
               Tenant of a petition to have Tenant or such controlling entity
               adjudged a bankrupt or a petition for reorganization or
               arrangement under any law relating to bankruptcy (unless, in the
               case of a petition filed against Tenant or such controlling
               entity, the same is dismissed within sixty (60) days); (iii) the
               appointment of a trustee or receiver to take possession of
               substantially all of Tenant's assets located at the Premises or
               of Tenant's interest in this Lease, where possession is not
               restored to Tenant within sixty (60) days; or (iv) the
               attachment, execution or other judicial seizure of substantially
               all of Tenant's assets located at the Premises or of Tenant's
               interest in this Lease or in the Premises, where such seizure is
               not discharged within sixty (60) days.

          (d)  An assignment shall occur in violation of Article 12 hereof.
<PAGE>



     11.2. LANDLORD'S REMEDIES. Upon the occurrence of an Event of Default,
Landlord shall have the remedies, in addition to all other rights and remedies
provided by law or equity, or elsewhere in this Lease or in any other agreement
related to this Lease, to which Landlord may resort cumulatively or in the
alternative:

          (a) Landlord may, at Landlord's election, terminate this Lease upon
              the delivery of written notice of such termination to Tenant. On
              the delivery of such notice, all Tenant's rights in the Premises
              and the Project, in all improvements located at the Premises, to
              revenues from the Premises, and to amounts which may otherwise be
              due from Landlord to Tenant under this Lease, shall terminate.
              Promptly after notice of termination, Tenant shall fulfill its
              obligations under Section 5.2 hereof and surrender and vacate the
              Premises in a broom clean condition, and Landlord may reenter and
              take possession of the Premises and eject all parties in
              possession or eject some and not others or eject none. Termination
              under this Subsection shall not relieve Tenant from the payment of
              any sum then due to Landlord or from any claim for damages
              previously accrued or then accruing against Tenant. Upon such
              termination, Landlord shall also be entitled to recover from
              Tenant (i) unpaid Rent or such other amounts which have been
              earned or are payable at the time of termination, and (ii) as
              liquidated damages and not as a penalty, a sum of money equal to
              the Rent and such other amounts and rental costs to be paid by
              Tenant to Landlord for the remainder of the Lease Term (the
              "ACCELERATED AMOUNT").

          (b) Landlord may, at Landlord's election, terminate Tenant's right to
              possession only, without terminating the Lease. Upon termination
              of Tenant's right to possession without termination of the Lease,
              Tenant shall surrender possession and vacate the Premises
              immediately and deliver possession of the Premises to Landlord,
              and Tenant hereby grants to Landlord the immediate right to enter
              into the Premises, remove Tenant's signs and other evidences of
              tenancy, and take and hold possession of the Premises with or
              without process of law, and to dispossess the others who may be
              occupying or within the Premises, without being deemed in any
              manner guilty of trespass, eviction, or forcible entry or
              detainer, without incurring any liability for any damage resulting
              therefrom, without such entry and possession terminating the Lease
              or releasing Tenant from Tenant's obligation to pay Rent and to
              fulfill all other of Tenant's obligations under this Lease for the
              full Lease Term. Landlord shall be entitled to recover from Tenant
              (i) unpaid Rent or such other amounts which have been earned or
              are payable at the time of termination, and (ii) as liquidated
              damages and not as a penalty, the Accelerated Amount.

          (c) Landlord may, at Landlord's election, store Tenant's personal
              property, if any, for the account and at the cost of Tenant.

          (d) Whether or not Landlord elects to terminate the Lease, Landlord
              may, but shall be under no obligation to, relet all or any part of
              the Premises for such rent and upon such terms as shall be
              satisfactory to Landlord (including the right to relet the

<PAGE>


          (h) In the event Landlord elects to terminate Tenant's rights to
              possession only, without terminating the Lease and without
              pursuing recovery of the Accelerated Amount, Landlord shall use
              "commercially reasonable efforts" to relet the Premises as the
              agent of Tenant and receive the rent therefor; and in the event of
              such reletting, Tenant shall pay Landlord the cost of reletting
              including brokerage and reasonable attorneys' fees and
              commissions, renovating, repairing and altering the Premises for a
              new tenant or tenants and any deficiency that may arise by reason
              of such reletting, on demand; provided, however, the failure of
              Landlord to relet the Premises shall not release or affect
              Tenant's liability for Rent or for damages and such Rent and
              damages shall be paid by Tenant on the dates specified herein. For
              purposes hereof, "commercially reasonable efforts" shall mean that
              Landlord has listed the Premises as available for leasing with a
              recognized brokerage firm and if Landlord has so listed the
              Premises, Landlord shall not be required to take any other action
              with respect to reletting the Premises nor shall Landlord be
              liable in any manner for failure to relet the Premises. The Rent
              payable by Tenant hereunder shall be reduced by the rent received
              by Landlord from such reletting.

     11.3. LANDLORD MAY PERFORM. Landlord shall have the right at any time,
after not less than thirty (30) days notice to Tenant (or without notice with
respect to matters described in Article 8, and in case of emergency or a
hazardous condition or in case any fine, penalty, interest or cost may otherwise
be imposed or incurred), to make any payment or perform any act required of
Tenant under any provision in this Lease, and in exercising such right, to incur
necessary and incidental costs and expenses, including reasonable attorneys'
fees. Nothing herein shall obligate Landlord to make any payment or perform any
act required of Tenant, and this exercise of the right to so do shall not
constitute a release of any obligation or a waiver of any default. All payments
made and all costs and expenses incurred in connection with any exercise of such
right shall be reimbursed to Landlord by Tenant as Additional Rent.


