AGREEMENT OF LEASE

                                     BETWEEN


                         NEWTOWN VENTURE IV ASSOCIATES,
                                            Landlord


                                       AND


                        COLLAGENEX PHARMACEUTICALS, INC.,
                                              Tenant






                               41 University Drive
                          Silver Lake Executive Campus
                              Newtown, Pennsylvania


<PAGE>


                                      LEASE
                                      -----

SILVER LAKE EXECUTIVE CAMPUS
Newtown Township, Pennsylvania                       Lease Dated: March 15, 1999


     1.   Reference Data

     Any reference in this Lease to the  following  subjects  shall  incorporate
therein the data stated for the subject(s) in this Section:

LANDLORD:  Newtown Venture IV Associates, a Pennsylvania limited partnership

BUILDING:  41 University Drive, Silver Lake Executive Campus, Newtown,
           Pennsylvania

LANDLORD'S ADDRESS:      c/o Pitcairn Properties Incorporated
                         One Pitcairn Place
                         165 Township Line Road
                         Jenkintown, Pennsylvania 19046

LANDLORD'S CONSTRUCTION REPRESENTATIVE: James Moyer

TENANT: CollaGenex Pharmaceuticals, Inc., a Delaware corporation

TENANT'S ADDRESS:  Prior to Commencement Date:
                   301 South State Street
                   Newtown, Pennsylvania 18940

                   After Commencement Date:
                   41 University Drive
                   Newtown, Pennsylvania  18940

TENANT'S CONSTRUCTION REPRESENTATIVE:  Mary Claire O'Loughlin

LEASED PREMISES:   A portion of the second floor of 41  University Drive, Silver
                   Lake Executive Campus, Newtown Township, Pennsylvania

RENTABLE AREA OF LEASED PREMISES:  approximately 14,204 Rentable Square Feet

LEASE TERM: One Hundred Twenty-Two (122) months

SCHEDULED COMMENCEMENT DATE:  May 15, 1999

COMMENCEMENT DATE: To Be Determined in accordance with Section 3 hereof



<PAGE>

ANNUAL FIXED RENT:   Months 1-2:       Tenant's Proportionate Share of $5.50 per
                     rentable square foot per annum 
                     Months 3-60:      $317,885.52  per  annum (14, 204 rentable
                     square feet $22.38/rentable square foot)
                     Months 61-122:    $333,509.92  per  annum (14, 204 rentable
                     square feet @ $23.48/rentable square foot)

OPERATING EXPENSE ALLOWANCE:  Currently  estimated  by  Landlord  at  $5.50  per
                     rentable  square  foot  and  subject   to  readjustment  in
                     accordance with Section 6.A. hereof.

OPERATING EXPENSE BASE YEAR:  The  period  from  June 1, 1999  to  May 31, 2000,
                     provided,  however, if the  actual average  occupancy level
                     for  the  Building during  such period  is less  than  95%,
                     and/or  a full and  final real estate  tax reassessment has
                     not been completed by the taxing authority for the Building
                     and  Lot and/or an abatement or  other form of  real estate
                     tax  relief  ("Tax Relief")  is  then  in  effect  for  the
                     Building  and/or  Lot, then, Landlord, in  accordance  with
                     generally   accepted  accounting   procedures  consistently
                     applied  with   respect  to   operating   expenses  and  in
                     accordance with a recent appraisal of the Building and  Lot
                     as  fully improved  and operating with respect to estimated
                     real estate tax assessment, shall make  a determination  of
                     what the  Operating Expenses for the Operating Expense Base
                     Year would have been  if during the entire one  year period
                     the occupancy of the Building had been not less than 95%, a
                     full and final assessment had been issued and no Tax Relief
                     had been in effect ("Landlord's Determination")

TENANT'S PROPORTIONATE SHARE: 16.4%

PERMITTED USES: General Offices

SECURITY DEPOSIT:  $26,490.46

CONSTRUCTION ALLOWANCE:  Landlord, at  its sole  cost and  expense,  shall fully
                     fund (i) the cost  of the turnkey  buildout for the  Leased
                     Premises under the final  plans and specifications  for the
                     same   prepared  by  Hayden  Architecture  &  Urban  Design
                     ("Tenant's  Architect")  as attached  hereto as Exhibit "B"
                     (the "Final Plans"), which  Final Plans have  been approved
                     by Landlord  and Tenant;  plus, (ii) the  aggregate cost of
                     the  following: (a) seventy-five  cents ($.75)  per  square
                     foot toward fees of Tenant's  Architect, payable within ten
                     (10) days  of the  execution of  this Lease;  plus (b)  the
                     costs of Building standard  mini  blinds  on  all  exterior
                     windows (the total cost of (i) and (ii),  the "Construction
                     Allowance").

                                       2
<PAGE>

BROKER: Tactix Advisory Services, Inc.

                                            NEWTOWN VENTURE IV ASSOCIATES
                                            By Pitcairn Properties Incorporated,
                                               its general partner



                                            By  /s/ James M. Watson
                                              ----------------------------------
                                              Name:  James M. Watson
                                              Title: Senior Vice President




                                            TENANT:

                                            COLLAGENEX PHARMACEUTICALS, INC.



                                            By  /s/ Nancy C. Broadbent
                                              ----------------------------------
                                              Name:  Nancy C. Broadbent
                                              Title: Vice President and
                                                     Chief Financial Officer

                                       3
<PAGE>

     2.   Demise/Access.  Landlord  hereby demises and lets to Tenant and Tenant
          -------------
takes and hires from Landlord that certain space containing approximately 14,204
rentable square feet (the "Leased Premises") delineated in Exhibit "A", attached
hereto and made part hereof,  consisting of a portion of the second floor in the
four (4) story office building (the "Building")  erected upon a parcel of ground
located at 41 University  Drive,  Newtown  Township,  Pennsylvania  (the "Lot"),
TOGETHER WITH,  appurtenant to the Leased  Premises,  the right to use in common
with Landlord and other  tenants,  occupants  and visitors to the Building,  all
common areas of the Building and Lot, including,  without limitation, the common
walkways,  sidewalks  and parking  lots of the Lot.  Tenant  shall enjoy 24 hour
access to the Leased  Premises  subject to the payment to Landlord of reasonable
charges for keys, magnetic card keys, or other security devices.

     3.   Term. The Lease  Term  shall commence  on the  Commencement Date which
          ----
shall be the earlier of (A) the date on which  Tenant shall take  possession  of
the Leased  Premises,  or (B) the first Monday following the date of Substantial
Completion as defined in Section 7 hereof,  and shall continue for the period of
years set forth in Section I hereof,  unless  extended or sooner  terminated  as
provided herein.

          Landlord shall give Tenant notice of the estimated date of Substantial
Completion at least thirty (30) days prior thereto,  provided,  however, failure
of  Landlord  timely to  provide  such  notice  shall not effect a change in the
Commencement Date. When the Commencement Date and, consequently,  the Lease Term
have been so determined, Landlord and Tenant shall confirm the Commencement Date
accordingly by an amendment to Section 1.

     4.   Holding Over. If Tenant  retains possession of  the Leased Premises or
          ------------
any part thereof after the  termination of this Lease by expiration of the Lease
Term or otherwise,  without the prior written consent of Landlord,  Tenant shall
pay Landlord (A) as agreed  liquidated  damages for such holding over alone,  an
amount,  prorated on a per diem basis for each day of such  unlawful  retention,
equal to the  greater of (i) one  hundred  fifty  percent  (150%) of the monthly
Fixed Rent last in effect, or (ii) the established  market rental for the Leased
Premises,  for the time Tenant thus remains in  possession,  plus, in each case,
all Additional Rent and other sums payable  hereunder and (B) all other damages,
costs and  expenses  sustained  by Landlord by reason of Tenant's  holding  over
provided that Tenant shall not be liable for the consequential  damages incurred
by Landlord arising from a holdover of sixty (60) days or less. Without limiting
any rights and remedies of Landlord  resulting by reason of the wrongful holding
over by Tenant, or creating any right in Tenant to continue in possession of the
Leased Premises, all Tenant's obligations with respect to the use, occupancy and
maintenance of the Leased Premises shall continue during such period of unlawful
retention.

     5.   Rent.  The monthly installments  of Fixed  Rent are  payable by Tenant
          ----
beginning  on  the  first  day  of  the  third  calendar  month   following  the
Commencement  Date (the "Rent  Commencement  Date") in monthly  installments  of
one-twelfth  (1/12th) of the then  current  Fixed Rent as set forth in Section 1
hereof,  without  prior  notice or demand,  and without any set-off or deduction
whatsoever,  in advance,  on the first day of each month at Landlord's office in
Jenkintown,  Pennsylvania or at such other place as Landlord may direct,  except
that the Fixed

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<PAGE>

Rent for the first full month of the Lease Term for which  Fixed Rent is payable
hereunder  will be paid on the date of the  execution of this Lease.  During the
period from the Commencement  Date to the Rent  Commencement  Date, Tenant shall
enjoy two (2) months free of Fixed Rent,  but shall pay on the first day of each
such  month,  as  Additional  Rent  hereunder,  one-twelfth  (1/12) of  Tenant's
Proportionate  Share of  Operating  Expenses of $5.50 per square foot per annum.
Fixed Rent and Additional Rent are sometimes  collectively referred to herein as
"Rent."

          In addition, if the Lease Term commences on a day other than the first
day of a  calendar  month,  Tenant  shall  pay to  Landlord,  on or  before  the
Commencement  Date  of the  Lease  Term,  a pro  rata  portion  of  the  monthly
installment  of such  Additional  Rent as is  stated  in  this  Section  5 to be
payable,  such pro rata  portion to be based on the number of days  remaining in
such partial month after the Commencement Date of the Lease Term.

          Tenant hereby covenants and agrees  to pay the Fixed Rent,  Additional
Rent and other sums payable to Landlord  hereunder when due, and to pay interest
to Landlord at the Overdue  Interest Rate (as defined  below) (A) on all overdue
installments  of Fixed Rent from the due date thereof to the date of payment and
(B) on all  payments  of  Additional  Rent or other  sums  payable  to  Landlord
hereunder from the date of written demand for payment until the date of payment;
provided,  however  that no  interest  shall be  payable on  Tenant's  Operating
Expense  Adjustment (as hereinafter  defined) so long as such Operating  Expense
Adjustment  is paid  within the thirty (30) day period  described  in the second
paragraph of Section 6.A. hereof. Upon the occurrence of an Event of Default (as
hereinafter  defined) by Tenant in the payment of such  Additional Rent or other
sums payable hereunder, Landlord shall be entitled to all rights and remedies to
which it would be  entitled  if an Event of Default of the payment of Fixed Rent
occurred.  As used herein, the term "Overdue Interest Rate" shall mean and equal
three  percent (3%) per annum over the prime  interest  rate as announced in the
"Money  Rates" column of the eastern  edition of The Wall Street  Journal on the
                                                 ------------------------
due  date of the  payment,  or if  such  rate is no  longer  published,  another
interest  rate index  selected by Landlord  to achieve a  substantially  similar
result.

     6.   Escalation.
          ----------

          A.  Operating Expense.  The Operating Expense  Allowance set  forth in
              ------------------
Section  1  hereof  represents  Landlord's  best  estimate  of  the  anticipated
Operating Expenses for the Operating Expense Base Year for the Building based on
information  presently  available to Landlord.  Within one hundred  twenty (120)
days following the end of the Operating Expense Base Year, or as soon thereafter
as  administratively  feasible,  Landlord  shall  furnish to Tenant an Operating
Expense Statement  reflecting (i) the actual Operating  Expenses (as hereinafter
defined) for the  Operating  Expense Base Year or, (ii) to the extent the actual
average  occupancy  level for the Building  during such period is less than 95%,
and/or a full and final real estate tax  reassessment  has not been completed by
the taxing  authority for the Building and Lot, and/or any form of Tax Relief is
then in effect for the Building and/or Lot, Landlord's  Determination thereof as
required under Section 1 hereof.  Subject to Tenant's right to audit as provided
herein,  including,  without  limitation,  Tenant's  right to challenge the real
estate component of Landlord's Determination,  thereafter,  the actual Operating
Expenses for the Operating  Expense Base Year or such  Landlord's  Determination
shall be the  Operating  Expense  Allowance for all purposes

                                       5
<PAGE>

hereunder.  In any Lease Year  subsequent to the Operating  Expense Base Year if
Landlord's  actual  Operating  Expenses for any Operating  Year (as  hereinafter
defined) shall be greater than the Operating Expense Allowance; Tenant shall pay
to Landlord as Additional Rent an amount equal to Tenant's  Proportionate  Share
(as defined below) of the difference (the amount of Tenant's Proportionate Share
of  such  difference  is  hereinafter  referred  to as  the  "Operating  Expense
Adjustment"). If Tenant occupies the Leased Premises or portion thereof for less
than a full Operating Year, the Operating  Expense  Adjustment will be allocated
proportionately  to the  amount of time in such  Operating  Year that  Tenant so
occupies such space.  Notwithstanding  anything to the  contrary,  in each month
during the period from June 1, 2000 to December  31,  2000,  Tenant shall pay to
Landlord as  Additional  Rent an amount equal to one twelfth  (1/12) of Tenant's
Proportionate  Share of the estimated annual increase,  if any, in the Operating
Expenses  for the calendar  year  beginning  January 1, 2000 over the  Operating
Expense Allowance.

          Such Additional Rent shall be paid in the following manner: within one
hundred  twenty (120) days  following the end of each  Operating Year or as soon
thereafter  as  administratively  feasible,  Landlord  shall  furnish  Tenant an
Operating  Expense Statement (as hereinafter  defined).  Within thirty (30) days
following  the  receipt  of  such  Operating  Expense  Statement  (the  "Expense
Adjustment  Date") Tenant shall pay to Landlord as Additional Rent the Operating
Expense  Adjustment  for such  Operating  Year. On the next  succeeding  Expense
Adjustment  Date,  Tenant  shall pay to Landlord  (or  Landlord  shall credit to
Tenant) any deficiency (or excess) between the  installments  paid on account of
the preceding  year's  Operating  Expense  Adjustment  and the actual  Operating
Expense Adjustment for such Operating Year.

          The following words  and terms  shall be  defined as  hereinafter  set
 forth:

               (i)   "OPERATING  YEAR" shall mean the calendar  year  commencing
January 1, 2000,  or such other period of twelve (12) months as hereafter may be
adopted by Landlord as its fiscal year, occurring during the Lease Term.

               (ii)  "OPERATING  EXPENSE STATEMENT" shall  mean a  statement  in
writing signed by Landlord,  delivered to Tenant within one hundred twenty (120)
days  following  the end of  each  Operating  Year,  or as  soon  thereafter  as
administratively  feasible, setting forth in reasonable detail (a) the Operating
Expense for the preceding  Operating Year, (b) the Operating Expense  Allowance,
and (c) the Tenant's  Operating  Expense  Adjustment for such Operating Year, or
portion thereof.  The Operating Expense for each Operating Year shall be audited
and certified by Landlord's independent certified public accountant whose report
thereon shall be available for inspection by Tenant at Landlord's  office during
normal business hours. The Operating  Expense Statement shall constitute a final
determination  as between  Landlord and Tenant of the Operating  Expense and the
Operating Expense  Adjustment for any Operating Year,  subject to Tenant's right
to audit Landlord as provided herein.

