Document:

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                                                                   Exhibit 10.8

                         EXECUTIVE EMPLOYMENT AGREEMENT

                                    PARTIES:

                  Mayson Brooks, Vice President, Sales & Marketing ("Executive")
                  120 Woodridge Road
                  Beech Mt, North Carolina 28604

                  August Technology Corporation ("Company")
                  5237 Industrial Boulevard
                  Minneapolis, Minnesota 55439

                  Dated this 20 day of May, 1999.

                                    RECITALS

A.       The parties desire to provide for employment of Executive by Company as
         its Vice President, Sales & Marketing.

B.       Company desires reasonable protection of Company's confidential
         business and technical information which has been developed over the
         years by Company at substantial expense.

         Company and Executive, each intending to be legally bound, covenant and
         agree as follows:

1.       EMPLOYMENT. Upon the terms and conditions set forth in this Agreement,
         Company hereby employs Executive, and Executive accepts such employment
         as its Vice President, Sales & Marketing. Except as expressly provided
         herein, termination of this Agreement by either party shall also
         terminate Executives employment by Company.

2.       DUTIES. Executive shall devote his full-time and best efforts to
         Company and fulfilling die duties of his position which shall include
         such duties as may from time to time be assigned him or her by the CEO
         or Board of Directors of the Company; provided that such duties are
         reasonably consistent with Executive's education, experience and
         background.

3.       EMPLOYMENT DATE. Executive's employment shall commence as of the date
         hereof ("Employment Date"), and continue until terminated as provided
         herein. In any event, the Agreement shall automatically terminate
         without notice when the Executive reaches 70 years of age. If
         employment is continued after the age of 70 by mutual agreement, it
         shall be terminable at will by either party.

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4.       COMPENSATION.

         (a)      BASE SALARY. For all services rendered under this Agreement
                  during the term of Executive's employment, Company shall pay
                  Executive a Base Salary ("Base Salary" shall mean regular cash
                  compensation paid on a periodic basis exclusive of benefits,
                  bonuses or incentive payments) at the annual rate of $109,500,
                  payable twice monthly subject to adjustment by the Board of
                  Directors at least annually. If the Executive's salary is
                  adjusted during the term of this Agreement, the adjusted
                  amount shall be the Base Salary until further adjusted by the
                  Board of Directors.

         (b)      BONUS AND Incentive. Bonus or incentive compensation shall be
                  in accordance with the August Technology Annual Award Plan
                  (Exhibit-A). Company reserves the right to alter, amend or
                  eliminate any bonus or incentive plans in accordance with
                  their terms.

         (c)      FRINGE BENEFITS. In addition to the compensation payable to
                  Executive as provided in paragraphs 4(a) and (b) above:

                  (i)      Vacation. Executive shall be entitled to accrue three
                           (3) weeks paid vacation for each year of employment,
                           which shall be calculated in arrears on a monthly
                           basis commencing as of the end of the month following
                           the Employment Date. Vacation shall accumulate, so
                           that if the full vacation that is earned and accrued
                           in a particular year of employment is not taken in
                           that particular year of employment, any unused
                           portion will be carried into and may be taken in the
                           following year of employment only.

                  (ii)     OTHER BENEFITS. The Executive shall be entitled to
                           participate in all other benefit programs offered by
                           the Company to its full-time executive employees,
                           including, but not limited to,
                           health/medical/cafeteria plans; retirement benefits
                           through the Company's 401k plans; personal days off
                           benefits; and other benefits that may be offered from
                           time to time by the Company.

         (d)      STOCK OPTIONS. Company hereby agrees to grant the Executive
                  Incentive Stock Options under the Company's 1997 Stock Option
                  Plan to purchase up to 55,000. Such options shall have
                  an exercise price equal to fair market value (FMV) as
                  determined by the Board of Directors, or shall be set equal to
                  the share price achieved during an equity offering (if
                  offering occurs within 120 days of this Agreement). Options
                  shall expire seven (7) years from the date of hereof shall
                  vest 20% per year commencing July 5, 1999 (subject to
                  paragraph 10 hereof, and shall have other provisions generally
                  included in stock option agreements of the Company. Such stock
                  options shall be governed by the terms of the Company's
                  applicable stock option plan(s) and a stock option agreement
                  with Executive. It is the intention of the Board of Directors,
                  from time to time, to make additional options available to
                  executives based on performance.

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5.       BUSINESS EXPENSES. Company shall, in accordance with, and to the extent
         of its policies in effect from time to time, bear all ordinary and
         necessary business expenses incurred by the Executive in performing his
         duties as an employee of Company, provided that Executive accounts
         promptly for such expenses to Company in the manner prescribed from
         time to time by Company.

6.       TERMINATION. Subject to the respective continuing obligations of the
         parties, pursuant to paragraphs 7, 8, 9, 10, 11, and 12, this Agreement
         may be terminated as follows:

         (a)      BY THE COMPANY. The Company may terminate this Agreement under
                  the following circumstances:

                  (i)      WITH CAUSE, ETC. Company may terminate this Agreement
                           immediately for cause, which for p of this agreement
                           shall include without limitation, fraud,
                           misrepresentation, theft or embezzler Company assets,
                           material intentional violations of law or Company
                           policies, actions involving turpitude or a material
                           breach of the provisions of this Agreement, including
                           specifically the failure to perform his duties as
                           required by paragraph 2 after notice of such failure
                           from Company the expiration of thirty (30) days
                           without corrective action having been undertaken by
                           Executive.

                  2.       WITHOUT CAUSE. Company may terminate this Agreement
                           without cause on sixty (60) days' advance written
                           notice subject to the severance payment provisions
                           set forth in paragraph 7.

         (b)      BY EXECUTIVE. Executive may terminate this Agreement without
                  cause on sixty (60) days' notice

         (c)      DEATH. If Executive should die during the term of this
                  Agreement, this Agreement shall thereupon terminate; provided,
                  however, that the Company shall pay to the Employee's
                  beneficiary or estate, the compensation as provided in
                  paragraph 7 below.

         (d)      PERMANENT DISABILITY. In the event the Executive should become
                  permanently disabled during the term of this Agreement, then
                  this Agreement shall terminate. For the purposes hereof, a
                  permanent disability shall mean that disability resulting from
                  injury, disease or other cause, whether mental or physical,
                  which incapacitates the Executive from performing his normal
                  duties as an employee, appears to be permanent in nature and
                  contemplates the continuous, necessary and substantially
                  complete loss of all management and professional activities
                  for a continuous period of six (6) months.

         (e)      PARTIAL DISABILITY. If the Executive should become partially
                  disabled, he shall be entitled to his salary as provided
                  herein for a period of six (6) months. At the end of said
                  period of time, if such Executive remains partially disabled,
                  the disabled Executive's salary shall be reduced according to
                  the amount of time disabled Executive is able to devote to the
                  Company's business.

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         (f)      TEMPORARY DISABILITY. In the event the Executive should become
                  disabled, but such disability is not permanent, as defined
                  above, such disabled Executive shall be entitled to his salary
                  for a period of six (6) months. If such temporary disability
                  continues longer than said period of time, then the disabled
                  Executive shall be deemed to have become permanently disabled
                  for the purposes of this Agreement at the end of said six (6)
                  month period.

7.       REMEDIES FOR EARLY TERMINATION.

         (a)      In the event of termination pursuant to paragraph 6, Base
                  Salary and any other compensation shall be paid as follows:

                  (ii)     In the event of termination pursuant to paragraph
                           6(a)(ii), Base Salary shall continue to be
                           semi-monthly basis for six (6) months following the
                           date of termination specified in any termination, and
                           Executive shall be entitled to continue to
                           participate in those benefit provided by Subparagraph
                           4(c)(ii) for the longer of six (6) months or the
                           minimum time period by law following termination,
                           provided that the Company shall bear the cost of such
                           benefits for no longer than six (6) months.

                  (iii)    In the event of termination pursuant to paragraph
                           6(b), compensation shall continue to be paid as
                           follows: if the notice of termination is given by
                           Executive at any time, Base Salary shall continue to
                           be paid on a semi-monthly basis prorated through the
                           date of termination specified match notice and shall
                           be entitled to continue to participate in those
                           benefit pr s provided by 4(c)(ii) for the minimum
                           time period required by law following termination at
                           his own cost.

                  (iv)     In the event of termination of this Agreement by
                           reason of Executive's death, payment of Base Salary
                           shall terminate as of the end of the month following
                           the Executive's death.

                  (v)      In the event of disability, payment of Base Salary
                           shall terminate as of the end of the month in which
                           the last day of the six (6) month period of
                           Executive's inability to perform his duties occurs.

         (b)      In the event of termination by reason of Executive's death or
                  disability (clauses (a)(iv) and (a)(v) above):

                  (i)      Executive shall receive a pro rata portion (prorated
                           through the last day Base Salary is payable pursuant
                           to clauses (a)(iii) and (a)(iv), respectively) of any
                           bonus or incentive payment (for the year in which
                           death or disability occurred), to which he/she would
                           have been entitled had he/she remained continuously
                           employed for the full fiscal year in which death or
                           disability occurred and continued to perform his
                           duties in the same manner as they were performed
                           immediately prior to the death or disability-, and
                           The exercise of any options then held by Executive
                           shall be governed by the terms of the applicable
                           Company stock option plan.

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                  (ii)     The exercise of any options then held by Executive
                           shall be governed by the terms of the applicable
                           Company stock option plan.

8.       CONFIDENTIAL INFORMATION.

         (a)      For purposes of this paragraph 8, the term "Confidential
                  Information" means information which is not generally known
                  and which is proprietary to Company or which has been made
                  available to the Company in a manner reasonably understood to
                  require confidential treatment, including (i) trade secret
                  information about Company and its products; and (ii)
                  information relating to the business of Company as conducted
                  at any time within the previous two (2) years or anticipated
                  to be conducted by Company, and to any of its past, current or
                  anticipated products, including, without limitation,
                  information about Companies research, development,
                  manufacturing, purchasing, accounting, engineering, marketing,
                  selling, leasing or servicing. All information that Executive
                  has a reasonable basis to consider Confidential Information or
                  which is treated by Company as being Confidential Information
                  shall be presumed to be Confidential Information, whether
                  originated by Executive or by others, and without regard to
                  the manner in which Executive obtains access to such
                  information.

         (b)      Executive will be governed by the terms of the Employee
                  Assignment and Disclosure Agreement attached hereto as
                  Exhibit-B.

9.       INVENTIONS.

         (a)      For purposes of this paragraph 9, the term "Inventions" means
                  discoveries, improvements and ideas (whether or not in writing
                  or reduced to practice) and works of authorship, whether or
                  not patentable or copyrightable, (1) which relate directly to
                  the business of Company, or to Company's actual or
                  demonstrably anticipated research or development, (2) which
                  result from any work performed by Executive for Company, (3)
                  for which equipment, supplies, facilities or trade secret
                  information of Company is utilized, or (4) which were
                  developed during the time Executive was obligated to perform
                  the duties described in paragraph 2.

         (b)      Executive will be governed by the terms of the Employee
                  Assignment and Disclosure Agreement attached hereto as
                  Exhibit-B.

10.      No ADEQUATE REMEDY. The parties declare that it is impossible to
         measure in money the damages which will accrue to either party by
         reason of a failure to perform any of the obligations under this
         Agreement. Therefore, if either party shall institute any action or
         proceeding to enforce the provisions hereof such person against whom
         such action or proceeding is brought hereby waives the claim or defense
         that such party has an adequate remedy at law, and such person shall
         not urge in any such action or proceeding the claim or defense that
         such party has an adequate remedy at law.

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11.      MISCELLANEOUS.

         (a)      SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
                  and inure to the benefit of the successors and assigns of
                  Company, whether by way of merger, consolidation, operation of
                  law, assignment, purchase or other acquisition of
                  substantially all the assets or business of Company and shall
                  only be assignable under the foregoing circumstances and shall
                  be deemed to be materially breached by Company if any such
                  successor or assign does not absolutely and unconditionally
                  assume all of Company's obligations hereunder. Any such
                  successor or assign shall be included in the term "Company" as
                  used in this Agreement.