                                  ARTICLE 12.
                           ASSIGNMENT AND SUBLETTING

     12.1. ASSIGNMENT BY TENANT. Tenant shall not voluntarily or by operation of
law assign, transfer, mortgage, lease, sublet, grant, license or otherwise
transfer or encumber all or any part of Tenant's interest in this Lease or in
the Premises, or permit the use or occupancy of the Premises or any part thereof
by anyone other than Tenant, without Landlord's prior written consent, which
consent shall not be unreasonably withheld or delayed at any time.

     12.2. TENANT OWNERSHIP. If Tenant is a corporation (except a corporation
whose stock is traded in a nationally recognized exchange), a limited liability
company, a partnership, limited, limited liability or general, or a business
trust and if at any time during the Lease Term, any part or all of the shares of
the corporation, membership interests in the limited liability company, general
partnership interest of the partnership, or beneficial interests of the trust
shall be transferred by sale, issuance, assignment, bequest, operation or law or
otherwise so as to result in a direct or indirect change in the present control
of Tenant, such transfer shall constitute an assignment within the meaning of
Section 12.2 hereof. The acceptance by Landlord of payment
<PAGE>
after notice of such a transfer shall not constitute a waiver of Landlord's
right at any time to treat such transfer as an Event of Default.

     12.3. RELATED ENTITY TRANSFERS. Notwithstanding anything contained in
Sections 12.1 and 12.2 hereof to the contrary, Tenant may, without the consent
of Landlord but with advance notice to Landlord, and without releasing or
relieving Tenant of or from its obligations hereunder, from time to time and at
any time (a) assign or otherwise transfer this Lease to or (b) sublet or
otherwise permit the use of all or any portion of the Premises by, any of the
following (each, a "RELATED ENTITY"): (i) any parent, subsidiary or affiliate
corporation or entity; (ii) any corporation resulting from the consolidation or
merger of Tenant into or with any other entity; or (iii) to or by any person,
firm, entity or corporation acquiring a majority of Tenant's issued and
outstanding capital stock or a substantial part of Tenant's physical assets. As
used herein, the term "SUBSIDIARY" shall mean an entity of which Tenant owns
one hundred percent (100%) of the capital stock thereof and an "AFFILIATE
CORPORATION OR ENTITY" shall mean a person or business entity, corporate or
otherwise, that, through one or more intermediaries, controls or is controlled
by, or is under common control with Tenant or is purchasing the business which
Tenant conducts at the Premises. The word "CONTROL" means the right and power
to direct or cause the direction of the management and policies of a person or
business entity, corporation or otherwise, through ownership of voting
securities, by contract or otherwise.

     12.4. ASSIGNMENT DUE TO BANKRUPTCY.

           (a)  In the event a petition is filed by or against Tenant under the
                Bankruptcy Code, Tenant, as debtor and debtor in possession,and
                any trustee who may be appointed, agree to adequately protect
                Landlord as follows:

                (i)   to pay monthly in advance on the first day of each month
                      as reasonable compensation for use and occupancy of the
                      Premises an amount equal to all Rent due pursuant to this
                      Lease; and

                (ii)  to perform each and every obligation of Tenant under this
                      Lease until such time as this Lease is either rejected or
                      assumed by order of a court of competent jurisdiction; and

                (iii) to determine within sixty (60) days after the filing of
                      such petition whether to assume or reject this Lease; and


                (iv)  to give Landlord at least thirty (30) days prior written
                      notice, unless a shorter notice period is agreed to in
                      writing by the parties, of any proceeding relating to any
                      assumption of this Lease; and

                (v)   to do all other things of benefit to Landlord otherwise
                      required under the Bankruptcy Code.

                      Tenant shall be deemed to have rejected this Lease in the
                      event of the failure to comply with any of the above.
<PAGE>


          (b)  If Tenant or a trustee elects to assume this Lease subsequent to
               the filing of a petition under the Bankruptcy Code, Tenant, as
               debtor and as debtor in possession, and any trustee who may be
               appointed agree as follows:

               (i)  to cure each and every existing breach by Tenant within not
                    more than thirty (30) days of assumption of this Lease; and

               (ii) to compensate Landlord for any actual pecuniary loss
                    resulting from any existing breach, including without
                    limitation, Landlord's reasonable costs, expenses and
                    attorney's fees incurred as a result of the breach, as
                    determined by a court of competent jurisdiction, within
                    thirty (30) days of assumption of this Lease; and

               (iii) in the event of an existing breach, to provide adequate
                     assurance of Tenant's future performance, including without
                     limitation:

                    (1)  the deposit of an additional sum equal to Rent for the
                         remainder of the Lease Term to be held (without any
                         allowance for interest thereon) to secure Tenant's
                         obligations under the Lease; and

                    (2)  the production to Landlord of written documentation
                         establishing that Tenant has sufficient present and
                         anticipated financial ability to perform each and every
                         obligation of Tenant under this Lease; and

                    (3)  assurances, in form acceptable to Landlord, as may be
                         required under any applicable provision of the
                         Bankruptcy Code; and

               (iv) the assumption will not breach any provision of this Lease;
                    and

               (v)  the assumption will be subject to all of the provisions of
                    this Lease unless the prior written consent of Landlord is
                    obtained; and

               (vi) the prior written consent to the assumption of any mortgage
                    to which this Lease has been assigned as collateral security
                    is obtained.

