LANVISION SYSTEMS INC, 10-Q, 1996-06-12

LANVISION SYSTEMS INC
10-Q, 1996-06-12
COMPUTER INTEGRATED SYSTEMS DESIGN

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<PAGE> 1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 1996

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number: 0-28132

LANVISION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

Delaware 31-1455414
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

10671 Techwoods Circle
Cincinnati, Ohio 45242-2846
(Address of principal executive offices) (Zip Code)

(513) 554-6900
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---

Number of shares of Registrant's Common Stock ($.01 par value per share) issued
and outstanding, as of June 10, 1996: 8,896,500.

<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Part I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets at April 30, 1996 and January 31, 1996 . . . . 3

Condensed Consolidated Statements of Operations for the three months ended April
30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Condensed Consolidated Statements of Cash Flows for the three months
ended April 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . 6

Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . 7

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Part II. OTHER INFORMATION

Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . 15

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>

2
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

LANVISION SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

Assets

<TABLE>
<CAPTION>
(Unaudited) (Audited)
April 30, January 31,
1996 1996
------------ -----------
<S> <C> <C>
Current assets:

Cash ........................................................... $ 1,783,770 $ --
Short-term cash equivalents .................................... 32,260,881 --
Accounts receivable, net of allowance for doubtful
accounts of $125,000 and $75,000, respectively ............. 2,156,577 1,871,099
Unbilled receivables ........................................... 687,847 677,620
Other .......................................................... 784,553 164,182
------------ -----------
Total current assets ..................................... 37,673,628 2,712,901

Property and equipment:
Equipment ...................................................... 452,650 356,914
Software ....................................................... 109,832 98,225
Furniture and fixtures ......................................... 43,719 40,237
------------ -----------
606,201 495,376
Accumulated depreciation and amortization ...................... (331,197) (314,380)
------------ -----------
275,004 180,996
Capitalized software development, net of accumulated amortization of
$470,563 and $455,563, respectively ................................ 172,366 152,366
------------ -----------
$ 38,120,998 $ 3,046,263
============ ===========
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

3
<PAGE> 4
LANVISION SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

Liabilities, Convertible Redeemable Preferred Stock and Stockholders' Equity
(Deficit)

<TABLE>
<CAPTION>
(Unaudited) (Audited)
April 30, January 31,
1996 1996
------------ -----------
<S> <C> <C>
Current liabilities:

Notes payable ............................................................ $ -- $ 600,000
Accounts payable ......................................................... 2,188,169 1,185,157
Accrued expenses ......................................................... 798,500 210,727
Deferred revenue ......................................................... 1,305,454 846,104
------------ -----------
Total current liabilities .......................................... 4,292,123 2,841,988

Convertible redeemable preferred stock, $.01 par value per share, 8,500 shares
authorized, issued and outstanding
(aggregate liquidation preference of $850,000) ........................... -- 850,000

Stockholders' equity (deficit):
Preferred stock $.01 par value per share, 5,000,000 shares authorized, 8,500
shares issued and outstanding
(see above) .......................................................... -- --
Common stock, $.01 par value per share, 25,000,000 shares
authorized, 8,896,500 shares issued and outstanding at
April 30, 1996; 4,488,000 shares of no par value issued
and outstanding at January 31, 1996 .................................. 88,965 45,000
Capital in excess of par value ........................................... 35,210,817 --
Accumulated deficit ...................................................... (1,470,907) (690,725)
------------ -----------
Total stockholders' equity (deficit) ......................................... 33,828,875 (645,725)
------------ -----------
$ 38,120,998 $ 3,046,263
============ ===========
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

4
<PAGE> 5
LANVISION SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended April 30,

(Unaudited)

<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Revenues:

Systems sales ................................... $ 1,674,317 $ 122,027
Service, maintenance and support ................ 439,176 279,973
----------- -----------
Total revenues .............................. 2,113,493 402,000

Operating expenses:

Cost of systems sales ........................... 996,884 70,961
Cost of service, maintenance and support ........ 481,197 187,701
Selling, general and administrative ............. 1,056,213 313,210
Product research and development ................ 279,736 186,241
----------- -----------
Total operating expenses .................... 2,814,030 758,113
----------- -----------
Operating (loss) ................................ (700,537) (356,113)
Other income (expense), including interest expense of
$79,684 and $7,559, respectively .................... (79,645) (629)
----------- -----------
Net (loss) ...................................... $ (780,182) $ (356,742)
=========== ===========

(Loss) per common share ............................. $ (.12) $ (.06)
=========== ===========

Number of shares used in per common share computation 6,404,694 6,190,325
=========== ===========
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

5
<PAGE> 6
LANVISION SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended April 30,

(Unaudited)

<TABLE>
<CAPTION>
1996 1995
------------ ----------
<S> <C> <C>
Operating activities:

Net (loss) ................................................ $ (780,182) $(356,742)
Adjustments to reconcile net (loss) to net cash
provided by (used for) operating activities:

Depreciation and amortization ........................ 31,817 40,517

Cash provided by (used for) current assets and liabilities:

Accounts and unbilled receivables .................... (295,705) 230,091
Other assets ......................................... (620,371) (4,288)
Accounts payable and accrued expenses ................ 1,590,785 (314,711)
Deferred revenue ..................................... 459,350 96,390
------------ ---------
Net cash provided by (used for) operating activities ...... 385,694 (308,743)

Investing activities:

Purchases of property and equipment ....................... (110,825) (16,708)
Capitalization of software development costs .............. (35,000) (30,827)
------------ ---------
Net cash (used for) investing activities .................. (145,825) (47,535)

Financing activities:

Payments on line of credit, net ........................... (600,000) 25,000
Issuance of common stock .................................. 34,404,782 --
------------ ---------
Net cash provided by financing activities ................. 33,804,782 25,000
------------ ---------

Increase (decrease) in cash ............................... 34,044,651 (331,278)
Cash at beginning of period ............................... -- 618,157
------------ ---------
Cash and short term cash equivalents at end of period ..... $ 34,044,651 $ 286,879
============ =========

Supplemental cash flow disclosures:

Income taxes paid ..................................... $ -- $ --
Interest paid ......................................... $ 79,684 $ 7,559
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

6
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LANVISION SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - BASIS OF PRESENTATION

The accompanying unaudited Condensed Consolidated Financial Statements have
been prepared by the Company without audit in accordance with generally
accepted accounting principles for interim financial information pursuant to
the rules and regulations applicable to quarterly reports on Form 10-Q of the
Securities and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation of the Condensed Consolidated Financial Statements have
been included. These Condensed Consolidated Financial Statements should be read
in conjunction with the financial statements and notes thereto included in the
LanVision Systems, Inc. Registration Statement on Form S-1, Registration Number
333-01494. Operating results for the three months ended April 30, 1996, are
not necessarily indicative of the results that may be expected for the fiscal
year ending January 31, 1997.

Note 2 - CASH EQUIVALENTS

Short-term cash equivalents at April 30, 1996, consist of investments in a
money market fund (which invests in U.S. Treasury Securities) and U.S. Treasury
Bills with initial terms of less than three months. For purposes of the
Condensed Consolidated Statements of Cash Flows, the Company considers all
highly liquid debt instruments with original maturities of three months or less
to be cash equivalents.

Note 3 - PUBLIC OFFERING OF COMMON STOCK

On April 18, 1996, the Company issued 2,912,500 Shares of Common Stock in an
Initial Public Offering. The net proceeds to the Company, before expenses, was
$35,211,147.

Note 4 - CHANGES IN ACCOUNT BALANCES

Other income (expense), net consists primarily of interest expense on higher
levels of outstanding indebtedness during the current quarter.

Other current assets at January 31, 1996, consisted primarily of costs related
to the Company's Initial Public Offering, which were subsequently offset
against the net

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proceeds from the stock offering. (See Note 3.) At April 30, 1996, other
current assets consist primarily of prepaid insurance, and acquired software
and hardware awaiting installation at customer sites.

The increase in accounts payable relates primarily to unpaid invoices relating
to the cost of the Initial Public Offering (approximately $350,000) and
increased purchases of third party software for installation at a customer site
(approximately $896,000).

The increase in accrued expenses results primarily from the accrual of expenses
related to the Initial Public Offering and increased compensation expense.

The increase in deferred revenue relates primarily to progress billings to
customers prior to the installation of the system, and accordingly deferral of
the revenue until the installation is completed.

Note 5 - EARNINGS PER SHARE

On April 18, 1996, the Company issued 2,912,500 shares of Common Stock in an
Initial Public Offering and issued 1,496,000 common shares upon conversion of
the Company's Convertible Redeemable Preferred Stock. (See Note 3.) Per share
data and numbers of common shares contained in these Condensed Consolidated
Financial Statements and in Management's Discussion and Analysis of Financial
Condition and Results of Operations reflect the 4,408,500 shares issued.

The (loss) per common share is calculated using the weighted average number of
common shares outstanding during the period (6,404,694), assuming the
conversion of the Convertible Redeemable Preferred Stock to 1,496,000 shares of
Common Stock, on an if converted basis as of the beginning of the quarter, and
the issuance of 2,912,500 common shares on April 18, 1996, the date of the
Initial Public Offering.

The (loss) per common share calculation, excludes the effect of the common
stock equivalents (stock options) as the inclusion thereof would be
antidilutive.

In accordance with the Staff Accounting Bulletin (SAB) 83 of the Securities and
Exchange Commission, the prior period (loss) per share is calculated assuming
the effect of any potentially dilutive securities priced below the Initial
Public Offering price issued during the one year period before the filing of
the Initial Public Offering. Accordingly, the weighted average shares
outstanding for this calculation is 6,190,325 shares.

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Note 6 - SUBSEQUENT EVENT

In May, 1996, the Company entered into a five year lease agreement, commencing
August 15, 1996, for the lease of new offices for the Company in suburban
Cincinnati, Ohio. The average annual rental expense approximates $400,000 over
the life of the lease. A copy of the lease has been filed as Exhibit 10 to this
Form 10-Q.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

In addition to historical information contained herein, this Discussion and
Analysis contains forward-looking statements. The forward-looking statements
contained herein are subject to certain risks and uncertainties that could
cause actual results to differ materially from those reflected in the
forward-looking statements, including those discussed below. Readers are
cautioned not to place undue reliance on these forward-looking statements,
which reflect management's analysis only as of the date hereof. The Company
undertakes no obligation to publicly release the results of any revision to
these forward-looking statements which may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

RESULTS OF OPERATIONS:

GENERAL

LanVision is a leading provider of healthcare information access systems that
enable hospitals and integrated healthcare networks to capture, manage,
retrieve, process and store vast amounts of clinical and financial patient
information. The Company's systems deliver on-line enterprise-wide access to
fully-updated patient information which historically was maintained on a
variety of media, including paper, magnetic disk, optical disk, x-ray film,
video, audio and microfilm. LanVision's systems, which incorporate data
management, document imaging and workflow technologies, consolidate patient
information into a single repository and provide fast and efficient access to
patient information from universal workstations located throughout the
enterprise, including the point of patient care. The systems are specifically
designed to meet the needs of physicians and other medical and administrative
personnel and can accommodate multiple users requiring simultaneous access to
patient information, thereby eliminating file contention. By providing access
to all forms of patient information, the Company believes that its healthcare
information access systems are essential components of the computer-based
patient record.

9
<PAGE> 10
The Company's revenues are derived from the licensing and sale of systems
comprised of internally developed software, third party software and hardware,
and from professional services, maintenance and support services. These
services include implementation, training, project management and custom
software development and currently are provided only to the company's customers
with installed systems or who are in the process of installing systems.
Revenues from professional services, maintenance and support services typically
are expected to increase as the number of installed systems increases, although
the margins on these revenues are expected to fluctuate based upon the
negotiated terms of the agreement with each customer and the Company's ability
to fully utilize its professional services, maintenance and support services
staff. The highest margin on systems sales is on proprietary software with
lower margins on third party hardware and software. Systems sales to any given
customer may include differing proportions of software and hardware, resulting
in varying margins among contracts.

The decision by a healthcare provider to replace, substantially modify or
upgrade its information systems is a strategic decision and often involves a
large capital commitment requiring an extended approval process. The sales
cycle for the Company's systems is typically six to eighteen months from
initial contact to the execution of a master sales agreement. As a result, the
sales cycle causes variations in quarter to quarter results. These master
agreements cover the entire implementation of the systems and specify the
implementation schedule, which typically takes place in one or more phases. The
agreements generally provide for the licensing of the Company's software and
third party software with a one-time perpetual license fee that is adjusted
depending on the number of workstations using the software. Third party
hardware is usually sold outright, with a one-time fee charged for installation
and training. Some specific customization, interfaces to existing customer
systems and other consulting services are sold on a fixed fee or a time and
material basis.

LanVision enters into master sales agreements with its customers to specify:
the scope of the systems to be installed and services to be provided by
LanVision, the agreed upon aggregate price and the preliminary timetable for
implementation. The master sales agreement typically provides that the Company
will deliver the systems in phases pursuant to the customer's purchase orders,
thereby allowing the customer flexibility in the timing of its receipt of
systems and to make adjustments that may arise upon changes in technology or
changes in customer needs. The Company's master sales agreements generally
proved that the customer may terminate its agreement upon a material breach by
the Company, may delay certain aspects of the installation and may terminate
the agreement at the customer's discretion without penalty and without regard
to the Company's performance. The master sales agreement also allows the
customer to request additional components as the installation progresses, which
additions are then separately negotiated as to price and terms. Historically,
customers have ultimately purchased systems and services in addition to those
originally contemplated by the master sales agreement, although there can be no
assurance that this trend will continue in the future.

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UNEVEN PATTERNS OF QUARTERLY OPERATING RESULTS

The Company's revenues from systems sales have varied, and may continue to
vary, significantly from quarter to quarter as a result of the volume and
timing of systems sales and delivery. Professional services revenues also
fluctuate from quarter to quarter as a result of the timing of the installation
of software and hardware, project management and customized programming.
Revenues from maintenance services do not fluctuate significantly from quarter
to quarter, but have been increasing as the number of customers increase.
Because a significant percentage of the Company's operating costs are expensed
as incurred, a variation in the timing of systems sales and installations and
the resulting revenue recognition can cause significant variations in operating
results from quarter to quarter. Accordingly, the Company believes that
quarter-to-quarter comparisons of its revenues and operating results from the
above factors and the significant expansion of operations previously discussed,
may not necessarily be meaningful and should not be relied upon as indicators
of future performance.

Generally, revenue from systems sales is recognized when a purchase agreement
is signed and products are shipped. Revenue recognition related to routine
installation, integration and other insignificant obligations is deferred until
the work is performed. If an agreement requires the Company to perform services
and modifications that are deemed significant to system acceptance, revenue
related to the delivered hardware and software components is deferred until
such obligations are deemed insignificant. Revenue from consulting, training
and implementation services is recognized as the services are performed.
Revenue from short-term support and maintenance agreements is recognized
ratably over the term of the agreements. Billings to customers recorded prior
to the recognition of the revenue are classified as deferred revenue. Revenue
recognized prior to progress billings to customers is recorded as unbilled
receivables.

The Company's revenues and operating results may vary significantly from
quarter to quarter as a result of a number of other factors, many of which are
outside the Company's control. These factors include the relatively large size
of customer agreements, unpredictability in the number and timing of systems
sales, length of the sales cycle, delays in the installation process and
changes in the customer's financial condition or budget. Also, because a
significant percentage of the company's operating costs are expensed as
incurred, a variation in the timing of systems sales and installations and the
resulting revenue recognition can cause significant variations in operating
results. As a result, period to period comparisons may not be meaningful with
respect to the past operations of the Company nor are they necessarily
indicative of the future operations of the Company.

REVENUES:

Revenues for the fiscal quarter ended April 30, 1996, were $2,113,493 compared
with $402,000 in the comparable quarter of 1995. The increase in revenues is
the result of installation and/or expansion of systems within the current
installed base of customers under the twelve current master sales agreements.
Between the end of the first quarter of

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fiscal 1995, and the 1995 fiscal year end, the Company executed five new master
agreements. There were no master sales agreements executed with new customers
during the first quarter of 1996. As previously discussed, after a master sales
agreement is executed, LanVision does not record revenues until it ships the
hardware and software or performs the agreed upon services. The commencement of
revenue recognition varies depending on the size and complexity of the system
and the scheduling of the implementation, training, interface development and
other services requested by the customer. Three customers accounted for
approximately 90% and 78% of revenues for the first quarter of 1996 and 1995,
respectively.

OPERATING EXPENSES:

Cost of System Sales

The cost of systems sales includes amortization of capitalized software
development costs, royalties and the cost of third party software and hardware.
Cost of systems sales as a percentage of systems sales may vary from period to
period depending on the hardware and software system configuration of the
systems sold. The cost of systems sales as a percentage of systems sales for
the first quarter of 1996 and 1995 were 59% and 58%, respectively.