         (b)      NOTICES. All notices, requests and demands given to or made
                  pursuant hereto shall, except as otherwise specified herein,
                  be in writing and be delivered or mailed to any such party at
                  its address which:

                  In the case of the Executive shall be:

                           Mayson Brooks
                           120 Woodridge Road
                           Beech Mt, North Carolina 28604

                  In the case of Company shall be:

                           August Technologv Corporation
                           5237 Industrial Boulevard
                           Minneapolis, Minnesota 55439

Either party may, by notice hereunder, designate a changed address. Any notice,
if mailed properly addressed, postage prepaid, registered or certified mail,
shall be deemed dispatched on the registered date or that stamped on the
certified mail receipt, and shall be deemed received within the second business
day thereafter or when it is actually received, whichever is sooner.

         (c)      CAPTIONS. The various headings or captions in this Agreement
                  are for convenience only and shall not affect the meaning or
                  interpretation of this Agreement.

         (d)      GOVERNING LAW. The validity, construction and performance of
                  this Agreement shall be governed by the laws of the State of
                  Minnesota and any and every legal proceeding arising out of or
                  in connection with this Agreement shall be brought in the
                  appropriate courts of the State of Minnesota, each of the
                  parties hereby consenting to the exclusive jurisdiction of
                  said courts for this purpose.

         (e)      CONSTRUCTION. Wherever possible, each provision of this
                  Agreement shall be interpreted in such manner as to be
                  effective and valid under applicable law, but if any provision
                  of this Agreement shall be prohibited by or invalid under
                  applicable law, such provision shall be ineffective only to
                  the extent of such prohibition or

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                  invalidity without invalidating the remainder of such
                  provision or the remaining provisions of this Agreement.

         (f)      WAIVERS. No failure on the part of either party to exercise,
                  and no delay in exercising, any right or remedy hereunder
                  shall operate as a waiver thereof nor shall any single or
                  partial exercise of any right or remedy hereunder preclude any
                  other or further exercise thereof or the exercise of any other
                  right or remedy granted hereby or by any related document or
                  by law.

         (g)      MODIFICATION. This Agreement may not be and shall not be
                  modified or amended except by written instrument signed by the
                  parties hereto.

         (h)      ENTIRE AGREEMENT. This Agreement constitutes the entire
                  Agreement and understanding between the parties hereto in
                  reference to all the matters herein agreed upon; provided,
                  however, that this Agreement shall not deprive Executives of
                  any other rights Executives may have now or in the future,
                  pursuant to law or the provisions of Company benefit plans.

         IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.

         ------------------------------------
         Mayson Brooks

         AUGUST TECHNOLOGY CORPORATION

         By
            ---------------------------------

         Its:
            ---------------------------------

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                                                                    Exhibit 10.9

                             OFFICE WAREHOUSE LEASE

                                 LEASE AGREEMENT

This LEASE AGREEMENT, made as of this 18 day of October, 1999, between
West 78h Street, Bloomington Associates, LLC ("Landlord"), and August Technology
Corporation ("Tenant");

WITNESSETH, THAT

1.       PREMISES: Landlord, subject to the terms and conditions hereof, hereby
initially leases to Tenant certain premises (the "Premises") shown generally on
Exhibit A and as detailed in the space plan dated September 13, 1999, prepared
by BDH & Young, attached hereto as Exhibit B, containing approximately 42,818
square feet in the building situated at 4900 W. 7 Street, Bloomington, Minnesota
("Building"). As of the date hereof, the square footage of the Building is
stipulated to be 98,613 square feet. Landlord shall pay all costs associated
with space planning for the Premises, the First Expansion Premises (as defined
below) and the Second Expansion Premises (as defined below), including, but not
limited to, preparation of construction drawings and costs associated with the
preparation of Exhibit B. Such costs shall not constitute Operating Costs
payable as Additional Rent by Tenant, and shall be separate from Leasehold
Improvements and allowances therefor provided by Landlord. The Building, the
land underlying and contiguous thereto and all improvements thereon are
hereinafter referred to as the "Project".

A.       MANDATORY EXPANSION: During the Term of the Lease the leased Premises
         shall be increased in the manner set forth below:

         (i)      Subject to the provisions of Section 8 below, commencing on
                  December 1, 2000, Tenant shall lease approximately 9,801
                  additional square feet in the Building, as described in
                  Exhibit B (the "First Expansion Premises"); provided, however,
                  that, if Tenant desires to take early delivery of the First
                  Expansion Premises, Tenant shall so notify Landlord in writing
                  and so long as Landlord does not have a binding agreement with
                  a third party for the lease of the First Expansion Premises,
                  Landlord shall use commercially reasonable efforts to provide
                  early delivery of the First Expansion Premises to Tenant in
                  accordance with Tenant's desired timing. Except for the
                  earlier delivery of such space, all other terms and conditions
                  of this Lease shall remain in full force and effect; provided,
                  however, that Tenant shall not be required to pay rent or
                  other charges with respect to the First Expansion Premises
                  until the earlier of (A) the date falling sixty (60) days
                  after the later of the date Landlord substantially completes
                  its required improvements to the First Expansion Premises as
                  set forth in Section 8 below and the date Landlord delivers
                  the First Expansion Premises to Tenant or (B) the date Tenant
                  begins conducting its business from the First Expansion
                  Premises. Additionally, if Landlord and Tenant determine that
                  it is desirable for Landlord to perform some or all of its
                  improvements to the First Expansion Premises described in
                  Section 8 below during the same timeframe as Tenant is
                  performing its build-out of the First Expansion Premises, the
                  parties agree to coordinate the

<PAGE>

                  improvement work within the First Expansion Premises and to
                  work in harmony during the construction process.

         (ii)     Subject to the provisions of Section 8 below, commencing on
                  December 1, 2002, Tenant shall lease approximately 10,224
                  additional square feet in the Building, as described in
                  Exhibit B (the "Second Expansion Premises"); provided,
                  however, that, if Tenant desires to take early delivery of the
                  Second Expansion Premises, Tenant shall so notify Landlord in
                  writing and so long as Landlord does not have a binding
                  agreement with a third party for the lease of the Second
                  Expansion Premises, Landlord shall use commercially reasonable
                  efforts to provide early delivery of the Second Expansion
                  Premises to Tenant in accordance with Tenant's desired timing.
                  Except for the earlier delivery of such space, all other terms
                  and conditions of this Lease shall remain in full force and
                  effect; provided, however, that Tenant shall not be required
                  to pay rent or other charges with respect to the Second
                  Expansion Premises until the earlier of (A) the date falling
                  sixty (60) days after the later of the date Landlord
                  substantially completes its required improvements to the
                  Second Expansion Premises as set forth in Section 8 below and
                  the date Landlord delivers the Second Expansion Premises to
                  Tenant or (B) the date Tenant begins conducting its business
                  from the Second Expansion Premises. Additionally, if Landlord
                  and Tenant determine that it is desirable for Landlord to
                  perform some or all of its improvements to the Second
                  Expansion Premises described in Section 8 below during the
                  same timeframe as Tenant is performing its build-out of the
                  Second Expansion Premises, the parties agree to coordinate the
                  improvement work within the Second Expansion Premises and to
                  work in harmony during the construction process.

B.       OPTIONAL EXPANSION: Tenant shall have the option (the "Third Expansion
         Premises Option") to lease approximately 15,594 additional square feet
         in the Building, as described in Exhibit B (the "Third Expansion
         Premises") and subject to the following:

         (i)      Tenant shall give written notice to Landlord on or before
                  February 28, 2002 of Tenant's exercise of the Third Expansion
                  Premises Option; provided, however, that, -if Tenant desires
                  to take early delivery of the Third Expansion Premises, Tenant
                  shall so notify Landlord in writing and so long as Landlord
                  does not have a binding agreement with a third party for the
                  lease of the Third Expansion Premises, Landlord shall use
                  commercially reasonable efforts to provide early delivery of
                  the MM Expansion Premises to Tenant in accordance with
                  Tenant's desired timing. Except for the earlier delivery of
                  such space, all other terms and conditions of this Lease shall
                  remain in full force and effect; provided, however, that
                  Tenant shall not be required to pay rent or other charges with
                  respect to the Third Expansion Premises until the earlier of
                  (A) the date falling sixty (60) days after the later of the
                  date Landlord substantially completes its required
                  improvements to the Third Expansion Premises as set forth in
                  Section 8 below and the date Landlord delivers the Third
                  Expansion Premises to Tenant or (B) the date Tenant begins
                  conducting its business from the Third Expansion Premises.
                  Additionally, if Landlord and Tenant determine that it is
                  desirable for Landlord to perform some or all of its
                  improvements to the Third Expansion Premises

                                       2
<PAGE>

                  described in Section 8 below during the same timeframe as
                  Tenant is performing its build-out of the Third Expansion
                  Premises, the parties agree to coordinate the improvement work
                  within the Third Expansion Premises and to work in harmony
                  during the construction process.

         (ii)     Except as otherwise provided herein, Tenant shall occupy the
                  Third Expansion Premises on December 1, 2002.

C.       DEFINITION OF "PREMISES:" For purposes of this Lease, and unless the
         context requires otherwise, "Premises" shall include the "First
         Expansion Premises," the "Second Expansion Premises" and the "Third
         Expansion Premises' to the extent applicable.

D.       BASEMENT SPACE: Tenant shall be entitled to use the basement of the
         Building for a total (gross) rent of $5.00 per square foot per year.
         The term for leasing such space shall be on a month to month basis and
         shall be based on the number of square feet in the basement that Tenant
         is actually utilizing from time to time. In this regard, Tenant shall
         submit, together with its monthly rent payment, an estimate of the
         approximate number of square feet of basement space that it is
         utilizing for the month in question. Rent for the basement shall be
         payable at the same times and in the same manner as Base Rent is
         payable with respect to the balance of the Premises. Landlord agrees
         that, irrespective of the number of square feet utilized by Tenant from
         time to time, Landlord shall not lease (or allow any other party to
         use) any portion of the basement of the Building during the term of
         this Lease including any extensions or renewals thereof (i.e., the
         entire basement shall be reserved for Tenant's use subject to the
         rental provisions described above); however, Landlord shall have the
         right to use any portion of the basement for storage and related
         purposes not required by Tenant upon notice to Tenant (it being further
         understood that Landlord shall promptly vacate any such portion of the
         basement used by Landlord if Tenant desires that space for its use). If
         any third party tenant has access to the basement, Landlord shall take
         reasonable steps to ensure that ingress and egress to the basement
         shall be provided in such manner so as not to comprise Tenant's
         security both with respect to the Premises and the basement.

E.       TRUCK SERVICES: Beginning on the Commencement Date, Landlord shall
         provide Tenant with exclusive access to three dock doors and one
         drive-in connection to the Premises as shown on Exhibit A.

F.       SIGNAGE: Tenant shall be entitled to place one or more signs on the
         Building at its own cost. The aggregate size of such signs shall not
         exceed 60% of the total area permitted for exterior signage on the
         Building per city codes. Such signage shall be subject to Landlord's
         approval, which shall not be unreasonably withheld, conditioned or
         delayed so long as such signage meets applicable code requirements.

2.       TERM: Tenant takes the Premises from Landlord, upon the terms and
conditions herein contained for an initial term ("Initial Term") of five (5)
years commencing on December 1, 1999 (the "Commencement Date") and terminating
on November 30, 2004, unless sooner terminated as herein provided or as renewed
as set forth below:

                                       3
<PAGE>

A.       RENEWAL TERM: Tenant shall have the option (the "Renewal Option") to
         renew this Lease for one additional period of three (3) years (the
         "Renewal Term"). Tenant shall provide written notice of its exercise of
         the Renewal Option at least 180 days prior to the termination of the
         initial Term of this Lease.

B.       DEFINITION OF "TERM:" For purposes of this Lease, and unless the
         context requires otherwise, "Term" shall include both the Initial Term
         and the Renewal Term, to the extent applicable.

