<PAGE>

                                                                   EXHIBIT 10.11
                                                                   -------------

                                                                      R-09/09/99
                                                                           FINAL



                                 OFFICE LEASE


                     OF PREMISES AT 15-19 CRAWFORD STREET,

                            NEEDHAM, MASSACHUSETTS


                                     FROM


                            BHX, LLC, AS TRUSTEE OF
                             CRAWFORD REALTY TRUST


                                      TO


                            SMARTERKIDS.COM, INC.,
                            A DELAWARE CORPORATION
<PAGE>

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>
                                                                                     Page
                                                                                     ----
<S>                                                                                  <C>
SUMMARY OF BASIC TERMS

ARTICLE I           .............................................................    10
---------

ARTICLE II          .............................................................    17
----------
     Section 2.1    Lease of The Premises........................................    17
     -----------    ---------------------
     Section 2.2    Communications Antenna; Backup Generator.....................    17
     -----------    ---------------------------------------
     Section 2.3    Parking......................................................    18
     -----------    -------
     Section 2.4    Commencement Date: Lease Term: Right to Extend...............    18
     -----------    ----------------------------------------------
     Section 2.5    Security Deposit.............................................    18
     -----------    ----------------
     Section 2.6    Lease Amendment..............................................    20
     ----------     ---------------

ARTICLE III         .............................................................    20
-----------

     Section 3.1    Landlord's Work..............................................    20
     -----------    ---------------
     Section 3.2    Tenant's Work; Pre-Term Occupancy............................    23
     -----------    ---------------------------------
     Section 3.3    Approval of Plans and Specifications.........................    24
     -----------    ------------------------------------
     Section 3.4    Signs........................................................    24
     -----------    -----

ARTICLE IV          .............................................................    25
----------

     Section 4.1    Base Rent....................................................    25
     -----------    ----------
     Section 4.2    Certain Additional Rent......................................    26
     -----------    ------------------------
     Section 4.3    Net Lease....................................................    27
     -----------    ----------
     Section 4.4    Taxes........................................................    27
     -----------    ------
     Section 4.5    Insurance Costs..............................................    28
     -----------    ----------------
     Section 4.6    Operating Costs..............................................    28
     -----------    ----------------
     Section 4.7    Payment for Electricity......................................    28
     -----------    ------------------------
     Section 4.8    Annual Statement: Tenant's Audit.............................    28
     -----------    ---------------------------------

ARTICLE V           .............................................................    29
---------

     Section 5.1    Permitted Use................................................    29
     -----------    -------------
     Section 5.2    Restrictions on Use..........................................    29
     -----------    -------------------
     Section 5.3    Hazardous Materials..........................................    30
     -----------    -------------------

ARTICLE VI          .............................................................    30
----------

     Section 6.1    Landlord's Services..........................................    30
     -----------    -------------------
     Section 6.2    Extraordinary Use............................................    31
     -----------    -----------------
     Section 6.3    Interruption; Delay..........................................    31
     -----------    -------------------
     Section 6.4    Additional Services..........................................    32
     -----------    -------------------
     Section 6.5    Tenant's Right to Cure.......................................    32
     -----------    ----------------------
     Section 6.6    Exoneration and Indemnification..............................    32
     -----------    -------------------------------

ARTICLE VII         .............................................................    33
-----------
</TABLE>
<PAGE>

<TABLE>
<S>                                                                                  <C>
     Section 7.1    Rent.........................................................    33
     -----------    ----
     Section 7.2    Utilities....................................................    33
     -----------    ---------
     Section 7.3    No Waste.....................................................    33
     -----------    --------
     Section 7.4    Maintenance; Repairs, and Yield-Up...........................    33
     -----------    ----------------------------------
     Section 7.5    Alterations by Tenant........................................    34
     -----------    ---------------------
     Section 7.6    Trade Fixtures and Equipment.................................    35
     -----------    ----------------------------
     Section 7.7    Compliance with Laws.........................................    35
     -----------    --------------------
     Section 7.8    Contents at Tenant's Risk....................................    35
     -----------    -------------------------
     Section 7.9    Exoneration: Indemnification and Insurance...................    36
     -----------    ------------------------------------------
     Section 7.10   Landlord's Access............................................    37
     ------------   -----------------
     Section 7.11   No Liens.....................................................    37
     ------------   --------
     Section 7.12   Compliance with Rules and Regulations........................    37
     ------------   -------------------------------------

ARTICLE VIII        .............................................................    37
------------

     Section 8.1    Subletting and Assignment....................................    37
     -----------    -------------------------

ARTICLE IX          .............................................................    40
----------

     Section 9.1    Subordination to Mortgages and Ground Leases.................    40
     -----------    --------------------------------------------
     Section 9.2    Lease Superior at Mortgagee's or Ground Lessor's Election....    40
     -----------    ---------------------------------------------------------
     Section 9.3    Notice to Mortgagee and Ground Lessor........................    41
     -----------    -------------------------------------
     Section 9.4    Limitations on Obligations of Mortgagees, around Lessors and
     -----------    ------------------------------------------------------------
                    Successors...................................................    41
                    ----------
     Section 9.5    Estoppel Certificate By Tenant and Information Concerning
     -----------    ---------------------------------------------------------
                    Tenant.......................................................    41
                    ------

ARTICLE X           .............................................................    42
---------

     Section 10.1   Damage From Casualty.........................................    42
     ------------   --------------------
     Section 10.2   Abatement of Rent............................................    42
     ------------   -----------------
     Section 10.3   Limitation on Landlord's and Tenant's Obligations............    43
     ------------   -------------------------------------------------
     Section 10.4   Landlord's Right to Terminate................................    43
     ------------   -----------------------------
     Section 10.5   Tenant's Right to Terminate..................................    43
     ------------   ---------------------------

ARTICLE XI          .............................................................    43
----------

     Section 11.1   Eminent Domain, Right to Terminate and Abatement in Rent.....    43
     ------------   --------------------------------------------------------
     Section 11.2   Restoration..................................................    44
     ------------   -----------
     Section 11.3   Landlord to Control Eminent Domain Action....................    44
     ------------   -----------------------------------------

ARTICLE XII         .............................................................    44
-----------

     Section 12.1   Event of Default.............................................    44
     ------------   ----------------
     Section 12.2   Landlord's Remedies..........................................    45
     ------------   ------------------
     Section 12.3   Reimbursement of Landlord....................................    46
     ------------   -------------------------
     Section 12.4   Landlord's Right to Perform Tenant's Covenants...............    46
     ------------   ----------------------------------------------
     Section 12.5   Cumulative Remedies..........................................    47
     ------------   -------------------
     Section 12.6   Expenses of Enforcement......................................    47
     ------------   -----------------------
     Section 12.7   Landlord's Default...........................................    47
     ------------   ------------------
     Section 12.8   Limitation of Landlord's Liability...........................    48
     ------------   ----------------------------------
     Section 12.9   Late Payment and Administrative Expense......................    48
     ------------   ---------------------------------------

ARTICLE XIII        .............................................................    48
------------
</TABLE>
<PAGE>

<TABLE>
     <S>                                                                                  <C>
     Section 13.1   Brokers............................................................   49
     ------------   -------
     Section 13.2   Quiet Enjoyment....................................................   49
     ------------   ---------------
     Section 13.3.  [intentionally omitted]............................................   49
     -------------  -----------------------
     Section 13.4   Notices............................................................   49
     ------------   -------
     Section 13.5   Waiver of Subrogation..............................................   49
     ------------   ---------------------
     Section 13.6   Entire Agreement: Execution; Time of the Essence, Headings, Table
     ------------   -----------------------------------------------------------------
                    of Contents........................................................   50
                    ----------
     Section 13.7   Partial Invalidity.................................................   50
     ------------   ------------------
     Section 13.8   No Waiver..........................................................   50
     ------------   ---------
     Section 13.9   Holdover...........................................................   50
     ------------   -------
     Section 13.10  When Lease Becomes Binding........................................    51
     -------------  --------------------------
     Section 13.11  No Recordation....................................................    51
     -------------  --------------
     Section 13.12  As Is.............................................................    51
     -------------  -----
     Section 13.13  Tenant's Financial Statements: Certain Representations and
     -------------  ----------------------------------------------------------
                    Warranties of Tenant..............................................    51
                    --------------------
     Section 13.14  Confidentiality...................................................    52
     -------------  ---------------
     Section 13.15  Summary of Basic Terms............................................    52
     -------------  ----------------------
     Section 13.16  [intentionally omitted]...........................................    52
     -------------  -----------------------
     Section 13.17  Year 2000 Compliance..............................................    52
     -------------  --------------------
</TABLE>

Exhibits:
---------

A  -  Property Description
B  -  Site Plan
C  -  Building Floor Plan
D  -  Base Building Work
E  -  Tenant Improvements Plans and Specifications
F  -  Tenant's Work
G  -  Rules and Regulations
H  -  Clerk's Certificate
I  -  Form of Letter of Credit
<PAGE>

                            SUMMARY OF BASIC TERMS

                                 OFFICE LEASE

                     OF PREMISES AT 15-19 CRAWFORD STREET,
                            NEEDHAM, MASSACHUSETTS

                                      TO

                             SMARTERKIDS.COM, INC.


                         DATED AS OF SEPTEMBER 8, 1999

--------------------------------------------------------------------------------

     The following is a summary of certain basic terms of this Lease which is
intended for the convenience and reference of the parties.  Capitalized terms
used, but not defined, in this Summary of Basic Terms, have their defined
meanings in this Lease.  In addition, some of the following items or terms are
incorporated into this Lease by reference to the item or term or to this
"Summary of Basic Terms."

1.   Landlord:  BHX, LLC, a Massachusetts limited liability company, as Trustee
     --------
     of Crawford Really Trust, under Declaration of Trust dated June 9, 1997,
     and filed with the Norfolk Registry District of the Land Court on June 9,
     1997 as Document No. 764674.

2.   Tenant:  SmarterKids.com, Inc., a Delaware corporation.
     ------

3A.  Premises:  The Building, as depicted on Exhibit B to this Lease, comprised
     --------                                ---------
     of an agreed upon 37,539 leasable square feet of office space (the "Office
                                                                         ------
     Space") and an agreed upon 1,613 leasable square feet of storage space (the
     -----
     "Storage Space").  The Office Space and Storage Space are depicted on
      -------------
     Exhibit C.
     ---------

3B.  Landlord's Property:  The real property with the Building and any other
     -------------------
     improvements now or hereafter thereon, now commonly known as 15-19 Crawford
     Street, Needham, Massachusetts, as described on Exhibit A to this Lease.
                                                     ---------

3C.  Leasable Square Footage of the Building:  An agreed upon 39,152 square
     ---------------------------------------
     feet.

3D.  Leasable Square Footage of the Office Space:  An agreed upon 37,539 square
     -------------------------------------------
     feet.

3E.  Leasable Square Footage of the Storage Space:  An agreed upon 1,613 square
     --------------------------------------------
     feet.
<PAGE>

4A.  Completion Date:  November 15, 1999, subject to extension due to Excusable
     ---------------
     Delay as provided in Section 3.1(b).

4B.  Landlord's Work:  Landlord shall perform Landlord's Work as set forth in
     ---------------
     Section 3.1 and Exhibits D and E.
                     ----------------

4C.  Tenant's Work:  Tenant shall perform the Tenants Work as set forth in
     -------------
     Section 3.2 and on Exhibit F.
                        ---------

4D.  Tenant Improvements Allowance.  Landlord shall provide Tenant an allowance
     -----------------------------
     for the Tenant Improvements Costs (the "Tenant Improvements Allowance"), in
                                             -----------------------------
     an amount equal to the lesser of (i) $17.00 multiplied by the Leasable
     Square Footage of the Office Space or (ii) the actual amount of the Tenant
     Improvements Costs.  In the event that the Tenant Improvements Allowance
     exceeds $12.00 multiplied by the Leasable Square Footage of the Office
     Space, then the Base Rent for the Office Space shall be increased so as to
     amortize such excess over the Initial Term with interest at the rate of 10%
     per annum.  All Tenant Improvements Costs in excess of the Tenant
     Improvements Allowance shall be paid by Tenant as part of Tenant's
     Contribution.

4E.  Tenant's Contribution:  Tenant shall contribute $0.00 toward the cost of
     ---------------------                            ----
     the Tenant Improvements Work, payment of which shall be Made at the time of
     execution of this Lease.  Thereafter, Tenant's Contribution is subject to
     increase as provided in Section 3.1.

5A.  Lease Term:  From the Commencement Date until October 31, 2004.
     ----------

5B.  Commencement Date:  The later of (i) the Substantial Completion Date or
     -----------------
     (ii) November 1, 1999; provided, however, that if Tenant occupies any
     portion of the Premises prior thereto, the Commencement Date shall be the
     date on which Tenant first occupies a portion of the Premises.

5C.  Rights of Extension:  Tenant shall have the right to extend the Lease Term
     -------------------
     for one (1) term of five (5) years in accordance with Section 2.4.

6.   Permitted Use:  The Office Space shall be used for offices and no other
     -------------
     use.  The Storage Space shall be used for warehouse and storage purposes
     and no other use.

7.   Tenant's Trade Style (d/b/2):  SmarterKids.com.
     ----------------------------

8.   Security Deposit:  $500,000.00. The Security Deposit shall be in the form
     ----------------
of cash or an unconditional, irrevocable letter of credit which meets the
requirements of Section 2.5.

9.   Tenant's Parking Allocation:  Tenant shall have the right to use the
     ---------------------------
parking spaces located on the Landlord's Property, subject to the provisions of
Section 2.3.

10.  Base Rent:  Base Rent for the Lease Term is as follows:
     ---------
<PAGE>

<TABLE>
<CAPTION>
                                                          ANNUAL             MONTHLY           PSF
PERIOD                                                     RATE                RATE           RATE
------------------------------------------------------------------------------------------------------
<S>                                                    <C>                  <C>              <C>
From the Commencement Date Through
October 31, 2004 (inclusive), Tenant will
pay Base Rent, as follows:

Office Space:                                          $  998,537.40        $83,211.45       $26.60

Storage Space:                                         $   16,130.00        $ 1,344.17       $10.00

                                                       -------------------------------
                                    Total:             $1,014,667.40        $84,555.62       N/A
</TABLE>

The Base Rent is subject to increase as provided in Item 4D of the Summary of
Basic Terms.

The Base Rent during any Extension Term will be determined in accordance with
Section 4.1 (b).

11A. Additional Rent:  Tenant's Tax Escalation, Tenant's Insurance Escalation,
     ---------------
     Tenant's Electricity Costs, Tenant's Operating Cost Escalation and/or Other
     Additional Rent.

11B. Tenant's Tax Escalation:  Taxes for any Tax Fiscal Year minus the Tax
     -----------------------
     Base; payable monthly (when base exceeded) in equal installments.  "Tax
                                                                         ---
     Base" means Taxes for the Base Tax Fiscal Year.
     ----

11C. Tenant's Insurance Escalation:  Insurance Costs for any calendar year
     -----------------------------
     minus the Insurance Cost Base; payable (when base exceeded) in equal
     monthly installments.  "Insurance Cost Base" means Insurance Costs for the
     Base Year.

11D. Payment of Tenant's Electricity Cost:  Tenant shall pay its actual costs
     ------------------------------------
     for for electricity provided to the Premises ("Tenant's Electricity Cost").
                                                    -------------------------
     At Landlord's sole option, Landlord may require that Tenant make monthly
     estimated payments of the Tenant's Electricity Cost provided to the
     Premises based on $1.00 per square foot of the Leasable Square Footage in
     the Premises and shall initially equal $39,152.00 per year and $3,262.67
     monthly. Landlord may adjust the amount collected from Tenant on account of
     Tenant's Electricity Cost from time to time based upon Landlord's estimate
     of the actual amount of Tenant's Electricity Cost.

