LEASE




                                 BY AND BETWEEN

                                  REXFORD LLC,
                                   as Landlord




                                       AND




                       TANGRAM ENTERPRISE SOLUTIONS, INC.,
                                    as Tenant





<PAGE>



                                 LEASE AGREEMENT


                             INDEX OF LEASE SECTIONS


         1.       OUTLINE OF LEASE PROVISIONS
         2.       DEMISE
         3.       DEFINITIONS
         4.       TERM
         5.       RENT
         6.       TENANT'S USE
         7.       LANDLORD'S DUTIES
         8.       CONDITION OF DEMISED PREMISES
         9.       INDEMNIFICATION AND INSURANCE
         10.      FIRE OR OTHER CASUALTY
         11.      ASSIGNMENT AND SUBLETTING
         12.      DEFAULT AND REMEDIES
         13.      BANKRUPTCY
         14.      COMMON AREAS
         15.      EMINENT DOMAIN
         16.      LANDLORD'S RIGHT OF ENTRY
         17.      QUIET ENJOYMENT
         18.      WAIVER
         19.      ACCORD AND SATISFACTION
         20.      SUBORDINATION
         21.      ESTOPPEL LETTER
         22.      NOTICES
         23.      REAL ESTATE COMMISSION
         24.      HOLDING OVER
         25.      RELATIONSHIP BETWEEN THE PARTIES
         26.      PARTIAL INVALIDITY
         27.      SUCCESSORS
         28.      TRANSFER OF LANDLORD INTEREST
         29.      LANDLORD'S LIABILITY
         30       HAZARDOUS MATERIALS
         31.      REIMBURSEMENT OF FEES AND COSTS
         32       FORCE MAJEURE
         33.      ENTIRE AGREEMENT; NO ORAL MODIFICATION
         34.      CONFIDENTIALITY
         35.      REVIEW OF DOCUMENTS
         36.      RULES
         37.      SIGNS
         38.      RIGHT TO PERFORM
         39.      EFFECTIVE
         40.      SECURITY
         41.      FINANCIAL STATEMENTS
         42.      COMPLIANCE WITH LAWS
         43.      LEASE RIDERS
<PAGE>

      LEASE RIDERS:
         Lease Rider No. 1:        Right of First Offer
         Lease Rider No. 2:        Intentionally Deleted
         Lease Rider No. 3:        Pre-Move In Expansion Offer
         Lease Rider No. 4:        Renewal Options
         Lease Rider No. 5:        Termination Option

      LEASE EXHIBITS:
         Exhibit A:                Legal Description
         Exhibit A-1:              Building
         Exhibit A-2:              Building Floor Plan
         Exhibit B:                Description of Landlord Work and Tenant Work
         Exhibit B-1:              Space Plan
         Exhibit C:                Rules and Regulations
         Exhibit D:                Confirmation Agreement




<PAGE>




                                 LEASE AGREEMENT

     This LEASE AGREEMENT (THE "LEASE") made and entered into this     day of
December, 1996, by and between Rexford LLC a North Carolina Limited Liability
company, referred to as "LANDLORD", and TANGRAM ENTERPRISE SOLUTIONS, INC. a
Delaware corporation, referred to as "TENANT".

         1. OUTLINE OF LEASE PROVISIONS: This Section 1 is intended to provide a
convenient reference to the provisions contained in this Lease. Each reference
in this Lease to any of the following subjects shall be construed to incorporate
the data stated for that subject in this Section 1.

         A.  LANDLORD AND LANDLORD'S NOTICE ADDRESS:

             Rexford LLC
             c/o Grubb Management, Inc.
             11,000 Regency Parkway, Suite 101
             Cary, North Carolina 27511
             Attn: Sal Cammarata

         B.  TENANT AND TENANT'S NOTICE ADDRESS:

             Sterling Regency
             11000 REGENCY PARKWAY
             CARY, NORTH CAROLINA 27511
             ATTN:  NANCY DUNN

         C.  BUILDING ADDRESS:

             Sterling Regency
             11000 Regency Parkway
             Cary, North Carolina  27511

         D.  Suite 301/401

         E.  RENTABLE SQUARE FEET OF DEMISED PREMISES: 49,574

         F.  RENTABLE SQUARE FEET OF BUILDING: 252,939

         G.  TERM COMMENCEMENT DATE:  MARCH 1, 1997

         H.  TERM EXPIRATION DATE:  THE END OF THE 91ST MONTH AFTER THE
             COMMENCEMENT DATE.

         I.  MINIMUM RENT EACH LEASE YEAR PER SQUARE FOOT:

         MONTH       PRSF        MONTHLY MINIMUM RENT      YEARLY MINIMUM RENT
         ---------------------------------------------------------------------
         1-6        $17.25             $12,650.00
         7          $17.25             $35,631.31
         8-19       $17.25             $71,262.63
         20-31      $17.60             $72,708.53               $872,502.40
         32-43      $17.95             $74,154.44               $889,853.30
         44-55      $18.30             $75,600.35               $907,204.20
         56-67      $18.65             $77,046.26               $924,555.10

                                       4

<PAGE>





         68-79      $19.00             $78,492.17               $941,906.00
         80-91      $19.35             $79,938.08               $959,256.90

*All rents calculated based on 49,574 RSF
                                  Total Aggregate Minimum Rent:$6,461,960.77


         J.  ESTIMATE OF PRO RATA SHARE OF OPERATING EXPENSES FOR FIRST LEASE
             YEAR: 19.6%

         K.  PERATING EXPENSE BASE YEAR:The lower of 1997 or 1998 grossed up
             to reflect 100% occupancy.

         L.  SECURITY DEPOSIT: NONE.

         M.  PERMITTED USE:  General Office Use.







                THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK

                                       5
<PAGE>





         2.  DEMISE:

             A. DEMISED PREMISES: Landlord hereby leases the "Demised Premises"
                described in EXHIBIT A, attached hereto and incorporated herein
                by reference together with the nonexclusive use of the Common
                Areas, to Tenant, and Tenant leases and accepts, subject to the
                terms and conditions of this Lease, the premises referred to as
                the Demised Premises which the parties stipulate for purposes of
                this Lease (including all rent and other charges hereunder)
                shall be 49,574 rentable square feet of space in the office
                building with an address listed in Section 1(C) known as 11000
                Regency, as shown on the site plan attached hereto and
                incorporated herein and marked EXHIBIT "A-1".

             B. EXCEPTION AND RESERVATION: Landlord reserves and excepts from
                within the Demised Premises the roof and exterior walls of the
                Building of which the Demised Premises are a part, and further
                reserves the right to construct additional floors on, or
                additions to, the Building of which the Demised Premises are a
                part and the right in, over and upon the Demised Premises as may
                be reasonably necessary or advisable for the servicing of the
                Demised Premises or of other portions of the Building. Landlord
                will provide Tenant with sixty (60) days notice prior to
                commencement of construction.

         3.  DEFINITIONS:  In addition to definitions contained within the body
             of this Lease, the following definitions shall apply:

             A. BUILDING: The term "Building" as used herein shall be deemed to
                mean the entire existing building and improvements, including
                all land as shown on EXHIBIT A-1 and any and all proposed
                structures (whether reflected on EXHIBIT A-1 or hereafter
                incorporated in the office building during the term or any
                extension thereof), parking or as the same may from time to time
                be increased by the addition of other land or decreased by the
                deletion of a portion thereof, together with structures and the
                like thereon which may from time to time be included by Landlord
                in the development.

             B. COMMON AREAS: The term "Common Areas" as used herein shall
                include parking areas, service roads, loading facilities,
                washrooms, hallways, interior corridors, sidewalks and other
                areas constructed or to be constructed for use in common by the
                Tenant, other tenants in the Building and their employees and
                business invitees, subject, however, to the terms of this Lease
                and to the rules and regulations which may be prescribed from
                time to time by Landlord.


             C. HOLIDAYS: The term "Holidays" shall mean New Year's Day,
                Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
                Christmas Day.

             D. LEASE YEAR: The term "Lease Year" shall mean the twelve (12)
                month period beginning on the first day of the first full month
                immediately following the Commencement Date referred to below,
                and each successive twelve (12) month period thereafter,
                provided that if the Commencement Date is on a day other than
                first day of a calendar month, the first Lease Year shall
                include the period from the Commencement Date through the end of
                the calendar month in which the Commencement Date occurs.

             E. NORMAL BUSINESS HOURS: The term "Normal Business Hours" shall
                mean the period from 8:00am to 6:00pm, Monday through Friday and
                from 8:00am to 12:00 noon on Saturdays, excluding Holidays.

                                       6
<PAGE>


             F. OPERATING EXPENSES: The term "Operating Expenses" shall mean (A)
                Landlord's operating expenses that are reasonable, actual and
                necessary, out-of-pocket (except Landlord may use its normal
                accrual method of accounting), obtained at competitive prices
                and that are directly attributable to the operation,
                maintenance, management, and repair of the Building, as
                determined under generally accepted accounting principles
                consistently applied, including:

                1. All supplies and materials used, and labor charges incurred,
                in the operation, maintenance, decoration, repairing and
                cleaning of the Building;

                2. Cost of all equipment purchased, leased or rented which is
                utilized in the performance of Landlord's obligations hereunder,
                and the cost of maintenance and operation of any such equipment;

                3. Cost of all third party management, maintenance and service
                agreements for the Building and the equipment therein,
                including, without limitation, alarm service, security service,
                window cleaning, and elevator maintenance;

                4. Accounting costs, including the cost of audits by certified
                public accountants, and legal and engineering fees and expenses
                incurred in connection with the operation and management of the
                Building, except for such costs based upon Landlord's gross
                negligence;

                5. Wages, salaries commissions, and related expenses of all
                on-site and off-site agents or employees engaged in the
                operation, maintenance, security and management of the Building;

                6. Cost of all insurance coverage for the Building;

                7. Any and all maintenance and repair (including repainting) of
                the common areas and public areas of the Building, and exterior
                and interior landscaping;

                8. Cost of removal of trash, rubbish, garbage and other refuse
                from the Building as well as removal of ice and snow from the
                sidewalks on or adjacent to the Building;

                9. The annual amortization over its useful life with a
                reasonable salvage value on a straight-line basis of cost of any
                capital improvements made to the Building subsequent to the
                Commencement Date (including legal, architectural and
                engineering fees incurred in connection therewith), which serve
                to reduce operating costs;

                10. All charges for gas, water, sewerage service, and other
                utilities furnished to the Building;

                11. All electricity furnished to the Building, including,
                without limitation, electricity furnished to individual tenants
                of the Building, to the common areas and public areas of the
                Building, and to the machinery and equipment (including any
                heating, ventilation and air-conditioning equipment) used in the
                operation and maintenance of the Building:

                                       7
<PAGE>


                12. Janitorial service, including service to areas of the
                Building leased to tenants;

                13. Management fees payable to any managing agent of the
                Building at market rates;

                14. Real property taxes assessed against the Building.

                15. Installments and interest on assessments for public
                betterment or public improvements.

                16. Legal fees and costs incurred in connection with contesting
                the amounts or the impositions of any Real Property Taxes.