3.       MONTHLY BASE RENT: Tenant agrees to pay to Landlord during the Term a
monthly Base Rent ("Base Rent") as set forth below:

                                  INITIAL TERM:

<TABLE>
<CAPTION>

Date                                Square Feet               Annual Base Rent Per Square Foot
----                                -----------               --------------------------------
<S>                                 <C>                       <C>
12/1/99 - 11/30/00                      42,818                                  $7.45

12/1/00 - 11/30/01                      52,619                                  $7.45

12/1/01 - 11/30/02                      52,619                                  $7.94

12/1/02 - 11/30/03                      62,843(1)                               $7.94

12/1/03 - 11/30/04                      62,843(1                                $8.59

                                  RENEWAL TERM:

Date                                Square Feet               Annual Base Rent Per Square Foot
----                                -----------               --------------------------------

12/1/04 - 11/30/05                      62,843(1)                               $8.19

12/1/05 - 11/30/06                      62,843(1)                               $8.48

12/1/06 - 11/30/07                      62,843(1)                               $8.48
</TABLE>

Subject to Sections 20 and 25 herein and except as otherwise expressly set forth
herein, Base Rent shall be payable on the first day of each month in advance,
without deduction or setoff of any kind, to Landlord and delivered to Landlord's
managing agent, Ryan Properties, Inc., 700 International Centre, 900 Second
Avenue South, Minneapolis, Minnesota 55402, or at such other place as may from
time to time be designated by Landlord.

4.       USE: Tenant may use the Premises on a twenty four (24) hour per day,
seven (7) day per week basis for Tenant's business of development, design and
manufacturing and related uses and shall not use the Premises for any other use
or purpose without the prior written consent of Landlord (which shall not be
unreasonably withheld, conditioned or delayed).

--------------------------------
(1) Assumes no exercise of the Third Expansion Premises Option. If such option
    were exercised, "Square Feet" would equal 78,437, and "Annual Base Rent Per
    Square Foot" would remain unchanged.

                                       4
<PAGE>

5.       OPERATING COSTS:

A.       DEFINITION OF "OPERATION COSTS:" Tenant shall, for the entire Term and
         at the same time it pays Base Rent, pay to Landlord as an item of
         additional rent ("Additional Rent"), without any setoff or deduction
         therefrom, its monthly estimated Proportionate Share of costs
         ("Operating Costs") which Landlord may incur in maintaining and
         operating the Project during each calendar year of the Term.
         "Proportionate Share" is defined as that percentage of Operating Costs
         incurred by Landlord with respect to the Premises (the decimal
         equivalent of a fraction, the numerator of which is the rentable area
         of the Premises and the denominator of which is the rentable area
         within the Building as well as any other buildings located on or within
         the Project (i.e. Tenant's Proportionate Share shall initially be
         43.420/o). "Operating Costs" are defined to include all expenses and
         costs (but not specific costs which are: (i) separately billed to and
         paid by individual tenant; or (ii) to be paid by the Landlord as set
         forth herein) of every kind and nature which the Landlord shall pay or
         become obligated to pay because of or in connection with the ownership
         and operation of the Project and supporting facilities of the Project,
         including but not limited to all real estate taxes and annual
         installments of special or other assessments payable with respect to
         the Project during the Term; costs of any contest of such taxes,
         including reasonable attorneys' fees (but only to the extent such
         contested taxes fall within the Term; provided, that Tenant is entitled
         to require Landlord to contest taxes on one or more occasions during
         the Term); management fees consistent with management fees charged by
         landlords of buildings similar to the Building in the Minneapolis/St.
         Paul metropolitan area (but, in any event, not to exceed 5% of gross
         rents for the Project), insurance premiums, utility costs, security
         costs, costs of wages, maintenance costs (relating to the Project
         including sidewalks, landscaping, snow removal and parking or service
         areas, common areas, service contracts, equipment and supplies) and all
         other costs of any nature whatsoever which for federal tax purposes may
         be expensed rather than capitalized, but exclusive of leasing
         commissions, depreciation, costs of Leasehold Improvements and payments
         of principal and interest on any mortgages, deeds of trusts, other
         security devices covering the Project, capital expenditures or
         improvements to the Project which do not benefit the Premises, repair
         or replacement of the parking lot servicing the Building (to the extent
         such repair or replacement encompasses an area greater dm 15% of the
         total parking lot in any calendar year, otherwise, if such work
         encompasses less than 15% of the total parking lot area in any calendar
         year, then the costs shall constitute an Operating Cost, subject to the
         Operating Cost Cap set forth herein), costs associated with
         construction drawings, the space plan costs associated with the
         preparation of Exhibit B, costs of any code compliance work, the cost
         of any testing, removal or remediation of any Hazardous Substances (as
         defined in Section 19 below) or any cost or expenditure that is not
         assessed on every other tenant in the Project. Operating Costs shall
         also include the yearly amortization of capital costs incurred by the
         Landlord for improvements or structural repairs to the Project required
         to comply with any change in the current laws, rules or regulations of
         any governmental authority having Jurisdiction, or for purposes of
         reducing Operating Costs, which costs shall be amortized over the
         useful life of such improvements or repairs, as calculated in
         accordance with GAAP (as defined in subsection B below).

                                       5
<PAGE>

B.       CAPS ON OPERATING COSTS: Notwithstanding the foregoing Section,
         Operating Costs as a whole, as well as certain specific components of
         Operating Costs, shall be capped as follows (provided, that in no event
         shall an operating cost exceed the amount allowed by Generally Accepted
         Accounting Principles ("GAAP") in a Lease Year (as that term is defined
         below)):

         (i)      OPERATING COSTS CAP: During the Term, and exclusive only of
                  taxes, insurance, snow and trash removal and Utilities (as
                  that term is defined in Section 9 herein) cost, Operating
                  Costs shall not exceed the following amounts (the "Operating
                  Cost Cap"):

<TABLE>
<CAPTION>

                                       Date                   Amount Per Square Foot
<S>                                                               <C>
                               12/1/99 - 12/31/00                      $1.35

                               1/1/01 - 12/31/01                       $1.39

                               1/1/02 - 12/31/02                       $1.43

                               1/1/03 - 12/31/03                       $1.48

                               1/1/04 - 12/31/04                       $1.52

                               1/1/05 - 12/31/05                       $1.57

                               1/1/06 - 12/31/06                       $1.61
                               1/1/07 - the expiration date
                                         of this Lease                 $1.66
</TABLE>

         (ii)     HVAC CAP: Any costs associated with repair or replacement of
                  heating, ventilating and air-conditioning ("HVAC") units
                  serving the Building which are billed to Tenant as Operating
                  Costs, for actual costs incurred, shall not exceed $.20 per
                  square foot during any calendar year (with appropriate
                  prorations to the first and last years of the Term if the
                  Commencement Date does not fall on January 1 or the expiration
                  date does not fall on December 31) (the "HVAC Cap"). Landlord
                  shall during the Term have and keep in force a maintenance
                  contract, with a contractor reasonably satisfactory to Tenant,
                  providing for regular periodic inspection and maintenance of
                  the HVAC units (which, in any case, shall be no less than once
                  every six months), and providing for necessary repairs thereto
                  (the "HVAC Maintenance Contract"). Any expenses related to the
                  HVAC Maintenance Contract shall be included in and subject to
                  the HVAC Cap.

         (iii)    ROOF CAP: Any costs associated with repair or replacement of
                  the roof of the Building which are billed to Tenant as
                  Operating Costs, for actual costs incurred, shall not exceed
                  $.20 per square foot (the "Roof Cap") during any calendar year
                  (with appropriate prorations to the first and last years of
                  the Term if the Commencement Date does not fall on January 1
                  or the expiration date does not fall on December 31).

                                       6
<PAGE>

C.       DETERMINATION OF OPERATING COSTS: As soon as reasonably practicable
         prior to the commencement of each calendar year during the Term,
         Landlord shall furnish to Tenant an estimate of Operating Costs for the
         ensuing calendar year and Tenant's Proportionate Share thereof. Tenant
         shall pay, as additional rent hereunder together with each installment
         of Base Rent, one-twelfth (1/12th) of its estimated annual
         Proportionate Share of Operating Costs. As soon as reasonably
         practicable after the end of each calendar year during the Term,
         Landlord shall furnish to Tenant a statement of the actual Operating
         Costs for the previous calendar year, including Tenant's Proportionate
         Share of Operating Costs, and within thirty (30) days thereafter Tenant
         shall pay to Landlord, or Landlord shall credit to the next rent
         payments due Landlord from Tenant, as the case may be, any difference
         between the actual Operating Costs and the estimated Operating Costs
         paid by Tenant. In the event Tenant overpays Operating Costs as of the
         expiration of this Lease, Landlord shall return such payment to tenant
         within sixty (60) days of the earlier of. (i) the expiration of the
         Term of this Lease; or (ii) the earliest date Landlord can reasonably
         determine that Tenant has overpaid. Tenant's Proportionate Share of
         Operating Costs for the years in which this Lease commences and
         terminates shall be prorated by multiplying the actual Operating Costs
         by a fraction the numerator of which is the number of days of that year
         of the Term and the denominator of which is 365.

D.       AUDIT OF OPERATING COSTS: For a period of two years following Tenant's
         receipt of Landlord's statement of actual Operating Costs, Landlord
         shall keep available for Tenant's inspection copies of all supporting
         statements relating to Operating Costs. During this period Tenant may
         audit, at its own cost, Landlord's Operating Costs records upon
         reasonable notice to Landlord. The audit must be performed during
         regular business hours in the offices located in the Minneapolis/St.
         Paul metropolitan area where Landlord maintains its accounting records.
         Within ten (10) business days of the completion of the audit, Tenant
         will provide Landlord a copy of the audit. If as a result of any such
         audit it is determined that Landlord has overcharged Tenant for its
         proportionate share of Operating Costs, (i) Landlord shall promptly
         refund such overpayment to Tenant and (ii) Landlord shall reimburse
         Tenant for its reasonable costs of performing such audit if Tenant has
         been overcharged by more than five percent (5%). No subtenant will have
         the right to audit under this provision. An assignee, approved by
         Landlord, may have the right to audit as provided herein, however, such
         right shall only apply to the assignee's term of occupancy in the
         Premises pursuant to the Lease.

6.       ADDITIONAL TAXES: Tenant shall pay as additional rent to Landlord,
together with each installment of Base Rent, the amount of any gross receipts
tax, sales tax or similar tax imposed in lieu of property taxes (but excluding
therefrom any income tax), payable or which will be payable by Landlord, by
reason of the receipt of the Base Rent and adjustments thereto.

7.       SECURYIY DEPOSIT: During the first 12 months of the Term, Tenant shall
pay to Landlord as a security deposit (the "Security Deposit") $2,083.33 per
month, payable at the same times and in the same manner as Base Rent. Provided
that Tenant is not default under this Lease beyond all applicable notice and
cure periods, then on the 1st day of the 15th month of the Term Landlord shall
return the entire accumulated Security Deposit in the amount of $25,000. During
the period beginning with the 13th month and ending with the 36th month, Tenant
shall pay a Security Deposit of $1,041.67 per month. Provided Tenant is not in
default under this Lease

                                       7
<PAGE>

beyond all applicable notice and cure periods, then on the 1st day of the 39th
month of the Term Landlord shall return the entire accumulated Security Deposit
in the amount of $25,000. The Security Deposit shall be held for the performance
by Tenant of Tenant's covenants and obligations under this Lease, it being
expressly understood that the deposit shall not be considered an advance payment
of rent or a measure of Landlord's damage in case of default by Tenant. Upon the
occurrence of any event of default by Tenant or breach by Tenant of Tenant's
covenants under this Lease that extends beyond all applicable notice and cure
periods, Landlord may, from time to time, without prejudice to any other remedy,
use the security deposit to the extent necessary to make good any arrears of
rent and/or damage, injury, expense or liability caused to Landlord by the event
of default or breach of covenant, any remaining balance of the security deposit
to be returned by Landlord to Tenant within 30 days of termination of this
Lease.