               (iii) "OPERATING  EXPENSE"  shall  mean  the  following  expenses
incurred  by Landlord  in  connection  with the  operation,  routine  repair and
maintenance of the Building and the Lot:

                                       6
<PAGE>

                    (a)  Wages,  salaries,   fees  and  other  compensation  and
payments  and  payroll  taxes  and   contributions   to  any  social   security,
unemployment insurance,  welfare, pension or similar fund and payments for other
fringe  benefits  required by law or by union agreement (or, if the employees or
any of them are  non-union,  then  payments  for  benefits  comparable  to those
generally  required by union  agreement in first class  office  buildings in the
Philadelphia  suburban area,  which are  unionized)  made to or on behalf of all
employees  of  Landlord  performing  services  rendered in  connection  with the
operation and  maintenance of the Building and the Lot, and  including,  solely,
such expenses of all such personnel  only for time and services  rendered to the
Building and Lot,  including,  without  limitation:  window cleaners;  janitors;
miscellaneous handymen;  watchmen;  persons engaged in patrolling and protecting
the  Building  and the  Lot;  carpenters;  engineers;  mechanics;  electricians;
plumbers;  persons  engaged in the operation and maintenance of the Building and
the Lot; building superintendent and assistants;  building manager; and clerical
and administrative personnel.

                    (b) The  uniforms  of  all  employees,  and  the   cleaning,
 pressing and repair thereof.

                    (c) Cleaning  costs for the Building and the Lot,  including
the windows and  sidewalks,  all snow and rubbish  removal  (including  separate
contracts  therefor)  and  the  costs  of all  labor,  supplies,  equipment  and
materials incidental thereto.

                    (d) Premiums  and other  charges  incurred by Landlord  with
respect to all insurance  relating to the Building and the Lot and the operation
and  maintenance  thereof,  including,  without  limitation:  fire and  extended
coverage  insurance,   including  windstorm,   hail,  explosion,  riot,  rioting
attending a strike,  civil  commotion,  aircraft,  vehicle and smoke  insurance;
public liability; elevator; workmen's compensation;  boiler and machinery; rent;
use and  occupancy;  and  health,  accident  and  group  life  insurance  of all
employees.

                    (e) All  taxes,  liens,  charges, imposts  and  burdens  and
special  assessments  of  every  kind and  nature  imposed  by any  governmental
authority on and/or with  respect to the Lot or Building  which  Landlord  shall
become obligated to pay because of or in connection with the ownership,  leasing
or operation of the Lot or the Building.

                    (f) The cost of electricity  used for site lighting and  the
cost  of  water  and  sewer  and  any and all  other  utility  services  used in
connection with the operation and maintenance of the Building and the Lot.

                    (g) Costs  incurred  for  operation,  service,  maintenance,
inspection,  routine  repairs and  alterations of the Building,  the Lot and the
heating,  air-conditioning,  ventilating, plumbing and electrical systems of the
Building  (including  any separate  contract  therefor)  and the costs of labor,
materials,  supplies and equipment used in connection  with all of the aforesaid
items;  provided,  Tenant shall have no  obligation  to  reimburse  Landlord for
capital  repairs,  replacements  or  improvements to the Building or Lot or such
systems, except as specifically provided elsewhere herein.

                                       7
<PAGE>

                    (h) Gross receipts  taxes, sales taxes and  excise taxes and
the like upon any of the expenses enumerated herein.

                    (i) Management fees of the managing agent for the Building.

                    (j) The cost of replacements for tools and equipment used in
the operation and maintenance of the Building and the Lot.

                    (k) The cost of telephone service, postage, office supplies,
maintenance  and  repair  of office  equipment  and  similar  costs  related  to
operation of the Building superintendent's and Building manager's office.

                    (l) The cost  of  licenses, permits  and  similar  fees  and
charges related to operation, repair and maintenance of the Building.

                    (m) Auditing fees  necessarily  incurred in connection  with
the maintenance  and operation of the Building,  and accounting fees incurred in
connection  with  the  preparation  and  certification  of  a  real  estate  tax
escalation  and the operating  expense  escalation  statements  pursuant to this
Section 6.

                    (n) All costs  incurred by Landlord to retrofit  any portion
or all of the  Building  to comply  with a change  in  existing  legislation  or
introduction of new legislation,  whether Federal,  State or Municipal,  and for
which  no  relevant  exemption  is  available,  or  repairs,   replacements  and
improvements  which are appropriate in Landlord's  reasonable  discretion taking
into  account  sound  principles  of  management  consistently  applied  for the
continued operation of the Building as a first class building.

                    (o) All expenses  associated  with the  installation  of any
energy or cost saving devices for the benefit of the Building.

                    (p) All assessments against Landlord for Landlord's pro rata
share  of  the  costs  of  Silver  Lake  Executive  Campus  as  provided  in the
Declaration of Condominium of Silver Lake Executive Campus.

                    (q) Any and all other expenditures of Landlord in connection
with the  operation,  repair or maintenance of the Lot or the Building which are
properly expensed in accordance with generally  accepted  accounting  principles
consistently  applied with respect to the operation,  repair and  maintenance of
first-class office buildings in the Philadelphia suburbs.

                    (r) expenses for seasonal and social relations functions for
the benefit of all tenants in the Building.

          If Landlord shall purchase any item of capital  equipment  or make any
capital expenditure as described in subsection (n) and (o) above, then the costs
for the same shall be included in Operating Expenses in the year of installation
and in  subsequent  years

                                       8
<PAGE>

amortized  over the useful life of such  equipment  or  improvement  in a manner
consistent with generally accepted accounting  principles  consistently applied,
with an interest  factor equal to the prime interest rate, as defined in Section
5 hereof.  If  Landlord  shall  lease such item of capital  equipment,  then the
rentals or other operating costs paid pursuant to such leasing shall be included
in Operating Expenses for each year in which they are incurred.

          Notwithstanding the foregoing, "Operating  Expense" shall not  include
expenditures for any of the following:

                    (a) The cost of any capital  addition  made to the  Building
(other than that  specified  as part of  Operating  Expense as provided  above),
including the cost to prepare space for occupancy by a new tenant.

                    (b) Repairs or  other work  occasioned by fire, windstorm or
other casualty or hazard, provided,  however, that the foregoing shall not limit
the Tenant's liability, if any, under the indemnities provided under this Lease.

                    (c) Leasing commissions,  real estate brokers'  commissions,
advertising  and  marketing  expenses  and other  costs  incurred  in leasing or
procuring new tenants.

                    (d) Repairs or rebuilding necessitated by condemnation.

                    (e)  Depreciation  and  amortization of the Building,  other
than

                         (I)   capital  expenditures as described  in subsection
(n) above; or

                         (II)  capital expenditures  as described  in subsection
(o) above.

                    (f) The  salaries  and  benefits  of  executive  officers of
Landlord or management company senior to the Building manager, if any.

                    (g) Interest and principal payments on mortgage debt.

                    (h) Ground rental payments.

                    (i) The costs  of:  painting  or  decorating  other  than in
public  areas;  alterations  to the Leased  Premises  or the  premises  of other
tenants of the  Building,  or work  finished  by Landlord  without  charge as an
inducement  for  a  tenant  to  lease  space  (i.e.,   free  rent,   improvement
allowances).

                    (j) Income or franchise taxes or such other taxes imposed or
measured by the income from Landlord from the operation of the Building.

                                       9
<PAGE>

                    (k) The cost of constructing,  installing,  or operating any
special  service or  facility  such as an  observatory,  broadcasting  facility,
luncheon club, athletic or recreational club, cafeteria or dining facility.

                    (l) The costs  associated  with  services or  amenities  not
available  to all  tenants or  provided  to any tenant to a  materially  greater
extent or more favorable manner than generally provided to all tenants.

                    (m) The costs of  correcting  latent  defects and defects in
construction or renovation of the Building or its systems.

                    (n) Legal expenses incurred in connection with tenant leases
including,  without  limitation,   negotiations  with  prospective  tenants  and
enforcing provisions or of other leases in the Building.

                    (o)  Payments  for  rental  items,  the cost of which  would
constitute a capital  expenditure if such equipment were purchased,  unless such
items are customarily treated as operating expenses in accordance with generally
accepted accounting principles consistently applied.

                    (p) Any fees and expenses  paid to any  contractor  which is
related  to  Landlord  to the  extent  such fees and  expenses  are in excess of
customary   market   amounts  which  would  be  paid  in  the  absence  of  such
relationship.

                    (q)  Expenditures  for  repairs  or  maintenance  which  are
covered by  warranties,  guaranties or service  contracts,  except to the extent
that such warranty,  guaranty or service  contract is not honored or charges are
imposed thereunder.

                    (r) The costs of repairs,  alterations,  additions, charges,
tools,  equipment  replacements  and the like  which  under  generally  accepted
accounting principles are properly classified as capital expenditures, except to
the extent otherwise permitted hereunder.

                    (s) Damages  incurred due to the  negligence or  intentional
acts or omissions of Landlord.

                    (t) The costs of financing or refinancing.

                    (u) Reserves for capital items, bad debts or rental losses.

          Operating Expense  shall be  "net" and,  for that  purpose,  shall  be
reduced by the amounts of any  reimbursement or credit received or receivable by
Landlord  with respect to an item of cost that is included in Operating  Expense
(other than  reimbursements  to Landlord by tenants of the Building  pursuant to
Operating Expense escalation provisions).

                                       10
<PAGE>

          To the extent that any item of Operating Expense is incurred in common
with another building or lot in the Silver Lake Executive  Campus,  such item of
expense shall be  apportioned  equitably  among the  properties  incurring  such
expenses.

          If Landlord shall eliminate  the payment of  any wages or  other labor
costs or otherwise reduce  Operating  Expense as a result of the installation of
new devices or equipment, or by any other means, then in computing the Operating
Expense the  corresponding  items shall be deducted from the  Operating  Expense
Allowance and Operating Year. All electricity  invoiced to Tenant directly or as
an Operating Expense shall be invoiced at Landlord's cost without markup.

          The Operating Expense for any Operating Year or portion thereof during
which less than ninety five percent  (95%) of the Rentable  Area of the Building
is  leased  to  tenants  shall be  increased  to  include  an  imputed  cost for
unoccupied  portions of the Building in an amount with respect to each such area
equal to the product of (a) the  Landlord's  estimate of the marginal  Operating
Expense saving resulting from such vacancy,  times (b) a fraction, the numerator
of which is the number of days during such  Operating  Year such  portion of the
Building was unoccupied and the denominator of which is three hundred sixty-five
(365),  times (c) the Rentable Area of such  unoccupied  space. In the time that
more than one such  portion of  Rentable  Area shall be  unoccupied  on separate
dates within a relevant  Operating  Year, then a separate  computation  shall be
made  with  respect  to  each  unoccupied  portion,  and  the  products  of such
computations shall be added together,  and the total thereof shall be the amount
of Operating  Expense  imputed to such  unoccupied  portions for such  Operating
Year.

               (iv)  "TENANT'S PROPORTIONATE  SHARE" shall mean a fraction,  the
numerator  of which  shall be the  Rentable  Area of  Leased  Premises,  and the
denominator of which is 86,597  rentable square feet (subject to adjustment only
by reason of any substantial addition to the Building made after the date of the
initial  completion of  construction  of the  Building),  and shall equal,  with
respect to the Leased  Premises,  the  percentage set forth in Section I of this
Lease.

     B.   Tenant shall  have the  right to  audit Landlord's  books  and records
relating to Operating  Expenses  once during each calendar year during the Lease
Term, including,  without limitation, the establishment of the Operating Expense
Allowance under Section 6.A hereof,  which right may be exercised by Tenant upon
written notice  delivered not less than two hundred seventy (270) days following
the delivery of the Operating  Expense  Statement to Tenant.  In the exercise of
Tenant's  rights  under this  Section,  Tenant shall have  reasonable  access to
Landlord's books and records relating to Operating  Expenses which shall be made
available at Landlord's  business  offices at a mutually  agreeable  time during
Landlord's normal business hours. Tenant shall not suspend payment of Rent based
upon the  pending  outcome of the audit.  In no event  shall  Tenant  engage any
professional  lease  audit  firm doing  business  on a  contingent  fee or other
similar commission  arrangement based on recovery.  In the event that such audit
discloses a discrepancy  in excess of three percent (3%),  Landlord shall (i) to
the extent Tenant  elects not to credit such  overpayment  against Rent,  refund
within  thirty  (30) days of such audit the entire  amount  overpaid  to Tenant,
together  with  interest  thereon at the Overdue  Interest Rate from the 

                                       11
<PAGE>

date of Tenant's overpayment, or Tenant may credit such overpayment against Rent
next coming due, and (ii) pay all reasonable costs of Tenant's audit.

     7.   Completion of Improvements. Before the commencement of the Lease Term,
          --------------------------
Landlord will  substantially  complete the  construction of the Building (if not
substantially  completed  as of the  execution  hereof)  to the  stage  that the
Building is operable for Tenant's purposes,  which shall be defined as occurring
when Tenant's  entrance to the Leased Premises are  substantially  completed and
the heating and  air-conditioning  system (as  required  for the season and then
prevailing climate) and all other mechanical systems required for service to the
Leased Premises are in regular  operation.  The Building shall be compliant with
all  applicable  state,  federal  and local  laws in effect on the date that the
certificate  of  occupancy  for  the  Building  is  issued,  including,  without
limitation, the ADA.

          The  Leased Premises shall  be deemed  to be  substantially  completed
("Substantially  Completed"  or  "Substantial  Completion")  when  (i) all  work
specified to be done in the Final  Plans,  has been  substantially  completed as
determined by Landlord except for minor items of finishing and construction of a
nature which are not necessary to make the Leased Premises reasonably tenantable
for Tenant's use as stated herein and (ii) a  certificate  of occupancy has been
issued.  All punch list items shall be completed by Landlord  within thirty (30)
days following the date of Substantial Completion, subject only to force majeure
(as hereinafter defined).

          If Tenant makes any  changes to the  Final Plans and  Landlord advises
Tenant at the time of the proposed  change that such changes would cause a delay
in the  Commencement  Date, then, if such delay should occur, in addition to the
costs  Tenant  shall pay for any costs to  Landlord  as  provided  in  Section 8
hereof,  Tenant shall  commence to pay rent on the Rent  Commencement  Date that
would  have  been  in  effect  had  the  changes  of  Tenant  not  affected  the
Commencement Date.

          Landlord shall have the Leased Premises Substantially Completed by the
Scheduled  Commencement Date, except for delays due to governmental  regulation,
unusual   scarcity  of  or  inability  to  obtain  labor  or  materials,   labor
difficulties, unusual delays in the procurement or issuance of permits, casualty
to the  Building or Acts of God (such  casualty  or Acts  herein  referred to as
"force majeure"),  any of which shall extend the Scheduled Commencement Date for
a period equal to the total of the duration of each such delay. In the event any
delay of the Scheduled  Commencement  Date is caused by factors other than force
majeure, Tenant shall be entitled to one (1) day of free rent for each period of
three (3) days the Scheduled  Commencement Date is delayed beyond June 1, 1999..
If the Leased Premises is not  Substantially  Completed  within three (3) months
following  the  Scheduled  Commencement  Date,  as the same may be  extended  in
accordance  herewith,  Tenant,  as  Tenant's  sole right  thereby  arising,  may
terminate  this Lease by written  notice to Landlord  given within  fifteen (15)
days  thereafter  provided that the Lease Term shall not have commenced prior to
the giving of such notice to Tenant,  this Lease to  terminate in such case upon
Landlord's receipt of such notice,  whereupon Landlord shall return all Rent and
other  monies  paid by Tenant to  Landlord  in  advance,  except as  hereinafter
stated, and all further obligations of the parties hereunder shall end.

