<PAGE>
 
                                                                   EXHIBIT 10.27


                                LEASE AGREEMENT

                                    Between

                          600 WINTER STREET, L.L.C.,
                     a Delaware limited liability company


                                  as Landlord

                                      And
                                        
                          EXODUS COMMUNICATIONS, INC.


                                   as Tenant

                         Dated as of December 25, 1997
<PAGE>
 
                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>

<S>                                                                                                       <C>
1.  PREMISES; ACQUISITION CONTINGENCY.................................................................     1

     1.1.   Demise of Premises; Acquisition Contingency...............................................     1
     1.2.   Delay in Delivery of Premises.............................................................     2

2.  CONDITION OF PREMISES; ENVIRONMENTAL MATTERS;.....................................................     2

     2.1.   Environmental Matters; Definitions........................................................     2
     2.2.   Tenant's Environmental Covenants..........................................................     4
     2.2A.  Tenant's Environmental Warranties.........................................................     7
     2.3.   Survival..................................................................................     7
     2.4.   Tenant's Acceptance.......................................................................     7
     2.5.   Title and Condition.......................................................................     8

2A.  CONSTRUCTION OF INITIAL IMPROVEMENTS.............................................................     9

3.  USE OF PREMISES...................................................................................    11

     3.1.   Permitted Use.............................................................................    11
     3.2.   Certificate of Occupancy..................................................................    12
     3.3.   Compliance with Legal Requirements and Insurance..........................................    12
     3.4.   Failure to Comply.........................................................................    12

4.  TERM..............................................................................................    13

     4.1.   Primary Term..............................................................................    13
     4.2.   Extended Term.............................................................................    13

5. RENT...............................................................................................    14

     5.1.   Basic Rent................................................................................    14
     5.2.   Additional Rent...........................................................................    14
     5.3.   Inclusion in "Rent".......................................................................    14
     5.4.   Late Payment of Rent......................................................................    14
     5.5.   Lease Interest Rate.......................................................................    14
     5.6.   Security Deposit..........................................................................    15
     5.7.   Transfer of Security Deposit..............................................................    15
     5.8.   Rent Adjustments..........................................................................    16
</TABLE>



                                      (i)
<PAGE>
 
<TABLE> 

<S>                                                                                                       <C>   
6.  NET LEASE; NON-TERMINABILITY......................................................................    23

     6.1.   Net Lease.................................................................................    23
     6.2.   Non-Terminability.........................................................................    23

7.  CONTEST AND UTILITIES.............................................................................    24

     7.1.   Contest...................................................................................    24

8.  INDEMNIFICATION AND WAIVER........................................................................    26

     8.1.   Indemnification...........................................................................    26
     8.2.   Waiver....................................................................................    26

9.  LIENS; LANDLORD'S RIGHTS 27

     9.1.   Liens.....................................................................................    27
     9.2.   Landlord's Rights.........................................................................    28

10.  MAINTENANCE AND REPAIR; ENCROACHMENTS; MAINTENANCE OF COMMON AREAS...............................    28

     10.1.  Maintenance and Repair....................................................................    28
     10.2.  Encroachments or Violations of Improvements...............................................    29
     10.3   Maintenance of Common Areas...............................................................    29

11.  ALTERATIONS......................................................................................    30

     11.1.  Permitted Alterations.....................................................................    30
     11.2.  Insurance in Connection with Alterations..................................................    31
     11.3.  Compliance with Laws......................................................................    31
     11.4.  Signs.....................................................................................    31
     11.5.  Alterations at Surrender..................................................................    31

12.  INSURANCE........................................................................................    32

     12.1.  Liability Insurance.......................................................................    32
     12.2.  Property Insurance........................................................................    32
     12.3.  Update of Value...........................................................................    32
     12.4.  Intentionally Deleted.....................................................................    33
     12.5.  Landlord's Rights.........................................................................    33
     12.6.  Waiver of Subrogation.....................................................................    33
     12.7.  Delivery to Landlord......................................................................    33

13.  DAMAGE OR DESTRUCTION............................................................................    33
</TABLE>


                                     (ii)
<PAGE>
 
<TABLE>

<S>                                                                                                       <C> 
     13.1.  Damage or Destruction.....................................................................    33
     13.2.  Abatement of Rent.........................................................................    35

14.  CONDEMNATION.....................................................................................    35

     14.1.  Substantial Condemnation..................................................................    35
     14.2.  Non-Substantial Condemnation..............................................................    35

15.  INTENTIONALLY DELETED............................................................................    36

16.  ASSIGNMENT AND SUBLETTING........................................................................    36

     16.1.  Assignment and Subletting.................................................................    36
     16.2.  Rentals Based on Net Income...............................................................    36
     16.3.  Tenant to Remain Obligated................................................................    36
     16.4.  Tenant's Notice; Landlord's Right to Terminate............................................    37
     16.5.  Landlord's Consent........................................................................    37
     16.6.  Profits...................................................................................    38
     16.7.  Assignee to Assume Obligations............................................................    39
     16.8.  Change of Control.........................................................................    39
     16.9.  Permitted Subleases.......................................................................    39

17.  LETTER OF CREDIT.................................................................................    40

     17.1.  Letter of Credit..........................................................................    40
     17.2.  Release of Letter of Credit...............................................................    41

18.  FINANCIAL STATEMENTS; INSPECTION.................................................................    41

     18.1.  Financial Statements......................................................................    41
     18.2.  Inspection................................................................................    41

19.  FIXTURES.........................................................................................    42

     19.1.  Fixtures..................................................................................    42
     19.2.  Equipment.................................................................................    42
     19.3.  Removal...................................................................................    42

20.  EVENTS OF DEFAULT; REMEDIES......................................................................    42

     20.1.   Event of Default.........................................................................    42
     20.2.   Landlord's Remedies......................................................................    45
</TABLE>


                                     (iii)
<PAGE>
 
<TABLE> 


<S>                                                                                                       <C> 
     20.3.   Waiver...................................................................................    46
     20.4.   Injunction...............................................................................    47
     20.5.   Remedies Cumulative......................................................................    47
     20.6.   Landlord's Right to Cure Events of Default...............................................    47

21.  EXPENSES OF ENFORCEMENT..........................................................................    48

     21.1.   Expenses of Enforcement..................................................................    48

22.  SUBORDINATION TO MORTGAGES.......................................................................    48

     22.1.  Subordination.............................................................................    48
     22.2.  Non-Disturbance and Attornment............................................................    48

23.  ESTOPPEL CERTIFICATE; CONSENT TO ASSIGNMENT......................................................    49

     23.1.  Form Estoppel Certificate.................................................................    49
     23.2.  Consent to Assignment.....................................................................    49
     23.3.  Failure to Deliver........................................................................    49

24.  MERGER...........................................................................................    50

     24.1.  No Merger.................................................................................    50

25.  SURRENDER........................................................................................    50

     25.1.  Surrender.................................................................................    50
     25.2.  Equipment.................................................................................    51
     25.3.  Holding Over..............................................................................    51

26.  SEPARABILITY; SAVINGS CLAUSE.....................................................................    52

     26.1.  Separability..............................................................................    52
     26.2.  Savings Clause............................................................................    52

27.  BROKERAGE........................................................................................    52

     27.1.  Brokerage.................................................................................    52

28.  RECORDING OF MEMORANDUM OF LEASE.................................................................    52

     28.1.  Recording.................................................................................    52
</TABLE>


                                     (iv)
<PAGE>
 
<TABLE> 

<S>                                                                                                       <C> 
29.  NOTICES..........................................................................................    52

     29.1.  Notices, Demands and Other Instruments....................................................    52

30.  SUCCESSORS AND ASSIGNS; MEANING OF LANDLORD;.....................................................    53

     30.1.  Successors and Assigns....................................................................    53
     30.2.  Meaning of Landlord.......................................................................    54
     30.3.  Limitation on Landlord's Liability........................................................    54

31.  MISCELLANEOUS....................................................................................    55

     31.1.  Captions..................................................................................    55
     31.2.  Applicable Law............................................................................    55
     31.3.  Amendment in Writing......................................................................    55
     31.4.  Relationship of the Parties...............................................................    55
     31.5.  Payments..................................................................................    55
     31.6.  Terms.....................................................................................    55
     31.7.  Lease Contains All Terms..................................................................    56
     31.8.  Tenant's Representation and Warranty......................................................    56
     31.9   Landlord's Representation and Warranty....................................................    56

32.  COVENANT OF QUIET ENJOYMENT......................................................................    56

     32.1.  Quiet Enjoyment...........................................................................    56
     32.2.  Control of Premises.......................................................................    56

33.  EXHIBITS.........................................................................................    57

     33.1.  Exhibits..................................................................................    57

EXHIBIT A  Legal Description of Land Parcel...........................................................   A-1

EXHIBIT B  Basic Rent Exhibit.........................................................................   B-1

EXHIBIT C  Floor Plan.................................................................................   C-1

EXHIBIT D  Estoppel Certificate.......................................................................   D-1

EXHIBIT E  Letter of Credit...........................................................................   E-1

EXHIBIT F  List of Retained Property..................................................................   F-1
</TABLE>

                                      (v)
<PAGE>
 
<TABLE> 

<S>                                                                                                      <C> 
EXHIBIT G  Initial Improvements.......................................................................   H-1

EXHIBIT H  Permitted Alterations......................................................................   H-1
</TABLE>

                                     (vi)
<PAGE>
 
     THIS LEASE AGREEMENT (this "Lease") is dated as of December ___, 1997
between 600 WINTER STREET, L.L.C., a Delaware limited liability company
("Landlord"), and EXODUS COMMUNICATIONS, INC. ("Tenant").

                                   RECITALS:
                                        
   A.  Landlord intends to purchase that certain parcel of improved real estate
commonly known as 600 Winter Street, Waltham, Massachusetts and more
particularly described on Exhibit A attached hereto (the "Land Parcel").
                          ---------                                     

   B.  Concurrently with Landlord's purchase and acquisition of ownership of the
Land Parcel, Landlord desires to lease to Tenant, and Tenant desires to lease
from Landlord the Premises (as hereinafter defined) on the terms, conditions and
provisions set forth herein.

                     1.  PREMISES; ACQUISITION CONTINGENCY

     1.1.   Demise of Premises; Acquisition Contingency.  In consideration of
            -------------------------------------------                       
the rents and covenants herein stipulated to be paid and performed, Landlord
hereby demises and lets to Tenant, and Tenant hereby lets from Landlord, for the
term herein described, the premises (herein called the "Premises") within the
building (sometimes hereinafter referred to as the "Building" or the
"Improvements") situated on the Land Parcel as such Premises are outlined on the
Floor Plan in Exhibit C attached hereto.  The Building, the Land Parcel and the
              ---------                                                        
buildings, structures and improvements from time to time located on the Land
Parcel are hereinafter together referred to as the "Real Property."   Until June
1, 1998, the Premises shall be deemed to contain, for purposes of this Lease,
11,400 rentable square feet, as shown Exhibit C.  Subject to Section 1.2,
                                      ---------                          
commencing on June 1, 1998 (the "Expansion Date"), as such Expansion Date may be
delayed as described in Section 1.2, and for the balance of the Term, the
Premises shall consist of the entire Building which shall be deemed, for
purposes of this Lease, to contain 30,400 rentable square feet.  Landlord also
demises and lets to Tenant, and Tenant lets from Landlord, for such term, all
easements, rights and appurtenances relating to the Land Parcel and the
Building, all upon the terms and conditions herein specified.  Notwithstanding
anything contained in this Lease to the contrary, Landlord and Tenant agree,
acknowledge and confirm that this Lease and Landlord's obligations under this
Lease are and shall be conditioned and contingent upon the consummation of
Landlord's purchase and acquisition of the Land Parcel, and if Landlord gives
Tenant written notice (the "Termination Notice") that Landlord 
<PAGE>
 
has not consummated such purchase and acquisition, this Lease and the parties
respective rights and obligations hereunder shall be null and void and of no
further force and effect.

     1.2.  Delay in Delivery of Premises.  In the event that Landlord is unable
           -----------------------------                                        
to deliver that portion of the Premises to be delivered on June 1, 1998 as a
result of a hold over by the prior occupant thereof, or for any other reason
beyond Landlord's reasonable control, Landlord shall not be liable for  any
damages to Tenant as a result of such delay in delivery, and Tenant shall not
have the right to terminate this Lease. The sole result by reason of such delay
in delivery, is that the Expansion Date shall be the date on which Landlord
tenders to Tenant such portion of the Premises, and, until the Expansion Date,
Basic Rent shall continue to be payable at the rate and amounts as set forth in
Section 5.1 which are applicable prior to June 1, 1998.

     1.3  Access By Other Tenant.  Tenant agrees that, until the Expansion Date,
          ----------------------                                                
but in no event any later than June 30, 1998, Tenant shall permit Mail America,
Inc. ("Mail"), another tenant of the Building, to have reasonable access through
the Premises during regular business hours so Mail may move its dollies of
materials to and from Mail's premises and the loading dock of the Building.  At
Tenant's election, any personnel of Mail having such access may be accompanied
at all times by Tenant.  The route through the Premises between Mail's premises
and the loading dock shall be as reasonably selected by Tenant, provided that,
if Tenant fails to reasonably select such route through the Premises, Tenant
gives Landlord the license to select such route, and nothing contained in this
Section 1.3 shall be deemed to be an interference with Tenant's quiet enjoyment
or use of the Premises. Landlord shall cause Mail to carry and maintain a
comprehensive general public liability insurance insuring Tenant against claims
for personal injury and property damage arising out Mail's access through the
Premises, and Landlord shall give Tenant a copy of a certificate of insurance
evidencing such coverage.

               2.  CONDITION OF PREMISES; ENVIRONMENTAL MATTERS; POSSESSION; 
                   TITLE AND CONDITION
                                        
   2.1.   Environmental Matters; Definitions.   For purposes of this Lease, the
          ----------------------------------                                   
following terms shall have the following definitions:

     (a) "Allowable Hazardous Materials" means such Hazardous Materials as are
customarily used for permitted normal business 

                                       2
<PAGE>
 
purposes in the operation of Tenant's business in the Premises, but only in such
quantities as are appropriate therefor and only to the extent that such uses are
in compliance with all Environmental Laws.

     (b) "Environmental Laws" means applicable federal, state or local laws,
regulations, or ordinances pertaining to (i) air and water quality, or (ii) the
handling, generation, transportation, storage, treatment, usage or disposal of
Hazardous Materials, or (iii) health, industrial hygiene or the environmental or
ecological, conditions on, under or about the Premises.

     (c) "Environmental Notifications" means any summons, citation, directive,
order, claim, complaint, litigation, investigation, proceeding, judgment, letter
or other written communication, actual or threatened, from any person,
concerning (i) any intentional or unintentional act or omission or any condition
or event which has resulted, or which may result, in the Release of Hazardous
Material at or from the Premises or any property adjacent to or within the
vicinity of the Premises, or any asserted liability therefor, (ii) the
imposition of any environmental lien on the Premises, or (iii) any violation of
any Environmental Law or any revocation or suspension of any environmental
permits.

     (d) "Hazardous Material" means all of the following:

         (1)  "hazardous substances" or "toxic substances" as those terms are
     defined by the Comprehensive Environmental Response, Compensation, and
     Liability Act (CERCLA), 42 U.S.C. # 9601, et seq., or the Hazardous
     Materials Transportation Act, 49 U.S.C. # 1801, et seq., both as amended to
     and after this date;

         (2)  "hazardous wastes," as that term is defined by the Resource
     Conservation and Recovery Act ("RCRA"), 42 U.S,C. # 6901, et seq., as
     amended to and after this date;

         (3)  any pollutant or contaminant or hazardous, dangerous, or toxic
     chemicals, materials, or substances within the meaning of any other
     applicable federal, state, or local law, regulation, ordinance, or
     requirement (including consent decrees and administrative orders) relating
     to or imposing liability or standards of conduct concerning any hazardous,
     toxic, or dangerous waste 

                                       3
<PAGE>
 
     substance or material, all as amended to and after this date;

          (4)  crude oil or any fraction of it that is liquid at standard
     conditions of temperature and pressure (60 degrees Fahrenheit and 14.7
     pounds per square inch absolute);

          (5)  any radioactive material, including any source, special nuclear,
     or by-product material as defined at 42 U.S.C. # 2011, et seq.;

           (6)  asbestos in any form or condition; and

           (7)  polychlorinated biphenyls (PCBs) or substances or compounds
     containing PCBs.

     (f) "Release" means the release, spill, emission, leaking, pumping, escape,
injection, deposit, disposal, discharge, dispersal, leaking or migration into
the indoor or outdoor environment or into or out of the Premises of Hazardous
Material through or in the air, soil, surface water, groundwater above, on or
under the Premises.

     2.2.   Tenant's Environmental Covenants.   Tenant hereby agrees that:
            --------------------------------                              

     (a) During the Term of this Lease, Tenant will operate the Premises in
compliance with all Environmental Laws, unless the Premises were in violation of
any Environmental Laws prior to the Commencement Date.  All governmental permits
relating to the use or operation of the Premises required by Environmental Laws
shall be obtained by Tenant and will remain in effect during the Term of the
Lease, and Tenant will comply with them.

     (b) Tenant will not permit to occur during the Term of the Lease any
Release, generation, manufacture, storage, treatment, transportation, or
disposal of Hazardous Materials other than the Allowable Hazardous Materials on,
in, under, or from the Premises.

     (c) If any Hazardous Material other than the Allowable Hazardous Materials
or any Hazardous Material located on the Premises prior to the Commencement Date
(except for asbestos which is to be removed by Tenant as part of the Initial
Improvements (as hereinafter defined)) is found on the Premises, Tenant, at its
own cost and expense, will 

                                       4
<PAGE>
 
immediately take such action as is necessary to detain the spread of and remove
such Hazardous Material to the reasonable satisfaction of Landlord and the
appropriate governmental authorities. If Tenant fails to comply with the
requirements of this subsection (c), Landlord may cause the removal of such
Hazardous Material from the Premises. The costs to Landlord of such Hazardous
Material removal (other than the removal of any Hazardous Material located on
the Premises prior to the Commencement Date) and any other cleanup (including
transportation and storage costs) will be additional sums falling due under this
Lease, whether or not a court has ordered the cleanup, and those costs will
become due and payable as Additional Rent on demand by Landlord. Tenant will
give Landlord, its agents, and employees access to the Premises to remove or
otherwise clean up any Hazardous Material. Landlord, shall have no affirmative
obligation to Tenant to remove or otherwise clean up any Hazardous Material (i)
except for any Hazardous Material located on the Premises prior to the
Commencement Date, other than asbestos to be removed by Tenant as part of the
Initial Improvements, or (ii) as a result of any action of Landlord or its
agents.