11E. Tenant's Operating Cost Escalation:  Operating Costs for any calendar year
     ----------------------------------
     minus the Operating Cost Base; payable monthly (when base exceeded) in
     equal installments.  "Operating Cost Base" means Operating Costs for the
                           -------------------
     Base Year.

11F. Other Additional Rent:  Includes all fees, charges, expenses, fines,
     ---------------------
     assessments, interest, indemnities, or other sums other than Base Rent,
     Tenant's Tax Escalation, Tenant's Insurance Escalation and Tenant's
     Operating Cost Escalation due under this Lease.
<PAGE>

11G. Base Year:  When referring to Taxes, Base Tax Fiscal Year shall mean Tax
     ---------
     Fiscal Year 2001 (which is from July 1, 2000 through June 30, 2001).  When
     referring to Insurance Costs or Operating Costs, Base Year shall mean
     calendar year 2000.

12.  Heat and Utilities:  To be supplied by Landlord (including water and sewer
     ------------------
     charges) as part of the Operating Costs (except that Tenant's Electricity
     Cost shall not be included in Operating Costs and, unless Landlord elects
     to collect Tenants Electricity Cost in accordance with the terms of this
     Lease, shall be paid directly by Tenant).

13.  First Payment:  First month's Base Rent in the amount of $84,555.62, plus
     -------------
     the first month's installment of Tenants Electricity Cost in the amount of
     $3,262.67, plus the letter of credit constituting the Security Deposit in
     the amount of $500,000.00, have been delivered to Landlord upon execution
     of this Lease.

14.  Brokers:  The Bulfinch Companies, Inc., having an office at First Needham
     -------
     Place, 250 First Avenue, Suite 200, Needham, Massachusetts  02494 and
     Cushman and Wakefield of Massachusetts, Inc., having an office at 101 Arch
     Street, 21/st/ Floor, Boston, Massachusetts 02110.

15A. Tenant's Address For Notices, Telephone Number, Fax Number and Taxpayer
     -----------------------------------------------------------------------
     Identification No.:
     ------------------

     1.  Before the Commencement Date:

     200 Highland Avenue, #401
     Needham, MA 02494
     Attn:  Robert Cahill, Vice President Finance
     Telephone:  (781) 449-7567;
     Fax:  (781) 449-4887
     Email:  bcahill@smarterkids.com

     2.     After the Commencement Date:

     15-19 Crawford Street
     Needham, MA  02494
     Attn:  Robert Cahill, Vice President Finance
     Telephone:  (781) 449-7567;
     Fax:  (781) 449-4887
     Email:  bcahill@smarterkids.com

     3.  Tenant F.I.D.#04-3226127

     With a copy to:

     Joseph Torpy, Esq.
<PAGE>

     Testa, Hurwitz & Thibeault, LLP
     125 High Street
     Boston, MA  02110
     Telephone:  (617) 248-7000;
     Fax:  (617) 248-7100
     Email:  torpy@tht.com

15B. Landlord's Address for Notices:
     ------------------------------

     BHX, LLC, as Trustee of Crawford Realty Trust
     c/o The Bulfinch Companies, Inc.
     First Needham Place
     250 First Avenue, Suite 200
     Needham, MA 02494
     Attention:  Robert A Schlager
     Telephone:  (781) 707-4000;
     Fax:  (781) 707-4001
     Email:  ras@bulfinch.com

     with a copy to:

     Vorys, Sater, Seymour and Pease LLP
     Suite 2100, Atrium Two
     221 E. Fourth Street
     Cincinnati, OH  45202-0236
     Attn:  Charles C. Bissinger, Jr., Esq.
     Telephone:  (513) 723-4000;
     Fax:  (513) 723-4056
     Email:  ccbissinger@vssp.com

15C. Guarantor:  Not applicable as of the date of execution of this Lease.
     ---------
<PAGE>

                                 OFFICE LEASE
                                 ------------

     THIS LEASE (this "Lease"), made as of the 8th day of September, 1999,
between BHX, LLC, a Massachusetts limited liability company, as Trustee of
Crawford Realty Trust, under Declaration of Trust dated June 9, 1997, and filed
with the Norfolk Registry District of the Land Court on June 9, 1997 as Document
No. 764674, and SmarterKids.com, Inc., a Delaware corporation, is as follows.

                             W I T N E S S E T H:
                             - - - - - - - - - -

                                   ARTICLE I
                                   ---------
                             CERTAIN DEFINITIONS
                             -------------------

     In addition to the words and terms defined elsewhere in this Lease, the
following words and terms shall have in this Lease the meanings set forth in
this Article (whether or not underscored):

     "Additional Rent" means (a) Tenants Tax Escalation, (b) Tenant's Insurance
      ---------------
Escalation, (c) Tenant's Operating Cost Escalation, (d) Tenant's Electricity
Costs, and (e) all Other Additional Rent.

     "Applicable Interest Rate" means the lesser of (a) a rate per annum equal
      ------------------------
to five percent (5%) plus the prime rate of Fleet National Bank, Boston,
Massachusetts (or any successor) in effect an the day the payment became due and
subject to change thereafter or (b) the maximum rate permitted by applicable
law.

     "Bankruptcy Laws" means any existing or future bankruptcy, insolvency,
      ---------------
reorganization, dissolution, liquidation or arrangement or readjustment of debt
law or any similar existing or future law of any applicable jurisdiction, or any
laws amendatory thereof or supplemental thereto, including, without limitation,
the United States Bankruptcy Code of 1978, as amended (11 U.S.C. Section 101 et
seq.), as any or all of the foregoing may be amended or supplemented from time
to time.

     "Base Building Work" means the work described in Exhibit D hereto.
      ------------------                              ---------

     "Base Tax Fiscal Year" means the Tax Fiscal Year beginning July 1, 2000,
      --------------------
and ending June 30, 2001.

     "Base Rent" has the meaning set forth in Item 10 of the Summary of Basic
      ---------
Terms.

     "Base Year" has the meaning set forth in Item 11G of the Summary of Basic
      ---------
Terms.

     "Brokers" has the meaning set forth in Item 14 of the Summary of Basic
      -------
Terms.
<PAGE>

     "Building" means the building located on Landlord's Property.  The address
      --------
of the Building is 15-19 Crawford Street, Needham, Massachusetts.

     "Building Floor Plan" means the floor plan of the Building attached hereto
      -------------------
as Exhibit C.

     "Business Day" means Monday through Friday, except holidays.  The term
      ------------
"holiday" shall mean the federal day of celebration of the following holidays:
New Year's Day, Martin Luther King Day, President's Day, Memorial Day, July 4th,
Labor Day, Columbus Day, Veterans Day, Thanksgiving, Christmas and any other
weekday on which banks in the City of Boston, Massachusetts, are closed or
required to be closed.

     "Business Hours" means Monday through Friday, 8:00 a.m. to 6:00 p.m., and
      --------------
Saturday, 8:00 a.m. to 1:00 p.m., except holidays.  The term `holiday" shall
mean the federal day of celebration of the following holidays:  New Year's Day,
Martin Luther King Day, Presidents Day, Memorial Day, July 4th, Labor Day,
Columbus Day, Veterans Day, Thanksgiving, Christmas and any other weekday on
which banks in the City of Boston, Massachusetts, are closed or required to be
closed.

     "Commencement Date" has the meaning set forth in Item 5B of the Summary of
      -----------------
Basic Terms.

     "Completion Date" has the meaning set forth in Item 4A of the Summary of
      ---------------
Basic Terms.

     "Construction Notice" has the meaning set forth in Section 3.1(a).
      -------------------

     "Environmental Law" means the Comprehensive Environmental Response,
      -----------------
Compensation, and Liability Act ("CERCLA"), 42 U.S.C. (S)9601 et seq., the
                                  ------                      -- ----
Resource Conservation and Recovery Act, 42 U.S.C. (S)6901 et seq., the Hazardous
                                                          -- ----
Materials Transportation Act, 49 U.S.C. (S)1802 et seq., the Toxic Substances
                                                -- ----
Control Act, 15 U.S.C. (S)2601 et seq., the Federal Water Pollution Control Act,
                               -- ----
33 U.S.C. (S)1251 et seq., the Clean Water Act, 33 U.S.C. (S)1321 et seq., the
                  -- ----                                         -- ----
Clean Air Act, 42 U.S.C. (S)7401 et seq., the Massachusetts Oil and Hazardous
                                 -- ----
Material Release Prevention and Response Act, Chapter 21E of the Massachusetts
General Laws, all regulations promulgated thereunder, and any other federal,
state, county, municipal, local or other statute, law, ordinance or regulation
(including any state or local board of health rules, regulation, or code), or
any common law (including common law that may impose strict liability or
liability based on negligence), which may relate to or deal with human health,
the environment, natural resources, or Hazardous Materials, all as may be from
time to time amended or modified.

     "Event of Default" means the occurrence of any of the events listed in
      ----------------
Section 12.1 of this Lease and the expiration of any applicable cure periods.

     "Excusable Delay" means those matters which are beyond Landlord's
      ---------------
reasonable control including, without limitation, the following:  delays caused
by Tenant (or by Tenant's Invitees), or delays caused by, or resulting from,
acts of God, accidents, breakdowns, war, civil commotion, fire or other
casualty, labor difficulties, shortages of labor, material or equipment,
<PAGE>

governmental regulations or orders, weather conditions or other causes beyond
Landlord's reasonable control.

     "Extension Term" means the period of time beginning at the end of the
      --------------
Initial Term and ending at 11:59 p.m. on October 31, 2009.

     "Final Amounts Due" has the meaning set forth in Section 2.5.
      -----------------

     "GAAP" means generally accepted accounting principles, consistently
      ----
applied.

     "Guarantor" means any Person now or hereafter guarantying any of Tenant's
      ---------
obligations under this Lease.

     "Hazardous Materials" or "Hazardous Substances" means, at any time, (a) any
      -------------------      --------------------
"hazardous substance" as defined in (S)101(14) of CERCLA (42 U.S.C. (S)9601(14))
or regulations promulgated thereunder, (b) any "solid waste," "hazardous waste,"
or "infectious waste," as such terms are defined in any Environmental Law at
such time; (c) asbestos, urea-formaldehyde, polychlorinated biphenyls ("PCBs"),
biomedical materials or waste, nuclear fuel or material, chemical waste,
radioactive material, explosives, known carcinogens, petroleum products and by-
products and other dangerous, toxic or hazardous pollutants, contaminants,
chemicals, materials or substances which may be hazardous to human or animal
health or the environment or which are listed or identified in, or regulated by,
any Environmental Law; and (d) any additional substances or materials which at
such time are classified or considered to be hazardous or toxic under any
Environmental Law.

     "Initial Term" means the period beginning at 12:01 A.M. on the Commencement
      ------------
Date and ending at 11:59 P.M. on October 31, 2004.

     "Insurance Base" has the meaning set fourth in Item 11C of the Summary of
      --------------
Basic Terms.

     "Insurance Costs" includes the cost of insuring the entire Landlord's
      ---------------
Property, including without limitation the buildings and improvements now or
hereafter situated thereon, and all operations conducted in connection
therewith, with such policies, coverages and companies and in such limits as may
be selected by Landlord (and/or which may be required by Landlord's lenders),
including, but not limited to, fire insurance with extended or with all-risk
coverage, comprehensive public liability insurance covering personal injury,
deaths and property damage with a personal injury endorsement covering false
arrest, detention or imprisonment, malicious prosecution, libel and slander, and
wrongful entry or eviction, rent loss or business interruption insurance,
workers compensation insurance, plate glass insurance, contractual liability
insurance, boiler insurance, and fidelity bonds.

     "Invitees" means employees, workers, visitors, guests, customers,
      --------
suppliers, agents, contractors, representatives, licensees and other invitees.
<PAGE>

     "Land" means the land located at 15-19 Crawford Street, Needham,
      ----
Massachusetts more particularly described in Exhibit A attached hereto and
                                             ---------
incorporated by reference herein and which is depicted on the Site Plan.

     "Landlord" means BHX, LLC, a Massachusetts limited liability company as
      --------
Trustee of Crawford Realty Trust under Declaration of Trust dated June 9, 1997,
and filed with the Norfolk Registry District of the Land Court on June 9, 1997
as Document No. 764674, its successors and assigns.

     "Landlord's Architect" means Smits Associates Architects, Inc. or any other
      --------------------
architect or architectural firm designated by Landlord.

     "Landlord's Property" means the Land, the Building and all present or
      -------------------
future appurtenances and/or improvements to the Land and/or the Building.

     "Landlord's Work" means the Base Building Work and the Tenant Improvements
      ---------------
Work.

     "Leasable Square Footage of the Building" has the meaning set forth in Item
      ---------------------------------------
3C of the Summary of Basic Terms.

     "Leasable Square Footage of the Office Space" has the meaning set forth in
      -------------------------------------------
Item 3D of the Summary of Basic Terms.

     "Leasable Square Footage of the Storage Space" has the meaning set forth in
      --------------------------------------------
Item 3E of the Summary of Basic Terms.

     "Lease Term" means the Initial Term and, if Tenant timely and properly
      ----------
exercises its right to extend pursuant to Section 2.4 of this Lease, the
Extension Term.

     "Lease Year" means the twelve (12) month period beginning an the
      ----------
Commencement Date and on each anniversary of the Commencement Date throughout
the Lease Term; provided, however, that if the Commencement Date occurs on a
date other than the first day of a month, the first Lease Year shall consist of
the portion of the calendar month in which the Commencement Date occurs and the
next subsequent 12 calendar months, and the first day of each Lease Year
thereafter shall be the first day of the month after the month in which the
Commencement Date occurs.

     "Legal Requirements" means all applicable laws, statutes, rules,
      ------------------
regulations and requirements of governmental authorities, including, but not
limited to, zoning laws and building codes.

     "Market Rent" has the meaning set forth in Section 4.1(b).
      -----------

     "Negotiation Period" has the meaning set forth in Section 4.1(b).
      ------------------

     "Office Space" has the meaning set forth in Item 3A of the Summary of Basic
      ------------
Terms.
<PAGE>

     "Operating Cost Base" has the meaning set forth in Item 11E of the Summary
      -------------------
of Basic Terms.

