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                                                                   Exhibit 10.5

                                GUARANTY OF LEASE



         WHEREAS, Ryan Companies US, Inc., a Minnesota corporation, as Landlord,
has entered into a certain Lease Agreement dated April 14, 1999, between
Landlord and D56, Inc., a Minnesota corporation, as Tenant (herein referred to
as the "Lease").

         WHEREAS, the undersigned ("Guarantor") is the parent company of the
Tenant.

         NOW, THEREFORE, for value received, the undersigned hereby absolutely
and unconditionally guarantees to said Landlord, its successors and assigns, the
due and prompt performance and observance of all of the obligations of said
Lease to be met by Tenant, including but not limited to the payment of rent and
other payments to be made under the Lease. The undersigned agrees that no act or
thing, except for payment in full or written release of this Guaranty by
Landlord, which but for this provision might or could in law or equity act as a
release of the liability of the undersigned hereunder, shall in any way affect
or impair the absolute and unconditional obligation of the undersigned. This
Guaranty shall be a continuing, absolute and unconditional Guaranty and shall be
in full force and effect for the term of the Lease or until this Guaranty has
been released in writing by Landlord, whichever occurs first. This Guaranty is a
guaranty of payment (and not of collection), and of performance. The liability
of Guarantor is co-extensive with that of Tenant and also joint and several with
that of Tenant, and this Guaranty shall be enforceable against Guarantor without
the necessity of any suit or proceeding on Landlord's part of any kind or nature
whatsoever against Tenant. This Guaranty shall inure to the benefit of the
successors and assigns of said Landlord, including any subsequent holder of the
Landlord's interest in the Lease.

         The undersigned expressly agrees that the liability and obligations
under this Guaranty shall not in any way be affected by the institution by or
against the Tenant of any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or any other similar proceedings for relief under any
bankruptcy law or similar law for relief of debtors and that upon the
institution of any of the above actions, at Landlord's sole discretion and
without any notice thereof or demand therefor, Guarantor shall pay all rent and
other payments to be made under the Lease and perform and observe all covenants
under the Lease.

         The undersigned hereby further agrees that notwithstanding any
assignment of the Lease or sublettings, the undersigned shall remain liable as a
guarantor of the Lease, irrespective of whether or not the Tenant has been
released from liability; and the Guarantor agrees to execute a reaffirmation of
this Guarantee upon the request of Landlord in connection with any such
assignment or subletting. Landlord shall deliver to Guarantor a copy of any and
all notices of default required pursuant to the terms and conditions of the
Lease to be given by Landlord to Tenant (and simultaneously with any such notice
to Tenant), by certified mail, return receipt requested as follows (or to such
other address as Guarantor may designate from time to time by written notice to
Landlord):

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                             Department 56, Inc.
                             One Village Place
                             6436 City West Parkway
                             Eden Prairie, MN 55344

         Landlord agrees to accept the cure by Guarantor of any such default by
Tenant so long as such cure is completed during the same cure period, if any,
accorded Tenant under the Lease.

         This Guaranty is executed under and intended to be constructed by the
laws of the State of Minnesota.

         IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be
executed as of this 14 day of April, 1999.


DEPARTMENT 56, INC., a Delaware corporation


BY  /s/ Robert Rose
   -------------------------

Its  Vice President
    ------------------------



STATE OF MINNESOTA         )
                           ) SS.
COUNTY OF HENNEPIN         )

         The foregoing instrument was acknowledged before me this 14 day of
April, 1999, by Robert Rose, the Vice President of Department 56, Inc., a
Delaware corporation, on behalf of the corporation.


/s/ Stephen M. Hickok
----------------------------
Notary Public