                NOTWITHSTANDING THE FOREGOING OPERATING EXPENSES EXCLUDE:

                1. Leasing commissions, costs, disbursements, and other expenses
                incurred for leasing, renovating, or improving space for
                tenants;

                2. Costs (including permit, license, and inspection fees)
                incurred in renovating, improving, decorating, painting, or
                redecorating vacant space or space for tenants;

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

                4. Depreciation and amortization on the Building;

                5. Costs incurred because the Landlord or another tenant
                violated the terms of any lease;

                6. Overhead and profit paid to subsidiaries or affiliates of
                Landlord for management or other services on or to the Building
                or for supplies or other materials, to the extent that the costs
                of the services, supplies or materials exceed the competitive
                costs of the services, supplies, or materials were they not
                provided by a subsidiary or affiliate;

                7. Interest on debt or amortization payments on mortgages or
                deeds of trust or any other debt for borrowed money;

                8. Compensation paid to clerks, attendants, or other persons in
                commercial concessions operated by Landlord;

                9. Items and services for which Tenant reimburses Landlord or
                pays third parties or that Landlord provides selectively to one
                or more tenants of the Building other than Tenant without
                reimbursement;

                10. Advertising and promotional expenditures;

                11. Repairs or other work needed because of fire windstorm, or
                other casualty or cause insured against by Landlord or to the
                extent Landlord's insurance would have provided insurance,
                whichever is the greater coverage;



                                       8
<PAGE>


                12. Costs incurred in operating a parking facility for the
                Building, if Landlord is charging for parking spaces.

                13. Nonrecurring costs incurred to remedy structural defects in
                original construction materials or installations;

                14. Any costs, fines, or penalties incurred because Landlord
                violated any governmental rule or authority;

                15. Costs incurred to test, survey, cleanup, contain, abate,
                remove, or otherwise remedy hazardous wastes or
                asbestos-containing materials from the Land or the Building
                unless the wastes or asbestos-containing materials were in or on
                the Property because of Tenant's acts.

                16. Cost of capital improvements or capital repairs, except as
                specifically provided for above.

             G. PARTIAL YEAR: The term "Partial Year" shall mean any period
                beginning on the first day of any Lease Year and ending, by
                reason of the termination of this Lease, prior to the end of
                such Lease Year.

             H. REAL PROPERTY TAXES: The term "Real Property Taxes" shall mean
                any form of assessment, license, fee, rent tax, levy, or tax,
                imposed by any authority having the direct or indirect power to
                tax, or by any city, county, state of federal government or any
                other district or division thereof, on the Building or any part
                thereof, or any legal or equitable interest of Landlord in the
                same.

             I. RENT: The term "Rent" shall mean minimum rent, Tenant's Pro Rata
                Share of Operating Expenses, and all other sums required to be
                paid by Tenant under the terms of this Lease, as additional
                rent, and, in the event of non-payment thereof, Landlord shall
                have the rights and remedies herein provided for in the case of
                non-payment of Rent.

             J. SINGLE TENANT FLOOR: The term "Single Tenant Floor" shall mean
                an entire floor within one wing of the Building occupied by a
                single tenant.

             K. TENANT'S PRO RATA SHARE shall mean that fraction, the numerator
                of which equal the number of rentable square feet in the Demised
                Premises, and the denominator of which equals the
                from-time-to-time total rentable square footage of the Building.

             L. USEABLE SQUARE FEET: The term "Useable Square Feet" for
                multi-tenant floors is the total floor square footage less
                vertical openings and Common Areas. The term "Useable Square
                Feet" for Single Tenant Floors is the total floor square footage
                less vertical openings.

             M. RENTABLE SQUARE FEET: The term "Rentable Square Feet" of Demised
                Premises for multi-tenant floors is Usable Square Feet plus
                fifteen percent (U + 15%). The term "Rentable Square Feet" of
                Single Tenant Floors is Usable Square Feet plus ten percent (U +
                10%).

         4.  TERM: This Lease shall commence on the commencement date specified
             in Section 1(F) (the "Commencement Date") and shall terminate at
             noon on the date specified in Section 1(G). If Landlord, for
             whatever reason, cannot deliver possession of the Demised Premises
             to Tenant on the Commencement Date, this Lease shall not be void


                                       9
<PAGE>


             or voidable; no obligation of Tenant shall be affected thereby
             (except that the payment of Rent shall not commence until delivery
             of possession); and neither Landlord nor Landlord's agents shall be
             liable to Tenant for any loss or damage resulting therefrom;
             provided, however, that in such event, the dates of commencement
             and termination for this Lease, and all other dates affected
             thereby, shall be revised to conform to the date of Landlord's
             delivery of possession to Tenant. However, Landlord will deliver
             Demised Premises within thirty-five (35) days of Commencement Date
             or pay a penalty of $2,000.00 per day to Tenant for each day beyond
             thirty (30) days; provided Lease is signed by December 20, 1996,
             and Tenant is not responsible for any delays. If Landlord is unable
             to deliver possession of the Demised Premises within sixty (60)
             days of the Commencement Date, Tenant may terminate this Lease by
             delivering written notice to Landlord.

             TENANT SHALL BE GIVEN ACCESS TO THE DEMISED PREMISES FOR A PERIOD
             OF SEVEN (7) DAYS PRIOR TO THE LEASE COMMENCEMENT DATE FOR
             INSTALLATION OF FURNITURE, PHONE SYSTEMS, ETC. AT NO COST TO TENANT
             SO LONG AS TO NOT INTERFERE WITH LANDLORD'S WORK AND IS NOT IN
             VIOLATION OF ANY BUILDING CODES.

         5.  RENT:

             A. MINIMUM RENT: Tenant shall pay Landlord as minimum rent for the
                Demised Premises, the amount per rentable square foot specified
                in Section 1(I), in monthly installments of the amounts
                specified in Section 1(I), without any setoff or deduction
                whatsoever and in advance on the first day of each month
                beginning in the eighth month following the Commencement Date
                and every month thereafter during the entire term of this Lease
                at the address specified in Section 1(A), or at such other place
                as Landlord may designate from time to time.

             B. ADDITIONAL RENT: Following the calendar year listed in Section
                1(K) (the "Base Year"), Landlord shall determine its Operating
                Expenses for the Base Year. Each succeeding year during the term
                hereof, Landlord shall estimate its Operating Expenses for the
                upcoming calendar year for the Building. If these Operating
                Expenses are estimated to exceed the Operating Expenses for the
                Base Year, then the Tenant shall pay Tenant's Pro Rata Share of
                any such overage. The Landlord's determination of the Operating
                Expenses for the Base Year shall be computed based upon a 100%
                occupancy of the Building. Landlord shall give Tenant notice of
                the estimated amount by which Operating Expenses for the
                upcoming calendar year are anticipated to exceed Operating
                Expenses for the Base Year. Tenant shall pay in equal monthly
                installments, as additional rent, one twelfth (1/12th) of the
                amount of such overage each month.Landlord shall provide
                computation of actual operating expenses to Tenant within
                seventy-five (75) days of the end of each calendar year. Any
                overages shall be distributed to Tenant by check or rental
                credit within thirty (30) days.

             C. PAYMENT OF CHARGES: All Rent and other charges to be paid by
                Tenant shall be paid as provided in this Lease agreement without
                any setoff or deduction whatsoever and the non-payment of any
                item when due (or with the monthly payments if not otherwise
                provided for herein) shall constitute an item of default under
                the terms hereof.

             D. LATE CHARGE: Rent in arrears five (5) days after the same is due
                shall bear interest at the annual rate (the "Default Rate")
                which shall be the lesser of eighteen percent (18%) or the
                highest amount permitted by law. This

                                       10
<PAGE>



                provision shall in no way affect the right of Landlord to
                declare Tenant in default of this Lease for the failure to pay
                any sums when due. Landlord shall be obligated to provide Tenant
                with written notice, a maximum of two times per calendar year
                and Tenant shall have a five (5) day grace period after receipt
                of such notice.

         6.  TENANT'S USE:

             A. PERMITTED USE: The Demised Premises shall be used and occupied
                by Tenant solely for the purposes listed in Section 1(M) and for
                no other purpose without Landlord's prior written consent.

             B. RESTRICTION ON USE: Tenant shall not do or permit anything to be
                done in or about the Demised Premises which will in any way
                obstruct or interfere with the rights of other tenants or
                occupants of the Building. Tenant shall not use or allow the
                Demised Premises to be used for any improper, immoral, unlawful
                or for any business, use or purpose deemed to be disreputable or
                inconsistent with the operation of a first class office
                building. Tenant shall not commit or suffer the commission of
                any waste in, on, or about the Demised Premises. Tenant shall
                not use the Demised Premises or permit anything to be done in or
                about the Demised Premises which will in any way conflict with
                any law, statute, ordinance, regulation, government rule or
                regulation, now or hereafter enacted. If any of the Tenant's
                office machines or equipment create a nuisance to any other
                tenant in the Building, then Tenant shall provide adequate
                insulation, or take such other action as may be necessary to
                eliminate the noise or disturbance.

         7.  LANDLORD'S DUTIES:

             A. MAINTENANCE AND REPAIR: Landlord will maintain and keep in
                reasonable repair the Demised Premises, including plumbing,
                electrical, and heating, and air conditioning systems,
                elevators, and the Common Areas on the floor, including, but not
                limited to, washrooms, hallways and elevator areas and in the
                building, as well as the foundation, exterior walls and roof of
                the Building in which the Demised Premises are located and the
                structural portions of the Demised Premises and the Building.
                Landlord shall not be called upon to make any such repairs
                occasioned by the act of neglect of Tenant, its agents,
                employees, invitees, licensees or contractors. Except as
                provided in Exhibit B, Landlord shall not be called upon to make
                any other improvements or repairs of any kind upon the Demised
                Premises and appurtenances. Any of the foregoing repairs
                required to be made by reason of the negligence of Tenant, its
                agents, employees, invitees, licensees, or contractors, as above
                described, shall be the responsibility of Tenant notwithstanding
                the provisions contained in this paragraph. Tenant shall
                promptly report in writing to Landlord any defective condition
                known to it. Landlord will make all repairs and replacements in
                a reasonable period of time after receiving notice or having
                actual knowledge of the need for repair or replacement. If after
                thirty (30) days, excluding emergencies, Landlord fails to make
                such repair and replacement, provided it can be repaired within
                thirty (30) days, Tenant can do so and charge Landlord. Tenant
                hereby waives the right to make repairs at Landlord's expense
                under any other law, statute or ordinance now or hereafter in
                effect.

             B. JANITORIAL AND UTILITY SERVICES: Landlord will provide for the
                Demised Premises during the five (5) business days per week,
                excluding Holidays:
                                       11
<PAGE>


                1. Janitorial services.

                2. Electrical power at voltage standard for office buildings
                   similar in type to the Building.

                3. Heating and air conditioning, sufficient to maintain
                   temperatures during Normal Business Hours as follows: 75
                   degrees fahrenheit or lower when outside conditions are less
                   than 95 degrees fahrenheit but greater than 60 degrees
                   fahrenheit; and 70 degrees fahrenheit or higher when outside
                   conditions are greater than 10 degrees fahrenheit but less
                   than 60 degrees fahrenheit. If requested by Tenant, with 24
                   hour notice, Landlord shall furnish heat and air conditioning
                   at times other than Normal Business Hours and the cost of
                   such services at the rate of $25.00 per hour shall be paid by
                   Tenant as additional Rent, payable within ten (10) days of
                   notice of such fee from Landlord.

                4. Removal of trash from site dumpsters in accordance with city
                   schedules.

                5. Cold water for lavatory and toilet purposes and hot water for
                   lavatory purposes.

                6. Restroom facilities.

                7. Sanitary sewer facilities.

                8. Directory listings for the various tenants at the Building,
                   including Tenant.

                9. Keys or access cards to serve the Demised Premises, up to a
                   total of four per 1,000 rsf without charge (additional keys
                   or access cards will be available for a fee determined by
                   Landlord).

                10. Elevators providing adequate services leading to the floor
                   on which the Demised Premises is located.

                11. Replacement of light tubes and lamp ballasts.

                12. Extermination and pest control.

                13. Maintenance of Common Areas in a manner comparable to other
                   first class office buildings in the Raleigh, NC area.