     "Operating Costs" means all costs, expenses and disbursements of every kind
      ---------------
and nature (except Taxes, Tenant's Electricity Costs and Insurance Costs) which
Landlord shall pay or become obligated to pay in connection with owning,
operating, managing, insuring, maintaining, repair or replacing Landlord's
Property, all as determined by Landlord.  Operating Costs shall include, by way
of illustration, but not be limited to: all charges payable by Landlord in
connection with the performance of Landlord's maintenance and repair obligations
with respect to Landlord's Property; all charges payable by Landlord to provide
janitorial service to Landlord's Property; all charges payable by Landlord to
provide heating, ventilating and air conditioning services to the Building; all
charges payable by Landlord to provide utility services to Landlord's Property,
all costs related to the operation of any shuttle or other transportation
service between Landlord's Property and public transportation stations (if
required by applicable laws, rules, regulations or requirements of authorities
with jurisdiction over the Landlord's Property); all costs related to any police
details at any entrances to Landlord's Property; all costs related to trash,
debris, and refuse removal, all costs related to removal of snow and ice; all
costs of pest and vermin control; all costs of providing, maintaining, repairing
and replacing of paving, curbs, walkways, landscaping, planters, roofs, walls,
drainage, utility lines, security systems and other equipment; all costs of
painting the exterior and/or interior of the Building; all costs of repaving,
resurfacing, and restriping Parking Areas and drives; all costs of lighting,
cleaning, waterproofing, repairing and maintaining the Building.  Parking Areas
and any other portions of Landlord's Property; all surcharges, costs and
expenses that may result from any Environmental Laws provided that such
surcharges, costs and expenses relate to or are directly associated with
Tenant's or Tenant Invitee's use of the Landlord's Property (excluding costs
related to Hazardous Materials which are located on Landlord's Property on the
date hereof or which are placed on the Landlord's Property by a Person other
than Tenant or a Tenant Invitee) or other laws, rules, regulations, guidelines
or orders; all costs of licenses, permits and inspection fees; all legal,
accounting, inspection and consulting fees; all costs of capital improvements to
the Building, Parking Areas, or other portions of Landlord's Property amortized
over their expected useful life based upon and including a market rate of
interest; all costs of wages, salaries and benefits of operating personnel,
including welfare, retirement, vacations and other compensation and fringe
benefits and payroll taxes; management fees equal to five percent (5.0%) of
gross rents (which management fees may be payable to an affiliate of Landlord);
all materials and supplies, including charges for telephone, overnight courier,
postage, stationery, supplies and other materials and expenses required for the
routine operation or management of Landlord's Property.  However,
notwithstanding the above, the following specific items shall not be included:
debt service and ground rent payments; any cost or expenditure for which
Landlord has been reimbursed by insurance proceeds; costs which have been
reimbursed under warranties provided to Landlord by contractors who have
warranty obligations; leasing commissions, attorneys' fees and collection costs
related to negotiation of tenant leases; expenses which are billed to, and paid
directly by, the Tenant; advertising, marketing, promotional, public relations
or brokerage fees, commissions or expenditures; financing and refinancing costs
in respect of any mortgage or security interest placed upon the Landlord's
Property or any portion thereof, including payments of principal, interest,
finance or other charges, and any points and
<PAGE>

commissions in connection therewith; interest or penalties for any late or
failed payments by Landlord under any contract or agreement unless resulting
from Tenant's failure to pay any amount due under this Lease on or before the
date when due; rent or other charges payable under any ground or underlying
lease; costs of any additions to or expansions of the Landlord's Property; costs
of repairs, restoration or replacements occasioned by fire or other casualty or
caused by the exercise of the right of eminent domain; the cost to make
improvements, alterations and additions to the Landlord's Property which are
required in order to render the same in compliance with Legal Requirements
existing on the date of this Lease; amounts paid to subsidiaries or affiliates
of Landlord for services rendered to Landlord's Property (except management
fees) to the extent such amounts exceed the competitive costs for delivery of
such services were they not provided by such related parties; and management
fees to the extent in excess of five percent (5.0%) of gross rents.

     "Other Additional Rent" has the meaning set forth in Item 11F of the
      ---------------------
Summary of Basic Terms.

     "Parking Areas" means those portions of Landlord's Property which may be
      -------------
used for parking as depicted on the Site Plan, as such areas may be changed by
Landlord from time to time.

     "Permitted Use" has the meaning set forth in Item 6 of the Summary of Basic
      -------------
Terms.

     "Person" means any individual, partnership, joint venture, trust, limited
      ------
liability company, business trust, joint stock company, unincorporated
association, corporation, institution, or entity, including any governmental
authority.

     "Premises" has the meaning set forth in Item 3A of the Summary of Basic
      --------
Terms.

     "Proceedings" has the meaning set forth in Section 4.4(b).
      -----------

     "Proposed Change Order" has the meaning set forth in Section 3.1 (c).
      ---------------------

     "Refund" has the meaning set forth in Section 4.4(b).
      ------

     "Rules and Regulations" means the rules and regulations promulgated by
      ---------------------
Landlord with respect to Landlord's Property, a copy of which are attached
hereto as Exhibit G, as the same may be reasonably modified by Landlord from
          ---------
time to time upon notice to Tenant.

     "Security Deposit" has the meaning set forth Item 8 of the Summary of Basic
      ----------------
Terms.

     "Selection Period" has the meaning set forth in Section 4.1 (b).
      ----------------

     "Storage Space" has the meaning set forth in Item 3A of the Summary of
      -------------
Basic Terms.

     "Substantial Completion Date" means the date, as reasonably determined in
      ---------------------------
good faith by Landlord's Architect, on which (a) the Landlord's Work is
substantially complete, except for incomplete or unsatisfactory items which do
not unreasonably interfere with Tenant's use of the
<PAGE>

Premises for the Permitted Use or (b) the building inspector for the Town of
Needham gives his final sign-off on the building permit, so that Tenant may
legally occupy the Premises for the Permitted Use, whichever is later.

     "Summary of Basic Terms" means the Summary of Basic Terms which is affixed
      ----------------------
to this Lease immediately after the table of contents of this Lease.

     "Tax Base" has the meaning set forth in Item 11B of the Summary of Basic
      --------
Terms.

     "Tax Fiscal Year" shall mean July 1 through June 30 next following, or such
      ---------------
other tax period as may be established by law for the payment of Taxes.

     "Taxes" shall mean (a) all taxes, assessments, betterments, water or sewer
      -----
entrance fees and charges including general, special, ordinary and
extraordinary, environmental, or any other charges (including charges for the
use of municipal services if billed separately from other taxes), levied,
assessed or imposed at any time by any governmental authority upon or against
the Land, the Building, or the fixtures, signs and other improvements thereon
then comprising Landlord's Property and (b) all attorneys' fees, appraisal fees
and other fees, charges, costs and/or expenses incur-red in connection with any
Proceedings or other proceedings related to the amount of the Taxes and/or the
tax classification and/or the assessed value of the Landlord's Property.  This
definition of Taxes is based upon the present system of real estate taxation in
the Commonwealth of Massachusetts; if taxes upon rentals or any other basis
shall be substituted, in whole or in part, for the present ad valorem real
estate taxes, the term "Taxes" shall be deemed changed to the extent to which
there is such a substitution for the present ad valorem real estate taxes.

     "Tenant" means SmarterKids.com, Inc., a Delaware corporation, its permitted
      ------
successors and permitted assigns.

     "Tenant Improvements Allowance" has the meaning set forth in Item 4D of the
      -----------------------------
Summary of Basic Terms.

     "Tenant Improvements Costs" means all costs of the Tenant Improvements
      -------------------------
Work, including, but not limited to (i) the fees of all architects and engineers
for design and supervision services, the cost of all required permits, (ii) the
charges of all contractors (including, but not limited to, overhead and profit
of all contractors), subcontractors, material suppliers and laborers engaged in
the performance of the Tenant Improvements Work, (iii) five percent (5%) profit
for the contractor on all costs of the Tenant Improvements Work and (iv) a fee
to the Landlord in the amount of two and one-half percent (2.5%) of all costs of
the Tenant Improvements Work.

     "Tenant Improvements Plans and Specifications" has the meaning set forth in
      --------------------------------------------
Section 3.1.

     "Tenant Improvements Work" means the work to be performed by Landlord in
      ------------------------
accordance with the Tenant Improvements Plans and Specifications.
<PAGE>

     "Tenant Invitees" means Tenant, its subtenants and assignees, together with
      ---------------
their respective Invitees.

     "Tenants Contribution" has the meaning set forth in Item 4E of the Summary
      --------------------
of Basic Terms.

     "Tenant's Electricity Cost" has the meaning set forth in Item 11D of the
      -------------------------
Summary of Basic Terms.

     "Tenant's Insurance Escalation" means the excess, if any, of (a) the
      -----------------------------
Insurance Costs for any calendar year, minus (b) the Insurance Base.

     "Tenants Operating Cost Escalation" means the excess, if any, of (a) the
      ---------------------------------
Operating Costs for any calendar year minus (b) the Operating Cost Base.

     "Tenant's Submission" has the meaning set forth in Section 3.1(c).
      -------------------

     "Tenants Tax Escalation" means the excess, if any, of (a) the Taxes for any
      ----------------------
Tax Fiscal Year minus (b) the Tax Base.

     "Tenant's Work" means the work, if any, to be performed by Tenant with
      -------------
respect to the Premises, as set forth in the Tenant's Work Plans and
Specifications.

     "Tenant's Work Plans and Specifications" means the plans and specifications
      --------------------------------------
for the Tenant's Work, as set forth in Exhibit F attached hereto, as the same
may be modified from time to time in accordance with this Lease.

                                  ARTICLE II
                                  ----------

                              LEASE OF PREMISES
                              -----------------

     Section 2.1  Lease of The Premises.  Landlord does hereby lease the
     ----------------------------------
Premises to Tenant, and Tenant hereby leases the Premises from Landlord, upon
and subject to the terms and provisions of this Lease and all zoning ordinances,
and easements, restrictions, and conditions of record.  Subject to the rights of
Landlord and applicable Legal Requirements; (a) Tenant shall have exclusive use
of the Land and the Parking Areas located thereon and (b) Tenant shall have
access to the Premises twenty-four hours a day, seven days a week, 365 days a
year, subject to the terms of this Lease.

     Section 2.2  Communications Antenna; Backup Generator.  Subject to
     -----------------------------------------------------
applicable Legal Requirements and the terms and conditions of this Lease
(including, but not limited to, Section 3.2 and Article VII), Tenant shall have
the right to install (a) a communications antenna on the roof of the Building
(provided, however, that Tenant shall not be permitted to make any penetrations
of the roof) and (b) a backup generator on the Land at a location on the Land to
be agreed upon by Landlord and Tenant.  The plans and specifications for the
foregoing shall be subject to Landlord's review and approval, which approval
shall not be unreasonably withheld.
<PAGE>

     Section 2.3  Parking.  Subject to the Rules and Regulations, Tenant
     --------------------
Invitees are authorized to park passenger automobiles in the Parking Areas at no
cost to Tenant (except as otherwise provided in this Lease) in common with
Landlord and Landlord's Invitees.  Tenant shall not (a) permit any Tenant
Invitees (other than visitors) to park in spaces designated as "visitor" spaces,
(b) permit any Tenant Invitees to park in spaces designated as `reserved" spaces
(unless reserved for Tenant), (c) permit the total number of passenger
automobiles parked on Landlord's Property by Tenant Invitees, at any time, to
exceed the number of spaces available to Tenant, and (d) except for delivery
trucks using designated loading and unloading facilities, permit any Tenant
Invitee to park any vehicle on Landlord's Property other than passenger
automobiles.  Landlord may, from time to time, designate one or more spaces as
reserved for the exclusive use of Landlord and/or for Landlord's Invitees.

     Section 2.4  Commencement Date: Lease Term: Right to Extend.
     -----------------------------------------------------------

          (a) The Lease Term shall commence at 12:01 A.M. on the Commencement
Date and, unless Tenant timely and properly exercises its right to extend
pursuant to Section 2.4(b) hereof, shall end at 11:59 P.M. on the last day of
the Initial Term.  At the request of Landlord or Tenant made after the
Commencement Date, Landlord and Tenant will execute a written amendment to, and
restatement of, the Summary of Basic Terms pursuant to Section 2.6, setting
forth the Commencement Date.

          (b) Provided there does not then exist an Event of Default or
circumstances which with the giving of notice, the passage of time, or both,
would constitute an Event of Default, Tenant shall have the right to extend the
Lease Term for one (1) period of five (5) years by giving Landlord written
notice specifying such extension, which notice must be received by Landlord not
more than eighteen (18) months nor less than twelve (12) months prior to the
expiration date of the Initial Term.  If such extension becomes effective, the
Lease Term shall be automatically extended upon the same terms and conditions
except that (i) Base Rent shall be payable for such Extension Term as set forth
in Section 4.1(b) and (ii) there shall be no further right to extend or renew
beyond the period expressly set forth herein.  The right of extension is
personal to SmarterKids.com, Inc. and is not exercisable by any subtenant or
assignee permitted hereunder.

     Section 2.5  Security Deposit.
     -----------------------------

          (a) Simultaneously with the execution and delivery of this Lease,
Tenant shall deliver to Landlord a security deposit in the amount specified in
Item 8 of the Summary of Basic Terms.  The Security Deposit is security for the
faithful performance and observance by Tenant of the terms, provisions and
conditions of this Lease and is not an advance payment of rent.  It is agreed
that if an Event of Default occurs, Landlord may use, apply or retain the whole
or any part of the Security Deposit to the extent required for payment of any
Base Rent, Additional Rent, or any other sum as to which Tenant is in default or
for any sum which Landlord may expend or may be required to expend by reason of
the occurrence of an Event of Default in respect of any of the terms, covenants
and conditions of this Lease, including, but not limited, to any damage or
deficiency accrued before or after summary proceedings or other re-entry by
Landlord, including
<PAGE>

the costs of such proceeding or re-entry and further including, without
limitation, reasonable attorney's fees. It is agreed that Landlord shall always
have the right to apply the Security Deposit, or any part thereof, as aforesaid,
without notice and without prejudice to any other remedy or remedies which
Landlord may have, or Landlord may pursue any other such remedy or remedies in
lieu of applying the Security Deposit or any part thereof. No interest shall be
payable on the Security Deposit and Landlord shall have the right to commingle
the Security Deposit with other funds of Landlord. If Landlord shall apply the
Security Deposit in whole or in part, Tenant shall immediately upon demand pay
to Landlord the amount so applied to restore the Security Deposit to its
original amount, Because Tenant's Operating Cost Escalation, Tenant's Tax
Escalation, Tenant's Insurance Escalation, Tenant's Electricity Costs and other
Additional Rent are subject to annual reconciliation based on actual amounts
(collectively "Final Amounts Due") determined to be due, in addition to the
               -----------------
other rights provided herein to Landlord regarding the Security Deposit,
Landlord shall have the right, in its discretion, upon the end of the Lease and
delivery of the Premises in accordance with the terms hereof, to hold up to
$50,000.00 of the Security Deposit until thirty (30) days after the
determination of Final Amounts Due at which time Landlord has the right to
deduct the Final Amounts Due from the remaining Security Deposit and return any
balance of the Security Deposit to Tenant. Landlord shall determine the Final
Amounts Due within ninety (90) days of expiration of the term or earlier
termination of this Lease. If the remaining Security Deposit, if any, is not
sufficient to pay Tenants obligations hereunder, Tenant shall pay the same
within ten (10) days of billing from Landlord. In the event of a sale or other
transfer of Landlord's Property, or leasing of the entire Landlord's Property
including the Premises subject to Tenant's tenancy hereunder, Landlord shall
transfer the Security Deposit then remaining to the vendee or lessee and,
provided that such vendee or lessee acknowledges receipt of the same in writing,
Landlord shall thereupon be released from all liability for the return of such
Security Deposit to Tenant; and Tenant agrees to look solely to the new landlord
for the return of the Security Deposit then remaining. The holder of any
mortgage upon Landlord's Property shall never be responsible to Tenant for the
Security Deposit or its application or return unless the Security Deposit shall
actually have been received in hand by such holder. Tenant further covenants
that it will not assign or encumber or attempt to assign or encumber the
Security Deposit and that neither Landlord nor its successors or assigns shall
be bound by any such assignment, encumbrance, attempted assignment or attempted
encumbrance. Except as provided above, the Security Deposit or any remaining
balance thereof after deduction for amounts due Landlord, shall be returned to
Tenant within thirty (30) days after the expiration of the Lease Term.

