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                                                                EXHIBIT 10.16(b)



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                             DRF 12000 PORTLAND LLC

                                      LEASE

                                      WITH

                           TELEX COMMUNICATIONS, INC.

                             (DATED: MARCH 16, 2000)




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                                 LEASE AGREEMENT

         THIS AGREEMENT, made this 16th day of March, 2000 between DRF 12000
PORTLAND LLC, a Minnesota limited liability company ("Landlord") and TELEX
COMMUNICATIONS, INC., a Delaware corporation ("Tenant").

         RECITALS:

         1. Landlord desires to purchase the Premises to be leased to Tenant, in
accordance with the terms and subject to the conditions of this Lease.

         2. Tenant desires to lease from Landlord the Premises in accordance
with the terms and subject to the conditions contained in this Lease.

         FOR AND IN CONSIDERATION of the mutual covenants contained in this
Lease, Landlord and Tenant (the "parties") agree as follows:

         Section 1. Property Acquisition. Landlord shall purchase certain
improved real estate having an address of 12000 Portland Avenue South,
Burnsville, Minnesota 55337-1535, and lease same to Tenant and Tenant shall
lease from Landlord the site described in Exhibit A (the "Property"), which
includes a building of approximately 114,100 square feet ("Building"). The
Property, together with the Building and all other improvements thereon, shall
be the "Premises". Provided, however, it is an express condition precedent to
Tenant's obligations hereunder that Landlord have good and clear, marketable
title to the Premises prior to commencement of the term of the lease.

         Section 2. Existing Improvements. (a) It is expressly acknowledged and
agreed by Tenant that no representations or warranties of any kind have been
made by Landlord with respect to the Premises and Landlord shall deliver the
Premises in "as is" "where is" condition "with all faults" and without
warranties express or implied, and that Landlord shall have no obligation to
make any repairs, improvements, changes or modifications to the Premises or any
improvements thereon or thereto as a condition of Tenant's occupancy of the
same, but nothing herein shall obviate Landlord's obligation to provide the
services set out in Section 8. Any alterations or additions to the existing
improvements to prepare the Premises for Tenant's initial occupancy, including
without limitation, distributing of utilities and HVAC within the Premises,
demising partitions, fixtures, etc., shall be at Tenant's sole cost and expense,
subject to payment by Landlord of the cash allowance provided below and any
funds available therefor in the Capital Reserve maintained under Section 35.
Such alterations or additions shall be constructed in a good and workmanlike
manner substantially in accordance with all applicable statutes, ordinances and
building codes, governmental rules, regulations, and orders including without
limitation, the Americans with Disabilities Act.

         (b) Tenant shall indemnify and defend Landlord against and save
Landlord and the



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<PAGE>   3

Premises, and any portion thereof, harmless from all losses, costs, damages,
expenses, liabilities and obligations, including, without limitation, reasonable
attorneys' fees resulting from the assertion, filing, foreclosure or other legal
proceedings with respect to any mechanic's lien or other lien for labor,
services, materials, supplies, machinery fixtures or equipment furnished to the
Premises by or on behalf of Tenant.

         (c) Landlord will pay to Tenant a cash allowance in the amount of
$500,000.00, of which

                  (i) $200,000 is designated for construction of an anechoic
         chamber, and

                  (ii) $300,000 is designated for other changes or improvements
         made to the Premises by Tenant to prepare the Premises for Tenant's
         occupancy.

If all of the funds designated for either category are not used for such
category, such excess funds shall upon completion of such work be available to
cover costs in the other category, provided that the total cash allowance shall
in no event exceed the total cost to Tenant of all such work. Such cash
allowance shall be paid in installments as Tenant's work progresses. During
construction of Tenant's work, Tenant shall submit to Landlord not more than
once in any calendar month a request for payment and Tenant's sworn statement
(with a sworn construction statement and supporting lien waivers from Tenant's
contractors) in form acceptable to Landlord which identifies those of Tenant's
designers, contractors, subcontractors, workers and suppliers who are entitled
to payment for work performed and materials and equipment supplied by them on
the Premises to the date of Tenant's application. The amount of each installment
of the cash allowance paid by Landlord shall be limited to the value of the
labor, materials and equipment supplied by Tenant's agents to the date of such
sworn statement, less the aggregate amount of all prior payments of such cash
allowance. In no event, however, shall the total of all installments exceed the
cash allowance. If an event of default is not continuing under this Lease and to
the extent Tenant has timely submitted the proper documentation to support a
given installment, Landlord shall pay such installment upon the earlier of 30
days of submittal of such documentation or the date payment therefor is
disbursed by the holder of the mortgage on the Premises or its title insurer. If
Landlord reasonably determines that additional documentation is necessary,
Landlord shall promptly notify Tenant of the discrepancy or omission in such
documentation and may withhold payment of such portion as shall not be
adequately supported until the discrepancy or omission is corrected to the
reasonable satisfaction of Landlord.

         (d) In addition to the cash allowance payable under (c), Landlord on
the Commencement Date will deposit the sum of $100,000 in an interest-bearing
escrow account, which sum (including accrued interest) will be used to replace
the EMS system for the Premises at such time as Landlord and Tenant may
reasonably determine, but in any event when the existing system becomes
impractical to operate or repair.

         Section 3. Initial Term. The initial term of the Lease (the "Initial
Term") shall



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commence March 16, 2000 or such later date as Landlord acquires title to the
Property (the "Commencement Date") and shall extend for ten (10) years (plus any
partial month if the Commencement Date is other than the first day of a month;
the end of such period being the "Expiration Date"), unless earlier terminated
pursuant to the terms of this Lease.

         Section 4. Renewal of Initial Term. Provided Tenant is not in default
under the terms of this Lease beyond the period allowed for cure, Landlord
grants Tenant the option to renew the Initial Term for three (3) renewal terms
(each, a "Renewal Term") of five (5) years each, exercised by written notice to
Landlord given not less than eighteen (18) months prior to the Expiration Date.
The Base Rent for any such Renewal Term shall be as set forth in Section 5.
(Initial Term and any Renewal Term or Terms shall herein collectively be
referred to as the "Term".)

         Section 5. Base Rent and Operating Cost. (a) Base Rent. In
consideration of the leasing of the Premises, Tenant shall pay to Landlord for
the Premises as base monthly rent ("Base Rent") the following:

<TABLE>
<CAPTION>

         Period                                               Monthly Rent
         ------                                               ------------

<S>                                                          <C>
         Through the 60th full calendar month of the          $ 90,666.67
         Initial Term

         After the 60th full calendar month of the            $ 98,221.08
         Initial Term

         First Renewal Term                                   $106,404.92

         Second Renewal Term                                  $115,236.50

         Third Renewal Term                                   $124,801.08
</TABLE>

payable in advance on the first day of each month during the Term, with the
first installment of Base Rent due on the Commencement Date. If the Commencement
Date falls on other than the first day of a month, the Base Rent for the first
month of the Initial Term shall be pro-rated.

         (b) Operating Cost.

                  (i) Prior to the Commencement Date and prior to each calendar
         year thereafter Landlord shall compute and deliver to Tenant a good
         faith estimate of the Operating Cost for such calendar year and the
         monthly payments as would fully recover the estimated Operating Cost in
         such calendar year. If at any time in such calendar year there is a
         material change in Landlord's estimate of the Operating Cost, Landlord
         may compute and deliver to Tenant an updated statement. The estimated
         Operating Cost shall


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         be paid by Tenant to Landlord in advance and without further notice on
         or before the Commencement Date and on or before the first day of each
         calendar month thereafter during the Term in monthly installments, each
         based on Landlord's most current statement. If the Commencement Date
         falls on other than the first day of a month, the payment of the
         estimated Operating Cost for the first month of the Initial Term shall
         be pro-rated.

                  (ii) Within a reasonable period after the end of each calendar
         year, Landlord shall give written notice to Tenant of the actual
         Operating Cost for that calendar year. If the actual Operating Cost for
         any calendar year during the Term exceeds the estimated Operating Cost
         paid by Tenant for the calendar year, Tenant shall pay to Landlord a
         sum equal to the difference between the actual Operating Cost for the
         year and the estimated Operating Cost paid by Tenant for the year. If
         the estimated Operating Cost paid by Tenant for any calendar year
         during the Term exceeds the actual Operating Cost for the calendar
         year, Landlord shall pay to Tenant a sum equal to the difference
         between the estimated Operating Cost paid by Tenant for the year and
         the actual Operating Cost for the year. Tenant shall pay to Landlord
         any amount due under this Section within 30 days after delivery of the
         annual notice, but failure to so notify Tenant within a reasonable
         period after any calendar year for which any amount is due shall not
         release Tenant from paying nor diminish Tenant's obligation to pay such
         amount. At Tenant's option, Landlord shall pay Tenant any amount due
         under this Article within 30 days after delivery of the annual notice
         or credit such amount against the next payments coming due under this
         Lease. If this Lease does not begin or end at the first day of a
         calendar year, the amount payable for any such Operating Cost
         adjustment will be adjusted accordingly.

                  (iii) Tenant may at Tenant's cost examine Landlord's books
         relating to the Operating Cost if requested within 100 days of receipt
         of Landlord's notice of the actual Operating Cost for any year. Such
         examination shall be made during normal business hours upon reasonable
         prior written notice to Landlord. The actual Operating Cost and any
         Operating Cost adjustment set out in Landlord's notice of the actual
         Operating Cost for any year shall be considered as final and binding on
         Tenant except to the extent of any written exception delivered to
         Landlord within 180 days of Tenant's request to examine Landlord's
         books. The written exception shall specify the items of Operating Cost
         or calculation of the Operating Cost adjustment to which exception is
         made and the reason for such exception. No examination of Landlord's
         books or written exception made by Tenant shall extend the due date of
         any Operating Cost adjustment or any other amount due under this Lease.

                  (iv) If Tenant's examination reveals that the actual Operating
         Cost for any period has been overstated, Tenant shall provide Landlord
         with a copy of the results of its examination and Landlord shall
         promptly reimburse Tenant the difference between the amount paid by
         Tenant and the amount actually due. In addition, if such examination
         reveals that actual Operating Cost for any year has been overstated by
         4% or more,


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         Landlord shall promptly reimburse Tenant the reasonable cost of such
         examination. If Tenant's examination reveals that the actual Operating
         Cost for any year has been understated, Tenant shall promptly pay
         Landlord the difference between the amount due and the amount paid by
         Tenant.