                However, if Tenant utilizes machines or equipment which expend
                an extraordinary amount of HVAC, Tenant will pay to Landlord the
                monthly amount which reasonably covers such extraordinary usage.
                Landlord shall not be responsible for any failure or
                interruption in utility services to the Demised Premises.
                Landlord shall not be liable for any loss, injury or damage
                caused by or resulting from any variation, interruption, or
                failure of such services due to any cause whatsoever, or from
                failure to make any repairs or perform any maintenance. In no
                event shall Landlord be liable for any damage to the Demised
                Premises or for any loss, damage or injury to any property
                therein or thereon occasioned by bursting, ruptured, leakage, or
                overflow of any plumbing or other pipes or other similar cause,
                unless such act or omission is a

                                       12
<PAGE>


                result of Landlord's gross negligence or willful act. Tenant
                shall pay or cause to be paid all charges for telephone or any
                other communication services.

         8.  CONDITION OF DEMISED PREMISES

             A. INITIAL CONSTRUCTION: Except as specified in Exhibit B, Tenant
                shall be deemed to have accepted the Demised Premises on the
                Commencement Date in their "as is" condition. The acceptance of
                the Demised Premises by Tenant shall be deferred until receipt
                by Tenant of an architect's certificate of readiness certifying
                that the Demised Premises are ready for occupancy and such
                occupancy has been granted. Within five (5) business days after
                the architect gives such notice, Tenant shall make such
                inspection of the Demised Premises as Tenant deems appropriate,
                and, except as otherwise notified by Tenant in writing to
                Landlord within such period, Tenant shall be deemed to have
                accepted the Demised Premises in its then condition. If, as a
                result of such inspection, Tenant discovers minor deviations or
                variations from the plans and specifications for Tenant's
                improvements of a nature commonly referred to as a "punch list"
                item, Tenant shall promptly notify Landlord of each deviation.
                The existence of any punchlist item shall not postpone the Lease
                Commencement Date nor the obligation of Tenant to pay Rent or
                any other charge due hereunder. Landlord will diligently attempt
                to complete the punchlist items within thirty (30) days after
                the Commencement Date. Landlord will also correct any latent
                defects as they become known. Landlord's obligations with
                respect to any upfit for Tenant, however, shall be limited to
                Landlord's Work set forth on EXHIBIT B attached hereto.

             B. TENANT'S DUTY TO REPAIR:

                1. Maintenance Obligation: Except as provided in Section 7 of
                   this Lease as being required of Landlord, Tenant shall keep
                   and maintain the Demised Premises in good order, condition
                   and repair, except for reasonable wear and tear, casualty and
                   condemnation.

                2. Surrender of Premises: Upon termination of this Lease or any
                   renewal term, Tenant shall deliver the Demised Premises in
                   broom clean and otherwise in the same condition as received
                   by it on the Commencement Date (subject to the removals
                   hereinafter required), reasonable wear and tear excepted, and
                   shall surrender all keys and access cards for the Demised
                   Premises to Landlord at the place then fixed for the payment
                   of Rent and shall inform Landlord of all combinations for
                   locks, safes and vaults, if any, in the Demised Premises.
                   Tenant, during the last thirty (30) days of the term, shall
                   remove all of its trade fixtures, and, to the extent required
                   by Landlord by written notice, any other installations,
                   alterations or improvements installed subsequent to
                   Commencement Date, before surrendering the Demised Premises
                   as aforesaid and shall repair any damage to the Demised
                   Premises caused thereby. Tenant's obligation to observe or
                   perform this covenant shall survive the expiration or other
                   termination of the Lease Term. Any items remaining in the
                   Demised Premises on the termination date of this Lease shall
                   be deemed abandoned for all purposes and shall become the
                   property of Landlord and the latter may dispose of the same
                   without liability of any type of nature.

             C. TENANT'S ALTERATIONS: Tenant shall not make any alterations,
                additions, changes or improvements to the Demised Premises,
                without, in each instance,


                                       13
<PAGE>


                the prior written approval of Landlord, which Landlord shall not
                unreasonably withhold or delay. All such work shall be done in a
                good and workmanlike manner using only good grades of material,
                and shall comply with all applicable laws of every governmental
                authority having jurisdiction over the Building at the time such
                work is performed and thereafter, and shall be diligently
                prosecuted through completion.

             D. MECHANICS LIENS: If Tenant makes any alterations or improvements
                in the Demised Premises, Tenant must pay for same when made.
                Nothing in the Lease shall be construed to authorize Tenant or
                any person dealing with or under Tenant, to charge the rents of
                the Demised Premises, or the property of which the Demised
                Premises forms a part, or the interest of Landlord in the estate
                of the Demised Premises or the Building, or any person under or
                through whom Landlord has acquired its interest in the estate of
                the Demised Premises, with a mechanic's lien or encumbrance of
                any kind, and under no circumstances shall Tenant be construed
                to be the agent, employee or representative of Landlord in the
                making of any such alterations or improvements to the Demised
                Premises, but, to the contrary, the right or power to charge any
                lien, claim or encumbrance of any kind against Landlord's rents
                or the Demised Premises or said land is denied. Landlord shall
                have the right, but not the obligation, to notify any person or
                entity supplying labor or materials for Tenant to the Demised
                Premises that such work is for the exclusive benefit of Tenant
                in order to notify the provider thereof that Landlord's interest
                in the Demised Premises is not subject to impression of a lien
                with respect thereto. If Tenant does authorized construction and
                a mechanic's or materialmen's lien is filed, the Tenant's only
                obligation shall be to remove the lien or post a bond in
                accordance with North Carolina statutes. In the event of the
                filing of a notice of any mechanic's or materialmen's lien,
                Tenant will promptly pay same and take steps immediately to have
                the same removed. If the same is not removed or bonded off
                within twenty (20) days from the date of written notice from
                Landlord, Landlord shall have the right at Landlord's option of
                paying the same or any portion thereof and the amounts so paid,
                including attorneys' fees and expenses associated therewith and
                interest at the Default Rate on any sums and expenses paid or
                advanced from the date of expenditure until the date of
                reimbursement by Tenant, shall be deemed to be additional rent
                due from Tenant to Landlord and shall be paid to Landlord
                immediately upon rendition to Tenant of a bill for same. Tenant
                shall indemnify and save harmless Landlord from and against all
                losses, claims, damages, costs or expenses suffered by Landlord
                by reason of any repairs, installations or improvements, made by
                Tenant.

             E. ROOF: Tenant will not in any manner cut or drive nails into or
                otherwise mutilate the roof of the Demised Premises and will be
                responsible for any damage caused to the roof by any acts of
                Tenant, its agents, servants, employees or contractors.

         9.  INDEMNIFICATION AND INSURANCE:

             A. INDEMNIFICATION: Tenant shall protect, indemnify and save
                Landlord harmless from and against any and all liability and
                expense of any kind arising from injuries or damages to persons
                or property on the Demised Premises or arising out of or
                resulting in any way from any negligent act or omission of
                Tenant, its agents, employees, contractors, licensees or
                invitees during the term of this Lease.

                                       14
<PAGE>


                Landlord shall protect, indemnify and save Tenant harmless from
                and against any and all liability and expense of any kind
                arising from injuries or damages to persons or property arising
                out of or resulting in any way from any gross negligent acts or
                omissions of Landlord, its agents or employees, contractors,
                licensees or invitees during the term of this Lease.

             B. NOTICE OF CLAIM OR SUIT: Tenant agrees to promptly notify
                Landlord of any claim, action, proceeding or suit instituted or
                threatened against Landlord, Tenant or Landlord's Lender.
                Landlord agrees to promptly notify Tenant of any claim, action,
                proceeding or suit instituted or threatened against Tenant of
                which Landlord has knowledge. In the event Landlord is made a
                party to any action for damages which Tenant has agreed to
                indemnify Landlord against, then Tenant shall pay all costs and
                shall provide counsel reasonably acceptable to Landlord and
                Landlord's Lender in such litigation or shall pay at Landlord's
                option the attorney fees and costs incurred in connection with
                said litigation by Landlord or Landlord's Lender.

             C. FIXTURES: Tenant shall obtain insurance covering all fixtures,
                merchandise, equipment and personal property from time to time
                located in, on or upon the Demised Premises, in the amount of
                their full replacement cost from time to time during the term of
                this Lease, providing protection against any peril included
                within the classification "Fire and Extended Coverage", together
                with insurance against sprinkler leakage (if the Demised
                Premises are sprinkled), vandalism and malicious mischief. Any
                policy proceeds shall be used for the repair or replacement of
                the property damaged or destroyed unless this Lease shall cease
                and terminate under the provisions of Section 10 hereof, in
                which event the terms of Section 10 hereof shall control.

                Landlord will maintain 100% replacement cost "all risk" policy
                for the Building at all times during the term of this Lease.

             D. LIABILITY INSURANCE: Tenant agrees to maintain at its expense at
                all times during the lease term full Commercial General
                Liability Insurance naming Landlord and Landlord's Lender, to
                the extent requested in writing, as additional insureds in an
                amount not less than $2,000,000.00 per occurrence.

                Landlord will maintain Commercial General Liability Insurance in
                amounts customary for office buildings in Raleigh, NC of the
                size of the Building.

             E. FAILURE TO PROCURE INSURANCE: In the event Tenant shall fail to
                procure insurance required under this Section and fail to
                maintain the same in force continuously during the term, of if
                Tenant shall fail to pay for any increase in premiums required
                hereunder, Landlord shall be entitled to procure the same and
                Tenant shall immediately reimburse Landlord for such premium
                expense, plus interest thereon at the Default Rate from the date
                of expenditure by Landlord until the date of reimbursement by
                Tenant. In order to collect such reimbursement, Landlord shall
                have all the remedies available to it under this Lease for a
                default in the payment of Rent.

                                       15
<PAGE>


             F. INCREASE IN FIRE INSURANCE PREMIUM: Tenant agrees not to keep
                upon the Demised Premises any articles, materials, equipment or
                goods which may be prohibited by the standard form of fire
                insurance policy. It is agreed between the parties that in the
                event the insurance rates applicable to fire and extended
                coverage insurance covering the within premises shall be
                increased by reason of any use of the Demised Premises made by
                Tenant, then Tenant shall pay to Landlord such increase in
                insurance as shall be occasioned by said use, within ten (10)
                days of Tenant's receipt of a bill for same.

             G. PROPERTY OF TENANT: Tenant agrees that all property owned by it
                in, on or about the Demised Premises shall be at the sole risk
                and hazard of Tenant. Landlord shall not be liable or
                responsible for any loss of or damage to Tenant, or anyone
                claiming under or through Tenant, or otherwise, whether caused
                by or resulting from a peril required to be insured hereunder,
                or from water, steam, gas, leakage, plumbing, electricity or
                electrical apparatus, pipe or apparatus of any kind, the
                elements or other similar or dissimilar causes, and whether or
                not originating in the Demised Premises or elsewhere, and
                provided such damage or loss is not the result of an intentional
                and willful wrongful act of Landlord or the result of gross
                negligence by Landlord, its agents, employees, invitees,
                licensees or contractors.

             H. POLICY FORM OF TENANT'S INSURANCE: All policies of insurance
                required of Landlord and Tenant herein shall be issued by
                insurance companies, with a general policy holder's rating of
                not less than "A" and a financial rating of not less than VIII
                as rated in the most current available "Best's" insurance
                reports, and qualified to do business in the State where the
                Demised Premises is located, which policies shall be for the
                mutual and joint benefit and protection of Landlord and Tenant.
                Executed copies of insurance certificates thereof shall be
                delivered to Landlord prior to delivery of possession of the
                Demised Premises to Tenant, renewal policies or certificates
                shall be delivered to Landlord within thirty (30) days prior to
                the expiration of the term of each such policy and upon request
                of Landlord at any time during the term. All public liability
                policies shall contain a provision that Landlord and Landlord's
                Lender shall be entitled to recovery under said policies for any
                loss occasioned to it or its servants, agents and employees by
                reason of the negligence of Tenant. Tenant's insurance policies
                shall contain endorsement that such insurance may not be
                cancelled or amended except upon thirty (30) days' prior written
                notice from the insurance company to Landlord, sent by certified
                or registered mail. As often as any such policies shall expire
                or terminate, renewal or additional policies shall be procured
                and maintained by Tenant in like manner and to like extent. All
                public liability, property damage and other casualty policies
                shall be procured and maintained by Tenant in like manner and to
                like extent. All public liability, property damage and other
                casualty policies shall be written as primary policies, not
                contributing with and not in excess of coverage which Landlord
                may carry.