                                       12
<PAGE>

          It  is understood  that in  the event  of such  termination by Tenant,
Landlord  shall  have no  responsibility  to  reimburse  Tenant  for any cost or
expenses as Tenant may have directly or indirectly  incurred toward this leasing
or the occupancy of the Leased  Premises,  whether with respect to arranging for
or termination of arrangements for other space.

     8.   Construction  of  Leased   Premises.  Landlord   will  construct   the
          ------------------------------------
improvements  in the Leased  Premises  in  accordance  with the Final Plans (the
"Landlord  Work") at  Landlord's  sole cost and expense,  excepting  only change
orders requested by Tenant in writing and agreed to in writing by Landlord which
shall,  in the  aggregate,  increase  the  cost  of  Landlord's  Work  over  the
Construction  Allowance as described  below.  In the event that Tenant  requires
written  change  orders  ("Change  Orders")  to the Final  Plans  which,  in the
aggregate,  increase  the cost of  Landlord's  Work to an amount  exceeding  the
Construction Allowance,  Tenant shall pay directly and/or reimburse Landlord for
(i) such excess cost over the  Construction  Allowance  arising  from the Change
Orders and (ii)  Landlord's  overhead in an amount equal to five percent (5%) of
any excess costs over the Construction Allowance. Notwithstanding the foregoing,
such excess costs and any such overhead  charges shall, if Tenant so elects,  be
paid for by Landlord and amortized over the Lease Term as Additional  Rent at an
interest  rate equal to twelve  percent  (12%) per  annum.  In  addition  to the
foregoing,  Tenant  shall have the right to require  Landlord  to pay for Tenant
improvements  over and  above the  Construction  Allowance  in an amount  not to
exceed  $5.00 per square foot and, in such event,  Tenant  shall  amortize  such
additional  expenditures  at an interest rate equal to twelve  percent (12%) per
annum.

          All  construction  work required  or permitted  by this Lease, whether
by Landlord  or Tenant,  shall be done in a good and  workmanlike  manner and in
compliance  with all  applicable  laws,  ordinances,  regulations  and orders of
governmental  authorities  and with all applicable  codes of all insurers of the
Building.  Each party may inspect the work of the other at reasonable  times and
shall promptly give notice of observed  defects.  Each party hereby agrees to be
bound by and  authorizes  the other to rely upon, in connection  with design and
construction,  approval  and other  actions by the  Construction  Representative
named  in  Section  I  or  any  person  hereafter   designated  as  Construction
Representative by an amendment to Section 1.

          With  the prior written consent  of Landlord, which  may be granted or
withheld in Landlord's sole discretion Tenant may prior to the Commencement Date
enter upon or have its  contractors and agents enter upon the Leased Premises to
install  data  and  telecommunications   equipment.   All  such  work  shall  be
accomplished  with minimal  interference  to the  Landlord's  contractors at the
site.  Tenant shall indemnify,  defend and hold Landlord  harmless from all loss
cost,   damage  or  expense   relating  to  the  entry  of  Tenant  or  Tenant's
contractor's,  agents or employees onto the Leased  Premises,  and shall provide
Landlord with evidence of insurance  satisfactory  to Landlord prior to entering
the Leased  Premises.  In the event that any conflict arises between  Landlord's
contractors and Tenant or Tenant's contractors, agents or employees, or Landlord
otherwise  determines that Tenant's activities are interfering with the progress
of the work, Landlord may (i) remove Tenant and Tenant's contractors,  agents or
employees from the Leased  Premises and (ii) treat the  interference as a tenant
delay as  provided in the third (3rd)  paragraph  of Section 7 hereof.  Landlord
shall use  commercially  reasonable  efforts to cause its general  contractor to
adopt and  implement  policies  designed  to 

                                       13
<PAGE>

avoid work  stoppages,  slowdowns,  disputes  or strikes  and shall at all times
maintain labor harmony.

          Within five (5) days after written  notice from  Landlord to Tenant of
the date on which  Landlord  reasonably  expects  that the  construction  of the
Leased  Premises  will be  Substantially  Completed  or, in the  absence of such
notice,  within thirty (30) days after Tenant commences  occupancy of the Leased
Premises,   or  any  part   thereof,   Landlord's   and  Tenant's   Construction
Representatives  shall make such  inspection  of the Leased  Premises  as Tenant
deems  appropriate,  and,  except as otherwise  notified by Tenant in writing to
Landlord within such period,  Tenant shall be deemed to have accepted the Leased
Premises in their then condition and as being in the condition in which Landlord
is obligated to deliver the Leased Premises  hereunder;  provided,  however that
Landlord  shall repair or cause to be repaired  latent  defects in  construction
that are  discovered  and reported by Tenant during the effective  period of any
applicable  guaranty  or  warranty.  If as a result  of such  inspection  Tenant
discovers  deviations or variations  from the Final Plans and Change Orders of a
nature  commonly  found  on a  "punch  list"  (as  that  term  is  used  in  the
construction   industry),   Tenant  shall  promptly   notify  Landlord  of  such
deviations.  The  existence  of such  punch list items  shall not  postpone  the
Commencement  Date of this  Lease  nor the  obligations  of  Tenant to pay rent.
Landlord  shall cause all punch list items to be  completed  within  thirty (30)
days following the Commencement Date,  subject only to force majeure.  After the
Commencement Date, Landlord,  its agents and/or contractors may enter the Leased
Premises from time to time to complete  unfinished  details and adjustments with
reasonable dispatch,  and such entry shall not constitute an eviction,  in whole
or in part,  entitle  Tenant to any  abatement or  diminution  of rent,  relieve
Tenant of any of its  obligations  under this Lease,  or impose any liability on
Landlord  to Tenant or its agents or  contractors  by reason  thereof,  provided
Landlord shall use  commercially  reasonable  efforts to minimize  disruption of
Tenant's business operations during such entries.

     9.   Alterations or Improvements  by  Tenant. Tenant shall  not make during
          -----------------------------------------
the Lease Term any  alterations or additions to the Leased  Premises unless with
the prior written  approval of Landlord and then only in  accordance  with plans
and  specifications   previously  approved  by  Landlord  and  subject  to  such
conditions as Landlord may require,  including,  without limitation, that Tenant
be required to pay for any  increased  cost to  Landlord  occasioned  thereby or
attributed  thereto and to readapt the Leased  Premises prior to the termination
of this  Lease,  all  without  expense  to  Landlord.  Any such  alterations  or
additions  which may be approved by Landlord  and made by Tenant shall be deemed
part of the  Building  and shall not  thereafter  be  removed  by Tenant  unless
Landlord shall require removal of same at the time of Landlord's approval of the
subject  alteration or  improvement,  in which case Tenant shall remove any such
alterations  or  additions  and repair any damage to the  Building or the Leased
Premises  occasioned  by  their  installation  or  removal  (including,  without
limitation,  repairing and patching  holes,  replacing  ceiling,  wall and floor
surfaces and repainting),  and restore the Leased Premises to substantially  the
same  condition  as  existed  prior to the time  which any such  alterations  or
additions  were  made.  Notwithstanding  anything  herein  or in the  Rules  and
Regulations  to the contrary,  Tenant may affix  ordinary  removable  decorative
items to the walls, subject to removal and restoration as provided herein.

                                        14
<PAGE>

          All   alterations  and  additions   by  Tenant  and   installation  of
furnishings  following  occupancy  shall be  coordinated  with  any  work  being
performed  by  Landlord  and   performed  in  such  manner  and  by  such  union
contractor(s)  as to assure  harmonious  labor relations and so as to not damage
the Building or interfere  with its  operation or with the  activities  of other
tenants and,  except for  installation  of  furnishings  only, by contractors or
workmen first approved by Landlord.

          As  further  conditions  to  Landlord's  approval   of  any   proposed
alterations  or additions by Tenant which are to be made after the  beginning of
the Lease Term, Tenant shall: secure all necessary licenses and permits; deliver
to Landlord a waiver,  executed  by all persons or firms who will be  furnishing
labor or  materials  waiving the right to file any  mechanic's  lien against the
Building, the Lot or the estate or interest of Landlord or Tenant therein; cause
the contractor(s) and subcontractor(s) to carry Workmen's Compensation insurance
in statutory  amounts and also  comprehensive  public  liability  insurance with
limits as approved by Landlord, and deliver to Landlord certificates of all such
insurance.

          Failure  to  comply  with any of  the  provisions  of  this  Section 9
(including,  without  limitation,  any of the terms or conditions of any consent
granted  hereunder)  shall  constitute a default  under this Lease and upon such
default  Landlord may pursue any or all of the remedies  provided for in Section
28 hereof.

          Tenant  shall promptly pay  when due the cost  of all such alterations
and  additions as referred to in this  Section 9 and shall cause any  mechanics'
liens which may be filed with respect thereto to be immediately discharged,  and
shall indemnify Landlord against any loss, cost or expense  occasioned  directly
by such alterations and additions.

     10.  Permitted  Uses.  Tenant  covenants and agrees  to use and occupy  the
          ---------------
Leased  Premises  only in  conformity  with  law and for the uses  specified  in
Section 1 hereof and not to use or permit any use of the Leased  Premises  which
creates any safety hazard, which would be dangerous to the Leased Premises,  the
Building  or the  occupants  of the same,  which  would be  disturbing  to other
tenants or  occupants  of the  Building,  or which would  cause any  increase in
premium for any insurance which Landlord may then have in effect with respect to
the Building generally.

     11.  Building  Operation  and Services.  Landlord  shall  furnish,  through
          ---------------------------------
Landlord's employees or independent contractors,  such services,  facilities and
supplies  equal in scope,  quality  and  frequency  to those  being  customarily
provided  by  landlords  in first class  office  buildings  in the  Philadelphia
suburbs, including, without limitation, the following:

          During the construction of the Leased Premises, Landlord shall install
a heat  pump or other  HVAC  system  to  provide  heating,  ventilating  and air
conditioning to the Leased Premises.  Tenant shall have the right to control the
hours of operation such system.

          Maintenance  and  cleaning shall  be provided  Monday  through  Friday
(excluding  holidays),  after  business  hours,  as  follows:  janitor  service,
consisting of the 

                                       15
<PAGE>

removal of customary office trash, dusting of furniture, desks and pictures, and
vacuuming; maintenance and service of the toilet rooms in the Leased Premises.

          Hot and cold water for normal  lavatory and kitchen  purposes shall be
provided. If Tenant requires water for additional purposes, Tenant shall pay the
cost  thereof as shown on a meter to be  installed  and  maintained  at Tenant's
expense to measure such additional consumption.

          During the construction of the Leased Premises, Landlord shall connect
the  electrical  service in the Leased  Premises to the electric  public utility
serving the Building and Tenant shall be responsible to pay Landlord the charges
for such  electricity as determined  through the separate meter monitoring usage
in the Leased  Premises.  Landlord shall select the electrical  utility provider
for the Building using its commercially reasonable business judgment taking into
consideration all relevant factors.

          Landlord shall furnish and install at Tenant's expense all replacement
lighting tubes, lamps, bulbs, and ballasts required in the Leased Premises.

          Landlord shall landscape and maintain the common areas of the Building
and Lot.

          Landlord shall provide a  security system to the  Building and  Leased
Premises.

          Landlord shall provide on-site property management.

          Landlord shall provide signage to Tenant on the Building Directory and
as otherwise shown in the Final Plans.

     12.  Interruption of Services.  In case Landlord is prevented or delayed in
          ------------------------
furnishing  any service as set forth in Section II herein or otherwise by reason
of any cause beyond Landlord's reasonable control,  Landlord shall not be liable
to Tenant therefor nor shall Tenant be entitled to any abatement or reduction in
rent by reason  thereof,  nor  shall  the same give rise to a claim in  Tenant's
favor that such absence of building services constitutes actual or constructive,
total or partial eviction or renders the Leased Premises untenantable,  provided
such  interruption  does not exist for longer  than five (5)  consecutive  days.
Thereafter, the continuing interruption shall give rise to an abatement of Fixed
Rent and Additional Rent until service is restored.  In the event service is not
restored  within  thirty (30) days  following the start of the  interruption  of
service  and Tenant has ceased  operations  at and is  prepared to vacate or has
vacated the Leased Premises, Tenant shall have the right to terminate this Lease
and receive  the return of the  unamortized  costs,  if any, of any sums paid by
Tenant on account of construction of the Leased Premises.

          Landlord  reserves  the right to stop any  service or utility  system,
when necessary by reason of accident or emergency,  or until  necessary  repairs
have been  completed,  provided,  however,  that in each  instance of  stoppage,
Landlord  shall  exercise  reasonable  diligence to eliminate the cause thereof.
Except  in case of  emergency  repairs,  

                                       16
<PAGE>

Landlord will give Tenant reasonable advance notice of any contemplated stoppage
and will use reasonable efforts to avoid unnecessary  inconvenience to Tenant by
reason thereof.

     13.  Repairs. Landlord  shall make  all repairs  necessary to maintain  the
          -------
plumbing,  heating,  ventilating,  air conditioning,  electric systems, external
windows and floors (excluding carpeting and floor coverings), provided, however,
that  Landlord  shall  not be  obligated  to make any  such  repairs  until  the
expiration of a reasonable  period of time after receipt of written  notice from
Tenant that such repair is needed. In no event shall Landlord be obligated under
this Section 13 to repair any damage  caused by any act,  omission or negligence
of  Tenant  or  its  employees,  agents,  invitees,  licensees,  subtenants,  or
contractors. If Tenant requires maintenance, servicing, repair or replacement of
any special plumbing, heating or air conditioning systems installed for Tenant's
benefit  in  the  Leased  Premises,  such  maintenance,   servicing,  repair  or
replacement  shall be made at the sole  expense of  Tenant,  unless the need for
such  repairs  is caused  solely by the  negligence  or  willful  misconduct  of
Landlord, its agents or employees.

          Tenant  shall  maintain  the  Leased  Premises  and the  fixtures  and
appurtenances therein in good repair at all times. Except to the extent released
by  Landlord  pursuant  to the  waiver of  subrogation  provision  in Section 23
hereof,  Tenant shall reimburse Landlord for all costs and expenses of repairing
and replacing  all damage or injury to the Leased  Premises and the Building and
to fixtures and equipment caused by Tenant or its employees,  agents,  invitees,
licensees,  subtenants,  or contractors,  or as the result of all or any of them
moving in or out of the  Building or by  installation  or removal of  furniture,
fixtures or other  property.  Such costs and expenses  shall be  collectible  as
Additional Rent and paid by Tenant within fifteen (15) days after rendition of a
bill therefor.

          Landlord shall use its best efforts to minimize disruption to Tenant's
business  operations during any period Landlord is making repairs,  alterations,
additions, or improvements to and in the Leased Premises or the Building or Lot.
Landlord  shall not be liable by reason of any  injury to or  interference  with
Tenant's business arising from the making of any repairs, alterations, additions
or  improvements  in or to  the  Leased  Premises  or  the  Building  or to  any
appurtenances or equipment therein.  There shall be no abatement of rent because
of such repairs, alterations,  additions or improvements or because of any delay
by Landlord in making the same provided that Landlord shall exercise  reasonable
efforts  to perform  such work at such time and in such a manner as to  minimize
disruption to Tenant's business operations.

          Tenant shall give to Landlord  prompt  written notice of any accidents
to, or defects in plumbing, electrical, heating and air conditioning systems and
apparatus located in the Leased Premises.