                  (v) If Landlord disputes the results of Tenant's examination,
         Landlord and Tenant shall negotiate in good faith in an attempt to
         resolve the dispute. If Landlord and Tenant do not resolve the dispute
         within 60 days of Landlord's receipt of the results of Tenant's
         examination, the dispute will be resolved by a mutually acceptable
         nationally-recognized accounting firm. Landlord and Tenant shall bear
         equally the cost of the services of such accounting firm. If Landlord
         disputes the results of Tenant's examination, then notwithstanding
         Section 5(b)(iv) Landlord shall not be required to reimburse Tenant for
         any overstated amount or cost of examination until the dispute is
         resolved, and the amount of the overstatement or understatement as
         determined by such resolution shall govern the amount to be reimbursed
         by Landlord or paid by Tenant.

                  (vi) For purposes of this Section, the "Operating Cost" for
         any calendar year will be all reasonable costs of Landlord (net of
         rebates and discounts actually received) attributable to the ownership,
         maintenance, operation and repair of the Premises pursuant to this
         Lease attributable to such year as determined by standard accounting
         practices, including but not limited to (A) all taxes, installments of
         special assessments (and interest thereon), fees, levies, and other
         governmental charges, general and special, ordinary and extraordinary,
         payable during such calendar year which are assessed, levied, charged
         or imposed upon or on account of all of any part of the Premises, (B)
         the cost of maintenance, operation, repair and replacement of the
         parking areas, roads, sidewalks, landscaping, drainage and exterior
         lighting facilities on or about the Premises, (C) the cost of
         maintenance, operation, repair and replacement of equipment and
         facilities providing heating, cooling, ventilation, electrical and
         plumbing services in the Building, (D) the cost of maintenance,
         operation, repair and replacement of any elevator equipment in the
         Building, (E) the cost of maintenance, repair and replacement of
         exterior glass and exterior doors, including cleaning the exterior
         surface of exterior window glass, (F) the cost for any additional
         services provided by Landlord under the terms of this Lease, (G) the
         cost of such insurance as may be provided by Landlord under the terms
         of this Lease, and (H) the amount of any management fees and expenses
         payable by Landlord for management of the Premises not to exceed the
         competitive cost or rate for such service. Operating Cost shall include
         any employment costs (including pension and benefits) for persons
         employed by Landlord or its manager in performing any of the foregoing
         maintenance, operation, repair or replacement work (or pro rata portion
         thereof if the employee is assigned to other properties in addition to
         the Premises), the cost of transportation of such employees in
         connection with such work, the cost of all supplies and materials used
         in performing such work, the cost of any utilities or services provided
         to or in the Premises which are not paid by Tenant, the cost of
         maintenance and service agreements for equipment serving the Premises
         such as exterior window cleaning and elevator



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         maintenance, and the cost of any equipment leased or rented in
         connection with such work. Capital expenditures for any repairs,
         modifications, alterations, changes and replacements which cost less
         than $25,000 for the project (whether under one contract or several
         trade contracts) will be included in Operating Cost for the year in
         which such expenditures are incurred. Capital expenditures for any work
         which exceed such amount will be drawn from the Capital Reserve
         maintained under Section 35 to the extent of funds available, and any
         amounts in excess thereof will amortized over the useful life or
         pay-back period (whichever is shorter) at an interest rate equal to
         Landlord's cost of funds and the amortized amount for each year will be
         included in the Operating Cost for such year. Operating Cost excludes,
         however, (A) depreciation, (B) principal and interest on debt, (C)
         finders' fees and real estate brokers' commissions, (D) financing and
         refinancing costs, (E) cost of repairs due to casualty or condemnation
         which are reimbursed by third parties, (F) any cost due to Landlord's
         breach of this Lease, (G) any income, estate, inheritance, or other
         transfer tax and any excess profit, franchise, or similar taxes on
         Landlord's business, (H) any amount for any item or service paid to
         Landlord or an affiliate of Landlord to the extent it exceeds the
         competitive cost or rate for such item or service, (I) costs of
         operation of the business of the entity which constitutes Landlord or
         preservation of Landlord's interest in the Premises, such as by way of
         illustration and not limitation the cost of internal accounting and
         legal matters, the sale or mortgaging of the Premises, any legal
         disputes with any employee relating to his or her employment, or any
         legal disputes with any holder of a mortgage on the Premises relating
         to its mortgage, as distinguished from costs of management, operation,
         maintenance and repair of the Premises, (J) amounts otherwise included
         in Operating Cost to the extent they are reimbursed (after deduction of
         the out-of-pocket cost of collection of such reimbursement) by
         insurance or otherwise, or (K) interest and penalties resulting from
         failure to pay any item included in Operating Cost when due and
         payable.

         (c) If, at any time during the term of this Lease, any method of
taxation shall be such that there shall be levied, assessed or imposed on
Landlord, or on the Base Rent or other amounts payable under this Lease, or on
the Premises, or any portion thereof, a capital levy, gross receipts or sales
tax or other tax on the rents received therefrom, or a franchise tax, or an
assessment, levy or charge measured by or based in whole or in part upon such
tenants, Tenant covenants to pay and discharge the same, it being the intention
of the parties hereto that the rent to be paid hereunder shall be paid to
Landlord absolutely net without deduction or charge of any nature whatsoever
foreseeable or unforeseeable, ordinary or extraordinary, or of any nature, kind
or description, except as in this Lease otherwise expressly provided. Nothing in
this Lease contained shall require Tenant to pay any Municipal, State or Federal
capital levy, estate, succession, income, inheritance or transfer taxes of
Landlord, or corporation franchise taxes imposed upon any corporate owner or
management company of the fee of the Premises.

         (d) If this Lease is terminated prior to the Expiration Date for
reasons other than Tenant's default and if the effective date of termination is
other than the last day of a month, Base Rent and other charges due hereunder
shall be pro-rated to the date of termination based on a


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<PAGE>   8

thirty-day month, and Landlord shall refund to Tenant any Base Rent or other
charges paid but unearned as of the termination date.

         (e) Base Rent and any other charges which are required herein to be
paid to Landlord directly, shall be paid to Landlord at the address set forth in
Section 30 or at such other address as Landlord may from time to time designate.

         (f) In the event of any default by Tenant in payment of any amounts
payable under this Lease, such amounts shall be deemed rent for the sole purpose
of affording Landlord all rights against Tenant under law for default in such
payment as in the case of arrears of rent.

         Section 6. Use. The Premises shall be used only for lawful purposes.
Tenant shall not use the Premises, or allow its use in any manner which
materially violates any rule, order, statute, ordinance, requirement dealing
with the occupancy of the Premises or its use as approved by applicable
governmental authorities, or restrictive covenant applicable thereto, or which
would make void or voidable any insurance with respect to the Premises or which
would cause structural injury to the improvements.

         Section 7. Alterations. (a) During the Initial Term and any Renewal
Term, Tenant shall not make structural or exterior alterations to the Premises
without Landlord's prior written consent said consent not to be unreasonably
withheld, delayed or conditioned, but Tenant shall have the right, without
Landlord's consent to make nonstructural alterations to the interior of the
Premises ("Alterations") provided same do not materially adversely affect the
value of the Premises in Landlord's reasonable opinion. Landlord hereby consents
to the Alterations shown on plans for the anechoic chamber prepared by
Electro-Voice, Inc., dated January 14, 2000, and the internal remodeling plans
dated March 1, 2000, initialed by the parties. In making any Alterations, Tenant
shall do the following:

                  (i) Notify Landlord at least fifteen days prior to
         commencement of the Alterations;

                  (ii) Comply with all applicable local, state or federal laws,
         regulations, codes or ordinances affecting such Alterations and the
         Premises including without limitation the Americans with Disability
         Act, as amended from time to time;

                  (iii) Not suffer or permit any mechanic's lien or other lien
         to be filed against the Premises, or any portion thereof, by reason of
         work, labor, skill, services, equipment or materials supplied or
         claimed to have been supplied to the Premises at the request of Tenant,
         or anyone holding the Premises, or any portion thereof, through or
         under Tenant. If any such mechanic's lien or other lien shall at any
         time be filed against the Premises, or any portion thereof, Tenant
         shall cause the same to be discharged of record within thirty (30) days
         after the date of filing the same. If Tenant shall fail to discharge
         such mechanic's lien or liens or other lien within such period, then,
         in addition to any other



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         right or remedy of Landlord, Landlord may, but shall not be obligated
         to, discharge the same by paying to the claimant the amount claimed to
         be due or by procuring the discharge of such lien as to the Premises by
         deposit in the court having jurisdiction of such lien, the foreclosure
         thereof or other proceedings with respect thereto, of a cash sum
         sufficient to secure the discharge of such lien, or in such other
         manner as is now or may in the future be provided by present or future
         law for the discharge of such lien as a lien against the Premises. Any
         amount paid by Landlord, or the value of any deposit so made by
         Landlord, together with all costs, fees and expenses in connection
         therewith (including reasonable attorney's fees of Landlord), together
         with interest thereon at the Maximum Rate of Interest set forth in
         Section 19 hereof, shall be repaid by Tenant to Landlord on demand by
         Landlord and if unpaid may be treated as rent as provided in Section
         5(f). Tenant shall indemnify and defend Landlord against and save
         Landlord and the Premises, and any portion thereof, harmless from all
         losses, costs, damages, expenses, liabilities, suits, penalties,
         claims, demands and obligations, including, without limitation,
         reasonable attorney's fees resulting from the assertion, filing,
         foreclosure or other legal proceedings with respect to any such
         mechanic's lien or other lien.

All materialmen, contractors, artisans, mechanics, laborers and any other person
now or hereafter furnishing any labor, services, materials, supplies or
equipment to Tenant with respect to the Premises, or any portion thereof, are
hereby charged with notice that they must look exclusively to Tenant to obtain
payment for the same. Notice is hereby given that Landlord shall not be liable
for any labor, services, materials, supplies, skill, machinery, fixtures or
equipment furnished or to be furnished to Tenant upon credit, and that no
mechanic's lien or other lien for any such labor, services, materials, supplies,
machinery, fixtures or equipment shall attach to or affect the estate or
interest of Landlord in and to the Premises, or any portion thereof. In the
event of the filing of a mechanic's lien, Tenant shall have the right to post
security with Landlord as reasonably determined by Landlord, so that Tenant may
dispute said lien; provided, however, in no event shall a foreclosure action be
commenced on said lien without Tenant either (i) paying off said lien or (ii)
complying with the statutory procedure such that the lien is removed from the
Premises.

         (b) Tenant's trade fixtures, furnishings and equipment in the Premises,
shall remain Tenant's property for all purposes, except as otherwise agreed in
advance in writing by Tenant and Landlord. On or before the Expiration Date (or
as appropriate the date the last Renewal Term expires), Tenant shall remove its
trade fixtures, furniture and equipment from the Premises and surrender the
Premises to Landlord in good order and condition, ordinary wear and tear and
damage from the elements or other insured casualty excepted only.