8.       LEASEHOLD IMPROVEMENTS:

A.       LEASEHOLD IMPROVEMENTS: Prior to the Commencement Date, Landlord shall,
         at its own cost (which cost shall not constitute an Operating Cost
         payable as Additional Rent by the Tenant), make and install or provide
         for the installation of leasehold improvements (the "Leasehold
         Improvements") in accordance with the plans, specifications, terms and
         conditions set forth in Exhibit B. Landlord warrants that at the
         Commencement Date (or at the time of Tenant's occupancy of the First,
         Second or Third Expansion Premises, as applicable), A CERTIFICATE OF
         OCCUPANCY (IF REQUIRED FOR TENANT'S OCCUPANCY THEREOF) SHALL HAVE BEEN
         ISSUED BY THE APPROPRIATE GOVERNMENTAL AUTHORITIES FOR THE APPLICABLE
         PORTION OF THE PREMISES AND the Leasehold Improvements will be free
         from defects in material and workmanship for the longer of: (i) one
         year or (ii) the warranty, if any, provided by the manufacturer. In
         preparation of the Leasehold Improvements, Landlord shall, at its own
         cost (which costs shall not constitute an Operating Cost payable as
         Additional Rent by the Tenant), demolish certain existing improvements
         and complete, such other work to the Premises as described in the
         demolition plan attached hereto as Exhibit C, and shall undertake other
         work specified in the Landlord's architectural plans attached hereto as
         Exhibit E. In addition to the work described in Exhibits B, C and E,
         the Landlord agrees to undertake the following, at Landlord's cost
         (which cost shall not constitute an Operating Cost payable as
         Additional Rent by the Tenant), prior to the Commencement Date:

         (i)      Replace all windows on the south side and east side of the
                  Building up to the loading dock area. Such replacement windows
                  shall be dual pane, thermally insulated, of commercial grade
                  and the glass shaft be tinted green. Moreover, a new window
                  shall be added to the southeast comer of the Building.

         (ii)     Repaint the exterior of the Building, including the concrete
                  block, trim, flashing and gutters. Additionally, as soon as
                  reasonably possible following the Commencement Date, Landlord
                  shall repaint the dock doors, fences, HVAC units visible to
                  the parking lot and streets, and bollards. The color for all
                  such painting shall be mutually agreed upon in writing by
                  Landlord and Tenant.

                                       8
<PAGE>

         (iii)    Landlord shall be responsible for any and all cost (which cost
                  shall not constitute an Operating Cost payable as Additional
                  Rent by the Tenant) associated with an ADA compliant ramp on
                  the east side of the Building. In addition to the foregoing,
                  Landlord shall contribute up to $30,000 (which cost shall not
                  constitute an Operating Cost payable as Additional Rent by the
                  Tenant and which shall be separate from the $150,000 in
                  financing for Leasehold Improvements to be provided by the
                  Landlord pursuant to Section 8(F) herein) for the construction
                  of a new entrance to the Building (the "East Entrance"), and
                  Tenant shall be responsible for all costs related to the East
                  Entrance in excess of $30,000; provided, however, that any
                  costs in excess of $30,000 shall be payable in equal monthly
                  installments over the Term as Additional Rent and interest
                  shall not accrue or be payable on any such amount in excess of
                  $30,000. The final design of the East Entrance shall be
                  mutually agreed upon between Landlord and Tenant.

         (iv)     The Landlord shall use best efforts to seal-coat and re-stripe
                  the parking lot, and patch and repair any holes or sunken
                  areas, as needed, to put the parking lot in good condition and
                  repair as of the Commencement Date; provided, further, that if
                  Landlord does not complete such work by the Commencement Date,
                  it shall use best efforts to complete the same as soon as
                  possible thereafter.

         (v)      Landscaping shall be undertaken by British Landscaping in
                  accordance with the work letter attached hereto as Exhibit D.

         (vi)     Repair the roof of the Building (and where necessary replace
                  portions thereof) in order to put the roof of the Building in
                  good condition and repair as of the Commencement Date.

         (vii)    General clean-up of the exterior of the Building, including,
                  but not limited to, sweeping parking lot, painting bollards,
                  removing signage of prior tenants and repairing damaged
                  fences.

         (viii)   Relocate the HVAC unit from its current location above the
                  East Entrance to a location which is mutually agreeable to the
                  Landlord and the Tenant.

         (ix)     Provide adequate parking lot light, and paint rusted light
                  pole located in the south parking lot of the Building.

         Such Leasehold Improvements shall not constitute Operating Costs, and
         shall not be paid by Tenant as Additional Rent. Except as specifically
         provided for in this Lease, Landlord shall have no obligation to
         repair, improve, redecorate or remodel the Premises. Without limitation
         of the foregoing provision of this Section 8(A), so long as Landlord
         substantially completes the Leasehold Improvements and foregoing items,
         the Commencement. Date shall not be delayed if the East Entrance is not
         substantially completed by the Commencement Date due to Tenant caused
         delays.

B.       LANDLORD'S COVENANTS REGARDING LEASEHOLD IMPROVEMENTS: During the Term,
         the Landlord agrees to the following:

                                       9
<PAGE>

         (i)      Without limitation of Landlord's obligations under Section
                  10(C) below, Landlord warrants that the HVAC units are or
                  shall be in good working condition as of the Commencement Date
                  and that the HVAC shall have the appropriate capacity and
                  distribution, given Tenant's initial intended use and
                  occupancy of the Premises and the layout of the Premises as of
                  the Commencement Date, to operate within the following
                  specifications (the "HVAC Specifications"): (i) at a
                  temperature between 68 and 72 degrees Fahrenheit in the
                  production area of the Building and (ii) at standard
                  tolerances for temperature variations in the office area of
                  the Building with appropriate zoning for internal and
                  perimeter office areas.

         (ii)     Landlord shall replace or repair, at its cost (which cost
                  shall not constitute an Operating Cost payable as Additional
                  Rent by the Tenant), any HVAC units that are unable to perform
                  in accordance with HVAC Specifications, through November 30,
                  2000.

C.       FIRST EXPANSION PREMISES: Prior to the earlier of October 1, 2000 and
         the date Tenant takes occupancy of the First Expansion Premises,
         Landlord shall, at its cost (which cost shall not constitute an
         Operating Cost payable as Additional Rent by the Tenant): (i) demolish
         and remove the following items from the First Expansion Premises:
         existing ceiling grid; ceiling tiles; lights; HVAC diffusers and duct
         work; carpet and base; and those certain walls identified on the
         demolition plan attached hereto as Exhibit B; (ii) install: new ceiling
         grid; HVAC diffusers and duct work; and sprinklers; and (iii) provide
         new ceiling tiles and lights (stacked on the floor) of the type
         specified in Exhibit A. The demolition and construction of the First
         Expansion Premises shall be performed by Ryan Companies, or another
         construction company mutually agreed upon by Landlord and Tenant. Such
         construction company shall have access to the First Expansion Premises
         to complete the foregoing work prior to the required delivery date. In
         addition to the foregoing costs to be assumed by the Landlord, Landlord
         shall provide Tenant with an allowance of $80,000 for completing
         Leasehold Improvements to the First Expansion Premises. Such allowance
         shall be paid on or before the date falling thirty (30) days after
         Tenant takes occupancy of the First Expansion Premises. Any unused
         portion of such allowance may be used, at Tenant's discretion, for
         improvements elsewhere in the Building or be applied to the Leasehold
         Improvements for the Second Expansion Premises.

D.       SECOND EXPANSION PREMISES: Prior to the earlier of October 1, 2002 and
         the date Tenant takes occupancy of the Second Expansion Premises,
         Landlord shall, at its cost (which cost shall not constitute an
         Operating Cost payable as Additional Rent by Tenant): (i) demolish and
         remove the following items from the Second Expansion Premises: existing
         ceiling grid; ceiling tiles; lights; HVAC diffusers and duct work;
         carpet and base; and those certain walls identified on the demolition
         plan attached hereto as Exhibit B; (ii) install: new ceiling grid; HVAC
         diffusers and duct work; and sprinklers; and (iii) provide new ceiling
         tiles and lights (stacked on the floor) of the type specified in
         Exhibit A. The demolition and construction to the Second Expansion
         Premises shall be performed by Ryan Companies, or another construction
         company mutually agreed upon by Landlord and Tenant. Such construction
         company shall have access to the First Expansion

                                       10
<PAGE>

         Premises to complete the foregoing work prior to the required delivery
         date. In addition to the foregoing costs to be assumed by the Landlord,
         Landlord shall provide Tenant with an allowance of $40,000 for
         completing Leasehold Improvements to the Second Expansion Premises.
         Such allowance shall be paid on or before the date falling thirty (30)
         days after the later of the date Tenant takes occupancy of the Second
         Expansion Premises and the date that Tenant furnishes Landlord with
         invoices for such improvements. Any unused portion of such allowance
         may be used, at Tenant's discretion, for improvements elsewhere in the
         Building or be applied to future rent payments (however, any portion of
         such allowance not utilized within six [61 months of the Second
         Expansion Premises commencement date shall be applied to future rent
         payments, and if so applied, the same shall be spread equally, without
         interest, across the remaining installments of Base Rent applicable to
         the Second Expansion Premises for the balance of the Initial Term).

E.       THIRD EXPANSION PREMISES: Prior to Tenant's occupancy of the Third
         Expansion Premises, Landlord shall, at its cost (which cost shall not
         constitute an Operating Cost payable as Additional Rent by Tenant),
         undertake the work specified in the demolition plan attached as Exhibit
         B. In addition to the foregoing costs which shall be assumed by the
         Landlord, Landlord shall provide Tenant with an allowance of $60,000
         for completing Leasehold Improvements to the Third Expansion Premises;
         provided, however, that if Tenant exercises the Renewal Option
         simultaneously with the Third Expansion Premises Option, then Landlord
         shall provide Tenant with an allowance of $180,000 for completing
         Leasehold Improvements to the Third Expansion Premises. Either such
         allowance shall be paid within thirty (30) days after the later of the
         date Tenant takes occupancy of the Third Expansion Premises and the
         date that Tenant furnishes Landlord with invoices for such
         improvements. Any unused portion of such allowance may be used, at
         Tenant's discretion, for improvements elsewhere in the Building or be
         applied to future rent payments (however, any portion of such allowance
         not utilized within six [6] months of the Third Expansion Premises
         commencement date shall be applied to future rent payments, and if so
         applied, the same shall be spread equally, without interest, across the
         remaining installments of Base Rent applicable to the Third Expansion
         Premises for the balance of the Initial Term [and the Renewal Term if
         Tenant simultaneously exercises the Third Expansion Premises Option and
         the Renewal Option]).

F.       ADDITIONAL FINANCING BY LANDLORD: In addition to any other allowances
         provided for Leasehold Improvements described elsewhere in this Lease,
         so long as Tenant is not then in monetary default hereunder and has not
         theretofore committed more than two (2) monetary defaults within the
         twelve (12) month period immediately prior to Tenant's request for the
         same, Landlord shall at any time and from time to time after the date
         hereof and prior to the expiration of the Term, provide Tenant with up
         to $150,000 in financing, in the aggregate, for so-called "leasehold
         improvements" to the Premises (i.e. including construction, design and
         related leasehold improvement costs but excluding furniture, trade
         fixtures, moveable equipment, personalty and similar costs). Any such
         financing shall be paid to Tenant within thirty (30) days after written
         request is made by Tenant to Landlord and shall be amortized over the
         then remaining Term, with an interest rate of 10% per annum on the
         first $100,000 and 11% per annum on the next $50,000.

                                       11
<PAGE>

         The amortized amount shall be deemed Additional Rent and shall be paid
         at the same times and in the same manner as monthly Base Rent. If any
         such additional financing is provided to Tenant, Landlord and Tenant
         shall enter into an amendment to this Lease reflecting the amount of
         such additional financing and the requirement by Tenant to make
         payments on such financing in accordance with the terms of this
         Section.