          (b) If all or any portion of the Security Deposit is in the form of a
letter of credit, such letter of credit must satisfy all of the following
conditions:  (i) the letter of credit must be in the exact form attached hereto
as Exhibit I with an expiration date not less than one (1) year after the date
the letter of credit is delivered to Landlord; (ii) the beneficiary of the
letter of credit must be Landlord or Landlord's designee; (iii) the letter of
credit must be irrevocable, unconditional and transferable one or more times
without charge; (iv) the letter of credit must by issued by a U.S. bank with
assets in excess of $10 billion, which bank is otherwise satisfactory to
Landlord in its sole and absolute discretion; and (v) the letter of credit must
provide that it may be drawn at a location in Boston, Massachusetts.  If, at any
time, the issuer of the letter of credit gives notice of its election not to
renew, extend and/or reissue the letter of credit, then Tenant shall, on or
before forty-five (45) days prior to the expiration of the term of the letter of
credit,
<PAGE>

deliver to Landlord (1) a replacement letter of credit satisfying all of the
above conditions or (2) cash in the full amount of the expiring letter of
credit; and if Tenant fails to timely deliver to Landlord a replacement letter
of credit as provided above or cash in the full amount of the expiring letter of
credit, such failure shall constitute an Event of Default and, in addition to
any other rights which Landlord might have by reason of such Event of Default,
Landlord may draw on the letter of credit and hold the proceeds of such drawing
as part of the Security Deposit. If (x) Landlord shall reasonably feel insecure
with the creditworthiness of the bank issuing the letter of credit and Tenant
shall fail, within ten (10) days after notice, to either provide a replacement
letter of credit as provided above or cash in the full amount of the existing
letter of credit, or (y) Tenant fails to provide Landlord with cash in the full
amount of the letter of credit within ten (10) days after (I) any proceedings
under the Bankruptcy Code or any insolvency law are instituted with the bank as
debtor or (II) the bank issuing the letter of credit is taken over by the
Federal Deposit Insurance Corporation, the Resolution Trust Corporation or a
similar entity, then such failure by Tenant under clauses (x) or (y) of this
sentence shall constitute an Event of Default and, in addition to any other
rights which Landlord might have by reason of such Event of Default, Landlord
may draw on the letter of credit and hold the proceeds of such drawing as part
of the Security Deposit.

     Section 2.6  Lease Amendment.  If, pursuant to any provision of this Lease,
     ----------------------------
there results a change in (or, in the case of the Commencement Date, the
confirmation of any of the terms or amounts in the Summary of Basic Terms
(including, without limitation, the Base Rent) then in effect, Landlord and
Tenant will promptly execute a written amendment to, and restatement of, the
Summary of Basic Terms, substituting the changed (or confirmed) terms and
recomputed amounts in lieu of each of the applicable terms and amounts then in
effect which have been changed.  As of the effective date of the amendment to
the Summary of Basic Terms, the changed terms (and recomputed amounts) will be
effective for all purposes of this Lease, and the amended and restated Summary
of Basic Terms will be a part of, and incorporated into, this Lease.


                                  ARTICLE III
                                  -----------
                        LANDLORD'S WORK; TENANT'S WORK
                        ------------------------------

     Section 3.1  Landlord's Work.
     ----------------------------

          (a)  Tenant Improvements Plan and Specifications.
               -------------------------------------------

               (i)   Landlord has retained Landlord's Architect to prepare the
final, detailed working plans and specifications for the build-out of the Office
Space (the "Tenant Improvements Plans and Specifications"), which Tenant
            --------------------------------------------
Improvements Plans and Specifications are identified in Exhibit E attached
                                                        ---------
hereto. On or before September 13, 1999, Landlord will give Tenant written
notice (a "Construction Notice") specifying the amount of the Tenant
           -------------------
Improvements Costs on the basis of the Tenant Improvements Plans and
Specifications. If a Construction Notice does not specify Tenant Improvements
Costs which exceed the Tenant Improvements Allowance, then Tenant shall not
respond to the Construction Notice and Tenant shall be deemed to have approved
the Construction Notice upon delivery. However, if a
<PAGE>

Construction Notice specifies Tenant Improvements Costs which exceed the Tenant
Improvements Allowance, then Tenant shall, within two (2) Business Days after
receipt of the Construction Notice, give written notice to Landlord either
approving or disapproving the Construction Notice, and the failure of Tenant to
disapprove the Construction Notice within such time shall be deemed to
constitute approval. If Tenant has the right to and does disapprove a
Construction Notice, then Tenant shall, within two (2) Business Days after
giving notice of disapproval, prepare, at its expense, and submit to Landlord
revised Tenant Improvements Plans and Specifications. Tenant shall submit such
revised Tenant Improvements Plans and Specifications to Landlord for Landlord's
review and approval. Within two (2) Business Days after receipt of such revised
Tenant Improvements Plans and Specifications, Landlord shall, by written notice
to Tenant, approve or disapprove the revised Tenant Improvements Plans and
Specifications. In any disapproval of revised Tenant Improvements Plans and
Specifications, Landlord shall specify in reasonable detail the respects in
which the revised Tenant Improvements Plans and Specifications are not
satisfactory to Landlord and the changes which Landlord desires in order that
such revised Tenant Improvements Plans and Specifications will be satisfactory
to Landlord. Within two (2) Business Days after receiving any notice of
disapproval from Landlord with respect to the revised Tenant Improvements Plans
and Specifications, Tenant, at its expense, will further revise the revised
Tenant Improvements Plans and Specifications as reasonably requested by Landlord
and will resubmit the revised Tenant Improvements Plans and Specifications to
Landlord for review and approval in accordance with the procedures set forth in
this Section. If the Tenant Improvements Costs as specified in an approved
Construction Notice exceed the Tenant Improvements Allowance, then Tenant shall
pay to Landlord, within three (3) Business Days after receipt of the
Construction Notice, the amount of such excess, as part of Tenant's
Contribution. Tenant shall have the right to review all of Landlord's books and
records with respect to the Tenant Improvements Costs and Landlord agrees that
the Tenant Improvements Costs shall not exceed the actual costs of the Tenant
Improvements Work plus the contractors fee of five percent (5%) and the
Landlord's fee of two and one-half percent (2.5%) of all costs of the Tenant
Improvements Work as provided in this Lease.

               (ii)  The Completion Date specified in this Lease is based upon
the assumption that the Construction Notice will be approved not later than
September 16, 1999. If the approval of the Construction Notice is delayed beyond
September 16, 1999, then, except to the extent that such delay is attributable
to delay by Landlord beyond the period provided in Section 3.1(a)(i) in giving a
Construction Notice, the Completion Date shall be extended by the period of such
delay, and Tenant shall pay, as and when the same would have become due and
payable but for such delay, an amount equal to the Base Rent for the period of
such delay.

          (b)  Landlord shall perform Landlord's Work in a good and workmanlike
manner using materials of a quality consistent with the Tenant Improvements
Plans and Specifications.  Subject always to Excusable Delay, the Landlord's
Work shall be substantially completed (as determined by Landlord's Architect) by
the Completion Date.  If any of Landlord's Work is not competed as a result of
an Excusable Delay, the Completion Date shall be extended upon notice from
Landlord to Tenant for a reasonable period of time under all of the
circumstances.  Landlord reserves the right to make changes in Landlord's Work
from time to time as Landlord deems necessary and/or appropriate in order to
complete the performance of
<PAGE>

Landlord's Work. Without limiting the generality of the foregoing, Landlord may
substitute materials to minimize delays and Landlord may make such changes to
the Tenant Improvements Plans and Specifications as Landlord deems necessary or
appropriate in light of actual conditions, provided that no such changes shall
materially and adversely affect the function or appearance of the Premises.
Landlord shall obtain a certificate of occupancy for the Office Space.

          (c)  In the event that Tenant requests any changes in Landlord's Work,
the following procedures shall apply:

               (i)    Tenant shall give Landlord written notice of the proposed
     change(s) with such details, plans and specifications as may be required by
     Landlord ("Tenant's Submission").
                -------------------

               (ii)   Landlord shall review Tenant's Submission and, Landlord
     shall, within fifteen (15) days after receipt of Tenant's Submission,
     reject it, approve it or approve it with conditions.  If Landlord rejects
     Tenant's Submission or fails to respond within the specified period,
     Landlord's Work shall not be changed.  If Landlord approves Tenant's
     Submission, Landlord shall provide Tenant with a proposed change order (a
     "Proposed Change Order") setting forth (A) the increase in the Tenants
      ---------------------
     Contribution, if any, which will be required due to the work included in
     Tenant's Submission, (B) the expected delay, if any, in achieving
     substantial completion of Landlord's Work in connection therewith and (C)
     any conditions imposed by Landlord on the grant of its approval.

               (iii)  If Landlord provides Tenant with a Proposed Change Order,
     Tenant shall, within five (5) days after receipt of such Proposed Change
     Order, either reject or accept it.  If Tenant rejects such Proposed Change
     Order (or fails to respond within the specified period), Landlord's Work
     shall not be changed.  If Tenant approves such Proposed Change Order, then
     (A) Tenant shall execute the Proposed Change Order and deliver a signed
     original thereof to Landlord within the specified five (5) day period,
     together with payment of (1) the full amount of the specified increases, if
     any, in the Tenants Contribution and (2) an amount equal to the Base Rent
     for the period of time set forth in clause (ii)(B) above, and (B) the
     Completion Date shall be extended for the time period specified in clause
     (ii)(B) above.

          (d)  Tenant's taking possession of the Premises on or after the
Commencement Date shall be conclusive evidence, as against Tenant, that the
Premises were in good order and satisfactory condition in substantial accordance
with the Tenant Improvements Plans and Specifications when Tenant took
possession, except for punch list items on a list signed by both parties within
thirty (30) days after the date on which Tenant takes possession of the
Premises.

          (e)  Warranties.  For any construction or installation, Tenant shall
               ----------
receive, to the extent possible, the benefit of any and all warranties from
contractors, subcontractors, material suppliers, equipment suppliers,
architects, engineers or others in connection with the Premises; however,
Landlord will not have any obligation to bring any action to enforce any
<PAGE>

warranty claim. Landlord shall be deemed to have warranted to Tenant, at the
time of delivery to Tenant of the Premises upon Substantial Completion: (i) that
Landlord's Work has been Substantially Completed in accordance with the Tenant
Improvements Plans and Specifications, with such modifications as are permitted
under the terms of this Lease or approved by Tenant; (ii) that the electrical,
plumbing, HVAC and other mechanical systems in the Building and serving the
Premises are in good working order and condition and conform to the requirements
(where applicable to the Premises) contained in this Lease; (iii) that the
Premises are served by water, electricity and other utilities; (iv) that the
Premises are served by sewer, and such sewer system, as installed, is of
sufficient capacity to serve the Building when fully occupied; and (v) the
Landlord's Work is free of material defects in materials or workmanship.
Notwithstanding the foregoing, Landlord's warranties shall exclude, and Landlord
shall not be responsible for (1) any damage or defects arising out of (or
aggravated by) the acts or omissions of Tenant, and/or any other Tenant Invitee,
(2) ordinary wear and tear, and (3) except to the extent provided in Article VI,
routine maintenance, repairs and/or replacements and/or any damage or defects
due to neglect or failure to provide proper maintenance and repairs. Landlord's
warranties as set forth herein shall be limited to items as to which Tenant
gives Landlord written notice within twelve (12) months of the Substantial
Completion Date and in any event with respect to the Building's HVAC system
shall extend for not less than a full cooling and heating season following
Substantial Completion of the Premises. Except for the express warranties set
forth in this Section 3.1(e), Landlord disclaims all warranties (express or
implied) with respect to the Landlord's Work, and Tenant hereby releases all
warranties not expressly stated in this Section 3.1(e).

     Section 3.2  Tenant's Work; Pre-Term Occupancy.  Tenant agrees to perform
     ----------------------------------------------
all of Tenant's Work as specified herein and on Exhibit F and to complete same
                                                ---------
by the Completion Date, as the same may be extended as provided herein.  The
Tenant's Work Plans and Specifications and all modifications thereto shall be
subject to Landlord's prior written approval, which approval shall not be
unreasonably withheld.  Except as hereinafter set forth, Tenant's Work shall
commence as soon as the Tenant Improvements Work has progressed to the point at
which Tenant's Work may reasonably begin.  All of Tenant's Work shall be done in
a good and workmanlike manner using new and high quality materials, in
accordance with the provisions of all laws, rules, regulations and insurance
requirements applicable thereto and in accordance with the requirements of
Section 7.5 hereof.  In the event that Tenant enters Landlord's Property prior
to the Commencement Date, such entry shall be at Tenants own risk solely for the
purpose of preparing for occupancy by Tenant and installing fixtures and
equipment; provided, however, that in so entering Landlord's Property prior to
the Commencement Date, Tenant shall not interfere with Landlord's construction
activities: and provided, further, that Tenant may not so enter Landlord's
Property prior to October 1, 1999 without the prior written approval of
Landlord, which approval Landlord shall have no obligation to give.  During the
period of any entry by Tenant prior to the Commencement Date pursuant to the
above provisions of this Section, Tenant shall be subject to the insurance
obligations set forth in Sections 7.8 and 7.9 and to all other obligations of
Tenant under this Lease, other than the obligations to pay Base Rent, Tenant's
Tax Escalation, Tenant's Insurance Cost Escalation and Tenants Operating Cost
Escalation, and, prior to any such entry by Tenant prior to the Commencement
Date, Tenant shall furnish Landlord with a certificate of insurance confirming
its procurement of the insurance required by Sections 7.8 and 7.9. In the event
of any delay in the performance of Landlord's
<PAGE>

Work and/or increase in the cost thereof due to any entry by Tenant or any
Tenant Invitee prior to the Commencement Date, Tenant shall pay to Landlord,
within ten (10) days after demand, an amount equal to the Base Rent for the
period of such delay plus any and all such cost increases.

     Section 3.3  Approval of Plans and Specifications.  If Tenant's Work as set
     -------------------------------------------------
forth on Exhibit F does not refer to complete plans and specifications approved
         ----------
by Landlord, then Tenant shall promptly, following execution of this Lease,
cause such plans and specifications to be prepared at Tenant's cost and
submitted to Landlord for Landlord's prior written approval before Tenant's Work
is commenced.  Landlord shall not unreasonably withhold or delay such approval.
Landlord's approval of any Plans and specifications pursuant to this Section or
any other provisions of this Lease shall not, and shall not be deemed to, be a
certification, representation, or warranty by Landlord that the plans and
specifications are adequate, complete, or in compliance with applicable codes
and legal requirements.

     Section 3.4 Signs.  Tenant shall have the right, at Tenant's sole cost, to
     -----------------
erect one (1) sign on the exterior of the Building provided that such sign
complies with the provisions of this Section 3.4 and other applicable provisions
of this Lease.  The sign's location, design, shape, size, materials, color and
type and all other matters related to such sign (other than Tenant's right to
erect a sign) shall be subject to Landlord's prior written approval (which
approval shall be in Landlord's sole discretion), following submission by Tenant
to Landlord of detailed plans and specifications therefor.  Tenant shall provide
such plans and specifications to Landlord within twenty (20) days after the date
hereof.  Except for the one sign permitted pursuant to this Section 3.4, Tenant
shall not erect any signs which are visible from the exterior of the Building.
Tenant shall not erect signs except in compliance with all applicable
requirements of the Town of Needham and all other applicable Legal Requirements.
Tenant shall be solely responsible for confirming that any proposed sign is in
compliance with all such requirements.  All costs of obtaining permits and
approvals, creating, installing, illuminating, maintaining, repairing, and/or
replacing such sign shall be paid by Tenant.  Any signs located in the interior
of the Building (i) shall comply with all applicable Legal Requirements and the
sign criteria included in the Rules and Regulations, and (ii) and shall have
been approved of in writing and in advance by Landlord following submission of
detailed plans and specifications by Tenant to Landlord.  Tenant shall maintain
its signs, if any, in good repair and condition.  Immediately upon the
expiration of the Lease Term or other termination of this Lease, Tenant shall
remove all signs from the exterior of the Building and shall make all repairs
necessary to restore the exterior surfaces to the condition of the surrounding
exterior surfaces of the Building.