         (c) Tenant has notified Landlord that it intends to construct an
addition to the existing improvements on the Premises for purposes of adding a
facility known as an "Anechoic Chamber" which will affect the structure and
exterior of the improvements. Landlord, subject to review and approval of the
Plans and Specifications for said "Anechoic Chamber" (which approval will not be
unreasonably withheld or delayed) agrees that Tenant may make such



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<PAGE>   10
addition to the Premises, provided the quality of the construction of
the improvements is similar to the quality of the construction of the Building
and architecturally compatible.

         Section 8. Landlord Services. Subject to participation by Tenant by
payment of Operating Cost, Landlord shall provide as promptly and as
expeditiously as reasonably possible during Tenant's occupancy of the Premises
the following services in a good and skillful manner in accordance with
applicable law and the standards for similar buildings in the community:

                  (i) all necessary maintenance, repair and replacement of the
         foundations, exterior walls, floor slabs, roof and other structural
         elements of the Building,

                  (ii) maintenance, repair and replacement of all parking areas,
         roads, sidewalks, landscaping, drainage, and exterior lighting
         facilities on the Premises (including removal of snow from parking,
         roadway and walking surfaces, and mowing and upkeep of the lawn and
         other landscaped areas),

                  (iii) maintenance, operation, repair and replacement of all
         equipment and facilities providing heating, cooling, ventilation,
         electrical and plumbing services in the Building,

                  (iv) maintenance, operation, repair and replacement of any
         elevator equipment within the Building,

                  (v) maintenance, repair and replacement of the exterior glass
         and exterior doors of the Building, including cleaning of exterior
         surface of exterior window glass,

                  (vi) repairs, modifications, alterations, changes and
         replacements required by any governmental authority or insurance
         carrier which do not result from Tenant's specific use or intended use
         of the Premises, and

                  (vii) such other additional services as Landlord and Tenant
         may mutually agree in writing.

         (b) Prior to each calendar year, Landlord will submit to Tenant for
Tenant's approval Landlord's budget for the operation of the Premises for such
year. It is the intent of Landlord and Tenant that Landlord's cost of operating
the Premises will be competitive with buildings of similar age, condition and
use in the community. Tenant's approval will not be unreasonably withheld,
delayed or conditioned so long as such budget will reasonably maintain the
Building in a commercially reasonable condition for similar buildings in the
community.

         (c) Landlord shall not be liable in damages or otherwise if any service
provided by Landlord or any other supplier is interrupted or terminated because
of necessary repairs, installations or improvements or any cause beyond the
control of Landlord, nor shall any such event be


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<PAGE>   11

construed as an eviction of Tenant, work an abatement of rent, or relieve Tenant
from fulfilling any obligation of the Lease. However, to the extent the Premises
are rendered unusable by Tenant in its business by reason of any such event
within the control of Landlord for more than two consecutive business days after
notice from Tenant, the Base Rent shall thereafter be equitably reduced until
the Premises are again rendered usable. If any of the equipment or machinery
used by Landlord in supplying the services breaks down or for any cause ceases
to function properly, Landlord shall use reasonable diligence to make the
necessary repair or replacement.

         (d) Landlord shall be entitled to cooperate voluntarily in any
reasonable manner with the efforts of any governmental agency or utility
supplier in reducing energy or other resource consumption or in coordinating
other services.

         Section 9. Maintenance of Premises. (a) Except for the services
provided by Landlord under Section 8,Tenant at its sole cost and expense,
throughout the term of this Lease, shall take good care of the interior portions
of the Building (including any additions or outbuildings hereafter erected or
installed on the Property) and any leasehold improvements therein, and shall
keep the same in good order and condition, and shall make and perform all
repairs and maintenance thereof and all necessary repairs thereto. When used in
this Section, "repairs" shall include all necessary replacements, renewals,
alterations, additions and betterment. All repairs made by Tenant shall be at
least equal in quality to the original work and shall be made by Tenant in
accordance with all laws, ordinances and regulations whether heretofore or
hereafter enacted. The necessity for or adequacy of maintenance and repairs
shall be measured by the standards which are appropriate for improvements of
similar construction and class, provided that Tenant shall in any event make all
repairs necessary to avoid any structural damage or other damage or injury to
the Premises.

         (b) Tenant shall accomplish all maintenance for which it is responsible
as soon as practicable; provided, however, that Tenant shall have any essential
maintenance performed immediately if a hazardous or emergency situation exists.

         (c) Tenant, at its sole cost and expense, shall provide janitorial
services, cleaning of the interior surface of exterior window glass and all
interior window glass, refuse collection and removal, and utilities in
connection with its use of the Premises. Tenant shall be billed directly by the
applicable utility and service companies and pay for all utilities and other
services furnished to the Premises including the costs of utility deposits.
Except for the services provided by Landlord under Section 8, Landlord shall not
be required to furnish any services or facilities or to make any repairs or
alterations in, about or to the Premises or any improvements hereafter erected
thereon.

         (d) Tenant shall not do or suffer any waste or damage, disfigurement or
injury to the Premises, or any improvements hereafter erected thereon, or to the
fixtures or equipment therein, or permit or suffer any overloading of the floors
or other use of the Premises that would place an


                                      -10-


<PAGE>   12


undue stress on the same or any portion thereof beyond that for which the same
was designed.

         Section 10. Signs. Tenant, at its sole cost and expense, shall have the
right to place exterior signs on the Premises subject to any and all applicable
laws, codes or ordinances, or restrictive covenants. Tenant shall be solely
responsible for maintaining in good condition its signs and shall remove them
and repair any damage caused by such removal on or before the Expiration Date
(or the expiration date of the last Renewal Term, as applicable). Tenant during
the Term of this Lease and Tenant's occupancy of the Premises shall have the
right to name the Building, subject to all applicable laws, ordinances,
statutes, regulations and restrictive covenants.

         Section 11. Landlord's Right of Access. (a) Landlord and its authorized
representatives shall have the right to enter the Premises following notice to
Tenant during Tenant's regular business hours and at all other reasonable times
for the purpose of (i) determining whether the Premises are in good condition
and whether Tenant is complying with its obligations under this Lease, (ii)
performing any maintenance or repairs for which Landlord is responsible under
this Lease, or (iii) posting "for rent" signs during the last twelve months of
(y) the Initial Term if the Renewal Term is not exercised or (z) the last
Renewal Term. Landlord agrees that its access to the Premises shall be subject
to reasonable rules of Tenant regarding security of the Premises and Tenant's
business, including providing Tenant with adequate notice of desire for access,
agreeing to require its employees and other visitors to the Premises to execute
agreements upon entry to the Premises, agreeing to reasonable requirements of
confidentiality and nondisclosure of matters viewed within the Premises (to the
extent all visitors with similar access to the Premises are required to execute
such agreements) and allowing all access to be pursuant to Tenant escorted
visits, if required by Tenant.

         (b) Landlord shall conduct its activities in the Premises in a manner
that will cause the least possible interference with Tenant's business
operations, and Base Rent shall abate for any period in excess of 48 hours
during which Tenant is deprived of beneficial occupancy of the Premises as a
result of Landlord's presence in the Premises except when Landlord's presence is
a result of the act or omission of Tenant, its agents, employees or contractors.

         Section 12. Tenant's Indemnity. Tenant shall indemnify and hold
Landlord harmless from and against all claims, actions, demands, judgments,
damages, liabilities and expenses, including reasonable attorneys' fees, for
death of or bodily injury to any person or for loss of, damage to or destruction
of any property arising from Tenant's use of the Premises, except for any such
claims, actions, demands, judgments, damages, liabilities or expenses arising
from the acts or omissions of Landlord, its agents, employees or contractors.

         Section 13. Insurance. (a) During the term of this Lease, Landlord
shall obtain and continuously maintain in full force and effect the following
insurance coverage:

                  (i) Commercial public liability insurance against any loss,
         liability or damage


                                      -11-


<PAGE>   13

         on, about or relating to the Premises, or any portion thereof, with
         limits of not less than Five Million Dollars ($5,000,000.00) single
         limit coverage on an occurrence basis (which may be provided by
         umbrella).

                  (ii)  Boiler and pressure vessel (including, but not limited
         to, pressure pipes, steam pipes and condensation return pipes)
         insurance, provided the Premises contain a boiler or other pressure
         vessel or pressure pipes, in an amount reasonably satisfactory to
         Landlord.

                  (iii) Property insurance in an amount equal to the greater of
         (y) Landlord's mortgage or (z) an amount equal to the full replacement
         cost of Building and other improvements constructed, installed or
         located on the Premises, for the benefit of Landlord, its managing
         agent and Tenant, against (i) loss or damage by fire; (ii) loss or
         damage from such other risks or hazards now or hereafter embraced by an
         "Extended Coverage Endorsement", including, but not limited to,
         windstorm, hail, explosion, vandalism, riot and civil commotion,
         ordinance, damage from vehicles, smoke damage, water damage and debris
         removal; (iii) loss for flood if the Premises is in a designated flood
         or flood insurance area; and (iv) loss from so-called explosion,
         collapse and underground hazards; (v) loss of rents coverage for twelve
         (12) months and (vi) loss or damage from such other risks or hazards of
         a similar or dissimilar nature which are now or may hereafter be
         customarily insured against with respect to improvements similar in
         construction, design, general location, use and occupancy to the
         Building and other improvements on the Premises. Landlord or Landlord's
         Mortgagee shall be named loss payee and said Mortgagee shall be
         provided with a standard Mortgagee's clause as to said coverage. If a
         sprinkler system shall be located in the Building or other
         improvements, sprinkler leakage insurance in form and amount reasonably
         satisfactory to Landlord may be procured.

                  (iv)  Such other insurance as may be required under the
         Landlord's Mortgage or otherwise approved by Tenant.

         (b) During the term of this Lease Tenant, at its sole cost and expense,
but for the mutual benefit of Landlord, its Mortgagee and Tenant, shall obtain
and continuously maintain in full force and effect:

                  (i)   Commercial public liability insurance with contractual
         liability and personal injury coverage insuring Tenant, Landlord,
         Landlord's managing agent, and any other parties reasonably requested
         by Landlord from all claims, demands or actions for injuries to or
         death of any person or damage to or loss of any property in or about
         the Premises with coverage of not less than $5,000,000, combined single
         limit (which may be provided by umbrella or excess liability insurance
         for amounts in excess of $1,000,000).

                  (ii)  Workers' compensation insurance within statutory limits
         covering


                                      -12-


<PAGE>   14


         Tenant's employees in the Premises, including employers' liability up
         to a limit if at least $500,000.

The insurance set forth in this Section shall be maintained by Tenant at not
less than the limits set forth herein until reasonably required to be changed
from time to time by Landlord, in writing, whereupon Tenant covenants to obtain
and maintain thereafter such protection in the amount or amounts so required by
Landlord. Tenant agrees that the policies required to be carried by Tenant under
the Lease shall be primary over the Landlord's insurance.