     14.  Credit Enhancements.  Tenant  shall deliver, simultaneously  with  the
          -------------------
execution and delivery of this Lease,  an  irrevocable  standby letter of credit
from a  financial  institution  reasonably  acceptable  to  Landlord in form and
substance  substantially  similar to that attached hereto as Exhibit "E", in the
amount of Seventy  Three  Thousand Two Hundred  Ninety Two Dollars  ($73,292) to
secure the payment of the Tenant's  portion of the cost of Landlord's  Work. The
amount of the letter of credit shall be reduced on a straight line basis in each
of the

                                       17
<PAGE>

first  five (5) years of the Lease  Term such  that,  as of the first day of the
sixth year of the Lease Term, no letter of credit shall be required hereunder.

     15.  Quiet  Enjoyment.  Tenant, upon  paying  the  Annual Fixed  Rent,  all
          ----------------
Additional  Rent and all other sums and charges  herein  provided for and,  upon
observing,  keeping and performing  all covenants,  agreements and conditions of
this Lease on Tenant's part to be observed,  kept and  performed,  shall quietly
have and enjoy the Leased Premises  throughout the Lease Term without  hindrance
 or molestation by Landlord or by anyone claiming by, through or under Landlord,
subject, however, to the exceptions, reservations and conditions of this Lease.

     16.  Landlord's Right of Entry. Landlord, any  ground lessor,  mortgagee or
          -------------------------
any agent thereof,  shall have the right, upon reasonable prior notice, to enter
the Leased  Premises  during  regular  business  hours:  to  perform  Landlord's
covenants as set forth in this Lease,  for purposes of inspection  and to insure
Tenant's  compliance  with the  provisions  of this Lease,  to make any repairs,
replacements  or  alterations  to the Building or do any work which Landlord may
deem  necessary,  or to show the Leased  Premises to  prospective  purchasers or
mortgagees  of the  Building,  and also,  during  the last six (6) months of the
final Lease Term, to show the Leased Premises to prospective  tenants.  Landlord
shall  use  commercially  reasonable  efforts  during  such  entry  to  minimize
disruption of Tenant's business operations.

     17.  Surrender of Premises. Any  alterations,  improvements or additions to
          ---------------------
the Leased Premises made in accordance  with  Landlord's  Work, as same may have
been modified from time to time  throughout  construction of the Leased Premises
shall remain upon the Leased  Premises at the expiration or earlier  termination
of this Lease and shall  become  the  property  of  Landlord.  Any  alterations,
improvements  or  additions  to  the  Leased  Premises  made  after  substantial
completion of the Leased  Premises shall remain upon the Leased  Premises at the
expiration or earlier termination of this Lease and shall become the property of
Landlord,  unless,  Landlord,  at the time of  Landlord's  approval of plans for
same,  shall have given  written  notice to Tenant to remove  such  alterations,
improvements and additions. In such event, Tenant shall repair any damage caused
by the removal  (including,  without  limitation,  repairing and patching holes,
replacing  ceiling,  floor and wall  surfaces and  repainting),  and restore the
Leased Premises to substantially the same condition in which it existed prior to
the time that any such alterations,  improvements or additions were made. Should
Tenant fail to remove any such  alterations,  improvements  or  additions  or to
repair such damage when  required by Landlord so to do pursuant to this  Section
17,  Landlord may do so, and the  reasonable  cost and expense  thereof shall be
paid by Tenant to Landlord as Additional Rent.

          Any personal property which shall remain in the Leased Premises or any
part thereof after the expiration or earlier  termination of this Lease shall be
deemed  to have been  abandoned  and  either  may be  retained  by  Landlord  as
Landlord's  property or may be  disposed  of in such manner as Landlord  may see
fit, provided that  notwithstanding  the foregoing Tenant shall, upon request of
Landlord  made no later  then ten (10) days  after  the  expiration  or  earlier
termination of this Lease,  promptly  remove from the Building any such personal
property at Tenant's own cost and expense. Should Tenant fail so to do, Landlord
may do so, and the reasonable  cost and expense  thereof shall be paid by Tenant
to Landlord as Additional  Rent.  If such personal  property or any part thereof
shall be sold by Landlord,  Landlord may receive and

                                       18
<PAGE>

retain the proceeds of such sale(s) as are  necessary to reimburse  Landlord for
its expenses in connection with the disposal of such personal property, with the
remainder, if any, being delivered to Tenant forthwith.  The covenants contained
in this Section 17 shall survive the  expiration or earlier  termination of this
Lease.

     18.  Miscellaneous Covenants.  Tenant shall faithfully  perform all of  the
          -----------------------
covenants and conditions to be performed and observed by Tenant hereunder and in
addition to those covenants and conditions which are set forth elsewhere herein,
Tenant agrees:

          A.  To  secure  and maintain in  effect  any  governmental  approvals,
licenses and permits as may be required  for  Tenant's use and  occupancy of the
Leased Premises.

          B.  To  comply  with  all  applicable  laws,  codes and regulations of
governmental  authorities applicable to Tenant's use and occupancy of the Leased
Premises and all rules and  regulations  of insurers of the Leased  Premises and
the  National  Board of Fire  Underwriters  as they  apply to  Tenant's  use and
occupancy of the Leased Premises.

          C.  Not  to use  or place any  curtains, blinds,  drapes, coverings or
signs over any exterior  windows or upon the window surfaces as would be visible
from the outside of the Building without the prior written approval of Landlord.

     19.  Rules and Regulations.  Tenant covenants and agrees  that Tenant,  its
          ---------------------
servants,  employees,  agents,  invitees,  licensees  and other  visitors  shall
observe  faithfully,  and  comply  strictly  with,  the  Rules  and  Regulations
contained in Exhibit "C", attached hereto and made a part hereof, and such other
and further  reasonable  Rules and Regulations as Landlord or Landlord's  agents
may, after written notice to Tenant, from time to time adopt,  provided all such
Rules and  Regulations  shall be applied to and enforced  against all tenants of
the  Building in a  nondiscriminatory  manner.  Nothing in this Lease  contained
shall be construed to impose upon Landlord any duty or obligation to enforce the
Rules and  Regulations  or terms,  covenants or conditions in any other lease as
against  any other  tenant,  and  Landlord  shall  not be  liable to Tenant  for
violation of the same by any other  tenant,  its  servants,  employees,  agents,
invitees,  licensees or other visitors.  Landlord acknowledges that Tenant shall
maintain  vending  machines on the Leased  Premises for the use of its employees
and invitees only, and consents to such installation.

     20.  Performance  of  Tenant's  Covenants.  If Tenant  fails to perform any
          ------------------------------------
covenant  or  observe  any  condition  to be  performed  or  observed  by Tenant
hereunder or acts in violation  of any  covenant or condition  hereof,  Landlord
may,  but shall not be required to on behalf of Tenant,  perform  such  covenant
and/or take such steps,  including entering upon the Leased Premises,  as may be
necessary  or  appropriate  to meet the  requirements  of any such  covenant  or
condition,  provided  that  Landlord  shall have given Tenant at least seven (7)
days prior written notice of Landlord's  intention to do so, unless an emergency
situation  exists,  in which  case  Landlord  shall  have the  right to  proceed
immediately;  and all costs  and  expenses  incurred  by  Landlord  in so doing,
including  reasonable  legal  fees,  shall be paid by  Tenant to  Landlord  upon
demand,   plus  interest  at  the  Overdue   Interest  Rate  from  the  date  of
expenditure(s) by Landlord,  as Additional Rent. Landlord's proceeding under the
rights reserved to Landlord 

                                       19
<PAGE>

under  this  Section  shall  not in any way  prejudice  or waive  any  rights as
Landlord might otherwise have against Tenant by reason of Tenant's default.

     21.  Eminent Domain.  In the event of the exercise of the power  of eminent
          --------------
domain  whereby  (A) such  portion of the  Building  is taken that access to the
Leased Premises is permanently  impaired thereby and reasonable alternate access
is not provided by Landlord  within a time period which is reasonable  under the
circumstances,  (B)  all or  substantially  all of the  Leased  Premises  or the
Building is taken, (C) if less than  substantially  all of the Building is taken
but  Landlord,  acting  in  good  faith,  determines  that  it  is  economically
unfeasible  to  continue  to operate the  uncondemned  portion as a  first-class
office building, or (D) if less than substantially all of the Leased Premises is
taken, but Tenant, acting in good faith,  determines that because of such taking
it is  economically  unfeasible  to  continue  to conduct  its  business  in the
uncondemned  portion  of the  Leased  Premises,  then in the case of (A) or (B),
either party, and in the case of (C), Landlord,  and in the ease of (D), Tenant,
shall have the right to terminate  this Lease as of the date when  possession of
that part which was taken is  required to be  delivered  or  surrendered  to the
condemning  authority;  and in such  ease all rent and  other  charges  shall be
adjusted to the date of termination. The foregoing right of termination shall be
applicable to the taking of any estate or interest whatsoever which, as a matter
of law,  would deprive  Landlord or Tenant of any right to possession (in common
with  others,  as to common areas of the  Building)  for any period in excess of
sixty (60) consecutive  days from the date of taking,  whether or not the taking
be in fee, for a term of years or of any other estate or interest;  and a taking
shall  include the  transfer of title or of any interest in the Building by deed
or other  instrument in settlement of or in lieu of transfer by operation of law
incident to condemnation proceedings.

          Tenant shall have no right to participate or share in any condemnation
claim,  damage award or settlement in lieu thereof with respect to any taking of
any nature; provided,  however, that Tenant shall not be precluded from claiming
or  receiving  payment for  Tenant's  relocation  and moving  expenses as may be
permitted  under  applicable  law so  long  as the  amount  of the  same  is not
subtracted from the award which Landlord is entitled to receive.

     22.  Casualty Damage. In  the  event  of  damage to  or destruction of  the
          ---------------
Leased Premises caused by fire or other casualty,  or of the entrances and other
common facilities necessary to provide normal access to the Leased Premises,  or
to other portions of the Building or its equipment  which portions and equipment
are necessary to provide services to the Leased Premises in accordance herewith,
Landlord shall undertake to make repairs and restorations as hereafter provided,
unless this Lease be  terminated  by Landlord or Tenant or unless any  mortgagee
which is entitled to receive casualty insurance proceeds fails to make available
to  Landlord  a  sufficient  amount of such  proceeds  to cover the cost of such
repairs and restoration.

          If  (A) the  damage is of  such nature or  extent,  in Landlord's sole
judgment,  that more than one hundred and eighty (180)  consecutive  days, after
commencement  of the work,  would be required (with normal work crews and hours)
to repair and restore the part of the Leased  Premises or the Building which has
been  damaged,  or (B) a  substantial  portion  of the  Leased  Premises  or the
Building is so damaged that, in Landlord's  sole  judgment,  it is uneconomic to
restore or repair the Leased  Premises or the  Building,  as the case may be, or
(C) less than two (2) years remain on the Lease Term,  Landlord  shall so advise
Tenant in the case 

                                       20
<PAGE>

described  in clauses  (A) and (B) above,  not later than ninety (90) days after
the occurrence of such casualty,  and in the case of clause (C) above, promptly,
and either party, in the case described in clause (A) above, or Landlord, in the
case  described  in  clauses  (B) or (C)  above,  for a period  of ten (10) days
thereafter,  shall have the right to terminate  this Lease by written  notice to
the other, as of the date specified in such notice, which termination date shall
be no later than thirty (30) days after the date of such notice. In the event of
such fire or other  casualty,  if this Lease is not  terminated  pursuant to the
terms  of this  Section  22,  if  sufficient  casualty  insurance  proceeds  are
available for use for such  restoration or repair,  and if this Lease is then in
full force and  effect,  Landlord,  commencing  not later than  ninety (90) days
following  the  occurrence  of  such  casualty,  shall  proceed  diligently  and
continuously to restore the Leased Premises to substantially its condition prior
to the  occurrence of the damage,  provided that Landlord shall not be obligated
to repair or restore any  alterations,  additions  or fixtures  which Tenant may
have installed  (whether or not Tenant has the right or the obligation to remove
the same or is  required  to leave  the same on the  Leased  Premises  as of the
expiration  or earlier  termination  of this Lease) unless  Tenant,  in a manner
satisfactory to Landlord, assures payment in full of all cost as may be incurred
by Landlord in connection therewith.  Landlord shall not insure any improvements
or  alterations  to the Leased  Premises in excess of those made pursuant to the
Final Plans,  or any  fixtures,  equipment or other  property of Tenant.  Tenant
shall  have the right,  at its sole  expense,  to insure the value of  leasehold
improvements  of Tenant made  pursuant  to Change  Orders or  otherwise  made by
Tenant in addition to Landlord's  Work,  fixtures,  equipment or other  property
located in the Leased  Premises,  for the purpose of providing funds to Landlord
to repair and restore the Leased Premises to  substantially  its condition prior
to the occurrence of the damage.  If there be any such  alteration,  fixtures or
additions  and Tenant does not assure or agree to assure  payment of the cost of
restoration  or repair as aforesaid,  Landlord shall have the right to determine
the  manner  in  which  the  Leased  Premises  shall  be  restored  so  as to be
substantially as the Leased Premises existed prior to the damage  occurring,  as
if such alterations,  additions or fixtures had not then been made or installed.
The  validity  and effect of this Lease  shall not be impaired in any way by the
failure of Landlord to complete  repairs and  restoration of the Leased Premises
or of the  Building  within one  hundred  eighty  (180)  consecutive  days after
commencement  of work,  even if Landlord had in good faith notified  Tenant that
the repair and restoration could be completed within such period,  provided that
Landlord proceeds diligently with such repair and restoration; provided, further
however that Landlord's  portion of such  restoration  shall be completed within
three hundred sixty (360) days of the occurrence of such casualty.

          In  the  case of  damage to  the  Leased Premises  not  caused by  the
negligence or other  tortious acts of Tenant which is of a nature or extent that
Tenant's  continued  occupancy is  substantially  impaired the Annual Fixed Rent
otherwise  payable by Tenant hereunder shall be equitably abated or adjusted for
the  duration  of such  impairment.  Anything  to the  contrary  in  this  Lease
notwithstanding,  expressed  or implied,  Landlord  shall have no  liability  to
Tenant  for and shall have no duty to  repair,  replace  or  restore  any damage
whatsoever,  occurring  as a result of  leakage or seepage of water or any other
liquid from any source  whatsoever,  or  breakage  of any pipes,  mains or other
plumbing located in or about the Building, or snow, frost, steam, excessive heat
or cold, falling plaster,  sewage,  gas, odors, noise, or by air conditioning or
heating apparatus, provided, however, Landlord shall repair, replace and restore
all damage to the  

                                       21
<PAGE>

Building structure,  systems and fixtures. Tenant shall be responsible to insure
and/or repair all of Tenant's leasehold improvements and all equipment, fixtures
and personal property located in the Leased Premises.

     23.  Hold  Harmless,  Public Liability Insurance,  Waiver  of  Subrogation.
          ---------------------------------------------------------------------
Tenant covenants and agrees to exonerate,  indemnify,  defend,  protect and save
Landlord,  owner of the Lot and Landlord's managing agent, if any, harmless from
and against any and all claims, demands,  expenses, losses, suits and damages as
may be  occasioned  by reason of (A) any  accident  or matter  occurring  on the
Leased  Premises,  causing  injury to persons or damage to property  (including,
without limitation,  the Leased Premises),  unless such accident or other matter
resulted from the negligence or otherwise tortious act of Landlord or Landlord's
agents,  contractors  or  employees,  (B) the  failure  of  Tenant  to fully and
faithfully  perform the obligations and observe the conditions of this Lease, or
(C) the negligence or otherwise tortious act of Tenant, its agents,  contractors
or employees  or anyone in or about the Building on behalf or at the  invitation
or right of Tenant.