Cost of Service, Maintenance and Support

The cost of service, maintenance and support includes compensation and benefits
for support and professional services personnel and the cost of third party
maintenance contracts. As a percentage of service, maintenance and support
revenues, the cost of such service, maintenance and support was 109% and 67%
for the first quarter of fiscal 1996 and 1995, respectively.

The professional services staff was increased by five persons in the first
quarter of 1996. The negative margin on services in the first quarter of 1996
was due to an increase in non-billable time associated with the expansion of
the professional services staff and various internal consulting projects. In
addition, in the first quarter of 1996, the Company performed several special
projects for customers at discounted rates.

Selling, General and Administrative

Selling, General and Administrative expenses consist primarily of salaries,
commissions, benefits and reimbursable travel and living expenses related to
the Company's sales, marketing and administrative personnel as well as general
corporate expenses. During the first quarter, operating expenses increased to
$1,056,213 compared with $313,210 in the comparable prior quarter. The company
continued to expand operations, including the infrastructure necessary to
support its anticipated future operations, in order to take advantage of the
growth market opportunities in the healthcare information systems market.
During the first quarter of 1996, the selling, general and administrative staff
was

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increased by four persons. During the next three quarters, the Company intends
to continue to expand its operations. Accordingly, management expects operating
expenses to continue to increase as the Company employs additional personnel
and expand its facilities.

Product Research and Development

Product research and development expenses consist primarily of compensation and
related benefits, and an allocated portion of general overhead costs. During
the first quarter of 1996, the product research and development staff was
increased by five persons. The majority of product research and development
expenses for the current quarter relate to the continued enhancement of
ChartVision(R) version 3.0 and the development of On-Line Chart Completion(TM)
software. The Company capitalized, in accordance with Financial Accounting
Standards No. 86, $35,000, and $30,827 of product research and development
costs in the first quarter of fiscal 1996 and 1995, respectively.

Net loss

The net loss for the first fiscal quarter of 1996 was $780,182 ($.12) compared
with a net loss of $356,742 ($.06) in the first quarter of 1995, primarily as a
result of the increase in expenses discussed above.

Since commencing operations in 1989, the Company has from time to time incurred
operating losses. Although the Company achieved profitability in fiscal years
1992 and 1993, the Company incurred a net loss in fiscal years 1994 and 1995.
In view of the Company's prior operating history, there can be no assurance
that the Company will be able to achieve consistent profitability on a
quarterly or annual basis or that it will be able to sustain or increase its
revenue growth in future periods.

LIQUIDITY AND CAPITAL RESOURCES

On April 18, 1996, the Company, in its Initial Public Offering, issued
2,912,500 Shares of Common Stock, with net proceeds to the Company, before
expenses, of $35,211,147. Subsequent to April 30, 1996, the Company entered
into a five year lease for office facilities with an annual rental of
approximately $400,000. The Company has no other significant obligations for
capital resources. It is expected that existing cash, cash equivalents, the
availability of borrowings under the credit line, as well as cash provided from
operations, will be sufficient to meet anticipated cash requirements, including
the planned expansion of staff, office facilities and furniture and equipment.

The Company's customers typically have been well-established hospitals or
medical facilities with good credit history, and payments have been received
within normal time frames for the industry. Master sales agreements with
customers often involve significant amounts, and contract terms typically
require customers to make progress payments. At April 30, 1996, accounts
receivable were approximately $335,000 greater than accounts

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receivable at January 31, 1996. This increase is primarily due to the increase
in billings during the quarter. At April 30, 1996, accounts payable were
approximately $1,003,000 greater than accounts payable at January 31, 1996. The
increase in accounts payable is due to the increase in purchases of hardware
and third party software in April.

LanVision maintains a revolving line of credit with The Huntington National
Bank allowing the Company to borrow up to $1,400,000, bearing interest at the
bank's prime commercial rate plus three-quarters of one percent per annum.
Under the terms of the loan agreement, the Company is able to borrow money
based on a percentage of its eligible receivables. The Company currently has no
outstanding indebtedness under this line of credit.

SIGNED AGREEMENTS - BACKLOG

At April 30, 1996, the Company's customers had entered into master sales
agreements for systems and services (excluding maintenance) which had not yet
been delivered, installed and accepted which, if fully performed, would
generate sales of approximately $9,500,000. The systems and services related to
the master agreements are expected to be delivered or performed over the next
two to three years. Of the backlog at April 30, 1996, the Company has received
purchase order for $6,700,000 of systems and services (excluding maintenance).

In addition, the Company's master sales agreements also generally provide for
an initial maintenance period and give the customer the right to subscribe for
maintenance services on a monthly, quarterly or annual basis.

Part II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The Company is not currently engaged in any litigation.

Item 5 OTHER INFORMATION

George E. Castrucci, 58, a business consultant and private investor was
appointed to the Company's Board of Directors. Mr. Castrucci is the retired
Chief Executive Officer of Great American Broadcasting, formerly known as Taft
Broadcasting Company. He serves on the Board of Directors of Baldwin Piano &
Organ Company, Kenley Corporation, Sencorp, BMF Federal Savings Bank, and the
Ohio National Life Insurance Company mutual funds, One Fund, Inc. and Ohio
National Fund, Inc. Mr. Castrucci's appointment increases the Company's Board
to 4 Directors.

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Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

(10) Material Contract - Office Lease with Duke Realty Limited
Partnership

(11) Computation of Earnings (Loss) Per Common Share

(27) Financial Data Schedule

(b) Reports on Form 8-K

None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

LANVISION SYSTEMS, INC.

DATE: June 12, 1996 By: /s/ J. BRIAN PATSY
-------------------------
J. Brian Patsy
Chief Executive Officer,
President and Treasurer

DATE: June 12, 1996 By: /s/ THOMAS E. PERAZZO
-------------------------
Thomas E. Perazzo
Chief Financial Officer

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INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Sequential
Exhibit No. Exhibit Page No.
----------- ------- ----------
<S> <C> <C>
10 Material Contract - Office Lease with Duke Realty
Limited Partnership . . . . . . . . . . . . . 17

11 Computation of Earnings (Loss) Per Common Share . . 70

27 Financial Data Schedule . . . . . . . . . . . . . . 71
</TABLE>

<PAGE> 1
Exhibit 10
LANVISION SYSTEMS, INC.

LEASE AGREEMENT BETWEEN LANVISION, INC.

AND

DUKE REALTY LIMITED PARTNERSHIP

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OFFICE LEASE

THIS LEASE, made this 7th day of May, 1996, by and between DUKE REALTY
LIMITED PARTNERSHIP, an Indiana limited partnership ("Landlord"), and
LANVISION, INC., an Ohio corporation ("Tenant").

W I T N E S S E T H:

ARTICLE 1 - LEASE OF PREMISES

SECTION 1.01. LEASE OF PREMISES. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord, subject to all of the terms and conditions
hereinafter set forth, office space in the office building described below
which is commonly known as The Ohio National Building in Hamilton County, Ohio
(the "Building") for the term hereinafter specified. The space in the Building
hereby leased to Tenant is set forth in Item A of the Basic Lease Provisions
and is cross-hatched on EXHIBIT A attached hereto (the "Leased Premises").
Landlord reserves the right to alter any portion of the Building not included
within the Leased Premises; provided, however, Tenant's access to the Leased
Premises shall not be materially impaired. Elevators shall not be leased to
Tenant and shall remain under Landlord's control.

SECTION 1.02. BASIC LEASE PROVISIONS.

A. Building Address: One Financial Way, Montgomery, Ohio 45242; Floor: 4th;
Suite: 400;

B. Rentable Area: approximately 20,501 rentable square feet (18,063 usable
square feet ("Useable Area"));

Landlord shall use commercially reasonable standards, consistently applied, in
determining the Rentable Area and the rentable area of the Building. The
Rentable Area shall include the area within the Leased Premises plus a pro rata
portion of the area covered by the Common Areas within the Building, as
reasonably determined by Landlord from time to time. Landlord's determination
of Rentable Area made in good faith shall conclusively be deemed correct for
all purposes hereunder, including without limitation the calculation of the
Building Expense Percentage and the Minimum Annual Rent. Notwithstanding
anything to the contrary contained herein, Tenant's pro rata portion of the
area covered by the Common Areas within the Building shall be the product of
(i) the Useable Area within the Leased Premises, as such amount may change from
time to time pursuant to the terms of this Lease and (ii) Tenant's Common Area
Factor. For purposes of this Lease,

18
<PAGE> 3
Tenant's Common Area Factor shall be as reasonably determined by the Landlord;
provided, however, that Tenant's Common Area Factor shall not exceed 1.135.

C. Building Expense Percentage: 9.67% (calculated as follows: 20,501 / 212,125).
As of the Commencement Date the total rental area including Common Areas of
the Building equals 212,125 square feet;

D. Minimum Annual Rent:

<TABLE>
<S> <C>
Year 1 (months 1-2) $ 0.00
Year 1 (months 3-12) $222,094.17
Year 2 $276,763.50
Year 3 $276,763.50
Year 4 $281,888.75
Year 5 $281,888.75;
</TABLE>

E. Monthly Rental Installments:

<TABLE>
<S> <C>
Months 1-2 $ 0.00
Months 3-12 $22,209.42
Months 13-36 $23,063.63
Months 37-60 $23,490.73;
</TABLE>

F. Lease Term: Five (5) years and zero (0) months;

G. Target Commencement Date: August 15, 1996;

H. Security Deposit: $0.00;

I. Brokers: Duke Realty Limited Partnership, representing Landlord and West
Shell Realtors representing Tenant;

J. Permitted Use: General office purposes, computer repair and for no other
purpose whatsoever;

K. Working Drawings Approval Date: On or before May 17, 1996, (See Exhibit B);

L. Address for payments and notices as follows:

Landlord: Duke Realty Limited Partnership
8044 Montgomery Road, Suite 600
Cincinnati, OH 45236

With Rental
Payments to: Duke Realty Limited Partnership
P.O. Box 960664
Cincinnati, OH 45296-0664

19
<PAGE> 4
Tenant: LanVision, Inc.
One Financial Way
Montgomery, OH 45242

Prior to LanVision, Inc.
Commencement Date: 10671 Techwoods Circle
Cincinnati, OH 45242

ARTICLE 2 - TERM AND POSSESSION

SECTION 2.01. LEASE TERM. The term of this Lease shall be the period of time
specified in Item F of the Basic Lease Provisions ("Lease Term") and shall
commence upon the earlier of (i) the date Landlord delivers to Tenant a
temporary certificate of occupancy subject only to minor punchlist items and
final electrical approval for the Leased Premises or (ii) Tenant commences use
of the Leased Premises. Notwithstanding the above, if Tenant does not meet the
time schedules for submitting approvals and selections for the Tenant Finish
Improvements to Landlord and such delays affect Landlord's ability to complete
the Tenant Finish Improvements as hereinafter defined, as reasonably determined
by Landlord, then commencing on the Target Commencement Date, Tenant shall pay
one (1) day's Minimum Rent and Annual Rental Adjustment for each day Tenant is
late in submitting approvals up to a maximum of thirty (30) days late and
Tenant shall pay Landlord one and one-half times the amount of Minimum Rent and
Annual Rental Adjustment for each day late in excess of thirty (30) days.
Provided Tenant pays such amounts to Landlord, the Commencement Date shall be
extended one (1) day for each day Tenant is late. Tenant shall not be liable
for the payment of any such amounts prior to the Target Commencement Date. The
date of commencement as defined above, hereinafter called the "Commencement
Date," and the "Expiration Date" shall be confirmed by Tenant as provided in
Section 2.03.

SECTION 2.02. CONSTRUCTION OF TENANT FINISH IMPROVEMENTS AND POSSESSION.
Landlord agrees at its own cost and expense to perform and complete the work on
the tenant finish improvements in the Leased Premises as set out in EXHIBIT B
(the "Tenant Finish Improvements") subject to space plans and exact square
footage of the Leased Premises to be finalized no later than May 17, 1996 and
subject to events and delays due to causes beyond its reasonable control and
shall give ten (10) days advanced written notice of the day on which its work
to be performed in accordance with the terms of EXHIBIT B shall be completed.
From and after receipt of said notice or earlier with the consent of Landlord,
Tenant shall have the right and privilege of going onto the Leased Premises to
complete interior decoration work and to prepare the Leased Premises for its
occupancy, provided, however, that its schedule in so doing shall be
communicated to Landlord and the approval of Landlord secured so as not to
interfere with other work of Landlord being carried on at the time; and
provided further that Landlord shall have no responsibility or

20
<PAGE> 5
liability whatsoever for any loss or damage to any of Tenant's leasehold
improvements, fixtures, equipment or any other materials installed or left in
the Leased Premises by Tenant prior to the Commencement Date unless such loss
or damage shall be as a result of the gross negligence or willful misconduct of
Landlord or its employees. Notwithstanding anything in this Lease to the
contrary, beginning on August 15, 1996 and continuing until the Commencement
Date, Landlord shall pay to Tenant's current Landlord in accordance with the
terms of Tenant's current lease with Techwood Circle Ltd. Partnership
("Tenant's Current Lease"), any holdover charges actually incurred by Tenant in
excess of the minimum rent due under Tenant's Current Lease ("Monthly Holdover
Charges") as a result of a delay caused by Landlord in delivering the Leased
Premises to Tenant. Landlord shall pay any Monthly Holdover Charges to Tenant's
current landlord on a monthly basis within five (5) days of the presentation to
Landlord of a statement setting forth in reasonable detail such Monthly
Holdover Charges. If Landlord has not obtained a temporary certificate of
occupancy for the Leased Premises due to the fault of Landlord on or before
October 31, 1996, Tenant shall have the right to terminate this Lease by
providing Landlord with written notice of its intent to terminate this Lease on
or before November 6, 1996. This Lease shall terminate upon Landlord's receipt
of such written notice and the parties shall have no further liability
hereunder.

SECTION 2.03. TENANT'S ACCEPTANCE OF THE LEASED PREMISES.

Upon delivery of possession of the Leased Premises to Tenant as hereinbefore
provided, Tenant shall execute a letter of understanding acknowledging (i) the
Commencement Date and Expiration Date of this Lease, and (ii) that Tenant has
accepted the Leased Premises for occupancy and that the condition of the Leased
Premises, including the Tenant Finish Improvements and the Building, was at the
time satisfactory and in conformity with the provisions of this Lease in all
respects, except for any defects as to which Tenant shall give written notice
to Landlord within thirty (30) days after such delivery. Landlord shall within
thirty (30) days thereafter commence the correction of all significant defects.
Such letter of understanding shall become a part of this Lease. Notwithstanding
anything to the contrary contained herein, Landlord shall warrant the Tenant
Finish Improvements for a period of one (1) year from the Commencement Date or,
with respect to defects, the date of correction of the defect to Tenant's
reasonable satisfaction and shall pay all costs and expenses of any repairs and
or replacements of the Tenant Finish Improvements during such period unless
made necessary by the actions of Tenant, its employees, invitees or agents or
ordinary wear and tear.

SECTION 2.04. SURRENDER OF THE PREMISES. Upon the expiration or earlier
termination of this Lease, or upon the exercise by Landlord of its right to
re-enter the Leased Premises without terminating this Lease, Tenant shall
immediately surrender the Leased Premises to Landlord, together with all
alterations, improvements and other property as provided elsewhere herein, in
broom-clean condition and in good order, condition and repair (except for
ordinary wear and tear and damage which Tenant is not obligated to repair),
failing which Landlord may restore the Leased Premises to such condition at,
and Tenant shall be responsible for the payment of all reasonable costs and
expenses incurred by Landlord in connection with such restoration upon the
presentation of a statement setting

21
<PAGE> 6
forth, in reasonable detail, the amount and type of each such cost or expense.
Upon such expiration or termination, Tenant shall remove its personal property,
trade fixtures and any of Tenant's alterations designated by Landlord including
by way of illustration, but not limitation, wiring and cabling. Any property
remaining in the Leased Premises after the expiration or termination of this
Lease shall be deemed abandoned and Landlord shall have the right to remove and
dispose of such property, and Tenant shall be responsible for the payment of
all reasonable costs and expenses incurred by Landlord in connection with such
removal upon the presentation of a statement setting forth, in reasonable
detail, the amount and type of each such cost or expense. Tenant shall, at its
expense, promptly repair any damage caused by any such removal, and shall
restore the Leased Premises to the condition existing prior to the installation
of the items so removed.

SECTION 2.05. HOLDING OVER. If Tenant retains possession of the Leased Premises
after the expiration or earlier termination of this Lease, Tenant shall become
a tenant from month-to-month at one hundred twenty-five percent (125%) of the
then Monthly Rental Installments in effect upon the date of such expiration or
earlier termination (subject to adjustment as provided in Article 3 hereof and
prorated on a daily basis), and otherwise upon the terms, covenants and
conditions herein specified, so far as applicable. Acceptance by Landlord of
rent after such expiration or earlier termination shall not result in a renewal
of this Lease. Notwithstanding the foregoing provision, no holding over by
Tenant shall operate to extend this Lease, and Tenant shall vacate and
surrender the Leased Premises to Landlord upon Tenant being given thirty (30)
days prior written notice from Landlord to vacate. The foregoing provisions of
this Section 2.05 are in addition to and do not affect Landlord's right of
re-entry or any other rights of Landlord hereunder or as otherwise provided by
law.