         (b) Each policy required under this Section 13 shall have attached
thereto (i) an unqualified endorsement that such policy shall not be canceled or
materially changed without at least thirty (30) days prior written notice to
Landlord and Tenant, and (ii) an unqualified endorsement to the effect that the
insurance shall not be invalidated by any act or neglect of any person. All
policies of insurance shall be written in companies reasonably satisfactory to
Landlord and Tenant and licensed in the state in which the Premises are located,
and shall be written in such form and shall be distributed in such companies as
shall be reasonably satisfactory to Landlord and Tenant. Such policies (or
acceptable certificates of insurance) shall be delivered to Landlord and Tenant
upon commencement of the term; and prior to expiration of such policy, a new
policy (or certificates of insurance acceptable to Landlord), shall be delivered
to Landlord and Tenant.

         (c) Tenant shall elect whether or not to maintain insurance coverage
upon Tenant's business and upon all personal property of Tenant or the personal
property of others kept, stored or maintained on the Premises against loss or
damage by fire, windstorm or other casualties or causes for such amount as
Tenant may desire, and Tenant agrees that any such policies shall contain a
waiver of subrogation clause as to Landlord. Tenant hereby waives, releases,
discharges and agrees to indemnify and defend Landlord, its agents and employees
from and against all claims whatsoever arising out of loss, claim, expense or
damage to or destruction of any such personal property or to Tenant's business
notwithstanding that such loss, claim, expense or damage may have been caused by
Landlord, its agents or employees, and Tenant agrees to look to the insurance
coverage only in the event of such loss.

         (d) Upon expiration of the term of this Lease, the unearned premiums
upon any of Tenant's insurance policies or certificates thereof lodged with
Landlord by Tenant shall be payable to Tenant, provided that Tenant shall not
then be in default in keeping, observing or performing the terms and conditions
of this Lease.

         Section 14. Waiver of Subrogation. Landlord and Tenant waive and
release each other of and from any and all rights of recovery, claim, action or
cause of action, against each other, their agents, officers and employees, for
any loss or damage that may occur to the Premises, improvements to the Building
or personal property within the Building, by reason of fire or the elements
regardless of cause or origin, including negligence of Landlord or Tenant or
their agents, officers and employees. Because this paragraph will preclude the
assignment of any



                                      -13-


<PAGE>   15


claim mentioned in it by way of subrogation or otherwise to an insurance company
or any other person, the parties agree immediately to give to each insurance
company which has issued to it policies of insurance covering risks of direct
physical loss, written notice of the terms of the mutual waivers contained in
this Section 14, and to have the insurance policies properly endorsed, if
necessary, to prevent the invalidation of the insurance coverages by reason of
the mutual waivers contained in this paragraph, and to secure from their
respective insurers waivers of the insurers' subrogation rights. Landlord and
Tenant mutually waive their respective rights of recoveries against each other
for any loss insured by fire, extended coverage and other property insurance
policies existing for the benefit of either of them.

         Section 15. Casualty. In case of damage to or destruction of the
Building or other improvements after the Commencement Date of this Lease, by
fire or other insurable casualty, Landlord shall promptly restore, repair,
replace and rebuild the same as nearly as possible to the condition that the
same were in immediately prior to such damage or destruction. Tenant shall
forthwith give Landlord written notice of such damage or destruction upon the
occurrence thereof and specify in such notice, in reasonable detail, the extent
thereof. Subject to receipt by Landlord of insurance proceeds covering all Base
Rent and other charges due from Tenant, the Base Rent and Operating Cost shall
abate ratably for the period of time that the Premises is untenantable, in whole
or in part (based upon the portion of the Premises that is untenantable). Such
restoration, repairs, replacements, rebuilding, changes and alterations,
including the cost of temporary repairs for the protection of the Premises, or
any portion thereof, ending with the completion thereof are sometimes
hereinafter referred to as the "Restoration". In the event the insurance
proceeds are inadequate to restore the Building and other improvements, Landlord
may terminate this Lease by written notice to Tenant given within 90 days
following the damage or destruction unless Tenant agrees in writing within 30
days thereafter to pay for any shortfall and provides evidence reasonably
acceptable to Landlord of the availability of such funds. Landlord shall not be
responsible for damages to Tenant's personal property or trade fixtures, and
Tenant shall bear the cost to repair or replace those items.

         If fire or other casualty shall render the whole or any material
portion of the Premises untenantable, and the Premises can reasonably be
expected to be made tenantable within two hundred seventy (270) days from the
date of such event, Landlord shall repair and restore the Premises to as near
their condition prior to the fire or other casualty as is reasonably possible
within such two hundred seventy (270) day period (subject to delays for causes
beyond Landlord's reasonable control) and notify Tenant that it will be doing
so, such notice to be mailed within thirty (30) days from the date of such
damage or destruction, and this Lease shall remain in full force and effect, but
the Base Rent and Operating Cost for the period during which the Premises are
untenantable shall be abated pro rata (based upon the portion of the Premises
which is untenantable), provided Landlord receives from Tenant proceeds from the
loss of rents insurance set forth in Section 13(a)(iii)(v) sufficient to cover
all Base Rent and other charges due hereunder.

         If the Premises cannot reasonably be expected to be made tenantable
within two hundred




                                      -14-

<PAGE>   16


seventy (270) days from the date of such event, either Landlord or Tenant, by
notice in writing to the other, mailed within thirty (30) days from the date of
such damage or destruction, may terminate this Lease effective upon a date
within thirty (30) days from the date of such notice.

         Section 16. Condemnation. (a) If, during the term of this Lease, the
entire Premises shall be taken as the result of the exercise of the power of
eminent domain (hereinafter referred to as the "Proceedings"), this Lease and
all right, title and interest of Tenant hereunder shall cease and come to an end
on the date of vesting of possession in the condemning authority Landlord shall
be entitled to and shall receive the total award made in such Proceedings,
Tenant hereby assigning any interest in such award, damages, consequential
damages and compensation to Landlord and Tenant hereby waiving any right Tenant
has now or may have under present or future law to receive any separate award of
damages for its interest in the Premises, or any portion thereof, or its
interest in this Lease.

         (b) If, during the Initial Term of this Lease, or any extension or
renewal thereof, less than the entire Premises, but more than ten percent (10%)
of the floor area of the Building, or more than twenty percent (20%) of the
parking area of the Premises, shall be taken in any such Proceedings, and
Landlord is unable to replace such parking area with additional parking
contiguous to the Premises, or restore said floor area whatever the use may be,
this Lease shall, upon delivery of possession to the condemning authority
pursuant to the Proceedings, terminate as to the portion of the Premises so
taken, and Tenant may, at its option, terminate this Lease as to the remainder
of the Premises. Tenant shall not have the right to terminate this Lease
pursuant to the preceding sentence unless the business of Tenant conducted in
the portion of the Premises taken cannot reasonably be carried on with
substantially the same utility and efficiency in the remainder of the Premises.
Such termination as to the remainder of the Premises shall be effected by notice
in writing given not more than sixty (60) days after the date of delivery of
possession to the condemning authority pursuant to the Proceedings, and shall
specify a date not more than sixty (60) days after the giving of such notice as
the date for such termination. Upon the date specified in such notice, the term
of this Lease, and all right, title and interest of Tenant hereunder, shall
cease and come to an end. The Tenant may not terminate this Lease, as in this
Section provided, at any time that Tenant is in default in the performance of
any of the terms, covenants or conditions of this Lease on its part to be
performed, and any termination upon Tenant's part shall become effective only
upon compliance by Tenant with all such terms, covenants and conditions to the
date of such termination. In the event that Tenant elects not to terminate this
Lease as to the remainder of the Premises, the rights and obligations of
Landlord and Tenant shall be governed by the provisions of Section 16 (c)
hereof.
         (c) If ten percent (10%), or less, of the floor area of the Building,
or twenty percent (20%), or less, of the parking area of the Premises, shall be
taken in such Proceedings, or if more than ten percent (10%) of the floor area
of the Building or more than twenty percent (20%) of the parking area of the
Premises is taken (but less than the entire Premises) and this Lease is not
terminated as in Section 16 (b) hereof provided, this Lease shall, upon vesting
or possession in the condemning authority pursuant to the Proceedings, terminate
as to the parts so taken.



                                      -15-


<PAGE>   17


Landlord agrees to promptly restore that portion of the Building and other
improvements on the Premises not so taken to a complete architectural and
mechanical unit for the use and occupancy of Tenant as in this Lease provided
and Tenant will be responsible at Tenant's cost for restoration of Tenant's
trade fixtures and equipment therein.

         (d) Notwithstanding any of the foregoing, Tenant shall have, the
limited right to prove in the Proceedings and to receive any separate award
which may be made for damages to or condemnation of Tenant's trade fixtures and
equipment, the unamortized cost of any improvements made to the Premises by
Tenant at Tenant's cost (it being understood however, that Landlord will be
entitled to the full award for any improvements covered by the cash allowance
provided under Section 2(c) or by the Capital Reserve provided under Section 35
or otherwise included in the Operating Cost under Section 5(b)), and for moving
expenses paid for by Tenant, so long as such claims by Tenant do not reduce
Landlord's award below what it would be absent such claim, and provided further
that any first mortgage against the Property shall be paid in full prior to any
collection of damages by Tenant. (Said mortgage shall in no event be for an
amount greater than 80% of the appraised value at the time of placing said
mortgage against the Property unless approved by Tenant).

         (e) In the event of any termination of this Lease, or any part thereof,
as a result of any such Proceedings, Tenant shall pay to Landlord all Base Rent
and other charges payable hereunder with respect to that portion of the Premises
so taken in such Proceedings with respect to which this Lease shall have
terminated justly apportioned to the date of such termination. From and after
the date of delivery of possession pursuant to such Proceedings, Tenant shall
continue to pay the Base Rent and other charges payable hereunder, as in this
Lease provided, to be paid by Tenant, subject to an abatement of a just and
proportionate part of the Base Rent and any amounts payable into the Capital
Reserve under Section 35 according to the extent and nature of such taking as
provided for in Section 16 (c) and (f) hereof in respect to the Premises
remaining under this Lease after such taking.

         (f) In the event of a partial taking of the Premises under Section 16
(c) hereof, or a partial taking of the Premises under Section 16 (b) hereof,
followed by Tenant's election not to terminate this Lease, the fixed Base Rent
payable hereunder during the period from and after the date of delivery of
possession pursuant to such Proceedings to the termination of this Lease shall
be reduced to an amount equal to the product of the Base Rent provided for
herein multiplied by the number of usable square feet of space in the Premises
after such taking and after the same has been restored to a complete
architectural unit, and the amounts payable into the Capital Reserve will be the
amounts set out in Section 35 multiplied by a fraction the numerator of which is
the usable square feet of the building remaining under this Lease and the
denominator of which is 114,100 square feet.