9.       UTILITIES:

A.       UTILITY COSTS: Landlord shall provide mains and conduits to supply
         water, gas, electricity and sanitary sewage service to the Premises.
         Tenant shall pay, when due, all charges for sewer usage or rental,
         garbage disposal, refuse removal, water, electricity, gas, telephone
         and/or other utility services or energy source (the "Utilities")
         furnished to the Premises during the term of this Lease, or any renewal
         or extension thereof (the "Utility Costs"). Moreover, Tenant agrees
         that during the period beginning on the Commencement Date and ending on
         November 30, 2002, it shall also pay, as Additional Rent, 33% of the
         costs of electric, gas and water for the vacant space located only on
         the first floor of the Building (and not including the basement);
         provided, however, that by the Commencement Date Landlord shall install
         at its own cost (which cost shall not constitute an Operating Cost
         payable as Additional Rent by the Tenant) an energy management system
         in the Building that allows for separate zoning of the vacant space
         from the Premises so as to allow temperature set backs on the vacant
         space. At any time any services or utilities are jointly metered,
         Tenant shall pay its Proportionate Share thereof within 20 days of
         Landlord's written statement. Landlord shall maintain and keep
         available for Tenant's inspection, for a period of a minimum of two
         years, records of the Utilities in the Building. Tenant may audit such
         records upon reasonable notice to Landlord with an auditor reasonably
         acceptable to Landlord, and the cost of such auditors shall be split
         between Landlord and Tenant. The audit must be performed during regular
         business hours in the office where Landlord maintains its accounting
         records. Within 10 business days of the completion of the audit, Tenant
         will provide a copy of the audit. Any adjustment in Utility Costs as a
         result of an audit shall be both retroactive and prospective for any
         vacant space in the Building, and prospective only for the entire
         Building. It as a result of any such audit it is determined that
         Landlord has overcharged Tenant for its proportionate share of Utility
         Costs, (i) Landlord shall promptly refund such overpayment to Tenant
         and (ii) notwithstanding the foregoing, Landlord shall pay the entire
         cost of the audit if Tenant has been overcharged by more than five
         percent (5%). If as a result of any such audit it is determined that
         Landlord has undercharged Tenant for its proportionate share of Utility
         Costs (i) Tenant shall promptly pay the difference to Landlord and (ii)
         notwithstanding the foregoing, Tenant shall pay the entire cost of the
         audit if Tenant has been undercharged by more than five percent (5%).
         No subtenant will have the right to audit under this provision. An
         assignee, approved by Landlord, may have the right to audit as provided
         herein, however, such right shall only apply to the assignee's term of
         the occupancy in the Premises pursuant to the Lease. Landlord shall
         have the right at any time, at its sole cost (and not payable by Tenant
         as Additional Rent), to submeter or separately meter Tenant's utility
         usage. The utility costs shall be deemed Additional Rent.

                                       12
<PAGE>

10.      CARE AND REPAIR OF PREMISES BUILDING AND PROJECT:

A.       TENANT'S RESPONSIBILITY TO MAINTAIN AND REPAIR: Tenant shall, at all
         times throughout the Term of this Lease, including renewals and
         extensions, and at its sole expense, keep and maintain the Premises in
         a clean, safe, sanitary and in the same condition as the Premises was
         delivered, normal wear and tear and damage by fire or other casualty
         excepted, and in compliance with all applicable laws, codes,
         ordinances, rules and regulations relating to Tenant's specific use and
         occupancy thereof. Tenant's obligations hereunder shall include but not
         be limited to the maintenance, repair and replacement, if necessary, of
         all lighting, plumbing fixtures and equipment, fixtures, motors and
         machinery, all interior walls, partitions, doors and windows, including
         the regular painting thereof, all exterior entrances, windows, doors
         and docks and the replacement of all broken glass. When used in this
         provision, the term "repairs" shall include replacements or renewals
         when necessary, and all such repairs made by the Tenant shall be equal
         in quality and class to the original work.

B.       TENANT'S FAILURE TO MAINTAIN OR REPAIR: If Tenant fails, refuses or
         neglects to maintain or repair the Premises as required in this Lease
         after written notice shall have been given Tenant and all cure periods
         have expired, Landlord may make such repairs and upon completion
         thereof, Tenant shall pay to Landlord, as Additional Rent, all actual
         costs for repairing the Premises plus an administrative fee equal to
         ten percent (10%) of such costs.

C.       LANDLORD'S RESPONSIBILITY TO MAINTAIN OR REPAIR: Subject to the
         provisions of Section 5 above, Landlord, at its sole cost and expense,
         shall maintain in good condition and repair the roof, foundation,
         structural supports, the HVAC (and all other structural portions) of
         the Building and Premises, plumbing and electrical systems to the point
         of entry to the Premises, exterior walls, exterior painting, and the
         sewer lines serving the Premises to the point of entry to the Premises,
         and all mechanical, fire protection, life safety and other building
         systems serving the Building or the Premises. Landlord shall indemnify
         Tenant for any repair or replacement costs for damage to any Leasehold
         Improvements or to any of Tenant's property including, but not limited
         to, furniture, fixtures, inventory, work in process or equipment that
         is related to roof leakage, unless such roof leakage is caused by
         Tenant's negligence or willful acts. The cost to replace or repair
         Leasehold Improvements or Tenant's furniture or equipment shall not
         constitute an Operating Cost, and shall not be paid as Additional Rent.
         Moreover, Tenant shall not be required to submit insurance claims for
         such casualty loss and, if Landlord chooses to make such claims on its
         insurance, any costs related thereto including any insurance deductible
         shall not constitute an Operating Cost, and shall not be paid as
         Additional Rent. Landlord further agrees that, throughout the Term, it
         shall maintain the parking lot serving the Building in good repair and
         condition. Costs to maintain, repair or replace the parking lot
         (including asphalt surfaces, curbs and sidewalks) shall constitute
         Operating Costs only in the manner set forth in Section 5(A) herein.

D.       LANDLORD'S FAILURE TO MAINTAIN OR REPAIR: In the event the Premises
         become or are out of repair and not in good condition due to either the
         failure of Landlord to comply with the terms of Section 10(C) or a
         latent defect, then Landlord shall perform or cause to be

                                       13
<PAGE>

         performed any and all repairs necessary to restore the Premises to a
         state of good condition and repair. If such repairs are not completed
         within fifteen (15) days after Landlord has received written notice
         from Tenant of such state of disrepair or if such repairs cannot
         reasonably be completed within such fifteen (15) day period and
         Landlord shall fail to commence such repairs within fifteen (15) days
         after notice and proceed diligently thereafter, then Tenant may
         prosecute such repairs itself and Landlord shall reimburse Tenant for
         the cost of prosecuting such repairs, plus an administrative fee equal
         to ten percent (10%) of such costs within twenty (20) days following
         the date that Tenant furnishes Landlord with invoices therefor.
         Notwithstanding the foregoing, in the case of an emergency (such as,
         without limitation, a leaky roof or HVAC breakdown), Tenant shall have
         the right to prosecute immediately any and all necessary repairs and
         shall deliver contemporaneous notification to Landlord of the emergency
         and related repairs and Landlord shall reimburse Tenant for the cost of
         prosecuting such repairs, plus an administrative fee equal to ten
         percent (10%) of such costs within twenty (20) days following the date
         that Tenant furnishes Landlord with invoices therefor; provided,
         further, that if contemporaneous notice is not practicable, as
         determined by Tenant in its reasonable judgment then Tenant shall
         provide such notice as soon thereafter as reasonably practicable.

E.       LANDLORD'S MANAGEMENT OF THE PROJECT: In a manner consistent with first
         class owners of buildings similar to the Building, Landlord shall
         maintain and manage all common areas of the Project which management
         and maintenance shall include, without limitation, snow plowing, lawn
         care and general maintenance of the grounds and parking areas. The cost
         of said maintenance shall be prorated in accordance with Section 5 of
         this Lease. All such maintenance which is provided by Landlord shall be
         provided as reasonably necessary for the comfortable use and occupancy
         of the Premises during business hours, except Saturdays, Sundays, and
         nationally recognized holidays, upon the condition that the Landlord
         shall not be liable for damages for failure to do so due to causes
         beyond its control.

11.      COVENANTS OF TENANT: Tenant agrees that it shall:

A.       Observe such reasonable rules and regulations as from time to time may
         be put in effect by Landlord for the general safety, comfort and
         convenience of Landlord, occupants and tenants of the Building so long
         as the same are enforced by Landlord in a uniform and nondiscriminatory
         manner.

B.       Give Landlord access to the Premises upon 24 hours' written (unless an
         emergency exists, in which case Landlord shall use its best efforts to
         give reasonable notice), without change or diminution of rent, to
         enable Landlord to examine the same and to make such repairs, additions
         and alterations as Landlord may deem advisable. During the ninety (90)
         days prior to the expiration of the Term, the Landlord shall be
         permitted to exhibit the Premises to prospective tenants upon 48 hours'
         written notice. During any such entry into the Premises, Landlord shall
         use reasonable efforts to minimize disruption of Tenant's business
         operations.

                                       14
<PAGE>

C.       Keep the Premises in good order and condition and replace all broken
         glass with glass of the same quality as that broken, save only glass
         broken by fire or other casualty covered by standard all risk
         insurance, and commit no waste on the Premises.

D.       Pay for all electric lamps, starters and ballasts used in the Premises.

E.       Upon the termination of this Lease in any manner whatsoever, remove
         Tenant's goods and effects and those of any other person claiming under
         Tenant, and quit and deliver up the Premises to Landlord peaceably and
         quietly in as good order and condition as the same are now in or
         hereafter may be put in by Landlord or Tenant, reasonable use, wear and
         tear thereof, damage by fire or other casualty and repairs which are
         Landlord's obligation excepted. Landlord acknowledges and agrees that
         Tenant shall be entitled to remove its equipment used in the operation
         of its business from the Premises, whether or not such equipment
         constitutes a fixture, including, but not limited to, clean room
         equipment, vacuum pumps and compressors, however, Tenant agrees to
         repair any material damage to the Premises caused by such removal.
         Goods and effects not removed by Tenant within twenty (20) days of the
         termination of this Lease, however terminated, shall be considered
         abandoned and Landlord may dispose of the same as it deems expedient,
         at Tenant's expense.

F.       The Tenant may not assign this Lease or sublet all or any part of the
         Premises voluntarily, involuntarily or by operation of law, or through
         change in the ownership of Tenant if Tenant is a corporation or a
         partnership, without first obtaining Landlord's written consent
         thereto. Landlord's consent will not be unreasonably withheld,
         conditioned or delayed provided that (i) the occupancy of any such
         assignee or sublessee is not inconsistent with the character of the
         Building; (ii) such assignee or sublessee shall agree in writing to be
         bound by all of the covenants and obligations of Tenant hereunder;
         (iii) a fully executed copy of any such assignment or sublease shall be
         immediately delivered to Landlord but the making of such assignment or
         sublease shall not be deemed to release Tenant from the payment and
         performance of any of its obligations under this Lease; (iv) Tenant
         shall promptly disclose and, after deducting reasonable lease related
         costs incurred by Tenant in connection with such subletting (e.g.
         broker's commissions and construction costs), pay to Landlord as
         Additional Rent hereunder eighty percent (80%) of the amount of any
         rent or other payments actually paid to Tenant pursuant to any sublease
         which exceeds the amounts payable hereunder and any other consideration
         paid, or to be paid, by reason of the assignment or sublease; (v) such
         assignment or subletting is approved by any mortgagee holding a
         mortgage covering the Premises which reserves such right unto the
         mortgagee; and (vi) Tenant is not then in monetary default or in
         non-monetary default beyond applicable notice and cure periods under
         the terms of this Lease.