ARTICLE 3 - RENT

SECTION 3.01. MINIMUM ANNUAL RENT. Beginning on the Commencement Date, Tenant
shall pay to Landlord as Minimum Annual Rent for the Leased Premises the sum
specified in Item D of the Basic Lease Provisions, payable in equal consecutive
Monthly Rental Installments as specified in Item E of the Basic Lease
Provisions, in advance, without deduction or offset, on or before the first day
of each and every calendar month during the Lease Term; provided, however, that
if the Commencement Date shall be a day other than the first day of a calendar
month or the Expiration Date shall be a day other than the last day of a
calendar month, the Monthly Rental Installment for such first or last
fractional month shall be prorated on the basis of the number of days during
the month this Lease was in effect in relation to the total number of days in
such month.

SECTION 3.02. ANNUAL RENTAL ADJUSTMENT.

A. DEFINITIONS. For purposes of this Section 3.02, the following definitions
shall apply:

22
<PAGE> 7
1. "ANNUAL RENTAL ADJUSTMENT" - shall mean the amount of Tenant's Proportionate
Share of Operating Expenses for a particular calendar year.

2. "OPERATING EXPENSES" - shall mean the amount of all of Landlord's direct
costs and expenses paid or incurred in operating and maintaining the Building
(including the Common Areas as defined in Section 18.03) for a particular
calendar year as determined by Landlord in accordance with generally accepted
accounting principles, consistently applied, including all additional direct
costs and expenses of operation and maintenance of the Building which Landlord
reasonably determines that it would have paid or incurred during such year if
the Building had been fully occupied, including by way of illustration and not
limitation: all general real estate taxes or service agreement payments in lieu
thereof and all special assessments levied against the Building (hereinafter
called "real estate taxes"), other than penalties for late payment; costs and
expenses of contesting the validity or amount of real estate taxes; insurance
premiums; water, sewer, electrical and other utility charges other than the
separately billed electrical and other charges paid by Tenant or other tenants
of the Building as provided in this Lease; service and other charges incurred
in the operation and maintenance of the skywalk servicing the Building (if
any), elevators, the plumbing systems, the electrical systems the heating,
ventilation and air-conditioning systems; cleaning and other janitorial
services; tools and supplies; repair costs; landscape maintenance costs;
security services; license, permit and inspection fees; administrative fees
(equal annually to fifteen percent (15%) of the total Operating Expenses);
wages and related employee benefits payable for the maintenance and operation
of the Building; amortization of capital improvements or replacements for the
Building that benefit the health and safety of the tenants of the Building,
produce a reduction in operating costs or are required under any applicable
governmental law, ordinance, resolution, order or regulation, together with
interest at the rate of twelve percent (12%) per annum on the unamortized
balance thereof; maintenance and repair costs, dues, fees and assessments
incurred under any documents of record or owner association agreement, as
amended from time to time, if any (the "Covenants"); and in general all other
costs and expenses which would, under generally accepted accounting principles,
be regarded as operating and maintenance costs and expenses. The foregoing list
of Operating Expenses is for definitional purposes only and shall not impose
any obligations upon Landlord to incur such expenses or provide such services.

Notwithstanding anything to the contrary contained herein, for purposes of
this Lease, "Operating Expenses" shall not include the following fees, costs and
expenses:

a. Mortgage principal and interest payments, fees and points;

b. Refinancing or sale costs;

c. Depreciation and amortization of Building or equipment;

23
<PAGE> 8

d. Capital improvements or replacements, except expressly allowed
herein;

e. Advertising costs;

f. Brokerage, leasing, commissions and marketing costs;

g. Alterations for other tenants;

h. Costs reimbursed by or paid directly by Tenant or by other
tenants;

i. Costs reimbursed by insurance or governmental authorities;

j. Special service costs paid directly by Tenant or by other tenants;

k. Legal fees for enforcing other tenants' leases;

l. Art work in the Building;

m. Services performed by Landlord or its related parties at
above-market cost;

n. Taxes on net income, stock, capital, transfer, successions or

o. Repairs or maintenance covered under any warranty or guarantees;

p. The cost of the land or the construction of the Building, whether
initially or in connection with any replacement due to faulty construction
or expansion thereof, whether mandated by law or otherwise, including,
without limitation, costs of correcting:

(i) defective conditions in the Building or Leased Premises
resulting from defects in or inadequacy of the initial
design or construction of the same; or

(ii) code violations or the payment of fines or citations in
connection therewith;

q. The initial cost of the initial installation of the parking areas,
landscaping, and/or other facilities or the amortization or depreciation of
that initial cost or the initial establishment of janitorial and cleaning
services and building security, if any;

r. Any bad debt loss, rent loss, or reserves for bad debt or rent
loss;

24
<PAGE> 9
s. Costs associated with Landlord's management office and Building
Manager including Building Manager's wages.

3. "BUILDING EXPENSE PERCENTAGE" - shall mean the percentage specified
in Item C of the Basic Lease Provisions. This percentage was
determined by dividing the rentable area in the Leased Premises by the
total rentable area in the Building. Rentable Area excludes the
elevators and elevator shafts, which are reserved to Landlord.

4. "TENANT'S PROPORTIONATE SHARE OF OPERATING EXPENSES" - shall be an
amount equal to the product of Tenant's Building Expense Percentage as
provided in Item C of the Basic Lease Provisions times the Operating
Expenses as they may be composed of Uncontrollable Expenses and
Controllable Expenses.

B. PAYMENT OBLIGATION. In addition to the Minimum Annual Rent specified in this
Lease, Tenant shall pay to Landlord as additional rent for the Leased Premises
the Annual Rental Adjustment for such calendar year.

1. PAYMENT OF ESTIMATED ANNUAL RENTAL ADJUSTMENT - The Annual Rental
Adjustment shall be estimated annually by Landlord, and written notice thereof
shall be given to Tenant at least thirty (30) days prior to the beginning of
each calendar year. In the case of the calendar year in which the Lease Term
commences, written notice of the estimated Operating Expenses shall be given
Tenant prior to the Commencement Date. Tenant shall pay to Landlord each month,
at the same time the Monthly Rental Installment is due, an amount equal to
one-twelfth (1/12) of the estimated Annual Rental Adjustment.

2. INCREASES IN ESTIMATED ANNUAL RENTAL ADJUSTMENT - If real estate
taxes or the cost of utility or janitorial services increase during a calendar
year, Landlord may increase the estimated Annual Rental Adjustment during such
year by giving Tenant written notice to that effect, and thereafter Tenant
shall pay to Landlord, in each of the remaining months of such year, an amount
equal to the amount of such increase in the estimated Annual Rental Adjustment
divided by the number of months remaining in such year.

3. ADJUSTMENT TO ACTUAL ANNUAL RENTAL ADJUSTMENT - Within ninety (90)
days after the end of each calendar year, Landlord shall prepare and deliver to
Tenant a statement showing the actual Annual Rental Adjustment. Within thirty
(30) days after receipt of the aforementioned statement, Tenant shall pay to
Landlord, or Landlord shall credit against the next rent payment or payments
due from Tenant, as the case may be, the difference between the actual Annual
Rental Adjustment for the preceding calendar year and the estimated amount paid
by Tenant during such year. If this Lease shall commence, expire or be
terminated on any date other than the last day of a calendar year, then the
Annual Rental Adjustment for such partial calendar year shall be prorated on
the basis of the number of days during the year this Lease was in effect in
relation to the total number of days in such year.

25
<PAGE> 10
4. TENANT VERIFICATION - Tenant or its accountants shall have the
right to inspect, at reasonable times and in a reasonable manner, during the
ninety (90) day period following the delivery of Landlord's statement of the
actual amount of the Annual Rental Adjustment, such of Landlord's books of
account and records as pertain to and contain information concerning such costs
and expenses in order to verify the amounts thereof and to obtain an audit
thereof by an independent certified public accountant selected by Tenant and
approved by Landlord to determine the accuracy of Landlord's statement. If any
such audit discloses a liability for the Annual Rental Adjustment for the
previous calendar year which is less than the amount which Landlord has
indicated to Tenant for such calendar year, as aforesaid, the Landlord shall
promptly credit Tenant so much of the Annual Rental Adjustment paid by Tenant
for such calendar year in excess of the amount for which the Tenant is actually
liable, as disclosed by such audit. If such audit discloses a liability for the
Annual Rental Adjustment for such calendar year which is less than ninety-five
percent (95%) of the amount which the Landlord has otherwise indicated to
Tenant in writing for such calendar year, as aforesaid, the Landlord shall, in
addition to the credit of such excess, pay to Tenant the cost of such audit for
such calendar year. Subject to the foregoing provisions of this paragraph,
Tenant shall bear the cost of any such audit. As a result of such audit,
Landlord shall thereafter, if appropriate, change its method of calculating the
Operating Expenses to be consistent with the results of the audit.

C. NET LEASE. This Lease is what is commonly called a "net lease," it being
understood that Landlord shall receive the rent free and clear of any and all
impositions, taxes, liens, charges or expenses of any nature whatsoever in
connection with its leasing of the Leased Premises and that, subject to the
provisions of this Lease, Tenant shall be responsible for, and shall bear its
proportionate share of all costs associated with, the operation and maintenance
of the Building and the Leased Premises except as expressly excluded in this
Section 3.02.

SECTION 3.03. LATE CHARGES. Tenant acknowledges that Landlord shall incur
certain additional unanticipated costs and expenses, including administrative
costs and attorneys' fees, if Tenant fails to timely pay any payment required
hereunder. Therefore, as compensation for such additional expenses, and in
addition to the other remedies available to Landlord hereunder, if any payment
of Minimum Rent or any other sum or charge required to be paid by Tenant to
Landlord hereunder shall become overdue for a period of ten (10) days, a late
charge of seven percent (7%) of the payment so due shall be paid by Tenant as
additional rent. In addition, if Tenant fails to pay within fifteen (15) days
after the same is due and payable any sum or charge required to be paid by
Tenant to Landlord, such unpaid amount shall bear interest from the due date
thereof to the date of payment at the rate of fifteen percent (15%) per annum.

SECTION 3.04. MAXIMUM INCREASE IN OPERATING EXPENSES. Notwithstanding anything
herein to the contrary, for the calendar years 1996 and 1997, Tenant's Annual
Rental Adjustment shall not exceed Six Dollars and Sixty Cents ($6.60)
multiplied by the Rentable Area. Notwithstanding anything in this Lease to the
contrary:

26
<PAGE> 11
a) UNCONTROLLABLE EXPENSES. Commencing January 1, 1998, Tenant will be
responsible for Tenant's Proportionate Share of real estate taxes, reasonable
costs and expenses of contesting the validity or amount of real estate taxes or
service payments made in lieu thereof; insurance premiums; and utilities which
Landlord shall determine within its reasonable discretion to be uncontrollable
expenses, without regard to the level of increase in any or all of the above in
any year or other period of time.

b) CONTROLLABLE EXPENSES. Commencing January 1, 1998, Tenant's
obligation to pay its Proportionate Share of the increases in all other costs
and expenses payable by Tenant pursuant to the terms hereof for Operating
Expenses (herein "Controllable Expenses") shall be limited to a six percent
(6%) per annum increase over the Base Amount, as hereinafter defined. For each
calendar year thereafter, Tenant's obligation to pay its Proportionate Share of
Controllable Expenses shall be limited to a six percent (6%) per annum increase
over the amount Controllable Expenses for the immediately preceding calendar
year would have been had the Controllable Expenses increased at the rate of six
percent (6%) in all years after January 1, 1998. The Base Amount shall equal
the lesser of (i) the actual Controllable Expenses for calendar year 1997 or
(ii) the product of (x) Seven Dollars and Fifteen Cents ($7.15) (y) the
percentage obtained by dividing the actual aggregate Controllable Expenses for
the Building for calendar year 1997 by the actual Operating Expenses for
calendar year 1997 and (z) the Rentable Area. For example, if (i) the actual
Controllable Expenses payable by Tenant for calendar year 1997 were
Ninety-seven Thousand Dollars ($97,000.00), (ii) the actual aggregate
controllable expenses of the Building for calendar year 1997 were equal to One
Million Dollars ($1,000,000.00) and (iii) the actual Operating Expenses of the
Building for calendar year 1997 were equal to Two Million Dollars
($2,000,000.00) the Base Amount would equal:

($7.15) x ($1,000,000.00 / $2,000,000.00) x (20,501) = $73,291.08

Tenant's obligation to pay its Proportionate Share of the Controllable Expenses
during 1998 would be limited to Seventy-seven Thousand Six Hundred Eighty-eight
Dollars and Fifty-four Cents ($77,688.54) (the Base Amount plus a six percent
(6%) increase).

ARTICLE 4 - SECURITY DEPOSIT - INTENTIONALLY OMITTED.

ARTICLE 5 - OCCUPANCY AND USE

SECTION 5.01. OCCUPANCY. Tenant shall use and occupy the Leased Premises for
the purposes set forth in Item J of the Basic Lease Provisions and shall not
use the Leased Premises for any other purpose whatsoever.

SECTION 5.02. COVENANTS OF TENANT REGARDING USE. In connection with its use of
the Leased Premises, Tenant agrees to do the following:

27
<PAGE> 12

A. Tenant shall (i) use and maintain the Leased Premises and conduct its
business thereon in a safe, careful, reputable and lawful manner, (ii) comply
with the Covenants, if any, and all laws, rules, regulations, orders,
ordinances, directions and requirements of any governmental authority or
agency, now in force or which may hereafter be in force, including without
limitation those which shall impose upon Landlord or Tenant any duty with
respect to or triggered by a change in the use or occupation of, or any
improvement or alteration to, the Leased Premises, (iii) comply with and obey
all reasonable directions of the Landlord, including the Building Rules and
Regulations attached hereto as Exhibit C and as may be modified from time to
time by Landlord on reasonable notice to Tenant, and (iv) shall not do or
permit anything to be done in or about the Leased Premises which will in any
way obstruct or interfere with the rights of other tenants or occupants of the
Building or injure or annoy them. Landlord shall not be responsible to Tenant
for the non-performance by any other tenant or occupant of the Building of any
of the Building Rules and Regulations, but agrees to take reasonable measures
to assure such other tenant's compliance.

B. Tenant shall not overload the floors of the Leased Premises beyond their
designed weight-bearing capacity, which Landlord has determined to be seventy
(70) pounds per square foot live load and eighty (80) pounds per square foot
live load in certain areas, including an allowance for partition load. Landlord
reserves the right to direct the positioning of all heavy equipment, furniture
and fixtures which Tenant desires to place in the Leased Premises so as to
distribute properly the weight thereof, and to require the removal of any
equipment or furniture which exceeds the weight limit specified herein.

C. Tenant shall not use the Leased Premises, or allow the Leased Premises to be
used, for any purpose or in any manner which would invalidate any policy of
insurance now or hereafter carried on the Building or increase the rate of
premiums payable on any such insurance policy. Should Tenant fail to comply
with this covenant, Landlord may, at its option, require Tenant to stop
engaging in such activity or to reimburse Landlord as additional rent for any
increase in premiums charged on the insurance carried by Landlord on the Leased
Premises and attributable to the use being made of the Leased Premises by
Tenant.

D. Tenant shall not inscribe, paint, affix or display any signs, advertisements
or notices on the Building, except for such tenant identification information
as Landlord permits to be included or shown on the directory board in the main
lobby and on or adjacent to the access door or doors to the Leased Premises.

SECTION 5.03. LANDLORD'S RIGHTS REGARDING USE. In addition to the rights
specified elsewhere in this Lease, Landlord shall have the following rights
regarding the use of the Leased Premises or the Common Areas by Tenant, its
employees, agents, customers and invitees, each of which may be exercised
without notice or liability to Tenant:

28
<PAGE> 13
A. Landlord may install such signs, advertisements or notices or tenant
identification information on the directory board or tenant access doors as it
shall deem necessary or proper.

B. Landlord shall approve or disapprove, prior to installation, all types of
drapes, shades and other window coverings used in the Leased Premises, and may
control all internal lighting that may be visible from outside the Leased
Premises.

C. Landlord shall approve or disapprove all sign painting and lettering used on
the Leased Premises and the Building, including the suppliers thereof.

D. Landlord may grant to any person the exclusive right to conduct any business
or render any service in the Building, provided that such exclusive right shall
not operate to limit Tenant from using the Leased Premises for the use
permitted in Item J of the Basic Lease Provisions.