     (d) Tenant will immediately notify Landlord and provide copies upon receipt
of any Environmental Notifications.  Tenant, at Tenant's sole cost and expense,
will promptly cure and have dismissed with prejudice any actions and proceedings
referred to in such Environmental Notifications to the extent that those actions
or proceedings involve Tenant's storage, generation, Release, transportation,
manufacture or disposal of Hazardous Material.

     (e) Landlord will, upon not less than 48 hours' prior notice to Tenant,
have the right at all reasonable times and from time to time to conduct
environmental audits of the Premises, and Tenant will cooperate in the conduct
of those audits. The audits will be conducted by a consultant of Landlord's
choosing, and if any Hazardous Material other than Allowable Hazardous Material
is detected or if a violation of any of the covenants contained in this Article
2 is discovered, the reasonable fees and expenses of such consultant and such
audit will be borne by Tenant and will be paid as Additional Rent under this
Lease on demand by Landlord.  Notwithstanding anything to the contrary contained
in this subsection, Landlord shall have the right at any time after giving
Tenant reasonable prior notice to conduct an environmental audit of the Premises
and Tenant shall cooperate in the conduct of any audit should Landlord
reasonably believe (i) that any Hazardous Material has been deposited, stored,
disposed of, placed or otherwise located or 

                                       5
<PAGE>
 
allowed to be located on, in, under, or affecting all or any portion of the
Premises, or (ii) that Tenant has violated any Environmental Law.

     (f) Tenant hereby agrees to, and does hereby, indemnify, defend, and hold
harmless Landlord (and, if Landlord is a Trust, its beneficiaries and trustees),
and its partners, members, managers, officers, employees, agents and contractors
from and against any claims, judgments, damages, penalties, fines, expenses,
liabilities or losses arising from or in connection with:

          (1)  any Hazardous Material which has been deposited, stored, disposed
     of, placed or otherwise located or allowed to be located on, in, under, or
     affecting all or any portion of the Premises subsequent to the Commencement
     Date and prior to the later to occur of either the termination of this
     Lease or Tenant's vacation of the Premises, unless any Hazardous Material
     located on the Premises is the result of any action of Landlord or its
     agents;

          (2)  any misrepresentation, inaccuracy, or breach of any warranty,
     covenant, or agreement contained or referred to in this Article 2;

          (3)  any violation by Tenant of any Environmental Law; or

          (4)  the imposition of any lien for the recovery of any costs for
     environmental cleanup or other response costs relating to the Release or
     threatened release of Hazardous Materials prior to the later to occur of
     either the termination of this Lease or Tenant's vacation of the Premises;
     provided, however, that this clause (4) shall not apply to any Release or
     threatened Release of any Hazardous Material located on the Premises prior
     to the Commencement Date, other than asbestos which is to be removed by
     Tenant as part of the Initial Improvements, or which are located on the
     Premises as a result of any action of Landlord or its agents.

 (g) Notwithstanding anything to the contrary contained in subsections 2.2(a)
through (f)above: (i) if any Hazardous Substance is present in, on or under the
Premises, and both (A) such Hazardous Substance became present on the Premises
only after both the 

                                       6
<PAGE>
 
termination of this Lease and the date on which the Tenant has fully vacated the
Premises, and (B) the presence of such Hazardous Substance on the Premises
(other than asbestos which is to be removed by Tenant as part of the Initial
Improvements) was not caused by, or did not arise out of, any act or omission of
Tenant, then none of Tenant's covenants in Subsections 2.2(a) through (f) shall
apply to such Hazardous Substance; and (ii) if within the first twelve (12)
months of the Term, Tenant delivers to Landlord a copy of a report prepared by a
licensed environmental engineer disclosing that asbestos, other than the
asbestos which is to be removed by Tenant as part of the Initial Improvements,
is present on the Premises, in quantities and condition which present a hazard
to the health and safety to Tenant's employees and invitees, and Landlord fails
to initiate reasonable measures within a reasonable time (but in no event any
sooner than thirty (30) days after Landlord has received a copy of such report)
to remove such asbestos or to otherwise abate such hazard, and once such
measures are initiated, Landlord fails to complete such removal or abatement
within a reasonable time, then, Tenant shall have the right to terminate this
Lease by giving Landlord twenty one (21) days' prior written notice of Tenant's
intent to so terminate. If Landlord fails within such twenty one (21)-day period
to either initiate such reasonable measures, or to proceed reasonably to
complete such removal or abatement, as the case may be, then this Lease shall
terminate and the parties hereto shall be relieved of any further obligations
under this Lease, except for such obligations which this Lease expressly
provides are to survive the termination or expiration of this Lease.

     2.2A. Tenant's Environmental Warranties.   Tenant represents and warrants,
           ---------------------------------                                   
after due diligence, that:

     (a) Tenant is not in violation of, nor is a subject of any existing,
pending or threatened investigation by any governmental authority under any
Environmental Laws in connection with any Hazardous Materials on, under or about
the Premises.

     (b) There is no Hazardous Material in or on any building, building
component, equipment or machinery on the Premises, except Allowable Hazardous
Materials, and the asbestos which Tenant shall remove in accordance with
paragraph (d) of this Section 2.2A, and any Hazardous Material referred to on
any environmental report furnished to Tenant prior to the Commencement Date.

                                       7
<PAGE>
 
     (c) There has been no handling, transportation, storage, treatment or use
of Hazardous Materials on the Premises by Tenant or its agents or contractors to
the date hereof, except for Allowable Hazardous Materials.

     (d) Tenant agrees that, notwithstanding anything contained in this Lease or
in Exhibit G to the contrary, Tenant shall remove from the Premises, and the
   ---------                                                                
Initial Improvements shall include Tenant's removal of, all asbestos-containing
floor and ceiling tiles.

     2.3.   Survival.   The provisions of Sections 2.1, 2.2 and 2.2A shall
            --------                                                      
survive the expiration or termination of this Lease.

     2.4.   Tenant's Acceptance.
            ------------------- 

            (a) Tenant conclusively accepts the Premises in its present "as is",
"where is" condition, without any representation or warranty of any kind by
Landlord concerning the physical or environmental condition thereof, or the
compliance or non-compliance of the Premises with any applicable laws, codes or
ordinances, including, without limitation, any Environmental Laws and the
Americans With Disabilities Act of 1990 (42 U.S.C. (S) 12101 et seq.) and
                                                             ------      
regulations and guidelines promulgated thereunder, as all of the same may be
amended and supplemented from time to time (collectively referred to herein as
the "ADA").

            (b) NEITHER LANDLORD, NOR ANY AGENT OR REPRESENTATIVE OF LANDLORD,
HAS MADE, NOR WILL THEY MAKE, ANY INSPECTION OF ANY OF THE PREMISES. LANDLORD
LEASES AND WILL LEASE AND, AS DESCRIBED ABOVE, TENANT TAKES AND WILL TAKE, THE
PREMISES AS IS, WHERE IS, AND WITH ALL FAULTS, AND TENANT ACKNOWLEDGES THAT
NEITHER LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY)
NOR ANY AGENT OR REPRESENTATIVE OF LANDLORD HAS MADE AND WILL NOT MAKE, NOR
SHALL LANDLORD NOR ANY AGENT OR REPRESENTATIVE OF LANDLORD BE DEEMED TO HAVE
MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF
THE PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO ITS FITNESS FOR USE
OR PURPOSE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, AS TO
LANDLORD'S TITLE THERETO, OR AS TO VALUE, COMPLIANCE WITH SPECIFICATIONS,
LOCATION, USE, CONDITION, MERCHANTABILITY, QUALITY, DESCRIPTION OR OPERATION, IT
BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT. TENANT
ACKNOWLEDGES THAT THE PREMISES ARE OF ITS SELECTION AND TO ITS SPECIFICATIONS,
AND THAT THE PREMISES HAVE BEEN INSPECTED BY TENANT AND 

                                       8
<PAGE>
 
ARE SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE
PREMISES OF ANY NATURE, NEITHER LANDLORD NOR ANY AGENT OR REPRESENTATIVE OF
LANDLORD SHALL HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR
ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT).
THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED, AND THE FOREGOING
PROVISIONS ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY
WARRANTIES BY LANDLORD OR ANY AGENT OR REPRESENTATIVE OF LANDLORD, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY OF THE PREMISES, ARISING PURSUANT TO ANY LAW NOW OR
HEREAFTER IN EFFECT OR OTHERWISE.

     2.5.   Title and Condition.   The Premises are demised and let subject to
            -------------------                                               
(a) any state of facts which an accurate survey or physical inspection thereof
might show, (b) all zoning regulations, restrictions, rules and ordinances,
building restrictions and other laws and regulations now in effect or hereafter
adopted by any governmental authority having jurisdiction, and (c) the condition
of the Improvements located thereon, as of the Commencement Date, without
representation or warranty by Landlord.  Prior to the execution and delivery of
this Lease, Landlord shall provide Tenant with a copy of a title report covering
the title to the Premises.  Tenant shall examine such title report, and Tenant
taking possession of the Premises shall evidence that title to the Premises
shall be deemed to be satisfactory for the purposes contemplated hereby and
Tenant acknowledges that Tenant has only the right of possession and use of the
Premises as provided in this Lease.

            2A.  CONSTRUCTION OF INITIAL IMPROVEMENTS

     (a) Tenant, at Tenant's sole and exclusive cost, except as expressly
provided in (c) below, shall promptly construct and complete the Initial
Improvements described on Exhibit G attached hereto and made a part hereof.
                          ---------                                         
Tenant shall also obtain all permits and governmental approvals for the work
necessary to construct and complete the Initial Improvements then applicable to
the Premises, or any portion thereof.

     (b) Tenant agrees and covenants that, when completed, the Initial
Improvements and the Premises shall be free from liens of materialmen,
contractors, subcontractors, laborers, and all other mechanic's liens, subject
to Tenant's right to contest any claim of lien in good faith, as provided in
Article 9.  Tenant shall erect, construct, install and complete the Initial
Improvements in accordance 

                                       9
<PAGE>
 
with Legal Requirements (as hereinafter defined), all Insurance Requirements (as
hereinafter defined) then applicable to the Premises, or any portion thereof.

     (c) So long as Tenant is not in default under this Lease and Tenant
furnishes Landlord with all construction contracts, lien waivers, certificates
of insurance and all other documents and things and performs all acts, necessary
for Landlord to remain in compliance with the requirements of any Lender (as
hereinafter defined) which is providing Project Financing (as hereinafter
defined), Landlord shall provide to Tenant the amount of not more than
$250,000.00 (the "Landlord Contribution") towards the costs of those specific
Initial Improvements listed on Exhibit G.  Subject to the satisfaction of the
                               ---------                                     
conditions for Landlord providing the Landlord Contribution set forth in the
immediately preceding sentence, Landlord shall pay to Tenant the Landlord
Contribution within thirty (30) days after the Commencement Date.  In no event
shall Landlord be obligated to advance any amount in excess of the Landlord's
Contribution.  If the cost of those particular Initial Improvements listed on
Exhibit G is less than the Landlord Contribution, all savings shall be for the
---------                                                                     
exclusive benefit of Landlord, and Tenant shall not be entitled to any portion
of such savings, either directly or through a credit against Rent.  Tenant
acknowledges that the funds for the Landlord Contribution are derived from the
proceeds of a construction loan from the Lender providing Project Financing.
Tenant shall comply with all reasonable obligations and requirements of the
Lender that is providing the Project Financing and with any Loan Document (as
hereinafter defined) with respect to the Project Financing, and shall not either
commit any act or omit to perform any act which could result in Landlord
defaulting or place Landlord in default under any such Loan Document.

     (d) At all times during construction, Landlord and its representatives
shall have the right to enter upon the Premises for the purpose of inspecting
construction and progress of the Initial Improvements.  Tenant agrees that
Landlord's entry onto and occupation of the Premises prior to the Commencement
Date shall be subject to all of the terms, covenants and conditions of this
Lease as the same shall be applicable thereto, except the covenants to pay Basic
Rent.

     (e) In addition to the insurance required pursuant to Article 12, Tenant
shall procure and maintain, during construction of the Initial Improvements, All
Risk Property Insurance (as hereinafter 

                                       10
<PAGE>
 
defined) in the amount of the full replacement value of the Initial
Improvements.

     (f) For purposes of this Lease, the following terms shall have the
following definitions:

          (i)       "Insurance Requirement" or "Insurance Requirements" shall
                    mean, as the case may be, any one or more of the terms of
                    each insurance policy required to be carried by Tenant under
                    this Lease and the requirements of the issuer of such
                    policy, and whenever Tenant shall be engaged in making any
                    alteration, addition or improvement to the Premises, repairs
                    or construction work of any kind, including without
                    limitation, the Initial Improvements, the term "Insurance
                    Requirement" or "Insurance Requirements" shall be deemed to
                    include a requirement that Tenant obtain or cause its
                    contractor to obtain completed value builder's risk
                    insurance when the estimated cost of the Work in any one
                    instance exceed the sum of Five Thousand ($5,000.00) Dollars
                    and that Tenant or its contractor shall obtain worker's
                    compensation insurance or other adequate insurance coverage
                    covering all persons employed in connection with the Work,
                    whether by Tenant, its contractors or subcontractors and
                    with respect to whom death or bodily injury claims could be
                    asserted against Landlord.

          (ii)      "Legal Requirement" or "Legal Requirements" shall mean, as
                    the case may be, any one or more of all present or future
                    laws, codes, ordinances, orders, judgments, decrees,
                    injunctions, rules, regulations and requirements, even if
                    unforeseen or extraordinary, of every duly constituted
                    governmental authority or agency (but excluding those which
                    by their terms are not applicable to and do not impose any
                    obligation on Tenant, Landlord or the Premises) and all
                    covenants, restrictions and conditions now or hereafter of
                    record which may be applicable to Tenant, to Landlord or to
                    any of the Premises, or to the 

                                       11
<PAGE>
 
                    use, manner of use, occupancy, possession, operation,
                    maintenance, alteration, repair or reconstruction of any of
                    the Premises, even if compliance therewith (i) necessitates
                    structural changes or improvements (including changes
                    required to comply with the ADA) or results in interference
                    with the use or enjoyment of any of the Premises or (ii)
                    requires Tenant to carry insurance other than as required by
                    the provisions of this Lease.

         (iii)      "Lender" shall mean any financial institution or other
                    entity, its successors and/or assigns, which provides the
                    Project Financing to Landlord.

          (iv)      "Loan Document" shall mean, as the case may be, any one or
                    more of any instruments, agreements or other documents
                    evidencing or securing or given in connection with the
                    Project Financing.

          (v)       "Project Financing" shall mean the amount borrowed by
                    Landlord to acquire to Land Parcel and/or to pay for the
                    construction of the Initial Improvements and any and all
                    other amounts borrowed by or advanced from Landlord in
                    connection therewith.


                              3.  USE OF PREMISES

     3.1.   Permitted Use.   Tenant may occupy and use the Premises solely for
            -------------                                                     
commercial and light industrial purposes, including the installation, operation,
maintenance and repair of telecommunications equipment and facilities, and for
no other purpose.  Tenant shall not create or suffer to exist any public or
private nuisance, hazardous or illegal condition or waste on or with respect to
the Premises.

     3.2.   Certificate of Occupancy.   Tenant shall not conduct its business
            ------------------------                                         
operation in the Premises unless and until (and only during such time as) all
necessary certificates of occupancy, permits, licenses and consents from any and
all appropriate governmental authorities have been obtained by Tenant and are in
full force and effect.

                                       12
<PAGE>
 
     3.3.   Compliance with Legal Requirements and Insurance Requirements.
            -------------------------------------------------------------   
Tenant shall, at its expense, in connection with the operation or conduct of
Tenant's business in the Premises, and the operation or conduct of the business
of any of Tenant's sublessees from time to time, and in the performance of
Tenant's maintenance and repair obligations pursuant to Section 10.1 hereof,
comply with, and Tenant shall cause the Premises to comply with, all present and
future Legal Requirements, and all orders, rules and regulations of the National
Board of Fire Underwriters, or any other body or bodies exercising similar
functions, the failure to comply with which at any time would affect the
Premises or any part thereof, or the use thereof, including those Legal
Requirements which require the making of any unforeseen or extraordinary
changes, whether or not any of the same involve a change of policy on the part
of the body enacting the same; Tenant shall, at its expense, comply with all
changes required in order to obtain the insurance described hereunder, and with
the provisions of all contracts, agreements, instruments and restrictions
existing as of the Commencement Date of this Lease or thereafter suffered or
permitted by Tenant affecting the Premises or any part thereof or the ownership,
occupancy or use thereof.

     3.4.   Failure to Comply.   Tenant shall pay all reasonable costs,
            -----------------                                          
expenses, claims, fines, penalties and damages that may in any manner arise out
of or be imposed because of the failure of Tenant to comply with the provisions
of this Lease, and in any event agrees to indemnify Landlord against all
liability incurred by Landlord resulting from Tenant's non-compliance. Tenant
shall promptly give notice to Landlord of any notice of violation received by
Tenant. Without diminishing the obligation of Tenant, if Tenant shall at any
time after five (5) days written notice (from Landlord which notice shall
identify the Legal Requirement concerning or affecting the Premises, or the use
or occupancy thereof) fail or neglect to comply, or fail to commence to comply
as expeditiously as is reasonably feasible, with any of such laws, rules,
requirements, orders, directions, ordinances or regulations concerning or
affecting the Premises, or the use and occupancy thereof, as hereinbefore
provided, and, if a stay is necessary, shall have failed to obtain a stay or
continuance thereof, Landlord shall be at liberty to comply therewith, and all
reasonable expenses consequent thereon shall be borne and paid by Tenant; and
upon Tenant's failure so to pay, Landlord may pay the same, and any payments so
made by Landlord, together with the interest thereon at the Lease Interest Rate
(as hereinafter defined) from the date of payment, shall immediately become due
and payable by Tenant as Additional Rent.

                                       13
<PAGE>
 
                                    4.  TERM
                                        
     4.1. Primary Term.  Subject to the terms and conditions hereof, Tenant
          ------------                                                      
shall have and hold the Premises for a term (herein called the "Primary Term")
commencing as of the date (the "Commencement Date") which is the closing date of
Landlord's Purchase of the Premises and continuing thereafter for ten (10)
successive Lease Years (as hereinafter defined).