         Section 17. Default. The occurrence of any one or more of the following
events (the "Events of Default") shall constitute a default and breach of this
Lease by Tenant:


                                      -16-




<PAGE>   18

                  (i) The abandonment of the Premises by Tenant (vacation not
         being deemed to be abandonment unless there is failure to perform the
         obligations of Tenant required by this Lease).

                  (ii) Failure by Tenant to make any payment of Base Rent, or
         any other charges or payment required to be made by Tenant under this
         Lease when due where such failure continues for a period of fifteen
         (15) days after written notice by Landlord to Tenant;

                  (iii) The failure by Tenant to observe or perform any of the
         covenants, conditions or provisions of this Lease to be observed or
         performed by Tenant, other than as described in subparagraph (ii)
         above, where such failure continues for a period of thirty (30) days
         after written notice by Landlord to Tenant; provided, however, that if
         the nature of Tenant's obligation which it has failed to perform is
         such that more than thirty (30) days are reasonably required for its
         cure, then it shall not be deemed an Event of Default if Tenant
         commences such cure within the 30 day period and diligently prosecutors
         the cure to completion;

                  (iv) The making by Tenant of an assignment for the benefit of
         its creditors, or the filing by or against Tenant of a petition to have
         Tenant adjudged a bankrupt, or a petition or reorganization or
         arrangement under any law relating to bankruptcy (unless, in the case
         of a petition filed against Tenant, the same is dismissed within 90
         days), or the appointment of a trustee or a receiver to take possession
         of substantially all of Tenant's assets located in the Premises or of
         Tenant's interest in this Lease, where possession is not restored to
         Tenant with in 90 days, or the attachment, execution or other judicial
         seizure of substantially all of Tenant's assets located in the Premises
         or of Tenant's interest in this Lease, or such seizure is not
         discharged within the 90 days.

                  (v) If default shall be made by Tenant, by operation of law or
         otherwise, under the provisions of Section 27 hereof relating to
         assignment, sublease, mortgage or other transfer of Tenant's interest
         in this Lease or in the Premises or in the income arising therefrom.

         Section 18. Landlord's Remedies. If an Event of Default occurs, at any
time after the occurrence, with or without additional notice or demand and
without limiting Landlord's rights or remedies as a result of the Event of
Default, Landlord may do the following:

                  (i) Upon any termination of this Lease, Tenant shall quit and
         peaceably surrender the Premises, and all portions thereof, to
         Landlord, and Landlord, upon or at any time after any such expiration
         or termination, may, without further notice, enter upon and reenter the
         Premises, and all portions thereof, and possess and repossess itself
         thereof, by summary proceeding, ejectment or otherwise, and may
         dispossess Tenant and remove Tenant and all other persons and property
         from the Premises, and all portions


                                      -17-


<PAGE>   19


         thereof, and may have, hold and enjoy the Premises and the right to
         receive all rental and other income of and from the same.

                  (ii) At any time, or from time to time after any such
         termination, Landlord may relet the Premises, or any portion thereof,
         in the name of Landlord or otherwise, for such term or terms (which may
         be greater or less than the period which would otherwise have
         constituted the balance of the term of this Lease) and on such
         conditions (which may include market concessions or free rent) as
         Landlord, in its sole discretion, may determine and may collect and
         receive the rents therefor. Landlord shall in no way be responsible or
         liable for any failure to relet the Premises, or any part thereof, or
         for any failure to collect any rent due upon any such reletting.

                  (iii) No such termination of this Lease or retaking of
         possession shall relieve Tenant of its liabilities and obligations
         under this Lease (as if this Lease had not been so terminated), and
         such liabilities and obligations shall survive any such termination. In
         the event of any such termination, whether or not the Premises, or any
         portion thereof, shall have been relet, Tenant shall pay to Landlord a
         sum equal to the Base Rent and any other charges required to be paid by
         Tenant, up to the time of such termination of this Lease or retaking of
         possession by Landlord, less net proceeds as described in (b) below, if
         any, and thereafter Tenant, until the end of what would have been the
         term of this Lease in the absence of such termination, shall be liable
         to Landlord for, and shall pay to Landlord, as and for agreed current
         damages for Tenant's default:

                           (a) The equivalent of the amount of the Base Rent and
                  other charges which would be payable under this Lease by
                  Tenant if this Lease were still in effect, less

                           (b) The net proceeds of any reletting effected
                  pursuant to the provisions of Section (ii) hereof after
                  deducting all of Landlord's expenses in connection with such
                  reletting, including, without limitation, all repossession
                  costs, reasonable and customary brokerage commissions, legal
                  expenses, reasonable attorney's fees, reasonable alteration
                  costs, and reasonable expenses of preparation of the Premises,
                  or any portion thereof, for such reletting.

         Tenant shall pay such current damages in the amount determined in
         accordance with the terms of Section (iii), as set forth in a written
         statement thereof from Landlord to Tenant (hereinafter called the
         "Deficiency"), to Landlord in monthly installments on the days on which
         the Base Rent would have been payable under this Lease if this Lease
         were still in effect, and Landlord shall be entitled to recover from
         Tenant each monthly installment of the Deficiency as the same shall
         arise.

                  (iv) At any time after any such termination or retaining of
         possession, in addition to any monthly Deficiencies as set forth in
         Section (iii) accruing through the date


                                      -18-



<PAGE>   20

         of such demand, Landlord shall be entitled to recover from Tenant, and
         Tenant shall pay to Landlord, on demand, as and for damages for
         Tenant's default, an amount equal to the excess, if any, of the then
         present worth of the aggregate of the Base Rent and any other charges
         to be paid by Tenant hereunder from and after the date of such demand
         for the unexpired portion of the term of the Lease (assuming this Lease
         had not been so terminated), over the then present worth of the then
         aggregate fair and reasonable fair market rent of the Premises for the
         same period. In the computation of present worth, a discount at the
         rate of the prime rate of interest plus 2% (the prime rate shall be the
         costs charged by Norwest Bank Minnesota N.A. to its most credit-worthy
         customers, or the successors in interest to Norwest Bank Minnesota
         N.A.) per annum shall be employed. If the Premises, or any portion
         thereof, be relet by Landlord for the unexpired term of this Lease, or
         any part thereof, before presentation of proof of such damages to any
         court, commission or tribunal, the amount of rent reserved upon such
         reletting shall, prima facie, be the fair and reasonable fair market
         rent for the part or the whole of the Premises so relet during the term
         of the reletting. Nothing herein contained or contained in Section
         (iii) shall limit or prejudice the right of Landlord to prove for and
         obtain, as damages by reason of such expiration or termination, an
         amount equal to the maximum allowed by any statute of rule of law in
         effect at the time when, and governing the proceedings in which, such
         damages are to be proved, whether or not such amount be greater, equal
         to or less than the amount of the difference referred to above.

                  (v) No failure by Landlord or by Tenant to insist upon the
         performance of any of the terms of this Lease or to exercise any right
         or remedy consequent upon a breach thereof, and no acceptance by
         Landlord of full or partial rent from Tenant or any third party during
         the continuance of any such breach, shall constitute a waiver of any
         such breach or of any of the terms of this Lease. Landlord agrees to
         mitigate damages arising out of Tenant's default to the extent
         commercially reasonable. No waiver of any breach shall affect or alter
         this Lease, but each of the terms of this Lease shall continue in full
         force and effect with respect to any other then existing or subsequent
         breach of this Lease. No waiver of any default of Tenant herein shall
         be implied from any omission by Landlord to take any action on account
         of such default, if such default persists or is repeated and no express
         waiver shall affect any default other than the default specified in the
         express waiver and that only for the time and to the extent therein
         stated. One or more waivers by Landlord shall not be construed as a
         waiver of a subsequent breach of the same covenant, term or condition.

                  (vi) In the event of any breach or threatened breach by Tenant
         of any of the terms contained in this Lease, Landlord shall be entitled
         to seek to enjoin such breach or threatened breach and shall have the
         right to invoke any right or remedy allowed at law or in equity or by
         statute or otherwise as though entry, reentry, summary proceedings and
         other remedies were not provided for in this Lease. Each remedy or
         right of Landlord provided for in this Lease, or now or hereafter
         existing at law or in equity or by statute or otherwise, and the
         exercise or the beginning of the exercise by Landlord of any one or


                                      -19-




<PAGE>   21

         more of such rights or remedies shall not preclude the simultaneous or
         later exercise by Landlord of any or all other rights or remedies.

         Section 19. Interest on Late Payments. Unpaid installments of Base
Rent, or other sums due to Landlord shall bear interest from the date due at the
rate of 5% over the prime rate of interest charged by Norwest Bank Minnesota,
N.A. or its successor, from time to time (charged to its most credit-worthy
customer) or at the highest lawful interest rate in the jurisdiction in which
the Premises are located, whichever is less.

         Section 20. Quiet Enjoyment. Provided it has paid all Base Rent and
other charges due hereunder and is not otherwise in default beyond the period
allowed for cure herein, Tenant shall at all times during the Initial Term and
any Renewal Term peaceably and quietly enjoy the Premises without disturbance by
Landlord or any person claiming through Landlord.

         Section 21. Subordination and Attornment. (a) Provided any Mortgagee
agrees to grant nondisturbance protection to Tenant as long as Tenant is not in
default beyond the period allowed for cure herein, this Lease and all rights of
Tenant therein, and all interest or estate of Tenant in the Premises, or any
portion thereof, shall be subject and subordinate to the lien of any first
mortgage, first deed of trust, security instrument or other document of like
nature held by such Mortgagee, hereinafter referred to as "Mortgage", which at
any time may be placed upon the Premises, or any portion thereof, by Landlord,
and to any replacement, renewals, amendment, modifications, extensions or
refinancing thereof, and to each and every advance made under such Mortgage.
Tenant agrees at any time hereafter, and from time to time on demand of
Landlord, to execute and deliver to Landlord any instruments, releases or other
documents that may be reasonably required for the purpose of subjecting and
subordinating this Lease to the lien of any such Mortgage, provided however, it
is agreed, nevertheless, that so long as Tenant be not in default in the payment
of Base Rent and other amounts due under this Lease and the performance and
observance of all other covenants, conditions, provisions, terms and agreements
to be performed and observed by Tenant under this Lease after the expiration of
any applicable cure period, that such subordination agreement or other
instrument, release or document shall not interfere with, hinder or molest
Tenant's right to quiet enjoyment under this Lease, nor the right of Tenant to
continue to occupy the Premises, and all portions thereof, and to conduct its
business thereon in accordance with the covenants, conditions, provisions, terms
and agreements of this Lease. The lien of any such Mortgage shall not cover
Tenant's trade fixtures or other personal property located in or on the
Premises.