         Notwithstanding the foregoing, with respect to any proposed assignment
         or sublease after the thirteenth (13th) month of the Initial Term, in
         the event the above requirements are met and the net worth of the
         proposed assignee or sublessee is equal to or greater than
         $1,500,000.00 (as shown on current audited financial statements of the
         assignee or sublessee prepared by a firm of certified public
         accountants of national standing and delivered to Landlord), then
         Landlord shall be required to approve such assignment or sublease.
         Additionally, provided that Tenant is not then in default beyond
         applicable

                                       15
<PAGE>

         notice and cure periods, Tenant shall have the absolute right without
         Landlord's approval (written or otherwise), to sublet, assign or
         otherwise transfer its interest in this Lease to (each, an
         "Affiliate"): (i) any parent or wholly owned operating subsidiary of
         Tenant; (ii) any subsidiary of Tenant's parent; or (iii) any
         corporation with which it may merge or consolidate or a person or
         entity that acquires all or substantially all of Tenant's assets
         (including, without limitation, this Lease, irrespective of whether
         this Lease is considered an asset or a liability) so long as the
         resulting or acquiring entity has a net worth equal to or greater than
         that of Tenant immediately prior to such merger, consolidation or
         acquisition, as the case may be. In the event of any such subletting,
         assignment or other transfer, (A) Tenant shall promptly notify Landlord
         of same and (B) with respect to an assignment, Tenant shall
         automatically be released from all obligations under this Lease, vided
         such Affiliate has a net worth equal to or greater than $1,500,000.00
         so long as Tenant furnishes Landlord with current audited financial
         statements prepared by a firm of certified public accountants of
         national standing evidencing such Affiliate's net worth.
         Notwithstanding anything contained in this Section to the contrary,
         Landlord shall have the right, exercisable within fifteen (15) days
         following any request by Tenant for Landlord to consent to an
         assignment or subletting to any third party (other than an Affiliate),
         to (i) sublease the Premises or the portion thereof proposed to be
         sublet by Tenant upon the same terms as those offered to the proposed
         subtenant, (ii) take an assignment of the Lease upon the same terms as
         those offered to the proposed assignee, or (iii) terminate this Lease
         as to the portion of the Premises proposed to be assigned or sublet,
         with a proportionate adjustment in the Rent and other charges payable
         hereunder if the Lease is terminated as to less than all of the
         Premises; provided, however, that if Landlord elects to recapture the
         Premises or any portion thereof pursuant to this provision, Tenant
         shall have the right, exercisable within fifteen (15) days after
         Landlord so elects to recapture, to withdraw its proposal to assign
         this Lease or sublet all or any portion of the Premises, in which case,
         Landlord's exercise of its recapture right shall be deemed rescinded
         and of no further force and effect. Moreover, if Landlord does not
         exercise any of the nature options described in the preceding sentence
         within the stated fifteen (15) day period, Landlord's right to
         recapture with regard to the Premises (or portion thereof) shall be
         null and void and of no further force and effect, and Landlord shall
         promptly consent or deny its consent to the proposed assignment or
         subletting.

G.       Not place signs on or about the Premises without first obtaining
         Landlord's written consent thereto (which consent shall not be
         unreasonably withheld, conditioned or delayed).

H.       Not overload, damage or deface the Premises or do any act which may
         make void or voidable any insurance on the Premises or the Building.

L.       Not place any additional locks on any of Tenant's doors without the
         written consent of the Landlord (which consent shall not be
         unreasonably withheld). The Landlord shall have the right to keep pass
         keys to the Premises.

J.       Not make any alterations or additions to the Premises in excess of
         $20,000 in any 12 month period without obtaining the prior written
         approval of the Landlord thereto (which approval shall not be
         unreasonable withheld), and all alterations, additions or

                                       16
<PAGE>

         improvements (including carpeting or other floor covering which has
         been glued or otherwise affixed to the floor) which may be made by
         either of the parties hereto upon the Premises, except movable office
         furniture and equipment shall be the property of Landlord, and shall
         remain upon and be surrendered with the Premises, as a part thereof, at
         the termination of this Lease; provided, however, Tenant shall be
         entitled to remove its equipment and fixtures so long as Tenant repairs
         any damage to the Premises caused by such removal.

K.       Keep the Premises and the Project free from any mechanics',
         materialmen's, contractors' or other liens arising from, or any claims
         for damages growing out of, any work performed, materials furnished or
         obligations incurred by or on behalf of Tenant. Provided, however, that
         Tenant shall have the right to contest any such lien, in which event
         such lien shall not be considered a default under this Lease until the
         existence of the lien has been finally adjudicated and all appeal
         periods have expired. Tenant shall indemnify and hold harmless Landlord
         from and against any such lien, or claim or action thereon, reimburse
         Landlord promptly upon demand therefor by Landlord for costs of suit
         and reasonable attorneys' fees incurred by Landlord in connection with
         any such lien, claim or action, and, upon written request of Landlord,
         provide Landlord with a bond in an amount and under circumstances
         necessary to obtain a release of the Premises or the Project from such
         lien.

L.       Not carry any stock of goods or do anything in or about said Premises
         which will increase insurance rates on said Premises or the Building in
         which the same are located without the Landlord's written consent
         (which consent shall not be unreasonable withheld). If Landlord shall
         consent to such use, Tenant agrees to pay as Additional Rent any
         increase in premiums for insurance resulting from the business carried
         on in the Premises by Tenant. Tenant shall, at its own expense, comply
         with the requirements of insurance underwriters and insurance rating
         bureaus and governmental authorities having jurisdiction.

M.       Maintain at its expense at all times during the Term (i) a policy or
         policies of public liability insurance with respect to the Premises and
         the business of Tenant, with limits of not less than $2,000,000.00
         combined single limit; and (ii) a policy or policies of all risk
         insurance insuring Tenant's leasehold improvements, trade fixtures and
         other personal property for the full insurable value thereof. All such
         insurance policies shall be placed with companies that hold a
         Certificate of Authorization, (Licensed), to do business in the State
         of Minnesota, and any public liability insurance policy shall provide
         for at least thirty (30) days prior written notice to Landlord before
         cancellation or amendment, name Landlord as an additional insured
         thereon, and evidence of such policies of insurance be in the form of
         an ISO ACORD form Certificate of Insurance, or its equivalent, filed
         with Landlord prior to Tenant's occupancy of the Premises and at all
         times thereafter during the Tenn. These insurance requirements are only
         minimum requirements and are not meant to represent Tenant's insurance
         needs.

         Landlord shall, at all times during the Term, procure and maintain all
         risk property insurance for the full replacement cost of the Building
         in which the Premises are located and such other insurance as may be
         required by its mortgagee, if any. Landlord shall

                                       17
<PAGE>

         also, at all times during the Term, procure and maintain commercial
         general liability insurance for the Building in which the Premises are
         located. Such insurance shall have minimum limits of liability of
         $2,000,000.00, combined single limit.

12.      AMERICANS WITH DISABILITIES ACT: The parties agree that the liabilities
and obligations of Landlord and Tenant under that certain federal statute
commonly known as the Americans With Disabilities Act as well as the regulations
and accessibility guidelines promulgated thereunder as each of the foregoing is
supplemented or amended from time to time (collectively, the "ADA") shall be
apportioned as follows:

A.       If any of the common areas of the Project, including, but not limited
         to, exterior and interior routes of ingress and egress, off-street
         parking and all rules and regulations applicable to the Premises, the
         Building or the Project, fails to comply with the ADA, such
         nonconformity shall be promptly made to comply by Landlord at
         Landlord's cost (and the same shall not be considered part of Operating
         Costs). Landlord shall also cause its manager of the Building and the
         Project (the "Manager") to comply with the ADA in its operation of the
         Building and the Project.

B.       Landlord assumes responsibility for compliance of the Leasehold
         Improvements set forth on Exhibit B with the ADA at no cost to Tenant.
         From and after delivery of the initial Premises, the First Expansion
         Premises, the Second Expansion Premises or the Third Expansion
         Premises, as applicable, Tenant covenants and agrees to conduct its
         operations within the Premises in compliance with the ADA. If any of
         the Premises fails to comply with the ADA as a result of Tenant's
         specific use and occupancy, such nonconformity shall be promptly made
         to comply by Tenant. In the event that Tenant elects to undertake any
         alterations to, for or within the Premises, Tenant agrees to cause such
         alterations to be performed in compliance with the ADA.

13.      PARKING AND DRIVES: Tenant, its employees, and invitees shall have the
nonexclusive right to use the common driveways and parking lots along with the
other tenants and customers of the building; provided, however, that the
Landlord agrees that the parking lot for the Building shall contain
non-exclusive parking at a level of at least four stalls per 1,000 square feet
of space leased in the Premises by the Tenant during the Term. The Landlord
further agrees that Tenant shall be provided not less dm 160 parking stalls on
the north and east side of the Building during the Term. Notwithstanding the
foregoing, Landlord agrees that in addition to the handicap parking required by
code, Tenant shall have the right to designate up to six visitor parking stalls
near the East Entrance for Tenant's exclusive use. The use of such driveways and
parking facilities are subject to such reasonable rules and regulations as the
Landlord may impose. Tenant further agrees not to use, or permit the use by its
employees, of the parking areas for the overnight storage of automobiles or
other vehicles without the written permission of Landlord.

14.      CASUALTY LOSS: If the Premises is damaged in part or whole from any
cause and the Premises can be substantially repaired and restored within one
hundred eighty (180) days from the date of the damage using standard working
methods and procedures, then Landlord shall at its expense promptly and
diligently repair and restore the Premises to substantially the same condition
as existed before the damage. This repair and restoration shall be made within

                                       18
<PAGE>

one hundred eighty (180) days from the date of the damage unless the delay is
due to causes beyond Landlord's reasonable control.

If the Premises cannot be repaired and restored within the one hundred eighty
(180) day period, then either party may, within ten (10) days after determining
that the repairs and restoration cannot be made within one hundred eighty (180)
days, cancel the Lease by giving notice to the other party. If the Premises is
not repaired and restored within one hundred eighty (180) days from the date of
the damage, then Tenant may cancel the Lease at any time after the one hundred
eightieth (180th) day and before the two hundred tenth (210th) day following the
date of damage. Tenant shall not be able to cancel this Lease if its willful
misconduct caused the damage unless Landlord is not promptly and diligently
repairing and restoring the Premises.

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

Landlord shall not be obligated to repair or restore damage to Tenant's trade
fixtures, furniture, equipment or other personal property but shall repair any
and all leasehold improvements made to the Premises (including the First
Expansion Premises, the Second Expansion Premises and the Third Expansion
Premises, as applicable) made by Landlord or Tenant.

Landlord may cancel this Lease if

                  (i)      more than forty percent (40%) of the Building is
                           damaged and the Landlord decides not to repair and
                           restore the Building;

                  (ii)     any mortgagee of the Building does not allow adequate
                           insurance proceeds for repair and restoration unless
                           Tenant agrees to pay the difference at a commercially
                           reasonable time and in a commercially reasonable
                           manner,

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

                  (iv)     the Lease is in the last twelve (12) months of its
                           Term unless Tenant exercises any then available
                           renewal option within fifteen (15) days after notice
                           of Landlord's intended cancellation of this Lease.

To cancel, Landlord must give notice to Tenant within thirty (30) days after the
Landlord knows of the damage. The notice must specify the cancellation date,
which shall be at least thirty (30) but not more than sixty (60) days after the
date notice is given.

15.      CONDEMNATION: If the entire Project is taken by eminent domain or
transferred under threat of such taking, this Lease shall automatically
terminate as of the date of taking. In the event of a partial taking, Landlord
shall, at its expense, restore the Project and the Premises, exclusive of any
changes made therein by Tenant (but including any and all leasehold

                                       19
<PAGE>

improvements made by Landlord or Tenant to the initial Premises, the First
Expansion Premises, the Second Expansion Premises and the Third Expansion
Premises, as applicable), to as near the condition which existed immediately
prior to the date of taking as reasonably possible, and to the extent that the
Premises are rendered untenantable, the rent shall proportionately abate;
provided, however, that, if a taking concerns more than ten percent (10%) of the
Project and restoring the Project and the Premises is not feasible from an
economic standpoint or otherwise, Landlord shall have the right to terminate
this Lease upon notice to Tenant given no later than thirty (30) days after
Landlord is given legal notice of such taking which termination shall be
effective as of the taking of possession by the condemning authority.
Additionally, if any portion of the Project or the Premises is taken by eminent
domain so as to have a material adverse effect on Tenant's business operations
(and provided Landlord can not reasonably correct the same within sixty [60]
days, subject to Force Majeure events [as described in Section 30 below], then
Tenant may terminate this Lease by written notice thereof to Landlord, which
notice must be given within (30) days after Tenant is given legal notice of such
taking and which shall be effective as of the taking of possession by the
condemning authority. All damages awarded for a taking under the power of
eminent domain shall belong to and be the exclusive property of Landlord,
whether such damages be awarded as compensation for diminution in value of the
leasehold estate hereby created or to the fee of the Premises; provided,
however, that Landlord shall not be entitled to any separate award made to
Tenant which does not reduce any separate condemnation award made to Landlord.