     4.2.   Extended Term.   So long as no default by Tenant under this Lease or
            -------------                                                       
Event of Default shall then exist or have occurred, Tenant shall have the right
and option to extend this Lease for one (1) consecutive term of ten (10) Lease
Years (herein called the "Extended Term" (or called the "Extended Term") and
together with the Primary Term, called either the "Term" or the "Term of this
Lease") unless this Lease shall be sooner terminated pursuant to the terms
hereof.  If no default or Event of Default shall exist and be continuing
hereunder, the Extended Term shall commence on the day immediately succeeding
the expiration date of the Primary Term.  Tenant may exercise each such option
to extend this Lease for the Extended Term by giving written notice to Landlord
at least 180 days prior to the end of the Primary Term of Tenant's intention to
so extend this Lease.  No instrument of renewal needs to be executed.  The
Extended Term shall not take effect unless this Lease is in full force and
effect and no default or Event of Default exists immediately prior to the
commencement thereof.  If Tenant fails to give such notice of Tenant's intention
to so extend this Lease, the Tenant shall have no further option to extend this
Lease unless otherwise provided by a written agreement executed by Landlord.
Landlord shall have the right at any time during the Term of this Lease to
advertise the availability of the Premises for sale or reletting and to erect
upon the Premises signs appropriate for the purpose of indicating such
availability; provided, however, during the first eight (8) Lease Years, if
Tenant shall not be in default under this Lease, Landlord shall not erect any
signs on the Premises advertising the reletting thereof.  The term "Lease Year"
shall mean (i) if the Commencement Date is the first day of a calendar month,
the twelve (12)-month period commencing on the Commencement Date, or (ii) if the
Commencement Date is not the first day of a calendar month, the period
commencing on the Commencement Date and ending on the last day of the twelfth
(12th) full calendar month of the Term, and, in either case, each succeeding
twelve (12) month period thereafter which falls in whole or in part during the
Term.

                                       14
<PAGE>
 
                                    5. RENT
                                        
     5.1.   Basic Rent.   Tenant covenants to pay to Landlord as and for base or
            ----------                                                          
minimum rent (herein called the "Basic Rent") for the Premises during the Term,
the annual amounts on Exhibit B hereto.  The Basic Rent shall be due and payable
                      ---------                                                 
in equal monthly installments on or before the Commencement Date and on or
before the first day of each calendar month thereafter through the Term.  If the
Term commences on a day other than the first day of a calendar month, or ends on
a day other than the last day of a calendar month, then the Basic Rent for such
month shall be prorated on a per diem basis, based upon the number of days of
such calendar month occurring within the Term.  Basic Rent shall be paid by
Tenant to Landlord or to such other person at such place or account as Landlord
from time to time may designate to Tenant in writing.

     5.2.   Additional Rent.   Tenant covenants that all other amounts,
            ---------------                                            
liabilities and obligations which Tenant assumes or agrees to pay or discharge
pursuant to this Lease, including, but not limited to, the Rent Adjustments (as
hereinafter defined), together with every fine, penalty, interest and cost which
may be added for nonpayment or late payment thereof, shall constitute additional
rent hereunder (herein called "Additional Rent").

     5.3.   Inclusion in "Rent".   The Basic Rent, together with all Additional
            -------------------                                                
Rent payable hereunder (including, without limitation, Tenant's payments of Rent
Adjustments and utilities as described in Article 7) is collectively sometimes
herein called "Rent".
 
     5.4.   Late Payment of Rent.   In the event of any failure by Tenant to pay
            --------------------                                                
or discharge any of the foregoing, Landlord shall have all rights, powers and
remedies provided herein or by law in the case of nonpayment of Rent.  Tenant
also covenants to pay to Landlord on demand an amount equal to five percent (5%)
of the payment amount then due, on all overdue installments of Basic Rent or
Additional Rent which are payable to Landlord and not received by Landlord on or
before five days of when due.  Said late charge shall become automatically due
and payable, without any cure or grace period (unless otherwise provided
hereunder) before said late charge is imposed.

     5.5.   Lease Interest Rate.   Tenant further covenants to pay to Landlord
            -------------------                                               
on demand interest at a rate equal to the prime rate plus two of eighteen
percent (2%) (or at the maximum rate not prohibited by 

                                       15
<PAGE>
 
applicable law, whichever is less) (the "Lease Interest Rate") on all past due
Rent and all other obligations which Landlord shall have paid on behalf of
Tenant from the date of such payment by Landlord until Landlord is paid in full.
As used herein, "prime rate" means the rate of interest announced from time to
time by First National Bank of Chicago NBD, Chicago, Illinois (or by any other
national bank selected by Landlord), as its prime, reference or corporate base
rate, changing as and when said prime, reference, or corporate base rate
changes.

     5.6.   Security Deposit.   Tenant has deposited with Landlord (or its
            ----------------                                              
beneficiary, if Landlord is a trustee) the "Letter of Credit" described in
Article 17 and in the form attached hereto as Exhibit E (the "Security
                                              ---------               
Deposit"), as security for the full and faithful performance of every provision
of this Lease to be performed by Tenant.  Upon the occurrence of an Event of
Default, including, but not limited to, the provisions relating to the payment
of Rent, Landlord may use, apply or retain any part or all of the Security
Deposit for the payment of any Rent or for the payment of any other amount which
Landlord may spend or become obligated to spend by reason of an Event of Default
or to compensate Landlord for any other loss or damage which Landlord may suffer
by reason of an Event of Default.  If any portion of the Security Deposit is to
be used or applied, Tenant shall, within five (5) days after written demand
therefor, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount, and Tenant's failure to do so shall be
an Event of Default under this Lease.  Landlord shall not be required to keep
the Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on the Security Deposit.  If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, the
Security Deposit or any balance thereof shall be returned to Tenant (or, at
Landlord's option, to the last assignee of Tenant's interest hereunder) within
fifteen (15) days after the expiration or earlier termination of the Term and
Tenant's vacation of the Premises.  Subject to the terms and conditions of
Article 17, if there exists no default hereunder by Tenant, and Tenant shall
fully and faithfully perform every provision of this Lease to be performed by it
and no portion of the Security Deposit has been applied and not restored, the
Letter of Credit shall be released by Landlord and thereafter, the Security
Deposit shall be reduced to and consist of the sum of $53,200.  If Landlord
gives Tenant the Termination Notice, such Termination Notice shall be
accompanied with a return of the Security Deposit.

                                       16
<PAGE>
 
     5.7.   Transfer of Security Deposit.   Tenant hereby agrees not to look to
            ----------------------------                                       
any mortgagee as mortgagee, mortgagee-in-possession or successor in title to the
Land Parcel for accountability for the Security Deposit required by Landlord
hereunder, unless said sums have actually been received by said mortgagee as
security for Tenant's performance of this Lease.  Landlord may deliver the funds
and/or the Letter of Credit deposited hereunder by Tenant to the purchaser of
Landlord's interest in the Land Parcel, in the event that such interest is sold,
and upon such delivery, such purchaser shall be deemed to have agreed to hold
such funds and/or the Letter of Credit in accordance with and subject to the
terms and condition of Section 5.6 hereof, and Landlord shall be discharged from
any further liability with respect to the Security Deposit.

     5.8. Rent Adjustments.
          ---------------- 

     (a) In addition to paying the Basic Rent specified in Section 5.1 hereof,
Tenant shall also pay as Additional Rent the amounts determined in accordance
with this Section 5.8 (hereinafter referred to as "Rent Adjustments"):

     (b)  As used in this Lease,

          (i)  "Adjustment Date" shall mean the Commencement Date and each June
1 thereafter falling within the Term.
 
          (ii)  "Adjustment Year" shall mean each period of twelve calendar
months during which an Adjustment Date falls, except that the first Adjustment
Year shall be the period between the Commencement Date and May 31, 1998.

          (iii) "Common Areas" shall mean (A) parking areas, landscaped areas,
driveways, lobbies, shared bathrooms and other facilities located on the Land
Parcel which are available for joint use by tenants of the Building, but shall
exclude any portion of the Building which may be leased from time to time to
tenants; (B) sidewalks adjacent to the Land Parcel; and (C) any areas serving or
benefitting the Land Parcel, or any portion thereof, such as water detention
areas, and utility lines running through or adjacent to the Land Parcel.

          (iv)  "Expenses" shall mean and include (A) those reasonable costs and
expenses actually paid or incurred by or on behalf of 

                                       17
<PAGE>
 
Landlord for owning, maintaining and repairing the Common Areas, and the
personal property used in conjunction therewith, including, without limitation,
snow and ice and trash removal; cleaning and sweeping; planting and replacing
decorations, flowers and landscaping; maintenance, repair and replacement of
utility systems serving the Common Areas (but including replacement only to the
extent of replacement of parts and components incidental to the maintenance and
repair thereof, and not to the extent replacement of any item would constitute a
capital improvement or a capital expenditure which is excluded from Expenses as
hereinafter provided); electricity, steam, water, sewers, fuel, heating,
lighting and air conditioning serving the Common Areas; window cleaning;
janitorial service; painting; wages and salaries of all persons engaged in the
maintenance and repair of the Common Areas, or any other reasonable cost or
expense which Landlord pays or incurs to provide benefits for employees so
engaged in the operation, management, maintenance and repair of the of the
Common Areas (provided, however, that if any person engaged with respect to the
Building devotes services on a part-time basis, such person's wages and benefits
shall, for purposes of computing "Expenses", be equitably adjusted to reflect
such part-time engagement); the charges of any independent contractor who, under
contract with Landlord or its representatives, does any of the work of
operating, managing, maintaining or repairing the Common Areas; and any other
expense or charge, whether or not hereinbefore mentioned, which, in accordance
with generally accepted management practices, would be considered as an expense
of owning, managing, operating, maintaining or repairing the Common Areas; (B)
Insurance Costs; and (C) an overhead charge equal to fifteen percent (15%) of
those "Expenses" described in subclause (A) of this clause (iv). Expenses shall
not include costs or other items included within the meaning of the term "Taxes"
(as hereinafter defined), costs of capital improvements (except as hereinafter
provided), depreciation charges, interest and principal payments on mortgages,
ground rental payments; the Landlord Contribution, and any expenditures for
which Landlord has been reimbursed (other than pursuant to this Article 5 or
provisions in other leases requiring the tenants thereunder to pay a share of
expenses associated with the Building), except as hereinafter provided.

     Notwithstanding anything contained in this clause (iv) to the contrary:

                (A) the cost of any capital improvements to the Common Areas
          made after the date of this Lease which are intended

                                       18
<PAGE>
 
          to reduce Expenses or which are required under any governmental laws,
          regulations or ordinances which were not applicable to the Building at
          the time it was constructed, amortized over the useful life of such
          capital improvements shall be included in "Expenses"; and

                (B) if any item of Expenses, though paid or incurred in one
          year, relates to more than one calendar year, then at the option of
          Landlord such item may be proportionately allocated among such related
          calendar years.

          (v) "Insurance Costs" shall mean and include Landlord's annual total
costs for (A) commercial general liability insurance on the Real Property; and
(B) all risk property insurance covering fire and extended coverage and other
perils of physical loss or damage insuring the improvements and betterments
located on the Real Property and all appurtenances thereto, to the extent that
such costs and coverages are reasonable and customary with respect to light
industrial properties located in the greater Boston area of an age, size and
construction similar to the Real Property.

          (vi) "Taxes" shall mean real estate taxes, assessments (whether they
be general or special), sewer rents, rates and charges, transit and transit
district taxes, taxes based upon the receipt of rent, and any other federal,
state or local governmental charge, general, special, ordinary or extraordinary
(but not including income or franchise taxes or any other taxes imposed upon or
measured by Landlord's income or profits, except as provided herein), which may
now or hereafter be levied, assessed or imposed against the Real Property.
"Taxes" shall include all reasonable legal fees and expenses relating  to
seeking or obtaining reductions in and refunds of real estate taxes.
Notwithstanding anything contained in this clause (iv) to the contrary:

          (A) If at any time the method of taxation then prevailing shall be
          altered so that any new or additional tax, assessment, levy,
          imposition or charge or any part thereof shall be imposed upon
          Landlord in place or partly in place of any such Taxes or contemplated
          increase therein, or in addition to Taxes, and shall be measured by or
          be based in whole or in part upon the Real Property or the rents or
          other income therefrom, then all such new taxes, assessments, levies,
          impositions or charges or parts thereof, to the extent that they are
          so measured or based, 

                                       19
<PAGE>
 
          shall be included in Taxes levied, assessed or imposed against the
          Real Property to the extent that such items would be payable if the
          Real Property were the only property of Landlord subject thereto and
          the income received by Landlord from the Real Property were the only
          income of Landlord.

               (B) Notwithstanding the year for which any such taxes or
          assessments are levied, (1) in the case of taxes or special
          assessments which may be paid in installments, the amount of each
          installment, plus any interest payable thereon, paid during a calendar
          year shall be included in Taxes for that year, and (2) if any taxes or
          assessments payable during any calendar year shall be computed with
          respect to a period in excess of twelve calendar months, then taxes or
          assessments applicable to the excess period shall be included in
          "Taxes" for that year. Except as provided in the preceding sentence,
          all references to Taxes "for" a particular year shall be deemed to
          refer to taxes levied, assessed or otherwise imposed for such year
          without regard to when such taxes are payable.

               (C) Taxes shall also include any personal property taxes
          (attributable to the calendar year in which paid) imposed upon the
          furniture, fixtures, machinery, equipment, apparatus, systems and
          appurtenances which are components of the Real Property.

               (D) Taxes shall not include any franchise, inheritance, estate,
          succession, or transfer tax of Landlord or any income or excess
          profits tax assessed upon or in respect of any income of Landlord or
          chargeable to or required to be paid by Landlord unless such tax shall
          be specifically levied against the rental income of Landlord derived
          hereunder, in lieu of, as and for a substitute for, or in addition to,
          the real estate taxes, in whole or in part, upon the Building situated
          thereon, in which event said rent shall be considered as the sole
          income of Landlord.

          (vii)       "Tenants Proportionate Share" shall mean 37 1/2% until the
Expansion Date, and 100% beginning on the Expansion Date and for the balance of
the Term.

                                       20
<PAGE>
 
          (viii)       "Rent Adjustments" shall mean all amounts determined
pursuant to this Section 5.8, including all amounts payable by Tenant to
Landlord on account thereof.

     (c) During the Term, Tenant shall pay Rent Adjustments for each Adjustment
Year determined as hereinafter set forth. Rent Adjustments payable by Tenant
with respect to each Adjustment Year during which an Adjustment Date falls shall
include the following amounts:

          (i) the product of Tenant's Proportionate Share multiplied by the
amount of Taxes for such Adjustment Year (said product being hereinafter
referred to as the "Tax Adjustment"); plus

          (ii) the product of Tenant's Proportionate Share multiplied by the
amount of Expenses for such Adjustment Year (said product being hereinafter
referred to as the "Expense Adjustment").

Tenant agrees and acknowledges that Landlord has made no representation,
warranty or guaranty relating to the amount of Taxes and Expenses. Tenant has
had an opportunity to consult with Landlord with respect to the Taxes and
Expenses projected for the operation of the Building but has not relied upon any
statements or representations of Landlord or any agent or affiliate of Landlord
in regard thereto in executing this Lease and agreeing to perform the terms and
covenants hereof and shall make no claim against Landlord based thereon.

     (d) Tenant shall make payments on account of the Tax Adjustment and Expense
Adjustment (the aggregate of such payments with respect to any Adjustment Year
being hereinafter referred to as the "Rent Adjustment Deposit" or "Rent
Adjustment Deposits") as follows:

          (i) Landlord may, prior to each Adjustment Date and from time to time
during the Adjustment Year in which such Adjustment Date falls, deliver to
Tenant a written notice or notices (each such notice being hereinafter referred
to as a "Projection Notice") setting forth (A) Landlord's reasonable estimates,
forecasts or projections (collectively, the "Projections") of either or both of
Taxes and Expenses for such Adjustment Year, and (B) Tenant's Rent Adjustment
Deposits with respect to the Tax Adjustment and Expense Adjustment components of
Rent Adjustments for such Adjustment Year based upon the Projections.

                                       21
<PAGE>
 
          (ii) Tenant shall commence payments of monthly installments of Rent
Adjustment Deposits on the first day of the first calendar month during the Term
following Landlord's delivery of the first Projection Notice hereunder. On such
date, and on or before the first day of each calendar month thereafter of the
Adjustment Year covered by such Projection Notice, Tenant shall pay to Landlord
one-twelfth (1/12) of the Rent Adjustment Deposits shown in the Projection
Notice. Within fifteen (15) days following Landlord's delivery of a Projection
Notice for an Adjustment Year in progress, Tenant shall also pay Landlord a lump
sum equal to the Rent Adjustment Deposits shown in the Projection Notice less
the sum of (A) any previous payments on account of Rent Adjustment Deposits made
with respect to such Adjustment Year, and (B) monthly installments on account of
Rent Adjustment Deposits due for the remainder of such Adjustment Year. Until
such time as Landlord furnishes a Projection Notice for an Adjustment Year,
Tenant shall continue to pay monthly installments of Rent Adjustment Deposits in
the amount shown by the most recent Projection Notice or, if the Tax and Expense
Adjustment for the Adjustment Year covered by such Projection Notice has been
determined, one-twelfth (1/12) of such Tax and Expense Adjustment, whichever is
greater.

     (e) The following readjustments shall be made by Landlord and Tenant for
the Expense Adjustment and the Tax Adjustment:

          (i) Following the end of each Adjustment Year and after Landlord shall
have determined the amount of Expenses to be used in calculating the Expense
Adjustment for such Adjustment Year, Landlord shall notify Tenant in writing
(any such notice being hereinafter referred to as "Landlord's Expense
Statement") of such Expenses and Tenant's Expense Adjustment for such Adjustment
Year. If the Expense Adjustment owed for such Adjustment Year exceeds the
Expense Adjustment component of the Rent Adjustment Deposit paid by Tenant
during such Adjustment Year, then Tenant shall, within thirty (30) days after
the date of Landlord's Expense Statement, pay to Landlord an amount equal to the
excess of the Expense Adjustment over the Expense Adjustment component of the
Rent Adjustment Deposit paid by Tenant during such Adjustment Year. If the
Expense Adjustment component of the Rent Adjustment Deposit paid by Tenant
during such Adjustment Year exceeds the Expense Adjustment owed for such
Adjustment Year, then Landlord shall credit such excess to Rent payable after
the date of Landlord's Expense Statement, or may, at its option, credit such
excess to any Rent theretofore due and owing, until such excess has been
exhausted. If this Lease shall expire or be terminated prior to full application

                                       22
<PAGE>
 
of such excess, Landlord shall pay to Tenant the balance thereof not theretofore
applied against Rent and not reasonably required for payment of Rent for the
Adjustment Year in which this Lease expires, subject to Tenant's obligations
under Section 4.08 hereof, provided Tenant shall have vacated the Premises and
otherwise surrendered the Premises to Landlord in accordance with this Lease and
Tenant is not then in default under this Lease.