          (c)  If Tenant assumes this Lease and proposes to assign the same
               pursuant to the provisions of the Bankruptcy Code to any person
               or entity who shall have made a bona fide offer to accept any
               assignment of this Lease on terms acceptable to Tenant, then
               notice of such proposed assignment shall be furnished by Tenant
               to Landlord, setting forth:

               (i)  the name and address of such person; and

               (ii) all the terms and conditions of such offer; and

<PAGE>


               (iii) the adequate assurance to be provided Landlord to assure
                     such person's future performance under the Lease, including
                     without limitation, the assurances referred to in any
                     applicable provision of the Bankruptcy Code, shall be given
                     to Landlord by Tenant no later than twenty (20) days after
                     receipt by Tenant, but in any event no later than ten (10)
                     days prior to the date that Tenant shall make application
                     to a court of competent jurisdiction for authority and
                     approval to enter into such assignment and assumption, and
                     Landlord shall thereupon have the prior right and option,
                     to be exercised by notice to Tenant given at any time prior
                     to the effective date of such proposed assignment, to
                     accept (or to cause its designee to accept) an assignment
                     of this Lease upon the same terms and conditions and for
                     the same consideration, if any, as the bona fide offer made
                     by such person, less any brokerage commissions which may be
                     payable out of the consideration to be paid by such person
                     for the assignment of this Lease. The adequate assurance to
                     be provided Landlord to assure the assignee's future
                     performance under the Lease shall include without
                     limitation:

                     (1)  the deposit of a sum equal to Rent for the remainder
                          of the Lease Term to be held (without any allowance
                          for interest thereon) as security for performance
                          hereunder; and

                     (2)  a written demonstration that the assignee meets all
                          reasonable financial and other criteria of Landlord as
                          did Tenant and its business at the time of execution
                          of this Lease, including the production of the most
                          recent audited financial statement of the assignee
                          prepared by a certified public accountant; and

                     (3)  the assignee's use of the Premises will be a Permitted
                          Use; and

                     (4)  assurances, in form acceptable to Landlord, as to all
                          matters identified in any applicable provision of the
                          Bankruptcy Code.

     12.5. NO RELEASE OF TENANT. Notwithstanding anything to the contrary
contained in this Lease, and regardless of Landlord's consent, no assignment,
encumbrance, subletting, transfer, lease or other permission for the use or
occupancy of all or any part of the Premises shall, unless otherwise agreed by
Landlord, release Tenant of Tenant's obligation to pay the Rent and other
charges and to perform all other obligations to be performed by Tenant under
this Lease. The acceptance of Rent and other charges by Landlord from any other
person shall not be deemed to be a waiver by Landlord of any provision hereof.
Consent to one assignment shall not be deemed consent to any subsequent
assignment.

     12.6. TRANSFER OF LANDLORD'S RIGHTS. Landlord shall have the right to
transfer and assign, in whole or in part, all and every feature of its rights
and obligations hereunder and in the Premises. Such transfers or assignments,
howsoever made, are to be fully binding upon and recognized by Tenant. Upon such
transfer or assignment and the assumption of Landlord's


<PAGE>


                        Attention: Vice President Corporate Service
                        Facsimile: (507) 388-0406
                        Confirmation No.: (507) 388-5000


     With a copy to:    Gray, Plant, Mooty, Mooty & Bennett, P.A.
                        3400 City Center
                        33 South Sixth Street
                        Minneapolis, MN 55402
                        Attention: Laura J. Schoenbauer, Esq.
                        Facsimile: (612) 333-0066
                        Confirmation No.: (612) 343-2947


Such addresses may be changed at any time or from time to time or additional
notice parties added, by notice as above provided.


     13.9. WAIVERS. No waiver by Landlord of any provision of this Lease shall
be implied and, in order to be enforceable, all waivers by Landlord shall be in
a written instrument duly executed by Landlord. No waiver by Landlord of any
provision of this Lease shall be deemed a waiver of any other provision hereof
or of any subsequent breach by Tenant of the same or any other provision.
Landlord's consent to or approval of any act shall not be deemed to render
unnecessary the obtaining of Landlord's consent to or approval of any subsequent
act by Tenant. No payment by Tenant or receipt by Landlord of a lesser amount
than the amount then due shall be deemed to be other than on account of the
earliest rent due, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as payment be deemed an accord and
satisfaction, and Landlord shall accept such check or payment without prejudice
to Landlord's right to recover the balance of such payment or pursue any other
remedy in this Lease provided.

     13.10. RECORDING. Tenant shall not record this Lease or any indicia hereof
in any public record.

     13.11. HOLDING OVER. Tenant shall surrender the Premises upon the
expiration of the Lease Term or earlier termination of the Lease. Any holdover
not consented to by Landlord in writing shall not result in a new tenancy or
interest and, in such case, Landlord may treat Tenant as a trespasser. If Tenant
remains in possession of the Premises or any part thereof after the expiration
of the Lease Term or the earlier termination hereof without the express written
consent of Landlord, Tenant shall pay rent (for such holdover period) equal to
the amount of one hundred fifty percent (150%) of the amount of Rent and other
charges actually paid by Tenant under this Lease during the last full Lease
Year.

     13.12. CUMULATIVE REMEDIES. Except as expressly provided herein, no remedy
or election hereunder shall be deemed exclusive but shall, wherever possible, be
cumulative with all other remedies at law or in equity or otherwise available to
Landlord.