             I. MUTUAL WAIVER OF SUBROGATION: Landlord and Tenant hereby waive
                the rights each may have against the other on account of any
                loss or damage occasioned to Tenant or Tenant, as the case may
                be, their respective property, the Demised Premises or its
                contents or to other portions of the Building, arising from any
                risk insured against by Landlord or Tenant, and the parties
                each, on behalf of their respective insurance companies insuring
                the property of either Landlord or Tenant against any such loss,
                waive any right of subrogation that it may have against Landlord
                or Tenant, as the case may be. The release and waiver of
                subrogation rights provided herein shall apply only if and to
                the
                                       16
<PAGE>



                extent that insurance proceeds are in fact paid to or for
                the account of the party giving the release hereunder.

         10. FIRE OR OTHER CASUALTY: If the Demised Premises shall be partially
             damaged by fire or other casualty insured under Landlord's
             insurance policies, then upon Landlord's receipt of the insurance
             proceeds, Landlord shall, except as otherwise provided herein,
             repair and restore the same (exclusive of Tenant's fixtures,
             equipment, decorations, signs and contents and any of Tenant's work
             described in EXHIBIT B hereto) substantially to the condition
             thereof immediately prior to such damage or destruction; limited,
             however, to the extent of the insurance proceeds received in hand
             by Landlord therefor. If by reason of such occurrence, (a) the
             Building or the Demised Premises are damaged in whole or in part as
             a result of a risk which is not covered by Landlord's insurance
             policies; or (b) the Building or the Demised Premises are damaged
             to an extent of thirty percent (30%) or more of the then
             replacement value thereof; or (c) any or all of said buildings or
             the Common Areas of the Building are damaged (whether or not the
             Demised Premises are damaged) to such an extent that the Building
             cannot in the sole judgment of Landlord be operated as an integral
             unit; or (d) any mortgagee or deed of trust holder requires that
             any of Landlord's insurance proceeds be applied to reduce
             Landlord's loan balance, then in any of such events, Landlord may
             elect either to repair the damage as aforesaid, or cancel this
             Lease by written notice of cancellation given to Tenant within
             sixty (60) days after the date of such occurrence, and thereupon
             this Lease shall cease and terminate with the same force and effect
             as though the date set forth in Landlord's said notice were the
             date herein fixed for the expiration of the term hereof and Tenant
             shall immediately vacate and surrender the Demised Premises to
             Landlord. In addition, Tenant may also terminate this Lease, by
             written notice to Landlord (i) if prior to beginning the
             restoration, Landlord cannot provide assurances satisfactory to
             Tenant that such restoration can be completed within one hundred
             twenty (120) days following the casualty or (ii) at any time
             between the one hundred twenty-first (121st) and one hundred
             thirty-fifth (135th) days after the occurrence of any such
             casualty, if Landlord shall fail to restore the damaged portions of
             the Demised Premises within one hundred twenty (120) days after
             such casualty. However, if Landlord is prevented by any cause
             beyond its reasonable control, from completing the restoration
             within said one hundred twenty (120) day period, and if Landlord
             shall provide Tenant with written notice of such cause for delay
             within fifteen (15) days after the occurrence thereof, then
             Landlord shall have an additional period beyond said one hundred
             twenty (120) days, equal to the period Landlord is delayed by
             causes beyond its reasonable control, in which to restore the
             damaged areas of the Demised Premises, and Tenant may not elect to
             terminate this Lease until said additional period has expired with
             Landlord having failed to complete such restoration. In such case,
             Tenant's fifteen (15) day right of termination shall begin to run
             upon the expiration of Landlord's additional period for
             restoration. Upon the termination of this Lease, Tenant's liability
             for the Rent and other charges reserved hereunder shall cease as of
             the effective date of the termination of this Lease.

             Rent Abatement. If by reason of such casualty the Premises is
             rendered wholly untenantable, the Rent and other charges payable by
             Tenant shall be fully abated, or if only partially damaged, such
             Rent and other charges shall be abated proportionately as to that
             portion of the Demised Premises rendered untenantable, in either
             event (unless the Lease is terminated, as aforesaid) from the date
             of such casualty until the Demised Premises have been substantially
             restored, or until Tenant has resumed its business operations in
             the Demised Premises, whichever shall occur sooner.

         11. ASSIGNMENT AND SUBLETTING:
                                       17
<PAGE>


             A. TENANT ASSIGNMENT AND SUBLETTING: Tenant shall not assign,
                transfer or encumber this Lease without the prior written
                consent of Landlord, and shall not sublet or allow any other
                tenant to come in, with or under Tenant without like prior
                written consent, which consent shall not be unreasonably
                withheld; provided, however, Tenant may assign this Lease to its
                parent company, Safeguard Scientifics, Inc., or any corporation
                resulting from the merger or consolidation with Tenant, without
                Landlord's consent. Except for a corporate tenant whose stock is
                traded on the New York or American Stock Exchange or on the
                "over the counter" market, a transfer of any of Tenant's stock
                or a transfer or change of "control" of Tenant or a change in
                the composition of the persons or entities owning any interest
                in any non-corporate tenant shall be deemed as assignment for
                the purposes of this paragraph. "Control" shall mean, with
                respect to a corporation, the ownership, directly, directly or
                indirectly, of stock possessing, or the right to exercise, at
                least 25% of the total combined voting power of all classes of
                the controlled corporation's stock issued, outstanding, directly
                or indirectly, of at least 25% of all legal and equitable
                interests therein. If Tenant desires the consent of Landlord to
                sublease or assign, Tenant must submit the sublease or
                assignment to Landlord for its approval, together with the
                following documents: (a) a complete financial statement of the
                subtenant or assignee with an authorization to verify the same;
                (b) a declaration by the subtenant or assignees as to the type
                of business to be carried out and the number of employees to
                occupy the Demised Premises; (c) payment of a $300.00 fee for
                processing and approval of the sublease or assignment documents;
                and (d) proof of payment of all leasing commissions, if
                applicable. Consent of Landlord to one assignment or subletting
                of the Demised Premises or any portion thereof for any use which
                will violate the exclusive use rights or prohibited use
                restrictions granted to any other tenant in the Building. Any
                assignment or subletting, notwithstanding the consent of the
                Landlord, shall not in any manner release Tenant herein from its
                continued liability for the performance of the provisions of
                this Lease and any amendments or modifications thereto. In
                addition, the assignee shall agree in writing (a copy of which
                shall be delivered to Landlord) to assume all of Tenant's
                obligations under this Lease. The acceptance of any rental
                payments by Landlord from any alleged assignee shall not
                constitute approval of the assignment of this Lease by Landlord.
                Tenant expressly acknowledges that Landlord may refuse to give
                its consent to any proposed assignment or subletting if Landlord
                determines in good faith that Landlord's interest in the Demised
                Premises or the Building would be adversely affected by, among
                other things, (i) the financial condition, credit-worthiness or
                business reputation of the proposed assignee or subtenant; (ii)
                the proposed use of the Demised Premises by, or business of, the
                proposed assignee or subtenant; (iii) the tenant mix of the
                Building; or (iv) the obligations of Landlord and/or the rights
                of other tenants of the Building.

             B. LEGAL FEES: Landlord shall be promptly fully reimbursed by
                Tenant for legal fees incurred by Landlord with respect to any
                proposed assignment or sublease, regardless of whether the
                assignment or sublease is approved.

             C. RENTALS: In the event that pursuant to any assignment or
                sublease, Tenant receives or has the right to receive any
                monies, rental payments or any other consideration in excess of
                Tenant's rental obligations hereunder, Tenant guarantees that
                fifty percent (50%) of all such excess amounts from any sublease
                or assignments shall, when due or payable, be immediately
                delivered or paid to the Landlord by Tenant or any such assignee
                or subtenant. All such monies, rental payments or any other
                consideration shall be the sole and


                                      18

<PAGE>


                exclusive property Landlord. In determining any minimum sublease
                rent requirements or excess rent received from a subtenant which
                occupies less than all of the Demised Premises, the rent payable
                by Tenant hereunder shall be compared to the rent payable by
                the subtenant on a per square foot basis, i.e, rent shall be the
                total rent accruing during such period multiplied by a fraction,
                the numerator of which is the floor area of any such subleased
                area and the denominator of which is the area of the Demised
                Premises.

             D. NOTICE OF CONTEMPLATED ASSIGNMENT OR SUBLETTING: In the event
                Tenant shall desire to assign, transfer or sublet the Demised
                Premises to any other person or entity, then Tenant shall notify
                Landlord in writing and shall furnish Landlord with information
                regarding the assignee, transferee, subtenant or the change in
                the ownership of the controlling interest of Tenant. The phrase
                "controlling interest" as used in the preceding sentence shall
                have the same meaning as the word "control" as described in
                Section 11(A). Landlord shall have twenty (20) days after
                receipt of such notice and supporting data to adopt one of the
                following alternatives: (a) to approve the proposed assignment,
                transfer or subletting (or stock sale or transfer where
                applicable), in which case Tenant shall continue to be liable
                along with the said assignee for the fulfillment of all Tenant's
                obligations for the remainder of the term; or (b) to disapprove
                the same and provide Tenant with its written reasons for
                disapproving, in which case this Lease shall continue in full
                force and effect with Tenant continuing to occupy the Demised
                Premises under the terms hereof.

         12. DEFAULT AND REMEDIES:

             A. DEFAULT: The following events shall be deemed to be events of
                default by Tenant under this Lease: (a) if Tenant shall fail to
                make any payment of Rent within five (5) days after the same
                shall become due; (b) if Tenant shall fail to comply with any
                term, provision or covenant of this Lease, other than the
                payment of Rent, and shall not cure such failure within ten (10)
                days after written notice thereof to Tenant; (c) the failure of
                Tenant to open for business in the Demised Premises within
                ninety (90) days of the Commencement Date; or (d) if Tenant
                assigns its assets for the benefit of its creditors. Landlord
                shall be obligated to provide Tenant with written notice, a
                maximum of two times per calendar year, of a payment default and
                Tenant should have a five (5) day grace period after receipt of
                such notice. For a non-monetary default, Tenant shall have a
                30-day grace period after receipt of written notice from
                Landlord to cure such default.

             B. REMEDIES OF LANDLORD: Upon the occurrence of any such event of
                default, Landlord shall have the option to pursue any one or
                more of the following remedies (as well as any other remedies
                provided by law) without any notice or demand whatsoever:

                1. Enter upon and take possession of the Demised Premises
                   without terminating this Lease and without relieving Tenant
                   of its obligation to make the payments of Rent herein
                   reserved, and expel or remove Tenant and any other person who
                   may be occupying the Demised Premises or any part thereof and
                   any personal property or trade fixtures located therein, and
                   change or alter the locks and other security devices, and
                   relet the Demised Premises on behalf of Tenant, at any rental
                   readily obtainable, and receive the rent therefor. In such
                   event, Tenant shall pay to Landlord on demand the reasonable
                   expenses of

                                       19
<PAGE>


                   such reletting, and any deficiency which may arise by reason
                   of such reletting for the residue of the term of this Lease.