          Landlord covenants and agrees to exonerate, indemnify, defend, protect
and save Tenant harmless from and against any and all claims, demands, expenses,
losses,  suits and damages as may be occasioned by reason of (A) any accident or
matter  occurring on or about the Building or Lot,  causing injury to persons or
damage to property (including,  without limitation, the Leased Premises), unless
such accident or other matter resulted from the negligence or otherwise tortious
act of Tenant or Tenant's agents,  contractors or employees,  (B) the failure of
Landlord  fully and  faithfully  to perform  the  obligations  and  observe  the
conditions of this Lease,  or (C) the  negligence  or otherwise  tortious act of
Landlord,  its management  company and their respective  agents,  contractors or
employees or anyone in or about the  Building on behalf of or at the  invitation
or right of Landlord.

          Tenant  shall keep in force at  its own expense comprehensive  general
liability insurance (including a contractual liability insurance endorsement) in
companies  acceptable to Landlord  sufficient to cover such  indemnification and
naming as insured Landlord, owner of the Lot, Landlord's managing agent, if any,
and Tenant against claims for personal injury" including bodily injury, death or
property damage in amounts not less than $1,000,000 or such higher limits as may
be customary in the commercial  office  market,  and Tenant will further deposit
the  policy  or  policies  of such  insurance,  or  certificates  thereof,  with
Landlord.  Said policy or policies of insurance or  certificates  thereof  shall
have  attached  thereto an  endorsement  that such policy  shall not be canceled
without at least ten (10) days prior written  notice to Landlord and  Landlord's
managing agent,  if any, and that no act or omission of Tenant shall  invalidate
the interest of Landlord under said insurance.  Landlord shall keep in force and
effect such broad form policy or policies of insurance as shall  provide for the
full replacement value of the Building.

          Landlord  and  Tenant  hereby  release  the  other  from  any  and all
liability or  responsibility  to the other or anyone  claiming  through or under
them by way of  subrogation  or  otherwise  for any loss or damage  to  property
covered by any  insurance  then in force or which should have been kept in force
and effect in accordance with the provisions of this Lease, even if such fire or
other  casualty  shall have been caused by the fault or  negligence of the other
party, or 

                                       22
<PAGE>

anyone  for whom such party may be  responsible,  provided,  however,  that this
release  shall be  applicable  and in force and effect only to the extent of and
with respect to any loss or damage  occurring  during such time as the policy or
policies of insurance  covering said loss shall contain a clause or  endorsement
to the  effect  that this  release  shall not  adversely  affect or impair  said
insurance or prejudice the right of the insured to recover thereunder.

     24.  Mortgagee  and  Other  Agreements.  In  the  event  any  person, firm,
          ---------------------------------
corporation or other entity who is a party to any instrument to which this Lease
is subject or subordinate  (including,  without limitation,  any mortgage now or
hereafter placed upon the Building or Lot or on any interest created therein) or
their successor(s), succeeds thereunder to the interest of Landlord hereunder in
the Building or the Lot, or acquires the right to  possession of the Building or
the Lot, such person, firm,  corporation or other entity shall not be (A) liable
for any act or omission  of the party named above as Landlord  under this Lease;
(B) liable for the performance of Landlord's covenants hereunder which arise and
accrue prior to such person, firm, corporation or other entity succeeding to the
interest  of Landlord  hereunder  or  acquiring  such right to  possession;  (C)
subject to any offsets or  defenses  which  Tenant may have at any time  against
Landlord  except as provided  in the Lease or at law;  and (D) bound by any rent
which  Tenant may have paid  previously  for more than one (1) month in advance;
and (E) bound by any amendment or modification  hereof relating to the reduction
of rent, shortening of term, or effecting a cancellation or surrender hereof and
made  without the consent of such  person,  firm,  corporation  or other  entity
unless such cancellation or surrender is provided for in this Lease.

          Tenant and Landlord each agrees, from time to time as may be requested
by the other, to execute,  acknowledge and deliver an estoppel letter certifying
to such party as Tenant or Landlord  reasonably  may  designate,  including  any
mortgagee,  assignee or sublessee, as the case may apply and to the extent true,
that this Lease is in full force and effect and has not been  amended,  modified
or superseded,  that Landlord has satisfactorily completed all construction work
required by this Lease,  that Tenant has accepted the Leased Premises and is now
in  possession  thereof,  that Tenant has no defense,  offsets or  counterclaims
hereunder or otherwise against Landlord with respect to this Lease or the Leased
Premises and that  Landlord or Tenant is not in default  hereunder (or if any of
the  foregoing not be the case,  specifying in reasonable  detail the extent and
nature  thereof),  that Tenant has no knowledge of any pledge or  assignment  of
this Lease or rentals hereunder,  that rent is accruing under this Lease but has
not been paid more than one (1) month in advance  and the date to which rent has
been  paid;  and any  other  instrument  as may be  reasonably  requested  to be
executed by Tenant or Landlord by any  mortgagee  of the Lot or the  Building or
any interest  therein,  or any  prospective  assignee or sublessee of the Leased
Premises, so long as the rights of the party delivering the estoppel as provided
for by this Lease are not  materially  affected  by any such  other  instrument.
Tenant's estoppel letter shall be in the form of Exhibit "D" attached hereto and
made a part  hereof,  or in such other form as Landlord or its  mortgagee  shall
hereafter request.

     25.  Subordination and Attornment. This Lease and the estate, interest  and
          ----------------------------
rights hereby created are  subordinate  to any mortgage now or hereafter  placed
upon the Lot, the Building or any estate or interest therein, including, without
limitation,  any  mortgage  on  any  leasehold  estate,  and  to  all  renewals,
modifications,  consolidations,  replacements and extensions of the same as well
as any substitutions therefor. Tenant agrees that in the event any person, firm,


                                       23
<PAGE>

corporation or other entity  acquires the right to possession of the Lot and the
Building  including  any  mortgagee  or holder of any estate or interest  having
priority  over this Lease,  Tenant  shall,  if requested  by such person,  firm,
corporation  or other  entity,  attorn to and become the tenant of such  person,
firm, corporation or other entity, upon the same terms and conditions as are set
forth herein for the balance of the Lease Term, provided that such person, firm,
corporation  or other entity shall enter into a  non-disturbance  agreement with
Tenant in form and substance reasonably  satisfactory to Tenant and its counsel.
Notwithstanding the foregoing,  any mortgagee may, at any time,  subordinate its
mortgage  to this  Lease,  without  Tenant's  consent,  by notice in  writing to
Tenant,  and thereupon this Lease shall be deemed prior to such mortgage without
regard to their respective  dates of execution and delivery,  and in that event,
such  mortgagee  shall have the same rights with respect to this Lease as though
it had been  executed  prior to the  execution  and  delivery  of the  mortgage.
Landlord  shall  obtain,  prior  to the  Commencement  Date,  a  non-disturbance
agreement  in form and  substance  reasonably  satisfactory  to  Tenant  and its
counsel, from the Landlord's mortgagee.

          Tenant,  if requested by Landlord,  shall execute any such instruments
in recordable form as may be reasonably required by Landlord in order to confirm
or effect the subordination,  non-disturbance and attornment  provisions of this
Section.

     26.  Assignment and Subletting.  Tenant shall not assign, pledge,  mortgage
          -------------------------
or otherwise  transfer or encumber this Lease, nor sublet all or any part of the
Leased  Premises or permit the same to be occupied or used by anyone  other than
Tenant or its employees without Landlord's prior written consent,  which consent
shall not be unreasonably withheld or delayed.  Tenant shall not solicit current
tenants of the  Building  nor  advertise  any rental rate below the then current
market rental rate for the Building.  Notwithstanding  anything in the foregoing
to the  contrary,  Tenant  may  assign or sublet  the  Leased  Premises  without
Landlord's consent to a corporation which is a parent or subsidiary of Tenant or
is affiliated with Tenant in a common group of corporations, or any purchaser of
same, provided that no such assignment or subletting shall relieve Tenant of its
obligations and liabilities hereunder.

          Tenant's request for consent shall be in writing and contain the name,
address,  and description of the business of the proposed assignee or subtenant,
its  most  recent  financial  statement  and the  other  evidence  of  financial
responsibility,  its  intended  use of the  Leased  Premises,  and the terms and
conditions of the proposed assignment or subletting.

          Within ten (10) days from  receipt  of such  request,  Landlord  shall
either:  (A) grant or refuse  consent;  or (B) elect to  require  Tenant  (i) to
execute an  assignment  of lease or sublease of Tenant's  interest  hereunder to
Landlord or its designee  upon the same terms and  conditions  as are  contained
herein,  together with an  assignment  of Tenant's  interest as sublessor in any
such  proposed  sublease,   except  that  no  subtenant  or  assignee  requiring
Landlord's  approval  hereunder  shall enjoy the rights  granted to Tenant under
Sections  42, 43 and 44  hereof,  or (ii) if the  request  is for  consent  to a
proposed  assignment of this Lease,  to terminate this Lease and the term hereof
effective as of the date such assignment would have otherwise become  effective.
In the event that  Landlord has not notified  Tenant of its election as provided
herein, Landlord shall be deemed to have consented to the proposed assignment or
sublease.

                                       24
<PAGE>

          Each  assignee  hereunder shall  assume and be  deemed to  have assume
this Lease and shall be and remain liable  jointly and severally with Tenant for
all payments and for the due performance of all terms, covenants, conditions and
provisions  herein  contained on Tenant's part to be observed and performed.  No
assignment  shall be binding upon Landlord  unless the assignee shall deliver to
Landlord an instrument in recordable form containing a covenant of assumption by
the  assignee,  but the failure or refusal of assignee to execute the same shall
not release assignee from its liability as set forth herein.

          All the  foregoing  notwithstanding,  Tenant  shall not enter into any
lease, sublease,  license,  concession or other agreement for the use, occupancy
or utilization of the Leased Premises or any portion thereof, which provides for
a rental or other payment for such use,  occupancy or utilization based in whole
or in part on the income or profits  derived  by any  person  from the  property
leased,  used,  occupied  or  utilized  (other  than an amount  based on a fixed
percentage  or  percentages  of receipts or sales).  Any such  purported  lease,
sublease,  license,  concession or other  agreement shall be absolutely void and
ineffective as a conveyance or any right or interest in the  possession,  use or
occupancy of any part of the Leased Premises.

          Any consent by Landlord  hereunder  shall not  constitute  a waiver of
strict  future  compliance  by Tenant of the  provisions of this Section 26 or a
release  of Tenant  from the full  performance  by  Tenant of any of the  terms,
covenants, provisions, or conditions in this Lease contained.

     27.  Default. Any other provisions in the  Lease notwithstanding, it  shall
          -------
be an  Event  of  Default  under  this  Lease  if (A)  Tenant  fails  to pay any
installment  of Fixed  Rent,  Additional  Rent or other  sum  payable  by Tenant
hereunder  when due and such  failure  continues  for a period  of ten (10) days
after  written  notice  given by or on behalf of Landlord  to Tenant,  provided,
however, Landlord need not give any such written notice, and Tenant shall not be
entitled  to any such  period of grace,  more than once in any twelve (12) month
period,  (B) Tenant  vacates the Leased  Premises or uses or occupies the Leased
Premises  otherwise than as permitted by Sections 1 and 10 hereof, or assigns or
sublets,  or  purports  to assign to  sublet,  the Leased  Premises  or any part
thereof  otherwise  than in the  manner  and upon the  conditions  set  forth in
Section 26 hereof,  (C) Tenant fails to observe or perform any other covenant or
agreement of Tenant herein  contained and such failure  continues  after written
notice  given by or on behalf of  Landlord  to Tenant for more than  thirty (30)
days and such additional  time, if any, as is reasonably  necessary to cure such
failure,  provided Tenant commences to cure such failure within such thirty (30)
day period and diligently  thereafter  prosecutes  such cure to completion,  (D)
without  Landlord's prior written consent,  Tenant removes or attempts to remove
or manifests an  intention  to remove any or all of Tenant's  property  from the
Leased Premises otherwise than in the ordinary and usual course of business, (E)
Tenant makes any assignment for the benefit of creditors;  Tenant commits an act
of  bankruptcy  or files a  petition  or  commences  any  proceeding  under  any
bankruptcy or insolvency law; a petition is filed or any proceeding is commenced
against  Tenant under any  bankruptcy  or  insolvency  law and such  petition or
proceeding  is not  dismissed  within sixty (60) days;  Tenant is  adjudicated a
bankrupt;   Tenant  by  any  act  indicates  its  consent  to,  approval  of  or
acquiescence in, or a court approves,  a petition filed or proceeding  commenced
against  Tenant  under any  bankruptcy  or  insolvency  law; a receiver or other
official is appointed for Tenant or for a substantial part of Tenant's assets or
for Tenant's  interests in this

                                       25
<PAGE>

Lease; any attachment or execution against a substantial part of Tenant's assets
or of Tenant's  interest in this Lease  remains  unstayed or  undismissed  for a
period of more than twenty (20) days; a substantial  part of Tenant's  assets or
of  Tenant's  interest  in this  Lease is taken by legal  process  in any action
against Tenant,  or (F) any of the foregoing occur as to any guarantor or surety
of Tenant's  performance  under this Lease, or such guarantor or surety defaults
on any provision under its guaranty or suretyship agreement.

     28.  Landlord's Remedies.
          -------------------

          A.  If  an  Event  of  Default hereunder  shall have  happened and  be
continuing, Landlord may, at its option:

               (i)   declare due and payable and sue for and recover, all unpaid
Fixed Rent for the unexpired  period of the Lease Term (and also all  Additional
Rent as the amount(s) of same can be  determined or reasonably  estimated) as if
by the terms of this Lease the same were payable in advance,  together  with all
legal fees and other  expenses  incurred  by  Landlord  in  connection  with the
enforcement of any of Landlord's rights and remedies  hereunder,  such amount to
be discounted in accordance with Section 28.F. hereof, and/or

               (ii)  collect or  bring action for such Fixed Rent and Additional
Rent as being  rent in  arrears,  or may enter  judgment  for  possession  in an
amicable  action,  or may file a Proof of Claim in any  bankruptcy or insolvency
proceeding  for such Fixed Rent and  Additional  Rent,  or  institute  any other
proceedings,  whether similar or dissimilar to the foregoing, to enforce payment
thereof, and/or

               (iii) terminate the  Lease Term by giving written  notice thereof
to Tenant  and,  upon the giving of such  notice,  the Lease Term and the estate
hereby  granted  shall  expire and  terminate  with the same force and effect as
though  the  date of  such  notice  was  the  date  hereinbefore  fixed  for the
expiration of the Lease Term,  and all rights of Tenant  hereunder  shall expire
and terminate, but Tenant shall remain liable as hereinafter provided, and/or

               (iv)  exercise  any  other  rights  and  remedies  available   to
Landlord at law or in equity provided hereunder.