          (ii) Following the end of each Adjustment Year and after Landlord
shall have determined the actual amount of Taxes to be used in calculating the
Tax Adjustment for such Adjustment Year, Landlord shall notify Tenant in writing
(any such notice being hereinafter referred to as "Landlord's Tax Statement;
Landlord's Expense Statement and Landlords Tax Statement are sometimes
hereinafter referred to as "Landlord's Statement") of such Taxes for such
Adjustment Year. If the Tax Adjustment owed for such Adjustment Year exceeds the
Tax Adjustment component of the Rent Adjustment Deposit paid by Tenant during
such Adjustment Year, then Tenant shall, within thirty (30) days after the date
of Landlord's Tax Statement, pay to Landlord an amount equal to the excess of
the Tax Adjustment over the Tax Adjustment component of the Rent Adjustment
Deposit paid by Tenant during such Adjustment Year. If the Tax Adjustment
component of the Rent Adjustment Deposit paid by Tenant during such Adjustment
Year exceeds the Tax Adjustment owed for such Adjustment Year, then Landlord
shall credit such excess to Rent payable after the date of Landlord's Tax
Statement, or may, at its option, credit such excess to any Rent theretofore due
and owing, until such excess has been exhausted. If this Lease shall expire or
be terminated prior to full application of such excess, Landlord shall pay to
Tenant the balance thereof not theretofore applied against Rent and not
reasonably required for payment of Rent for the Adjustment Year in which this
Lease expires, subject to Tenant's obligations under Section 4.08 hereof,
provided Tenant shall have vacated the Premises and otherwise surrendered the
Premises to Landlord in accordance with this Lease and Tenant is not then in
default under this Lease.

     (f) Landlord shall maintain books and records showing Taxes and Expenses in
accordance with sound accounting and management practices. Tenant or its
representative shall have the right to examine Landlord's books and records
showing Taxes and Expenses upon reasonable prior notice and during normal
business hours at any time within thirty (30) days following the furnishing by
Landlord to Tenant of Landlord's Statement provided for in Section 5.8(e).
Unless Tenant shall take written exception to any item within thirty (30) days
after the 

                                       23
<PAGE>
 
furnishing of the Landlord's Statement containing such item, such Landlord's
Statement shall be considered as final and accepted by Tenant.

     (g) If Tenant shall notify Landlord within such thirty (30) day period that
Tenant disputes any specific item or items in any such Landlord's Statement and
such dispute is not resolved between Landlord and Tenant within thirty (30) days
after the date such notice is given by Tenant, either party may, during the
fifteen (15) day period next following the expiration of the thirty (30) day
period commencing on the date such notice is given, refer such disputed item or
items for determination to an independent certified public accountant selected
by such party and approved by the other party, which approval shall not be
unreasonably withheld, and the determination of such accountant shall be final,
conclusive and binding upon Landlord and Tenant. Tenant agrees to pay all costs
involved in such determination except in the case of the Tax Adjustment and the
Expense Adjustment for any Adjustment Year where it is determined that Landlord
has overcharged Tenant for Tax Adjustment and Expense Adjustment for such
Adjustment Year by more than five percent (5%), in which case Landlord shall pay
such costs.

     (h) With respect to any Adjustment Year which does not fall entirely within
the Term, Tenant shall be obligated to pay as Rent Adjustments for such
Adjustment Year only a pro rata share of Rent Adjustments as hereinabove
determined, based upon the number of days of the Term falling within the
Adjustment Year. Following expiration or termination of this Lease, Tenant shall
pay any Rent Adjustments due to Landlord within fifteen (15) days after the date
of each Landlord's Statement sent to Tenant. Without limitation of other
obligations of Tenant which shall survive the expiration of the Term, the
obligation of Tenant to pay Rent Adjustments provided for in this Article 4
accruing during the Term shall survive the expiration or termination of this
Lease.

     (i) In no event shall any Rent Adjustments result in a decrease of the
Basic Rent payable hereunder as set forth in Section 3.01 hereof.

     (j) All amounts payable by Tenant as or on account of Rent Adjustments
shall be deemed to be Additional Rent becoming due under this Lease.

                                       24
<PAGE>
 
                        6.  NET LEASE; NON-TERMINABILITY
                                        
     6.1.   Net Lease.  It is the intent of the parties hereto that the Basic
            ---------                                                         
Rent payable under this Lease shall be an absolutely net return to Landlord and
that Tenant shall pay all costs and expense relating to the Premises and the
business carried on therein, unless otherwise expressly provided in this Lease.
Any amount or obligation herein relating to the Premises which is not expressly
declared to be that of Landlord shall be deemed to be an obligation of Tenant to
be performed by Tenant at Tenant's expense.  Basic Rent, Additional Rent and all
other sums payable hereunder by Tenant, shall be paid without notice (except as
expressly provided herein), demand, setoff, counterclaim, abatement, suspension,
deduction or defense.

     6.2.   Non-Terminability.
            ----------------- 

          (a) This Lease shall not terminate, nor shall Tenant have any right to
terminate this Lease, nor shall Tenant be entitled to any abatement or reduction
of Rent hereunder nor shall the obligations of Tenant under this Lease be
affected, by reason of (i) any damage to or destruction of all or any part of
the Premises from whatever cause, whether with or without fault on part of
Tenant, except as otherwise expressly set forth in this Lease; (ii) the taking
of the Premises or any portion thereof by condemnation, requisition or
otherwise, except as otherwise expressly set forth in this Lease; (iii) the
prohibition, limitation or restriction of Tenant's use of all or any part of the
Premises, or any interference with such use; (iv) any eviction by paramount
title or otherwise; (v) Tenant's acquisition or ownership of all or any part of
the Premises otherwise than as expressly provided herein; (vi) any default on
the part of Landlord under this Lease, or under any other agreement to which
Landlord and Tenant may be parties; (vii) the failure of Landlord to deliver
possession of the Premises on the Commencement Date; or (viii) any other cause
whether similar or dissimilar to the foregoing, any present or future law to the
contrary notwithstanding.  It is the intention of the parties hereto that the
obligations of Tenant hereunder shall be separate and independent covenants and
agreements, that the Basic Rent, the Additional Rent and all other sums payable
by Tenant hereunder shall continue to be payable in all events and that the
obligations of Tenant hereunder shall continue unaffected, unless the
requirement to pay or perform the same shall have been terminated pursuant to an
express provision of this Lease.

                                       25
<PAGE>
 
     (b) Except as may be otherwise expressly set forth in this Lease, Tenant
agrees that it will remain obligated under this Lease in accordance with its
terms, and that it will not take any action to terminate, rescind or avoid this
Lease, notwithstanding (i) the bankruptcy, insolvency, reorganization,
composition, readjustment, liquidation, dissolution, or winding-up or other
proceeding affecting Landlord or its successors in interest or (ii) any action
with respect to this Lease which may be taken by any trustee or receiver of
Landlord or its successors in interest or by any court in any such proceeding.

     (c) Except as may be otherwise expressly set forth in this Lease, Tenant
waives all rights which may now or hereafter be conferred by law (i) to quit,
terminate or surrender this Lease or the Premises or any part thereof or (ii) to
any abatement, suspension, deferment or reduction of the Basic Rent, Additional
Rent or any other sums payable under this Lease.

                           7.  CONTEST AND UTILITIES
                                        
     7.1.   Contest.   So long as Tenant is leasing the entire rentable square
            -------                                                           
footage of the Building, Tenant shall have the right, but not the obligation, in
good faith and due diligence, to contest any tax, assessment, tax lien or other
charge or imposition upon or against the Premises or any part thereof or the
Building by appropriate legal proceedings which shall have the effect of
preventing the collection of the tax, assessment, tax lien or other imposition
or charge so contested; provided that Tenant shall not be relieved from
continuing to make payment to Landlord on account of the Tax Adjustment as
provided in Section 5.8 as if such contest was not being made by Tenant, or
Tenant shall give Landlord or any mortgagee of Landlord as required by Landlord,
such reasonable security as may be demanded by Landlord to insure payment of the
amount of the tax, assessment, tax lien or other imposition or charge, and all
interest and penalties thereon.  All costs and expenses engendered by any such
contest by Tenant shall be borne and paid by Tenant, and Landlord shall join
with Tenant when requested and execute any and all documents prepared at
Tenant's expense as Tenant may reasonably request in connection with any such
contest.  In the event that Tenant fails to contest any tax, assessment, tax
lien or other imposition, and Landlord determines in good faith that it is
reasonable to do so, Landlord shall have the right, at Landlord's expense
(except to the extent the expense is included in "Taxes" as provided in Section
5.8(a)(vi)), to contest the same, and Tenant shall join with Landlord when
requested and execute 

                                       26
<PAGE>
 
any and all documents prepared at Landlord's expense as Tenant may reasonably
request in connection with any such contest.

     7.2.   Utilities.
            --------- 

     (a) Electricity shall not be furnished by Landlord, but shall be furnished
by an electric utility company serving the area in which the Building is
located. Landlord shall permit Tenant to receive such service directly from such
utility company at Tenant's cost, and shall permit Landlord's wire and conduits,
to the extent available, suitable and safely capable, to be used for such
purposes. Tenant shall make all necessary arrangements with the utility company
for metering and paying for electric current furnished by it to Tenant, and
Tenant shall pay for all charges for electric current consumed on the Premises
during Tenant's occupancy thereof.  Tenant shall make no alterations or
additions to the electric equipment or appliances without the prior written
consent of Landlord in each instance. Tenant covenants and agrees that at all
times its use of electric current shall never exceed the capacity of the feeders
to the Building or the risers or wiring installed thereon.

     (b) During the Term of this Lease and any extension thereof, Tenant shall
at its own cost and expense pay for any and all utilities and services necessary
for its use and operation of the Premises, including without limitation charges
for electricity, water, fuels, scavenger service, gas, light, heat, telephone,
power and other utilities and communication services rendered or used on or
about the Premises, and any fees, costs, charges, or assessments levied with
respect to the Premises pursuant to covenants contained in any industrial park
declaration recorded against the title to the Premises relating to any events
occurring between (i) the earlier of Tenant's possession of the Premises and the
Commencement Date, and (ii) the later of Tenant vacating the Premises and the
expiration of the Term, or the earlier termination of this Lease in accordance
with the terms and conditions of this Lease.

     (c) Tenant agrees that Landlord and its agents shall not be liable in
damages, by abatement of Rent or otherwise, for failure to furnish or delay in
furnishing any service when such failure or delay is occasioned, in whole or in
part, by repairs, renewals or improvements, by any strike, lockout or other
labor trouble, by inability to secure electricity, water or other services at
the Building, by any accident or casualty whatsoever (other than as a 

                                       27
<PAGE>
 
result of Landlord's gross negligence or willful misconduct), by the act or
default of Tenant or other parties, or by any cause beyond the reasonable
control of Landlord; and such failures or delays shall never be deemed to
constitute an eviction or disturbance of Tenant's use and possession of the
Premises or relieve Tenant from paying Rent or performing any of its obligations
under this Lease.

                         8.  INDEMNIFICATION AND WAIVER

     8.1.   Indemnification.   Tenant agrees to pay, and to protect, defend,
            ---------------                                                 
indemnify and save harmless Landlord and for purposes of this Article 8, the
term "Landlord" shall include its trustees, beneficiaries, managers, members,
shareholders, partners, officers, directors, employees, agents and their
successors and/or assigns from and against any and all liabilities, losses,
damages, costs, expenses (including all reasonable attorney's fees and
reasonably necessary expenses of Landlord), causes of action, suits, claims,
demands or judgments of any nature whatsoever arising from (i) any injury to, or
the death of, any person or damage to property on the Premises or upon adjoining
sidewalks, streets or right of ways, in any manner growing out of or connected
with the use, failure to use condition or occupation of the Premises, adjoining
sidewalks, streets or right of ways, unless any such injury, death or damage is
the result of any breach by Landlord or any of Landlord's obligations under this
Lease, and/or (ii) any violation by Tenant of any agreement or condition of this
Lease, or any contract or agreement to which Tenant is a party or any
restriction, law, ordinance or regulation, in each case affecting the Premises
or any part thereof or the occupancy or use thereof, (iii) performance by or at
the request of Tenant or its agents or contractors of any labor or services or
the furnishing of any materials or other property in respect of the Premises or
any part thereof, or (iv) any instrument which Landlord is requested by Tenant
to execute pursuant to Sections 7.6 or 7.7.  If Landlord or any beneficiary of
Landlord, (if Landlord is a trustee) or any agent or employee of either of them)
shall be made a party to any such litigation commenced against Tenant, and if
Tenant, at its expense, shall fail to provide Landlord or any such beneficiary,
or their respective agents with counsel (upon Landlord's request) reasonably
approved by Landlord, Tenant shall pay all reasonable costs and attorneys' fees
and expenses incurred or paid by Landlord or any such beneficiary, or their
respective agents in connection with such litigation, unless any such injury,
death or damage is the result of any breach by Landlord or any of Landlord's
obligations under this Lease.  The Tenant's obligations and liabilities 

                                       28
<PAGE>
 
under this Section 8.1 herein shall survive the termination or expiration of
this Lease,

     8.2.   Waiver.   Tenant waives all claims it may have against Landlord for
            ------                                                             
damage or injury to person or property sustained by Tenant or any persons
claiming through Tenant or by any occupant of the Premises, or by any other
person, resulting from any part of the Premises or any of the Improvements,
equipment or appurtenances becoming out of repair, or resulting from any
accident on or about the Premises or resulting directly or indirectly from any
act or neglect of any person, including Landlord (except for Landlord's gross
negligence or willful misconduct or breach of Landlord's obligations under this
Lease) to the extent permitted by law.  This Section 8.2 shall include, but not
by way of limitation, damage caused by water, snow, frost, steam, excessive heat
or cold, sewage, gas, odors, or noise, or caused by bursting or leaking of pipes
or plumbing fixtures, and shall apply equally whether any such damage results
from the act or neglect of Tenant or of any other person, including Landlord to
the extent permitted by law, and whether such damage be caused or result from
any thing or circumstance above mentioned or referred to, or to any other thing
or circumstance whether of a like nature or of a wholly different nature.  All
personal property belonging to Tenant or any occupant of the Premises that is in
or on any part of the Premises shall be at the risk of Tenant or of such other
person only, and Landlord shall not be liable for any damage thereto or for the
theft or misappropriation thereof.

                          9.  LIENS; LANDLORD'S RIGHTS
                                        
     9.1.   Liens.   Tenant shall not do any act which shall in any way encumber
            -----                                                               
the title of Landlord in and to the Premises, nor shall any interest or estate
of Landlord in the Premises be in any way subject to any claim by way of lien or
encumbrance, whether by operation of law or by virtue of any express or implied
contract by Tenant, and any claim to or lien upon the Premises arising from any
act or omission of Tenant shall accrue only against the leasehold estate of
Tenant and shall in all respects be subject and subordinate to the paramount
title and rights of Landlord in and to the Premises. Tenant will not permit the
Premises to become subject to any mechanics', laborers' or materialmen's lien on
account of labor or material furnished to Tenant or claimed to have been
furnished to Tenant in connection with work of any character performed or
claimed to have been performed on the Premises by or at the direction or
sufferance of Tenant; provided, 

                                       29
<PAGE>
 
however, that Tenant shall have the right to contest in good faith and with
reasonable diligence, the validity of any such lien or claimed lien if Tenant
shall first give to Landlord such security as may be reasonably demanded by
Landlord (and required by any Mortgagee of Landlord) to insure payment thereof
and to prevent any sale, foreclosure, or forfeiture of the Premises by reason of
non-payment thereof. On any final determination of the lien or claim for lien,
Tenant will immediately pay any judgment rendered, with all proper costs and
charges, and will, at its own expense, have the lien released and any judgment
satisfied.

     9.2.   Landlord's Rights.  If Tenant shall fail to contest the validity of
            -----------------                                                  
any lien or claimed lien or if reasonably demanded by Landlord (and required by
any Mortgagee of Landlord) fail to give security to Landlord to insure payment
thereof, or shall fail to prosecute such contest with diligence, or shall fail
to have the same released and satisfy any judgment rendered thereon, then
Landlord may, at its election (but shall not be so required) remove or discharge
such lien or claim for lien (with the right, in its discretion, to settle or
compromise the same), and any amounts advanced by Landlord, including reasonable
attorneys' fees, for such purposes shall be so much Additional Rent due from
Tenant to Landlord at the next rent payment date after any such payment, with
interest at the Lease Interest Rate from the date of payment thereof.

     10.  MAINTENANCE AND REPAIR; ENCROACHMENTS; MAINTENANCE OF COMMON AREAS.

     10.1.  Maintenance and Repair.   Tenant agrees that, at its expense, it
            ----------------------                                          
shall keep and maintain the Premises, including any altered, rebuilt,
substituted buildings, improvements thereto, in good repair and appearance,
except for ordinary wear and tear.  Tenant shall also make promptly, all
nonstructural, foreseen and unforeseen, ordinary and extraordinary changes and
repairs of every kind which may be required to be made to keep and maintain the
Premises in such good condition, repair and appearance and it will keep the
Premises orderly and free and clear of rubbish, subject to local rubbish removal
schedules.  Tenant covenants to perform or observe all terms, covenants or
conditions of any reciprocal easement or maintenance agreement to which it may
at any time be a party or to which the Premises are currently subject.  Tenant
shall, at its expense, use commercially reasonable efforts to enforce compliance
with any reciprocal easement or maintenance agreement benefitting the Premises
by any other person 

                                       30
<PAGE>
 
subject to such agreement. Landlord shall not be required to maintain, repair or
rebuild, or to make any alterations, replacements or renewals of any nature to
the Premises, or any part thereof or to maintain the Premises or any part
thereof in any way, except as expressly set forth in this Section 10.1. Landlord
agrees, at Landlord's expense, (except to the extent that such expense is within
the definition of "Expenses") to make all necessary structural repairs or
replacements to the Improvements, including the foundation, walls and roof,
unless any such repairs are made necessary due to or arising out of (i) the
specific nature (as opposed to the general use for light industrial purposes) of
the operation or conduct of Tenant's business, or the specific nature (as
opposed to the general use for light industrial purposes) of the operation or
conduct of the business of any of Tenant's sublessees; or (ii) the act or
omission of Tenant or any sublessees of Tenant or their respective employees,
agents or contractors, in which event Tenant, notwithstanding anything contained
in this Section 10.1 to the contrary, shall promptly reimburse to Landlord, as
Additional Rent hereunder, the reasonable cost of such structural repairs
incurred by Landlord. Tenant hereby expressly waives the right to make repairs
at the expense of Landlord which may be provided for in any law in effect at the
Commencement Date or which may thereafter be enacted. If Tenant shall abandon
the Premises, it shall give Landlord immediate notice thereof.