                2. Forfeit and terminate this Lease forthwith. In the event of
                   such termination, Tenant shall immediately surrender the
                   Demised Premises the Landlord and if Tenant fails to do so,
                   Landlord may enter upon and take possession of the Demised
                   Premises and expel or remove Tenant and any other person who
                   may be occupying the Demised Premises or any part thereof,
                   and any personal property or trade fixtures located therein.
                   In the event of the forfeiture of this Lease as provided
                   herein, Tenant shall pay to Landlord, on demand, the
                   reasonable expenses of such reletting (including all repairs,
                   reasonable improvements, brokers' and attorneys' fees and all
                   loss or damage which Landlord may sustain by reason or such
                   re-entry and reletting) plus an amount equal to the
                   difference between the Rent provided for herein and the
                   amount of rent received by Landlord from the subsequent
                   reletting of the Demised Premises, for the balance of the
                   term of this Lease.


         13. BANKRUPTCY:

             A. TENANT BANKRUPTCY: If Tenant or the guarantor of Tenant's
                obligations hereunder ("Guarantor") (i) makes an assignment or
                other arrangement for the benefit of creditors or takes any
                other similar action for the protection or benefit of creditors,
                (ii) ceases doing business as a going concern, (iii) generally
                does not pay its debts as they become due, (iv) admits in
                writing its inability to pay its debts as they become due, (v)
                takes any action to dissolution or liquidation, (vi) gives
                written notice to any governmental body of insolvency, or
                pending insolvency, or suspension or pending suspension of
                operations, or (vii) takes any corporate or partnership action
                in connection with any of the foregoing, then Landlord may give
                Tenant a notice of termination of this Lease, in which case this
                Lease shall terminate as of the date specified in such notice of
                termination, whether or not the term has commenced, with the
                same effect as if that day were the expiration date of the term.
                If a petition shall be filled or a proceeding or bankruptcy case
                commenced against Tenant or the Guarantor or any of their
                affiliates in any court, pursuant to any bankruptcy or
                insolvency or for arrangement or reorganization or for the
                appointment of a receiver or trustee of all or a portion of
                Tenant's or guarantor's or their respective affiliate's
                property, and the same is not discharged within ninety (90)
                days, or if Tenant or any of their respective affiliates shall
                voluntarily file any such petition or make an assignment for the
                benefit of creditors or petition for or enter into an
                arrangement, this Lease shall, effective the date of filing,
                automatically and as a matter of law, be deemed to have been
                cancelled, terminated and expired with the same effect as if
                that date were the expiration date of the term.

             B. LEASE TERMINATION: From and after the date of a termination as
                described above, neither Tenant nor anyone claiming through or
                under Tenant by virtue of any statute or of an order of any
                court shall be entitled to acquire or remain in possession of
                the Demised Premises, and Landlord shall have no further
                liability hereunder to Tenant, and any such person or entity, if
                in possession, shall forthwith quit and surrender the Demised
                Premises. If this Lease shall be so cancelled or terminated,
                Landlord, in addition to the other rights and remedies of
                Landlord by virtue of any other provisions herein or elsewhere
                in this Lease contained or by virtue of any statute, law or rule
                of law, may retain


                                       20
<PAGE>


                as liquidated damages any rent, security deposit or monies
                received by Landlord from Tenant or others in behalf of Tenant.
                In the event of the termination of this Lease as described
                above, Landlord shall be entitled to recover from Tenant an
                amount equal to the maximum allowed by any statute, law or rule
                of law in effect at the time when, and governing the proceeding
                which, such damages are to be proved.

             C. LEASE ASSUMPTION: If pursuant to the insolvency laws (i.e., the
                United States Bankruptcy Code, 11 U.S.C. Section 101 et seq.,
                and any federal, state, foreign or other laws of like impact),
                Tenant or a trustee of Tenant is permitted to, and elects to,
                assume or assume and assign this Lease:

                1. Tenant or the trustee shall as a condition to such assumption
                   or assumption and assignment either cure all defaults under
                   this Lease, or provide Landlord Adequate Assurance
                   (hereinafter defined) that: (a) Tenant or the trustee shall
                   cure all monetary defaults under this Lease within ten (10)
                   days after the date of any such assumption; and (b) Tenant or
                   the trustee shall cure all non-monetary defaults under this
                   Lease within thirty (30) days after the date of any such
                   assumption.

                2. Tenant or the trustee shall as a condition to such assumption
                   or assumption and assignment either compensate, or provide
                   Adequate Assurance to landlord that within ten (10) days from
                   the date of any such assumption Tenant or the trustee shall
                   compensate Landlord for any pecuniary loss incurred by
                   Landlord arising from any default under this Lease,
                   including, but not limited to, Landlord's attorneys' fees and
                   disbursements and any late charge applicable under this
                   Lease, as recited in Landlord's written statement of
                   pecuniary loss sent to Tenant or the trustee.

                3. In the case of an assumption, Tenant or the trustee shall as
                   a condition to such assumption provide Landlord with Adequate
                   Assurance of the future performance of the obligations of
                   Tenant under this Lease, including, without limitation,
                   Adequate Assurance of Tenant's or the trustee's ability to
                   pay Rent.

                4. In the case of an assumption and assignment, such assignee
                   shall as a condition to such assignment provide Landlord with
                   Adequate Assurance of the future performance of the
                   obligations of Tenant under this Lease, including, without
                   limitation, Adequate Assurance of such assignee's ability to
                   pay Rent.

                5. In the case of an assumption and assignment, any and all
                   monies or other consideration payable or otherwise to be
                   delivered in connection with such assignment shall be paid or
                   delivered to Landlord (or shall be held in trust for the
                   benefit of Landlord and be promptly paid or delivered to
                   Landlord), shall be and remain the exclusive property of
                   Landlord and shall not constitute property of Tenant or of
                   the estate of Tenant within the meaning of the United States
                   Bankruptcy Code, 11 U.S.C. Section 101 et seq. (as the same
                   may be amended, the "Bankruptcy Code").

                6. In the case of an assumption, Tenant or the trustee, and in
                   the case of an assumption and assignment, such assignee,
                   shall be deemed without further act or deed to have assumed
                   all of the obligations arising under

                                       21
<PAGE>


                   this Lease on and after the date of such assumption or
                   assumption and assignment. Tenant and any such trustee or
                   assignee shall upon demand execute and deliver to Landlord an
                   instrument confirming such assumption.

                7. The assumption of this Lease by Tenant or the trustee and the
                   assumption and subsequent assignment of this Lease to the
                   assignee is subject to all the provisions of this Lease, and
                   Tenant, trustee or assignee will not breach any provision
                   contained in this Lease or any other lease, mortgage,
                   financing agreement, master agreement or other agreement
                   relating to the Building.

                8. Notwithstanding anything in the Lease to the contrary, all
                   amounts payable by Tenant to or on behalf of Landlord under
                   this Lease, whether or not expressly denominated as Rent or
                   other charges due hereunder shall constitute rent for the
                   purpose of Section 502(b)(6) of the Bankruptcy Code and for
                   the purpose of any similar section of any other present or
                   future Insolvency Laws.

         14. COMMON AREAS:

             A. CONTROL OF COMMON AREAS: All parking areas, driveways, entrances
                and exits thereto, sidewalks, ramps, landscaped areas, exterior
                stairways, and all other Common Areas and facilities provided by
                Landlord for the common use of tenants of the Building and their
                agents, employees and customers, shall at all times be subject
                to the exclusive control and management of Landlord. Landlord
                shall have the right to operate and maintain the same in such
                manner as Landlord, in its sole discretion, shall determine from
                time to time, including without limitation the right to employ
                all personnel and to make all rules and regulations pertaining
                to and necessary for the proper operation and maintenance of
                said Common Areas and the Building as a whole. Tenant shall not
                use the sidewalks adjacent to the Demised Premises or any area
                outside the Demised Premises for business purposes without the
                previous written consent of Landlord. Landlord shall have the
                exclusive right at any and all times to close any portion of the
                Common Areas for the purpose of making repairs, changes or
                additions thereto, provided that such changes do not materially
                impair Tenant's use of the Premises and are consistent with
                common areas in first class office buildings in Raleigh NC, and
                may change the size, area or arrangement of the parking areas or
                the lighting thereof within or adjacent to the existing areas
                and may enter into agreements with adjacent owners for
                cross-easements for parking, ingress or egress.

             B. PARKING AREA: Tenant shall have the right to park in the
                Building parking facilities in common with other tenants in the
                Building upon such terms and conditions, including the
                imposition of reasonable parking charges, if the same is
                established by Landlord at any time during the term of this
                Lease. Tenant agrees not to overburden the parking facilities
                and agrees to cooperate with Landlord and other tenants in use
                of the parking facilities. Landlord reserves the right in its
                absolute discretion to determine whether the parking facilities
                are being overburdened and to allocate and assign parking spaces
                among Tenant and other tenants, and to reconfigure the parking
                area and modify the existing ingress to and egress from the
                parking area as Landlord shall deem appropriate. Landlord
                further shall have the right from time to time to grant tenants,
                including Tenant, exclusive rights to certain parking spaces at
                the parking facilities at the Building. Landlord will provide
                that it will always

                                       22
<PAGE>


                maintain parking ratios as required by the zoning code, but in
                no event less than four parking spaces per 1,000 useable square
                feet of the Building. If Landlord offers reserved parking to any
                other tenants in the Building, of less than 50,000 rsf, then
                Landlord shall provide Tenant with not more than five (5)
                designated parking spaces.

             C. LOADING: Tenant agrees that all loading and unloading of
                equipment, furniture, and goods shall be made at such places as
                are designated by Landlord.

         15. EMINENT DOMAIN:

             A. FULL TAKING: If all of the Demised Premises shall be acquired
                under threat of condemnation or condemned by eminent domain for
                any public or quasi-public use or purpose, then and in that
                event the term of this Lease shall cease and terminate from the
                date of title vesting in such proceeding and Tenant shall have
                no claim against Landlord for the value of any unexpired term of
                this Lease.

             B. PARTIAL TAKING: If any part of the Demised Premises (or so much
                of the Building as to make continued operation of the Building
                impractical in the reasonable business judgment of Landlord)
                shall be acquired under threat of condemnation or condemned by
                eminent domain for any public or quasi-public use or purpose
                then Landlord may (i) elect to restore the Demised Premises to a
                condition comparable to its condition at the time of such
                condemnation less the portion taken in such condemnation
                provided Tenant's use of the property is not materially
                impaired, and this Lease shall thereafter continue in full force
                and effect with a proportionate adjustment to the minimum rent
                for the portion of the Demised Premises lost by such taking or
                condemnation; or (ii) elect to cancel this Lease by written
                notice of cancellation given to Tenant within one hundred twenty
                (120) days after the date of such taking and thereupon this
                Lease shall cease and terminate as of the date set forth in said
                notice and Tenant shall immediate vacate and surrender the
                Demised Premises to Landlord. The term "condemnation" as used
                herein shall include any voluntary conveyance in lieu thereof.
                If Tenant's space is materially impaired for more than one
                hundred twenty (120) days, Tenant may terminate the Lease and
                receive a rent abatement from the date of the condemnation
                action.

             C. AWARD: In the event the Demised Premises shall be acquired under
                threat of condemnation or condemned by eminent domain for any
                public or quasi-public use or purpose as hereinbefore provided,
                either whole or partial, Tenant shall not be entitled to any
                part of the award as damages or otherwise for such condemnation
                and Landlord shall receive the full amount of such ward, Tenant
                hereby expressly waiving any right or claim to any part thereof;
                except that Tenant shall be entitled to receive and retain any
                amounts which may be specifically awarded to it in such
                condemnation proceedings because of the taking of its trade
                fixtures. It is understood that in the event of the termination
                of this Lease as aforesaid, neither Landlord nor Tenant shall
                have any claim against the other for the value of any unexpired
                term of this Lease and Tenant shall have no right or claim to
                any part of the award on account thereof.