                                  ARTICLE IV
                                  ----------
                          BASE RENT; ADDITIONAL RENT
                          --------------------------

     Section 4.1 Base Rent.
     ---------------------

          (a)  In consideration of the lease of the Premises pursuant to this
Lease, Tenant shall pay therefor Base Rent in the amounts set forth in Item 10
of the Summary of Basic Terms.

          (b)  (i)  The Base Rent during the Extension Term will be the greater
of (A) the Base Rent in effect during the last Lease Year prior to the Extension
Term or (B) ninety-


<PAGE>

five percent (95%) of the Market Rent, as determined by this Section 4.1(b).
Within thirty (30) days after Tenant gives to Landlord written notice of
exercise of the extension option pursuant to Section 2.4 hereof, Landlord and
Tenant shall simultaneously exchange proposals setting forth their opinions as
to the market rent for the Premises for the Extension Term "Market Rent").
                                                            -----------
Landlord and Tenant shall negotiate in good faith until the later of: (X)
fifteen (15) days after the exchange of proposals or (Y) the date which is ten
(10) months prior to the expiration of the Initial Term (such period being
herein called the "Negotiation Period") to attempt to agree upon the Market
                   ------------------
Rent, and, in the course of such negotiations, each party may from time to time
submit modified proposals to the other. If the parties agree upon the Market
Rent prior to the determination of the arbitrator pursuant to Section 4.1(b)(ii)
hereof, whether such agreement is reached during or after the Negotiation
Period, the Market Rent shall be so agreed.

          (ii)   If the parties are unable to agree upon the Market Rent for the
Extension Term within the Negotiation Period then each party shall, upon
selection of an arbitrator pursuant to Section 4.1 (b)(iii) hereof,
simultaneously exchange and submit to the arbitrator for binding arbitration a
proposal as to Market Rent for the Extension Term. "Market Rent" shall be
determined as of the commencement of the Extension Period at the then current
arms-length negotiated rentals being charged to new (or renewal tenants for
renewals and extensions which do not have pre-negotiated contract rents) for
comparable space in comparable buildings located in the Needham area, taking
into account and giving effect to, in determining comparability, without
limitation, such considerations as lease term, Base Years and the age, size,
location, condition, and amenities of the Building. For purposes of such
determination, the Premises shall be considered to be vacant and to be rented as
a whole for its highest and best use with the degree of finishes and level of
leasehold improvements then generally afforded as "building standard" by
landlords in the Needham area. The arbitrator shall also consider and
incorporate into the computation, the existing improvements to the Premises.
Neither party shall be deemed under any compulsion to rent or lease space. The
arbitrator shall not have the right to modify any other provision of the Lease
except Base Rent. Within thirty (30) days after both parties have submitted such
proposals to the arbitrator, the arbitrator shall select one of the proposals as
more closely approximating the Market Rent appropriate for the applicable
Extension Term, and, unless the parties have then agreed upon the Market Rent,
the proposed Market Rent set forth in such proposal selected by the arbitrator
shall be deemed to be the Market Rent for the Extension Term.

          (iii)  If the parties are unable to agree upon the Market Rent within
the Negotiation Period, then the parties shall, within fifteen (15) days after
the end of the Negotiation Period (such fifteen (15) day period being herein
called the "Selection Period"), attempt to agree upon an arbitrator to whom to
            ----------------
submit the determination of Market Rent for binding arbitration pursuant to
Section 4.1(b)(ii) hereof.  If the parties are unable to agree upon an
arbitrator within the Selection Period, then, at the end of the Selection
Period, each party shall select an arbitrator and, within fifteen (15) days
after the end of the Selection Period, the arbitrators shall agree upon an
arbitrator to whom the determination of Market Rent shall be submitted for
binding arbitration pursuant to Section 4.1(b)(ii) hereof.  If such arbitrators
are unable to agree promptly upon an arbitrator, an arbitrator shall be selected
by the American Arbitration Association.  Any arbitrator selected by either
party, by the arbitrators selected by the parties or by the American Arbitration
Association shall be independent of both parties and shall have such experience,
either as a
<PAGE>

licensed real estate broker or salesperson or as an appraiser, as would qualify
such arbitrator as an expert with respect to office leasing terms in Needham,
Massachusetts. Such arbitrator shall make the determination required pursuant to
Section 4.1(b)(ii) within thirty (30) days of selection. The parties shall share
equally the fees and expenses of the arbitrator to whom the determination of
Market Rent is submitted. Landlord and Tenant shall each pay the fee of the
arbitrator selected by it. In making its determination of Market Rent, the
arbitrator shall not make any downward adjustment to account for any savings to
be realized by Landlord with respect to leasing commissions or tenant
improvements.

          (c)  Base Rent for each Lease Year shall be payable in equal monthly
     installments of one-twelfth of the annual Base Rent for such Lease Year and
     shall be paid without offset for any reason, in advance, on the first day
     of each calendar month during the Lease Term following the Commencement
     Date.  If the Commencement Date is not on the first day of a calendar
     month, Tenant shall pay, on or before the Commencement Date, a
     proportionate part of the Base Rent for the month in which the Commencement
     Date occurs based upon the annual Base Rent applicable to the first Lease
     Year, divided by 360 and then multiplied by the number of days in such
     month (including the Commencement Date) included in the Lease Term.  Base
     Rent and Additional Rent shall be paid at Landlord's option, by either (i)
     an "electronic funds transfer" system arranged by and among Tenant,
     Tenant's bank and Landlord, or (ii) a check sent to Landlord's office, c/o
     Robert A. Schlager, or at such other place as Landlord shall from time to
     time designate in writing.  If Tenant is using checks, rent checks shall be
     made payable to BHX, LLC, as Trustee of Crawford Realty Trust or to such
     other entity or trade-style as Landlord may designate from time to time in
     writing.  The parties hereto acknowledge and agree that the obligations
     owing by Tenant under this Section 4.1 are rent reserved under this Lease,
     for all purposes hereunder, and are rent reserved within the meaning of
     Section 502(b)(6) of the Bankruptcy Code or any successor provision
     thereto.

     Section 4.2 Certain Additional Rent.  Tenant shall pay, without offset for
     -----------------------------------
any reason, all payments of Additional Rent payable by Tenant to Landlord
hereunder.  If Tenant fails to pay any Additional Rent, Landlord shall have all
the rights and remedies for failure to pay Base Rent.  The parties hereto
acknowledge and agree that the obligations owing by Tenant under this Section
4.2 are rent reserved under this Lease, for all purposes hereunder, and are rent
reserved within the meaning of Section 502(b)(6) of the Bankruptcy Code or any
successor provision thereto.

     Section 4.3 Net Lease.  Landlord and Tenant intend that the rent payable
     ---------------------
under this Lease shall be net Base Rent and Additional Rent to Landlord as
described herein during the Lease Term.  Tenant shall pay all costs, expenses
and obligations of every kind and nature whatsoever relating to the Premises and
all expenses and obligations of every kind and nature whatsoever relating to the
operation, maintenance, upkeep, replacement or repair of Landlord's Property in
excess of the Operating Cost Base, Insurance Cost Base and Tax Base to the
extent property includable in Operating Costs, Insurance Costs and Taxes as
provided in this Lease, without any deduction or offset unless expressly
provided otherwise herein.

     Section 4.4 Taxes.
     -----------------
<PAGE>

          (a)  Tenant shall pay to Landlord, as Additional Rent, an amount equal
to Tenant's Tax Escalation as provided in the following sentence.  Tenant's Tax
Escalation shall be estimated in good faith by Landlord at the end of each Tax
Fiscal Year, and thereafter be payable to Landlord in equal estimated monthly
installments together with the payment of Base Rent, subject to readjustment
when the actual amount of Taxes is determined.  After readjustment, any shortage
shall be due and payable by Tenant within 30 days of demand by Landlord and any
excess shall, unless an Event of Default has occurred, be credited against
future Additional Rent obligations, or refunded if the Lease Term has ended and
Tenant has no further obligations to Landlord.  If the taxing authority provides
an estimated tax bill, then monthly installments of Taxes shall be based thereon
until the final tax bill is ascertained.  Landlord shall furnish to Tenant, upon
Tenant's request, but not more than once in any year, a copy of the tax bill or
any estimated tax bill.

          (b)  If, after Tenant shall have made any payment under this Section
4.4, Landlord shall receive a refund (the "Refund") of any portion of the Taxes
                                          ---------
paid on account of any Tax Fiscal Year in which such payments shall have been
made as a result of an abatement of such Taxes, by final determination of legal
proceedings, settlement or otherwise ("Proceedings"), Landlord shall, within
                                       -----------
thirty (30) days after receiving the Refund, pay to Tenant (unless an Event of
Default has occurred) an amount equal to (i) the lesser of (A) Tenant's Tax
Escalation payments for such Tax Fiscal Year or (B) the Refund, which payment to
Tenant shall be appropriately adjusted if Tenant's Tax Escalation covered a
shorter period than covered by the Refund, less (ii) all expenses incurred by
Landlord in connection with such Proceedings (including, but not limited to,
attorneys' fees, costs and appraisers' fees).  Landlord shall have sole control
of all tax abatement proceedings.  Tenant shall not receive any credit or refund
in the event that the Taxes for any Tax Fiscal Year is less than the Tax Base.

          (c)  If the Commencement Date of this Lease is not on July 1, or the
expiration or termination of this Lease is not on June 30, Tenant's obligation
in respect of Taxes shall be prorated.  If the final tax bill for the Tax Fiscal
Year in which such expiration or termination of this Lease occurs shall not have
been received by Landlord, then within thirty (30) days after the receipt of the
tax bill for such Tax Fiscal Year, Landlord and Tenant shall make appropriate
adjustments of estimated payments.

          (d)  Without limiting the generality of the foregoing, Tenant shall
pay all rent and personal property taxes attributable to its signs or any other
personal property including but not limited to its trade fixtures, the existing
or any future floor coverings, wall treatments and light fixtures in the
Premises.

     Section 4.5 Insurance Costs.  Tenant shall pay to Landlord, as Additional
     ---------------------------
Rent, an amount equal to Tenant's Insurance Cost Escalation.  Tenant's Insurance
Cost Escalation shall be estimated in good faith by Landlord at the end of each
calendar year, and thereafter be payable in equal estimated monthly
installments, together with the Base Rent, subject to readjustment from time to
time as determined by Landlord and also when actual Insurance Costs are
determined.  After a readjustment, any shortage shall be due and payable by
Tenant within 30 days of demand by Landlord and any excess shall, unless an
Event of Default has occurred, be credited against
<PAGE>

future Additional Rent obligations, or refunded if the Lease Term has ended and
Tenant has no further obligations to Landlord. Landlord shall provide Tenant
upon request with reasonable supporting documentation for the Insurance Costs
for the prior calendar year, provided that such request is received by Landlord
within six (6) months after the end of the calendar year to which such Insurance
Costs relate.

     Section 4.6 Operating Costs.  Tenant shall pay to Landlord, as Additional
     ---------------------------
Rent, an amount equal to Tenant's Operating Cost Escalation.  Tenant's Operating
Cost Escalation shall be estimated in good faith by Landlord at the end of each
calendar year, and thereafter be payable in equal estimated monthly
installments, together with the Base Rent, subject to readjustment from time to
time as determined by Landlord and also when actual Operating Costs are
determined.  After a readjustment, any shortage shall be due and payable by
Tenant within 30 days of demand by Landlord and any excess shall, unless an
Event of Default has occurred, be credited against future Additional Rent
obligations, or refunded if the Lease Term has ended and Tenant has no further
obligations to Landlord.  Landlord shall provide Tenant upon request with
reasonable supporting documentation for the Operating Costs for the prior
calendar year; provided that such request is received by Landlord within six (6)
months after the end of the calendar year to which such Operating Costs relate.

     Section 4.7 Payment for Electricity.  Landlord shall cause the Premises to
     -----------------------------------
be separately metered or submetered for electrical use including, without
limitation, with respect to all variable air volume ("VAV") boxes and pre-
                                                      ---
heaters, lighting and outlets serving the Premises.  Except to the extent of
amounts collected by Landlord from Tenant on account of Tenant's Electricity
Costs, Tenant shall promptly pay all charges related to its use of electricity
to the appropriate public utility.

     Section 4.8 Annual Statement: Tenant's Audit.  Subsequent to the Base Year
     ---------------------------------------------
and Base Tax Fiscal Year, Landlord shall provide one or more statements to
Tenant setting forth the Operating Cost Base, Insurance Cost Base, and/or the
Tax Base (each such statement being referred to hereinafter as a "Base
                                                                  ----
Statement").  Thereafter, with respect to each year during the Lease Term,
Landlord-shall provide an annual statement of Operating Costs, Insurance Costs,
and Taxes.  Tenant shall have the right to audit each annual statement and the
books and records relating thereto, by delivering a notice of its intention to
perform such audit to Landlord within sixty (60) gays after receipt of such
statement.  Such audit may be performed at any time prior to the sixtieth (60")
day following the date that Tenant gives such notice of audit (the "Audit
                                                                    -----
Deadline").  If Tenant wishes to receive a refund of any of Tenant's Operating
-----------
Cost Escalation, Insurance Cost Escalation, and/or Tenants Tax Escalation as a
result of such audit, Tenant shall deliver to Landlord, no later than forty-five
(45) days after the Audit Deadline, a notice demanding such a refund, together
with a statement of the grounds for each such demand and the amount of each
proposed refund.  The cost of any such audit shall be paid by Tenant, except
that, if it is determined on the basis of any such audit that the amount of the
Operating Costs, Insurance Costs, and Taxes was overstated in any such annual
statement by more than five percent (5.0%), the reasonable cost of such audit,
but in no event more than the amount by which Tenant was overcharged due to such
overstatement, shall be paid or reimbursed to Tenant by Landlord.  An
overstatement shall not be deemed to exist due to a Refund.  Any audit shall be
performed by either (a) Tenant's regular employees or (b) a nationally
recognized accounting
<PAGE>

firm whose compensation is not, directly or indirectly, contingent in whole or
in part on the results of the audit.


                                   ARTICLE V
                                   ---------
                                USE OF PREMISES
                                ---------------

     Section 5.1 Permitted Use.  Tenant shall use and occupy the Premises only
     -------------------------
for the Permitted Use.

     Section 5.2 Restrictions on Use.  Tenant shall use the Premises in a
     ---------------------------
careful, safe and proper manner, shall not commit or suffer any waste on or
about Landlord's Property, and shall not make any use of Landlord's Property
which is prohibited by or contrary to any laws, rules, regulations, orders or
requirements of public authorities, or which would cause a public or private
nuisance.  Tenant shall comply with and obey all laws, rules, regulations,
orders and requirements of public authorities which in any way affect the use of
Landlord's Property.  Tenant, at its own expense, shall obtain any and all
permits, approvals and licenses necessary for use of the Premises, except that
Landlord shall obtain all building permits, approvals and certificates of
occupancy required for Landlord's Work.  Tenant shall not overload the floors or
other structural parts of the Building; and shall not commit or suffer any act
or thing an Landlord's Property which is illegal, offensive, dangerous, or which
unreasonably disturbs other tenants.  Tenant shall not do or permit to be done
any act or thing on Landlord's Property which will invalidate or be in conflict
with any insurance policies, or which will increase the rate of any insurance,
covering the Building.  If, because of Tenants failure to comply with the
provisions of this Section or due to any use of the Premises or activity of
Tenant in or about Landlord's Property, the Insurance Costs are increased,
Tenant shall pay Landlord the amount of such increase caused by the failure of
Tenant to comply with the provisions of this Section.  Tenant shall cause any
fire lanes in the front, sides and rear of the Building to be kept free of all
parking associated with its business or occupancy and in compliance with all
applicable regulations.  Tenant shall conduct its business at all times so as
not to annoy or be offensive to other tenants and occupants in Landlord's
Property.  Tenant shall not permit the emission of any objectionable noise or
odor from the Premises and shall at its own cost install such extra sound-
proofing or noise control systems and odor control systems, as may be needed to
eliminate noise, vibrations and odors, if any, emanating from the Premises being
heard, felt or smelled outside the Premises.  Tenant shall not place any file
cabinets bookcases, partitions, shelves or other furnishings or equipment in a
location which abuts or blocks any windows.