          B.  If  any Event of  Default shall have  happened and be  continuing,
Landlord  may,  whether  or not the  Lease  Term has been  terminated  as herein
provided,  re-enter  and  repossess  the Leased  Premises or any part thereof by
force, summary  proceedings,  ejectment or otherwise and Landlord shall have the
right to remove all persons and property  therefrom.  Landlord shall be under no
liability for or by reason of any such entry,  repossession  or removal;  and no
such re-entry or taking of possession of the Leased  Premises by Landlord  shall
be  

                                       26
<PAGE>

construed as an election on Landlord's part to terminate the Lease Term unless a
written  notice  of such  intention  be  given to  Tenant  pursuant  to  Section
28(A)(iii)  or unless  the  termination  of this  Lease be decreed by a court of
competent jurisdiction.

          C.  At any time or from  time to time  after  the repossession  of the
Leased  Premises or any part thereof  pursuant to Section 28(B),  whether or not
the Lease Term  shall  have been  terminated  pursuant  to  Section  28(A)(iii),
Landlord,  notwithstanding anything elsewhere herein to the contrary, shall make
all  commercially  reasonable  efforts to mitigate  any damages to Landlord as a
result of any default by Tenant hereunder,  including,  without  limitation,  to
relet all or any part of the Leased  Premises for the account of Tenant for such
term or terms  (which  may be  greater  or less  than  the  period  which  would
otherwise have constituted the balance of the Lease Term) and on such conditions
(which may include  concessions or free rent) and for such uses as Landlord,  in
its commercially reasonable discretion,  may determine, and Landlord may collect
and receive any rents  payable by reason of such  reletting.  For the purpose of
such reletting,  Landlord may decorate or make repairs, changes,  alterations or
additions in or to the Leased  Premises or any part thereof to the extent deemed
by Landlord desirable or convenient,  and the cost of such decoration,  repairs,
changes,  alterations or additions  shall be charged to and be payable by Tenant
as Additional Rent hereunder, as well as any reasonable brokerage and legal fees
expended by Landlord.

          D.  Subject to the results of Landlord's efforts to mitigate  damages,
as aforesaid, no expiration or termination of the Lease Term pursuant to Section
28(A)(iii),  by operation of law or otherwise, and no repossession of the Leased
Premises or any part thereof  pursuant to Section  28(B),  or otherwise,  and no
reletting of the Leased  Premises or any part thereof  pursuant to Section 28(C)
shall relieve Tenant of its liabilities and obligations hereunder,  all of which
shall survive such expiration, termination, repossession or reletting.

          E.  In the event of any  expiration  or termination  of this  Lease or
repossession  of the  Leased  Premises  or any  part  thereof  by  reason  of an
occurrence  of an Event of Default,  and Landlord has not elected to  accelerate
rent pursuant to Section 28(A)(i),  Tenant shall pay to Landlord the Fixed Rent,
Additional  Rent and other sums  required to be paid by Tenant to and  including
the date of such  expiration,  termination  or  repossession;  and,  thereafter,
Tenant shall,  until the end of what would have been the expiration of the Lease
Term in the absence of such expiration, termination or repossession, and whether
or not the Leased  Premises or any part thereof shall have been relet, be liable
to Landlord  for, and shall pay to Landlord,  as liquidated  and agreed  current
damages,  the Fixed Rent,  Additional Rent and other sums which would be payable
under this Lease by Tenant in the  absence of such  expiration,  termination  or
repossession,  less the net proceeds,  if any, of any reletting effected for the
account of Tenant pursuant to Section 28(C),  after deducting from such proceeds
all  of  Landlord's  reasonable  expenses  in  connection  with  such  reletting
(including,  without  limitation,  all  related  repossession  costs,  brokerage
commissions,  legal expenses,  attorneys' fees, employees' expenses,  alteration
costs and expenses of  preparation  for such  reletting).  Tenant shall pay such
current  damages on the days on which the Fixed  Rent  would  have been  payable
under this Lease in the absence of 

                                       27
<PAGE>

such expiration,  termination or repossession, and Landlord shall be entitled to
recover the same from Tenant on each such day.

          F.  At any time after such expiration or  termination of this Lease or
repossession  of the  Leased  Premises  or any part  thereof  by  reason  of the
occurrence of an Event of Default,  whether or not Landlord shall have collected
any current  damages  pursuant to Section  28(E),  Landlord shall be entitled to
recover from Tenant,  and Tenant shall pay to Landlord on demand,  unless Tenant
has paid the whole of accelerated rent pursuant to Section 28(A)(i),  as and for
liquidated  and agreed  final  damages for  Tenant's  default and in lieu of all
current damages beyond the date of such demand (it being agreed that it would be
impracticable or extremely difficult to fix the actual damages), an amount equal
to the excess,  if any, of (i) Fixed Rent,  Additional Rent and other sums which
would be payable  under this Lease for the  remainder of the Lease Term from the
date of such demand (or, if it be earlier,  the date to which  Tenant shall have
satisfied in full its  obligations  under Section 28(E) to pay current  damages)
for what would have been the then unexpired term of this Lease in the absence of
such  expiration,  termination  or  repossession,  discounted at the rate of six
percent  (6%) per  annum,  over (ii) the then fair  rental  value of the  Leased
Premises for the same period,  discounted at a like rate. If any statute or rule
of law shall validly limit the amount of such  liquidated  final damages to less
than the amount  above agreed  upon,  Landlord  shall be entitled to the maximum
amount allowable under such statute or rule of law.

          G.  Tenant,  in  consideration  for the  execution  of this  Lease  by
Landlord and for the  covenants and  agreements  on the part of Landlord  herein
contained,   and  fully  comprehending  the  relinquishment  of  certain  rights
including rights of pre-judgment notice and hearing, hereby expressly authorizes
any attorney of any Court of Record to accept  service of process for, to appear
for,  and to confess  judgment  against  Tenant in any and all  actions  brought
hereunder by Landlord against Tenant to recover  possession from time to time of
the Leased  Premises (and Tenant agrees that upon the entry of each judgment for
said  possession a Writ of  Possession  or other  appropriate  process may issue
forthwith).

          H.  INTENTIONALLY DELETED.

          I.  In any amicable action for ejectment Landlord shall first cause to
be filed in such action an affidavit made by it or someone acting for it setting
forth the facts  necessary  to authorize  the entry of judgment,  of which facts
such affidavit shall be conclusive evidence, and if a true copy of this Lease be
filed in such  action,  it shall  not be  necessary  to file the  original  as a
warrant of  attorney,  any rule of court,  custom or  practice  to the  contrary
notwithstanding.  The authority to confess  judgment  against  Tenant  hereunder
shall  not be  exhausted  by one  (1)  exercise  thereof,  but  judgment  may be
confessed as provided  herein from time to time as often as any Event of Default
occurs under this Lease,  and such  authority may be exercised as well after the
expiration  of the Lease  Term  and/or  during or after  the  expiration  of any
extended or renewal term.

                                        28
<PAGE>

          J.  No  right or remedy herein conferred upon  or reserved to Landlord
is intended to be exclusive of any other right or remedy herein by law provided,
but each shall be  cumulative  and in addition  to every  right or remedy  given
herein or now or hereafter existing at law or in equity or by statute.

          K.  No waiver by Landlord  of any breach by Tenant of any of  Tenant's
obligations,  agreements or covenants herein shall be a waiver of any subsequent
breach or of any obligation, agreement or covenant, nor shall any forbearance by
Landlord  to seek a remedy for any breach by Tenant be a waiver by  Landlord  or
any rights and  remedies  with respect to such or any subsequent breach.

          L.  In the event of a breach or threatened  breach by Tenant of any of
the covenants or provisions hereof,  Landlord shall have the right of injunction
and right to  invoke  any  remedy  allowed  at law or in  equity as if  re-entry
summary proceedings and other remedies were not herein provided for.

          M.  Tenant  hereby  expressly  waives any and all rights of redemption
granted  by or under any  present  or future  laws in the event of Tenant  being
evicted or  dispossessed  for any cause,  or in the event of Landlord  obtaining
possession of the Leased  Premises,  by reason of the violation by Tenant of any
of the covenants and conditions of this Lease, or otherwise.

     29.  Landlord's Costs  and  Expenses. Tenant shall pay  upon demand  all of
          -------------------------------
Landlord's  costs,  charges and expenses,  including the fees and  out-of-pocket
expenses of legal counsel,  agents and others  retained by Landlord  incurred in
enforcing  Tenant's  obligations  hereunder  or  incurred  by  Landlord  in  any
litigation,  negotiation or transaction in which Tenant causes Landlord, without
Landlord's fault, to become involved or concerned, together with interest at the
Overdue  Interest Rate from the date incurred by Landlord to the date of payment
by Tenant; provided however, that in the event of litigation between the parties
that is concluded  by a final  unappealable  judgment,  the  attorneys  fees and
expenses of the prevailing party shall be paid by the non-prevailing party.

     30.  Intentionally Omitted.

     31.  Successors and Assigns. The obligations of this Lease shall be binding
          ----------------------
upon and  inure to the  benefit  of the  parties  hereto  and  their  respective
successors and assigns;  provided that Landlord and each successive owner of the
Building and/or the Lot shall be liable only for obligations accruing during the
period of its  ownership  or interest in the  Building or the Lot;  and from and
after the  transfer by Landlord or such  successive  owner of its  ownership  or
other  interest  in the  Building  or the Lot,  Tenant  shall look solely to the
successors in title for the performance of Landlord's obligations hereunder. The
liability of Landlord or any  successive  owner of the  Building  and/or the Lot
hereunder and all of its officers, employees, shareholders or 

                                       29
<PAGE>

joint  venturers  or  partners,  if any,  whether  general or limited,  shall be
limited to Landlord's  estate or other title or interest in the Building  and/or
the Lot.

     32.  Waivers. No delay or  forbearance by Landlord  in exercising any right
          -------
or remedy  hereunder or in  undertaking or performing any act or matter which is
not  expressly  required  to be  undertaken  by  Landlord  shall  be  construed,
respectively,  to be a waiver of Landlord's rights or to represent any agreement
by Landlord to undertake or perform such act or matter thereafter.

     33.  Waiver  of  Trial by  Jury.  It  is  mutually  agreed by  and  between
          --------------------------
Landlord and Tenant that the respective  parties hereto shall and they hereby do
waive trial by jury in any action,  proceeding or counterclaim brought by either
of the parties hereto against the other on any matter whatsoever  arising out of
or in any way  connected  with this Lease,  the  relationship  of  Landlord  and
Tenant,  Tenant's use of or occupancy of the Leased Premises and/or any claim of
injury or damage and any emergency  statutory or any other statutory  remedy. It
is further  mutually  agreed that in the event  Landlord  commences  any summary
proceeding for nonpayment of rent, Tenant will not interpose any counterclaim of
whatever nature or description in any such proceeding.

     34.  Severability.  Each  covenant  and agreement in  this Lease shall  for
          ------------
all  purposes  be  construed  to  be a  separate  and  independent  covenant  or
agreement.  If any provision in this Lease or the  application  thereof shall to
any extent be invalid, illegal or otherwise unenforceable, the remainder of this
Lease,  and the application of such provision other than as invalid,  illegal or
unenforceable,  shall not be affected thereby; and such provisions in this Lease
shall be valid and enforceable to the fullest extent permitted by law.

     35.  Notices.  All  notices or other  communications  required or permitted
          -------
hereby shall be effective  only if the same are in writing and are signed by the
party giving the notice or by an agent or other person  authorized in writing to
so act on behalf of such party. Notices to Tenant may be given by the leaving of
the same at the  Leased  Premises  during  business  hours or by  registered  or
certified mail, return receipt requested, addressed to Tenant at the address set
forth in  Section  1  hereto;  with a copy to  Buchanan  Ingersoll  Professional
Corporation,   Eleven  Penn  Center,  1835  Market  Street,   Fourteenth  Floor,
Philadelphia,  Pennsylvania 19103, Attention:  Kevin J. Silverang,  Esquire, and
notices to Landlord  shall be given by  registered  or  certified  mail,  return
receipt  requested to the address set forth in Section 1 hereof,  with a copy to
Drinker Biddle & Reath LLP, Philadelphia  National Bank Building,  1345 Chestnut
Street,  Philadelphia,   Pennsylvania  19107-3496,   Attention:  Karl  Piirimae,
Esquire. All notices shall be deemed given unless otherwise specified herein, on
the date when same are delivered, if delivered, or on the date when the same are
deposited in the mail.

     36.  Amendment and Modifications.  This Lease contains the entire agreement
          ---------------------------
between the parties hereto,  and shall not be amended,  modified or supplemented
unless by agreement in writing  signed by both  Landlord and Tenant and the same
shall not be valid unless  approved in writing by all  mortgagees and holders of
any estate or interest  in the  Building or the Lot by virtue of leases or other
instruments expressly referred to herein or which are then of record.

                                       30
<PAGE>

     37.  Security  Deposit.  Upon execution of this Lease, Tenant shall deposit
          -----------------
the sum set forth in Section 1 hereof with  Landlord as a security  deposit (the
"Security Deposit") to be held by Landlord as security for Tenant's  performance
of all  Tenant's  obligations  under this  Lease.  Landlord  may  commingle  the
Security  Deposit with its general funds and any interest earned on the Security
Deposit shall belong to Landlord.  Landlord,  in its sole discretion,  may apply
the Security  Deposit to cure any Event of Default under this Lease. If any such
application  is made,  upon notice by Landlord to Tenant,  Tenant shall promptly
replace  the amount so  applied.  If there has been no Event of  Default  within
thirty (30) days after expiration or earlier termination of this Lease, Landlord
shall return the entire balance of the Security  Deposit to Tenant.  Tenant will
not look to any  foreclosing  mortgagee  on the Lot or Building or any  interest
therein  for the  return  of the  Security  Deposit  unless  the  mortgagee  has
expressly  assumed  Landlord's  obligation  under  this  Lease  or has  actually
received the balance of the Security  Deposit.  In the event  Landlord sells the
Lot and Building and  transfers  the Security  Deposit to a new owner of the Lot
and  Building,  Tenant shall look solely to such new owner for the return of the
balance of the Security Deposit.

     38.  Environmental Matters.
          ----------------------

          A.  Tenant shall promptly  deliver  to Landlord copies  of any of  the
following documents that Tenant receives or prepares:

               (i)   applications   or   other   materials  regarding  the  Lot,
Building,  or Leased Premises submitted to any governmental agency in compliance
with Environmental Statutes;

               (ii)  any notifications regarding the  Lot, Building,  or  Leased
Premises submitted to any person pursuant to Environmental Statutes;

               (iii) any permit,  license, approval,  amendment or  modification
thereto granted  regarding the Lot,  Building,  or Leased  Premises  pursuant to
Environmental Statutes;

               (iv)  any record or manifest required to  be maintained regarding
the Lot, Building, or Leased Premises pursuant to Environmental Statutes; and

               (v)   any correspondence, notice of  violation,  summons,  order,
complaint or other  document  received by Tenant or its lessees,  sublessees  or
assigns (if permitted),  pertaining to the Lot, Building, or Leased Premises and
to compliance with any Environmental Statutes.

               "Environmental  Statutes"  shall mean all  statutes,  ordinances,
regulations,  orders and  requirements  of common law  regulating  environmental
matters  concerning (a) activities at the Lot, Building or Leased Premises,  (b)
repairs or construction of any improvements  located on the Lot, (c) handling of
any materials,  (d) discharges to the air, soil,  surface water or ground water,
and (e) storage,  treatment  or disposal of any waste at or  connected  with any
activity at the Lot, Building or Leased Premises.