         16. LANDLORD'S RIGHT OF ENTRY: Except in the case of emergencies,
             Landlord reserves the right at all reasonable times and with
             reasonable notice to Tenant during the term of this Lease for
             Landlord or Landlord's agents to enter the Demised Premises for the
             purpose of inspecting and examining the same, and to show the same

                                       23
<PAGE>



             to prospective purchasers or tenants, and to make such repairs,
             alterations, improvements or additions as Landlord may deem
             necessary or desirable. During the ninety (90) days prior to the
             expiration of the term of this Lease or any renewal term, Landlord
             may exhibit the Demised Premises to prospective tenants and place
             upon the Demised Premises the usual notices advertising the Demised
             Premises for lease, which notices Tenant shall permit to remain
             thereon without molestation. If Tenant shall not be personally
             present to open and permit an entry into said Demised Premises, at
             any time, when for any reason an entry therein shall be necessary
             or permissible, Landlord or Landlord's agents, connected with
             Building maintenance, may enter the same by a master key, or may
             forcibly enter the same, without rendering Landlord or such agents
             liable therefore, and without in any manner affecting the
             obligations and covenants of this Lease. Nothing herein contained,
             however, shall be deemed or construed to impose upon Landlord any
             obligation, responsibility or liability whatsoever for the care,
             maintenance or repair of the Demised Premises or any part thereof,
             except as otherwise herein specifically provided.

         17. QUIET ENJOYMENT: Landlord agrees that, if the Rent is being paid in
             the manner and at the time prescribed and the covenants and
             obligations of Tenant are being all and singular kept, fulfilled
             and performed, Tenant shall lawfully and peaceably have, hold,
             possess, use and occupy and enjoy the Demised Premises so long as
             this Lease remains in force, without hindrance, disturbance or
             molestation from Landlord, subject to the specific provisions of
             this Lease.

         18. WAIVER: No failure to exercise, nor any delay in exercising any
             right, power or remedy hereunder by Landlord shall operate as a
             waiver thereof, nor shall any single or partial exercise by
             Landlord of any such right, power or remedy preclude any other or
             further exercise thereof or the exercise of any other right. Waiver
             by Landlord of any default, breach or failure of Tenant under this
             Lease shall not be construed as a waiver of any subsequent or
             different default, breach or failure. In case of a breach by Tenant
             of any of the covenants or undertakings of Tenant, Landlord
             nevertheless may accept from Tenant any payment or payments
             hereunder without in any way waiving Landlord's rights with respect
             thereto as herein provided or any rights or remedies available at
             law or in equity by reason of any other breach or lapse which was
             in existence at the time such payment or payments were accepted by
             Landlord.

         19. ACCORD AND SATISFACTION: No payment by Tenant or receipt by
             Landlord of a lesser amount than the Rent herein stipulated shall
             be deemed to be other than on account of the earliest stipulated
             Rent, nor shall any endorsement or statement on any check or any
             letter accompanying any check or payment as Rent be deemed an
             accord and satisfaction, and Landlord may accept such check or
             payment without prejudice to Landlord's right to recover the
             balance of such rent or pursue any other remedy in this Lease
             provided.

         20. SUBORDINATION: Tenant accepts this Lease subject and subordinate to
             any mortgage or deed of trust presently existing or hereafter
             arising on the Demised Premises or upon the Building, and to any
             renewals, refinancing, extensions and replacements thereof.
             Landlord and Tenant agree that this Lease shall be subordinate to
             any future mortgage or deed of trust; provided that Tenant receives
             an executed Non-Disturbance Agreement from such lender which sets
             forth that Tenant's possession of the Demised Premises shall not be
             disturbed so long as Tenant is not in default hereunder, and that
             if any purchaser by a foreclosure sale or by deed in lieu of
             foreclosure becomes the owner of the Demised Premises or the
             Building, Tenant will attorn to and recognize such entity as
             Landlord hereunder. In confirmation of this subordination, Tenant
             shall execute and promptly deliver any certificate that lessor or
             any mortgagee may reasonably require. Tenant agrees to give any
             mortgagee and/or



                                       24
<PAGE>

             trust deed holder, by certified mail, a copy of any notice of
             default served upon the Landlord, provided that prior to such
             notice Tenant has been notified in writing (by way of notice of
             assignment of rents and leases or otherwise) of the address of such
             mortgagee and/or trust deed holder. Tenant further agrees that if
             Landlord shall have failed to cure any default hereunder within the
             time provided for in this Lease, then the mortgagee and/or trust
             deed holder shall have an additional thirty (30) days within which
             to cure such default, or if such default cannot be cured within
             that time, then such additional time as may be necessary if within
             such thirty (30) day period, any mortgagee and/or trust deed holder
             has commenced and is diligently pursuing the remedies necessary to
             cure such default (including but not limited to commencement of
             foreclosure proceedings if necessary to effectuate such cure).

         21. ESTOPPEL LETTER:

             Either party (Answering Party) shall from time to time, with ten
             (10) business days after receiving a written request by the other
             party (Asking Party), execute and deliver to the Asking Party a
             written statement. This written statement, which may be relied upon
             by the Asking Party and any third party with whom the Asking Party
             is dealing shall certify:

             (i) the accuracy of the Lease document;

             (ii) the Beginning and Ending Dates of the Lease;

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

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

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

         22. NOTICES: All notices by either party to the other shall be made by
             either (i) hand delivery; or (ii) depositing such notice with a
             nationally known overnight courier service; or (iii) depositing
             such notice in the certified mail of the United States of America.
             Such notice shall be deemed to have been served on the date of hand
             delivery or of such depositing in the Certified Mail or overnight
             courier, as applicable. The refusal by either party to accept
             delivery shall not negate its effectiveness. All notices shall be
             delivered to the addresses specified in Section 1. Either party may
             change its address from time to time, and shall give the other
             party notice of such new address.

         23. REAL ESTATE COMMISSIONS: Landlord and Tenant each represent that
             they have dealt with no broker other than Goodman Segar Hogan
             Hoffler and CORPORATE REALTY ADVISORS in connection with the
             negotiation, execution and delivery of this Lease. Landlord agrees
             to pay the commission due said brokers pursuant to a separate
             agreement. This provision shall not be construed to create any
             third party rights hereunder in favor of said brokers. If any
             person or entity other than Goodman Segar Hogan Hoffler and
             CORPORATE REALTY ADVISORS shall assert a claim to a finder's fee,
             broker's commission or other compensation on account of the alleged
             employment as finder or broker for Tenant or performance of
             services as a finder or broker for Tenant in connection with this
             transaction, Tenant agrees to indemnify and hold Landlord harmless
             from and against any and all claims and all costs, expenses and
             liabilities
                                       25
<PAGE>


             incurred in connection therewith, including but not limited to
             reasonable attorney's fees and court costs, by any other such
             broker, agent or other person claiming a commission or other form
             of compensation by virtue of having dealt with Tenant with regard
             to this Lease.

         24. HOLDING OVER: Should Tenant remain in possession of the Demised
             Premises after the expiration or sooner termination of the term of
             this Lease (or any renewal term hereof) without the consent of
             Landlord, Landlord may, at its option, serve written notice upon
             Tenant that such holding over constitutes any one of the following:
             (i) a renewal of this Lease for one year; or (ii) a tenancy from
             month-to-month terminable in accordance with applicable law; or
             (iii) a tenancy at sufferance terminable in accordance with
             applicable law. Any such period described in (i), (ii) or (iii)
             shall be subject to all of the terms, covenants and conditions of
             this Lease, except that Tenant shall pay Rent at 150% the rate of
             Rent hereinbefore provided to be paid during the last month of the
             lease term. If no notice is served, then a tenancy at sufferance
             shall be deemed to be created. Tenant shall be liable to Landlord
             for all damages suffered by Landlord resulting from retention of
             possession by Tenant, including the loss of any proposed subsequent
             Tenant for all or any portion of the Demised Premises.

         25. RELATIONSHIP BETWEEN THE PARTIES: The sole relationship between
             Landlord and Tenant is that of landlord and tenant. It is
             understood that Landlord shall not be deemed to be a partner or
             joint venturer with Tenant in the conduct of Tenant's business.

         26. PARTIAL INVALIDITY: If any term or condition of this Lease or the
             application thereof to any person or event shall to any extent be
             invalid and unenforceable, the remainder of this Lease in the
             application of such term, covenant or condition to persons or
             events other than those to which it is held invalid or
             unenforceable shall not be affected and each term, covenant and
             condition of this Lease shall be valid and be enforced to the
             fullest extent permitted by law.

         27. SUCCESSORS: The provisions, covenants and conditions of this Lease
             shall bind and inure to the benefit of the legal representatives,
             and assigns of each of the parties, except that no assignment or
             subletting by Tenant without the written consent of Landlord shall
             vest any right in the assignee or sublessee of Tenant.

         28. TRANSFER OF LANDLORD INTEREST: In the event of any sale or exchange
             of the Building and the Demised Premises by Landlord, Landlord
             shall be and is hereby entirely freed and relieved of all liability
             under any and all of its covenants and obligations contained in or
             derived from this Lease arising out of any act, occurrence or
             omission relating to the Demised Premises or this Lease occurring
             after the consummation of such sale, exchange or assignment.

         29. LANDLORD'S LIABILITY: Anything contained in this Lease to the
             contrary notwithstanding, Tenant agrees that Tenant shall look
             solely to the estate and property of Landlord in the Demised
             Premises for the collection of any judgment (or other judicial
             process) requiring the payment of money by Landlord to Tenant in
             the event of any default or breach by Landlord with respect to any
             of the terms and provisions of this Lease to be observed and/or
             performed by Landlord, subject, however, to the prior rights of any
             holder of any mortgage covering the Building, and no other assets
             of Landlord shall be subject to levy, execution or other judicial
             process for the satisfaction of Tenant's claims.

                                       26
<PAGE>


         30. HAZARDOUS MATERIALS: Tenant shall not use, store, manufacture,
             dispose of or discharge any pollutants, contaminants, or harmful or
             hazardous substances from or on the Demised Premises or otherwise
             occupy or permit the Demised Premises to be occupied or used in a
             manner which (i) violates any law, regulation, rule or other
             governmental requirement, (ii) impairs the health, safety or
             condition of any person or property or (iii) adversely affects the
             use, enjoyment or value of the Demised Premises or the surrounding
             property. Tenant shall promptly notify Landlord of the breach, or
             the potential or threatened breach, of any of the provisions of
             this paragraph. Landlord shall have the right of access to the
             Demised Premises to inspect, test and, in Landlord's sole
             discretion, remedy any potential environmental problem. Tenant
             shall indemnify and hold Landlord, Landlord's Lender and their
             respective officers, shareholders, partners, employees, and agents,
             harmless from any loss, claim, liability or expense (including,
             without limitation, attorneys' fees, court costs, consultant fees,
             expert fees, penalties, fines, removal, clean-up, transportation,
             disposal, restoration expenses, diminution in value of the Demised
             Premises, damages for the loss or restriction on use of rentable or
             usable space or of any amenity of the Demised Premises, damages
             arising from any adverse impact on marketing of space) arising in
             connection with Tenant's failure to comply with the provisions of
             this paragraph. A breach of the provisions of this paragraph shall
             be a material default enabling Landlord to exercise any of the
             remedies set forth in this Lease or otherwise provided by law.
             Tenant's obligation hereunder shall survive the expiration or
             sooner termination of this Lease.

         31. REIMBURSEMENT OF FEES AND COSTS: In the event that any action or
             proceeding is brought to enforce any term, covenant or condition of
             this Lease on the part of Landlord or Tenant, the prevailing party
             shall be entitled to reasonable attorney's fees from the losing
             party.