E. Landlord may control the Common Areas in such manner as it reasonably deems
necessary or proper, including by way of illustration and not limitation,
requiring all persons entering or leaving the Building to identify themselves
and their business in the Building to a security guard; excluding or expelling
any peddler, solicitor or loud or unruly person from the Building; and closing
or limiting access to the Building or any part thereof, including entrances,
corridors, doors, and elevators, during times of emergency, repairs or after
regular business hours.

SECTION 5.04. ACCESS TO AND INSPECTION OF THE LEASED PREMISES.
Upon reasonable notice to Tenant, except in the case of an emergency, Landlord,
its employees and agents and any mortgagee of the Building shall have the right
to enter any part of the Leased Premises at reasonable times for the purposes
of examining or inspecting the same, showing the same to prospective
purchasers, mortgagees or tenants and making such repairs, alterations or
improvements to the Leased Premises or the Building as Landlord may deem
necessary or desirable. During the progress of any work on the Leased
Premises, Landlord shall take commercially reasonable efforts to not
inconvenience Tenant or interrupt Tenant's business. If representatives of
Tenant shall not be present to open and permit such entry into the Leased
Premises at any time when such entry is necessary or permitted hereunder,
Landlord and its employees and agents may enter the Leased Premises by means of
a master or pass key or otherwise. Landlord shall use its best efforts to
safeguard access to such master or pass key. Landlord shall incur no liability
to Tenant for such entry, nor shall such entry constitute an eviction of Tenant
or a termination of this Lease, or entitle Tenant to any abatement of rent
therefor.

ARTICLE 6 - UTILITIES AND OTHER BUILDING SERVICES

SECTION 6.01. SERVICES TO BE PROVIDED. Provided Tenant is not in default,
Landlord shall furnish to Tenant, except as noted below, the following
utilities and other building services to the extent reasonably necessary for
Tenant's comfortable use and occupancy of the

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Leased Premises for general office use or as may be required by law or directed
by governmental authority:

A. Heating, ventilation and air-conditioning twenty-four (24) hours per day
seven (7) days a week except during the maintenance and repairs of such which
Landlord shall attempt to schedule during nonbusiness hours;

B. Subject to interruptions beyond Landlord's control, electrical current not
to exceed eight (8) watts per square foot. At all times Tenant's use of
electric current shall never exceed the capacity of the feeders to the Building
or the risers or wiring installation;

C. Water in the Common Areas and Leased Premises for lavatory, cleaning and
drinking purposes;

D. Automatic elevator service;

E. Cleaning and janitorial service, including the supplying and installing of
paper towels, toilet tissue and soap in the Common Areas on Monday through
Friday of each week except legal holidays; provided, however, Tenant shall be
responsible for carpet cleaning other than routine vacuuming;

F. Washing of windows at intervals reasonably established by Landlord;

G. Replacement of all lamps, bulbs, starters and ballasts in Building standard
lighting (Landlord's standard tenant finish improvements being described in
EXHIBIT B) as required from time to time as a result of normal usage;

H. Cleaning and maintenance of the Common Areas, including the removal of
rubbish and snow; and

I. Repair and maintenance to the extent specified elsewhere in this Lease.

Notwithstanding anything to the contrary contained herein, Landlord shall not
discontinue furnishing any services under this Article 6 for a default by
Tenant, unless and until all cure periods under this Lease, as they may be
extended, have expired and all notices required hereunder have been delivered.

SECTION 6.02. ADDITIONAL SERVICES. If Tenant requests any other utilities or
building services in addition to those identified above or any of the above
utilities or building services in frequency, scope, quality or quantity
substantially greater than those which are normally required by other tenants
in the Building for general office use, then Landlord shall use reasonable
efforts to attempt to furnish Tenant with such additional utilities or building
services. In the event Landlord is able to and does furnish such additional
utilities or building services, the reasonable costs thereof shall be borne by
Tenant, who shall

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reimburse Landlord monthly for the same as additional rent at the same time
Monthly Rental Installments and other additional rent is due.

If any lights, machines or equipment (including but not limited to computers)
used by Tenant in the Leased Premises materially affect the temperature
otherwise maintained by the Building's air-conditioning system or generate
substantially more heat in the Leased Premises than that which would normally
be generated by the lights and business machines typically used by other
tenants in the Building or by tenants in comparable office buildings, then
Landlord shall have the right to install any machinery or equipment which
Landlord considers reasonably necessary in order to restore the temperature
balance between the Leased Premises and the rest of the Building, including
equipment which modifies the Building's air-conditioning system. All costs
expended by Landlord to install any such machinery and equipment and any
additional costs of operation and maintenance occasioned thereby shall be borne
by Tenant, who shall reimburse Landlord for the same as provided in this
Section 6.02.

Tenant shall not install or connect any electrical equipment other than
personal computers, servers, the business machines and equipment typically used
for general office purposes by tenants in office buildings comparable to the
Building without Landlord's prior written consent (which shall not be
unreasonably withheld). Landlord acknowledges that Tenant is a computer
software developer and may require a variety of computers, servers and other
computer software development devices to be installed in the Leased Premises.
If Landlord determines that the electricity used by the equipment to be so
installed or connected exceeds the designed load capacity of the Building's
electrical system or is in any way incompatible therewith, then Landlord shall
have the right, as a condition to granting its consent, to make such
modifications to the electrical system or other parts of the Building or Leased
Premises, or to require Tenant to make such modifications to the equipment to
be installed or connected, as Landlord considers to be reasonably necessary
before such equipment may be so installed or connected. The cost of any such
modifications shall be borne by Tenant, who shall reimburse Landlord for the
same (or any portion thereof paid by Landlord) as provided in this Section
6.02.

SECTION 6.03. INTERRUPTION OF SERVICES. Tenant understands, acknowledges and
agrees that any one or more of the utilities or other building services
identified in Section 6.01 may be interrupted by reason of accident, emergency
or other causes beyond Landlord's control, or may be discontinued or diminished
temporarily by Landlord or other persons until certain repairs, alterations or
improvements can be made; that Landlord does not represent or warrant the
uninterrupted availability of such utilities or building services, and that any
such interruption shall not be deemed an eviction or disturbance of Tenant's
right to possession, occupancy and use of the Leased Premises or any part
thereof, or render Landlord liable to Tenant for damages by abatement of rent
or otherwise, or relieve Tenant from the obligation to perform its covenants
under this Lease. Landlord shall use its best efforts to help restore any
interrupted building services.

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ARTICLE 7 - REPAIRS, MAINTENANCE, ALTERATIONS, IMPROVEMENTS AND FIXTURES

SECTION 7.01. REPAIR AND MAINTENANCE OF BUILDING. Subject to Section 7.02 and
except for any repairs made necessary by the negligence, misuse, or default of
Tenant, its employees, agents, customers and invitees, Landlord shall make all
necessary repairs (structural or otherwise) to the exterior walls, exterior
doors, windows, corridors and other Common Areas of the Building, and Landlord
shall keep the Building and all Common Areas in a safe, clean and neat
condition and use reasonable efforts to keep all equipment used in common with
other tenants, such as elevators, plumbing, heating, air conditioning and
similar equipment, in good condition and repair. Except as provided in Article
8 and Article 10 hereof, there shall be no abatement of rent and no liability
of Landlord by reason of any injury to or interference with Tenant's business
arising from the making of any repairs, alterations or improvements in or to
any portion of the Building or the Leased Premises or in or to any fixtures,
appurtenances and equipment therein or thereon. Except as expressly provided
herein and subject to reimbursement for Operating Expenses, Landlord shall bear
the costs associated with all such repairs, alterations or improvements.

SECTION 7.02. REPAIR AND MAINTENANCE OF LEASED PREMISES. Landlord shall keep
and maintain the Leased Premises in good order, condition and repair. Except
for ordinary wear and tear and damage which Tenant is not obligated to repair
as provided elsewhere in this Lease, the reasonable cost of all repairs and
maintenance to the Leased Premises shall be borne by Tenant, who shall be
separately billed and shall reimburse Landlord for the same as additional rent,
or as a part of Operating Expenses.

SECTION 7.03. ALTERATIONS OR IMPROVEMENTS. Tenant shall not make or permit
alterations of or upon any part of the Leased Premises or additions to the
Leased Premises without first obtaining the written consent of Landlord which
consent shall not be unreasonably withheld. As a condition of such approval,
Landlord may require Tenant to remove the alterations and restore the Leased
Premises upon termination of this Lease. Tenant shall at its sole expense and
cost, ensure that all permitted alterations and additions which are made or
necessitated thereby (whether inside or outside the Leased Premises) shall be
made in accordance with all applicable laws, rules, codes, ordinances and
regulations in a good and workmanlike manner and in quality equal to or better
than the original construction of the Leased Premises or Building, and Tenant
shall comply with such requirements as Landlord reasonably considers necessary
or desirable. Landlord's consent to any such alterations or additions shall
create no responsibility or liability on the part of Landlord for the
completeness, design, sufficiency, or compliance with laws, rules, codes,
ordinances, or regulations of such alterations or additions or the plans,
specifications or working drawings therefor. Tenant shall promptly pay all
costs attributable to such alterations and additions and shall promptly repair
any damage to the Leased Premises, Building or Common Areas caused by or
resulting from such alterations and additions. Any such alterations and
additions shall remain for the benefit of Landlord, provided, however, that
Landlord may elect by prior written notice to Tenant to require that Tenant, at
its expense, remove at the expiration or earlier termination of this Lease all
or a portion

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of the alterations or additions made by Tenant and repair any damage caused by
such removal. Tenant's obligations under this Section shall survive the
expiration or earlier termination of this Lease.

Tenant shall indemnify and save harmless Landlord from all costs, loss or
expense in connection with any construction or installation. No person shall be
entitled to any lien directly or indirectly derived through or under Tenant or
through or by virtue of any act or omission of Tenant upon the Leased Premises
for any improvements or fixtures made thereon or installed therein or for or on
account of any labor or material furnished to the Leased Premises and nothing
in this Lease contained shall be construed to constitute a consent by Landlord
to the creation of any lien. In the event any lien is filed against the Leased
Premises, or any part thereof, for work claimed to have been done for or
material claimed to have been furnished to Tenant, Tenant shall cause such lien
to be discharged of record within thirty (30) days after filing by bonding or
as provided or required by law or in any other lawful manner. Tenant shall
indemnify and save harmless Landlord from all costs, losses, expenses, and
attorneys' fees in connection with any such lien.

SECTION 7.04. TRADE FIXTURES. Any trade fixtures installed on the Leased
Premises by Tenant at its own expense, such as movable partitions, counters,
shelving, showcases, mirrors and the like, may, and, at the request of
Landlord, shall be removed on the expiration or earlier termination of this
Lease, provided that Tenant is not then in default, that Tenant bears the cost
of such removal, and further that Tenant repairs at its own expense any and all
damage to the Leased Premises resulting from such removal. If Tenant fails to
remove any and all such trade fixtures from the Leased Premises on the
expiration or earlier termination of this Lease, all such trade fixtures shall
become the property of Landlord unless Landlord elects to require their
removal, in which case Tenant shall, at its expense, promptly remove the same
and restore the Leased Premises to their prior condition.

ARTICLE 8 - FIRE OR OTHER CASUALTY; CASUALTY INSURANCE

SECTION 8.01. SUBSTANTIAL DESTRUCTION OF THE BUILDING OR THE LEASED PREMISES.
If either the Building or the Leased Premises should be substantially destroyed
or damaged (which as used herein, means destruction or material damage to at
least 50% of the Building or the Leased Premises) by fire or other casualty
insured under the fire and extended coverage insurance provided by Landlord in
accordance with Section 8.03 hereof, then Landlord or Tenant may, at its
option, terminate this Lease by giving written notice of such termination to
the other party within thirty (30) days after the date of such casualty. In
such event, rent shall be apportioned to and shall cease as of the date of such
casualty. If neither party exercises this option, then the Leased Premises
shall be reconstructed and restored, at Landlord's expense, to substantially
the same condition as they were prior to the casualty; provided however, that
Landlord's obligation hereunder shall be limited to the reconstruction of such
of the Tenant Finish Improvements as were originally required to be made by
Landlord in accordance with EXHIBIT B to the extent of the availability of
insurance proceeds therefor; and further provided that if Tenant has made any
additional

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improvements pursuant to Section 7.03, Tenant shall reimburse Landlord for the
reasonable cost of reconstructing the same. In the event of such
reconstruction, rent shall be abated from the date of the casualty until
substantial completion of the reconstruction repairs; and this Lease shall
continue in full force and effect for the balance of the Lease Term.

SECTION 8.02. PARTIAL DESTRUCTION OF THE LEASED PREMISES. If the Leased
Premises should be damaged by fire or other casualty insured under the fire and
extended coverage insurance provided by Landlord in accordance with Section
8.03 hereof, but not substantially destroyed or damaged to the extent provided
in Section 8.01, then such damaged part of the Leased Premises shall be
reconstructed and restored, at Landlord's expense, to substantially the same
condition as it was prior to the casualty; provided however, that Landlord's
obligation hereunder shall be limited to the reconstruction of such of the
Tenant Finish Improvements as were originally required to be made by Landlord
in accordance with EXHIBIT B to the extent of the availability of insurance
proceeds therefor; and further provided that if Tenant has made any additional
improvements pursuant to Section 7.03, Tenant shall reimburse Landlord for the
cost of reconstructing the same. In such event, rent shall be abated in the
proportion which the approximate area of the damaged part bears to the total
area in the Leased Premises from the date of the casualty until substantial
completion of the reconstruction repairs; and this Lease shall continue in full
force and effect for the balance of the Lease Term. Landlord shall use
reasonable diligence in completing such reconstruction repairs, but in the
event Landlord fails to complete the same within one hundred twenty (120) days
from the date of the casualty, Tenant may, at its option, terminate this Lease
by giving Landlord written notice of such termination, whereupon both parties
shall be released from all further obligations and liability hereunder.

SECTION 8.03. CASUALTY INSURANCE. Landlord shall at all times during the Lease
Term carry, at its own expense, a policy of insurance which insures the
Building, including the Leased Premises, against loss or damage by fire or
other casualty (namely, the perils against which insurance is afforded by a
standard fire insurance policy and extended coverage endorsement); provided,
however, that Landlord shall not be responsible for, and shall not be obligated
to insure against, any loss of or damage to any personal property of Tenant or
which Tenant may have in the Building or the Leased Premises or any trade
fixtures installed by or paid for by Tenant on the Leased Premises or any
additional improvements which Tenant may construct on the Leased Premises, and
Landlord shall not be liable for any loss or damage to such property,
regardless of cause, except for the gross negligence or willful misconduct of
Landlord and its employees. Landlord represents that Landlord has secured such
casualty insurance. If the Tenant Finish Improvements installed by Landlord or
Tenant pursuant to EXHIBIT B which are in excess of the Building standard
tenant finish improvements or any alterations or improvements made by Tenant
pursuant to Section 7.03 result in an increase in the premiums charged during
the Lease Term on the casualty insurance carried by Landlord on the Building,
then the cost of such increase in insurance premiums shall be borne by Tenant,
who shall reimburse Landlord for the same as additional rent after being
separately billed therefor.

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To the extent that Landlord actually recovers payment or disbursement
from another party for the incremental cost of casualty insurance regarding a
tenant's finish improvements or alterations as provided in this Section 8.03,
Landlord shall not include the amount recovered in the Operating Expenses.

SECTION 8.04. WAIVER OF SUBROGATION. Landlord and Tenant hereby release each
other and each other's employees, agents, customers and invitees from any and
all liability for any loss of or damage or injury to person or property
occurring in, on or about or to the Leased Premises, the Building or personal
property within the Building by reason of fire or other casualty or any other
risk which is or which is required to be insured against under this Lease,
regardless of cause, including the negligence of Landlord or Tenant and their
respective employees, agents, customers and invitees, and agree that all
insurance carried by either of them shall contain a clause whereby the insurer
waives its right of subrogation against the other party. Because the provisions
of this Section 8.04 are intended to preclude the assignment of any claim
mentioned herein by way of subrogation or otherwise to an insurer or any other
person, each party to this Lease shall give to each insurance company which has
issued to it one or more policies of fire and extended coverage insurance
notice of the provisions of this Section 8.04 and have such insurance policies
properly endorsed, if necessary, to prevent the invalidation of such insurance
by reason of the provisions of this Section 8.04. In the event that such
endorsement is not generally available in the commercial real estate industry
then such waiver requirement shall be ineffective.