     13.13. COVENANTS AND CONDITIONS. Each provision of this Lease performable
by Tenant shall be deemed both a covenant and a condition.

<PAGE>


     13.14. BINDING EFFECT. This Lease shall bind and inure to the benefit of
Landlord and Tenant and their respective permitted successors and assigns.

     13.15. SUBORDINATION; ATTORNMENT AND NON-DISTURBANCE.

          (a) This Lease, at the option of Landlord or any of its lenders, shall
              be subordinate to any ground lease, mortgage or any other
              hypothecation for security and any renewals, future advances,
              modifications, consolidations, replacements and extensions
              thereof, provided Tenant's rights hereunder continue to be
              recognized so long as no Event of Default exists.

          (b) Provided Tenant's rights hereunder continue to be recognized so
              long as no Event of Default exists, Tenant shall execute any
              documents required to effectuate such subordination or to make
              this Lease prior to the lien of any mortgage, ground lease or
              other security device, as the case may be.

          (c) In the event of (i) a sale, assignment, ground lease, mortgage or
              other transfer of Landlord's interest in the Premises or any
              portion thereof or in this Lease; or (ii) any proceedings brought
              for the foreclosure of, the granting of a deed in lieu of
              foreclosure of or the exercise of the power of sale under any
              mortgage or security agreement made by Landlord covering the
              Premises or any portion thereof, and provided that such mortgagee
              or other transferee shall agree to recognize Tenant's rights
              hereunder so long as an Event of Default has not occurred, Tenant
              shall attorn to the mortgagee or other transferee and recognize
              such mortgagee or other transferee as Landlord under this Lease.

          (d) In the event Landlord desires to convey the Premises pursuant to a
              sale/leaseback transaction, Tenant shall upon Landlord's request
              agree to terminate this Lease and enter into a new lease upon the
              same terms and conditions as set forth herein.

     13.16. ATTORNEY'S FEES. If Landlord retains an attorney to enforce the
terms of or determine rights under this Lease, Landlord shall be entitled to
recover reasonable costs, attorneys' fees and expenses, including those incurred
at the appellate level. In the event that Landlord fails to fulfill its
obligations hereunder and Tenant commences an action against Landlord under
Section 13.7(a) hereof, the party prevailing in such action shall be entitled to
its reasonable attorneys' fees and expenses.

     13.17. CORPORATE AUTHORITY. Each individual executing this Lease on behalf
of Tenant represents and warrants that he is duly authorized to execute and
deliver this Lease on behalf of Tenant, in accordance with a duly adopted
resolution, and that this Lease is binding upon Tenant in accordance with its
terms. Tenant shall, contemporaneous with the execution of this Lease, deliver
to Landlord a certified copy of a resolution of the Board of Directors of Tenant
authorizing or ratifying the execution and delivery of this Lease.


<PAGE>
     13.18. NO JOINT VENTURE. Landlord and Tenant, by entering into this Lease
or consummating the transactions contemplated hereby, shall not be considered
partners or joint venturers.

     13.19. QUIET ENJOYMENT. Provided Tenant pays the Rent herein recited and
performs all of Tenant's other covenants and agreements herein contained,
Landlord covenants that Tenant shall peacefully have, hold and enjoy the
Premises, subject to all the other provisions herein contained.

     13.20. MORTGAGE FINANCING. In the event Landlord desires to obtain
mortgage financing and Landlord's mortgagee or mortgagees reasonably request
certain modifications or amendments to this Lease, then Tenant, on not less
than twenty (20) days advance notice, agrees to execute such modifications or
amendments as required. Notwithstanding the foregoing, Tenant shall not be
required to execute any modifications or amendments to this Lease which shall
modify the provisions of this Lease relating to the amount of Rent or other
charges or costs to be paid by Tenant, Tenant's rights or obligations under the
Lease, the size of the Premises, notice periods, notice requirements, cure
periods, the duration of the term of this Lease, or otherwise subject Tenant to
additional cost, expense, risk, liability or obligations. Tenant agrees to
cooperate with Landlord's efforts in obtaining said mortgage financing provided
there is no cost or expense to Tenant.

     13.21. COUNTERPARTS. This Lease may be executed in any number of
counterparts, each of which shall be an original and all of which together
shall constitute and be construed as one and the same instrument.

     13.22. BROKERS. Each party hereto does hereby indemnify and agree to hold
the other harmless from and against any and all claims, fees, commissions and
suits of any real estate broker or agent with respect to services claimed to
have been rendered at the request of or through or under such party in
connection with the execution of this Lease or the transactions set forth
herein.

     13.23. FINANCIAL STATEMENTS. Tenant shall deliver to Landlord (a) within
120 days after the end of each calendar year annual audited operating
statements for Tenant and a copy of the balance sheet of Tenant as of the end
of such year, and related statements of income and retained earnings and
changes in financial position for such year, and (b) such other information as
Landlord may from time to time reasonably request. All financial statements of
Tenant delivered to Landlord shall be true and correct in all respects, shall
be prepared in accordance with GAAP, and fairly present the financial condition
of the subject thereof as of the dates thereof. None of the aforesaid financial
statements, or any certificate or statement furnished to Landlord by or on
behalf of Tenant in connection with the transactions contemplated hereby, shall
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein or herein not
misleading. All financial statements of Tenant delivered to Landlord under this
Section shall be treated confidentially by Landlord and its lenders and all
parties that have access to such information shall execute a confidentiality
agreement in form and content satisfactory to Tenant, in its sole discretion,
prior to having access of such information.