16.      DELAY IN POSSESSION:

A.       If the Premises are not ready for occupancy by the Tenant or the
         Leasehold Improvements described in Exhibit B have not been
         substantially completed by the Commencement Date, then Base Rent and
         Additional Rent shall abate until the Premises are delivered or such
         Leasehold Improvements have been substantially completed. In addition,
         and without limitation of the foregoing abatement, if, subject to
         Excused Delays (as hereinafter defined), the Premises are not ready for
         occupancy or such Leasehold Improvements have not been substantially
         completed by (i) December 31, 1999, then, provided the Leasehold
         Improvements have been completed by January 31, 2000, Base Rent shall
         be abated for thirty (30) days following the date of substantial
         completion and delivery of the Premises to Tenant (however, under such
         circumstances, the expiration date of the Lease shall be extended by an
         additional thirty (30) days), (ii) by January 31, 2000, then, provided
         the Leasehold Improvements have been substantially completed by
         February 29, 2000, Base Rent shall be abated for sixty (60) days
         following the date of substantial completion and delivery of the
         Premises to Tenant (however, under such circumstances, the expiration
         date of the Lease shall be extended by an additional sixty (60) days),
         and (iii) by February 29, 2000, then Base Rent shall be abated for
         ninety (90) days following the date of substantial completion and
         delivery of the Premises to Tenant (however, under such circumstances,
         there shall be no extension of the expiration date). This Lease shall
         remain in all other respects in full force and effect and the Term
         shall not be extended. Tenant acknowledges that Landlord will require
         access to the Premises during December 1999 to complete minor
         additional Leasehold Improvements and certain punchlist items, so long
         as such work is conducted in such a manner that does not materially
         impair Tenant's ability to conduct its business within the Premises.
         Notwithstanding the foregoing, but subject to Excused Delays (provided
         that delays by

                                       20
<PAGE>

         reason of one or more Force Majeure Events [as defined in Section 30
         below] may not exceed sixty (60) days, in the aggregate, in the context
         of this sentence), in the event the Premises are not ready for
         occupancy by the Tenant or the Leasehold Improvements described in
         Exhibit B have not been substantially completed by April 30, 2000, then
         Tenant shall have the Option to terminate this Lease in its entirety
         upon written notice to Landlord without liability on the part of or
         penalty to the Tenant. For purposes hereof the term "Excused Delays"
         shall mean any delays reasonably attributable to Tenant and any delays
         by reason of a Force Majeure.

B.       If Landlord does not substantially complete the improvements to the
         First Expansion Premises described in Section 8(C) above and deliver
         the First Expansion Premises to Tenant by October 1, 2000, then Base
         Rent and Additional Rent with respect to the First Expansion Premises
         shall abate until the date falling sixty (60) days after such
         improvements are substantially completed and the First Expansion
         Premises are delivered to Tenant; provided, further, that Landlord
         shall use commercially reasonable efforts to complete such improvements
         to the First Expansion Premises and deliver the First Expansion
         Premises to Tenant as soon thereafter as practicable.

C.       If Landlord does not substantially complete the improvements to the
         Second Expansion Premises described in Section 8(D) above and deliver
         the Second Expansion Premises to Tenant by October 1, 2002, then Base
         Rent and Additional Rent with respect to the Second Expansion Premises
         shall abate until the date falling sixty (60) days after such
         improvements are substantially completed and the Second Expansion
         Premises are delivered to Tenant; provided, further, that Landlord
         shall use commercially reasonable efforts to complete such improvements
         to the Second Expansion Premises and deliver the Second Expansion
         Premises to Tenant as soon thereafter as practicable.

D.       If Landlord does not substantially complete the improvements to the
         Third Expansion Premises described in Section 8(E) above and deliver
         the Third Expansion Premises to Tenant by December 31, 2002, then Base
         Rent and Additional Rent with respect to the Third Expansion Premises
         shall abate until such improvements are substantially completed and the
         Third Expansion Premises are delivered to Tenant; provided, further,
         that Landlord shall use commercially reasonable efforts to complete
         such improvements to the Third Expansion Premises and deliver the Third
         Expansion Premises to Tenant as soon thereafter as practicable.

E.       Landlord agrees to use best efforts to complete any and all punchlist
         items with respect to the Leasehold Improvements as well as the
         improvements to the First Expansion Premises, the Second Expansion
         Premises and Third Expansion Premises described in Section 8 above
         within thirty (30) days following substantial completion of such
         Leasehold Improvements and other improvements described in Section 8.

F.       The abatement provisions set forth in this Section 16 shall be in
         addition to (and not in lieu of) any other rights and remedies
         available to Tenant.

17.      LIABILITY AND INDEMNITY: Save for its tortious acts, gross negligence
or intentional acts of Landlord, its agents, contractors or employees, Landlord
shall not be

                                       21
<PAGE>

responsible or liable to Tenant for any loss or damage (i) that may be
occasioned by or through the acts or omissions of persons occupying any part of
the Building or any persons ting any business in or about the Building or
persons present in or about the Building for any other purpose or (ii) for any
loss or damage resulting to Tenant or its property from burst, stopping or
leaking water, sewer, sprinkler or steam pipes or plumbing fixtures or from any
failure of or defect in any electric line, circuit or facility. Tenant shall
defend, indemnify and save Landlord harmless from and against all liabilities,
damages, claims, costs, charges, judgments and expenses, including, but not
limited to, reasonable attorneys' fees, which may be imposed upon or incurred or
paid by or asserted against Landlord, the Premises or any interest therein or in
the Building by reason of or in connection with any use, non-use, possession or
operation of the Premises, or any part thereof, any negligent, tortious act or
intentional act on the part of Tenant or any of its agents, contractors,
servants, employees, licensees or invitees, any accident, injury, death or
damage to any person or property occurring in, on or about the Premises or any
part thereof, and any failure on the part of Tenant to perform any of the terms
or conditions of this Lease provided, however, that nothing contained in this
paragraph shall be deemed to require Tenant to indemnify Landlord with respect
to any gross negligence or tortious act committed by Landlord or to any extent
prohibited by law. Landlord hereby agrees to indemnify and hold Tenant harmless
from all acts, all injuries, losses, or claim and all damage to personal
property or any causes of action that arise in the common areas or parking lots
of the Building or Project which are due, directly or indirectly, to the
negligence or willful misconduct of Landlord, its agents, contractors or
employees.

18.      MUTUAL RELEASE/WAIVER OF SUBROGATION: Each of Landlord and Tenant
hereby releases the other from any and all liability or responsibility to the
other or anyone claiming through or under them by way of subrogation or
otherwise for any loss or damage to property caused by any of the all risk
casualties, even if such casualty shall have been caused by the fault or
negligence of the other party, or anyone for whom such party may be responsible.

19.      HAZARDOUS SUBSTANCES:

A.       DEFINITION OF "HAZARDOUS SUBSTANCE:" The term "Hazardous Substance", as
         used in this Lease, shall include, without limitation, flammables,
         explosives, radioactive materials, asbestos, polychlorinated biphenyls
         (PCBs), chemicals known to cause cancer or reproductive toxicity,
         pollutants, contaminants, hazardous wastes, toxic substances or related
         materials, petroleum and petroleum products, and substances including,
         without limitation, freon or other chlorofluorocarbons declared to be
         hazardous or toxic or regulated or banned under any law or regulation
         now or hereafter enacted or promulgated by any government authority.

B.       LANDLORD'S REPRESENTATIONS: Landlord has not (and, except as disclosed
         in the environmental report dated _________, 19____ prepared by B.A.
         Liesch for Landlord and made available to Tenant for review, Landlord
         has no knowledge of any facts and circumstances which might reasonably,
         suggest that any other person has) placed, held, located, stored,
         buried, dumped,, disposed, spilled or released any Hazardous Substances
         on the Premises. Landlord further represents to Tenant that Landlord
         has not received any notice from any governmental entity of a violation
         existing on or about the Project of

                                       22
<PAGE>

         any federal, state or local law or ordinance regarding Hazardous
         Substances ("Hazardous Substance Laws").

C.       TENANT'S COVENANTS: Tenant shall not cause or actively permit to occur:
         (a) any violation of any Hazardous Substance Law now or hereafter
         enacted, related to environmental conditions on, under, or about the
         Premises, or arising from Tenant's use or occupancy of the Premises,
         including, but not limited to, soil and ground water conditions; or (b)
         the use, generation, release, manufacture, refining, production,
         processing, storage, or disposal of any Hazardous Substance on, under,
         or about the Premises, or the transportation to or from the Premises of
         any Hazardous Substance in any manner not sanctioned by law or by the
         commercial standards prevailing in the industry for the storage and use
         of such substances or materials, nor allow to be brought into the
         Building any such materials or substances except to use in the ordinary
         course of Tenants business.

D.       ENVIRONMENTAL CLEANUP: Tenant agrees to Environmental Cleanup as
         follows: (a) Tenant shall, at Tenant's own expense, comply with all
         Hazardous Substance Laws regulating the use, generation, storage,
         transportation, or disposal of Hazardous Substances; (b) Tenant shall,
         at Tenant's own expense, make all submissions to, provide all
         information required by, and comply with all requirements of all
         governmental authorities (the "Authorities") under the Laws; (c) should
         any Authority demand that a cleanup plan be prepared and that a cleanup
         be undertaken because of any deposit, spill, discharge, or other
         release of Hazardous Substances that occurs during the term of this
         Lease, at or from the Premises, or which arises at any time from
         Tenant's use or occupancy of the Premises, then Tenant shall, at
         Tenant's own expense, prepare and submit the required plans and all
         related bonds and other financial assurances, and Tenant shall carry
         out all such cleanup plans; and (d) Tenant shall promptly provide all
         information regarding the use, generation, storage, transportation, or
         disposal of Hazardous Substances that is requested by Landlord;
         provided, however, Tenant shall not be responsible for Environmental
         Cleanup of. (i) Hazardous Substances existing on the Premises prior to
         the Commencement Date; or (ii) Hazardous Substances whose presence on
         the Premises were caused by a party other dm Tenant or a party
         operating under Tenant's direction or control. If Tenant fails to
         fulfill any duty imposed under this Paragraph within a reasonable time,
         Landlord may do so, at Tenant's expense; and in such case, Tenant shall
         cooperate with Landlord in order to prepare all documents Landlord
         deems necessary or appropriate to determine the applicability of the
         Hazardous Substance Laws to the Premises and Tenant's use thereof, and
         for compliance therewith, and Tenant shall execute all documents
         promptly upon Landlord's request. No such action by Landlord and no
         attempt made by Landlord to mitigate damages under any Hazardous
         Substance Laws shall constitute a waiver of any of Tenant's obligations
         under this Paragraph. Tenant will, at and to the extent of any
         reasonable written request of Landlord, remove from the Premises at the
         end of Term, at Tenant's expense and in accordance with any applicable
         laws or regulations, equipment that belongs to Tenant (including
         refrigeration equipment and enhancements to the Building's standard
         HVAC systems) that contains, uses or generates freon or any other
         chlorofluorocarbons, whether or not such removal is then required by
         applicable laws or regulations. Tenant's obligations and liabilities
         under this Paragraph shall survive the expiration of this Lease.

                                       23
<PAGE>

E.       ENVIRONMENTAL INDEMNIFICATION BY TENANT: Tenant agrees to indemnify,
         defend, and hold harmless Landlord, the manager of the property, and
         their respective officers, directors, beneficiaries, shareholders,
         partners, agents, and employees from all fines, suits, procedures,
         claims, and actions of every kind, and all costs associated therewith
         (including attorneys' and consultants' fees) arising out of or in any
         way connected with any deposit, spill, discharge, or other release of
         Hazardous Substances that occurs during the term of this Lease, at or
         from the Premises and which is caused by Tenant or a party operating
         under Tenant's direction or control or from Tenant's failure to provide
         all information, make all submissions, and take all steps required by
         all Authorities under the Hazardous Substance Laws and all other
         environmental laws. Tenant's obligations and liabilities under this
         Paragraph shall survive the expiration of this Lease.