ARTICLE 9 - GENERAL PUBLIC LIABILITY, INDEMNIFICATION AND INSURANCE

SECTION 9.01. TENANT'S RESPONSIBILITY. Tenant shall assume the risk of, be
responsible for, have the obligation to insure against, and indemnify Landlord
and hold it harmless from any and all liability for any loss of or damage or
injury to any person (including death resulting therefrom) or property
occurring in the Leased Premises, regardless of cause, except for any loss or
damage from fire or other casualty as provided in Section 8.03 and except for
that caused directly by the sole negligence of Landlord and its employees,
agents, customers and invitees; and Tenant hereby releases Landlord from any
and all liability for the same. Tenant's obligation to indemnify Landlord
hereunder shall include the duty to defend against any claims asserted by
reason of such loss, damage or injury and to pay any judgments, settlements,
costs, fees and expenses, including attorneys' fees, incurred in connection
therewith. Notwithstanding anything herein to the contrary, Tenant shall bear
the risk of any loss or damage to its personal property as provided in Section
8.03, unless such loss or damage is due to Landlord's or Landlord's employees
gross negligence or willful misconduct.

SECTION 9.02. TENANT'S INSURANCE. Tenant, in order to enable it to meet its
obligation to insure against the liabilities specified in this Lease, shall at
all times during the Lease Term carry, at its own expense, one or more policies
of general public liability and property

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damage insurance, issued by one or more insurance companies acceptable to
Landlord, with the following minimum coverages:

A. Worker's Compensation - - minimum statutory amount.

B. Comprehensive General - Not less than $2,000,000
Liability Insurance, Combined Single Limit
including Blanket, Con- for both bodily injury
tractual Liability, and property damage.
Broad Form Property
Damage, Personal Injury,
Completed Operations,
Products Liability,
Fire Damage.

C. Fire and Extended Coverage, Vandalism and Malicious Mischief, and
Sprinkler Leakage insurance, for the full cost of replacement of Tenant's
property.

Such insurance policy or policies shall protect Tenant and Landlord as their
interests may appear, naming Landlord and Landlord's managing agent and
mortgagee as additional insureds and shall provide that they may not be
cancelled on less than thirty (30) days prior written notice to Landlord.
Tenant shall furnish Landlord with Certificates of Insurance evidencing such
coverage. Should Tenant fail to carry such insurance and furnish Landlord with
such Certificates of Insurance after a request to do so, Landlord shall have
the right to obtain such insurance and collect the cost thereof from Tenant as
additional rent.

SECTION 9.03. LANDLORD'S RESPONSIBILITY. Landlord shall assume the risk of, be
responsible for, have the obligation to insure against, and indemnify Tenant
and hold it harmless from, any and all liability for any loss of or damage or
injury to person (including death resulting therefrom) or property (other than
Tenant's property as provided in Section 8.03) occurring in, on or about the
Common Areas, regardless of cause, except for that caused by the sole
negligence of Tenant and its employees, agents, customers and invitees; and
Landlord hereby releases Tenant from any and all liability for the same.
Landlord's obligation to indemnify Tenant hereunder shall include the duty to
defend against any claims asserted by reason of such loss, damage or injury and
to pay any judgments, settlements, costs, fees and expenses, including
attorneys' fees, incurred in connection therewith.

ARTICLE 10 - EMINENT DOMAIN

If the whole or any part of the Leased Premises shall be taken for public or
quasi-public use by a governmental or other authority having the power of
eminent domain or shall be conveyed to such authority in lieu of such taking,
and if such taking or conveyance shall cause the remaining part of the Leased
Premises to be untenantable and inadequate for use

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<PAGE> 21
by Tenant for the purpose for which they were leased, then either Landlord or
Tenant may, at their respective option, terminate this Lease as of the date
Tenant is required to surrender possession of the Leased Premises by giving
written notice of such termination to the other party. If a part of the Leased
Premises shall be taken or conveyed but the remaining part is tenantable and
adequate for Tenant's use in Tenant's reasonable determination, then this Lease
shall be terminated as to the part taken or conveyed as of the date Tenant
surrenders possession; Landlord shall make such repairs, alterations and
improvements as may be necessary to render the part not taken or conveyed
tenantable to the extent the condemnation award proceeds received by Landlord
are sufficient therefor; and the rent shall be reduced in proportion to the
part of the Leased Premises so taken or conveyed. All compensation awarded for
such taking or conveyance shall be the property of Landlord without any
deduction therefrom for any present or future estate of Tenant, and Tenant
hereby assigns to Landlord all its right, title and interest in and to any such
award. However, Tenant shall have the right to recover from such authority, but
not from Landlord, such compensation as may be awarded to Tenant including
without limitation, all moving and relocation expenses, all claims for
leasehold damages, diminution in value of Tenant's leasehold interest and
depreciation to and removal of Tenant's property or any alterations or
improvements made in accordance with Section 7.03.

ARTICLE 11 - LIENS

If, because of any act or omission of Tenant or any person claiming by,
through, or under Tenant, any mechanic's lien or other lien shall be filed
against the Leased Premises or the Building or against other property of
Landlord (whether or not such lien is valid or enforceable as such), Tenant
shall, at its own expense, cause the same to be discharged of record within
forty-five (45) days after the date of filing thereof, and shall also indemnify
Landlord and hold it harmless from any and all claims, losses, damages,
judgments, settlements, costs and expenses, including attorneys' fees,
resulting therefrom or by reason thereof. Landlord may, but shall not be
obligated to, pay the claim upon which such lien is based so as to have such
lien released of record; and, if Landlord does so, then Tenant shall pay to
Landlord, as additional rent, upon demand, the amount of such claim, plus all
other reasonable costs and expenses incurred in connection therewith, plus
interest thereon at the rate of fifteen percent (15%) per annum until paid.

ARTICLE 12 - RENTAL, PERSONAL PROPERTY AND OTHER TAXES

Tenant shall pay before delinquency any and all taxes, assessments, fees or
charges, including any sales, gross income, rental, business occupation or
other taxes, levied or imposed upon Tenant's business operations in the Leased
Premises and any personal property or similar taxes levied or imposed upon
Tenant's trade fixtures, leasehold improvements or personal property located
within the Leased Premises. In the event any such taxes, assessments, fees or
charges are charged to the account of, or are levied or imposed upon the
property of Landlord, Tenant shall within ten (10) days reimburse Landlord for
the same as additional rent. Notwithstanding the foregoing, Tenant shall

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have the right to contest in good faith any such item and to defer payment
until after Tenant's liability therefor is finally determined.

If any tenant finish improvements, trade fixtures, alterations or improvements
or business machines and equipment located in, on or about the Leased Premises,
regardless of whether they are installed or paid for by Landlord or Tenant and
whether or not they are affixed to and become a part of the realty and the
property of Landlord, are assessed for real property tax purposes at a
valuation higher than that at which other such property in other leased space
in the Building is assessed, then Tenant shall reimburse Landlord as additional
rent for the amount of real property taxes shown on the appropriate county
official's records as having been levied upon the Building or other property of
Landlord by reason of such excess assessed valuation. To the extent that
Landlord actually recovers payment or reimbursement from another party for the
incremental cost of additional real property taxes regarding a tenant's finish
improvements, trade fixtures, alterations or improvements or business machines
and equipment as provided in this Article 12, Landlord shall not include the
amount recovered in the Operating Expenses.

ARTICLE 13 - ASSIGNMENT AND SUBLETTING

Tenant may not assign this Lease or sublet the Leased Premises or any part
thereof, without the prior written consent of Landlord; and any attempted
assignment or subletting without such consent shall be invalid which shall not
be unreasonably withheld. In the event of a permitted assignment or subletting,
Tenant shall nevertheless at all times remain fully responsible and liable for
the payment of rent and the performance and observance of all of Tenant's other
obligations under the terms, conditions and covenants of this Lease. No
assignment or subletting of the Leased Premises or any part thereof shall be
binding upon Landlord unless such assignee or subtenant shall deliver to
Landlord an instrument (in recordable form, if requested) containing an
agreement of assumption of all of Tenant's obligations under this Lease. Upon
the occurrence of an event of default, if all or any part of the Leased
Premises are then assigned or sublet, Landlord, in addition to any other
remedies provided by this Lease or by law, may, at its option, collect directly
from the assignee or subtenant all rent becoming due to Landlord by reason of
the assignment or subletting. Any collection by Landlord from the assignee or
subtenant shall not be construed to constitute a waiver or release of Tenant
from the further performance of its obligations under this Lease or the making
of a new lease with such assignee or subtenant.

Landlord may refuse to give its consent to any proposed assignment or
subletting for any reason, including, but not limited to Landlord's
determination that its interest in the Lease or the Leased Premises would be
adversely affected by (i) the financial condition, creditworthiness or business
reputation of the proposed assignee or subtenant, (ii) the prevailing market or
quoted rental rates for space in the Building or other comparable buildings or
(iii) the proposed use of the Leased Premises by, or business of, the proposed
assignee or subtenant. If Landlord refuses to give its consent to any proposed
assignment or subletting, Landlord may, at its option, within thirty (30) days
after receiving notice of the proposal, terminate this Lease by giving Tenant
thirty (30) days prior written notice of

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such termination, whereupon each party shall be released from all further
obligations and liability hereunder.

Notwithstanding the above, Tenant may assign this Lease to a parent of Tenant
without Landlord's prior consent, provided (i) such parent or affiliate of
Tenant has a net worth at least equal to Tenant's at the Commencement Date of
this Lease; (ii) that Tenant remains fully liable under this Lease; and (iii)
that Tenant provides Landlord with thirty (30) days written notice of such
assignment.

ARTICLE 14 - TRANSFERS BY LANDLORD

SECTION 14.01. SALE AND CONVEYANCE OF THE BUILDING. Landlord shall have the
right to sell and convey the Building at any time during the Lease Term,
subject only to the rights of Tenant hereunder; and such sale and conveyance
shall operate to release Landlord from liability hereunder after the date of
such conveyance as provided in Section 15.04, provided that any transferee or
successor accepts the Building subject to this Lease and agrees to accept and
perform all of Landlord's obligations hereunder.

SECTION 14.02. SUBORDINATION. Tenant's rights under this Lease are and shall
always be subordinate to the operation and effect of any mortgage, deed of
trust, ground lease or master lease now or hereafter placed upon or governing
the Building or any part or parts thereof by Landlord. This clause shall be
self-operative, and no further instrument of subordination shall be required.
In confirmation thereof, Tenant shall execute such further assurance as may be
required. Any mortgagee, ground lessor or trustee under any such mortgage, deed
of trust, ground lease or master lease may elect that this Lease shall have
priority over its mortgage, deed of trust, ground lease or master lease; and
upon notification to Tenant of such election by such mortgagee, ground lessor
or trustee, this Lease shall be deemed to have priority over said mortgage,
deed of trust, ground lease or master lease whether this Lease is dated prior
to or subsequent to the date of such mortgage, deed of trust, ground lease or
master lease. Notwithstanding the foregoing, no default by Landlord under any
such mortgage, deed of trust, ground lease or master lease shall affect
Tenant's rights hereunder so long as Tenant is not in default under this Lease.
Tenant hereby attorns to any successor to Landlord's interest in this Lease and
shall recognize such successor as Landlord hereunder, provided that any
transferee or successor accepts the Building subject to this Lease and agrees
to accept and perform all of Landlord's obligations hereunder. Tenant agrees to
execute, within fifteen (15) days after Landlord's request, all instruments as
may be reasonably required by such successor to confirm such attornment.

ARTICLE 15 - DEFAULTS AND REMEDIES

SECTION 15.01. DEFAULTS BY TENANT. The occurrence of any one or more of the
following events shall be an "Event of Default" under and breach of this Lease
by Tenant:

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A. Tenant shall fail to pay within ten (10) days after written notice from
Landlord any Monthly Rental Installment of Minimum Annual Rent or the Annual
Rental Adjustment, or any other amounts due Landlord from Tenant as additional
rent or otherwise including any amounts owed by Tenant hereunder (hereinafter
referred to together as "Rent").

B. Tenant shall fail to perform or observe any material term, condition,
covenant or obligation required to be performed or observed by it under this
Lease for a period of thirty (30) days after notice thereof from Landlord;
provided, however, that if the term, condition, covenant or obligation to be
performed by Tenant is of such nature that the same cannot reasonably be
performed within such thirty (30)-day period, such default shall be deemed to
have been cured if Tenant commences such performance within said thirty
(30)-day period and thereafter diligently undertakes to complete the same and
does so complete the required action within a reasonable time.

C. A trustee or receiver shall be appointed to take possession of substantially
all of Tenant's assets in, on or about the Leased Premises or of Tenant's
interest in this Lease (and Tenant does not regain possession within ninety
(90) days after such appointment); Tenant makes an assignment for the benefit
of creditors; or substantially all of Tenant's assets in, on or about the
Leased Premises or Tenant's interest in this Lease are attached or levied under
execution (and Tenant does not discharge the same within ninety (90) days
thereafter).

D. A petition in bankruptcy, insolvency, or for reorganization or arrangement
is filed by or against Tenant pursuant to any federal or state statute (and,
with respect to any such petition filed against it, Tenant fails to secure a
stay or discharge thereof within ninety (90) days after the filing of the
same).

SECTION 15.02. LANDLORD'S RIGHTS AND REMEDIES UPON AN EVENT OF DEFAULT. If an
Event of Default occurs, Landlord shall have the rights and remedies
hereinafter set forth, which rights and remedies shall survive the termination
of this Lease, and shall be distinct, separate and cumulative with and in
addition to any other right or remedy allowed under any applicable law or other
provisions of this Lease:

A. TERMINATION OF LEASE. Upon the occurrence of an Event of Default, Landlord
may terminate this Lease by giving written notice of such termination to
Tenant, which termination shall be effective as of the date of such notice or
any later date therefor specified by Landlord in such notice (and on the
effective date of such termination, all obligations and liabilities of Landlord
hereunder shall terminate) and, without further notice and without liability,
Landlord shall have the right to repossess the Leased Premises, expel or remove
Tenant and any other person or entity who may be occupying the Leased Premises,
remove any and all of their property from the Leased Premises, and change the
locks. Landlord shall be entitled to recover all loss and damage Landlord may
suffer by reason of such termination, whether through inability to relet the
Leased Premises on satisfactory terms or otherwise, including without
limitation, the following (without duplication by any element of damages):

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(1) accrued Rent to the effective date of termination
together with late charges and interest as provided herein; plus

(2) the unamortized cost of Tenant's improvements,
brokers' fees and commissions, attorneys' fees, allowances for moving or tenant
finish expenses and any other costs incurred by Landlord in connection with
making or executing this Lease (such amortized costs being the total of all
such costs, times a fraction, the denominator of which shall be the total
number of months of the stated original Lease Term, and the numerator of which
shall be the number of months from the Commencement Date to the effective date
of termination); plus

(3) the cost of recovering the Leased Premises, including
without limitation, attorneys' fees; plus

(4) all costs of enforcing this Lease, including, without
limitation, the provisions of this subparagraph A against Tenant and any
Guarantor; plus

(5) all reasonable costs and expenses incurred by
Landlord for any repairs, maintenance, changes, alterations and improvements to
the Leased Premises (whether to prevent damage or to prepare the Leased
Premises for reletting), brokerage commissions, advertising costs, attorneys'
fees, any economic incentives given to replacement tenants, and costs of
collecting rent from replacement tenants (collectively, "Reletting Costs");
plus

(6) the present value of the Rent (discounted at a rate of
interest equal to twelve percent (12%) per annum (the "Discount Rate"), that
would have accrued under this Lease for the balance of the Lease Term but for
such termination, reduced by the reasonable fair market rental value of the
Leased Premises for such balance of the Lease Term (determined from the present
value of the actual minimum or base rents, discounted at the Discount Rate,
received and to be received from Landlord's reletting of the Leased Premises
or, if the Leased Premises have not been relet, the minimum or base rents,
discounted at the Discount Rate, that would be received from a comparable lease
and comparable tenant for a comparable term and taking into account, among
other things, the condition of the Leased Premises, market conditions and the
period of time the Leased Premises may reasonably remain vacant before Landlord
is able to release the same to a suitable replacement tenant, it being agreed,
however, that Landlord's obligation to relet or attempt to relet the Leased
Premises is subject to the provisions of subparagraph J below). For purposes of
computing the amount of Rent that would have accrued after the effective date
of termination, obligations for real estate taxes, insurance costs and
Operating Expenses shall be projected, based upon the rate of increase, if any,
in such items from the Commencement Date through the termination date; plus

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(7) any other reasonable costs or amounts necessary to
compensate Landlord for all damages caused by Tenant's failure to perform its
obligations hereunder.