<PAGE>


     13.24. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Lease is or will be
made and delivered in the State and shall be governed by and construed and
interpreted in accordance with the laws of the United States of America and the
State, without regard to principles of conflict of laws. All judicial actions,
suits or proceedings brought by or against Landlord or Tenant with respect to
its rights, obligations, liabilities or any other matter under or arising out of
or in connection with this Lease or any transaction contemplated hereby or for
recognition or enforcement of any judgment rendered in any such proceedings
shall be brought in any state or federal court in the State. By execution and
delivery of this Lease, Landlord and Tenant accept, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts and
irrevocably agree to be bound by any final judgment rendered thereby in
connection with this Lease or any transaction contemplated hereby from which no
appeal has been taken or is available. Tenant and Landlord each hereby
irrevocably waive any objections, including without limitation any objection to
the laying of venue or based on the grounds of forum non conveniens, which
either may now or hereafter have to the bringing of any such action or
proceeding in any such jurisdiction. Tenant and Landlord acknowledge that final
judgment against it in any action, suit or proceeding referred to in this
Section shall be conclusive and may be enforced in any other jurisdiction by
suit on the judgment, a certified or exemplified copy of which shall be
conclusive evidence of the same.

     13.25. "AS IS" LEASE. Notwithstanding anything to the contrary herein
contained, Tenant expressly understands, acknowledges and agrees that the lease
of the Premises shall be made by Landlord to Tenant on an "as is, where is"
basis, and "with all faults," and Tenant acknowledges that Tenant has agreed to
lease the Premises in its present condition and that Tenant is relying solely on
its own examination and inspections of the Premises and not on any statements or
representations made by Landlord or any agents or representatives of Landlord.
Additionally, Tenant hereby acknowledges that, Landlord makes no warranty or
representation, express or implied, or arising by operation of law, including,
but in no way limited to, any warranty of condition, habitability,
merchantability, or fitness for a particular purpose of the Project, the
Premises or any portion thereof. Landlord hereby specifically disclaims any
warranty, guaranty or representation, oral or written, past, present or future,
of, as to, or concerning: (a) the nature and condition of the Project, the
Premises or any part thereof, including but not by way of limitation, as to its
water, soil or geology, or the suitability thereof, for any and all activities
and uses which Tenant may elect to conduct thereon, or any improvements Tenant
may elect to construct thereon, or any income to be derived therefrom or
expenses to be incurred with respect thereto, or any obligations or any other
matter or thing relating to or affecting the same; (b) the absence of any
Hazardous Substances on, in or under the Project on, in or under any land
adjacent to or abutting the Land; (c) the manner of construction or condition or
state of repair or lack of repair of the Project; (d) the nature or extent of
any easement, restrictive covenant, right-of-way, lease, possession, lien,
encumbrance, license, reservation, condition or other similar matter pertaining
to the Project, the Premises or any portion thereof; and (e) the compliance of
the Project, the Premises or the operation of the Project, the Premises or
portion thereof with any Legal Requirements.

     13.26. THIRD PARTY BENEFICIARY. There are no third party beneficiaries of
this Lease, intended or otherwise.
<PAGE>


     13.27. TENANT PUT. Provided no Event of Default shall exist on the first
anniversary of the Commencement Date, Tenant shall have the right to elect to
terminate this Lease with respect to a portion of the Premises, the size of
which Tenant may specify, not to exceed fifty percent (50%) of the Premises
(exclusive of the Common Areas) with notice of its election, but, subject to the
conditions herein, the location of which Landlord shall specify. Provided no
Event of Default shall exist on the second anniversary of the Commencement Date,
Tenant shall have the right to elect to terminate this Lease with respect to a
portion of the Premises, the size of which Tenant may specify, not to exceed
fifty percent (50%) of the Premises (exclusive of the Common Areas) with notice
of its election, but, subject to the conditions herein, the location of which
Landlord shall specify. The applicable location specified by Landlord is
referred to herein as the "PUT PREMISES". In specifying the applicable Put
Premises under this Section, Landlord shall not include in the Put Premises that
portion of the Premises that is cross-hatched in Exhibit "D-2" attached hereto
and shall consult with Tenant, shall act reasonably and in good faith and shall
endeavor to take into account concerns regarding contiguity, leasehold
improvements, Tenant's operational needs, a balance of interior and exterior
space and a balance of finished and unfinished space. In specifying the Put
Premises with respect to the second election by Tenant under this Section, if
any, Landlord may not specify any portion of the Improvements which are not on,
the date of such election, included within the Premises; shall include the
systems network room in the Put Premises and shall consult with Tenant, shall
act reasonably and in good faith and shall endeavour to take into account
concerns regarding contiguity, leasehold improvements, Tenant's operational
needs, a balance of interior and exterior space and a balance of finished and
unfinished space. In addition, if, at the time of the second election, Tenant
has not exercised the first election, the Put Premises shall not include that
portion of the Premises that is cross-hatched on Exhibit "D-2." The first
election under this Section, if made by Tenant, shall be delivered to Landlord
in writing prior to the first anniversary of the Commencement Date and shall be
effective on the second anniversary of the Commencement Date. The second
election under this Section, if made by Tenant, shall be delivered to Landlord
in writing prior to the second anniversary of the Commencement Date and shall be
effective on the third anniversary of the Commencement Date. The applicable
effective date of an election under this Section is referred to herein as the
"PUT DATE". Such elections once made by Tenant by the delivery of notice, as
aforesaid, shall be irrevocable. Such elections may only be made once by Tenant
and if such elections are not, or may not be, made, as aforesaid, Tenant shall
have no further rights under this Section. In the event Tenant does not, or may
not, make the first election under this Section, Tenant shall continue to be
entitled to make the second election under this Section. On or before the
applicable Put Date, Tenant shall remove itself from possession of the
applicable Put Premises and, with respect to such Put Premises, comply with all
other provisions of this Lease applicable upon the expiration of the Lease Term.
From and after the applicable Put Date, the term "Premises" shall mean the
Premises other than the applicable Put Premises. On the applicable Put Date,
Landlord shall adjust the amount of Base Rent to be paid by Tenant and Tenant's
Share to properly reflect the reduction in the size of the Premises by the size
of the applicable Put Premises. Following the applicable Put Date, Landlord
shall have the right, at its sole cost and expense, to enter the Premises for
purposes of constructing demising walls, doors, corridors and related work which
Landlord determines to be necessary to properly separate and divide the
applicable Put Premises.