                                       31
<PAGE>

          B.  In  the event that  Landlord or Landlord's  mortgagee  performs or
causes to perform an  investigation  of the Lot or  Building of any of the below
described  matters,  Tenant,  at  Landlord's or such  mortgagee's  sole cost and
expense,  and,  in any event,  not more than once during each Term of the Lease,
shall  cooperate  with  Landlord or  Landlord's  mortgagee  with respect to such
investigation:

               (i)   compliance  at the Lot, Building,  or Leased  Premises with
Environmental Statutes;

               (ii)  the presence  of hazardous  substances or  contamination at
the Lot, Building, or Leased Premises;

               (iii) the presence  at the Lot, Building, or  Leased Premises  of
polychlorinated  biphenyls,  substances  containing  polychlorinated  biphenyls,
asbestos, materials containing asbestos, or ureaformaldehyde foam insulation;

               (iv)  the presence at the Lot of (a) a wetland or other "water of
the United  States" for purposes of Section 404 of the federal  Clean Water Act,
33 U.S.C.  ss. 1344,  or any similar area  regulated  under any state law, (b) a
flood plain or other flood hazard area as defined  pursuant to the  Pennsylvania
Flood Plain  Management  Act, Pa.  Stat.  tit. 3 2, ss. 679. 101 to .601 (Purdon
Sup.  1989),  (c) a portion of the  coastal  zone for  purposes  of the  federal
Coastal Zone Management Act, 16 U.S.C. ss.ss.  1451-1464,  or (d) any other area
development of which is specifically  restricted  under applicable law by reason
of its physical characteristics or prior use;

               (v)   the presence at the Lot,  Building,  or Leased  Premises of
radon-products; or

               (vi)  the presence at the  Lot, Building, or  Leased Premises  of
tanks  presently or formerly  used for the storage of any liquid or gas above or
below ground.

          C.  In the  event any present  or future Federal,  State or  municipal
statute,  ordinance,  law,  rule or  regulation  requires  Landlord or Tenant to
obtain a clearance certificate or Declaration of  Non-Applicability,  similar or
dissimilar  to  those  required  by  the  New  Jersey   Environmental   Clean-Up
Responsibility  Act,  upon the  expiration or earlier  termination  of the Lease
Term,  or upon the sale of the Lot or  Building by  Landlord,  Tenant will apply
therefor,  or execute and deliver an  application  therefor to Landlord  without
delay,  and take such action as may be necessary under such applicable  statute,
ordinance,  law,  rule or  regulation to obtain such  clearance  certificate  or
Declaration of Non-Applicability.

     39.  Brokers.  Landlord and Tenant each represent  and warrant to the other
          -------
that it has not  engaged  any  broker,  finder or other  person  other  than the
broker,  if any,  listed  in  Section I hereof,  who  would be  entitled  to any
commission or fees in respect of the negotiation,  execution or delivery of this
Lease.  Landlord and Tenant each agree to indemnify  and hold harmless the other
against any loss,  cost,  liability or expense incurred by the other as a result
of any claim  asserted by any other broker,  finder or other person on the basis
of any  arrangements  or  agreements  made or alleged to have been made by or on
behalf  of the  other.  Landlord  shall  be  

                                       32
<PAGE>

responsible for the payment of a brokerage fee to the broker listed in Section I
at  Landlord's  scheduled  commission  rate or as  otherwise  agreed in  writing
between Landlord and such broker.

     40.  Financial Statements.  Tenant is a publicly  traded company and  shall
          --------------------
deliver  to  Landlord  a copy of  Tenant's  published  annual  report as soon as
available following the end of Tenant's fiscal year and, within thirty (30) days
of  Landlord's  reasonable  request  therefor,  shall furnish a copy of the most
recent financial statement prepared by Tenant.

     41.  Options to Extend. Provided no Event of  Default under this Lease  has
          -----------------
occurred and is continuing,  Tenant shall have the right and option, exercisable
by  giving  Landlord  written  notice  at  least  nine (9)  months  prior to the
expiration  of the then current Lease Term, to extend the Lease Term for two (2)
additional  periods of five (5) years each (each, an "Extended  Term") and, upon
the giving of such notice,  this Lease shall  automatically be extended for such
five (5) year periods and no further agreement of extension need be executed. In
the event that Tenant fails to give such notice to Landlord as herein  provided,
this Lease shall  automatically  terminate at the end of the then current  Lease
Term and Tenant shall have no further right or option to extend this Lease. Each
Extended Term shall be upon the same covenants,  agreements,  provisions,  terms
and  conditions  as during the original  Lease Term except that the Annual Fixed
Rent during each  Extended  Term shall equal the Fair Market Rent for the Leased
Premises. The "Fair Market Rent" for the Leased Premises shall mean the rent for
comparable space in a Class A mid-rise  building in upper Bucks County for a new
tenant  entering into a new five (5) year lease and with the  Operating  Expense
Allowance  being  adjusted to reflect the expense  allowance used in calculating
the Fair Market Rent. At least twelve (12) months prior to the expiration of the
then current  Lease Term,  Tenant may request  Landlord to quote the Fair Market
Rent  effective  for the  first day of the  Extended  Term.  If  Tenant  objects
thereto, Landlord and Tenant shall negotiate for a period of thirty (30) days to
determine whether the Fair Market Rent can be agreed upon. In the event Landlord
and Tenant  cannot  agree on the Fair  Market  Rent  within such thirty (30) day
period,  Landlord and Tenant shall mutually select a real estate  appraiser (MAI
or equal)  knowledgeable  of rents obtained in Class A mid-rise office buildings
in upper Bucks County, Landlord shall submit to such appraiser the lowest Annual
Fixed Rent which  Landlord is willing to accept,  together with any  information
with respect  thereto that  Landlord  deems  relevant and Tenant shall submit to
such  appraiser  the highest  Annual  Fixed Rent which Tenant is willing to pay,
together with any  information  with respect thereto that Tenant deems relevant,
and the appraiser  will then select which of Landlord's or Tenant's  submissions
most clearly reflect the Fair Market Rent for Class A mid-rise office  buildings
in upper Bucks County for new leases for a five (5) year term as aforesaid.  The
appraiser's decision shall be rendered within forty-five (45) days following his
selection  and to  determine  the Fair  Market  Rent of the Leased  Premises  as
aforesaid. Such determination shall be final, binding and conclusive on Landlord
and Tenant.

     42.  Tenant's Termination Rights.  In the event that Landlord is unable  to
          ---------------------------
provide Tenant with  additional  space in the Building or other Buildings in the
Silver Lake  Executive  Campus as provided in Sections 43 and 44 hereof,  Tenant
shall have the right and option to  terminate  this Lease at any time  following
the sixtieth (60th ) Lease Month (the  "Termination  Date") of the initial Lease
Term by giving  Landlord  not less than nine (9)  months  prior  written  notice
thereof  and  paying to  Landlord  at the time of the  giving  of such  notice a

                                       33
<PAGE>

termination fee equal to the unamortized  portion of the cost of Landlord's Work
and brokerage  commissions (the  "Termination  Fee"),  calculated at an interest
rate of ten percent  (10%) per annum.  If Tenant gives notice of its election to
terminate this Lease under this Section 42, but fails to pay the Termination Fee
or fails to vacate  the  Leased  Premises  on or before  the  Termination  Date,
Landlord  shall have the option of treating  such failure as either (a) Event of
Default hereunder, (b) a rescission of Tenant's notice of termination,  or (c) a
holdover under Section 4 hereof. In any event,  notwithstanding  anything herein
to the contrary,  Tenant shall pay Landlord,  as Additional Rent hereunder,  all
damages,  losses,  costs  and  expenses  (including  reasonable  legal  fees and
expenses)  Landlord may have  incurred by reason of Tenant's  failure to vacate,
including  without  limitation,  any costs or lost profits from any reletting or
proposed  reletting  of the Leased  Premises  and  Landlord's  efforts to regain
possession of the Leased Premises.

     43.  Expansion  Space.  Commencing  upon  the execution  of this Lease  and
          ----------------
until the  Expansion  Space  (as  defined  below)  is leased by Oxford  Clinical
Communications,  Inc. ("OCC"), Tenant shall have the right to lease that portion
of the  balance  of the  contiguous  rentable  area of the  second  floor of the
Building that becomes available as shown in the cross-hatched  area of the floor
plan attached as Exhibit "F" hereto (the "Expansion Space"). Such right of offer
shall be on the following conditions:

          A.  Tenant acknowledges  and agrees that  the right of offer  provided
herein  shall be  subject  in all  respects  to the rights of OCC so long as the
lease agreement  between  Landlord and OCC the (the "OCC Lease") shall continue.
The  provisions of this Section shall be effective  only upon the  completion of
the offer procedures set forth in the OCC Lease.

          B.  If any of the Expansion Space is available for lease, and Landlord
receives  an  expression  of  interest  from a  prospective  tenant for all or a
portion of the Expansion Space, Landlord shall give Tenant written notice of the
expression of interest (the "Offer Notice").  The Offer Notice shall include the
identity of the prospective  tenant,  the proposed date on which Expansion Space
will be  available,  the  proposed  length of term of the  lease,  and all other
material  terms  and  conditions  upon,  which  Landlord  intends  to offer  the
Expansion  Space,   including  Base  Rent,   Additional  Rent,   allowances  and
concessions. Tenant shall have ten (10) business days after receipt of the Offer
Notice,  time being of the  essence,  to notify  Landlord of its exercise of the
offer right  hereunder.  Tenant  acknowledges  and agrees that the Offer  Notice
provided hereunder may be delivered simultaneously to OCC, but that the exercise
by OCC of its rights  under the OCC Lease shall  supersede  the rights of Tenant
hereunder.

          C.  If Tenant declines by written notice to lease the space identified
in the Offer Notice or Tenant fails to timely notify Landlord of its election to
lease all or a portion  of the  Expansion  Space  pursuant  to clause (i) above,
Landlord shall be free to lease such space to the prospective  tenant identified
in the Offer Notice upon such rights to renew, extend and expand as set forth in
the Offer  Notice  (except  that  Landlord may increase or decrease the economic
terms by an amount not  greater  than ten  percent  (10%) of the total  economic
terms set forth in the Offer  Notice)  for a period of six (6) months  following
the date Tenant's response is due as provided in clause (i) above.

                                       34
<PAGE>

          D.  Any lease by Tenant  of all or any portion of  the Expansion Space
shall be upon the same covenants,  agreements,  provisions, terms and conditions
as  in  this  Lease,  except  rent,  tenant's  proportionate  share  and  tenant
improvement allowances,  .-and the term of the Lease. The Lease of any Expansion
Space (or any additional  space within the Building)  shall be coterminous  with
the  Lease;  provided,  however  that if less than five (5) years  remain in the
Lease Term, the Expansion Space shall be leased to Tenant on an "as-is" basis at
a rental rate equal to the prevailing market rate for "as-is" space. If Landlord
and Tenant  reach an  agreement  to lease all or a part of the  Expansion  Space
pursuant to this  Article,  Landlord  and Tenant will enter into an amendment to
this Lease increasing the rentable area of the Leased Premises, the Annual Fixed
Rent to be  paid, Tenant's  Proportionate Share  and  to reflect  the provisions
hereof.

          E.   Landlord  shall have  no obligation to  deliver any  notice under
this  Section  if an Event of  Default  shall have  occurred  and be  continuing
hereunder beyond all applicable periods of notice and cure.

          F.   Except as  specifically provided  herein to the  contrary, if any
part  of the  Expansion  Space  is  leased  by  Landlord  to a third  party  and
thereafter becomes available for lease,  Tenant shall have a subsequent right of
first offer thereon as described in this Section.

     44.  Tenant Expansion.  In  the event  that Tenant  determines that  Tenant
          ----------------
shall require an additional  twenty  thousand  (20,000)  rentable square feet of
more of office  space,  Tenant shall  deliver  written  notice to Landlord  (the
"Expansion  Notice")  setting  forth (a) the exact  amount of space  required by
Tenant; (b) the length of the term, including a proposed  commencement date; (c)
any specialty work required (i.e.  laboratory or computer  rooms);  and (d) such
other relevant information necessary for Landlord to fully evaluate and estimate
the cost of Tenant requirements (the "Expansion  Requirements").  Not later than
thirty  (30) days after the  receipt of the  Expansion  Notice,  Landlord  shall
deliver a written response  ("Landlord's  Notice") to Tenant  describing (a) the
available  contiguous  space within the Building;  (b) available  space in other
Buildings  owned by Landlord or its affiliates  within the Silver Lake Executive
Campus;  and (c) the terms and conditions  upon which Landlord or its affiliates
would be able to provide  space in a building to be  constructed  by Landlord in
the Silver Lake  Executive  Campus,  which terms and  conditions  shall provide,
among  other  things for a term of not less than ten (10)  years with  rental at
prevailing  market  rates.  Within  fifteen  (15)  days  after the  delivery  of
Landlord's  Notice,  Tenant shall  deliver to Landlord  Tenant's  decision as to
whether to proceed with any of the options  described in Landlord's Notice which
notice shall be irrevocable and  unconditional.  In the event that Tenant elects
to lease additional space in accordance with Landlord's Notice and this Lease is
terminated, no termination penalty shall be applicable.

     45.  Parking.  At no additional rent to Tenant,  Landlord shall provide  on
          -------
the Lot on which the  Building is located  parking  for all  tenants  (including
Tenant),  their  guests and  customers  at an overall  rate of five (5)  parking
spaces per 1,000 square feet of office space in the Building.

     46.  Headings  and  Terms.  The title,  headings  and table of contents  of
          --------------------
this Lease are for  convenience  of  reference  only and shall not in any way be
utilized to construe or interpret  the agreement of the parties as otherwise set
forth  herein.  The term "Landlord" and the

                                       35
<PAGE>

term "Tenant" as used herein shall mean, where  appropriate,  all persons acting
by or on behalf of the respective parties,  except as to any required approvals,
consents or amendments,  modifications or supplements  hereunder when such terms
shall only mean the parties  originally named on the first page of this Lease as
Landlord and Tenant, respectively, and their agents so authorized in writing.

     47.  Governing  Law.  This  Lease  shall  be  governed  by and construed in
          --------------
accordance with the laws of the Commonwealth of Pennsylvania.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed the date first mentioned.


                                            LANDLORD:

                                            NEWTOWN VENTURE IV ASSOCIATES
                                            By Pitcairn Properties Incorporated,
                                               its general partner


                                            By  /s/ James. M. Watson
                                              ----------------------------------
                                              Name:  James M. Watson
                                              Title: Senior Vice President


                                            TENANT:

                                            COLLAGENEX PHARMACEUTICALS, INC.


                                            By  /s/ Nancy C. Broadbent
                                              ----------------------------------
                                              Name:  Nancy C. Broadbent
                                              Title: Chief Financial Officer



                                       36
<PAGE>


                                   EXHIBIT "A"

                             Plan of Leased Premises

<PAGE>


                [ARCHITECT'S PLAN OF LEASED PREMISES GOES HERE]




<PAGE>


                                   EXHIBIT "B"

                                 LANDLORD'S WORK

            Attached to and made a part of Lease dated March 15, 1999
                                     Between
                          Newtown Venture IV Associates
                                       and
                    CollaGenex Pharmaceuticals, Inc., Tenant

<PAGE>

                                  EXHIBIT "B"

                       Hayden Architecture & Urban Design
                          as issued for permit 2/1/99

                       A1.1   General Info and Index
                       A1.2   Code/Egree Plan
                       A3.1   Construction Plan
                       A3.2   Door Schedules and Note
                       A4.1   Reflected Ceiling
                       A4.2   Light Fixture Schedule
                       A5.1   Sec/Elevation
                       A6.1   Construction Details
                       E.1    Electrical/Data Plan
                       E.2    Electrical Schedules





                                   EXHIBIT B

<PAGE>


                                   EXHIBIT "C"

                              RULES AND REGULATIONS
             Attached to and made part of Lease dated March 15, 1998

                                     Between
                     Newtown Venture IV Associates, Landlord
                                       and
                    CollaGenex Pharmaceuticals, Inc., Tenant


Definitions
-----------

     Wherever in these Rules and Regulations the word "Tenant" is used, it shall
be taken to apply to and include  Tenant and its  servants,  agents,  employees,
invitees,  licensees,  subtenants and  contractors,  and is to be deemed of such
number and gender as the circumstances  require.  The word "room" is to be taken
to include the space covered by this Lease.  The word "Landlord"  shall be taken
to include the employees and agents of Landlord.