B. REPOSSESSION AND RE-ENTRY. Upon the occurrence of an Event
of Default, Landlord may immediately terminate Tenant's right of possession of
the Leased Premises (whereupon all obligations and liability of Landlord
hereunder shall terminate), but not terminate this Lease, and, without notice,
demand or liability, enter upon the Leased Premises or any part thereof, take
absolute possession of the same, expel or remove Tenant and any other person or
entity who may be occupying the Leased Premises, remove any and all of their
property from the Leased Premises, and change the locks. If Landlord terminates
Tenant's possession of the Leased Premises under this subparagraph B, Landlord
may, at it sole option, relet the Leased Premises, rent received by Landlord
from such reletting shall be applied first to Reletting Costs, second, to the
payment of any indebtedness other than Rent due hereunder from Tenant to
Landlord (in such order as Landlord shall determine), third to the extent
permitted by applicable law, to the payment of Rent due and unpaid hereunder
(in such order as Landlord shall determine), and the residue, if any, shall be
held by Landlord and applied to the payment of other obligations of Tenant to
Landlord as the same become due; and Tenant shall satisfy and pay to Landlord
any deficiency upon demand therefor from time to time. No such re-entry or
taking of possession of the Leased Premises by Landlord shall be construed as
an election on Landlord's part to terminate this Lease unless a written notice
of such termination is given to Tenant pursuant to subparagraph A above. If
Landlord relets the Leased Premises, either before or after the termination of
this Lease, all such rentals received from such lease shall be and remain the
exclusive property of Landlord, and Tenant shall not, at any time, be entitled
to recover any such rental. Landlord may at any time, whether before or after a
reletting, elect to terminate this Lease pursuant to subparagraph A above.

C. CONTINUING OBLIGATIONS. No repossession of or re-entering
upon the Leased Premises or any part thereof pursuant to subparagraph B above
or otherwise shall relieve Tenant or any Guarantor of its liabilities and
obligations hereunder, all of which shall survive such repossession or
re-entering. In the event of any such repossession of or re-entering upon the
Leased Premises or any part thereof by reason of the occurrence of an Event of
Default, Tenant will continue to pay to Landlord all Rent required to be paid
by Tenant under this Lease.

D. NEW LOCKS; DISPOSITION OF PROPERTY. If Landlord terminates
the Lease pursuant to subparagraph A above or terminates Tenant's possession
under subparagraph B above, (1) Landlord shall have no obligation whatsoever to
tender to Tenant a key for new locks installed at the Leased Premises, and (2)
any and all property which Landlord has the right to remove from the Leased
Premises pursuant to subparagraph A or subparagraph B above, shall at Tenant's
sole cost and expense, be (a) stored, and/or (b) sold at a commercially
reasonable private or public sale for such price as Landlord may obtain, with
the proceeds of any such sale being applied to amounts due from Tenant to
Landlord under this Lease (including Landlord's reasonable attorneys' fees

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and other reasonable costs incurred in the removal, storage and/or sale of such
items), with any remainder to be paid to Tenant.

E. CUMULATIVE REMEDIES. No right or remedy herein conferred upon or reserved to
Landlord is intended to be exclusive of any other right or remedy, and each and
every right and remedy shall be cumulative and in addition to any other right or
remedy given hereunder or now or hereafter existing at law or in equity or by
statute. In addition to the other remedies provided in this Lease, Landlord
shall be entitled, to the extent permitted by applicable law, to injunctive
relief in case of the violation, or attempted or threatened violation, of any of
the covenants, agreements, conditions or provisions of this Lease, or to a
decree compelling performance of any of the covenants, agreements, conditions or
provisions of this Lease.

F. LATE CHARGES AND INTEREST. Any Rent not paid when due shall bear interest as
provided in Section 3.03 hereof.

G. LANDLORD'S CURE OF TENANT DEFAULTS. If Tenant fails to perform or commence to
perform any obligation under this Lease for thirty (30) days after notice
thereof by Landlord (except that no notice shall be required in emergencies or
for monetary defaults), Landlord shall have the right (but not the duty), to
perform such obligation on behalf and for the account of Tenant. In such event,
Tenant shall reimburse Landlord upon demand, as Additional Rent, for all
reasonable expenses incurred by Landlord in performing such obligation together
with an amount equal to fifteen percent (15%) thereof for Landlord's overhead.
Landlord's performance of Tenant's obligations hereunder shall not be deemed a
waiver or release of Tenant therefrom, or a waiver of any remedies to which
Landlord is entitled to as a result of Tenant's failure to perform.

H. BAD RENT CHECKS. If during the Term, Landlord receives two (2) or more checks
from Tenant which are returned by Tenant's bank for insufficient funds, Landlord
may require that all checks thereafter be bank certified or cashier's checks
(without limiting Landlord's other remedies). All bank service charges resulting
from any bad checks shall be paid by Tenant.

I. OTHER MATTERS. No re-entry or repossession, repairs, changes, alterations,
additions, reletting, acceptance of keys from Tenant, or any other action or
omission by Landlord shall be construed as an election by Landlord to terminate
this Lease or Tenant's right to possession, or to accept a surrender of the
Leased Premises, nor shall the same operate to release the Tenant in whole or in
part from any of Tenant's obligations hereunder, unless express written notice
of such intention is sent by Landlord to Tenant. Landlord may bring suits for
amounts owed by Tenant hereunder or any portions thereof, as the same accrue or
after the same have accrued, and no suit or recovery of any portion due
hereunder shall be deemed a waiver of Landlord's right to collect all amounts to
which Landlord is entitled hereunder, nor shall the same serve as any defense to
any subsequent suit brought for any amount not theretofore reduced to judgment.
Landlord shall be under no obligation to observe or perform any provision of

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this lease on its part to be observed or performed which accrues after the date
of any Event of Default by Tenant. The times set forth herein for the curing of
violations by Tenant are of the essence of this Lease. To the extent permitted
by applicable law, Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease or Tenant's right to
possession after this Lease or Tenant's right to possession is terminated on
account of an Event of Default.

J. MITIGATION OF DAMAGES. If Landlord terminates this Lease or Tenant's right to
possession, Landlord shall have no obligation to mitigate Landlord's damages
except to the extent required by applicable law. If Landlord has not terminated
this Lease or Tenant's right to possession, Landlord shall have no obligation to
mitigate under any circumstances except to the extent required by applicable law
and may permit the Leased Premises to remain vacant or abandoned. If Landlord is
required by applicable law to mitigate damages under this Lease: (1) Landlord
shall be required only to use reasonable efforts to mitigate, which shall not
exceed such efforts as Landlord generally uses to lease other space in the
Building, (2) Landlord will not be deemed to have failed to mitigate if Landlord
leases any other portions of the Building before reletting all or any portion of
the Leased Premises, and (3) Landlord will not be deemed to have failed to
mitigate if Landlord must incur Reletting Costs. In recognition that the value
of the Building depends on the rental rates and terms of leases therein,
Landlord's rejection of a prospective replacement tenant based on an offer of
rentals below Landlord's published rates for new leases of comparable space at
the Building at the time in question, or at Landlord's option, below the rates
provided in this Lease, or containing terms less favorable than those contained
herein, shall not give rise to a claim by Tenant that Landlord failed to
mitigate Landlord's damages.

SECTION 15.03. DEFAULT BY LANDLORD AND REMEDIES OF TENANT. It shall be a
default under and breach of this Lease by Landlord if it shall fail to perform
or observe any term, condition, covenant or obligation required to be performed
or observed by it under this Lease for a period of thirty (30) days after
notice thereof from Tenant; provided, however, that if the term, condition,
covenant or obligation to be performed by Landlord is of such nature that the
same cannot reasonably be performed within such thirty-day period, such default
shall be deemed to have been cured if Landlord commences such performance
within said thirty-day period and thereafter diligently undertakes to complete
the same. Upon the occurrence of any such default, Tenant may sue for
injunctive relief or to recover damages for any loss resulting from the breach,
but Tenant shall not be entitled to terminate this Lease or withhold or abate
any rent due hereunder.

SECTION 15.04. LIMITATION OF LANDLORD'S LIABILITY. If Landlord shall fail to
perform or observe any term, condition, covenant or obligation required to be
performed or observed by it under this Lease as provided in Section 15.03 and
if Tenant shall, as a consequence thereof, recover a money judgment against
Landlord, Tenant agrees that it shall look solely to Landlord's right, title
and interest in and to the Building for the collection of such judgment; and
Tenant further agrees that no other assets of Landlord shall be subject to

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levy, execution or other process for the satisfaction of Tenant's judgment and
that Landlord shall not be liable for any deficiency.

The references to "Landlord" in this Lease shall be limited to mean and include
only the owner or owners, at the time, of the fee simple interest in the
Building. In the event of a sale or transfer of such interest (except a
mortgage or other transfer as security for a debt), the "Landlord" named
herein, or, in the case of a subsequent transfer, the transferor, shall, after
the date of such transfer, be automatically released from all personal
liability for the performance or observance of any term, condition, covenant or
obligation required to be performed or observed by Landlord hereunder; and the
transferee shall be deemed to have assumed all of such terms, conditions,
covenants and obligations accruing after the date of transfer.

SECTION 15.05. NON-WAIVER OF DEFAULTS. The failure or delay by either party
hereto to exercise or enforce at any time any of the rights or remedies or
other provisions of this Lease shall not be construed to be a waiver thereof,
nor affect the validity of any part of this Lease or the right of either party
thereafter to exercise or enforce each and every such right or remedy or other
provision. No waiver of any default and breach of the Lease shall be deemed to
be a waiver of any other default and breach. The receipt by Landlord of less
than the full rent due shall not be construed to be other than a payment on
account of rent then due, nor shall any statement on Tenant's check or any
letter accompanying Tenant's check be deemed an accord and satisfaction, and
Landlord may accept such payment without prejudice to Landlord's right to
recover the balance of the rent due or to pursue any other remedies provided in
this Lease. No act or omission by Landlord or its employees or agents during
the Lease Term shall be deemed an acceptance of a surrender of the Leased
Premises, and no agreement to accept such a surrender shall be valid unless in
writing and signed by Landlord.

SECTION 15.06. ATTORNEYS' FEES. In the event Tenant defaults in the performance
or observance of any of the terms, conditions, covenants or obligations
contained in this Lease and Landlord employs attorneys to enforce all or any
part of this Lease, collect any rent due or to become due or recover possession
of the Leased Premises, Tenant agrees to reimburse Landlord for the reasonable
attorneys' fees incurred thereby, whether or not suit is actually filed.

ARTICLE 16 - LANDLORD'S RIGHT TO RELOCATE TENANT

At any time after the expiration of the third (3rd) year of the term of this
Lease, Landlord shall have the right, at its option, upon at least sixty (60)
days' prior written notice to Tenant, to relocate Tenant and to substitute for
the Leased Premises described herein other space in the Building or Bank One
Towers located at 8044 Montgomery Road, Cincinnati, Ohio 45236 containing at
least as much contiguous and nondivided rentable area as the Leased Premises at
no additional cost. Such substituted space shall be improved by Landlord, at
its expense, with improvements at least equal in quantity and quality to those
in the Leased Premises. Landlord shall reimburse Tenant for all

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reasonable expenses incurred by such relocation, including telephone
installation, moving of equipment and furniture, printing of stationary and
business cards with Tenant's new address and reasonable and necessary costs of
compliance with requirements of relevant securities laws and stock exchange or
market requirements as a result of such relocation. Such costs shall be
reimbursed by Landlord to Tenant within thirty (30) days of receipt from Tenant
of original invoices or receipts marked "paid in full." In no event shall
Landlord be liable for any consequential damages to Tenant as a result of any
such relocation, including but not limited to loss of business income or
opportunity. Upon completion of the relocation, Landlord and Tenant shall amend
this Lease to change the description of the Leased Premises and any other
matters pertinent thereto.

ARTICLE 17 - NOTICE AND PLACE OF PAYMENT

SECTION 17.01. NOTICES. Any notice required or permitted to be given under this
Lease or by law shall be deemed to have been given if it is written and
delivered in person or mailed by Registered or Certified mail, postage prepaid,
or by delivery by a nationally recognized overnight courier service to the
party who is to receive such notice at the address specified in Item L of the
Basic Lease Provisions. When so mailed, the notice shall be deemed to have been
given as of the date it was mailed. The address specified in Item L of the
Basic Lease Provisions may be changed by giving written notice thereof to the
other party.

SECTION 17.02. PLACE OF PAYMENT. All rent and other payments required to be
made by Tenant to Landlord shall be delivered or mailed to Landlord's
management agent at the address specified in Item L of the Basic Lease
Provisions or any other address Landlord may specify from time to time by
written notice given to Tenant.

ARTICLE 18 - MISCELLANEOUS GENERAL PROVISIONS

SECTION 18.01. CONDITION OF PREMISES. Tenant acknowledges that neither Landlord
nor any agent of Landlord has made any representation or warranty with respect
to the Leased Premises or the Building or with respect to the suitability or
condition of any part of the Building for the conduct of Tenant's business
except as provided in this Lease.

SECTION 18.02. INSOLVENCY OR BANKRUPTCY. In no event shall this Lease, to the
extent permitted by applicable law, be assigned or assignable by operation of
law, and in no event shall this Lease be an asset of Tenant in any
receivership, bankruptcy, insolvency, or reorganization proceeding.

SECTION 18.03. COMMON AREAS. The term "Common Areas," as used in this Lease,
refers to the areas of the Building which are designed for use in common by all
tenants of the Building and their respective employees, agents, customers,
invitees and others, and includes, by way of illustration and not limitation,
entrances and exits, hallways and stairwells, elevators, restrooms, sidewalks,
driveways, parking areas, loading and delivery areas, landscaped areas and
other areas as may be designated by Landlord as part of the Common Areas of the
Building. Tenant shall have the non-exclusive right, in common

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with others, to the use of the Common Areas, subject to such reasonable
nondiscriminatory rules and regulations as may be adopted by Landlord including
those set forth in Section 5.02 and EXHIBIT C of this Lease.

SECTION 18.04. CHOICE OF LAW. This Lease shall be governed by and construed
pursuant to the laws of the State of Ohio.

SECTION 18.05. SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
Lease, all of the covenants, conditions and provisions of this Lease shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.

SECTION 18.06. NAME. Tenant shall not, without the written consent of Landlord,
use the name of the Building for any purpose other than as the address of the
business to be conducted by Tenant in the Leased Premises, and in no event
shall Tenant acquire any rights in or to such names.

SECTION 18.06. EXAMINATION OF LEASE. Submission of this instrument for
examination or signature to Tenant does not constitute a reservation of or
option for Lease, and it is not effective as a Lease or otherwise until
execution by and delivery to both Landlord and Tenant.

SECTION 18.07. TIME. Time is of the essence of this Lease and each and all of
its provisions.

SECTION 18.08. DEFINED TERMS AND MARGINAL HEADINGS. The words "Landlord" and
"Tenant" as used herein shall include the plural as well as the singular. If
more than one person is named as Tenant, the obligations of such persons are
joint and several. The marginal headings and titles to the articles of this
Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof.

SECTION 18.09. PRIOR AGREEMENTS. This Lease, the Exhibits attached hereto and
the letter of understanding executed pursuant to Section 2.03 hereof contain
all of the agreements of the parties hereto with respect to any matter covered
or mentioned in this Lease, and no prior agreement, understanding or
representation pertaining to any such matter shall be effective for any
purpose. No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective
successors in interest.

SECTION 18.10. PAYMENT OF AND INDEMNIFICATION FOR LEASING COMMISSIONS. The
parties hereby acknowledge, represent and warrant that the only real estate
broker or brokers involved in the negotiation and execution of this Lease is
that, or are those named in Item I of the Basic Lease Provisions; that Landlord
is obligated to pay to it or them or for their benefit a leasing commission
under its Leasing Agreement with Duke Realty Limited Partnership; and that no
other broker or person is entitled to any leasing commission or

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compensation as a result of the negotiation or execution of this Lease. Each
party shall indemnify the other party and hold it harmless from any and all
liability for the breach of any such representation and warranty on its part
and shall pay any compensation to any other broker or person who may be deemed
or held to be entitled thereto. Landlord will not pay a broker commission to
any broker representing Tenant for any extension of the Lease Term and/or
expansion of the Leased Premises.

SECTION 18.11. SEVERABILITY OF INVALID PROVISIONS. If any provision of this
Lease shall be held to be invalid, void or unenforceable, the remaining
provisions hereof shall not be affected or impaired, and such remaining
provisions shall remain in full force and effect.

SECTION 18.12. DEFINITION OF THE RELATIONSHIP BETWEEN THE PARTIES. Landlord
shall not, by virtue of the execution of this Lease or the leasing of the
Leased Premises to Tenant, become or be deemed a partner of or joint venturer
with Tenant in the conduct of Tenant's business on the Premises or otherwise.

SECTION 18.13. ESTOPPEL CERTIFICATE. Tenant shall, within fifteen (15) days
following receipt of a written request from Landlord, execute, acknowledge and
deliver to Landlord or to any lender, purchaser or prospective lender or
purchaser designated by Landlord a written statement, in the form as Landlord
may reasonably request, certifying (i) that this Lease is in full force and
effect and unmodified (or, if modified, stating the nature of such
modification), (ii) the date to which rent has been paid, (iii) that there are
not, to Tenant's knowledge, any uncured defaults (or specifying such defaults
if any are claimed), and (iv) any other matters or state of facts reasonably
required respecting the Lease or Tenant's occupancy of the Leased Premises. Any
such statement may be relied upon by any prospective purchaser or mortgagee of
all or any part of the Building. Tenant's failure to deliver such statement
within such period shall be conclusive upon Tenant that this Lease is in full
force and effect and unmodified, and that there are no uncured defaults in
Landlord's performance hereunder.