         (b) In the event of any act or omission of Landlord constituting a
default by Landlord, Tenant shall not exercise any remedy until Tenant has given
Landlord and any Mortgagee of the Premises a prior thirty (30) day written
notice to remedy such act or omission and such time shall have elapsed following
the giving of such notice; provided, however, if such act or omission cannot,
with due diligence and in good faith, be remedied within such thirty (30) day
period, the Landlord and Mortgagee shall be allowed such further period of time
as may be reasonably necessary provided that it commence remedying the same with
due diligence and in good faith



                                      -20-



<PAGE>   22

within said thirty (30) day period. Nothing herein contained shall be construed
or interpreted as requiring any Mortgagee to remedy such act or omission.

         (c) If any Mortgagee (provided said Mortgagee's security interest is
subordinate to the Lease or said Mortgagee has agreed not to disturb Tenant's
possession of the Premises and/or its interest in the Lease provided Tenant is
not in default beyond the period allowed for all herein) shall succeed to the
rights of Landlord under this Lease or to ownership of the Premises, whether
through possession or foreclosure of the delivery of a deed to the Premises,
then, upon the written request of such Mortgagee so succeeding to Landlord's
rights hereunder, Tenant shall attorn to and recognize such Mortgagee as
Tenant's Landlord under this Lease, and shall promptly execute and deliver any
instrument that such Mortgagee may reasonably request to evidence such
attornment (whether before of after making of the mortgage). In the event of any
other transfer of Landlord's interest hereunder, upon the written request of the
transferee and Landlord, Tenant shall attorn to and recognize such transferee as
Tenant's Landlord under this Lease and shall promptly execute and deliver any
instrument that such transferee and Landlord may reasonably request to evidence
such attornment.

         Section 22. Sale of Premises by Landlord. If Landlord sells the
Premises, it shall be relieved of all liability under any and all of its
covenants and obligations contained in this Lease and arising out of any act,
occurrence or omission occurring after the consummation of such sale; provided,
however, that the purchaser of the Premises shall be deemed without further
agreement between the parties, or between the parties and any such purchaser, to
have assumed and agreed to carry out all of the covenants and obligations of the
Landlord arising after the closing under this Lease.

         Section 23. Broker's Commission. Landlord and Tenant represent each to
the other that United Properties was used by Tenant in connection with this
Lease. Landlord shall be responsible for payment of the commission. Landlord and
Tenant agree to indemnify one another from and against any claims, demands and
actions brought to recover a brokerage commission or any other damages by any
broker engaged by the other.

         Section 24. Estoppel Certificate. (a) Either party may request and
receive from the other party, upon not less than 15 business days prior written
notice an executed statement in writing, (i) certifying that this Lease is
unmodified and in full force and effect (or if modified, stating the nature of
the modification and certifying that this Lease as so modified is in full force
and effect) and the date to which Base Rent is paid in advance, if any, (ii)
acknowledging that there are not, to the attesting party's knowledge, any
uncured defaults on the part of the other party, or specifying such defaults if
any are claimed, and (iii) such other matters reasonably requested to be stated
therein. Any such statement may be relied upon by a prospective purchaser of the
Premises or any of Landlord's or Tenant's lenders having an interest in the
Premises.

         (b) In the event that Tenant is a corporation, Tenant shall, deliver to
Landlord without charge upon ten (10) days prior written request the following
instruments and documents:



                                      -21-



<PAGE>   23

                  (i) Certificate of Good Standing in the state of incorporation
         of Tenant and in the state in which the Premises are located issued by
         the appropriate state authority and bearing a current date.

                  (ii) A copy of Tenant's Articles of Incorporation and By-Laws,
         and any amendments or modifications thereof certified by the Secretary
         or Assistant Secretary of Tenant.

                  (iii) Such other certifications or statements as may be
         reasonably required provided Landlord shall not request information
         which is not otherwise disclosed as a publicly held company.

         Section 25.  INTENTIONALLY OMITTED

         Section 26. Holding Over. If Tenant remains in possession of the
Premises after the Expiration Date (or after the expiration date of any of the
Renewal Terms, such occupancy shall be a tenancy from month-to-month at a Base
Rent equal to one and one-half times the Base Rent payable during the last month
of the Initial Term (or the applicable Renewal Term), and subject to all other
amounts payable and other terms and conditions of this Lease.

         Section 27. Assignment and Subletting. (a) Tenant shall not transfer,
assign, or otherwise alienate its interest in and to the Premises without first
obtaining the written consent of Landlord, which consent shall not be
unreasonably withheld. Any assignment, mortgage, pledge, hypothecation,
encumbrance, or license of this Lease or of Tenant's leasehold interest in the
Premises without the prior written consent of Landlord shall be null and void.
For purposes of this Section, a merger, consolidation or other reorganization of
Tenant or the sale or transfer of a controlling percentage of the stock of
Tenant for all or substantially all of the assets of Tenant shall not be deemed
to be a transfer, assignment, subletting or other alienation of Tenant's
interest in and to the Premises, provided the remaining entity under the Lease
has a tangible net worth greater than or equal to the tangible net worth of
Tenant immediately prior to said merger, consolidation or other reorganization.
Subject to the provisions of Section 27(c) herein, Tenant may sublet all or a
portion of the Premises provided Tenant remains fully liable under the Lease.

         (b) Notwithstanding anything contained in Section 27 to the contrary,
Landlord reserves the right to refuse to give its consent to any assignment,
subletting or transfer of Tenant's interest in the Premises unless Tenant
remains fully liable for the performance of the Tenant's covenants and
obligations under this Lease.

         (c) Tenant will reimburse Landlord for any costs and legal fees
reasonably incurred by Landlord in connection with any proposed transfer or
sublease. Tenant will also pay over to Landlord upon receipt 50% of any rent or
other consideration received by Tenant in connection with any such sublease
which (after deducting the out-of-pocket cost to Tenant, if any, in



                                      -22-



<PAGE>   24

effecting the sublease, including reasonable alteration costs, commissions and
legal fees) is in excess of the Base Rent and Operating Cost for the comparable
period (or, if the sublease is for less than all of the Premises, in excess of
the pro rata portion of the Base Rent and Operating Cost for the comparable
period) and 50% of any consideration received by Tenant in connection with any
other transfer or this Lease (after deducting the out-of-pocket cost to Tenant,
if any, in effecting the transfer).

         Section 28. Tenant agrees to look solely to Landlord's interest in the
Premises for the recovery of any judgment against Landlord, it being agreed that
Landlord, or Landlord's partners (general or limited), members, shareholders,
managers or officers shall never be personally liable for any such judgment.

         Section 29. Financial Information. Tenant agrees to provide to
Landlord, within the later of one hundred twenty-five (125) days after the end
of each fiscal year of Tenant or five (5) days after the date said filing is
made to the SEC, a financial statement, prepared in accordance with generally
accepted accounting principles and audited by an independent, certified public
accountant. In addition, Tenant agrees to provide to Landlord, from time to
time, any other unaudited financial information as Landlord may reasonably
request provided such financial information of Tenant should be limited to such
information of Tenant otherwise made publicly available.

         Section 30. Further Assurances. Each party agrees that is will take
such actions, provide such documents, do such things and provide such further
reassurances as may reasonably be requested by the other party during the term
of this Lease.

         (a) All section headings and captions used in this Lease are purely for
convenience and shall not affect the interpretation of this Lease.
         (b) All Exhibits described in this Lease shall be deemed to be
incorporated in and made a part of this Lease, except that if there is any
inconsistency between this Lease and the provisions of any Exhibit the
provisions of this Lease shall control.

         (c) This Lease shall be deemed entered into within and shall be
governed by and interpreted in accordance with the laws of the state where the
Premises are located, and the parties submit to the jurisdiction of any
appropriate court within that state for adjudication of disputes arising from
this Lease.

         (d) Except as otherwise provided, this Lease shall not be modified
except by written agreement signed on behalf of Tenant and the Landlord by their
respective authorized officers.

         (e) This Lease supersedes all prior understandings, representations,
negotiations and correspondence between the parties, constitutes the entire
agreement between them with respect to the matters described, and shall not be
modified or affected by any course of dealing, course of performance or usage of
trade.




                                      -23-



<PAGE>   25

         (f) If any provision of this Lease is held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall in no way be affected or impaired.

         (g) The failure of either party at any time to require performance by
the other of any provision of this Lease shall in no way affect that party's
right to enforce such provision, nor shall the waiver by either party of any
breach of any provision of this Lease be taken or held to be a waiver of any
further breach of the same provision or any other provision.

         (h) This Lease may be executed in any number of counterparts and each
fully executed counterpart shall be deemed an original.

         (i) All notices, approvals, requests, consents and other communications
given pursuant to this Lease shall be in writing and shall be deemed to have
been duly given when sent by confirmed facsimile transmission, or delivered by
Courier, or sent by U.S. mail or Federal Express delivery addressed as follows:

         If to Landlord:                    DRF 12000 Portland LLC
                                            c/o Frauenshuh Companies
                                            7101 West 78th Street, Suite 100
                                            Bloomington, MN 55439
                                            Attn: Randy T. McKay
                                            Facsimile: (952)829-3481

         If to Tenant:
         Prior to May 1, 2000:              Telex Communications, Inc.
                                            9600 Aldrich Avenue South
                                            Minneapolis, MN  55420
                                            Attn: General Counsel
                                            Facsimile: (952)886-3754

         Upon From and after
         May 1, 2000:                       Telex Communications, Inc.
                                            12000 Portland Avenue South
                                            Burnsville, MN 55337
                                            Attn: General Counsel
                                            Facsimile: (952)886-3754

         Section 31. Compliance with Environmental Laws. (a) Landlord warrants
and represents to Tenant that, to the best of Landlord's knowledge based solely
on a Phase I Environmental Assessment performed by Environmental Strategies
Corporation dated May 27, 1999 for Emerson Electric Co. of the Fisher-Rosemount
Systems, Inc. facility in Burnsville, Minnesota



                                      -24-



<PAGE>   26

("Audit) and except for any matters disclosed in said Audit, the Premises are in
full compliance with all applicable environmental laws, rules, requirements,
orders, directives, ordinances and regulations of the United States of America
or any state, city or municipal government or lawful authority having
jurisdiction or affecting the Premises (collectively "Environmental Laws").
Landlord shall name Tenant as additional insured on any policy of environmental
insurance maintained by Landlord on the Premises.