     10.2.  Encroachments or Violations of Improvements.   If any Improvements
            -------------------------------------------                       
hereafter constructed by or on behalf of Tenant and situated on the Premises at
any time during the Term of this Lease shall encroach upon any property, street
or right-of-way adjoining or adjacent to the Premises, or shall violate the
agreements or conditions contained in any restrictive covenant affecting the
Premises or any part thereof, or shall impair the rights of others under or
hinder or obstruct any easement or right-of-way to which the Premises are
subject, then, promptly after the written request of Landlord or any person
affected by any such encroachment, violation, impairment, hindrance or
obstruction, Tenant shall, at its expense, either (i) obtain effective waivers
or settlements of all claims, liabilities and damages resulting from each such
encroachment, violation, impairment, hindrance or obstruction whether the same
shall affect Landlord, Tenant or both, or (ii) make such changes in the
Improvements on the Premises and take such other action as shall be necessary to
remove such encroachments, hindrances or obstructions and to end such violations
or impairments, including, if necessary, the alteration or removal of any
improvement on the Premises.  Any such alteration or removal shall be 

                                       31
<PAGE>
 
made in conformity with the requirements of Section 11.1 to the same extent as
if such alteration or removal were an alteration under the provisions of Section
11.1.

     10.3    Maintenance of Common Areas.  Landlord covenants and agrees that,
             ---------------------------
so long as no Event of Default has occurred and Tenant shall have completed in
accordance with applicable Legal Requirements any and all Initial Improvements
which affect or pertain to any portion of the Real Property, including paving
and striping the parking areas and providing for handicapped parking stalls,
Landlord shall maintain or cause to be maintained the Real Property, exclusive
of the Premises and any other areas from time to time leased to tenants, in a
manner comparable to the manner in which light industrial properties located in
the greater Boston area of the age, size, and construction similar to the Real
Property are from time to time maintained.


                                11.  ALTERATIONS

      11.1.  Permitted Alterations.  Except as otherwise expressly set forth in
             ---------------------                                              
this Section 11.1, Tenant shall not at any time during the Term of this Lease
make any material alteration, addition or improvement to the Premises or any
Improvements located thereon without in each instance the prior written consent
of Landlord.  Landlord shall not unreasonably withhold or delay its consent to
minor, non-structural alterations and improvements made by Tenant, provided such
alterations do not affect the roof or electrical, plumbing HVAC or sewage
systems of any building located on the Premises and the costs of any such
alterations or improvements shall not exceed, in the aggregate, in any
consecutive twelve (12) month period, $100,000. It shall not be deemed
unreasonable for Landlord to withhold its consent to a proposed alteration,
addition or improvement, if, in Landlord's good faith reasonable opinion, such
proposed alteration, addition or improvement would be likely to materially
impair or diminish the value of the Premises.  Notwithstanding anything
contained in this Section 11.1 to the contrary, Tenant shall not be obligated to
obtain Landlord's prior consent to the alterations and improvements (jointly and
collectively, the "Permitted Alterations") listed on Exhibit H attached hereto,
                                                     ---------                 
as long as (i) except as hereinafter permitted, any such Permitted Alterations
will not affect the structure, roof, or the electrical, heating, air
conditioning, plumbing or sewage systems located in or serving the Building or
any other portions of the Real Property; (ii) Tenant submits plans and
specifications for the Permitted Alterations 

                                       32
<PAGE>
 
for Landlord's review, obtains necessary permits and insurance, and delivers to
Landlord copies of all contracts and subcontracts, affidavits listing all
contractors, subcontractors and suppliers, and requirements as to the manner and
times in which the Permitted Alterations shall be done; (iii) the Permitted
Alterations comply with any and all reasonable requirements of Landlord's
insurers, and with all Laws; and (iv) the Permitted Alterations are performed in
a good and workmanlike manner and all material used are of a quality comparable
to or better than those in the Premises and are in accordance with the plans and
specifications delivered to Landlord. Notwithstanding anything contained in
clause (i) of this Section 11.1, provided that Tenant otherwise complies with
the requirements set forth in this Section 11.1, such Permitted Alterations may
comprise alterations to the existing electrical and heating, ventilation, and
air-conditioning systems of the Building, so long as (x) such systems being
altered by Tenant do not materially impair or diminish the value of the
Premises, and (y) upon the end of the Term or earlier termination of this Lease,
Tenant, at Landlord's request, restores such systems to their condition as of
the Commencement Date. Landlord's approval or right of approval, if any, of
Tenant's plans and specifications shall create no responsibility or liability on
the part of Landlord and their agents for the completeness, design, sufficiency,
or compliance with Laws of such plans and specifications. If Landlord consents
to our supervises the Permitted Alterations, consent or supervision shall not be
deemed a warranty by Landlord or their agents as to the adequacy of the
workmanship or quality or materials, and Landlord hereby expressly disclaims any
responsibility or liability for the same. Landlord shall under no circumstances
have any obligation to repair, maintain or replace any portion of the Permitted
Alterations.

     11.2.  Insurance in Connection with Alterations.   No alteration, addition
            ----------------------------------------                           
or improvement to the Premises shall be commenced by Tenant until Tenant has
furnished Landlord with a satisfactory certificate or certificates from an
insurance company acceptable to Landlord, evidencing workmen's compensation
coverage, and insurance coverage in amounts satisfactory to Landlord and
protecting Landlord against public liability and property damage to any person
or property, on or off the Premises, arising out of and during the making of
such alterations, additions or improvements.

     11.3.  Compliance with Laws.   Any alteration, addition or improvement by
            --------------------                                              
Tenant hereunder shall be done in a good and workmanlike 

                                       33
<PAGE>
 
manner, lien free, and in strict compliance with any applicable governmental
law, statute, ordinance or regulation.

     11.4.  Signs.   Tenant may, in compliance with applicable law, place, erect
            -----                                                               
and maintain any signs on the facia, walls, and any other place on or about the
Premises, which signs shall remain the property of Tenant and may be removed at
any time during the Term of this Lease, or any extensions thereof, provided
Tenant shall repair or reimburse Landlord for the cost of any damage to the
Premises resulting from the installation or removal of such signs, ordinary wear
and tear excepted.

     11.5.  Alterations at Surrender.   Except as may be otherwise expressly set
            ------------------------                                            
forth in this Lease and subject to the terms and conditions contained in Article
25, all alterations, additions and improvements (except Tenant's equipment, as
hereinafter defined) put in at the expense of Tenant shall become the property
of the Landlord and shall remain upon and be surrendered with the Premises as a
part thereof at the termination of this Lease, other than the alterations,
additions, improvements and equipment set forth on Exhibit F attached hereto and
                                                   ---------                    
made a part hereof (collectively and individually, the "Retained Property").


                                 12.  INSURANCE
                                        
     12.1.  Liability Insurance.   Tenant agrees that it will at all times
            -------------------                                           
during the Term of this Lease at its sole cost and expense, carry and maintain,
for the benefit of Landlord, and Landlord's beneficiaries, mortgagees, managers,
members, and agents, and Tenant, comprehensive general public liability
insurance against claims for personal injury, sickness or disease, including
death and property damage, in, on or about the Premises, such insurance to
afford protection in such amounts as Landlord may, from time to time, require,
but no less than $1,000,000.00 in respect to each person, and no less than
$2,000,000.00, in respect to any one occurrence causing bodily injury, personal
injury or death, and to the limit of not more than $1,000,000.00, in respect to
property damage.  Each of the foregoing stated minimum limits shall be increased
from time to time as reasonably required by Landlord, taking into account any
increase in the full replacement value as determined in accordance with Section
12.3.  All such insurance shall be procured from a responsible insurance company
or companies satisfactory to Landlord and to Landlord's mortgagee, if any, and
authorized to do business in the 

                                       34
<PAGE>
 
state in which the Premises are located and may be obtained by Tenant by
endorsement on its blanket insurance policies. All such policies shall provide
that the same may not, without Landlord's prior written consent, be cancelled or
altered except upon thirty (30) days' prior written notice of Landlord and shall
specifically name Landlord and Landlord's mortgagees, if any, as additional
named insureds.

     12.2.  Property Insurance.   Tenant further agrees that Tenant shall, at
            ------------------                                               
all times during the Term of this Lease at its sole cost and expense, carry and
maintain policies of insurance insuring all improvements and betterments to the
Premises made by Tenant, regardless of whether such improvements were paid for
in whole or in part of Landlord, and all contents, and Tenant's trade fixtures,
machinery, equipment, furniture and furnishings, in the Premises to the extent
of at least ninety percent (90%) of their replacement cost under standard fire
and extended coverage insurance, including, without limitation, vandalism and
malicious mischief endorsements.  The insurance to be carried by Tenant under
this Lease shall be procured from responsible companies reasonably satisfactory
to Landlord and to Landlord's mortgagee and authorized to do business in the
State of Massachusetts.

     12.3.  Update of Value.   Not less frequently than once in each three (3)
            ---------------                                                   
years after the Commencement Date, Tenant shall cause the full replacement value
to be revalued by indexing in accordance with the then current Industrial Cost
Trends Index for the state in which the Premises is located published by the
Factory Mutual Insurance Company, or, in the absence of such publication, in
accordance with a comparable index published by a major bank, financial
institution, university or recognized financial publication, as chosen by
Landlord in its sole discretion.

     12.4.  Intentionally Deleted.

     12.5.  Landlord's Rights.   In the event Tenant shall at any time fail,
            -----------------                                               
neglect or refuse to procure such insurance and keep the same in full force as
provided for in this Lease, then Landlord may, at its election, procure or renew
such insurance, and any amounts paid therefor by Landlord shall be so much
Additional Rent due at the next rent payment day after any such payment, with
interest at the Lease Interest Rate from the date of payment thereof by
Landlord.

     12.6.  Waiver of Subrogation.   Landlord and Tenant agree to have all
            ---------------------                                         
policies required under this Lease or which may be carried by 

                                       35
<PAGE>
 
either of them, endorsed with a clause providing that any release from liability
of, or waiver of claim for, recovery from the other party entered into in
writing by the insured thereunder prior to any loss or damage shall not affect
the validity of said policy or the right of the insured to recover thereunder,
and providing further that the insurer waives all rights of subrogation which
such insurer might have against the other party. Without limiting any release or
waiver of liability or recovery set forth elsewhere in this Lease, and
notwithstanding anything in this Lease which may appear to be to the contrary,
each of the parties hereto waives all claims for recovery from the other party
for any loss or damage to any of its property insured under valid and
collectible insurance policies to the extent of any recovery collectible under
such insurance policies.

     12.7.  Delivery to Landlord.   Tenant shall deliver to Landlord, at least
            --------------------                                              
ten (10) days prior to the date on which Tenant has the right to occupy the
Premises or any portion thereof, or the Commencement Date, whichever is the
earlier, a duplicate original insurance policy, or an insurance binder
(countersigned by the insurer), or Evidence of Insurance (in form ACCORD 27) for
each of the insurance policies Tenant is required to carry in compliance with
its obligations under this Lease.

                           13.  DAMAGE OR DESTRUCTION
                                        
   13.1.  Damage or Destruction.   If the Premises shall be damaged by fire or
          ---------------------                                               
other casualty and if such damage does not render all or a substantial portion
of the Premises untenantable, then Landlord shall proceed to repair and restore
the same with reasonable promptness, subject to reasonable delays for insurance
adjustments and delays caused by matters beyond Landlord's reasonable control.
If any such damage renders all of or a substantial portion of the Premises
untenantable, Landlord shall, within ninety (90) days after the occurrence of
such damage, estimate the length of time that will be required to substantially
complete the repair and restoration of such damage and shall by notice (the
"Estimate Notice") advise Tenant of such estimate. If it is so estimated that
the amount of time required to substantially complete such repair and
restoration will exceed two hundred seventy (270) days from the date Landlord
gives Tenant the Estimate Notice, then either Landlord or Tenant (but as to
Tenant, only if all or a substantial portion of the Premises are rendered
untenantable or otherwise unusable for the operation of an Internet data center)
shall have the right to terminate this Lease as of the

                                       36
<PAGE>
 
date of such damage upon giving notice to the other at any time within twenty
(20) days after Landlord gives Tenant the Estimate Notice (it being understood
that Landlord may, if it elects to do so, also give such notice of termination
together with the Estimate Notice). Unless this Lease is terminated as provided
in the preceding sentence, Landlord shall proceed with reasonable promptness to
repair and restore the Premises, subject to reasonable delays for insurance
adjustments and delays caused by matters beyond Landlord's reasonable control,
and also subject to zoning laws and building codes then in effect. Landlord
shall have no liability to Tenant, and Tenant shall not be entitled to terminate
this Lease (except as hereinafter provided) if such repairs and restoration are
not in fact completed within the time period estimated by Landlord, as
aforesaid, or within said two hundred seventy (270) days. If the Premises are
not repaired or restored within eighteen (18) months after the date of such fire
or other casualty, then either party may terminate this Lease, effective as of
the date of such fire or other casualty, by written notice to the other party
not later than thirty (30) days after the expiration of said eighteen (18) month
period, but prior to substantial completion of repair or restoration.
Notwithstanding anything to the contrary herein set forth, (a) Landlord shall
have no duty pursuant to this Section 13.1 to repair or restore any portion of
the alterations, additions or improvements owned or made by Tenant in the
Premises (regardless if any such alterations, additions or improvements were
paid for in whole or in part by Landlord) or to expend for any repair or
restoration amounts in excess of insurance proceeds actually received by
Landlord and available for repair or restoration; (b) Tenant shall not have the
right to terminate this Lease pursuant to this Section 13.1 if the damage or
destruction was caused by the act or neglect of Tenant or its agents or
employees, and (c) if any such damage rendering all or a substantial portion of
the Premises or the Building untenantable shall occur during the last two (2)
years of the Term, Landlord shall have the option to terminate this Lease by
giving written notice to Tenant within sixty (60) days after the date such
damage occurred, and if such option is so exercised, this Lease shall terminate
as of the date of such notice.

  13.2.          Abatement of Rent.  In no event shall Rent abate or be reduced
                 -----------------                                              
as a result of the Premises having been rendered untenantable as a result of any
such fire or casualty. In the event of termination of this Lease pursuant to
Section 13.1, Rent shall be apportioned on a per diem basis and be paid to the
date of the fire or other casualty.

                                       37
<PAGE>
 
                               14.  CONDEMNATION

     14.1.  Substantial Condemnation.   In the event the whole of the Premises
            ------------------------                                          
or a portion of the Land Parcel shall be taken as a result of the exercise of
the power of eminent domain or condemned for a public or quasi-public use or
purpose by any competent authority or sold to the condemning authority under
threat of condemnation, or in the event a portion of the Premises shall be taken
or sold as a result of such event, or if the grade of any street or alley
adjacent to the Land Parcel is changed by any competent authority, and as a
result of any such taking, sale or change of grade, in the reasonable
determination of Landlord, the Premises or the balance thereof, as the case may
be, cannot be used for the same purpose as before such taking, sale or
condemnation, then and in either of such events, the Term of this Lease shall
terminate as of the date of vesting of title pursuant to such proceeding or
sale.  The total award, compensation or damages received from such proceeding or
sale (hereinafter called the "award"), shall be paid to and be the property of
Landlord, and Tenant shall have no right to share in any such award.  Tenant
shall execute, immediately upon Landlord's demand, such documents as may be
necessary to facilitate Landlord's collection of any such award, compensation or
damages in accordance with this Section 14.1.

     14.2.  Non-Substantial Condemnation.   In the event only a part of the
            ----------------------------                                   
Premises shall be taken as a result of the exercise of the power of eminent
domain or condemned for a public or quasi-public use or purpose by any competent
authority or sold to the condemning authority under threat of condemnation, and
as a result thereof in Landlord's reasonable determination the balance of said
premises can be used for the same purpose as before such taking, sale or
condemnation, this Lease shall not terminate and Landlord, at its sole cost and
expense, shall promptly repair and restore the Premises and all Improvements;
provided, however, Landlord shall have no duty pursuant to this Section 14.2 to
expend for any repair or restoration amounts in excess of any award actually
received by Landlord.

                           15.  INTENTIONALLY DELETED
                                        

                         16.  ASSIGNMENT AND SUBLETTING

     16.1.       Assignment and Subletting.  Tenant shall not, without the
                 -------------------------                                 
prior written consent of Landlord in each instance, (a) assign, 

                                       38
<PAGE>
 
transfer, mortgage, pledge, hypothecate or encumber, or subject to or permit to
exist upon or be subjected to any lien or charge, this Lease or any interest
under it; (b) allow to exist or occur any transfer of or lien upon this Lease or
Tenant's interest herein by operation of law; (c) sublet the Premises or any
part thereof, except as expressly permitted in Section 16.9; (d) permit the use
or occupancy of the Premises or any part thereof for any purpose not provided
for under Section 3.1 hereof or by anyone other than Tenant, Tenant's employees,
and Tenant's customers; or (e) cause, suffer or permit to occur any "Change of
Control" (as such term is defined in Section 16.8 hereof). Notwithstanding
anything contained in this Lease to the contrary, Tenant shall have the right to
assign this Lease to an entity formed for the sole purpose of effectuating a
reincorporation of Tenant into a Delaware corporation (the "Reincorporated
Entity"), so long as the identity of the owners of 100% of the corporate shares
of the Reincorporated Entity are, at the time of the reincorporation, the same
as the shareholders of Tenant. Landlord has the absolute right to withhold its
consent without giving any reason whatsoever, except as herein expressly
provided to the contrary. In no event shall this Lease be assigned or assignable
by voluntary or involuntary bankruptcy proceedings or otherwise, and in no event
shall this Lease or any rights or privileges hereunder be an asset of Tenant
under any bankruptcy, insolvency or reorganization proceedings.