         32. FORCE MAJEURE: If either party shall be prevented or delayed from
             punctually performing any obligation or satisfying any condition
             under this Lease by any strike, lockout, labor dispute, inability
             to obtain labor materials or reasonable substitutes therefor, acts
             of God, unusual governmental restriction, regulation or control,
             enemy or hostile government action, civil commotion, insurrection,
             sabotage, fire or other casualty, or any other condition beyond the
             reasonable control of such party or caused by the other party, then
             the time to perform such obligation or to satisfy such condition
             shall be extended on a day-by-day basis for the period of delay
             caused by such event; provided, however, that the foregoing shall
             not apply to the obligations of Tenant or Landlord pursuant to this
             Lease to pay Rent or any other sums payable hereunder. In order for
             the foregoing to be effective, the party claiming the benefit of
             this paragraph shall give notice to the other party in writing
             within ten (10) days of the incident specified and the
             particularity of the nature thereof, the reason therefore, the date
             and time incurred and the reasonable length the incident will delay
             the fulfillment of obligations contained herein. Failure to give
             such notice within the specified time shall render such delay
             invalid in extending the time for performing the obligations
             hereunder.

         33. ENTIRE AGREEMENT; NO ORAL MODIFICATIONS: This Lease constitutes the
             sole and only agreement of the parties hereto and supersedes any
             prior understandings or written or oral agreements between the
             parties respecting the transaction and cannot be changed except by
             written agreement.

         34. CONFIDENTIALITY: In order to induce Landlord to enter into this
             Lease on the terms and conditions embodied in this Lease, Tenant
             agrees to keep strictly confidential the terms and conditions and
             rental set forth in this Lease and to cause all persons working for
             Tenant to do likewise. Tenant agrees that said rental and other
                                       27
<PAGE>


             terms and conditions of this Lease will be disclosed only to
             lawyers and accountants working for Tenant who have a need to know
             and on tax returns filed with required governmental authorities;
             otherwise no disclosure whatsoever of said rental, and Lease terms
             and conditions will be made by Tenant.

         35. REVIEW OF DOCUMENTS: The parties hereto represent that they have
             read and understand the terms of this Lease, and that they have
             sought legal counsel to the extent deemed necessary in order to
             protect their respective interests. Neither party shall be deemed
             to be the author of this Lease. This Lease was mutually prepared by
             both parties and shall not be more strongly construed against
             either party hereto.

         36. RULES: Tenant agrees to abide by the rules and regulations attached
             hereto and incorporated herein as EXHIBIT C. Provided that all
             these rules and regulations apply to all tenants of the Building.
             Landlord may modify the rules and regulations at any time and from
             time to time, and Tenant agrees to abide by any such modifications.

         37. SIGNS: Tenant shall not erect, install or maintain any sign,
             advertising or display matter on any exterior door, wall or window
             of the Demised Premises or on any other part of the Demised
             Premises which is visible to public view outside the Demised
             Premises without the prior written approval of Landlord. LANDLORD
             WILL PROVIDE TENANT WITH BUILDING STANDARD IDENTIFICATION ON THE
             LOBBY DIRECTORY AND AT THE SUITE ENTRANCE TO THE DEMISED PREMISES
             AT NO COST TO THE TENANT. TENANT SHALL HAVE THE RIGHT TO USE ITS
             STANDARD LOGO AND GRAPHICS AT THE MONUMENT SIGN TO BE LOCATED AT
             THE ENTRANCE OF THE BUILDING TO THE SAME EXTENT AS ANY OTHER TENANT
             AS WELL AS ON THE BUILDING DIRECTORY AND ENTRANCE TO THE SUITE
             SUBJECT TO LANDLORD'S REASONABLE APPROVAL, WHICH SHALL NOT BE
             UNREASONABLE WITHHELD.

         38. RIGHT TO PERFORM: If Tenant shall fail to pay any sum other than
             Rent, or shall fail to perform any other act on its part to be
             performed hereunder, and such failure shall continue for ten (10)
             days following notice from Landlord, then Landlord may (but shall
             not be obligated to and without waiving or releasing Tenant from
             its obligations) perform on behalf of Tenant. All sums paid by
             Landlord and all penalties, interest and costs in connection
             therewith, shall be due and payable by Tenant on the next day after
             such payment by Landlord, together with interest thereon at the
             Default Rate of interest from such date to the date of payment.

         39. EFFECTIVE: This Lease is not effective until duly signed by both
             Landlord and Tenant.

         40. SECURITY: Landlord shall be under no affirmative obligations with
             respect to security at and for the Building, however, Tenant agrees
             to the exercise by Landlord and its agents and employees, within
             their sole discretion, of such security measures as Landlord deems
             necessary.

         41. FINANCIAL STATEMENTS: Tenant shall provide its annual report within
             sixty (60) days after publication to Landlord. Failure to provide
             this annual report shall not constitute an event of default by the
             Tenant.

         42. COMPLIANCE WITH LAWS:

             A. Landlord's Compliance. Landlord warrants, that on the
                Commencement Date, the Premises will comply with all applicable
                laws, ordinances, rules, and regulations of governmental
                authorities (Applicable Laws). During the Term, Landlord shall
                comply with all Applicable Laws regarding the Demised Premises
                and Building except to the extent Tenant must comply under
                paragraph B below.
                                       28
<PAGE>


             B. Tenant's Compliance. Tenant shall comply with all Applicable
                Laws: (i) regarding the physical condition of the Demised
                Premises but only to the extent the Applicable Laws pertain to
                the particular manner in which Tenant uses the Demised Premises;
                or (ii) that do not relate to the physical condition of the
                Demised Premises but relate to the lawful use of the Demised
                Premises and with which only the occupant can comply, such as
                laws governing maximum occupancy, workplace smoking, and illegal
                business operations, such as gambling.

         43. LEASE RIDERS: The following riders to this lease, if any, are
             attached hereto and incorporated herein by this reference (if none,
             so state):

                  Lease Rider No. 1:        Right of First Offer
                  Lease Rider No. 2:        Intentionally Deleted
                  Lease Rider No. 3:        Pre-Move In Expansion Offer
                  Lease Rider No. 4:        Renewal Options
                  Lease Rider No. 5:        Termination Option


              THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.



                                       29
<PAGE>






         IN WITNESS WHEREOF, the undersigned have entered into this Lease the
day and year first above written.

                      LANDLORD:
                      REXFORD LLC,
                      a North Carolina Limited Liability company

                      BY:             _____________________________________

                      PRINTED NAME:   _____________________________________
                      TITLE:          _____________________________________

ATTEST:
------------------------------
__________ Secretary

[AFFIX CORPORATE SEAL]




                      TENANT:
                      TANGRAM ENTERPRISE SOLUTIONS, INC.,
                      a                       (SEAL)

                      BY:           ________________________________ (SEAL)

                      PRINTED NAME: _____________________________________
                      TITLE:        _____________________________________

[if Tenant is a corporation]:

ATTEST:
------------------------------
__________ Secretary

[AFFIX CORPORATE SEAL]


                                       30
<PAGE>




                                LEASE RIDER NO. 1
                              RIGHT OF FIRST OFFER

         IF TENANT DOES NOT EXERCISE ITS PRE-MOVE IN EXPANSION OPTION, Landlord
hereby grants to Tenant the Right of First Offer to lease the office premises
located on the second floor of the building (the "Expansion Premises"). If the
Expansion Premises become available for lease, and if Tenant is not then in any
form of default, Landlord shall give Tenant notice of Landlord's intent to lease
the Expansion Premises to a specifically identified third party and Tenant shall
have five (5) business days after receipt of such notice within which to give
Landlord written notice of whether or not Tenant desires to exercise its Rights
of First Offer to lease said space contemplated by the identified thirty party,
under the terms and conditions under which the third party would lease the
Expansion Premises. The failure of Tenant to so notify Landlord within such time
period shall be deemed to be a rejection by Tenant of its right to lease the
Expansion Premises. If Tenant exercises its right to lease such Expansion
Premises as herein provided, Landlord and Tenant shall enter into a supplemental
lease agreement relative to such Expansion Premises, on the same economic terms
offered to the third party. IF TENANT EXERCISES ITS RIGHTS OF FIRST OFFER AND
THERE IS A MINIMUM OF FORTY-TWO (42) MONTHS REMAINING ON THE TERM OF THE LEASE,
THE RENTAL RATE FOR THE EXPANSION PREMISES SHALL BE THE THEN CURRENT RENTAL RATE
PER RENTAL SQUARE FOOT BEING PAID WITHIN THE ORIGINAL LEASE, INCLUDING ANNUAL
INCREASES AND EXCLUDING ANY RENT ABATEMENT. FURTHER, IN THE EVENT TENANT
EXERCISES ITS RIGHTS OF FIRST OFFER, TENANT SHALL BE ENTITLED TO A RETROFIT
ALLOWANCE FOR THE EXPANSION PREMISES EQUAL TO TWENTY-FIVE CENTS ($.25) PER
USABLE SQUARE FOOT CONTAINED IN THE EXPANSION PREMISES TIMES THE NUMBER OF
MONTHS THEN REMAINING OF THE LEASE TERM (INCLUDING ANY EXTENSION THEN IN
EFFECT). HOWEVER, SUCH RETROFIT ALLOWANCE SHALL NOT EXCEED $15 PER USABLE SQUARE
FOOT.

                                       31
<PAGE>





                                LEASE RIDER NO. 2

                       THIS PAGE IS INTENTIONALLY DELETED

                                       32
<PAGE>





                                LEASE RIDER NO. 3
                          PRE-MOVE IN EXPANSION OPTION

         Landlord agrees to hold one-half (1/2) of the second floor of the west
wing off the market until February 1, 1997. In order to exercise this Expansion
Option, Tenant must give notice to Landlord of its intent to exercise this
Option prior to February 1, 1997. IF WRITTEN NOTICE IS NOT RECEIVED, THIS OPTION
SHALL EXPIRE AND BECOME NULL AND VOID. Such space shall be leased at the same
rental rate and terms of this Lease, EXCLUDING FREE RENT AND including Tenant
improvement build-out as described herein for the third floor space in a
turn-key condition using building standard materials.


                                       33
<PAGE>




                                LEASE RIDER NO. 4
                                 RENEWAL OPTIONS




         Tenant shall have the right to extend the term of the Lease for two (2)
additional periods of five (5) years, commencing on the expiration of the
immediately preceding term of this Lease. Such renewal option shall be deemed
effectively exercised only if Tenant has given Landlord written notice thereof
at least one hundred twenty (120) days prior to the expiration of the original
term, and only if Tenant is not in default as determined under Section 12 at the
time of such exercise and at the time of the commencement of the renewal term.
All terms and provisions of this Lease shall be applicable during such renewal
term except that the renewal rental rate shall be at the then prevailing market
rental rate. For purposes of this Lease, the then prevailing market rental rate
shall mean the annual amount per rentable square foot that willing, comparable,
non-equity, non-renewal, non-expansion new tenant would pay, and a willing,
comparable Landlord of a similar property would accept, in an arm's length
transaction, as of the commencement of the renewal term, taking into account the
annual rental rates per rentable square foot, the standard of measurement by
which the rentable square footage is measured, the type of escalation clause,
the extent of Tenant's liability under the lease, abatement provisions
reflecting free rent and/or no rent during the period of construction or
subsequent to the commencement date as to the space in question, brokerage
commissions, if any, which would be payable by Landlord in similar transactions,
leasehold improvements which would be payable by Landlord in similar
transactions, length of the lease term, and the size and location of the
premises being leased, it being the intent that Tenant will obtain the same rent
and other economic benefits that Landlord would otherwise give in comparable
transactions and Landlord will make and receive the same economic payments and
concessions that Landlord would otherwise make and receive in comparable
transactions.