     Section 5.3 Hazardous Materials.  Tenant in its use of the Premises will
     -------------------------------
not use, store, discharge, release, or permit the presence of any Hazardous
Materials on Landlord's Property, except in minor quantities typically found in
similar office buildings for typical office use in and in compliance with all
applicable Environmental Laws.

                                  ARTICLE VI
                                  ----------
                             LANDLORD'S SERVICES
                             -------------------
<PAGE>

     Section 6.1 Landlord's Services.  Landlord shall furnish to the Building
     -------------------------------
the services set forth below in this Section 6.1. subject to the conditions
stated in this Lease.  The cost of certain of these services are to be (i) paid
by Tenant, as provided in this Lease, or (ii) included in Operating Costs,
Insurance Costs or Taxes, as applicable and to the extent permitted under this
Lease.

          (a)  Exterior of Building and Structure.  Landlord shall keep in good
               ----------------------------------
condition and repair the exterior and structural elements of the Building,
including the roof, the utility lines and systems outside the Building (except
to the extent those utility lines or systems are the property or responsibility
of the applicable utility company) and the Parking Areas, landscaping and
sidewalks on the Land.

          (b)  Systems.  Subject to Tenant's obligations under Section 7.9,
               -------
Landlord shall operate, maintain and repair the heating, ventilating and air
conditioning system, the plumbing system and the electrical system (excluding
lamps and ballasts) of the Building so that the same are in good and operational
condition.  Landlord shall provide heating and air conditioning services to the
Premises to heat and cool the Premises at temperatures in accordance with ASHRAE
standards in effect as of the date of the Lease during Business Hours.  If
Tenant desires heating or air conditioning services at the Premises at any time
other than Business Hours, Landlord shall use reasonable efforts to arrange for
such "after hours" heating or air conditioning service, and Tenant shall pay for
such service as Additional Rent at an hourly rate of $50.00 (such payments shall
constitute Other Additional Rent and shall be due and payable within 30 days
after Landlord bills Tenant therefor).

          (c)  Water and Sewer.  Cold and hot water at standard Building
               ---------------
temperatures will be available for ordinary drinking, cleaning, sanitary and
lavatory purposes.

          (d)  Elevator.  Landlord will provide one (1) automatic operatorless
               --------
elevator in the Building.  Landlord shall operate, maintain and repair the
elevator so that the same is in good and operational condition.

          (e)  Waste Removal. Landlord shall provide or arrange for ordinary and
               -------------
reasonable waste removal services for the Building. In the event that Landlord
reasonably determines that Tenant's quantity of waste is excessive, or, in the
event that Landlord deter-mines that Tenant's waste is other than waste
generated by typical office use, Landlord may require that Tenant be responsible
for disposing of its own waste.

          (f)  Janitorial Services and Window Cleaning.  Landlord shall supply
               ----------------------------------------
routine janitorial services for the Office Space and window cleaning for the
Building comparable to that provided by the owners of comparable buildings in
the Greater Boston area.  Such services may be revised from time to time by
Landlord in its sole discretion, but janitorial services shall in all events be
provided five days a week except for Building holidays.

          (g)  Taxes. Landlord shall pay all Taxes levied upon or with respect
               -----
to Landlord's Property.
<PAGE>

          (h)  Snow Plowing and Ice Sanding. Landlord shall provide snow plowing
               ----------------------------
and ice sanding services with respect to the Parking Areas and sidewalks
comparable to that provided by the owners of comparable buildings in the Greater
Boston area.

          (i)  Insurance.  Landlord shall procure and maintain in full force and
               ---------
effect fire, casualty and extended coverage insurance with respect to the
Building, with vandalism and malicious mischief endorsements in an amount not
less than the replacement value of the Building (excluding foundations and
underground utilities), liability insurance with limits of not less than One
Million Dollars per occurrence for bodily injury and property damage and Two
Million Dollars annual aggregate, rent loss insurance and such other insurance
upon or with respect to Landlord's Property as Landlord determines to be
necessary, appropriate and/or desirable or is required by Landlord's lender, all
with such limits of coverage as Landlord or Landlord's lender may deem
necessary. appropriate and/or desirable.

     Section 6.2 Extraordinary Use.  Tenant acknowledges that the services to be
     -----------------------------
supplied by Landlord will be sufficient only for general office purposes.  Any
additional capacity or structural support, as determined by Landlord, needed for
uses beyond ordinary office uses, shall be subject to Landlord's prior written
approval, which approval shall be in Landlord's sole discretion, and all
necessary equipment shall be installed and maintained at Tenant's sole expense.

     Section 6.3 Interruption; Delay.  Landlord shall have no responsibility or
     -------------------------------
liability for failure or interruption of any such repairs or services referred
to in this Article VI, or for any interruption in utility services, caused by
breakage, accident, strikes, repairs, inability after exercise of reasonable
diligence to obtain supplies or otherwise furnish services, or for any cause or
causes beyond the reasonable control of Landlord (but Landlord, in respect of
those matters for which Landlord is responsible, will use reasonable efforts to
restore such services or make such repairs as soon as possible), nor in any
event for any indirect or consequential damages; and failure or omission on the
part of Landlord to furnish such service or make such repair shall not be
construed as an eviction of Tenant, nor, provided that Landlord is using
reasonable efforts to restore such services or make such repairs in those
circumstances where Landlord is obligated to do so, render Landlord liable in
damages, nor entitle Tenant to an abatement of Base Rent or Additional Rent, nor
release Tenant from the obligation to fulfill any of its covenants under this
Lease, except as provided in Articles X and XI hereof with respect to eminent
domain and damage by fire or other casualty.

     Section 6.4 Additional Services.  Should Tenant request any additional
     -------------------------------
services, or services beyond the noted hours for such services (other than
"after hours" HVAC which is covered in Section 6.1(b)), Tenant agrees to pay to
Landlord as Additional Rent therefor Landlord's costs for providing such
service, plus an additional fifteen (15%) percent as an administrative fee,
within thirty (30) days of Landlord's billing Tenant therefor.

     Section 6.5 Tenant's Right to Cure.  If Landlord shall be in material
     ----------------------------------
default under this Article VI, which default shall continue for thirty (30) days
after the written notice thereof from Tenant to Landlord, then Tenant shall have
the right, but not the obligation, to cure such default, in which event Landlord
shall pay to Tenant within thirty (30) days after receipt of Tenant's
<PAGE>

demand therefor (accompanied by invoices and other information reasonably
acceptable to Landlord documenting such costs), the reasonable out-of-pocket
third party costs incurred by Tenant to cure such default, provided, however, if
such fault is not reasonably susceptible of being cured within such thirty (30)
day period, then, as long as Landlord shall commence the curing thereof within
such thirty (30) day time period and is proceeding with due diligence to cure
the same, Tenant shall not have the aforesaid right and provided further, that,
in the event of an emergency, then the cure period shall be shortened to such
time period after notice from Tenant to Landlord as may be reasonable under the
circumstances. Notwithstanding anything to the contrary in this Lease. Tenant
shall not be entitled to cure a default under Sections 9.5 and 12.1 (j).

     Section 6.6 Exoneration and Indemnification.  Landlord will exonerate,
     -------------------------------------------
indemnify, defend, save and hold harmless Tenant (and any and all Persons
claiming by, through or under Tenant, from and against all claims, damages,
proceedings, defenses thereof, liabilities, costs, and expenses of any kind and
nature, including reasonable legal fees, arising from: (a) any breach of this
Lease by Landlord (but not any breach by a prior landlord) and/or (b) any act,
wrongful omission or negligence of Landlord (but not any act, omission or
negligence of any prior landlord).  Under no circumstances shall Landlord be
responsible to Tenant or any other Person for the acts or omissions of any
tenant of Landlord's Property or any Invitee of any tenant.  This exoneration,
indemnification and hold harmless agreement shall survive the termination of
this Lease.  Under no circumstances shall any landlord have any liability or
obligation under this Section for (i) any breach of this Lease by any
predecessor or (ii) any act, omission or negligence of any predecessor.


                                  ARTICLE VII
                                  -----------
                         CERTAIN OBLIGATIONS OF TENANT
                         -----------------------------

     Section 7.1 Rent.  Tenant will promptly pay the Base Rent and Additional
     ----------------
Rent, including without limitation any and all fees, charges, expenses, fines,
assessments or other sums payable by Tenant to Landlord (or to the applicable
provider of utilities) at the time and in the manner provided for in this Lease,
all of which shall be deemed to be obligations to pay Base Rent or Additional
Rent.

     Section 7.2 Utilities.  Except for Tenant's Electricity Costs, Tenant shall
     ---------------------
pay for all utility usage as a part of Tenant's Operating Cost Escalation.
Tenant agrees that its use of electric current shall never exceed the capacity
of existing feeders, risers and wiring installations in the Building.  Without
limiting the foregoing, Tenant shall not connect to the electrical distribution
system anything other than normal office equipment (which includes computers,
fax machines, printers and copiers).  Tenant shall not make or perform any
alterations to wiring, installations, lighting fixtures or other electrical
facilities in any manner without the prior written consent of Landlord, which
consent shall be in Landlord's sole discretion.  Any risers or wiring to meet
Tenant's excess electrical requirements, if requested by Tenant and approved by
Landlord, will be installed by Landlord at Tenants expense.
<PAGE>

     Section 7.3 No Waste.  Tenant shall not overload, damage or deface the
     --------------------
Premises nor shall it suffer or permit the same to be done, nor shall it commit
any waste.  Tenant shall initiate and carry out a program of regular maintenance
and repair of the Premises so as to impede, to the extent possible,
deterioration by ordinary wear and tear.

     Section 7.4 Maintenance; Repairs, and Yield-Up.  Subject to Landlord's
     ----------------------------------------------
obligations under Section 6.1, Tenant agrees that from the Commencement Date
until the end of the Lease Term and during any holdover, it will keep the
Premises and any improvements placed an Landlord's Property by Tenant neat and
clean and maintain the same in substantially the same repair and condition as
such were in on the Commencement Date (or the date on which installation of same
was completed, as applicable), except for reasonable wear and tear, damage by
fire or other casualty or taking by eminent domain.  Tenants obligation to so
maintain and repair the Premises and any improvements placed on Landlord's
Property by Tenant shall apply to all interior areas of the Premises, including,
without limitation, all doors, interior glass, fixtures, interior walls, floors
and ceilings.  Nothing contained in this Section 7.4 shall place any obligation
an Tenant to maintain or repair the exterior of the Building, the systems
serving the Building or the structure of the Building; provided, however, that
Tenant may be responsible for the costs incurred by Landlord in connection
therewith to the extent that such costs are properly included in Operating
Costs.  At the end of the Lease Term or sooner termination of this Lease, Tenant
shall peaceably surrender and deliver up the Premises to Landlord (and (i)
having first removed, at Tenant's sole cost and expense, any or all erections,
alterations and additions made to or upon the Premises as may be designated by
Landlord and restoring the Premises to the condition required above, and (ii)
leaving all erections, alterations and additions to the Premises which Landlord
designates to remain in good repair and condition, except for reasonable wear
and tear, damage by fire or other casualty and taking by eminent domain), broom
clean, with all utilities safely capped, and in good repair and condition, and
removing all signs and lettering and all personal property, goods and effects
belonging to Tenant or anyone claiming through or under Tenant.  Nothing
contained herein shall be deemed to require Tenant to remove Landlord's Work at
the end of the Lease Term, it being agreed that Tenant shall have no right nor
obligation to remove the same.  Without limiting the generality of the
foregoing, Tenant shall be responsible for the replacement of lamps and ballasts
in the Building at Tenant's cost.  Tenant shall cause all maintenance and repair
work to conform to applicable governmental laws, rules, regulations, orders and
requirements of public authorities.  Subject to Landlord's performance of its
obligations under Section 6.1(f), Tenant shall keep the Premises clear of all
filth, trash and refuse.  If Tenant fails to perform Tenant's obligations under
the above provisions of this Section, then Landlord will have the right (but not
the obligation), without waiving any default by Tenant, to cause such
obligations to be performed upon not less than ten (10) days prior written
notice to Tenant (or a shorter period of prior written notice, or a
contemporaneous written notice, if appropriate in Landlord's judgment in light
of the nature of Tenant's obligations to be performed), and if Landlord causes
any of such obligations to be performed, the costs and expenses reasonably
incurred by Landlord in connection therewith shall be due and payable by Tenant
to Landlord as Additional Rent upon demand.

     Section 7.5 Alterations by Tenant.  Tenant will not make any alteration in,
     ---------------------------------
or addition to, the Premises without first obtaining, on each occasion,
Landlord's consent in writing, which consent shall not be unreasonably withheld
or delayed, and then only at Tenants expense and in a
<PAGE>

lawful manner and upon such terms and conditions as Landlord, by such writing,
shall reasonably approve, which shall include, without limitation, (a)
maintenance of insurance in form and substance reasonably satisfactory to
Landlord and (b) compliance with Sections 7.9 and 7.11. Any such alteration or
addition shall be consistent in appearance with the rest of the Building and
Landlord's Property and shall be made only after duly obtaining (and providing
to Landlord copies of) all required permits and licenses from all governmental
authorities. Tenant will deliver to Landlord in writing a schedule setting forth
the details and location of all such proposed alterations or additions and
detailed plans and specifications. The contractor(s) performing the work shall
be subject to Landlord's approval, which approval shall not be unreasonably
withheld or delayed. If required by Landlord, Tenant shall provide a statutory
lien bond with respect to such work. All approved repairs, installations,
alterations, additions or other improvements made by Tenant shall be made in a
good and workmanlike manner. Tenant Invitees shall be given such reasonable
access to other portions of the Building and the mechanical systems as may be
necessary or appropriate to perform such work. Both during and after the
performance of any such work, Landlord shall have free access to any and all
mechanical installations in the Premises, including, but not limited to, air
conditioning, fans, ventilating systems, machine rooms and electrical closets;
and Tenant agrees not to construct or permit the installation of partitions
and/or other obstructions in the Premises which might interfere with Landlord's
free access to the Premises or Building, or impede the free flow of air to and
from air vents and other portions of the heating, ventilating and air
conditioning systems in the Building. Unless Landlord elects otherwise, all
installations, alterations, additions or improvements in or to the Premises
shall be the property of Landlord and shall remain upon, and be surrendered
with, the Premises at the end of the Lease Term or sooner termination of this
Lease.

     Section 7.6 Trade Fixtures and Equipment.  Any trade fixtures and equipment
     ----------------------------------------
installed in, or attached to, the Premises by, and at the expense of, Tenant,
shall remain the property of Tenant.  Tenant shall have the right, at any time
and from time to time during the Lease Term, to remove any and all of its trade
fixtures, which it may have installed in, or attached to, the Premises, during
the Lease Term.  In addition, at the end of the Lease Term or sooner termination
of this Lease, Tenant shall remove all of Tenant's trade fixtures and all floor
coverings and wait treatments installed by Tenant unless Landlord gives Tenant a
written waiver for same.  At any time that Tenant removes its trade fixtures,
Tenant shall promptly repair Landlord's Property as a result of any damage to,
or destruction of, Landlord's Property caused by the removal of its trade
fixtures.