     16.2.       Rentals Based on Net Income.  Without thereby limiting the
                 ---------------------------                                
generality of the foregoing provisions of this Article 16, Tenant expressly
covenants and agrees not to enter into any lease, sublease or license,
concession or other agreement for use, occupancy or utilization of the Premises
which provides for rental or other payment for such use, occupancy or
utilization based in whole or in part on the net 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), and
that any such purported lease, sublease or license, concession or other
agreement shall be absolutely void and ineffective as a conveyance of any right
to or interest in the possession, use, occupancy or utilization of any part of
the Premises.

     16.3.       Tenant to Remain Obligated.  Notwithstanding anything
                 --------------------------                            
contained in this Article 16 to the contrary, consent by Landlord to any
assignment, subletting, use, occupancy or transfer shall not operate to relieve
Tenant from any covenant or obligation under or pursuant to this Lease, or be
deemed to be a consent to or relieve 

                                       39
<PAGE>
 
Tenant from obtaining Landlord's consent to any subsequent assignment, transfer,
lien, charge, subletting, use or occupancy. Tenant shall pay all of Landlord's
reasonable costs and expenses, including attorneys' fees, incurred in connection
with any assignment, transfer, lien, charge, subletting, use or occupancy made
or requested by Tenant. Tenant agrees that all advertising by Tenant or on
Tenant's behalf with respect to the assignment of this Lease or subletting of
space must be approved in writing by Landlord prior to publication.

     16.4.       Tenant's Notice; Landlord's Right to Terminate.  Tenant shall,
                 ----------------------------------------------                 
by notice in writing, advise Landlord of its intention from, on and after a
stated date (which shall not be less than sixty (60) days after the date of
Tenant's notice) to assign this Lease or sublet any part or all of the Premises
for the balance of any part of the Term, and, in such event, Landlord shall have
the right, to be exercised by giving written notice to Tenant within thirty (30)
days after receipt of Tenant's notice, to recapture the space described in
Tenant's notice, and such recapture notice shall, if given, terminate this Lease
with respect to the space therein described as of the date stated in Tenant's
notice. Tenant's said notice shall state the name and address of the proposed
subtenant or assignee, and a true and complete copy of the proposed sublease or
assignment and sufficient information to permit Landlord to determine the
financial responsibility and character of the proposed subtenant or assignee
shall be delivered to Landlord with said notice. If Tenant's notice shall cover
all of the space hereby demised, and if Landlord shall give the aforesaid
recapture notice with respect thereto, the Term of this Lease shall expire on
the date stated in Tenant's notice as fully and completely as if that date had
been herein definitely fixed for the expiration of the Term. If, however, this
Lease shall be terminated pursuant to the foregoing with respect to less than
the entire Premises, the Basic Rent and Tenant's share of taxes and all other
expenses relating to the maintenance and operation of the Premises shall be
adjusted on the basis of the number of rentable square feet retained by Tenant,
and this Lease, as so amended, shall continue thereafter in full force and
effect; provided that Tenant shall pay all costs in connection with the physical
subdivision of any portion of the Premises.  This Section 16.4 shall not apply
to any sublet of a portion of the Premises complying with Section 16.9 hereof.

     16.5.       Landlord's Consent.  If Landlord, upon receiving Tenant's said
                 ------------------                                             
notice with respect to any such space, shall not exercise its right to terminate
as aforesaid, Landlord will not unreasonably 

                                       40
<PAGE>
 
withhold its consent to Tenant's assignment of this Lease or subletting the
space covered by its notice. Landlord shall not be deemed to have unreasonably
withheld its consent to a sublease of all or part of the Premises or an
assignment of this Lease if its consent is withheld because: (a) Tenant is then
in default hereunder; (b) any notice of termination of this Lease or termination
of Tenant's possession shall have been given under Article 20 hereof; (c) the
portion of the Premises which Tenant proposes to sublease, including the means
of ingress to and egress from and the proposed use thereof, and the remaining
portion of the Premises will violate any laws, ordinances, orders, rules,
regulations or requirements of any federal, state, municipal or local
government, department, commission, or board; (d) the proposed use of the
Premises by the subtenant or assignee does not conform with the use permitted by
Section 3.1 hereof; or (e) in the reasonable judgment of Landlord, the proposed
subtenant or assignee is of a character or is engaged in a business which would
be deleterious to the reputation of the Premises, or the subtenant or assignee
is not sufficiently financially responsible to perform its obligations under the
proposed sublease or assignment; provided, however, that the foregoing are
merely examples of reasons for which Landlord may withhold its consent and shall
not be deemed exclusive of any permitted reasons for reasonably withholding
consent, whether similar to or dissimilar from the foregoing examples.

     16.6.       Profits.  If Tenant, having first obtained Landlord's consent
                 -------                                                       
to any sublease or assignment, or if Tenant or a trustee in bankruptcy for
Tenant pursuant to any Bankruptcy Law (as hereinafter defined), shall assign
this Lease or sublet the Premises, or any part thereof, at a rental or for other
consideration in excess of the Rent or pro rata portion thereof due and payable
by Tenant under this Lease, then Tenant shall pay to Landlord as additional rent
(a) in the case of an assignment, any such excess rent or other monetary
consideration immediately upon receipt thereof, or (b) in the case of a
sublease, (i) on the first day of each month during the term of any sublease,
the excess of all rent and other consideration due from the subtenant for such
month over the Rent then payable to Landlord pursuant to the provisions of this
Lease for said month (or if only a portion of the Premises is being sublet, one-
half of the excess of all rent and other consideration due from the subtenant
for such month over the portion of the Rent then payable to Landlord pursuant to
the provisions of this Lease for said month which is allocable on a square
footage basis to the space sublet), and (ii) immediately upon receipt thereof,
one-half of any other consideration realized by Tenant from such subletting; it

                                       41
<PAGE>
 
being agreed, however, that Landlord shall not be responsible for any deficiency
if Tenant shall assign this Lease or sublet the Premises or any part thereof at
a rental less than that provided for herein.

     16.7.  Assignee to Assume Obligations.  If Tenant shall assign this Lease
            ------------------------------                                     
as permitted herein, the assignee shall expressly assume all of the obligations
of Tenant hereunder in a written instrument satisfactory to Landlord and
furnished to Landlord not later than fifteen (15) days prior to the effective
date of the assignment. If Tenant shall sublease the Premises as permitted
herein, Tenant shall obtain and furnish to Landlord, not later than fifteen (15)
days prior to the effective date of such sublease and in form satisfactory to
Landlord, the written agreement of such subtenant stating that the subtenant
will attorn to Landlord, at Landlord's option and written request, in the event
this Lease terminates before the expiration of the sublease. No such assignment
or assumption or attornment shall affect or reduce any of the obligations of
Tenant under or pursuant to this Lease, and all such obligations shall continue
in full force and effect as obligations of a principal and not as obligations of
a guarantor or surety, to the same extent as though no assignment or subletting
had been made. No assignment or sublease by Tenant made as permitted under this
Article 16 shall impose any obligations on Landlord or otherwise affect any of
the rights of Landlord under this Lease.

     16.8.       Change of Control.  Notwithstanding anything to the contrary
                 -----------------                                            
in this Article 16, if Tenant is a corporation (other than a corporation the
stock of which is publicly traded), the term "Change of Control" shall mean any
change in the ownership of the shares of stock which constitute control of
Tenant other than by reason of gift or death. The term "control" as used herein
means the power to directly or indirectly direct or cause the direction of the
management or policies of Tenant. If Tenant is a partnership (general or
limited) the term "Change of Control" shall mean any change in the ownership of
the partnership interests which constitute control of Tenant other than by
reason of gift or death. If Tenant is a limited liability company, the term
"Change of Control" shall mean any change in the ownership of the membership
interests which constitute control of Tenant other than by reason of gift or
death.

     16.9.       Permitted Subleases.  Notwithstanding anything contained in
                 -------------------                                         
Section 16.1 hereof to the contrary, Tenant shall have the right from time to
time during the Term to sublease portions of the 

                                       42
<PAGE>
 
Premises provided that (i) no more than fifty percent (50%) of the Premises,
including that portion of the Premises which Tenant intends to sublease, are not
at such time subject to one or more subleases; (ii) no Event of Default then
exists; (iii) the portion(s) of the Premises subleased or to be subleased,
including the means of ingress or egress thereto and egress therefrom and the
proposed use thereof, and the remaining portion of the Premises, will not
violate any Laws; (iv) in the reasonable judgment of Landlord, the proposed
sublessee is of a character or is engaged in a business which would not be
deleterious to the reputation of the Building; and (v) the proposed sublessee is
not a government or a government agency.

                              17. LETTER OF CREDIT

     17.1.       Letter of Credit.  As a material inducement to Landlord to
                 ----------------                                           
enter into this Lease, Tenant shall deliver to Landlord  at the time that Tenant
executes and delivers this Lease, that certain unconditional irrevocable letter
of credit in the original amount of $500,000 (the "Letter of Credit"), a copy of
which is attached here to as Exhibit E.  The Letter of Credit (or any
                             ---------                               
replacement thereof as described below) shall: (a) be in the form and substance
approved by Landlord; (b) name Landlord or such person or entity which Landlord
may from time to time designate, as the beneficiary under the Letter of Credit;
(c) specifically allow Landlord to draw upon it at any time and from time to
time by delivering to the issuer of the Letter of Credit written notice
certified as being true by Landlord certifying to such issuer that Landlord is
entitled to draw thereunder pursuant to the terms of this Lease; (d) expire no
earlier than ninety (90) days after the end of the Term of the Lease and (e) be
drawn under an FDIC-insured financial institution located in the central
business district of the City of Chicago approved by Landlord.  The Letter of
Credit shall have an expiration date no earlier than one (1) year after the date
of issue, and Tenant agrees to cause the issuer of the Letter of Credit to renew
the Letter of Credit, from time to time until such time as it has been released
by Landlord as required herein, at least ninety (90) days prior to the
expiration of the Letter of Credit upon the same terms and conditions.  If the
Premises are conveyed by Landlord, Tenant, upon written request, shall amend the
Letter of Credit to change the beneficiary thereunder to the successor landlord.
In the event: (i) Tenant defaults in the performance of its obligations under
this Lease, and such default is not cured within the applicable notice period
provided in this Lease (provided, however that, for purposes of this Section
17.1, Tenant shall not have the right to receive any notice 

                                       43
<PAGE>
 
with respect to a monetary default more than twice during the Term); or (ii)
Tenant fails to deliver, renew or replace the Letter of Credit within the
applicable time limits and as otherwise provided herein, then, in any such
event, Landlord or its successor or assign, in addition to all rights and
remedies which Landlord or its successor or assign, may have under this Lease or
at law, shall have the right to present the Letter of Credit for payment and
require the issuer of the Letter of Credit to make payment to Landlord or its
successor or assign the entire amount represented by the Letter of Credit. Any
proceeds obtained by Landlord by presenting the Letter of Credit shall be used
and applied by Landlord as the Security Deposit as provided in Section 5.6.

     17.2.       Release of Letter of Credit. If, during any Lease Year: (i)
                 ---------------------------                                 
Tenant has, to Landlord's reasonable satisfaction, not to be unreasonably
withheld, reported and achieved an annual net profit for two (2) consecutive
fiscal years, and for the same two consecutive fiscal years has a net worth
equal to or exceeding $25,000,000;(ii) Tenant deposits with Landlord an amount
equal to two monthly installments of the then applicable Basic Rent, which
deposit shall then be deemed to be the Security Deposit under this Lease; (iii)
there then exists no Event of Default; and (iv) no portion of the Security
Deposit has theretofore been applied and not restored, then, the amount of the
Letter of Credit shall be reduced by $100,000.  Any reduction of the Letter of
Credit pursuant to the immediately preceding sentence shall not occur more
frequently than once each Lease Year. For purposes of this Section 17.2, "net
profit", and Tenant's reporting and achievement of the same shall be as
determined by Landlord in accordance with generally accepted accounting
principles pursuant to the financial statements delivered pursuant to Section
18.1 and such further financial information and statements as Landlord may
reasonably require.

                      18. FINANCIAL STATEMENTS; INSPECTION

     18.1.       Financial Statements. The Tenant shall provide Landlord within
                 --------------------                                           
90 days of the end of each fiscal year of Tenant and any guarantor of this
Lease, including Guarantor, annual audited balance sheets, income statements and
statements of cash flow for tenant and Guarantor and any other guarantor of this
Lease, in form acceptable to Landlord from an independent auditor certifying
such statements.

                                       44
<PAGE>
 
     18.2.       Inspection.   Landlord shall, upon not less than 48 hours
                 ----------                                               
notice and not more than twice during any Lease Year have the right, at
Landlord's sole expense, during normal business hours, to visit and inspect the
Premises, to examine all of Tenants books of account, records, reports and other
papers, to make copies and extras therefrom, and to discuss the respective
affairs, finances and accounts with Tenant's respective officers, employees and
independent public accountants (and by this provision, the Tenant authorizes
said accountants to discuss with the Landlord the affairs and finances of the
Tenant) all at such reasonable times and costs and as often as may be reasonably
requested. Tenant shall not be required to pay or reimburse Landlord for such
expenses unless an Event of Default has occurred.

                                 19.  FIXTURES
                                        
     19.1.       Fixtures.   All buildings on the Premises, all Improvements and
                 --------                                                       
all plumbing, heating, lighting, electrical, sprinkler, ventilation and air-
conditioning fixtures and equipment, and other articles of personal property
used in the operation of the Premises (as distinguished from operations incident
to the business of Tenant and the Retained Property), whether or not attached or
affixed to the Premises (hereinafter referred to as "building fixtures"), shall
be and remain a part of the Premises and shall constitute the property of
Landlord.

     19.2.       Equipment.   All of Tenant's trade fixtures and all personal
                 ---------                                                   
property, fixtures, apparatus, machinery and equipment now or hereafter located
upon the Premises, including those items listed on Exhibit F hereto, other than
                                                   ---------                   
building fixtures as defined in Section 19.1 hereof, shall be and remain the
personal property of Tenant, and the same are herein referred to as "Tenant's
equipment."

     19.3.       Removal.   Tenant's equipment may be removed from time to time
                 -------                                                       
by Tenant, provided, however, that if such removal shall injure or damage the
Premises, Tenant shall repair the damage and place the Premises in the same
condition as it would have been if such equipment had not been installed.

                        20.  EVENTS OF DEFAULT; REMEDIES

                                       45
<PAGE>
 
     20.1.       Event of Default.   Any of the following occurrences or acts
                 ----------------                                            
shall constitute an event of default (herein called an "Event of Default") under
this Lease:

          (i)  if Tenant, at any time during the continuance of this Lease (and
               regardless of the pendency of any bankruptcy, reorganization,
               receivership, insolvency or other proceedings, at law, in equity,
               or before any administrative tribunal, which have or might have
               the effect of preventing Tenant from complying with the terms of
               this Lease), shall

               (A)  fail to make any payment when due of Basic Rent, Additional
                    Rent or other sum herein required to be paid by Tenant
                    hereunder and such failure continues for five (5) days, or

               (B)  fail to observe or perform any of the other covenants or
                    conditions in this Lease which Tenant is required to observe
                    and perform and such failure shall continue for fifteen (15)
                    days after a written notice to Tenant (provided however that
                    if a non-monetary, non-hazardous covenant is in default
                    which by its nature cannot be fully cured within said 15 day
                    period and within said 15 day period Tenant takes all
                    reasonable steps needed to commence its cure and correction
                    and diligently continues to prosecute such cure and does in
                    fact cure or correct such default within a reasonable period
                    thereafter, but in no event more than 30 days after the
                    expiration of said 15-day period, then such occurrence shall
                    not be an Event of Default hereunder), or

               (C)  if a default involves a hazardous condition for which Tenant
                    is obligated pursuant to the terms of this Lease, and is not
                    cured by Tenant immediately upon written notice to Tenant,
                    or

               (D)  cease to operate its business and operations at abandon the
                    Premises during the Term;

                                       46
<PAGE>
 
          (ii)  if any representation or warranty of Tenant or any guarantor of
                Tenant's obligations under this Lease, including Guarantor
                ("guarantor"), set forth in any notice, certificate, demand,
                request or other instrument delivered pursuant to, or in
                connection with this Lease shall prove to be either false or
                misleading in any material respect as of the time when the same
                shall have been made;

         (iii)  if Tenant or any guarantor, shall file a petition commencing a
                voluntary case under the Federal Bankruptcy Code or any other
                federal or state law (as now or hereafter in effect) relating to
                bankruptcy, insolvency, reorganization, winding-up or adjustment
                of debts (hereinafter collectively called "Bankruptcy Law") or
                if Tenant or any guarantor, shall

               (A)  apply for or consent to the appointment of, or the taking of
                    possession by, any receiver, custodian, trustee, United
                    States Trustee or liquidator (or other similar official) of
                    the Premises or any part thereof or of any substantial
                    portion of Tenant's or any guarantor's, or

               (B)  make a general assignment for the benefit of its creditors,
                    or

               (C)  fail to controvert in timely and appropriate manner, or in
                    writing acquiesce to, any petition commencing an involuntary
                    case against Tenant or any guarantor, or otherwise filed
                    against Tenant or any guarantor, pursuant to any Bankruptcy
                    Law, or

               (D)  take any action in furtherance of any of the foregoing;

          (iv)  if an order for relief against Tenant or any guarantor, shall be
                entered in any involuntary case under the Federal Bankruptcy
                Code or any similar order against Tenant shall be entered
                pursuant to any other Bankruptcy Law, or if a petition
                commencing an 

                                       47
<PAGE>
 
               involuntary case against Tenant or any guarantor, or proposing
               the reorganization of Tenant or any guarantor, under any
               Bankruptcy Law shall be filed and not be discharged or denied
               within ninety (90) days after such filing, or if a proceeding or
               case shall be commenced in any court of competent jurisdiction
               seeking

               (A)  the liquidation, reorganization, dissolution, winding-up or
                    adjustment of debts of Tenant or any guarantor, or

               (B)  the appointment of a receiver, custodian, trustee, United
                    States Trustee or liquidator (or any similar official) of
                    the Premises or any part thereof or of Tenant or any
                    guarantor, or of any substantial portion of Tenant's or any
                    guarantor's, or

               (C)  any similar relief as to Tenant or any guarantor, pursuant
                    to any Bankruptcy Law, and any such proceeding or case shall
                    continue undismissed, or an order, judgement or decree
                    approving or ordering any of the foregoing shall be entered
                    and continue unstayed and in effect for ninety (90) days;

          (v)  if the Premises shall be left both abandoned and without
               maintenance as provided herein, for a period of ten (10) days; or

          (vi) if Tenant or any guarantor of this Lease, shall commit a default
               under, fail to perform or breach any obligation or covenant under
               such guarantor's guaranty, and such default, failure or breach
               shall continue for 30 days after written notice to Tenant.