<PAGE>

     13.28. TENANT TERMINATION. Provided no Event of Default shall exist on the
fourth anniversary of the Commencement Date, Tenant shall have the right to
elect to terminate this Lease. Such election, if made by Tenant, shall be
delivered to Landlord in writing prior to the fourth anniversary of the
Commencement Date and shall be effective on the fifth anniversary of the
Commencement Date. Such election, once made by Tenant by delivery of notice, as
aforesaid, shall be irrevocable. If such election is not, or may not be, made,
as aforesaid, Tenant shall have no further rights under this Section.

     13.29. RECAPTURE. Upon not less than twelve (12) months notice to Tenant,
Landlord shall have the right to elect to recapture and terminate this Lease
with respect to all or any portion of the Premises cross-hatched on Exhibit
"D-1" attached hereto which Landlord may specify. Upon not less than 120 days
notice to Tenant, Landlord shall have the right to elect to recapture and
terminate this Lease with respect to all or any portion of the Premises
cross-hatched on Exhibit "D-2" attached hereto which Landlord may specify. At
any time on or after the fourth anniversary of the Commencement Date, upon not
less than twelve (12) months notice to Tenant, Landlord shall have the right to
elect to recapture and terminate this Lease with respect to all or any portion
of the Premises cross-hatched on Exhibit "D-3" attached hereto which Landlord
may specify. Any portion of the Premises which Landlord may specify for
recapture under this Section is referred to herein as the "RECAPTURED PREMISES".
In the event that the Recaptured Premises are less than the Premises, in
specifying the Recaptured Premises, Landlord shall consult with Tenant, shall
act reasonably and in good faith and shall endeavor to take into account
concerns regarding contiguity, leasehold improvements, Tenant's operational
needs, a balance of interior and exterior space and a balance of finished and
unfinished space. Such election, if made by Landlord, shall be delivered to
Tenant in writing. Such election may be made by Landlord from time to time and
as often as Landlord shall determine. In the event Landlord elects to recapture
and terminate this Lease as provided in this Section, such election shall be
effective on the date specified by Landlord (such effective date is referred to
herein as a "RECAPTURE DATE"). On or before the applicable Recapture Date,
Tenant shall remove itself from possession of the Recaptured Premises and, with
respect to the Recaptured Premises, comply with all other provisions of this
Lease applicable upon the expiration of the Lease Term. In the event that the
Recaptured Premises are less than the Premises, from and after the Recapture
Date, the term "Premises" shall mean the Premises other than the Recaptured
Premises, on the applicable Recapture Date Landlord shall adjust the amount of
Base Rent to be paid by Tenant and Tenant's Share to properly reflect the
reduction in the size of the Premises by the size of the Recaptured Premises and
following the applicable Recapture Date, Landlord shall have the right, at its
sole cost and expense, to enter the Premises for purposes of constructing
demising walls, doors, corridors and related work which Landlord determines to
be necessary to properly separate and divide the Recaptured Premises.
<PAGE>



     IN WITNESS WHEREOF, Tenant and Landlord have executed this Lease as of the
date set forth above.




                                         "LANDLORD"

                                         PREMIER DRIVE PROPERTIES, L.L.C.,
                                         a Delaware limited liability company


                                         By /s/  illegible signature
                                           ------------------------------------
                                           Its Manager





                                         "TENANT"

                                         FIREPOND, INC.,
                                         a Minnesota corporation


                                         By /s/ R.C. Lueck
                                           ------------------------------------
                                           R.C. Lueck
                                           Its Vice President Corporate Service



<PAGE>


                                  SCHEDULE "1"

                                  DEFINITIONS
                                  -----------


For purposes of this Lease, the following words and terms shall have the
following meanings ascribed to them:

(a)       "ACCELERATED AMOUNT" shall have the meaning ascribed to such term in
          Section 11.2(a) hereof.

(b)       "ADDITIONAL RENT" shall mean all costs, expenses, charges and other
          amounts owed by Tenant to Landlord hereunder, other than Base Rent.
          Additional Rent shall include Tenant's Share of Impositions and
          Operating Expenses, as well as any cost incurred by Landlord in
          fulfilling Tenant's obligations hereunder. Additional Rent shall be
          due and payable on the earlier of the date Landlord advances funds or
          demand, unless specifically provided to the contrary in this Lease.

(c)       "AWARD" shall have the meaning ascribed to such term in Section 10.1
          hereof.

(d)       "BANKRUPTCY CODE" shall mean the United States Bankruptcy Code, as
          amended.