     Section 7.7 Compliance with Laws.  Tenant, in its use of the Premises and
     --------------------------------
at its sole expense, shall comply with all laws, orders and regulations of
Federal, State, County and Town authorities, and with any direction of any
public officer or officers, pursuant to law, including, without limitation, all
Legal Requirements related to the use, storage, discharge, release, removal or
existence of Hazardous Materials.  Tenant agrees that the Premises shall be kept
in a sanitary and safe condition in accordance with all applicable Federal and
State laws and the by-laws, rules, regulations and ordinances of the Town of
Needham, and in accordance with all directions, rules and regulations of the
Health Officer, Fire Marshall, Building Inspector and other proper officers of
the governmental agencies having jurisdiction thereover. Notwithstanding the
foregoing, Landlord shall be responsible for delivering Landlord's Property in
compliance with
<PAGE>

applicable laws, orders and regulations and for maintaining Landlord's Property
in compliance therewith, the cost of maintaining such compliance to be included
as part of Operating Costs in accordance with the provisions of this Lease,
including without limitation, Section 4.6.

     Section 7.8 Contents at Tenant's Risk.  All inventory, equipment, goods,
     -------------------------------------
merchandise, furniture, fixtures and property of every kind which may be on or
about the Premises shall be at the sole risk and hazard of Tenant, and if the
whole or any part thereof shall be destroyed or damaged by fire, water or
otherwise, or by the use or abuse of water or by the leaking or bursting of
water pipes, or by rising water, or by roof or other structural leak, or in any
other way or manner, no part of such loss or damage shall be charged to or borne
by Landlord in any case whatsoever, except that to the extent required by
applicable Massachusetts law, the foregoing shall not exculpate the Landlord
from its own negligent acts or omissions or willful misconduct.  Tenant agrees
to maintain full and adequate insurance coverage on all of its property at the
Premises and in the remainder of Landlord's Property, including physical damage,
theft and business interruption insurance, or Tenant shall be a self-insurer
thereof, in which case Tenant shall so advise Landlord in writing and shall be
fully responsible for all such damage, and shall indemnify and save harmless
Landlord from any loss, cost, expense, damage or liability resulting from
Tenant's failure to have such insurance as required in this Lease.  Such
insurance an Tenant's property shall contain a waiver of subrogation cause in
favor of Landlord, or shall name Landlord as an additional insured for the sole
purpose of preventing a subrogation claim against Landlord.  If Tenant is a
self-insurer, in whole or in part, Landlord shall be entitled to the same
benefits it would have enjoyed had insurance covering the loss in full with a
waiver of subrogation clause been in effect, or as if the Landlord has been
named on insurance covering the loss in full as an additional insured for the
purpose of preventing a subrogation claim.

     Section 7.9 Exoneration: Indemnification and Insurance.  Tenant will
     ------------------------------------------------------
exonerate, indemnify, defend, save and hold harmless Landlord (and any and all
Persons claiming by, through or under Landlord) from and against all claims,
proceedings, defenses thereof, liabilities, costs, and expenses of any kind and
nature, including legal fees, arising from: (i) any breach of this Lease by
Tenant or any Tenant invitee or other Person claiming by, through or under
Tenant; and/or (ii) any act, omission or negligence of any Tenant invitee, or
arising from any accident, injury or damage occurring in, on or about Landlord's
Property, which such accident, damage or injury results or is claimed to have
resulted from the negligence or misconduct on the part of any Tenant invitee.
This exoneration, indemnification and hold harmless agreement shall survive the
termination of this Lease.

     From and after any pre-term occupancy by Tenant, if any allowed by
Landlord, and thereafter during the Lease Term and any period of holding over,
Tenant shall maintain in full force and effect a policy of commercial general
liability insurance under which Landlord (and its designees) and Landlord's
mortgagee(s) (whose names are provided to Tenant) are named as additional
insureds.  Each such policy shall be non-cancelable with respect to Landlord
without thirty (30) days prior written notice to Landlord (except for
cancellation for non-payment of premiums, in which case notice shall be ten (10)
days) and Tenant shall deliver to Landlord prior to any pre-term occupancy,
prior to the Commencement Date and thereafter at least thirty (30) days prior to
the expiration of any then effective coverage a satisfactory written certificate
of insurance coverages or the renewal or replacement of such coverages.  The
minimum limits of
<PAGE>

liability of such insurance shall be One Million Dollars ($1,000,000.00)
combined single limits for bodily injury and property damage, each occurrence,
and One Million Dollars ($1,000,000.00) limits for personal injury, together
with an overall umbrella coverage of an additional One Million Dollars
($1,000.000.00). Tenant shall not permit any contractor to do any work at or
furnish any materials to be incorporated into the Premises without first
delivering to Landlord satisfactory evidence of the Contractors commercial
general liability insurance, worker's compensation insurance, automobile
insurance and statutory lien bonds each reasonably acceptable to Landlord and
complying with any insurance specifications provided by Landlord. All insurance
requirements imposed upon Tenant or its contractors under this Lease shall be
subject to the further requirement that the forms of coverage and the insurers
providing the insurance be licensed in the Commonwealth of Massachusetts, be in
sound financial condition, carry an A+ or better Best's rating, and be
reasonably acceptable to Landlord. Tenant agrees that Landlord shall not be
responsible or liable to Tenant, or to those Persons claiming by, through or
under Tenant, for any loss or damage that may be occasioned by or through the
acts or omissions of Persons occupying or using adjoining premises or any part
of Landlord's Property, or otherwise, or for any loss or damage resulting to
Tenant or those Persons claiming by, through or under Tenant, or its or their
property, except that to the extent required by applicable Massachusetts law,
the foregoing shall not exculpate the Landlord from acts of its own negligence
or willful misconduct.

     Section 7.10 Landlord's Access.  Upon reasonable advance notice (except in
     ------------------------------
case of emergency), Landlord and its representatives shall have the right
without charge to it and without reduction in Base Rent or Additional Rent, at
reasonable times and in such manner as shall not unreasonably interfere with
Tenant's business, to enter the Premises for any reasonable purpose (including,
without limitation, showing the Premises to prospective purchasers, tenants and
lenders) and, if Landlord so elects, to make entry for the purpose of
investigating repair or maintenance problems and to make such repairs or changes
as Landlord deems advisable, and to maintain, use, repair, replace, relocate or
introduce pipes, ducts, wires, meters and any other Landlord's fixtures serving
or to serve the Premises or other parts of Landlord's Property, or to maintain
or repair any portion of Landlord's Property, and, in case of an emergency,
whether resulting from circumstances in the Premises or elsewhere in Landlord's
Property, Landlord or its representatives may enter the Premises (forcibly, if
necessary) at any time to take such measures as may be needed to cope with such
emergency.  Such access shall include, but not be limited to, the right to open
floors, walls, ceilings, and building systems for the foregoing purposes.
Landlord may place "For Lease", "For Rent" and/or "For Sale" signs on Landlord's
Property.  Any exercise of Landlord's rights under this Section 7.10 shall be
conducted at such times and in such manner as to minimize, to the extent
reasonable, any interference with Tenant's operations and shall be diligently
pursued to completion.  Any relocation or introduction of pipes, ducts, wires,
meters and/or other fixtures shall, to the extent reasonably practical, be
undertaken so as to minimize any loss of usable area in the Premises.

     Section 7.11 No Liens.  Tenant shall not permit any mechanics', laborers'
     ---------------------
or materialmen's liens to stand against Landlord's Property or Tenant's interest
in the Premises, this Lease, or the estate created hereby for any labor or
materials 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 in or on the Premises by or at the direction or sufferance of Tenant.
<PAGE>

Landlord may condition the right of Tenant to do Tenant's work or to do any
other work which could result in a lien upon Landlord's Property or Tenant's
interests in the Premises, this Lease, or the estate created hereby on the
delivery and recording of statutory lien bonds or indemnities satisfactory to
Landlord.

     Section 7.12 Compliance with Rules and Regulations.  Tenant covenants that
     --------------------------------------------------
all Tenant Invitees will comply with the Rules and Regulations and all other
reasonable rules and regulations as Landlord may from time to time hereafter
promulgate to regulate the conduct Generally of all the tenants of Landlord's
Property.  Landlord, however, shall have the reasonable right to change said
rules and regulations and to waive any one or more of them in the case of any
one or more tenants.

                                 ARTICLE VIII
                                 ------------
                           SUBLETTING AND ASSIGNMENT
                           -------------------------

     Section 8.1 Subletting and Assignment.
     -------------------------------------

          (a)  Except as hereinafter set forth, Tenant shall not assign,
mortgage, pledge or encumber this Lease nor sublet all or any part of the
Premises, nor permit or allow the use of all or any part of the Premises by
third party users, such as concessionaires, without, on each occasion, obtaining
Landlord's written consent thereto, which consent may be granted, conditionally
granted or withheld at Landlord's discretion for any reason or no reason.  As
used herein, the term "assign' or `assignment' shall be deemed to include,
without limitation: (i) any transfer of Tenants interest in this Lease by
operation of law and/or the merger or consolidation of Tenant with or into any
other firm or corporation; or (ii) the transfer or sale of a controlling
interest in Tenant (whether in a single transaction or series of transactions)
whether by sale of its capital stock or otherwise.

          (b)  (i)  Notwithstanding anything to the contrary in Section 8.1 (a),
Landlord will not unreasonably withhold, condition or delay its consent to any
sublease of all or any part of the Premises, so long as (A) the sublease will
not violate the terms of (1) any lease affecting the Landlord's Property or (2)
any agreement, instrument, law, rule, regulation or requirement which is binding
upon Landlord and/or the Landlord's Property; (B) the subtenant and its proposed
use is of a character consistent with the operation of a first class office
building; (C) the subtenant's proposed use is as offices and is permitted under
the terms of this Lease; (D) the subtenant is qualified to do business in the
Commonwealth of Massachusetts and has all applicable permits and licenses to do
business; (E) Tenant pays to Landlord all of Landlord's reasonable expenses
arising out of such sublease: (F) there does not then exist an Event of Default
and no Event of Default will be created as a result of the proposed sublease or,
the proposed use by the subtenant,, (G) there are not more than a total of two
(2) subtenants, including the proposed subtenant under the proposed sublease, in
occupancy of the Premises or portions thereof; (H) the proposed sublease
prohibits any assignment of the sublease or any sub-sublease of any portion of
the Premises without the prior written consent of Landlord, which consent may be
granted or denied in Landlord's sole discretion; and (1) each of Landlord's
mortgagees has consented to such sublease if such mortgagee's consent is
required pursuant to the terms of the applicable financing documents.
<PAGE>

               (ii)   Notwithstanding anything to the contrary in Section
8.1(a), but subject to the requirements set forth below in this paragraph,
Landlord's consent shall not be required to an assignment of this Lease to (A)
any entity which controls the legal and beneficial ownership of Tenant, (B) any
entity controlled by, or under common control with, Tenant, (C) any corporation
resulting from a merger or consolidation with Tenant, or (D) an entity acquiring
all or substantially all of Tenant's assets, so long as, in each instance under
any of clauses (A) through (D) above: (1) Tenant shall give Landlord at least
thirty (30) days prior written notice of such proposed assignment together with
the name and address of the proposed assignee, information concerning the terms
and provisions upon which the proposed assignment is to be made, copies of all
documents evidencing or setting forth the terms of the transaction and all other
information as reasonably requested by Landlord, (2) there is no change in the
use of the Premises; (3) Tenant is the surviving corporation in any merger or
consolidation, or, if Tenant is not the surviving corporation, the surviving
corporation assumes all of the obligations of Tenant under this Lease by
executing an assignment and assumption agreement with respect to this Lease in
form and substance satisfactory to Landlord; (4) the assignee has a tangible net
worth (i.e., book value, determined in accordance with generally accepted
accounting principles, consistently applied, less all intangible assets) on the
date of such assignment not less than $5,000,000.00; (5) the assignee is
qualified to do business in the Commonwealth of Massachusetts and has all
applicable permits and licenses to do business from the Premises: (6) Tenant
pays to Landlord all of Landlord's reasonable expenses arising out of such
assignment-, and (7) there does not then exist an Event of Default and no Event
of Default will be created as a result of the proposed assignment or the
proposed use by the assignee.

          (c)  In the event of an assignment of this Lease or sublease of all or
any part of the Premises by Tenant, Tenant and any Guarantor shall remain
primarily liable jointly and severally with the assignee or subtenant for the
payment of any and all Base Rent and Additional Rent which may become due by the
terms of this Lease and for the performance of all covenants, agreements and
conditions on the part of Tenant to be performed hereunder and, if required by
Landlord, Tenant and any Guarantor shall execute an instrument confirming the
foregoing.  No assignment of this Lease shall be effective unless and until the
assignee (x) executes and delivers to Landlord an agreement, in form and
substance satisfactory to Landlord, pursuant to which such assignee assumes all
of the obligations of Tenant under this Lease and (y) delivers to Landlord
evidence, in form and substance satisfactory to Landlord, of the insurance
coverages required to be maintained by Tenant under this Lease.  No sublease of
all or any portion of the Premises shall be effective unless and until (i) the
sublessee and the Tenant execute and deliver to Landlord an agreement, in
Landlord's standard form, pursuant to which, inter alia, such sublessee (A)
                                             ----- ----
assumes all of the obligations of the Tenant under this Lease, (B) agrees to
execute and deliver such estoppel certificates and subordination agreements as
may be required by Landlord, (C) acknowledges that Landlord has no obligations
to sublessee under this Lease, the sublease or otherwise and (D) agrees to
maintain the same insurance coverages as the insurance coverages which Tenant is
required to maintain under this Lease and to provide evidence thereof
satisfactory to Landlord when requested,, and (ii) the sublessee delivers to
Landlord evidence, in form and substance, satisfactory to Landlord, of the
insurance coverages required to be maintained by such sublessee under the
agreement referenced in clause (i) above.  No modification of the terms of this
Lease or any course of dealing between Landlord and any
<PAGE>

assignee or sublessee of Tenant's interest herein shall operate to release or
impair Tenant's obligations under this Lease or the obligations of any
Guarantor.

          (d)  Tenant shall pay to Landlord fifty percent (50%) of any rent
received as a result of any assignment or sublease which exceeds the rental
payable hereunder for the same time period on a per square foot basis after
deducting the actual direct out-of-pocket, third-party costs which are incurred
by Tenant for leasing commissions and additional tenant improvements paid in
connection with such assignment or sublease, and (ii) documented to Landlord's
reasonable satisfaction by invoices, contracts, canceled checks and the like.

          (e)  Notwithstanding anything to the contrary contained in this
Section 8.1 or other provisions of this Lease, in the event that Tenant seeks
Landlord's consent to an assignment of this Lease or a sublease of all or any
part of the Premises other than pursuant to Section 8.1(b)(i), then, in any such
event, Landlord, at its option, may, upon not less than ten (10) days notice
from Tenant's request, terminate this Lease (or if the request is for a sublease
of less than all of the Premises, at Landlord's option, Landlord may terminate
this Lease as to the portion requested to be sublet and Landlord and Tenant
shall execute an appropriate amendment to this Lease to modify the Premises and
to adjust the Base Rent and other Lease terms) (the "Landlord's Termination
Notice"). In such event, Landlord may enter into a new lease with the proposed
assignee or sublessee or any other party an any terms and provisions acceptable
to Landlord in Landlord's sole discretion for the Premises, and (provided that
Tenant vacates the Premises or applicable portion thereof and leaves the
Premises or said portion thereof in the condition required under this Lease),
Tenant shall have no further liability under this Lease for the portion of the
Premises released from this Lease except for any liability arising prior to such
termination and those obligations which expressly survive termination
(including, but not limited to, Tenant's obligations under Section 7.9).
Notwithstanding the foregoing, if Landlord exercised its right to terminate with
respect to all or a portion of the Premises, Tenant shall have the right to
rescind its request for consent to an assignment of this Lease or a sublease of
all or any part of the Premises by giving written notice to Landlord within ten
(10) days of the date of Landlord's Termination Notice and such Landlord's
Termination Notice shall be deemed void and this Lease shall remain in full
force and effect in accordance with its terms.