         For the first thirty (30) days following Landlord's receipt of Tenant's
notice of exercise of such option to renew, Landlord and Tenant shall have the
opportunity and option to mutually agree on the fair market rental for the
Demised Premises. If Landlord and Tenant are unable to agree upon such fair
market rental within the time period set forth above, then each party shall
appoint an appraiser within ten (10) days after the lapse of such thirty (30)
day time period and notify the other party of such appointment by identifying
the appraiser. Each party hereto agrees to select as it respective appraiser a
licensed real estate broker, who is an individual having at least five (5) years
experienced with respect to office property ownership, management and marketing
in the Cary-Raleigh, North Carolina area, which person should not be regularly
employed or have been retained during the last two (2) years as a consultant by
the party selecting such person. Neither party may consult directly or
indirectly with any appraiser regarding the fair market rental prior to the
appointment or after appointment, outside the presence of the other party. Not
later than ten (10) days after both appraisers are appointed, each party shall
separately, but simultaneously, submit in a sealed envelope to each appraiser
their separate suggested fair market rental and shall provide a copy of such
submission to the other party. The two selected appraisers, after reviewing such
submissions, shall each independently determine the fair market rental for the
Demised Premises and shall determine whether the Landlord's or the Tenant's
estimate of fair market rental is closer to the actual market rental for the
Demised Premises. If both appraisers agree that one of the said declared
estimates is the actual fair market rental for the Demised Premises, they shall
declare that estimate to be the fair market rental for the Demised Premises, and
their decision shall be final and binding upon the parties. If the two selected
appraisers are unable to agree upon the fair market rental within thirty (30)
days after receipt of Landlord's and Tenant's submitted estimates, then the
appraisers shall inform the parties and the appraisers shall select a third
appraiser, not less than ten (10) days after the expiration of the thirty (30)
day period. If no appraiser is selected within such ten (10) day period, either
party may immediately petition a court of competent jurisdiction to appoint such
third appraiser. The third appraiser shall have the same qualifications set
forth above and the restrictions set forth above shall likewise apply. The third
appraiser shall independently determine the fair market

                                       34
<PAGE>


rental of the Demised Premises. The ultimate fair market rental of the Demised
Premises shall be the arithmetic average of the two closest fair market rental
values, determined by two of the three appraisers, but in no event in excess of
the bounds established by Landlord's or Tenant's estimates furnished as set
forth above. The fair market rental established under this paragraph shall be
conclusive, unappealable and binding upon the parties hereto. Each party shall
be responsible for the costs, charges and/or fees of its appraiser, and the
parties shall equally in the costs, charges and/or fees of the third appraiser.

                                       35
<PAGE>







                                LEASE RIDER NO. 5
                               TERMINATION OPTION


         Landlord hereby grants to Tenant a one time right to terminate the
Lease pertaining to the square footage of space in the Demised Premises which is
occupied by that portion of Tenant's business dealing with AM:PM Software (the
"AM:PM Suite") at the end of the sixtieth (60th) month of the initial lease term
by providing Landlord one hundred eighty (180) days prior written notice. After
the effective date of such notice, Tenant shall have no further responsibilities
with respect to the AM:PM Suite.


                                       36
<PAGE>





                                   EXHIBIT A
                                LEGAL DESCRIPTION



         All of Lots C6b-1, C6b-2, and a portion of C6b-4 (consisting of
approximately 17.509 acres), as shown on survey of Denward W. Baker and
Associates, P.A., entitled "Regency park Site C6," recorded in Wake County
Register of Deeds, Book of Maps 1985, Page 1466.


                                       37
<PAGE>





                                   EXHIBIT A-1

                                    BUILDING


                                       38
<PAGE>





                                   EXHIBIT A-2
                               BUILDING FLOOR PLAN

                                       39
<PAGE>




                                    EXHIBIT B

                DESCRIPTION OF LANDLORD'S WORK AND TENANT'S WORK

                            Attached to and forming a
                                  part of Lease

                                 LANDLORD'S WORK


Landlord will provide the following (all other work not specifically identified
in this Exhibit B or elsewhere in this Lease in individual leases shall be at
Tenant's expense):

         1.  Landlord agrees to provide Tenant buildout using building standard
             finishes based on the enclosed space plan as shown on Exhibit B-1.
             LANDLORD SHALL PROVIDE A $5,000 ALLOWANCE TOWARD TENANT'S BUILT-IN
             RECEPTION COUNTER.

         2.  Landlord shall be responsible for constructing the Demised Premises
             according to the mutually agreed upon plans and specifications.

             Landlord will provide a $14.35 tenant improvement allowance per
             rentable square foot on 49,574 rentable square feet. In the event
             that such costs exceeds $14.35, Landlord shall pay for such cost
             and amortize such costs over seven (7) years at an interest rate of
             ten percent (10%) and charge Tenant such amortized amount as part
             of the base rent for the Demised Premises.

         3.  Landlord's upfitting of the Demised Premises shall not exceed the
             items listed above and the plans attached as Exhibit B-1 which
             include the engineers' drawings to be provided by Landlord in
             connection therewith. Landlord is further responsible for providing
             the common areas of the Building in compliance with the Americans
             with Disabilities Act and all other applicable code, statute,
             regulation or applicable law.

         4.  All architect, engineering and permitting cost to upfit the Demised
             Premises.

         5.  Landlord shall make the following improvements to the base
             Building:

             Re-stripe the existing parking lot to maximize the number of spaces
             available;

             Label visitor parking adjacent to the Building entrance; and

             Maintain a building perimeter entry control system for a
             multi-tenant office building befitting a Class A suburban office
             building, however, Landlord does not guaranty the safety or
             security at the Demised Premises and Building and Landlord assumes
             no liability under this Lease for such safety or security.

             Landlord will use its best efforts to provide a cafeteria for the
             nonexclusive use of tenants of the Building with such cafeteria
             operational by the Term Commencement.

             Landlord will use its best efforts to provide a fitness center
             available for the nonexclusive use of the tenants of the Building
             which will include without limitation locker room, changing rooms
             and shower facilities for men and women within one hundred twenty
             (120) days after the Term Commencement.

                                       40
<PAGE>



             Landlord to provide 100 KVA to each of the 3rd and 4th floors
             mechanical rooms.

             Landlord to provide $9,000.00 allowance to move Tenant's media
             center.




                                  TENANT'S WORK

         Landlord's work is limited to the work hereinabove described and
excludes work described as Tenant's work; all work not classified as Landlord's
work is Tenant's work.

         The work to be done by Tenant shall include, but not be limited to, the
purchase and/or installation and/or performance of the following, and all the
following shall be at Tenant's expenses. The plans and specifications, if any
are needed, and the detail and design shall be subject to the written approval
of Landlord or Landlord's architect. All construction to be performed by
Landlord's contractor.

         Tenant is responsible for moving Tenant's media center.


         ITEMS TO BE DONE


                                       41
<PAGE>










                                   EXHIBIT B-1
                                   SPACE PLAN


                                       42
<PAGE>





                                    EXHIBIT C

                              RULES AND REGULATIONS

Tenant agrees as follows:

1.  Tenant shall not display, any signs or banners or promotions without first
    obtaining the Landlord's prior written approval. Landlord shall have the
    right to remove any signs which are not in conformance with the terms of
    Tenant's Lease or the terms of these Rules and Regulations.


2.  All loading and unloading of goods shall be done only at such times, in the
    areas, and through the entrances, designated for such purposes by Landlord.

3.  The delivery or shipping of merchandise, supplies and fixtures to and from
    the Demised Premises shall be subject to such rules and regulations as in
    the judgment of Landlord are necessary for the proper operation of the
    Demised Premises or the Building.

4.  Landlord shall have the right to set the operating hours for the Building
    and restrict access to the Demised Premises during non-operating hours.
    Landlord may establish security controls for the purpose of regulating
    access to the Building. Tenant shall have access to the Demised Premises 24
    hours a day and seven days a week.

5.  No radio, television, cable, ONH receiver or other similar device shall be
    installed without first obtaining in each instance Landlord's consent in
    writing. No aerial shall be erected on the roof or exterior walls of the
    Demised Premises, or on the grounds, without in each instance, the written
    consent of Landlord. Any aerial so installed without such written consent
    shall be subject to removal without notice at any time. Landlord may install
    a master antenna.

6.  No loudspeakers, televisions, phonographs, radios or other devices shall be
    used in a manner so as to be heard or seen outside of the Demised Premises
    without the prior written consent of Landlord.

7.  Tenant and Tenant's employees shall park their cars only in those portions
    of the parking area designated for that purpose by landlord. Tenant shall
    furnish Landlord with state automobile license numbers assigned to Tenant's
    car or cars, and cars of Tenant's employees upon request.

8.  The plumbing facilities shall not be used for any other purpose than that
    for which they are constructed, and no foreign substance of any kind shall
    be thrown therein, and the expense of any breakage, stoppage or damage
    resulting from a violation of this provision shall be borne by Tenant, who
    shall, or whose employees, agents or invitees shall have caused it.


9.  Tenant shall not burn any trash or garbage of any kind in or about the
    Demised Premises/Building or within one (1) mile of the outside property
    lines of the Building.

10. Landlord reserves the right to make such reasonable amendments or additions
    to these Rules and Regulations as is deemed necessary to the proper
    administration and care of the Building. All amendments or additions to the
    Rules and Regulations shall apply to all tenants of the Building.
                                       43
<PAGE>


11. Before leaving the Demised Premises unattended, Tenant shall close and
    securely lock all doors and other means of entry to the Demised Premises.

12. Landlord reserves the right to exclude or expel from the Building any person
    who, in the judgment of Landlord, is intoxicated or under the influence of
    drugs or alcohol. Tenant shall not serve alcohol in or about the Demised
    Premises

13. Tenant shall not install or operate any internal combustion engine, boiler,
    machinery, heating, or air conditioning apparatus in or about the Demised
    Premises.

14. Tenant shall not solicit or canvass any occupant of the Building.

15. Tenant shall not waste electricity, water, heat or air conditioning and
    agrees to cooperate fully with Landlord to assure the most effective
    operation of the Demised Premises.

16. Tenant shall be allowed to install and maintain vending machines in the
    Demised Premises without Landlord's prior written consent.

17. Tenant shall not introduce lead based paint or asbestos-containing materials
    into the Building.


                                       44
<PAGE>




                                    EXHIBIT D
                     CONFIRMATION AGREEMENT - 11000 REGENCY

         To the Lease dated as of the ____ day of _____________, 1996, made by
and between Rexford LLC, as the Landlord, and Tangram Enterprise Solutions,
Inc., as the Tenant, for Premises at the 11000 Regency office building in Cary,
North Carolina.

         By this Confirmation Agreement dated the ____ day of _______________,
1996, landlord and Tenant agree as follows:

         1. The Building Premises improvements required to be constructed and
         finished by the Landlord in accordance with the terms of the Lease have
         been satisfactorily completed by the Landlord, subject to the
         completion of punch list items identified on the attachment hereto.

         2. The Premises have been delivered to and accepted by the Tenant.

         3. The term Commencement Date of the initial term of the Lease is the
         ____ day of _______________, 1996 and the Expiration Date is the _____
         day of _________________, ______ subject, however, to the terms and
         conditions of the Lease.

         4. The Building contains a total of 260,690 rentable square feet. The
         Premises consist of a total of 260,690 rentable square feet of floor
         area as shown on the attached Exhibits A-1 and A-2, which have been
         field verified as of the date hereof, comprised of 24,787 rentable
         square feet on the third floor.

         5. Minimum rent shall be payable in monthly installments as set forth
         in Section 1(H).

         6. Other than as set forth above, all of the terms and conditions of
         the Lease are hereby ratified and confirmed, and shall continue in full
         force and effect.

         IN WITNESS WHEREOF, this instrument has been duly executed by the
Parties as of the date second written above.


                                     REXFORD LLC

                                      By: ____________________________

                                      Title: ___________________________
                                                      ("Landlord")

                                       45
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                                    EXHIBIT E

                              INTENTIONALLY DELETED


                                       46
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