(e)       "BASE RENT" shall have the meaning ascribed to such term in Section
          3.1 hereof.

(f)       "COMMENCEMENT DATE" shall mean the date of this Lease.

(g)       "COMMON AREAS" shall mean, to the extent applicable, all parking
          areas, driveways, entrances, exits, loading docks, pick-up stations,
          sidewalks, ramps, landscaped areas, exterior stairways, public
          elevators, escalators, hallways, lobbies, and other areas and
          improvements provided by Landlord for the common use of tenants of the
          Project, the guests, customers, and employees of tenants of the
          Project, and all other portions of the Project that are not leased to
          Tenant or other tenants of the Project or otherwise leaseable,
          including mechanical rooms and bathrooms available to more than one
          tenant.

(h)       "DEFAULT" shall mean an event which but for the giving of notice or
          passage of time, or both, would constitute an Event of Default
          hereunder.

(i)       "DEFAULT RATE" shall mean the annual rate of interest of fifteen
          percent (15%), or such lesser amount as may be the maximum amount
          permitted by applicable law. In the event that Rent is not paid when
          due, the amount of Rent not so paid shall bear interest at the Default
          Rate from the date due until the date paid.

(j)       "ENVIRONMENTAL REGULATION(S)" means any law, rule, regulation or
          permit relating to the environment, human health or safety now
          existing or hereafter enacted.

<PAGE>


(k)       "EVENT OF DEFAULT" shall have the meaning ascribed to such term in
          Section 11.1 hereof.

(l)       "GAAP" shall mean generally accepted accounting principles as in
          effect in the United States on the Commencement Date applied on a
          consistent basis.

(m)       "GOVERNMENTAL AUTHORITY" means any federal, state, or local
          governmental body including elected bodies, departments, agencies,
          commissions, boards or instrumentalities having or purporting to have
          jurisdiction over Landlord, Tenant, the Project, the Premises or the
          business conducted or to be conducted from the Project or the
          Premises.

(n)       "HAZARDOUS SUBSTANCES" means any substance, pollutant or contaminant,
          as those terms are now or hereafter defined in any Environmental
          Regulation, and specifically includes, but it not limited to, lead
          oxide, asbestos, asbestos-containing materials, petroleum, or
          petroleum-based products, formaldehyde, and polychlorinated biphenyls.

(o)       "IMPOSITIONS" shall mean all real estate taxes of every kind and
          nature imposed upon or assessed of or against Landlord with respect to
          the Project, Tenant or any portion of the Project or interest therein,
          all charges for any easement or agreement maintained for the benefit
          of any portion of the Project, all installments of general and special
          assessments (payable over the longest period allowed by the assessing
          authority), levies, permits, inspection and license fees, all water
          and sewer rents and charges and all other public charges, levies or
          taxes, whether of a like or different nature, even if unforeseen or
          extraordinary, imposed upon or assessed of or against Landlord with
          respect to the Project, Tenant or any portion of the Project or
          interest therein, together with any penalties or interest on any of
          the foregoing to the extent Tenant has not provided Landlord with
          funds with respect to the payment of such taxes and charges under
          Section 3.2(a) hereof.

(p)       "IMPROVEMENTS" shall mean all buildings, structures and improvements
          now located or hereafter constructed on the Land and all fixtures and
          equipment attached to, forming a part of and necessary for the
          operation of such buildings, structures and improvements.

(q)       "INSURED CASUALTY" shall have the meaning ascribed to such term in
          Article 9 hereof.

(r)       "LAND" shall mean that certain real property located in Blue Earth
          County, Minnesota and legally described on Exhibit "A" attached
          hereto, together with all easements and rights benefitting or
          appurtenant to such real property.

(s)       "LANDLORD" shall mean Premier Drive Properties, L.L.C., a Delaware
          limited liability company, and its successors and assigns.

(t)       "LEASE" shall mean this Lease Agreement.

(u)       "LEASE TERM" shall mean the period from the Commencement Date through
          and including a date ten (10) years thereafter.

<PAGE>

(v)       "LEASE YEAR" shall mean a full calendar year, provided that the first
          and last Lease Years shall be determined in accordance with Section
          2.5 hereof.

(w)       "LEGAL REQUIREMENTS" shall mean all present and future laws, statutes,
          codes, ordinances, orders, judgments, decrees, injunctions,
          agreements, rules, regulations and requirements pertaining to the
          Project including any applicable insurance, environmental, zoning or
          building, use and land use laws, ordinances, rules or regulations and
          all covenants, restrictions and conditions now or hereafter of record
          which may be applicable to any of the Project, or to the use, manner
          of use, occupancy, possession, operation, maintenance, alteration,
          construction, repair or reconstruction of any of the Project.

