2ND LEASE AGREEMENT WITH WASHINGTON AVENUE L.L.P.

EDINA SOUTHWEST BUILDING

LEASE AGREEMENT



THIS LEASE is made and entered into this _____ day of July, 1998 by and between 7423 WASHINGTON AVENUE L.L.P, a general partnership hereinafter referred to as "LESSOR" and Datalink Corporation, a Minnesota corporation hereinafter referred to as "LESSEE".



WITNESSETH:



In consideration of the mutual covenants, promises, and agreements herein contained, the parties do hereby agree as follows:



1. DESCRIPTION OF THE PREMISES



LESSOR does hereby lease to LESSEE and LESSEE does hereby lease and take from LESSOR certain premises consisting of approximately 10,530 square feet within the building at 7435 Washington Avenue South, Edina, Minnesota hereinafter referred to as "Premises." These Premises are identified in the building plans as Suites 1 and 2 and are more specifically designated in Exhibit "A" which is made a part hereof. The Premises is measured from the outside of all exterior walls to the center of tenant division and common area walls and is hereafter referred to as the "leased premises."



2. TERM



This lease shall be for a term of Seventeen (17) months commencing on the first day of August, 1998 and terminating on the last day of December, 1999.



3. USE OF PREMISES



It is agreed that the leased premises shall be used by the LESSEE for offices, receiving, storage, and shipping of the LESSEE'S goods, subleasing of some of the warehouse and office areas, and for no other purpose; subject to all local, state, and federal laws and regulations regarding the use of the premises.



4. PARKING AND DRIVES



The LESSEE, its employees, and invitees shall have the nonexclusive right to use the common driveways and parking lots along with the other tenants, invitees and customers of the building. The use of such driveways and parking facilities are subject to such reasonable rules and regulations as the LESSOR may impose. No more than 23 parking spaces are to be occupied at any one time by the LESSEE, its employees and invitees. The LESSEE further agrees not to use, or permit the use by its employees, the parking areas for the overnight storage of automobiles or other vehicles without the written permission of the LESSOR.



5. NET LEASE



This is a "net" Lease, and LESSOR shall not be required to provide any services or do any acts in connection with the leased premises not specifically set forth in this Lease. As hereinafter further described in the Lease the LESSEE is responsible for and shall pay all utility charges, trash removal, its proportionate share of real estate taxes including installments of special assessments and its proportionate share of the building's operating expenses. For purposes of computing the share of the building that is leased to the LESSEE, it is mutually determined and agreed that the net rentable are of the building consists of 76,243 square feet, that the leased premises of LESSEE is 10,530 square feet, and accordingly, the LESSEE's percentage and proportionate share for purposes of allocating real estate taxes and assessments and operating expenses is 13.81%. Also, for the partial years at the beginning and end of this Lease, the "LESSEE" shall only be responsible for its share of costs for the portion of the year that the Lease is in effect.



6. RENT



LESSEE shall pay as annual rent for the leased premises, the sum of Fifty-Four Thousand Dollars ($54,000) payable in equal monthly installments of Four Thousand Five Hundred Dollars and no/100 ($4,500.00) in advance of the first business day of each month during the full term hereof.



In the event the original term hereof shall commence on a day other than the first day of a month, then a prorate rent payment shall be made paying the rent through the end of the first partial month. All rental payments required hereunder shall be paid to LESSOR at such place as LESSOR indicates on the rent statement of may otherwise direct in writing from time to time.



APPROXIMATE AREAS



ESP 1 Net 96





Office: 1st floor 2958 S.F.

2nd floor 3500 S.F.

Whse: 1st floor 3664 S.F.

2nd floor 260 S.F.

Other: 1st floor 148 S.F.

2nd floor none S.F.

TOTAL AREA 10,530



7. TAXES AND SPECIAL ASSESSMENTS



Commencing with the real estate taxes and installments of special assessments payable in the year this Lease commences the LESSEE shall pay to LESSOR, as additional rent for and during the full term of this Lease, its proportionate share of any and all such real estate taxes and installments of special assessments which are levied, assessed or charged against the entire property. As the dollar amount will not be known at the beginning of each calendar year, LESSOR shall make a reasonable estimate of what the amount will be for that year, and LESSEE shall pay an estimated share each month. The first of the month after LESSOR has received the actual real estate tax statement and sent a copy to the LESSEE an adjustment shall be made for any difference between that which the LESSEE paid and that which it should have paid. LESSEE shall then start paying its prorata share monthly based upon the actual tax statement.



8. OPERATING EXPENSES



The LESSEE shall pay, as additional rent, when billed by LESSOR, its proportionate share of the following operating expenses during the full term of this Lease:



(a) City water and sewer charges, except where used by tenants in

substantial amounts for production and is therefore separately

metered, and the monitoring surveillance of the fire protection



(b) Lawn care, snow and litter removal, and the repair and

maintenance as reasonably required for parking lots, drives,

sidewalks and landscaped areas.



(c) Maintenance, repair and replacement, if necessary, of all heating

and cooling equipment in the building, unless the need for such

work is the direct result of the LESSEE's misuse of such



(d) All insurance that is maintained by LESSOR with respect to the

building, for fire and extended coverage, loss of rents insurance

or business interruptions and general liability insurance.



(e) All other necessary maintenance, replacement and repair, to the

exterior of the building including the roof and structural



(f) Property management expenses, except for re-leasing commissions

and special services not related to the ongoing operation of the

building, of four percent (4.00%) of the rents and additional

rents collected.



LESSOR agrees to exercise due care and diligence to obtain these operating expense services and supplies at competitive and reasonable market costs with acceptable quality and service standards. LESSOR shall have the right to invoice these costs monthly to LESSEE on an estimated basis, making adjustments to actual costs periodically (but at least annually) as operating reports are available.



9. UTILITIES



LESSEE is responsible and shall pay for all utility services. The LESSEE is separately metered for gas and electricity and will deal with the utility companies for service requirements and billing.



In the event the LESSEE uses water and sewer in substantial amounts or for production purposes, the LESSOR shall install at LESSEE'S expense a water meter to sub-meter said water and sewer, and shall charge LESSEE for said water and sewer at rates as charged by the City of Eden Prairie.



LESSOR shall not be liable to LESSEE for any loss or damage of any kind of description whatsoever caused or sustained by reason of failure of the heating or ventilating and air conditioning system servicing the leased premises or because of inability to obtain energy or utilities for any reason beyond LESSOR'S control.



10. INSURANCE



The LESSEE shall maintain in full force and effect during the term hereof, a policy of public liability insurance under which the LESSOR and LESSEE are named insured. The minimum limits of liability for such insurance shall be $500,000.00 combined single limit for bodily injury and property damage. LESSEE agrees to deliver a duplicate copy of said policy, or a certificate of insurance evidencing such coverage, to LESSOR. Such policy shall contain a provision requiring ten (10) days written notice to the LESSOR before cancellation of the policy can be effected.



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