         (b) Except as set forth in Section 31(c), Landlord shall defend,
indemnify and save Tenant, its officers, shareholders, security holders and
affiliates, directors, agents and employees, harmless from and against all
claims, obligations, demands, actions, proceedings and judgments, loss, damage,
liability and expense (including reasonable attorneys' fees and expenses) which
any one or more of them may sustain in connection with any non-compliance with
any environmental condition affecting the Premises.

         (c) Tenant shall at Tenant's own cost and expense, timely comply with
all applicable, rules, requirements, orders, directives, ordinances and
regulations arising from Tenant's use and occupancy of the Premises, including
but not limited to the Environmental Laws, and shall indemnify, defend, save and
hold harmless Landlord, its directors, officers, agents and employees from and
against any and all claims, demands, losses and liabilities (including
reasonable attorneys' fees) resulting from any violation of the Environmental
Laws when caused by Tenant's use and occupancy of the Premises.

         (d) The provisions of this Section 31 shall survive the expiration or
earlier termination of this Lease.

         (e) Subject to Landlord's obligations specifically set forth in Section
31 hereof, Tenant shall, throughout the term of this Lease, and at Tenant's sole
cost and expense, promptly comply or cause compliance with or remove or cure any
violation of any and all present and future laws (including requirements of the
Americans with Disabilities Act, as modified from time to time), ordinances,
orders, rules, regulations and requirements of all Federal, State, Municipal and
other governmental bodies having jurisdiction over the Premises and the
appropriate departments, commissions, boards and officers thereof, and the
orders, rules and regulations of the Board of Fire Underwriters where the
Premises are situated, or any other body now or hereafter constituted exercising
lawful or valid authority over the Premises, or any portion thereof, or the
sidewalks, curbs, roadways, alleys, entrances or railroad track facilities
adjacent or appurtenant thereto, or exercising authority with respect to the use
or manner of use of the Premises, or such adjacent or appurtenant facilities,
and whether the compliance, curing or removal of any such violation and the
costs and expenses necessitated thereby shall have been foreseen or unforeseen,
ordinary or extraordinary, and whether or not the same shall be presently within
the contemplation of Landlord or Tenant or shall involve any change of
governmental policy, or require structural or extraordinary repairs, alterations
or additions by Tenant and irrespective of the costs thereof.



                                      -25-




<PAGE>   27

         (f) Tenant, at its sole cost and expense, shall comply with all
agreements, contracts, easements, restrictions, reservations or covenants, if
any, set forth in Exhibit "A" attached, or hereafter created by Tenant or
consented to, in writing, by Tenant or requested, in writing, by Tenant. Tenant
shall also comply with, observe and perform all provisions and requirements of
all policies of insurance at any time in force with respect to the Premises and
required to be obtained and maintained under the terms of Section 13 hereof and
shall comply with all development permits issued by governmental authorities
issued in connection with development of the Premises.

         (g) The following terms and conditions regarding environmental matters
and the Premises are included in this Lease:

                  (i) For the purpose of this Lease, the phrase "Regulated
         Materials" shall include, but shall not be limited to, those materials
         or substances defined as "hazardous substances", "hazardous materials",
         "hazardous waste", "toxic substances", "toxic pollutant" or other
         similar designations under the Comprehensive Environmental Response,
         Compensation and Liability Act of 1980, as amended, 42 U.S.C. 9601, et
         seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
         6901, et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
         1801, et seq., or regulations promulgated pursuant thereto. "Tenant's
         Regulated Materials" shall mean those Regulated Materials, brought
         onto, created, stored at, handled, or generated at the Premises by or
         on behalf of Tenant, its agents, employees, contractors (other than
         Landlord), subtenants, assignees, suppliers or other invitees.
         "Landlord's Regulated Materials" shall mean all other "Regulated
         Materials". Also the phrase "Governmental Agency or Agencies" means any
         federal, state, local or foreign government, political subdivision,
         court, agency or other entity, body, organization or group exercising
         any executive, legislative, judicial, quasi-judicial, regulatory or
         administrative function of government.

                  (ii) Tenant hereby covenants to Landlord and its Mortgagee
         that:

                           (1) Tenant shall (x) comply and shall cause all
                  occupants of the Premises to comply with all federal, state
                  and local laws, rules, regulations and orders with respect to
                  the discharge, generation, removal, transportation, storage
                  and handling of Tenant's Regulated Materials, (y) remove any
                  Tenant's Regulated Materials (other than supplies and
                  materials used in the ordinary course of its business and for
                  which all applicable laws, ordinances, rules and regulations
                  are complied with) immediately upon discovery of the same, and
                  (z) pay or cause to be paid all costs associated with such
                  removal;

                           (2) Tenant shall keep the Premises free of any lien
                  imposed pursuant to any state or federal law, rule, regulation
                  or order in connection with the existence of Tenant's
                  Regulated Materials on the Premises;



                                      -26-



<PAGE>   28

                           (3) Tenant shall not install or permit to be
                  installed on the Premises any Tenant's Regulated Material
                  including, but not limited to, asbestos, asbestos-containing
                  materials, urea formaldehyde insulation or any other chemical
                  or substance which has been determined to be a hazard to
                  health and environment other than supplies and materials used
                  in the ordinary course of its business and for which use all
                  applicable laws, ordinances, rules and regulations are
                  complied with;

                           (4) Tenant shall not cause or permit to exist as a
                  result of an intentional or unintentional act or omission on
                  the part of Tenant or any occupant of the Premises, a
                  releasing, spilling, leaking, pumping, emitting, pouring,
                  emptying or dumping of any Tenant's Regulated Materials onto
                  the Premises or into surrounding waters or other lands; and

                           (5) Tenant shall promptly provide a copy of any
                  summons, citation, directive, letter or other communication
                  which it receives from any Government Agency or Agencies
                  concerning any Regulated Matters on the Premises.

                  (iii) It shall constitute an Event of Default hereunder and
         the Landlord shall be entitled to exercise all remedies available to it
         under Section 18 of the Lease and hereunder if:

                           (1) Tenant shall fail to comply with the covenants
                  contained in Section 31(g)(ii) hereof within thirty (30) days
                  after Landlord mails notice to Tenant hereof or fails to
                  commence such compliance within such time and diligently
                  continue such compliance to completion;

                           (2) any Tenant Regulated Materials are hereafter
                  found to exist on the Premises or in its soil or groundwater
                  in violation of the environmental laws referenced in Section
                  31(g)(i) herein, and Tenant shall fail within seventy-five
                  (75) days after Landlord mails notice to Tenant thereof, to
                  commence and diligently pursue such actions as are necessary
                  to remove the same from the Premises; or

                           (3) any summons, citation, directive, letter or other
                  communication, written or oral, shall be issued by any
                  Governmental Agency or Agencies concerning the matters
                  described in Subparagraph 31(b) above and Tenant fails to cure
                  the condition occasioning the same within the time limit set
                  forth in this Subparagraph (g)(iii)(1) and (2). In the event
                  Tenant fails to comply with the terms of this Section 31, the
                  Tenant hereby grants Landlord and its employees and agents an
                  irrevocable and non-exclusive license to enter the Premises in
                  order to inspect, conduct testing and remove Tenant Regulated
                  Materials. All costs of


                                      -27-


<PAGE>   29


                  such inspection, testing and removal related to Tenant
                  Regulated Materials shall be due and payable from Tenant as
                  Additional Rent hereunder upon demand. Landlord's entry into
                  the Premises shall be subject to the advance notice
                  requirement set forth in this Lease.

                  (iv) The representations, covenants and indemnifications given
         by Tenant to Landlord and Landlord to Tenant in this Section 31 shall
         be a separate agreement between the parties, and shall survive any
         termination of the Lease.

                  (v) Landlord hereby covenants to Tenant that Landlord shall
         comply with all federal, state and local laws, rules, regulations and
         orders with respect to the discharge, generation, removal,
         transportation, storage and handling of Regulated Materials.

         Section 32. Contingency. This Lease is contingent upon Tenant's
assignment to Landlord of the Purchase and Sale Agreement between Tenant and
Fisher-Rosemount Systems, Inc. ("Seller"). Either Landlord or Tenant may
terminate this Lease by written notice delivered to the other party in the event
such Purchase and Sale Agreement has not been assigned to Landlord and the
assignment consented to by Seller, such that Landlord is in the position to
close by the date provided for closing therein, as such date may be extended
with the consent of Seller.

         Section 33. Reduction in Premises. On not less than 120 days' prior
written notice, Landlord at its discretion may remove that portion of the land
shown on Exhibit B (the "Deleted Portion") and any improvements thereon from the
Premises leased under this Lease. If the Deleted Portion is removed from the
Premises, Landlord at no cost to Tenant will create any cross-easement
agreements as may be necessary to provide for utility, driveway, and pedestrian
access arrangements as may be required by code or reasonably necessary for
operation of the remaining Premises and any improvements on the Deleted Portion,
subject to the approval of Tenant which approval will not be unreasonably
withheld or delayed. Such cross-easement agreements will include a covenant or
other assurance reasonably acceptable to Tenant that the Deleted Premises will
be developed and used in a manner which will be compatible with Tenant's use of
the Premises. Upon removal of the Deleted Portion from the Premises, Tenant will
have no rights or obligations in respect of the Deleted Portion except as may be
provided in such cross-easement agreements and this Lease will continue as a
lease of the remaining Premises only for the same Base Rent and on the other
terms and conditions set out in this Lease.

         Section 34. Security Deposit. Upon Landlord's purchase of the Property,
Tenant shall deposit with Landlord the sum of $250,000 in cash and $400,000 in
the form of an irrevocable Letter of Credit in form acceptable to Landlord and
drawn on a financial institution acceptable to Landlord, as and for a "Security
Deposit" for the full and faithful performance by Tenant of each and every term,
provision, covenant and condition of this Lease. On the first day of each month,
Tenant will deposit an additional $9,500 of cash into the Security Deposit. The
amount of the Letter of Credit held by Landlord or Landlord's Mortgagee shall be
reduced each six months by $1.00 for each $1.00 of any such additional cash
deposits made during the preceding six months



                                      -28-



<PAGE>   30

of the Term until the Letter of Credit is reduced to zero. The Security Deposit
in cash and Letter of Credit shall in no event exceed $1,150,000. The cash
portion of such Security Deposit shall be maintained by or on behalf of Landlord
and/or Landlord's Mortgagee in a separate interest-bearing account reasonably
acceptable to Tenant, and shall not be commingled with Landlord's other
accounts. The Letter of Credit portion of the Security Deposit shall be issued,
at Landlord's request, either in the name of Landlord, or Landlord's Mortgagee
and shall be held by either Landlord or an escrow agent, in which case Tenant
agrees it will execute any documentation necessary to effectuate the intent of
this Section 34. In the event that Tenant fails to pay any Base Rent or other
amounts payable under this Lease within three days of the due date, or in the
event Tenant defaults beyond the period allowed for cure in the Lease in respect
to any of the other terms, provisions, covenants and conditions of this Lease,
Landlord may use, apply or retain the whole or any part of the security so
deposited for the payment of any such amounts or for any sum which Landlord may
expend or be required to expend by reason of Tenant's default, including, but
not limited to, any damages or deficiency may accrue before or after reentry by
Landlord. Tenant shall be entitled to any interest on the Security Deposit,
payable quarterly, if the Security Deposit is in cash. It is expressly
understood and agreed that such deposit is not an advance rental deposit or a
measure of Landlord's damages in case of Tenant's default. Upon application of
any part of the deposit by Landlord as provided herein, Tenant shall pay to
Landlord on demand the amount so applied in order to restore the security
deposit to its original amount. Any application of the deposit by Landlord shall
not be deemed to have cured Tenant's default by reason of which the application
is made.