     20.2.     Landlord's Remedies.   Upon the occurrence and continuation of
               -------------------                                           
any one or more of the foregoing Events of Default, Landlord at its option may,
with or without notice or demand of any kind to Tenant or any other person, have
any one or more of the following described remedies in addition to all other
rights and remedies provided at law or in equity or elsewhere herein:

                                       48
<PAGE>
 
               (i)  Landlord may terminate this Lease and the Term created
          hereby, in which event Landlord may forthwith repossess the Premises
          and be entitled to recover forthwith, in addition to any other sums or
          damages for which Tenant may be liable to Landlord, as damages a sum
          of money equal to the excess of the value of the Rent provided to be
          paid by Tenant for the balance of the Term over the fair market rental
          value of the Premises (which fair market value shall be computed using
          a present value calculation utilizing the Federal Reserve Board's then
          current Discount Rate), after deduction of all anticipated expenses of
          reletting, for said period. Should the fair market rental value of the
          Premises, after deduction of all anticipated expenses of reletting,
          for the balance of the Term exceed the value of the Rent provided to
          be paid by Tenant for the balance of the Term, Landlord shall have no
          obligation to pay to Tenant the excess or any part thereof or to
          credit such excess or any part thereof against any other sums or
          damages for which Tenant may be liable to Landlord.

               (ii)  Landlord may terminate Tenant's right of possession and may
          repossess the Premises by forcible entry and detainer suit, by taking
          peaceful possession or otherwise, without terminating this Lease, in
          which event Landlord may, but shall be under no obligation to, relet
          the same for the account of Tenant, for such Rent and upon such terms
          as shall be satisfactory to Landlord, and it is understood that
          Landlord may give priority in its efforts to renting other unleased
          comparable real estate which Landlord may then have available. For the
          purpose of such reletting, Landlord is authorized to decorate, repair,
          remodel or alter the Premises.  If Landlord shall fail to relet the
          Premises, Tenant shall pay to Landlord as damages a sum equal to the
          amount of the Rent reserved in this Lease for the balance of the Term.
          If the Premises are relet and a sufficient sum shall not be realized
          from such reletting after paying all of the costs and expenses of all
          decoration, repairs, remodeling, alterations and additions and the
          expenses of such reletting and of the collection of the Rent accruing
          therefrom to satisfy the Rent provided for in this Lease, Tenant shall
          satisfy and pay the difference upon demand therefor from time to time.
          Tenant agrees that Landlord may file suit to recover any sums falling
          due under the terms of 

                                       49
<PAGE>
 
          this Section 20.2 from time to time and that no suit or recovery of
          any portion due Landlord hereunder shall be any defense to any
          subsequent action brought by Landlord for any further amounts alleged
          to be due.

Notwithstanding the cure or grace periods set forth above, Tenant agrees and
acknowledges that (x) sums remaining unpaid shall continue to accrue interest
during any such cure or grace period, at the Lease Interest Rate; (y) Tenant
shall not be entitled to more than two (2) such written notices and cure or
grace periods in any consecutive 12 month period during the Term of this Lease;
and (z) in addition to any and all other remedies to which Landlord is entitled
for the non-payment or late payment of Rent (including interest on sums due but
not yet received), Landlord shall also be entitled to collect a late charge as
set forth in Section 5.4.

     20.3.     Waiver.   (a) Tenant hereby expressly waives, so far as permitted
               ------                                                           
by law, the service of any notice of intention to re-enter the Premises provided
for in any statute, and except as is herein otherwise provided Tenant, for and
on behalf of itself and all persons claiming through or under Tenant (including
any leasehold mortgagee or other creditor), also waives any and all right of
redemption or re-entry or re-possession in case Tenant shall be dispossessed by
a judgment or by warrant of any court or judge or in case of re-entry or
repossession by Landlord or in case of any expiration or termination of this
Lease.  The terms "enter", "re-enter", "entry" or "re-entry" as used in this
Lease are not restricted to their technical legal meanings.

     (b) No failure by Landlord to insist upon the strict performance of any
agreement, term, covenant or condition hereof or to exercise any right or remedy
consequent upon an Event of Default hereof, and no acceptance of full or partial
Rent during the continuance of any such Event of Default, shall constitute a
waiver of any such Event of Default or of such agreement, term, covenant or
condition.  No agreement, term, covenant or condition hereof to be performed or
complied with by Tenant, and no Event of Default hereof, shall be waived,
altered or modified except by a written instrument executed by Landlord. No
waiver of any Event of Default shall affect or alter this Lease, but each and
every agreement, term, covenant and condition hereof shall continue in full
force and effect with respect to any other then existing or subsequent Event of
Default hereof.

                                       50
<PAGE>
 
     (c) Tenant hereby waives and surrenders for itself and all those claiming
under it, including creditors of all kinds, (i) any right or privilege which it
or any of them may have under any present or future constitution, statute or
rule of law to redeem the Premises or to have a continuance of this Lease for
the term hereby demised after termination of Tenant's right of occupancy by
order or judgment of any court or by any legal process or writ, or under the
Terms of this Lease or after the termination of the term of this Lease as herein
provided, and (ii) the benefits of any present or future constitution, statute
or rule of law which exempts property from liability for debt or for distress
for Rent.

     20.4.     Injunction.   In the event of any default hereunder by Tenant or
               ----------                                                      
threatened Event of Default by Tenant of any of the agreements, terms, covenants
or conditions contained in this Lease, Landlord shall be entitled to enjoin such
default or Event of Default or threatened Event of Default and shall have the
right to invoke any right and remedy allowed at law or in equity or by statute.

     20.5.     Remedies Cumulative.   Each right and remedy provided for in this
               -------------------                                              
Lease shall be cumulative and shall be in addition to every other right or
remedy provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise, and the exercise or beginning of the exercise
by Landlord or Tenant of any one or more of the rights or remedies provided for
in this Lease or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by the party in
question of any or all other rights or remedies provided for in this Lease or
now or hereafter existing at law or in equity or by statute or otherwise.

     20.6.     Landlord's Right to Cure Events of Default.   Landlord may, but
               ------------------------------------------                     
shall not be obligated to, cure, at any time, without notice, any default by
Tenant under this Lease.  Whenever Landlord so elects, all reasonable costs and
expenses incurred by Landlord, including, without limitation, reasonable
attorneys' fees, together with interest thereon at the Lease Interest Rate shall
be paid by Tenant to Landlord upon demand therefor.

                                       51
<PAGE>
 
                          21.  EXPENSES OF ENFORCEMENT

     21.1.     Expenses of Enforcement.   Tenant shall pay upon demand all
               -----------------------                                    
Landlord's reasonable expenses, including reasonable attorneys' fees and court
costs (together with interest on the amount of said fees, costs and expenses at
the Lease Interest Rate) incurred either directly or indirectly in enforcing any
obligation of Tenant under this Lease after an event of Default and in defending
or otherwise participating in any legal proceedings initiated by or on behalf of
Tenant wherein Landlord is not adjudicated to be in default under this Lease.

                        22.  SUBORDINATION TO MORTGAGES

     22.1.  Subordination.   Subject to Section 22.2, this Lease and the rights
            -------------                                                      
and interest of Tenant hereunder are subject and subordinate to any and all
present and future ground or underlying leases (individually and collectively,
"Ground Leases") and to the lien of any mortgage, trust deed, or other security
interest, including, but not limited to any purchase money mortgage or other
financing arising out of or in connection with, Landlord's purchase of the Land
Parcel (individually and collectively, "Mortgages"), and to any advances made or
hereafter to be made thereunder, and to the interest thereon, and all
extensions, renewals, consolidations, modifications, and amendments thereof,
unless the holders ("Mortgagee" or Mortgagees") of such Mortgages, or the
lessors ("Ground Lessor" or "Ground Lessors") under such Ground Leases require
in writing that this Lease be superior thereto.  Such subordination shall be
automatic and self-operative, and shall not require the execution of any further
instrument to be effective.  Notwithstanding the foregoing, Tenant shall at
Landlord's request or at the request of any Mortgagee or Ground Lessor, as the
case may be, execute such further instruments or assurances as Landlord or the
Mortgagee or the Ground Lessor, as the case may be, may reasonably deem
necessary to further evidence or confirm the subordination or superiority of
this Lease to any such Mortgages, or Ground Leases.  Tenant hereby irrevocably
authorizes Landlord to execute and deliver in the name of Tenant any such
instrument or instruments if Tenant fails to do so within 10 days of request by
Landlord, provided that such failure shall in no way relieve Tenant from the
obligation of executing such instruments of subordination or superiority.

                                       52
<PAGE>
 
     22.2.  Non-Disturbance and Attornment.   As a condition to the
            ------------------------------                         
subordination set forth in Section 22.1 above, Landlord shall deliver to Tenant,
and Tenant shall execute, as soon as practical after the execution hereof, a
non-disturbance and attornment agreement from any present Mortgagee, using said
Mortgagee's customary form. Landlord further agrees that it shall be a condition
to the subordination set forth in Section 22.1 above with respect to any future
Mortgagee that Landlord deliver a non-disturbance and attornment agreement from
said future Mortgagee or Ground Lessor using such Mortgagee's or Ground Lessor's
then customary form, as the case may be.  Tenant agrees that no action taken by
the Mortgagee to enforce the Mortgage by foreclosure, or by accepting a deed in
lieu of foreclosure, or by resorting to any other remedies available to the
Mortgagee, shall terminate this Lease or invalidate any of the terms thereof and
that Tenant will attorn to the Mortgagee, to the purchaser at a foreclosure
sale, or to a grantee in a voluntary conveyance, and will recognize such entity
as Landlord for the balance of the Term of the Lease, providing that, as a
condition to the subordination set forth in Section 22.1 above, the Mortgagee
will agree with the Tenant that, as long as no Event of Default shall exist and
be continuing hereunder, Tenant's possession will not be disturbed by the
Mortgagee. Such attornment shall be automatic and self-operative and no further
instrument shall be required for said attornment to be effective.
Notwithstanding the foregoing, Tenant shall at the request of Landlord or any
Mortgagee execute such further instruments as Landlord or such Mortgagee may
reasonably deem necessary to further evidence or confirm the attornment and non-
disturbance set forth herein.

                23.  ESTOPPEL CERTIFICATE; CONSENT TO ASSIGNMENT

     23.1.  Form Estoppel Certificate.   Tenant shall at any time and from time
            -------------------------                                          
to time, within ten (10) days of request by Landlord execute, acknowledge and
deliver to Landlord an executed Estoppel Certificate on the form attached hereto
as Exhibit D or such other form as Landlord may from time to time reasonably
   ---------                                                                
require.  Any such certificate may be relied upon by any Mortgagee, assignee,
prospective purchaser, prospective Mortgagee or Ground Lessor of the Premises.

     23.2.  Consent to Assignment.   From time to time during the Term of this
            ---------------------                                             
Lease, Landlord expects to secure financing of its interest in the Premises by
assigning Landlord's interest in this Lease and the sums payable hereunder.  In
the event of any such assignment, Tenant will, within ten (10) days of request
by Landlord, execute, acknowledge 

                                       53
<PAGE>
 
and deliver to Landlord a consent to such assignment addressed to such assignee
in a form satisfactory to such assignee and Tenant will produce, at Tenant's
expense, such certificates, opinions of counsel and other documents as may be
reasonably requested by such assignee.

     23.3.  Failure to Deliver.  Tenant hereby appoints Landlord as attorney-
            ------------------                                               
in-fact for Tenant with full power and authority to execute and deliver in the
name of Tenant, if Tenant fails to execute and deliver within 10 days of a
request by Landlord, any such Estoppel Certificate or consent to assignment as
described in this Article 23 so requested by Landlord or any existing or
prospective purchaser, mortgagee, assignee or ground lessor.  In the event that
Tenant fails to deliver a fully executed and complete Estoppel Certificate or
consent to assignment within the aforesaid ten (10) day period, such failure by
Tenant shall be conclusive evidence, upon which Landlord and any such purchaser,
mortgagee, assignee or ground lessor shall be entitled to rely, that this Lease
is in full force and effect and that Landlord is not in default, and Tenant
shall be estopped from asserting against Landlord or any such purchaser,
mortgagee, assignee, or any ground lessor any defaults of Landlord existing at
that time; provided, however, that Tenant shall not thereby be relieved of the
affirmative obligation to give such statement.  Tenant's failure to complete,
execute and deliver any such Estoppel Certificate or consent to assignment
within the aforesaid ten (10) day period shall be deemed to be an Event of
Default under this Lease.

                                  24.  MERGER
                                        
     24.1.  No Merger.   There shall be no merger of this Lease or the leasehold
            ---------                                                           
estate hereby created with the fee estate in the Premises or any part thereof by
reason of the same person acquiring or holding, directly or indirectly, this
Lease or the leasehold estate hereby created or any interest in this Lease or in
such leaseholder estate as well as the fee estate in the Premises or any portion
thereof.

                                 25.  SURRENDER

     25.1. Surrender.   Except as otherwise expressly provided in this Lease or
           ---------                                                           
in any of the Exhibits hereto, upon the termination of this Lease whether by
forfeiture, lapse of time or otherwise, or upon the termination of Tenant's
right to possession of the Premises, Tenant will at once surrender and deliver
up the Premises, together with all improvements thereon (regardless of whether
such improvements were 

                                       54
<PAGE>
 
constructed by Tenant at Tenant's expense), except the Retained Property, in
their then as is condition, to Landlord. All additions, hardware, improvements,
temporary or permanent, in or upon the Premises placed there by Tenant, except
the Retained Property, shall become Landlord's property and shall remain upon
the Premises upon such termination of this Lease by lapse of time or otherwise,
without compensation or allowance or credit to Tenant, unless Landlord requests
their removal. If Landlord so requests removal of said additions, hardware, or
improvements and/or the Retained Property, and Tenant does not make such removal
by the termination of this Lease, or within ten (10) days after such request,
whichever is later, Landlord may remove the same and deliver the same to any
other place of business of Tenant or warehouse the same, and Tenant shall pay
the cost of such removal, delivery and warehousing to Landlord on demand.

     25.2.  Equipment.   Upon the termination of this Lease by lapse of time, or
            ---------                                                           
otherwise Tenant may remove Tenant's equipment in addition to any Retained
property, provided, however, that the Tenant shall repair any injury or damage
to the Premises which may result from such removal.  If Tenant does not remove
Tenant's equipment or Retained Property from the Premises prior to the end of
the Term, however ended, Landlord may, at its option, remove the same and
deliver the same to any other place of business of Tenant or warehouse the same,
and Tenant shall pay the cost of such removal (including the repair of any
injury or damage to the Premises resulting from such removal), delivery and
warehousing to Landlord on demand.  If Tenant, within thirty (30) days after the
termination of this Lease, fails to recover Tenant's equipment and/or the
Retained Property and pay to Landlord all amounts due and payable by Tenant to
Landlord under this Section 25.2, then, Landlord may treat Tenant's equipment
and/or the Retained Property, as having been conveyed to Landlord with this
Lease as a Bill of Sale, without further payment or credit by Landlord to
Tenant.

     25.3.  Holding Over.   Any holding over by Tenant of the Premises after the
            ------------                                                        
expiration or sooner termination of this Lease shall operate and be construed to
be a tenancy from month to month only, at 150% of the most recent monthly rate
of Rent and other charges payable hereunder for the then Term, or at the
election of Landlord expressed in a written notice to Tenant, and not otherwise,
such holding over shall constitute a renewal of this Lease for one (1) year at
150% of the most recent annual Rent and upon all of the other covenants and
agreements contained in this Lease, provided, however, that if Tenant quits and
fully vacates the Premises within ten (10) days following 

                                       55
<PAGE>
 
such Landlord's notice then no such one year renewal shall be created, and
Tenant shall be liable for the month-to-month tenancy Rent set forth above. If
Tenant continues to hold over after a written demand by Landlord for possession
at the expiration of this Lease or after termination by either party of a month-
to-month tenancy created pursuant to this Section, or after termination of the
Lease or of Tenant's right to possession pursuant to any other section hereof,
Tenant shall pay monthly Rent at a rate equal to double the rate of Rent payable
hereunder immediately prior to the expiration or other termination of the Lease
or Tenant's right to possession. Nothing contained in this Section 25.3 shall be
construed to give Tenant the right to hold over at any time, and Landlord may
exercise any and all remedies at law or in equity to recover possession of the
Premises, as well as any damages incurred by Landlord due to Tenant's failure to
vacate the Premises and deliver possession to Landlord as herein provided.

                       26.  SEPARABILITY; SAVINGS CLAUSE
                                        
     26.1.  Separability.   Each and every covenant and agreement contained in
            ------------                                                      
this Lease is separate and independent, and the breach of any thereof by
Landlord shall not discharge or relieve Tenant from any obligation hereunder.
If any term or provision of this Lease or the application thereof to any person
or circumstances shall at any time be invalid and unenforceable, the remainder
of this Lease, or the application of such term or provision to persons or
circumstances or at any time other than those to which it is invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and shall be enforced to the extent permitted by law.

     26.2.  Savings Clause.   No provision contained in this Lease which
            --------------                                              
purports to obligate the Tenant to pay any amount of interest or any fees, costs
or expenses which are in excess of the maximum permitted by applicable law,
shall be effective to the extent that it calls for payment of any interest or
other sums in excess of such maximum.

                                 27.  BROKERAGE

     27.1.  Brokerage.   Each party represents and warrants to the other party
            ---------                                                         
that it has had no dealings with a broker or agent in connection with this Lease
other than Markley Stearns Partners and each party covenants to pay, hold
harmless and indemnify the other party from and 

                                       56
<PAGE>
 
against any and all cost, expense or liability for any compensation, commissions
and charges claimed by any other broker or other agent with respect to this
Lease or the negotiation thereof.

                     28.  RECORDING OF MEMORANDUM OF LEASE

     28.1.  Recording.  This Lease shall not be recorded, but the parties agree,
            ---------                                                           
at the request of either of them, to execute a Memorandum of Lease for
recording, containing the names of the parties, the legal description and the
Term of this Lease and such other information, if any, that may be required
under applicable law.