F.       ENVIRONMENTAL INDEMNIFICATION BY LANDLORD: Landlord agrees to
         indemnify, defend, and hold harmless Tenant and its officers,
         directors, beneficiaries, shareholders, partners, agents, and employees
         from all fines, suits, procedures, claims, and actions of every kind,
         and all costs associated therewith (including attorneys' and
         consultants' fees) arising out of or in any way connected with any
         deposit, spill, discharge, or other release of Hazardous Substance that
         was present on the Premises prior to the Commencement Date of this
         Lease,, or which arises at any time during the Term of this Lease from
         the actions of Landlord or a party operating under Landlord's direction
         or control, or from Landlord's failure to take all steps required by
         all Authorities under the Hazardous Substance Laws and all other
         environmental laws. Landlord's obligations and liabilities under this
         Paragraph shall survive the expiration of this Lease.

20.      DEFAULT: If Tenant fails to pay any amount due under the Lease within
10 days after notice of failure to pay on the due date, or Tenant fails to keep
or perform any of the other terms, conditions or covenants of this Lease for
more than 20 days after notice of such failure is given to Tenant (provided that
where a cure is not reasonably possible within that period, Tenant shall be
entitled to additional time to effect a cure so long as Tenant promptly
commences acts reasonably calculated to effect a cure and thereafter diligently
prosecutes those acts to completion), Landlord, in addition to all other rights
and remedies available to Landlord by law or by other provisions hereof, may
after five days written notice, with due process, re-enter immediately into the
Premises and remove all persons and property therefrom, and, at Landlord's
option, annul and cancel this Lease as to all future rights of Tenant and Tenant
hereby expressly waives the service of any notice in writing of intention to
re-enter as aforesaid. Tenant further agrees that in case of any such
termination Tenant will indemnify the Landlord against all loss of rents and
other damage which Landlord incurs by reason of such termination, including, but
not being limited to, costs of restoring and repairing the Premises and putting
the same in rentable condition, costs of renting the Premises to another tenant,
loss or diminution of rents and other damage which Landlord may incur by reason
of such termination, and all reasonable attorney's fees and expenses incurred in
enforcing any of the terms of the Lease. Neither acceptance of rent by Landlord,
with or without knowledge of default nor failure of Landlord to take action on
account of any default hereof or to enforce its rights hereunder shall be deemed
a waiver of any default, and absent written notice or consent, said default
shall be a continuing one. In the event of a default by Tenant, Landlord shall
take all reasonable actions to mitigate its damages.

                                       24
<PAGE>

21.      NOTICES: All bills, statements, notices or communications which
Landlord may desire or be required to give to Tenant shall be deemed
sufficiently given or rendered if in writing and either delivered to Tenant
personally or sent by registered or certified mail addressed to Tenant at the
Premises and the time of rendition thereof of the giving of such notice or
communication shall be deemed to be the time when the same is delivered to
Tenant or deposited in the mail as herein provided. Any notice by Tenant to
Landlord must be personally delivered to Landlord or served by registered or
certified mail addressed to Landlord at the address where the last previous
rental hereunder was payable, or in case of subsequent change upon notice given,
to the latest address furnished.

22.      HOLDING OVER: Should Tenant continue to occupy the Premises after
expiration or termination for any reason of the Term or any renewal or renewals
thereof such tenancy shall be from month to month, and shall be on all the terms
and conditions hereof applicable to a month to month tenancy except that Base
Rent shall equal one hundred fifty percent (150%) of the Base Rent payable at
the time of such expiration or termination. Nothing herein, however, shall
prevent Landlord from removing Tenant forthwith and seeking all remedies
available to Landlord in law or equity; however, Landlord shall not be entitled
to any lost profits or special or consequential damages in the event of a
holding over by Tenant.

23.      SUBORDINATION: The rights of Tenant shall be and are subject and
subordinate at all times to the lien of any mortgage now or hereafter in force
against the Project, and Tenant shall execute such further instruments
subordinating this Lease to the lien of any such mortgage as shall be requested
by Landlord, including upon request an agreement by Tenant to attorn to the
holder of such mortgage in return for a covenant of nondisturbance of Tenant's
occupancy by such holder in the event that such holder, its successors or
assigns, succeeds to the interest of Landlord.

24.      ESTOPPEL CERTIFICATE: Tenant shall at any time and from time to time,
within ten (10) days after written request by Landlord, execute, acknowledge and
deliver to Landlord and any other parties designated by Landlord, a certificate
in such form as may from time to time be provided, ratifying this Lease and
certifying (a) that this Lease is in full force and effect and has not been
assigned, modified or amended in any way (or, if there has been any assignment,
modification or amendment, identifying the same); (b) the dates of commencement
and expiration of the Lease Term, the date to which the Base Rent and additional
rent payable hereunder have been paid in advance, if any, and (c) that there
are, to Tenant's knowledge, no incurred defaults on the part of Landlord or any
defenses or offsets against the enforcement of this Lease by Landlord (or
specifying each default, defense or offset if any are claimed). Any such
certificate may be furnished to and relied upon by any prospective purchaser,
lessee or encumbrancer of all or any portion of the Building.

25.      SERVICE CHARGE: Tenant agrees to pay a service charge equal to one and
one half percent (1.5%) per month or any portion thereof of any payment of
monthly Base Rent or additional charge payable by Tenant hereunder which is not
paid within ten (10) days from the date due for the first late payment in any
twelve month period during the Term (or five (5) days' from the due date with
respect to any subsequent late payment during such twelve (12) month period), or
of $50.00 per month or portion thereof, whichever is greater.

                                       25
<PAGE>

26.      BINDING EFFECT: The word "Tenant", wherever used in this Lease, shall
be construed to mean tenants in all cases where there is more dm one tenant, and
the necessary grammatical changes required to make the provisions hereof apply
to corporations, partnerships or individuals, men or women, shall in all cases
be assumed as though in each case fully expressed. Each provision hereof shall
extend to and shall, as the case may require, bind and inure to the benefit of
Landlord and Tenant and their respective heirs, legal representatives,
successors and assigns, provided that this Lease shall not inure to the benefit
of any heir, legal representative, transferee or successor of Tenant except upon
the express written consent or election of Landlord.

27.      TRANSFER OF LANDLORD'S INTEREST: In the event of any transfer or
transfers of Landlord's interest in the Premises or the Project, other than a
transfer for security purposes only, the transferor shall be automatically
relieved of any and all obligations and liabilities on the part of Landlord
accruing from and after the date of such transfer, so long as the transferee
agrees to assume transferor's obligations under this Lease.

28.      LIMITATION OF LIABILITY: In the event that Landlord is ever adjudged by
any court to be liable to Tenant in damages, Tenant specifically agrees to look
solely to Landlord's interest in the Project (including the Building) for the
recovery of any judgment from Landlord, it being agreed that Landlord, or if
Landlord is a partnership, its partners whether general or limited, or if
Landlord is a corporation, its directors, officers, or shareholders, shall never
be personally liable for any judgment. The provision contained in the foregoing
sentence is not intended to, and shall not, limit any right that Tenant might
otherwise have to obtain injunctive relief against Landlord or Landlord's
successor in interest, or to maintain any other action not involving the
personal liability of Landlord (or if Landlord is a partnership, its partners
whether general or limited, or if Landlord is a corporation, requiring its
directors, officers or shareholders to respond in monetary damages from assets
other than Landlord's interest in the Project including the Building), or to
maintain any suit or action in connection with enforcement or collection of
amounts which may become owing or payable under or on account of insurance
maintained by Landlord.

29.      INCORPORATION OF EXHIBITS: The following exhibits to this Lease are
hereby incorporated by reference for all purposes as fully set forth at length
herein:

Exhibit A         Description of Premises
Exhibit B         Space Plan dated September 13, 1999, prepared by BDH & Young
Exhibit C         Demolition Plan
Exhibit D         British Landscaping Work Letter
Exhibit E         Landlord's Architectural Plans

30.      FORCE MAJEURE: All of the obligations of Landlord and of Tenant under
this Lease are subject to and shall be postponed for a period equal to any delay
or suspension resulting from fire, strikes, acts of God, and other causes beyond
the control of the party delayed in its performance hereunder (a "Force
Majeure'), this Lease remaining in all other respects in full force and effect
and the Term not thereby extended. Provided nevertheless, the unavailability of
funds for payment or performance of Landlord's or Tenant's obligations hereunder
shall not give

                                       26
<PAGE>

rise to any postponement or delay in such payment or performance of such party's
obligations hereunder.

31.      BROKERS: Landlord agrees to pay Northco Corporation a commission equal
to $10,000, plus 75% of the amounts set forth in the following schedule:

         -        7% of the Base Rent payable during the first 12 months of the
                  Lease.

         -        6% of the Base Rent payable during the second 12 months of the
                  Lease.

         -        5% of the Base Rent payable during the third 12 months of the
                  Lease.

         -        4% of the Base Rent payable during the fourth 12 months of the
                  Lease.

         -        3% of the Base Rent payable during the fifth 12 months of the
                  Lease.

         -        2% of the Base Rent payable during the balance of the Lease.

The Landlord shall pay such commission as follows: (i) 50% upon the mutual
execution of this Lease; and (ii) the remaining 50% on the Commencement Date.

32.      GENERAL: The submission of this Lease for examination does not
constitute the reservation of or an option for the Premises, and this Lease
becomes effective only upon execution and delivery hereof by Landlord and
Tenant. This Lease does not create the relationship of principal and agent or of
partnership, joint venture or any association between Landlord and Tenant, the
sole relationship between Landlord and Tenant being that of lessor and lessee.
No waiver of any default of Landlord or Tenant hereunder shall be implied from
any omission by Tenant or Landlord to take any action on account of such default
if such default persists or is repeated, and no express waiver shall affect any
default other than the default specified in the express waiver and that only for
the time and to the extent therein stated. Each term and each provision of this
Lease performable by Landlord and Tenant shall be construed to be both a
covenant and a condition. The topical headings of the several paragraphs and
clauses are for convenience only and do not define, limit or construe the
contents of such paragraphs or clauses. All preliminary negotiations are merged
into and incorporated in this Lease. This Lease can only be modified or amended
by an agreement in writing signed by the parties hereto, their successors or
assigns. All provisions hereof shall be binding upon the heirs, successors and
assigns of each party hereto.

33.      SEVERABILITY: The invalidity of any provision, clause or phrase herein
contained shall not serve to render the balance of this Lease ineffective or
void and the same shall be construed as if such had not been herein set forth.

34.      QUIET ENJOYMENT: Landlord covenants that Landlord has the right to
enter into this Lease and that, if Tenant is not in material default of this
Lease beyond the period for applicable cure, Tenant shall lawfully, peaceably
have, hold, occupy and enjoy the Premises through the Term and any extension
thereof without hindrance or ejection by Landlord or any person claiming by,
through or under Landlord or Landlord's successors, and Landlord shall defend
Tenant's right to such peaceable enjoyment. Landlord also represents, covenants
and

                                       27
<PAGE>

warrants (i) that it has lawful title to the Project shown on Exhibit A to this
Lease and has full right, power and authority to enter into this Lease; and (ii)
no restrictive covenant, easement, lease or other written agreement restricts,
prohibits or otherwise affects Tenant's rights set forth in this Lease.

35.      YEAR 2000: Landlord covenants to Tenant that Landlord shall use efforts
consistent with first class owners of buildings similar to the Building to
ensure that the Project are Millennium Compliant (as hereinafter defined).
Without limitation of the foregoing, any and all costs associated with making
Landlord or the Project (or any portion thereof) Millennium Compliant shall be
excluded from Operating Costs. For purposes of this Section, the term
"Millennium Compliant" means, with respect to the Project and Landlord, that all
software, hardware, equipment, goods or systems material to the physical
operations, business operations or financial reporting of Landlord and for the
Project will properly perform date sensitive functions before, during and after
January 1, 2000.

IN WITNESS WHEREOF, the respective parties hereto have caused this Lease to be
executed the day and year first above written.

TENANT:  August Technology Corporation

By
  ------------------------------------

Its
   -----------------------------------

By
  ------------------------------------

Its
   -----------------------------------

LANDLORD:  West 78th Street, Bloomington Associates, LLC

By
  ------------------------------------

Its
   -----------------------------------

By
  ------------------------------------

Its
   -----------------------------------

And:  Bloomington Office Project, LLC
Its:    Member and Manager

By:
   -----------------------------------
        Timothy M. Gray
        Its Chief Manager

                                       28

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