         Tenant hereby grants to Landlord a security interest in the Security
Deposit to secure all of Tenant's obligations to Landlord in connection with the
Lease, including without limitation, any claims in favor of Landlord arising out
of rejection of the Lease in bankruptcy. Tenant acknowledges that Landlord may
assign the Security Deposit to Landlord's Mortgagee and consents to said
assignment.

         In the event of a bona fide sale of the Building of which the Premises
are a part, Landlord shall have the right to transfer the Security Deposit to
its vendee for the benefit of Tenant, and thereafter Landlord shall be released
of all liability for the return of such deposit and Tenant agrees to look to
said vendee for the return of its security deposit. It is agreed that this
provision shall apply to every transfer or assignment made of the security
deposit to any new landlord.

         This Security Deposit shall not be assigned or encumbered by Tenant. It
is expressly understood that the reentry of the Premises by Landlord for any
default on the part of Tenant prior to the expiration of the term of this Lease
shall not be deemed a termination of this Lease so as to entitle Tenant to
recover the security deposit, and the security deposit shall be retained and
remain in the possession of Landlord until the end of the term of this Lease,
except as set forth below.

         Actions by Landlord against Tenant for breach of this Lease shall in no
way be limited or restricted by the amount of this security deposit and resort
to such deposit shall not waive any



                                      -29-


<PAGE>   31

other rights or constitute an election of remedies which Landlord may have. If
Tenant has fulfilled all of its obligations under the Lease through the Initial
Term and renews the Lease for the First Renewal Term, the Security Deposit will
be reduced to an amount equal to one monthly installment of the Base Rent and
other charges then due under this Lease, and the remaining amounts in the
Security Deposit (including accrued interest) will be returned to Tenant. If the
Lease is not renewed for the First Renewal Term, the Security Deposit will be
retained by Landlord and used to pay all costs of operating and maintaining the
Premises, marketing the Premises for sale or lease, making repairs and
improvements to the Premises, to prepare the Premises for sale or lease, and
paying any other costs reasonably incurred in selling or reletting the Premises.
Upon sale or lease of all or substantially all of the Premises, Landlord will
pay to Tenant any portions of such Security Deposit which have not been used for
such purposes. If Tenant performs all of its obligations under this Lease
through the First Renewal Term and any subsequent Renewal Terms, any amounts
remaining in the Security Deposit (including accrued interest) will be returned
to Tenant at the expiration of this Lease following any adjustment of Operating
Cost for the last year of the Term.

         Section 35. Capital Reserve. In addition to the other amounts payable
by Tenant under this Lease, Tenant shall pay to the Landlord (or as otherwise
directed by Landlord in writing) on or before the first day of each month during
the Term the sum of One Thousand Nine Hundred One and 67/100 Dollars
($1,901.67), to be deposited by Landlord or Landlord's Mortgagee in an
interest-bearing account (the "Capital Reserve") for payment of repairs of the
Building and other improvements on the Premises, extraordinary maintenance,
equipment repairs or replacements, or other capital items pertaining to the
Premises. Such account shall at all times be the property of the Tenant, subject
to the rights of the Landlord under this Lease. Landlord shall at all times have
a first security interest in the Capital Reserve, and the Tenant agrees to
execute any financing statement or other documentation requested by the Landlord
to evidence or perfect such security interest. Interest earned from the
investment of sums held in the Capital Reserve shall remain in, and be added to,
such account. Landlord shall have the right to withdraw funds from the Capital
Reserve at any time for the purposes described in this Section, provided that so
long as Tenant is not in default of this Lease no such funds will be used for
any capital item not approved by Tenant directly or by approval of the budget,
which approval will not be unreasonably withheld or delayed. Funds will be
released from the Capital Reserve in accordance with any procedures required by
Landlord's Mortgagee. At expiration or earlier termination of this Lease,
Landlord shall be entitled to withdraw funds from the Capital Reserve sufficient
to cover the unamortized portion of any capital expenditures made by Landlord
which under the terms of Section 5(b) are amortized over the useful life or pay
back period included in Operating Cost, and to cover any other capital
expenditures which are required to be made to the Premises to bring the Premises
to first-class order and condition. If Landlord and Tenant do not agree as to
the capital expenditures required to bring the Premises to first-class order and
condition, they shall mutually select a contractor or other party engaged in the
business of conducting physical inspections of property for purchase or sale and
the report of such inspector shall be determinative of the capital expenditures
required. If Tenant has paid all of the Base Rent and other amounts owing under
this Lease and is not otherwise in default, upon expiration of this Lease any
balance remaining in the




                                      -30-

<PAGE>   32


Capital Reserve after such withdrawals shall be paid over to Tenant.

         Section 36. Option to Purchase. At any time from and after March 1,
2002, and prior to the expiration of the Initial Term, and provided Tenant is
not in default under this Lease and the Lease term has not expired or been
terminated, and provided further that, so long as Tenant is a member of the
entity constituting the Landlord, neither of the members of the Landlord has
given notice exercising its right to acquire the interests of the other member
in such entity, Tenant shall have the option to purchase the Premises on the
following terms and contingencies:

                  (a) Tenant may give written notice to Landlord of its exercise
of its rights under this Section. Such notice shall identify the price that
Tenant is willing to pay for the Premises (which price shall in no event be less
than $11,000,000 net of closing costs and prorations, plus any prepayment
premium arising in connection with such purchase), and shall identify a date at
least 60 days after the date of the notice for closing the purchase and sale
transaction.

                  (b) Within 30 days after the date Landlord receives such
notice of exercise from Tenant, Landlord shall respond in writing to Tenant,
either accepting the terms contained in Tenant's notice, or demanding appraisal
pursuant to subsection (c). If Landlord fails to respond within such time,
Landlord shall be deemed to have accepted the price proposed by Tenant in its
notice.

                  (c) If Landlord elects appraisal of Premises, the purchase
price of the Premises will be determined by an appraisal conducted by a
qualified MAI appraiser with experience appraising real property in the area in
which the property to be appraised is located.

                  (d) If this option is exercised, the closing of the purchase
shall be at a time and place agreeable to the parties, but in any event no later
than 90 days after the giving of the required notice. Upon the closing, the
purchase price shall be paid in cash or by wire transfer or cashier's check. If
any member of the Landlord or any of its principals or investors have guaranteed
any loans or mortgages on or in respect of the Premises, then as a condition of
the purchase of the Premises under this Section such guaranties either will be
released at closing or the Tenant will pay off such loans and mortgages at
closing.

                  (e) The appraiser shall be selected by agreement of the
parties. If the parties cannot agree upon the appraiser, the parties shall each
name an appraiser who meets the qualifications set forth above, and the value
shall be the average of the two appraisals. In issuing the assignment to the
appraiser, the appraiser shall be instructed to determine the market value of
the Premises assuming (i) the Lease would remain in full force and effect for 10
years from the closing date; (ii) the existing debt would remain in place (and
accordingly the Landlord would have no obligation to pay any prepayment
premium); and (iii) the minimum market value of the Property is at least
$11,000,000 net of closing costs and prorations, plus any prepayment premium
arising in connection with such purchase.




                                      -31-

<PAGE>   33


IN WITNESS WHEREOF, the parties have signed this Lease on the date first above
written.

LANDLORD:                                  DRF 12000 PORTLAND LLC
                                           A MINNESOTA LIMITED LIABILITY COMPANY


                                           By:
                                              ----------------------------------
                                                     Title:  Manager



TENANT:                                    TELEX COMMUNICATIONS, INC.
                                           A DELAWARE CORPORATION


                                           By:
-------------------------------------------
                                               Title:
                                                     ---------------------------



                                      -32-


<PAGE>   34




STATE OF MINNESOTA  }
                    }SS.
COUNTY OF HENNEPIN  }

         The foregoing instrument was acknowledged before me this 16th day of
March, 2000, by Randy T. McKay, Manager of DRF 12000 PORTLAND LLC, a Minnesota
limited liability company, organized and existing under the laws of the State of
Minnesota, on behalf of the limited liability company.


                                            ------------------------------------
                                            Notary Public









STATE OF            }
                    }SS.
COUNTY OF           }

         The foregoing instrument was acknowledged before me this 16th day of
March, 2000, by                    , the                  , of TELEX
               --------------------      -----------------
COMMUNICATIONS, INC., a corporation organized and existing under the laws of the
State of Delaware, on behalf of the corporation.


                                            ------------------------------------
                                            Notary Public




                                      -33-


<PAGE>   35

                                    EXHIBIT A

                                LEGAL DESCRIPTION

Parcel A:

That part of Lot One (1), Block One (1), in Dicomed First Addition, according to
the recorded plat thereof, lying south of the Northerly line of First Addition
to Pleasant View Memorial Gardens.

Torrens Property

Parcel B:

That part of Lot One (1), Block One (1), in Dicomed First Addition, according to
the recorded plat thereof, except that part lying south of the Northerly line of
First Addition to Pleasant View Memorial Gardens.

Together with easements contained in Sanitary and Storm Easement Agreement filed
December 22, 1987, as Document No. 820775.

Abstract Property

Parcel C:

That part of Lot 5, Block 1, Riverwood Industrial Park Plat 5 as platted and of
record in the Office of the County Recorder, Dakota County, Minnesota, lying
Southwesterly of the following described line and its Southeasterly extension:

Commencing at the Southwest corner of said Lot 5; thence North 00 degrees 13
minutes 17 seconds West, bearing assumed, along the West line of said Lot 5, a
distance of 80.00 feet to the point of beginning of the line to be described:
Thence South 73 degrees 04 minutes 49 seconds East, a distance of 50.00 feet to
the Northwesterly right-of-way line of Portland Avenue, as platted in said
Riverwood Industrial Park Plat 5 and there terminating.

Abstract Property

Dakota County, Minnesota
Abstract and Torrens Property