SECTION 18.14. DECLARATION. INTENTIONALLY OMITTED.

SECTION 18.15. AGENCY DISCLOSURE. Tenant acknowledges having reviewed the
Agency Disclosure Statement and Tenant acknowledges that said Statement is
signed and attached hereto and made a part hereof as EXHIBIT "D". The broker as
provided in Item I of the Basic Lease Provisions, its agent and employees, have
represented only the Landlord, and have not in any way represented the Tenant,
in the marketing, negotiation, and completion of this lease transaction.

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ARTICLE 19. TENANT'S RESPONSIBILITY REGARDING ENVIRONMENTAL LAWS AND HAZARDOUS
SUBSTANCES.

SECTION 19.01. DEFINITIONS.

a. "Environmental Laws" - All federal, state and municipal laws,
ordinances, rules and regulations applicable to the environmental and
ecological condition of the Leased Premises, including, without limitation, the
Federal Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended; the Federal Resource Conservation and Recovery Act; the
Federal Toxic Substance Control Act; the Clean Air Act; the Clean Water Act;
the rules and regulations of the Federal Environmental Protection Agency, or
any other federal, state or municipal agency or governmental board or entity
having jurisdiction over the Leased Premises.

b. "Hazardous Substances" - Includes:

(i) Those substances included within the definitions of
"hazardous substances," "hazardous materials," "toxic substances" "solid waste"
or "infectious waste" in any of the Environmental Laws; and

(ii) Such other substances, materials and wastes which are or
become regulated under applicable local, state or federal law, or which are
classified as hazardous, toxic or infectious under present or future
Environmental Laws or other federal, state, or local laws or regulations.

SECTION 19.02. COMPLIANCE. Tenant, at its sole cost and expense, shall promptly
comply with the Environmental Laws which shall impose any duty upon Tenant with
respect to the use, occupancy, maintenance or alteration of the Leased
Premises. Tenant shall promptly comply with any notice from any source issued
pursuant to the Environmental Laws or with any notice from any insurance
company pertaining to Tenant's use, occupancy, maintenance or alteration of the
Leased Premises, whether such notice shall be served upon Landlord or Tenant.

SECTION 19.03. RESTRICTIONS ON TENANT. Tenant shall not cause or permit to
occur:

a. Any violation of the Environmental Laws related to environmental
conditions on, under, or about the Leased Premises, or arising from Tenant's
use or occupancy of the Leased Premises, including, but not limited to, soil
and ground water conditions.

b. The use, generation, release, manufacture, refining, production,
processing, storage or disposal of any Hazardous Substances on, under, or about
the Leased Premises, or the transportation to or from the Leased Premises of
any Hazardous Substances, except as necessary and appropriate for general
office use in which case the use, storage or disposal of such Hazardous
Substances shall be performed in compliance with the Environmental Laws and the
highest standards prevailing in the industry.

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SECTION 19.04. NOTICES, AFFIDAVITS, ETC.

a. Tenant shall immediately notify Landlord of (i) any violation by
Tenant, its employees, agents, representatives, customers, invitees or
contractors of the Environmental Laws on, under or about the Leased Premises,
or (ii) the presence or suspected presence of any Hazardous Substances on,
under or about the Leased Premises and shall immediately deliver to Landlord
any notice received by Tenant relating to (i) and (ii) above from any source.

b. Tenant shall execute affidavits, representations and the like from
time to time, within fifteen (15) days of Landlord's request therefor,
concerning Tenant's best knowledge and belief regarding the presence of any
Hazardous Substances on, under or about the Leased Premises.

SECTION 19.05. LANDLORD'S RIGHTS.

a. Landlord and its agent shall have the right, but not the duty, upon
advance notice (except in the case of emergency when no notice shall be
required) to inspect the Leased Premises and conduct tests thereon at any time
to determine whether or the extent to which there has been a violation of
Environmental Laws by Tenant or whether there are Hazardous Substances on,
under or about the Leased Premises. In exercising its rights herein, Landlord
shall use reasonable efforts to minimize interference with Tenant's business
but such entry shall not constitute an eviction of Tenant, in whole or in part,
and Landlord shall not be liable for any interference, loss, or damage to
Tenant's property or business caused thereby.

b. If Landlord, any lender or governmental agency shall ever require
testing to ascertain whether there has been a release of Hazardous Substances
on, under or about the Leased Premises or a violation of the Environmental
Laws, and such requirement arose in whole or in part because of an act or
omission on the part of Tenant, then the reasonable costs thereof shall be
reimbursed by Tenant to Landlord upon demand as Additional Rent.

SECTION 19.06. TENANT'S INDEMNIFICATION. Tenant shall indemnify and hold
harmless Landlord and Landlord's managing agent from any and all claims, loss,
liability, costs, expenses or damage, including attorneys' fees and costs of
remediation, incurred by Landlord in connection with any breach by Tenant of
its obligations under this Article 19. The covenants and obligations of Tenant
under this Article 19 shall survive the expiration or earlier termination of
this Lease.

ARTICLE 20 - ADDITIONAL PROVISIONS

SECTION 20.01. FINANCIAL STATEMENTS. Upon prior written request, during the
Lease Term and any extensions thereof, Tenant shall provide to Landlord on an
annual basis, a copy of Tenant's most recent certified and audited financial
statements prepared as of the end of Tenant's fiscal year. Such financial
statements shall be prepared in conformity with generally accepted accounting
principles.

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SECTION 20.02. REPRESENTATIONS AND INDEMNIFICATIONS. Any representations and
indemnifications of Landlord contained in the Lease shall not be binding upon
(i) any mortgagee having a mortgage presently existing or hereafter placed on
the Building, or (ii) a successor to Landlord which has obtained or is in the
process of obtaining fee title interest to the Building as a result of a
foreclosure of any mortgage or a deed in lieu thereof so long as such successor
agrees not to disturb this Lease and Landlord's obligations hereunder shall
continue in full force and effect.

SECTION 20.03. TENANT'S REPRESENTATIONS AND WARRANTIES. The undersigned
represents and warrants to Landlord that (i) Tenant is duly organized, validly
existing and in good standing in accordance with the laws of the state under
which it was organized; (ii) all action necessary to authorize the execution of
this Lease has been taken by Tenant; and (iii) the individual executing and
delivering this Lease on behalf of Tenant has been authorized to do so, and
such execution and delivery shall bind Tenant. Tenant, at Landlord's request,
shall provide Landlord with evidence of such authority.

SECTION 20.04. LANDLORD'S REPRESENTATIONS. Landlord represents that it is the
fee simple owner of the real estate and Building containing the Leased
Premises. Landlord represents that it has the full right and power to enter
into this Lease and that to the best of Landlord's knowledge, as of the
Commencement Date, Landlord has not received any written notice that the
Building or the Leased Premises are not in compliance with all applicable laws.

SECTION 20.05. GUARANTY OF LEASE. In consideration of Landlord's leasing the
Leased Premises to Tenant, Tenant shall provide Landlord with an Unconditional
Guaranty of Lease in the form attached hereto as Exhibit E which shall be
executed contemporaneously with this Lease by LanVision Systems, Inc.

SECTION 20.06. ADDITIONAL PROVISIONS. Additional provisions, if any, are
attached hereto as an Addendum, the provisions of which are incorporated herein
by reference. In the event of any inconsistencies between the provisions of
this Lease and of the Addendum, the provisions of the Addendum shall control.

51
<PAGE> 36
IN WITNESS WHEREOF, the parties hereto have fully executed this Lease as of the
day and year first above written.

LANDLORD:

WITNESSES: DUKE REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership

/s/ NICOLE C. STEVENS
- - -------------------------
Nicole C. Stevens By: Duke Realty Investments, Inc.,
(printed) its general partner

/s/ ALICE BATTAGLIA By: /s/ JEFFREY G. TULLOCH
- - ------------------------- --------------------------------
Alice Battaglia Jeffrey G. Tulloch
(printed) Vice President

TENANT:

WITNESSES: LANVISION, INC.,
an Ohio corporation

/s/ THOMAS E. PERAZZO By: /s/ ERIC LOMBARDO
- - ------------------------- --------------------------------
Thomas E. Perazzo Printed: Eric Lombardo
(printed)

/s/ RICHARD W. SAMMONS Title: Executive Vice President
- - ------------------------- -----------------------------
Richard W. Sammons
(printed)

52
<PAGE> 37
STATE OF OHIO )
) SS:
COUNTY OF HAMILTON )

Before me, a Notary Public in and for said County and State,
personally appeared Jeffrey G. Tulloch, by me known and by me known to be the
Vice President of Duke Realty Investments, Inc., an Indiana corporation, the
general partner of Duke Realty Limited Partnership, an Indiana limited
partnership, who acknowledged the execution of the foregoing "Lease" on behalf
of said partnership.

WITNESS my hand and Notarial Seal this 23rd day of May, 1996.

/s/ NICOLE C. STEVENS
----------------------------
Notary Public

(NOTARIAL SEAL)

Nicole C. Stevens
----------------------------
(Printed Signature)

My Commission Expires: October 31, 2000
----------------

My County of Residence: Hamilton
--------

53
<PAGE> 38
STATE OF OHIO )
) SS:
COUNTY OF HAMILTON )

Before me, a Notary Public in and for said County and State,
personally appeared ERIC LOMBARDO, by me known and by me known to be the
EXECUTIVE VICE PRESIDENT of LanVision, Inc., an Ohio corporation, who
acknowledged the execution of the foregoing "Lease" on behalf of said
corporation.

WITNESS my hand and Notarial Seal this 7th day of May, 1996.

/s/ JOAN WOLPIN
----------------------------
Notary Public

Joan Wolpin
----------------------------
(Printed Signature)

My Commission Expires: June 7, 2000
------------

My County of Residence: Hamilton (NOTARIAL SEAL)
--------

54
<PAGE> 39
ADDENDUM

THIS ADDENDUM is made this 7th day of May, 1996, by and between DUKE
REALTY LIMITED PARTNERSHIP, an Indiana limited partnership ("Landlord"), and
LANVISION, INC., an Ohio corporation ("Tenant") and is incorporated into the
above and foregoing Lease Agreement by and between Landlord and Tenant of even
date herewith as if stated verbatim therein.

1. The Lease is amended by adding the following additional terms:

SECTION 20.06. EARLY OCCUPANCY. Landlord will allow Tenant to enter the Leased
Premises as early as August 10, 1996 to allow Tenant to prepare the Leased
Premises for fixturing. All terms and conditions of this Lease will become
effective upon Tenant taking possession of the Leased Premises, except for the
payment of Minimum Rent and Additional Rent, which will commence on the
Commencement Date.

SECTION 20.07. RIGHT OF SECOND REFUSAL. Provided that (i) Tenant is not then in
default and, (ii) Tenant originally named herein or its successor remains in
possession of the entire Leased Premises throughout the Lease Term and subject
to the rights of Ohio National Life Insurance Company, Tenant shall have the
right of second refusal ("Refusal Option") to lease additional space on the
floor containing the Leased Premises ("Refusal Space") as such space becomes
available for leasing during the Lease Term. The Refusal Space shall be offered
to Tenant at the rental rate and upon such other terms and conditions,
excluding free rent and other concessions, as are then being offered by
Landlord to a specific third party prospective tenant for such space. In the
event that the Refusal Space is not leased to the initial third party
prospective tenant, then this Refusal Option shall remain in effect in the
event of an offer to any other specific third party prospective tenant and the
Refusal Space shall again be offered to Tenant in accordance herewith. Upon
notification in writing by Landlord that the Refusal Space is available, Tenant
shall have five (5) business days in which to notify Landlord in writing of its
election to lease the Refusal Space at such rental rates described above, in
which event this Lease shall be amended to incorporate such Refusal Space. It
is understood and agreed that this Refusal Option shall not be construed to
prevent any tenant in the Building from extending or renewing its lease.

SECTION 20.08. OPTION TO EXTEND.

A. GRANT AND EXERCISE OF OPTION. Provided that (i) Tenant is not then in
default during the Term of this Lease (the "Original Term"), (ii) the tangible
net worth of Tenant is at least Fifteen Million Dollars ($15,000,000.00) and
(iii) Tenant originally named herein or its successors remains in possession of
and is continuously operating the entire Leased Premises, Tenant shall have one
(1) option to extend the Original Term for one (1) additional period of five (5)
years (the "Extension Term"). The Extension Term shall be upon the same terms
and

55
<PAGE> 40
conditions contained in the Lease for the Original Term except (i) Tenant shall
not have any further option to extend and (ii) the Minimum Annual Rent shall be
adjusted as set forth herein ("Rent Adjustment"). Tenant shall exercise such
option by delivering to Landlord no later than four (4) months prior to the
expiration of the Original Term, written notice of Tenant's desire to extend
the Original Term. Tenant's failure to properly exercise such option shall
waive it. If Tenant properly exercises its option to extend, Landlord shall
notify Tenant of the Rent Adjustment no later than ninety (90) days prior to
the commencement of the Extension Term. Tenant shall be deemed to have accepted
the Rent Adjustment if it fails to deliver to Landlord a written objection
thereto within ten (10) business days after receipt thereof. If Tenant properly
exercises its option to extend, Landlord and Tenant shall execute an amendment
to the Lease (or, at Landlord's option, a new lease on the form then in use for
the Building) reflecting the terms and conditions of the Extension Term.

B. MARKET RENT ADJUSTMENT. The Minimum Annual Rent for the Extension Term
shall be an amount equal to ninety-five percent (95%) of the Minimum Annual Rent
then being quoted by Landlord to renewal tenants or prospective new tenants of
the Building for space of comparable size and quality and with similar or
equivalent improvements as are found in the Building, and if none, then in
similar buildings in the vicinity; provided, however, that in no event shall the
Minimum Annual Rent during the Extension Term be less than the highest Minimum
Annual Rent payable during the Original Term. The Minimum Monthly Rent shall be
an amount equal to one-twelfth (1/12) of the Minimum Annual Rent for the
Extension Term and shall be paid at the same time and in the same manner as
provided in the Lease.

SECTION 20.09. STORAGE SPACE. Tenant shall lease 1,500 usable square feet of
storage space underneath the Building at the rental rate of Seven Dollars
($7.00) per square foot gross, per year during the initial five (5) year Lease
Term. Tenant shall pay for such storage space in the same manner as provided in
Section 3.01 of the Lease. The rent for such storage space includes all fees
and operating expenses.

SECTION 20.10. PARKING. Provided Tenant is not in default beyond any applicable
cure period, Landlord hereby agrees to provide to Tenant two (2) reserve
parking spaces in the Building garage.

SECTION 20.11. AMERICAN 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 (42 U.S.C. 12101
et seq.) 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 "Act") shall be apportioned as follows:

(a) Tenant shall be responsible for all future alterations,
additions or improvements to the Leased Premises, excluding structural, in
order to bring the Leased Premises in compliance with the Act during the term
of the Lease. In the event that at any time during the term of the Lease,
Tenant is required by the Act to make any alterations or modifications within
the Leased

56
<PAGE> 41
Premises in order to accommodate any employee or customers of Tenant or any
applicant for employment with Tenant, Landlord agrees that Tenant shall have
the right, at Tenant's sole expense, to alter or modify the Leased Premises so
as to comply with the Act, so long as such alteration or modification does not
affect the structural integrity of the Building. Such alterations are subject
to the terms and conditions of Section 7.03 of the Lease, and prior written
approval by Landlord of the plans and specifications therefor which approval
shall not be unreasonably withheld.

(b) Landlord shall be responsible for the compliance of all
modifications to the Common Areas within and associated with the Building
(specifically including any parking areas, driveways or other outdoor common
areas associated with the Building) required in order to bring said Common
Areas in compliance with the provisions of the Act. Any such modifications by
Landlord shall be such as Landlord deems necessary to comply with applicable
law. All costs incurred by Landlord hereunder except any penalties or fines
which shall be paid by Landlord, shall be included in Operating Expenses in
accordance with the terms of Section 3.02 of the Lease unless such
modifications are due solely to the use of the Leased Premises by Tenant in
such case Tenant shall reimburse Landlord for all such reasonable costs.

(c) All construction, alterations and modifications required
or permitted hereunder shall be done in a good and workmanlike manner.

(d) Landlord and Tenant agree to indemnify and hold harmless
each other from and against any and all fines, suits, demands, losses and
actions (including attorneys' fees and costs and court costs) arising out of or
related to the other party's failure to perform any of its obligations under
this section.

IN WITNESS WHEREOF, the parties hereto have executed the Addendum as
of the day and year first above written.