(x)       "OPERATING EXPENSES" shall mean all costs and expenses of owning,
          operating, maintaining, repairing, restoring and replacing all or any
          portion of the Project. Operating Expenses shall include all costs and
          expenses of protecting, operating, managing the Project (including
          attorneys' and other professional fees, except those related to
          negotiation or enforcement of leases), repairing, repaving, lighting,
          cleaning, painting, striping, insuring, removing of snow, ice and
          debris, police protection, security and security patrol, fire
          protection, regulating traffic, inspecting, repairing and maintaining
          of machinery and equipment used in the operation of the Common Areas,
          including heating, ventilating and air conditioning machinery and
          equipment, depreciation of machinery and equipment providing heating,
          ventilating and air conditioning for the interior Common Areas, cost
          and expense of inspecting, maintaining, repairing and replacing storm
          and sanitary drainage systems, sprinkler and other fire protection
          systems, electrical, gas, water, telephone and irrigation systems,
          cost and expense of maintaining, repairing and replacing the Project
          and the exterior of the buildings in the Project, including, but not
          limited to floors, roofs, skylights, elevators, walls, stairs and
          signs, cost and expense of installing, maintaining and repairing
          burglar or fire alarm systems, if installed, cost and expense of
          landscaping and shrubbery, expense of utilities, reasonable property
          management costs. The following shall not be included in Operating
          Expenses: (a) interest or payments on any financing for the Project;
          (b) any expenses resulting from the gross negligence of the Landlord,
          its agents or employees; (c) any items for which Landlord is
          reimbursed by insurance; (d) the cost of providing improvements within
          or services to or allowances for the benefit of the premises and for
          the individual use of any other tenants in the Project at any time,
          and any improvements to the common areas; (e) any other cost of
          expense otherwise paid by Tenant under the Lease; (f) leasing
          commissions; (g) fines and penalties incurred other than as a result
          of a Default; (h) prior to the earlier to occur of a Put Date or a
          Recapture Date, property management fees; (i) legal expenses incident
          to the enforcement by Landlord of any terms of any lease; (j)
          compensation paid to any employee of Landlord, other than compensation
          paid to employees of Landlord in connection with the Project; (k)
          costs of travel, entertainment and promotion; (l) any costs associated
          with dividing the Premises; and (m) capital expenditures and other
          expenditures for improvements, except (a) the amortized amount of
          those made to reduce operating expenses, provided the savings achieved
          is the same or greater than the amortized capital expenditure, and (b)
          the amortized amount of those made to comply with governmental laws,
          or ordinances, regulations or orders applicable to the Project.
<PAGE>


(y)       "PERMITTED USE" shall mean the use of the Premises as an office,
          warehouse and light industrial facility in compliance with all Legal
          Requirements and the terms and conditions of this Lease.

(z)       "PREMISES" shall mean that portion of the Project depicted as such on
          Exhibit "C" attached hereto, consisting of approximately 63,259 square
          feet. Prior to the earlier to occur of a Put Date or a Recapture Date,
          the Premises shall be deemed to include the Common Areas. As such,
          until such date, the provisions of Sections 2.2 and 2.3 hereof shall
          have no force or effect.

(aa)      "PRESENT VALUE" shall have the meaning ascribed to such term in
          Section 11.2(f) hereof.

(bb)      "PROHIBITED CASUALTY" shall have the meaning ascribed to such term in
          Article 9 hereof.

(cc)      "PROHIBITED TAKING" shall have the meaning ascribed to such term in
          Section 10.1 hereof.

(dd)      "PROJECT" shall mean the collective reference to the Land and
          Improvements, which are located at 1983 Premier Drive, Mankato,
          Minnesota consisting of one building which contains approximately
          63,259 square feet.

(ee)      "PUT DATE" shall have the meaning ascribed to such term in Section
          13.27 hereof.

(ff)      "PUT PREMISES" shall have the meaning ascribed to such term in Section
          13.27 hereof.

(gg)      "RECAPTURE DATE" shall have the meaning ascribed to such term in
          Section 13.29 hereof.

(hh)      "RECAPTURED PREMISES" shall have the meaning ascribed to such term in
          Section 13.29 hereof.

(ii)      "RELATED ENTITY" shall have the meaning ascribed to such term in
          Section 12.3 hereof.

(jj)      "RENT" shall mean the sum of Base Rent and Additional Rent.

(kk)      "RULES" shall mean those reasonable rules and regulations adopted for
          all tenants within the Project from time to time by Landlord with
          respect to the use and care of the Project.

(ll)      "STATE" shall mean the State in which the Project is located.

(mm)      "TENANT" shall mean  FirePond, Inc., a Minnesota corporation.

(nn)      "TENANT'S SHARE" shall mean 100%, until the occurrence of a Put Date
          or Recapture Date, at which time Tenant's share shall be reduced as
          provided in Sections 13.27 or 13.29 hereof.
<PAGE>



                                  EXHIBIT "A"

                           LEGAL DESCRIPTION OF LAND



   Lot 2, Block 1, Eastwood Industrial Centre, Blue Earth County, Minnesota.



<PAGE>



                                  EXHIBIT "B"

                                   BASE RENT



                                              Monthly Amount
                        Dates                  of Base Rent
                        -----                 --------------
                   [months 1 - 60]             [$45,833.33]
                  [months 61 - 120]            [$48,124.99]



<PAGE>



                                  EXHIBIT "C"

                             DEPICTION OF PREMISES



                         [GRAPHIC OMITTED: FLOOR PLAN]


<PAGE>



                                  EXHIBIT "D"

                       DEPICTIONS OF RECAPTURED PREMISES





<PAGE>



                                 EXHIBIT "D-1"

                       [20% PROTECTED / 12 MONTHS NOTICE]



                         [GRAPHIC OMITTED: FLOOR PLAN]



<PAGE>



                                 EXHIBIT "D-2"

                       [55% UNPROTECTED / 120 DAY NOTICE]



                         [GRAPHIC OMITTED: FLOOR PLAN]


<PAGE>



                                 EXHIBIT "D-3"

                [25% PROTECTED / 12 MONTHS NOTICE AFTER 4 YEARS]



                         [GRAPHIC OMITTED: FLOOR PLAN]