Washrooms
---------

     Toilet rooms, water-closets and other water apparatus shall not be used for
any purposes other than those for which they were constructed.


Smoking Policy
--------------

     The  Building  shall  be  a  "non-smoking   building"  and  Landlord  shall
promulgate  and enforce  rules  reasonably  necessary  to effect the  Building's
non-smoking policy.  Landlord shall designate a specific smoking area outside of
the Building and prohibit smoking at any entranceway.


Hours of Operation
------------------

     Tenant  shall have  twenty-four  hour,  seven  days per week  access to the
Building. At least one passenger elevator shall be in operation at all times.


General Prohibitions
--------------------

     In order to insure proper use and care of the Building, Tenant shall not:

<PAGE>

               (a) Allow any  sign,  advertisement  or notice to be fixed to the
Building,  inside or outside,  except the  building  standard  signage  package,
except as otherwise provided in the Lease.

               (b) Make improper noises or disturbances of any kind.

               (c) Mark or defile  water-closets, toilet  rooms, walls, windows,
doors or any other part of the Building.

               (d) Place anything on the outside of the Building, including roof
setbacks, window ledges and other projections.

               (e) Cover or obstruct any window.

               (f) Fasten any article,  drill holes, drive nails or screws  into
the walls, floors, woodwork, window mullions, or partitions;  nor shall the same
be painted,  papered or otherwise covered or in any way marked or broken without
Landlord's consent.

               (g) Interfere  with  and/or   modify  the   heating  or   cooling
apparatus.

               (h) Allow anyone but Landlord's employees to clean rooms.

               (i) Leave  rooms  without  locking  doors,  stopping  all  office
machines, and extinguishing all lights.

               (j) Install any shades,  blinds,  or awnings  without  Landlord's
consent.

               (k) Use any electric heating device without Landlord's consent.


               (l) Install call boxes or any kind of wire in or on the  Building
without Landlord's consent and direction.

               (m) Manufacture  any commodity,  or prepare or dispense any foods
or  beverages,  whether by vending  or  dispensing  machines  or  otherwise,  or
alcoholic beverages,  tobacco,  drugs, flowers, or other commodities or articles
without Landlord's consent.

               (n) Unless  specifically set forth in the Use clause in Section 1
of this Lease,  engage in any form of retail sales of goods or  merchandise,  or
operate a loan,  check cashing,  precious  metals,  jewelry or similar  business
without Landlord's consent.

               (o) Secure  duplicate keys  for rooms,  except from  Landlord, or
change the locks of any doors to or in the Leased Premises.

               (p) Give its employees or other persons permission to go upon the
roof of the Building without Landlord's consent.

                                       2
<PAGE>

Publicity
---------

     Tenant shall not use the name of the Building in any way in connection with
its business except as the address  thereof.  Landlord shall also have the right
to prohibit any advertising by Tenant which, in its opinion, tends to impair the
reputation of the Building or its  desirability  as a building for offices;  and
upon written notice from Landlord, Tenant shall refrain from or discontinue such
advertising.


Business Machines
-----------------

     Business  machines and mechanical  equipment which cause vibration,  noise,
cold or heat that may be transmitted to the Building  structure or to any leased
space outside the Leased  Premises shall be placed and maintained by Tenant,  at
its sole cost and expense,  in settings of cork, rubber or spring type vibration
eliminators  sufficient  to absorb and prevent such  vibration,  noise,  cold or
heat.


Excess Trash
------------

     If Tenant  generates  trash in  amounts  materially  in  excess of  amounts
customarily  generated by tenants in a first class office  building by reason of
Tenant's data processing,  or otherwise,  Landlord reserves the right to require
Tenant, at Tenant's expense, to make independent arrangements for the collection
of trash from the Leased  Premises and the removal  thereof from the Building or
to require Tenant to pay, as Additional Rent, for the removal of such additional
trash.


Movement of Equipment
---------------------

     Landlord  reserves  the right to  designate  the time  when and the  method
whereby  freight,  small  office  equipment,  furniture,  safes and  other  like
articles may be brought into,  moved, or removed from the Building or rooms, and
to designate the location for temporary  disposition of such items.  In no event
shall any of the aforesaid items be taken from Tenant's space for the purpose of
removing the same from the Building without the express consent of Landlord.


Rights Reserved to Landlord
---------------------------

     Without  abatement or diminution in rent,  Landlord reserves and shall have
the following additional rights:

                                       3
<PAGE>

          (a) To change the name and/or street address of the Building.

          (b) To install  and  maintain a sign or signs on the  exterior  of the
Building.

          (c) To  make,   either   voluntarily  or  pursuant   to   governmental
requirement,  repairs,  alteration or  improvements in or to the Building or any
part thereof and during  alterations,  to close entrances,  doors,  windows,  or
other facilities,  provided that such acts shall not unreasonably interfere with
Tenant's use and occupancy of the Leased Premises.

          (d) To erect, use and maintain pipes and conduits in  and through  the
Leased Premises.

          (e) To  decorate,  remodel,  repair,  alter or otherwise  prepare  the
Leased  Premises for  reoccupancy  during or prior to the last six (6) months of
the Lease Term or any part thereof, if Tenant vacates the Leased Premises during
that time.

          (f) To constantly have pass keys to the Leased Premises.

          (g) To grant to anyone the  exclusive right to conduct any  particular
business or undertaking in the Building.

          (h) To exhibit the Leased Premises to others and to display "For Rent"
signs on the Leased Premises.

          (i) To  take  any and  all  measures, including inspections,  repairs,
alterations,  additions  and  improvements to  the  Leased  Premises or  to  the
Building as may be necessary or desirable in the operation of the Building.

     Landlord may enter upon the Leased  Premises and may exercise any or all of
the foregoing  rights hereby reserved without being deemed guilty of an eviction
or  disturbance  of Tenant's use or  possession  and without being liable in any
manner to Tenant.


Regulation Change
-----------------

     Landlord shall have the right to amend these Rules and Regulations,  and to
make such other and further reasonable Rules and Regulations, as in the judgment
of Landlord, may from time to time be needful for the safety,  appearance,  care
or  cleanliness of the Building or for the  preservation  of good order therein.
Landlord shall not be responsible to Tenant for the enforcement of the Rules and
Regulations or by the violation thereof by other tenants.


                                       4
<PAGE>

                                   EXHIBIT "D"

                              ESTOPPEL CERTIFICATE

     COLLAGENEX  PHARMACEUTICALS,  INC.  ("Tenant"),  a Tenant  under a  certain
Agreement of Lease ("Lease") dated __, 1999, with NEWTOWN VENTURE IV ASSOCIATES,
a  Pennsylvania  limited  partnership  ("Landlord"),  as  Landlord  for  certain
premises (the "Leased  Premises")  situate in the Silver Lake Executive  Campus,
Newtown  Township,  Pennsylvania,  for  good  and  valuable  consideration,  and
intending to be legally bound,  hereby certifies to  ______________  ("Lender"),
who in reliance upon this  certification  is lending funds secured by a mortgage
of the Lot and the Building of which the Leased Premises is a part that:

     1.  The Lease  initialed by Tenant and attached as Schedule "A" hereto is a
true,  complete and correct copy of the Lease,  and there has been no amendment,
modification  or supplement  of any kind or nature  varying the stated terms and
conditions thereof, except as so attached;

     2.  The Lease is presently in full force and effect;

     3.  The  Lease Term  commenced on ________ and  full rental is now accruing
thereunder and the Lease Term expires on __________;

     4.  Tenant has  accepted  possession  of the Leased  Premises,  and any and
all improvements  thereto  required to be made by Landlord  have been  completed
in accordance with the Lease;

     5.  No  rent  under the  Lease has been paid  more than thirty (30) days in
advance of its due date;

     6.  Tenant, as of this date, has no charge, lien, claim or offset under the
Lease  or  otherwise,  against  rents or  other  charges  due or  to become  due
thereunder;

     7.  All  Annual  Fixed  Rent,  Additional  Rent and other  charges due  and
payable  under  the  Lease by  Tenant have  been paid  up  to __________  except
escalation,  if any, not yet billed by Landlord;

     8.  No  notice has  been  received by  Tenant of a default  under the Lease
which has not been cured by Tenant;

     9. Tenant  has  not  given  Landlord  any notices  of defaults by  Landlord
under the Lease which have not been cured, and there are no defaults by Landlord
under the Lease as of the date hereof;

<PAGE>

     10.  (cross out one of the following)

          Landlord  is  not  holding a  security deposit  as  security  for  the
performance of Tenant's obligations under the Lease;

          Landlord  is holding  a security  deposit in  the amount of $______ as
security for the performance of Tenant's obligations under the Lease;

     11.  Tenant has no option or right to  purchase  the  property of which the
Leased Premises is a part, or any part thereof,

     12.  Upon  receipt of notice from  Lender of a default  under any  document
evidencing  its loan,  Tenant will make all payments under the Lease directly to
Lender, or to Lender's designee, as from time to time directed by Lender.

     13. Tenant  acknowledges that its Lease is being  collaterally  assigned to
Lender as  security  for  repayment  of the  aforementioned  mortgage  loan from
Lender.


DATE:  March 12, 1999                       TENANT:


                                            COLLAGENEX PHARMACEUTICALS, INC.



                                            By  Nancy C. Broadbent
                                              ----------------------------------
                                              Authorized Officer



                                       2
<PAGE>

                                   EXHIBIT "E"

                                     Form of
                                Letter of Credit

<PAGE>


OUR CREDIT NO.     ISSUE DATE         EXPIRY DATE        LETTER OF CREDIT AMOUNT
--------------     ----------         -----------        -----------------------
                     -  -               -  -             USD 73,292.00
----------         -- -- --           -- -- --
RFF


          BENEFICIARY                           APPLICANT
          -----------                           ---------
          PITCAIRN                              COLLAGENEX PHARMACEUTICALS, INC.



DEAR BENEFICIARY:

WE HEREBY  ESTABLISH OUR IRREVOCABLE  STANDBY LETTER OF CREDIT IN YOUR FAVOR, AS
BENEFICIARY, WHICH IS AVAILABLE BY PAYMENT AGAINST THE FOLLOWING DOCUMENTS:

1)   THE  BENEFICIARY'S  DRAFT(S)  DRAWN ON US AT SIGHT,  DULY  ENDORSED  ON THE
     REVERSE  SIDE  THEREOF,  AND BEARING THE CLAUSE:  "DRAWN  UNDER FIRST UNION
     NATIONAL BANK STANDBY LETTER OF CREDIT NUMBER        ."
                                                   -------

2)   A DATED,  TYPEWRITTEN STATEMENT ON THE LETTERHEAD OF AND PURPORTEDLY SIGNED
     BY AN AUTHORIZED OFFICER OF THE BENEFICIARY STATING THEREIN:

     "WE HEREBY DULY CERTIFY THAT COLLAGENEX  PHARMACEUTICALS,  INC. HAS VACATED
     THE  SUBJECT  PREMISES IN  VIOLATION  OF THE TERMS AND  CONDITIONS  OF THAT
     CERTAIN LEASE AGREEMENT DATED        BY AND BETWEEN PITCAIRN AND COLLAGENEX
                                  -------
     PHARMACEUTICALS,  INC.  (THE "LEASE") OR, HAS BEEN EJECTED FROM THE SUBJECT
     PREMISES  IN  ACCORDANCE  WITH  THE  TERMS  AND  CONDITIONS  OF THE  LEASE.
     THEREFORE  WE DEMAND  PAYMENT OF USD  (SUPPLY  AMOUNT)  UNDER  FIRST  UNION
     NATIONAL BANK STANDBY LETTER OF CREDIT NUMBER SM406553P."

3)   THE ORIGINAL OF THIS LETTER OF CREDIT AND ALL, AMENDMENTS,  IF ANY, FOR OUR
     ENDORSEMENT.  (IF YOUR DEMAND  REPRESENTS A PARTIAL DRAWING  HEREUNDER,  WE
     WILL ENDORSE THE ORIGINAL CREDIT AND RETURN SAME TO YOU FOR POSSIBLE FUTURE
     CLAIMS.  IF,  HOWEVER,  YOUR DEMAND  REPRESENTS  A FULL  DRAWING OR IF SUCH
     DRAWING IS PRESENTED ON THE DAY OF THE RELEVANT  EXPIRATION DATE HEREOF, WE
     WILL HOLD THE ORIGINAL FOR OUR FILES AND REMOVE SAME FROM CIRCULATION.)

THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR  UNDERTAKING  AND SUCH
UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED,  AMENDED OR AMPLIFIED BY REFERENCE
TO ANY  DOCUMENT  OR  INSTRUMENT  REFERRED  TO HEREIN OR IN WHICH THIS LETTER OF
CREDIT IS  REFERRED  TO OR TO WHICH THIS  LETTER OF CREDIT  RELATES AND ANY SUCH
REFERENCE SHALL NOT BE DEEMED TO INCORPORATE HEREIN BY REFERENCE ANY DOCUMENT OR
INSTRUMENT.

WE ENGAGE WITH YOU THAT ALL DOCUMENTS  PRESENTED IN COMPLIANCE WITH THE TERMS OF
THIS LETTER OF CREDIT  WILL BE DULY  HONORED BY US IF  DELIVERED  TO FIRST UNION
NATIONAL BANK, P.O. BOX 13866,  1345 CHESTNUT  STREET,  NINTH FLOOR,  MAIL CODE
PA4928, ATTENTION: LETTER OF CREDIT DEPARTMENT,  PHILADELPHIA, PA 19107 PRIOR TO
3 P.M. ON OR BEFORE THE EXPIRATION DATE HEREOF.

                                SEE CONTINUATION

<PAGE>

ATTACHED TO AND FORMING PART OF STANDBY CREDIT NO.         DATED  -  -
                                                  --------      -- -- --
PAGE TWO


EXCEPT SO FAR AS  OTHERWISE  EXPRESSLY  STATED  HEREIN  THIS LETTER OF CREDIT IS
SUBJECT TO THE  "UNIFORM  CUSTOMS AND PRACTICE FOR  DOCUMENTARY  CREDITS:  (1993
REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500".

ALL  INQUIRIES  REGARDING  THIS  CREDIT  SHOULD BE  DIRECTED  TO US AT OUR PHONE
NUMBERS: (215) 973-5981; (215) 973-8793; (215) 973-1944; (215) 973-8803.

***************SAMPLE***************

------------------------------------
          RICHARD FORTINO
    INTERNATIONAL BANKING OFFICER

<PAGE>


                                   EXHIBIT "F"

                                 Expansion Space

<PAGE>

                [ARCHITECT'S PLAN OF EXPANSION SPACE GOES HERE]