LANDLORD:

WITNESSES: DUKE REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership

/s/ NICOLE C. STEVENS
- - ----------------------------
Nicole C. Stevens By: Duke Realty Investments, Inc.,
(printed) its general partner

/s/ ALICE BATTAGLIA By: /s/ JEFFREY G. TULLOCH
- - ---------------------------- -------------------------------
Alice Battaglia Jeffrey G. Tulloch
(printed) Vice President

57
<PAGE> 42
TENANT:

WITNESSES: LANVISION, INC.,
an Ohio corporation

/s/ THOMAS E. PERAZZO By: /s/ ERIC LOMBARDO
- - ------------------------- ---------------------
Thomas E. Perazzo Printed: Eric Lombardo
(printed) Title: Executive Vice President

/s/ RICHARD W. SAMMONS
- - -------------------------
Richard W. Sammons
(printed)

STATE OF OHIO )
) SS:
COUNTY OF HAMILTON )

WITNESS my hand and Notarial Seal this 23rd day of May, 1996.

/s/ NICOLE C. STEVENS
------------------------
Notary public

(NOTARIAL SEAL )

Nicole C. Stevens
------------------------
(Printed Signature)

My Commission Expires: October 31, 2000
----------------

My County of Residence: Hamilton
--------

58
<PAGE> 43
STATE OF OHIO )
) SS:
COUNTY OF HAMILTON )

WITNESS my hand and Notarial Seal this 7th day of May, 1996.

/s/ Joan Wolpin
------------------------
Notary Public

Joan Wolpin
------------------------
(Printed Signature)

My Commission Expires: June 7, 2000
------------
(NOTARIAL SEAL)
My County of Residence: Hamilton
--------

59
<PAGE> 44

EXHIBIT A

PROPOSED SPACE PLAN FOR LANVISION

OHIO NATIONAL LIFE BUILDING

(OFFICE DIAGRAM)

EXHIBIT B

DETAILED LISTING OF BUILDING IMPROVEMENTS AND COST ESTIMATES

60
<PAGE> 45
EXHIBIT C

RULES AND REGULATIONS

1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or used for any purpose
other than ingress and egress.

2. No awnings or other projections shall be attached to the outside
walls of the Building. No curtains, blinds, shades or screens shall be attached
to or hung in, or used in connection with, any window or door of the Leased
Premises other than Landlord standard drapes without Landlord's prior written
approval. All electric ceiling fixtures hung in offices or spaces along the
perimeter of the Building must be fluorescent, of a quality, type, design and
bulb color approved by Landlord. Neither the interior nor the exterior of any
windows shall be coated or otherwise sunscreened without written consent of
Landlord.

3. No sign, advertisement, notice or handbill shall be exhibited,
distributed, painted or affixed by any tenant on, about or from any part of the
Leased Premises or the Building without the prior written consent of Landlord.
In the event of the violation of the foregoing by any tenant, Landlord may
remove or stop same without any liability, and may charge the expense incurred
in such removal or stopping to Tenant. Standard interior signs on doors and
directory tablet shall be inscribed, painted or affixed for each Tenant by the
Landlord, and shall be of a size, color and style acceptable to Landlord. The
directory tablet will be provided exclusively for the display of the name and
location of Tenants only, and Landlord reserves the right to exclude any other
names therefrom. Nothing may be placed on the exterior of corridor walls or
corridor doors other than Landlord's standard lettering.

4. The sashes, sash doors, windows, and doors that reflect or admit
light and air into halls, passageways or other public places in the Building
shall not be covered or obstructed by Tenant.

5. The water and wash closets and other plumbing fixtures shall not be
used for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures shall be borne by the Tenant
who, or whose subtenants, assignees or any of their servants, employees,
agents, visitors or licensees shall have caused the same.

6. No Tenant shall mark, paint, drill into, or in any way deface any
part of the Leased Premises or the Building. No boring, cutting or stringing of
wires or laying of linoleum or other similar floor coverings shall be
permitted, except with the prior written consent of the Landlord and as the
Landlord may direct.

61
<PAGE> 46
7. No bicycles, vehicles, birds or animals of any kind shall be
brought into or kept in or about the Leased Premises, and no cooking shall be
done or permitted by any Tenant on the Leased Premises, except microwave
cooking and the preparation of coffee, tea, hot chocolate and similar items for
Tenants and their employees. No Tenant shall cause or permit any unusual or
objectionable odors to be produced or permeate the Leased Premises.

8. The Leased Premises shall not be used for manufacturing or for the
storage of merchandise except as such storage may be incidental to the
permitted use of the Leased Premises. No Tenant shall occupy or permit any
portion of the Leased Premises to be occupied as an office for the manufacture
or sale of liquor, narcotics, or tobacco in any form, or as a medical office,
or as a barber or manicure shop, or an employment bureau without the express
written consent of Landlord. The Leased Premises shall not be used for lodging
or sleeping or for any immoral or illegal purpose.

9. No Tenant shall make, or permit to be made any unseemly or
disturbing noises or disturb or interfere with occupants of this or neighboring
buildings or premises or those having business with them, whether by the use of
any musical instrument, radio, phonograph, unusual noise, or in any other way.
No Tenant shall throw anything out of doors, windows or down the passageways.

10. No Tenant, subtenant or assignee nor any of its servants, employees,
agents, visitors or licensees, shall at any time bring or keep upon the Leased
Premises any inflammable, combustible or explosive fluid, chemical or
substance.

11. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by any Tenant, nor shall any changes be made in existing
locks or the mechanism thereof without Landlord's prior written consent. Each
Tenant must upon the termination of his tenancy, restore to the Landlord all
keys of stores, offices, and toilet rooms, either furnished to, or otherwise
procured by, such Tenant and in the event of the loss of keys so furnished,
such Tenant shall pay to the Landlord the cost of replacing the same or of
changing the lock or locks opened by such lost key if Landlord shall deem it
necessary to make such changes.

12. All removals or the carrying in or out of any safes, freight,
furniture, or bulky matter of any description must take place during the hours
which Landlord shall reasonably determine from time to time. The moving of
safes or other fixtures or bulky matter of any kind must be done upon previous
notice to the superintendent of the Building and under his supervision, and the
persons employed by any Tenant for such work must be reasonably acceptable to
Landlord. Landlord reserves the right to inspect all safes, freight or other
bulky articles to be brought into the Building and to exclude from the Building
all safes, freight or other bulky articles which violate any of these Rules and
Regulations or the Lease of which these Rules and Regulations are a part. The
Landlord reserves the right to prescribe the weight and position of all safes,
which must be placed upon supports approved by Landlord to distribute the
weight.

62
<PAGE> 47
13. No Tenant shall purchase water, ice, towel, janitorial or maintenance
or other like services, from any person or persons not reasonably approved by
Landlord.

14. Landlord shall have the right to prohibit any advertising by any Tenant
which, in Landlord's opinion tends to impair the reputation of the Building or
its desirability as an office location, and upon written notice from Landlord
any Tenant shall refrain from or discontinue such advertising.

15. Landlord reserves the right to require all persons entering the
Building between the hours of 6 p.m. and 8 a.m. and at all hours on Sunday and
legal holidays to register with Landlord's security personnel. Each Tenant
shall be responsible for all persons entering the Building at Tenant's
invitation, express or implied. Landlord shall in no case be liable for damages
for any error with regard to the admission to or exclusion from the Building of
any person. In case of an invasion, mod riot, public excitement or other
circumstances rendering such action advisable in Landlord's opinion, Landlord
reserves the right without any abatement of rent to require all persons to
vacate the Building and to prevent access to the Building during the
continuance of the same for the safety of the Tenants and the protection of the
Building and the property in the Building.

16. Any persons employed by any Tenant to do janitorial work shall, while
in the Building and outside of the Leased Premises, be subject to and under the
control and direction of the superintendent of the Building (but not as an
agent or servant of said superintendent or of the Landlord), and Tenant shall
be responsible for all acts of such persons.

17. All doors opening onto public corridors shall be kept closed, except
when in use for ingress and egress.

18. The requirements of Tenant will be attended to only upon application to
the Office of the Building.

19. Canvassing, soliciting and peddling in the Building are prohibited, and
each Tenant shall report and otherwise cooperate to prevent the same.

20. All office equipment of any electrical or mechanical nature shall be
placed by Tenant in the Leased Premises in settings which will, to the maximum
extent possible, absorb or prevent any vibration, noise and annoyance.

21. No air-conditioning unit or other similar apparatus shall be installed
or used by any Tenant without the written consent of Landlord.

22. There shall not be used in any space, or in the public halls of the
Building, either by any Tenant or others, any hand trucks except those equipped
with rubber tires and rubber side guards.

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<PAGE> 48
23. No vending machine or machines of any description shall be installed,
maintained or operated upon the Leased Premises without the written consent of
Landlord which shall not be unreasonably withheld.

24. The scheduling of Tenant move-ins shall be subject to the reasonable
discretion of Landlord.

25. No smoking shall be allowed in the Building. Smoking shall be allowed
only in areas designated by Landlord outside the Building.

64
<PAGE> 49
EXHIBIT D

NOTICE TO PROSPECTIVE REAL ESTATE PURCHASERS/TENANTS

In Ohio, real estate licensees are required to disclose which party the
represent in a real estate transaction. Under Ohio law, a real estate licensee
is considered to be an agent of the owner of real estate unless there is an
agreement to the contrary and that agreement is disclosed to all parties.

Some of the duties of the licensee, as the agent of the owner, are to:

o Treat all parties to a transaction honestly

o Offer the property without regard to race, color, religion,
sex, ancestry, national origin or handicap

o Promote the best interest of the owner
o Obtain the best price for the owner

o Fully disclose to the owner all facts which might affect or
influence a decision

o Present all offers to the owner

As a buyer, if you choose to have a real estate broker represent you as your
agent, you should enter into a written contract that clearly establishes the
obligations of both you and your agent and specifies how your agent will be
compensated.

Under Ohio law, the disclosure statement below must be submitted to the
prospective purchaser/tenant in each transaction. This form has been approved
by the Ohio Real Estate Commission for use by Ohio real estate licensees.
Please sign below.

65
<PAGE> 50

AGENCY DISCLOSURE STATEMENT

The listing broker and all agents associated with the listing broker represent
the owner. The WEST SHELL
----------------
(Selling Broker)

and DOUG ALTEMUEHLE represent (please check one):
---------------
(Selling Agent)
the purchaser/tenant X the owner
--- ---

If a broker/agent is representing both the purchaser/tenant and the owner as a
dual agent, he/she must attach a copy of the agreement signed by the
purchaser/tenant and owner acknowledging their agreement to this arrangement.

By signing below, the parties confirm that they have received, read and
understood the information in this Agency Disclosure Form and that this form
was provided to them before signing a contract to purchase/lease real estate.

/s/ ERIC LOMBARDO 5-7-96 /s/K SCHUERMANN 5/1/96
- - ------------------------------------------------------------------------------
Purchaser/Tenant Date Owner Date

- - ------------------------------------------------------------------------------
Purchaser/Tenant Date Owner Date

Any questions regarding the role or responsibility of real estate brokers or
agents in Ohio can be directed to an attorney or to:

State of Ohio
Department of Commerce
Division of Real Estate

Telephone in Ohio 1-800-344-4100 or in Columbus 614/466-4100

66
<PAGE> 51
EXHIBIT E

UNCONDITIONAL GUARANTY OF LEASE

This Unconditional Guaranty of Lease is entered into as of the 7th day
of May, 1996, by the undersigned, LANVISION SYSTEMS, INC., a Delaware
corporation ("Guarantor").

R E C I T A L S

WHEREAS, LanVision, Inc., an Ohio corporation ("Tenant") desires to
enter into a certain Lease with Duke Realty Limited Partnership, an Indiana
limited partnership ("Landlord"), for certain space described therein and more
commonly known as Suite 400, Ohio National building, Cincinnati, Ohio (the
"Lease"); and

WHEREAS, Landlord is willing to enter into the Lease only if it receives
a guaranty of obligations thereunder from the undersigned upon the terms and
conditions set forth below; and

WHEREAS, in order to induce Landlord to enter into the Lease, Guarantor
is willing and agrees to enter into this Unconditional Guaranty of Lease upon
the following terms and conditions; and

WHEREAS, Guarantor is a shareholder of Tenant and will be benefited by
the Lease;

NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Guarantor agrees as follows:

1. Guarantor hereby becomes surety for and unconditionally guarantees
(I) the prompt payment of all rents, additional rents and other sums
to be paid by Tenant under the terms of the Lease; and (ii) the
performance by Tenant of the covenants, conditions and terms of the
Lease (such payment and performance to be referred to collectively as
"Obligations"). In the event tenant defaults in the performance of the
Obligations during the term of the lease, Guarantor hereby promises
and agrees to pay to Landlord all rents and any arrearages thereof and
any other amounts that may be or become due and to fully satisfy all
conditions and covenants of the Lease to be kept and performed by
Tenant.

2. As conditions of liability pursuant to this Guaranty, Guarantor
hereby unconditionally waives (a) any notice of default by Tenant in
the payment of rent or any other amount or any other term, covenant or
condition of the Lease; (b) any requirement that Landlord exercise or
exhaust its rights and remedies against Tenant or against any person,
firm or corporation prior to enforcing its rights against Guarantor,
and (c) any and all rights of reimbursement, indemnity, subrogation or
otherwise which, upon payment under this Guaranty, Guarantor may have
against Tenant.

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<PAGE> 52
3. Landlord may, without notice to Guarantor, and Guarantor hereby
consents thereto, (a) modify or otherwise change or alter the terms
and conditions of the Lease; and (b) waive any of its rights under the
Lease or forbear to take steps to enforce the payment of rent or any
other term or condition of the Lease against Tenant.

4. Guarantor hereby agrees, upon the request of Landlord, to execute,
acknowledge and deliver to Landlord a statement in writing certifying,
if this be the fact, that this Guaranty of the referenced Lease is
unmodified, in full force and effect, and there are no defenses or
offsets thereto and other things Landlord reasonably requests.

In the event Tenant fails during the term of this Lease to
pay any rent, additional rent or other payments when due or fails to
comply with any other term, covenant or condition of the Lease,
Guarantor, upon demand of Landlord, shall make such payments and
perform such covenants as if they constituted the direct and primary
obligations of Guarantor; and such obligations of Guarantor shall be
due with attorneys' fees and all costs of litigation and without
relief from valuation or appraisement laws.

The rights and obligations created by this guaranty shall
inure to the benefit of and be binding upon the successors, assigns
and legal representatives of Guarantor and landlord.

IN WITNESS WHEREOF, Guarantor has executed this Unconditional
Guaranty of Lease as of the date set forth above.

"GUARANTOR"

LANVISION SYSTEMS, INC., a
Delaware corporation

By: /s/ ERIC LOMBARDO
--------------------------

Printed: Eric Lombardo
--------------------------

Title: Executive Vice President
--------------------------

Address: 10671 Techwoods Cir.
--------------------------
Cinti., OH. 45242
--------------------------

68
<PAGE> 53
STATE OF OHIO )
)
COUNTY OF HAMILTON )

Before me, a Notary Public in and for said County and State,
personally appeared Eric Lombardo, the Executive Vice President of LanVision
Systems, Inc., a Delaware corporation, who acknowledged the execution of the
above and foregoing "Unconditional Guaranty of Lease" on behalf of the
corporation.

WITNESS my hand and Notarial Seal this 7th day of May, 1996.

/s/ JOAN WOLPIN
------------------
Notary Public

------------------
(Printed)

My County of Residence:
-----------------
(Notarial Seal)

My Commission Expires: June 7, 2000
------------

<PAGE> 1
Exhibit 11
LANVISION SYSTEMS, INC.

COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE

<TABLE>
<CAPTION>
Three Months Ended
April 30,
--------------------------
1996 1995
---------- ----------
<S> <C> <C>
Net (loss) $ (780,182) $ (356,742)
========== ==========
Weighted average number of shares outstanding 6,404,694 6,190,325
========== ==========
(Loss) per common share amount $ (0.12) $ (0.06)
========== ==========
</TABLE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED
APRIL 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-01-1996
<PERIOD-END> APR-30-1996
<EXCHANGE-RATE> 1
<CASH> 1,783,770
<SECURITIES> 32,260,881
<RECEIVABLES> 2,156,577
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 37,673,628
<PP&E> 606,201
<DEPRECIATION> 331,197
<TOTAL-ASSETS> 38,120,998
<CURRENT-LIABILITIES> 4,292,123
<BONDS> 0
<COMMON> 88,965
0
0
<OTHER-SE> 33,739,910
<TOTAL-LIABILITY-AND-EQUITY> 38,120,998
<SALES> 2,113,493
<TOTAL-REVENUES> 2,113,493
<CGS> 1,478,081
<TOTAL-COSTS> 2,814,030
<OTHER-EXPENSES> 79,645
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (780,182)
<INCOME-TAX> 0
<INCOME-CONTINUING> (780,182)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (780,182)
<EPS-PRIMARY> (0.12)
<EPS-DILUTED> 0

</TABLE>