                                  29.  NOTICES

     29.1.  Notices, Demands and Other Instruments.   All notices, demands,
            --------------------------------------                         
requests, consents, approvals and other instruments required or permitted to be
given pursuant to the terms of this Lease shall be in writing and shall be
deemed delivered on the earlier of (a) actual receipt, or (b) the next business
day after the date when sent by Federal Express or other nationally recognized
overnight courier, addressed as follows:

          If to Landlord:

          Markley Stearns, Inc.
          875 North Michigan Avenue
          26th Floor
          Chicago, Illinois 60611
          Attn: Eli Stearns and Dan Sullivan

          with a duplicate copy to:
 
          Levenfeld, Eisenberg,
          Janger & Glassberg
          33 West Monroe Street, 21st Flr.
          Chicago, Illinois  60603
          Abraham Trieger, Esq.

                                       57
<PAGE>
 
          If to Tenant:

          Exodus Communications, Inc.
          2650 San Tomas Expressway
          Santa Clara, California  95051
          Attn:  Richard Stoltz

          with a duplicate copy to:

          Exodus Communications, Inc.
          2650 San Tomas Expressway
          Santa Clara, California  95051
          Attn:  Adam Wegner, Esq.


Landlord and Tenant shall each have the right from time to time to specify as
its address for purposes of this Lease any other address in the United States of
America upon fifteen (15) days' written notice thereof, similarly given, to the
other party.

               30.  SUCCESSORS AND ASSIGNS; MEANING OF LANDLORD;
                    LIMITATION ON LANDLORD'S LIABILITY

     30.1.  Successors and Assigns.   All of the covenants, agreements,
            ----------------------                                     
conditions and undertakings in this Lease contained shall extend and inure to
and be binding upon not only Landlord and Tenant, but also all of their heirs,
executors, administrators, successors and assigns the same as if they were in
every case specifically named, and wherever in this Lease reference is made to
either of the parties hereto, it shall be held to include and apply to, wherever
applicable, the heirs, executors, administrators, successors and assigns of such
party, but this Section shall not operate to permit any transfer, assignment,
mortgage, encumbrance, lien, charge or subletting contrary to the provisions
contained in this Lease.  Nothing herein contained shall be construed to grant
or confer upon any person or persons, firm, corporation or governmental
authority, other than the parties herein, their heirs, executors,
administrators, successors and assigns, any right, claim or privilege by virtue
of any covenant, agreement, condition or undertaking in this Lease contained.

     30.2.  Meaning of Landlord.   The term "Landlord" as used in this Lease, so
            -------------------                                                 
far as covenants or obligations on the part of Landlord are concerned, shall be
limited to mean and include only the owner or 

                                       58
<PAGE>
 
owners at the time in question of the fee of the Premises, and in the event of
any transfer or transfers of the title to such fee, the Landlord herein named
(and in case of any subsequent transfers or conveyances, the then grantor) shall
be automatically freed and relieved, from and after the date of such transfer or
conveyance, of all personal liability as respects the performance of any
covenants or obligations on the part of Landlord contained in this Lease to be
performed after the date of such assignment; provided that this Lease is
assigned and transferred in full, and the assignee assumes all of Landlord's
obligations to be performed under this Lease after the date of such assignment;
and provided, further, that any funds in the hands of such Landlord or the then
grantor at the time of such transfer, in which Tenant has an interest, shall be
turned over to the grantee, and any amount then due and payable to Tenant by
Landlord or the then grantor under any provisions of this Lease, shall be paid
to Tenant.

     30.3.  Limitation on Landlord's Liability.   If Landlord or any successors
            ----------------------------------                                 
in interest shall be an individual, joint venture, tenancy in common, firm,
limited liability company or partnership, general or limited, there shall be no
personal liability on such individual, limited liability company, or partnership
joint venture, tenancy in common, firm, or partnership, or on the members or
partners of such joint venture, tenancy in common, firm, or partnership or on
such joint venture, tenancy in common, firm, or partnership, in respect to any
of the covenants or conditions of this Lease, and in the event of any default or
breach by Landlord with respect to any of the terms, covenants and conditions of
this Lease to be observed, honored or performed by Landlord, Tenant shall look
solely to the estate and property of Landlord in the Land Parcel and
Improvements owned by Landlord comprising the Premises for the collection of any
judgment (or any other judicial procedures, requiring the payment of money by
Landlord) and no other property or assets of Landlord shall be subject to levy,
execution, or other procedures for satisfaction of Tenant's remedies.

                               31.  MISCELLANEOUS

     31.1.  Captions.  The captions of this Lease are for convenience only and
            --------                                                          
are not to be construed as part of this Lease and shall not be construed as
defining or limiting in any way the scope or intent of the provisions hereof.

                                       59
<PAGE>
 
     31.2.  Applicable Law.   This Lease shall be construed and enforced in
            --------------                                                 
accordance with the laws of the state in which the Premises are located.

     31.3.  Amendment in Writing.   None of the covenants, terms or conditions
            --------------------                                              
of this Lease, to be kept and performed by either party, shall in any manner be
altered, waived, modified, changed or abandoned, except by a written instrument,
duly signed, acknowledged and delivered by the other party.

     31.4.  Relationship of the Parties.   Nothing contained herein shall be
            ---------------------------                                     
deemed or construed by the parties herein, nor by any third party, as creating
the relationship of principal and agent or of partnership, or of joint venture
by the parties hereto, it being understood and agreed that no provisions
contained in this Lease nor any acts of the parties hereto shall be deemed to
create any relationship other than the relationship of Landlord and Tenant.

     31.5.  Payments.   No payment by Tenant or receipt by Landlord of a lesser
            --------                                                           
amount than the Basic Rent herein stipulated and Additional Rent shall be deemed
to be other than on account of the earliest stipulated Rent, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such Rent or pursue any other remedy in this Lease provided. Landlord
shall have the right to apply payments received from Tenant pursuant to this
Lease (regardless of Tenant's designation of such payments) to satisfy any
obligations of Tenant hereunder, in such order and amounts, as Landlord in its
sole discretion, may elect.

     31.6.  Terms.   The necessary grammatical changes required to make the
            -----                                                          
provisions hereof apply either to corporations or partnerships or individuals,
men or women, as the case may require, shall in all cases be assumed as though
in each case fully expressed.

     31.7.  Lease Contains All Terms.   All prior negotiations, representations
            ------------------------                                           
and understandings between Landlord and Tenant are merged and incorporated
herein. No other agreement between Landlord and Tenant with respect to the
Premises exists, unless set forth in writing and executed by the parties.

                                       60
<PAGE>
 
     31.8.  Tenant's Representation and Warranty.   By the execution hereof,
            ------------------------------------                            
Tenant and each individual signing on behalf of Tenant, does hereby represent
and warrant that: (1) Tenant has the full power and authority to enter into this
Lease and perform the obligations of Tenant hereunder; (2) by the execution
hereof this Lease is a valid, binding obligation of Tenant, enforceable in
accordance with its terms, except for the application of bankruptcy and other
debtor's and creditor's laws generally; (3) all financial statements of Tenant
and Guarantor of Tenant submitted to Landlord are true, correct and complete in
all material respects as of the date of execution hereof.  Tenant acknowledges
and agrees that each and all of the foregoing representations and warranties are
being relied upon by Landlord as a material inducement to Landlord's execution
of this Lease.

     31.9 Landlord's Representation and Warranty.  By the execution hereof,
          --------------------------------------                            
Landlord and each individual signing on behalf of Landlord does hereby represent
that: (1) Landlord has the full power and authority to enter into this Lease and
perform the obligations of Landlord hereunder; and (2) by the execution hereof,
this Lease is a valid, binding obligation of Landlord, enforceable in accordance
with its terms, except for the application of bankruptcy and other debtor's and
creditor's laws generally.

          32.  COVENANT OF QUIET ENJOYMENT
               ---------------------------

     32.1.  Quiet Enjoyment.  Subject to the terms of this Lease, Landlord
            ---------------                                                
covenants and represents that Landlord has full right and power to execute and
perform this Lease and to grant the estate demised herein, and that at all times
when Tenant is not in default under the terms of and during the term of this
Lease, Tenant's quiet and peaceful enjoyment of the Premises shall not be
disturbed or interfered with by Landlord or by any person claiming by, through
or under Landlord.

     32.2.  Control of Premises.  It is understood and agreed that Tenant,
            -------------------                                            
during the term of this Lease and any extensions thereof, shall have exclusive
control of the Premises, except as otherwise specifically provided for in this
Lease, and neither Landlord nor any Ground Lessor or any Mortgagee may take any
action pertaining to the Premises without the prior written consent of the
Tenant, except as otherwise specifically provided for in this Lease.

                                       61
<PAGE>
 
                                 33.  EXHIBITS
                                        
     33.1.  Exhibits.   The following are Exhibits A, B, C, D, E, F and G
            --------                                                     
referred to in this Lease, which are hereby incorporated by reference herein and
made a part thereof.

     (a)  Exhibit A
          To Lease:  Legal Description of Land Parcel *

     (b)  Exhibit B
          To Lease:  Basic Rent Exhibit 

     (c)  Exhibit C
          to Lease:  Floor Plan *

     (d)  Exhibit D
          to Lease:  Estoppel Certificate

     (e)  Exhibit E
          to Lease:  Letter of Credit Form *

     (f)  Exhibit F
          to Lease: List of Retained Property

     (g)  Exhibit G
          to Lease: Initial Improvements *

     (h)  Exhibit H
          to Lease: Permitted Alterations *

                                       62


*  Omitted from the copy of this agreement with the Securities and Exchange
   Commission. Copies of those exhibits will be furnished supplementally to the
   Securities and Exchange Commission upon request.

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

LANDLORD:                             TENANT:

600 Winter Street, L.L.C.             Exodus Communications, Inc.
a Delaware Limited
Liability Company
 
By: /s/ Eli Stearns                   By: /s/ Dick Stoltz            
   -------------------------             -----------------------------
                                                                     
Its: Manager                          Name: Dick Stoltz              
    ------------------------               ---------------------------
                                                                     
                                      Its: CFO/COO                       
                                          ----------------------------
                                                  (Title)     
                                                                         
                                                                         
                                      Attest:                             
                                             -------------------------

                                      Name:                               
                                           ---------------------------
        
                                      Its:                                
                                          ----------------------------
                                                  (Title)               

                                       63
<PAGE>
 
                                   EXHIBIT A
                                   ---------

                        Legal Description of Land Parcel








                                      A-1
                                        
<PAGE>
 
                                   EXHIBIT B
                                   ---------

                               Basic Rent Exhibit
                               ------------------


     LEASE YEAR                              ANNUAL AMOUNT OF BASE RENT
     ----------                              --------------------------

     Primary Term
     ------------

     1
     ((a) Months 1 through    ($19,950.00 per month)
     day immediately
     preceding the
     Expansion Date)

     ((b) Expansion Date ($53,200.00 per month)
     through last day of
     first Lease Year)

<TABLE>
<CAPTION>
 
 
<S>                           <C>
2                             $651,168.00
3                             $664,191.36
4                             $677,475.19
5                             $691,024.69
6                             $704,845.18
7                             $718,942.09
8                             $733,320.93
9                             $747,987.35
10                            $762,947.10
 
 
First Extended Term
-------------------
 
11                            $778,206.04
12                            $793,770.16
13                            $809,645.57
14                            $825,838.48
15                            $842,355.25
16                            $859,202.35
17                            $876,386.40
18                            $893,914.13
19                            $911,792.41
</TABLE> 


                                      B-1
<PAGE>
 
20                            $930,028.26



                                      B-2
<PAGE>
 
                                   EXHIBIT C
                                   ---------

                                   Floor Plan







                                      C-1
<PAGE>
 
                                   EXHIBIT D
                                   ---------

                              Estoppel Certificate
                                        

     The undersigned, ___________________________________ (the "Tenant") is the
tenant under a lease (the "Lease") dated ___________________ (the "Lease")
between the Tenant and _______________________________________________, an
________________________ (the "Landlord") of certain real property located in
the County of _________ in the State of ______________ as described on attached
Exhibit A (the "Premises") to the Lease.  With the understanding that
________________________________ ("Lender") will rely upon the representations
made herein in making a mortgage loan of $________ (the "Loan") to
_____________________________________ evidenced by a Secured Promissory Note
(the "Note") executed by Landlord in favor of Lender and secured by a
____________________ _______________________________________ (the "Deed of
Trust") creating a first lien on the Premises and an Assignment of Leases and
Rents creating a direct and absolute assignment to Lender all of Landlord's
rights, title and interest as Landlord in and to the Lease, Tenant hereby
represents and certifies as follows:

     1.  The Tenant is the owner and holder of all rights, title and interest in
the Tenant's leasehold estate created by the Lease.  Tenant has no actual
knowledge of any prior assignment of the Landlord's interest in the Lease.

     2.  To Tenant's knowledge, Landlord does not have any unsatisfied
obligations to the Tenant arising out of or incurred in connection with the
construction of the Improvements on the Premises, the sale of the Premises to
the Landlord or the leasing of the Premises to the Tenant, and no right of
termination or offset exists with respect to any Rent or other sums payable or
to become payable by the Tenant under the Lease.

     3.  All building permits and certificates of occupancy, if any, required
for the operation of the Premises by the Tenant have been obtained, and under
applicable zoning and use laws, ordinances, rules and regulations, as well as
environmental protection laws, the Premises may be used for the purposes
contemplated by the Tenant.



                                      D-1
<PAGE>
 
     4.  The Lease is in full force and effect and has not been modified,
supplemented, canceled or amended in any respect except as stated above.

     5.  The term of the Lease commenced on or before ___________ and continues
through at least _______________.  The Tenant is obligated to pay Rent in
monthly installments in an amount not less than $___________, which Rent
obligation is continuing and is not past due or delinquent in any respect.  No
installment of Rent has been or will be prepaid more than one month in advance.

     6.  The Premises comprise a light industrial facility.

     7.  To the best of Tenant's knowledge after reasonable inquiry, no event
has occurred or is continuing which would constitute a default by Tenant under
the Lease or would constitute such a default but for the requirement that notice
be given or that a period of time elapse or both.

     8.  The Tenant agrees to deliver to Lender duplicate original copies of all
notices, offers, undertakings, demands, statements, documents or other
communications which it may deliver pursuant to the Lease.

     9.  The Tenant agrees that its obligations set forth in Section 2.1 of the
Lease concerning indemnification are modified to include Lender, its successors
and assigns and its agents, servants, employees, officers and directors.

     10. Any provisions of the Lease notwithstanding and so long as the Loan is
outstanding, Tenant agrees that it will not cause or permit any termination of
the Lease (except in accordance with the terms of the Lease).

     11. Without the prior written consent of the Lender, Tenant agrees not to
enter into any agreement subordinating or terminating the Lease (except in
accordance with the terms of the Lease) nor to enter into any agreement amending
or modifying the Lease and any attempted subordination or amendment or
termination (except in accordance with the terms of the Lease) shall be void.
In the event that the Lease shall be amended, modified or supplemented with the
Lender's prior written consent, the Lease as so amended, modified or
supplemented shall continue to be subject to the provisions of this Certificate,




                                      D-2
<PAGE>
 
Tenant covenants and agrees with Lender that Tenant shall remain obligated under
the Lease in accordance with its terms and that it will not take any action to
terminate, rescind or void the Lease notwithstanding the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution, winding up
or other proceedings affecting the Landlord or any assignee of the Landlord, and
notwithstanding any action with respect to the Lease which may be taken by an
assignee or receiver of the Landlord or any such assignee or by any court in any
such proceedings.

     12.  This Certificate shall inure to the benefit of and be binding upon the
parties hereto, and their respective successors and assigns, and to no other
person or entities, and any representations, warranties and agreements made
herein shall survive the closing of the Loan between the Lender and Landlord.

     13.  For so long as the loan is outstanding, Lender or its designee may
upon reasonable notice enter upon the property during regular business hours to
visit or inspect the Premises at such reasonable times as Lender or its designee
may request.

     14.  To the best of Tenant's knowledge after reasonable inquiry, neither
the execution, delivery nor performance of the Lease or this Certificate by
Tenant shall violate any applicable law, order, writ, injunction or decree of
any court or government authority of competent jurisdiction or result in any
default in the terms of any agreement or instrument to which Tenant is a party
or create any lien, charge or encumbrance upon said property except those
expressly created or permitted by the Lease.

     15.  The Lease and this Certificate have been duly authorized, executed and
delivered by Tenant and constitute legal, valid and binding instruments
enforceable against Tenant in accordance with their respective terms, except to
the extent such terms may be limited by bankruptcy, insolvency or similar laws
affecting creditor's rights generally.

     16.  The provisions of the Lease, including those providing for payments
thereunder, were negotiated at arms length and no consent, authorization or
approval of any government authority is necessary in connection with Tenants
execution, delivery or performance of the Lease or this Certificate.



                                      D-3
<PAGE>
 
     17.  Except as set forth herein, between Landlord and Tenant, the execution
and delivery of this Tenant's Estoppel Certificate shall in no way expand the
rights and obligations of Tenant arising under the Lease.

     In witness whereof, this Certificate has been duly executed and delivered
by the authorized officers of the undersigned as of ____________________.


                              _________________________________


Attest:____________________   By:______________________________
 
Name:______________________   Name:____________________________

Its:_______________________   Its:_____________________________
          (Title)                  (Title)





                                      D-4
<PAGE>
 
                                   EXHIBIT E
                                   ---------

                                Letter of Credit
                                        




                                      E-1
<PAGE>
 
                                   EXHIBIT F
                                   ---------

                           List of Retained Property
                                        
1.   All generators, fuel tanks and enclosures.
2.   All UPS systems, battery cabinets, and associated transformers.
3.   All electrical upgrade equipment including transformers, automatic transfer
     switches, breaker panels and distribution panels.
4.   All parabolic light fixtures.
5.   Computer raised floor tile and supports.
6.   FM200 fire suppressions system.
7.   Security/surveillance system.
8.   Furniture and systems furniture, consoles, cabinets, cages and racks.
9.   Computer equipment, servers, phone switch, telco system equipment.
10.  Full height glass walls.
11.  HVAC units and associated condensers.
12.  Appliances.




                                      F-1
<PAGE>
 
                                   EXHIBIT G
                                   ---------

                              Initial Improvements





                                      G-1
<PAGE>
 
                                   EXHIBIT H
                                   ---------

                             Permitted Alterations





                                      H-1