          (f)  Tenant shall not enter into any arrangements with any subtenant
or assignee to circumvent, or which has the effect of circumventing, (i) its
obligation to share rents received from a sublease or assignment, or (ii) any of
the other provisions of this Section 8.1.

                                  ARTICLE IX
                                  ----------
        RIGHTS OF MORTGAGEES AND GROUND LESSORS; ESTOPPEL CERTIFICATES
        --------------------------------------------------------------

     Section 9.1 Subordination to Mortgages and Ground Leases.  Tenant agrees
     --------------------------------------------------------
that this Lease is and shall be and remain subordinate to the lien of any
present or future mortgage or mortgages, or ground lease, upon Landlord's
Property, irrespective of the time of execution or time of recording of any such
mortgage or mortgages, or ground lease, and to all renewals, extensions, and
modifications therefor or amendments thereto, provided that the holder of such
mortgage or ground lease enters into a non-disturbance agreement consistent with
this Article IX.  Tenant agrees that it will, upon ten (10) days' advance
written request from Landlord or any
<PAGE>

holder of a mortgage on all or a portion of Landlord's Property or the ground
lessor thereof, execute, acknowledge, and deliver any and all instruments
reasonably deemed necessary or desirable by Landlord, or such holder to give
effect to, or notice of, such subordination and non-disturbance agreement. Upon
ten (10) days' written request from Landlord, any holder of a mortgage or ground
lease an Landlord's Property or any successor in interest to Landlord, whether
by purchase, foreclosure, deed in lieu of foreclosure or otherwise, Tenant and
such holder shall enter into an attornment and non-disturbance agreement, in the
form requested by such party, with such party.

     Section 9.2 Lease Superior at Mortgagee's or Ground Lessor's Election.
     ---------------------------------------------------------------------
At the request in writing of any mortgagee, or ground lessor, of Landlord's
Property, this Lease shall be deemed superior to such mortgage, or ground lease,
whether this Lease was executed before or after such mortgage, or ground lease,
and Tenant shall execute such documents to effect the foregoing in recordable
form as such mortgagee, or ground lessor, shall reasonably request.

     Section 9.3 Notice to Mortgagee and Ground Lessor.  Upon receipt of a
     -------------------------------------------------
written request from Landlord or any holder of a mortgage, on all or any part of
Landlord's Property, or the ground lessor thereof, Tenant will thereafter send
any such holder copies of all notices (including, but not limited to, notices of
default or termination) given by Tenant to Landlord in accordance with any
provision of this Lease.  In the event of any failure by Landlord to perform,
fulfill or observe any agreement by Landlord herein or any breach by Landlord of
any representation or warranty of Landlord herein. any such holder may at its
election cure such failure or breach for and on behalf of Landlord within twenty
(20) business days after the time provided herein for Landlord to cure the same
or such longer period as may be reasonably necessary to cure the default.

     Section 9.4 Limitations on Obligations of Mortgagees, around Lessors and
     ------------------------------------------------------------------------
Successors.  Tenant agrees that the holder of a mortgage or ground lease or any
----------
successor-in-interest to any of them or to Landlord shall not be: (a) bound by
any payment of an installment of Base Rent or Additional Rent which may have
been made more than 30 days before the due date of such installment; (b) bound
by any amendment or modification to this Lease made without the consent of the
holder of a mortgage or ground lease or such successor in interest, (c) liable
for any previous act or omission of Landlord (or its predecessors in interest),
(d) responsible for any monies owing by Landlord to the credit of Tenant or
subject to any credits, offsets, claims, counterclaims, demands or defenses
which Tenant may have against Landlord (or any of its predecessors in interest);
(e) bound by any covenant to undertake or complete any construction of the
Premises or any portion thereof; or (f) obligated to make any payment to Tenant
other than any security deposit actually delivered to holder of a mortgage or
ground lease or such successor in interest.  Further, Tenant agrees that it will
not seek to terminate this Lease by reason of any act or omission of Landlord
until Tenant shall have given written notice of such act or omission to the
holder of such mortgage or ground lease (at such holder's last address furnished
to Tenant) and following the giving of such notice such holder shall have the
right, but shall not be obligated, to remedy such act or omission within twenty
(20) business days after the time period provided for in this Lease for Landlord
to cure the same or such longer period as may be reasonably necessary to cure
the same.  Tenant shall enter into a written agreement confirming
<PAGE>

the foregoing from time to time upon written request from Landlord and/or the
holder of a mortgage or ground lease on Landlord's Property.

     Section 9.5 Estoppel Certificate By Tenant and Information Concerning
     ---------------------------------------------------------------------
Tenant.  Tenant agrees, at any time and from time to time, within ten (10) days
------
after written request by Landlord or any holder of a mortgage on all or a
portion of Landlord's Property or the ground lessor thereof, (a) to execute,
acknowledge and deliver to Landlord a statement in writing certifying that
(except may be otherwise specified by Tenant): (i) this Lease is presently in
full force and effect and unmodified; (ii) Tenant has accepted possession of the
Premises; (iii) any improvements required by the terms of this Lease to be made
by Landlord have been completed to the satisfaction of Tenant; (iv) no rent
under this Lease has been paid more than 30 days in advance of its due date; (v)
the addresses for notices to be sent to Tenant is as set forth in this Lease or
as specified in such certificates (vi) Tenant as of the date of executing the
certificate has no charge, lien or claim of offset under this Lease, or
otherwise, against rents or other charges due or to become due hereunder, (vii)
Tenant is not in default under this Lease; (viii) to the best of Tenant's
knowledge, Landlord is not in default of this Lease; and (ix) such other
information as Landlord may reasonably request about this Lease or Tenant's
occupancy; and (b) to deliver information in form satisfactory to Landlord and
such holder or ground lessor concerning Tenants operations, including but not
limited to historic and current financial statements of Tenant, provided that,
(i) at any time during which the shares of Tenants stock are publicly traded on
a recognized stock exchange, such information shall be limited to information
Tenant makes publicly available (including, without limitation, filings with the
Securities and Exchange Commission); and (ii) during the pendency of any public
offering of the shares of Tenant's stock, Tenant shall only be required to
deliver information that can be made available by Tenant in accordance with
applicable law.


                                   ARTICLE X
                                   ---------
                                   CASUALTY
                                   --------

     Section 10.1 Damage From Casualty.  In the event that the Premises are
     ---------------------------------
damaged in whole or in part by fire or other casualty, Tenant shall promptly
notify Landlord thereof.  If following the execution hereof and prior to the
expiration of the Lease Term the Premises shall be damaged or destroyed in whole
or in part by fire or other casualty, this Lease shall, except as hereinafter
provided in this Article X, remain in full force and effect and Landlord shall,
upon notice of such damage from Tenant and proceeding with reasonable dispatch,
repair or rebuild the Premises (exclusive of Tenants Work and any alterations or
improvements, other than Landlord's Work, made by or on behalf of Tenant) to
substantially their condition immediately prior to the time of such damage or
destruction (subject, however, to zoning laws and building codes then in
existence), but Landlord shall not be responsible for any Excusable Delay.
including any delay which may result by reason of adjustment of insurance claims
or collection of insurance proceeds, nor shall Landlord be obligated to commence
repair or restoration work prior to receipt of sufficient insurance proceeds,
nor shall Landlord be required to expend sums in excess of "net recovered
insurance proceeds.  The term "net recovered insurance proceeds" shall mean the
                                   ----------------------------
amount of any insurance proceeds actually recovered by Landlord, less the cost
of obtaining the same (including attorneys' fees and appraisal fees) and less
the amount thereof
<PAGE>

required to be paid to a mortgagee or ground lessor, plus the amount of any
insurance deductible. Subject to the terms of this Lease, Tenant shall
concurrently repair or restore so much of the Premises (a) as were constructed
by Tenant or (b) are the responsibility of Tenant under this Lease and shall
repair and restore its fixtures and personal property.

     Section 10.2 Abatement of Rent.  In the event that the provisions of
     ------------------------------
Section 10.1 shall become applicable, the Base Rent, Tenant's Tax Escalation,
Tenant's Insurance, Escalation and Tenant's Operating Cost Escalation shall be
abated or reduced proportionately during any period in which, by reason of any
such damage or destruction, there is interference, as reasonably determined by
Landlord, with the operation of the business of Tenant in the Premises, having
regard to the extent to which Tenant may be required to discontinue its business
in the Premises, and such abatement or reduction shall continue (but may be
adjusted from time to time based on the extent of the interference with Tenant's
operations as reasonably determined by Landlord) for the period commencing with
such destruction or damage and ending with the substantial completion by
Landlord of such work, repair and/or reconstruction as Landlord may do.

     Section 10.3 Limitation on Landlord's and Tenant's Obligations.  Landlord
     --------------------------------------------------------------
and Tenant shall not be obligated to do any repair or restoration work if
Landlord or Tenant elects to terminate this Lease as provided for in this
Article X.

     Section 10.4 Landlord's Right to Terminate.  Notwithstanding the
     ------------------------------------------
foregoing, Landlord may terminate this Lease following: (a) damage or
destruction to the Premises to the extent of thirty percent (30%) or more of the
cost of replacement thereof; or (b) the refusal of the applicable insurance
carrier to pay funds sufficient for the cost to repair or replace or the refusal
of any applicable mortgagee or ground lessor to release the insurance proceeds
for such purposes.  Landlord may exercise the right to so terminate this Lease
by written notice to Tenant given within sixty (60) days after the date of the
damage or sixty (60) days after the date Landlord receives written notice of
such damage, whichever is later.  Such notice of termination shall be effective
on the date thereof.

     Section 10.5 Tenant's Right to Terminate.  If the Premises are damaged by
     ----------------------------------------
fire or other casualty and (a) Landlord does not elect, by notice to Tenant
given within sixty (60) days after Tenant's written notice of such damage or
destruction is received by Landlord, to substantially repair or restore the same
to their former condition (excluding those portions which consist of the
Tenant's Work or other alterations or improvements, other than Landlord's Work,
made by or on behalf of Tenant), (b) the damage or destruction is such that
restoration of the Premises cannot, in the opinion of Landlord upon consultation
with Landlord's Architect, be completed within nine (9) months of the date of
such damage or destruction or (c) Landlord, having elected to restore, fails to
do so within said nine (9) month period, as the same may be extended due to
Excusable Delay, then, in any of such events, Tenant may thereafter terminate
this Lease upon sixty (60) days prior written notice to Landlord unless such
repair or restoration is substantially completed within such 60-day period.
<PAGE>

                                  ARTICLE XI
                                  ----------
                                EMINENT DOMAIN
                                --------------

     Section 11.1 Eminent Domain, Right to Terminate and Abatement in Rent.  If
     ---------------------------------------------------------------------
the Premises or any part thereof, or the whole or any substantial part of
Landlord's Property, shall be taken, or if a conveyance shall be made in
anticipation thereof, for any street or other public use, by action of the
municipal, state, federal or other authorities, or shall receive any substantial
direct or consequential damage for which Landlord or Tenant shall be entitled to
compensation by reason of anything lawfully done in pursuance of any public
authority, after the execution hereof and before the expiration of the Lease
Term, then this Lease and the Lease Term shall terminate at the election of
Landlord (such termination to be effective upon the date of taking), and such
election may be made in case of any such taking notwithstanding the entire
interest of Landlord may have been divested by such taking; and if Landlord does
not so elect, then in case of any such taking or destruction of, or damage to,
the Premises, rendering the same or any part thereof unfit for use and
occupation, a just proportion of the Base Rent hereinbefore reserved according
to the nature and extent of the injury sustained by the Premises as determined
by Landlord, shall be suspended or abated until the Premises or, in case of such
taking, what may remain thereof, shall have been put in proper condition for use
and occupation.  To the extent that the Premises, upon having been put in proper
condition for use and occupation are smaller, the Base Rent hereinbefore
reserved shall be reduced for the balance of the Lease Term in the same
proportion which the reduction in space bears to the original Leasable Square
Footage of the Premises.

     Section 11.2 Restoration.  If this Lease is not terminated as provided in
     ------------------------
Section 11.1, Landlord shall apply so much of the available proceeds of the
eminent domain award as are required to restore Landlord's Property and the
Premises to a condition, to the extent practical, substantially the same as that
immediately preceding the taking, but subject to zoning laws and building codes
then in existence.  If the available proceeds of the eminent domain award are
insufficient, in Landlord's judgment, for that purpose, Landlord shall have no
obligation to expend funds in excess of said proceeds and Landlord shall have
the right to select which portions of Landlord's Property, if any, shall be
restored.  The term "available proceeds" shall mean the amount of the award paid
                     ------------------
to Landlord, less cost of obtaining the same (including attorneys' fees and
appraisal fees) and less the amount thereof required to be paid to a mortgagee
or ground lessor.

     Section 11.3 Landlord to Control Eminent Domain Action.  Landlord reserves
     ------------------------------------------------------
all rights to compensation for damage to the Premises or any part thereof, or
the leasehold hereby created, heretofore accrued or hereafter to accrue, by
reason of any taking for public use of said Premises or any portion thereof, or
right appurtenant thereto, or privilege or easement in, through, under or over
the same, and by way of confirmation of the foregoing Tenant hereby assigns all
rights to such damages heretofore accrued or hereafter accruing during the Lease
Term to Landlord.  Provided, however, nothing herein contained shall limit
Tenant's right to any separate award for the taking of personal property, moving
expenses, or other items the payment of which shall not reduce the award payable
to Landlord.

                                  ARTICLE XII
                                  -----------
<PAGE>

                             DEFAULT AND REMEDIES
                             --------------------

     Section 12.1 Event of Default.  As used herein, `Event of Default' shall
     -----------------------------
mean the occurrence and/or existence Of any one or more of the following: (a)
Tenant shall neglect or fail to pay when first due Base Rent or any installment
thereof, or Additional Rent or, as applicable, any installment thereof (and such
failure is not solely due to an error by Landlord or Landlord's bank in
collecting such installment by an electronic funds transfer when Tenant has
adequate available funds in its account to pay such installment), or (b) Tenant
shall neglect or fail to perform or observe any of the other covenants or
undertakings herein on its part to be performed or observed and such neglect or
failure shall continue for thirty (30) days after notice to Tenant; provided,
however, that if the default is other than a default under clause (a) above, or
clauses (c) through (j) below, and is such that it cannot be cured within thirty
(30) days, but is capable of being cured, such thirty (30) day period shall be
extended by up to thirty (30) additional days provided that Tenant commences to
cure such default within said initial thirty (30) day period, continues to do so
diligently, and thereafter completes such cure within not more than sixty (60)
days following the notice of default; or (c) there is filed by Tenant or any
Guarantor any case, petition, proceeding or other action under any Bankruptcy
Law; or (d) any other proceedings shall be instituted against Tenant or any
Guarantor under any Bankruptcy Law and not be dismissed within ninety (90) days;
or (e) Tenant or any Guarantor shall execute an assignment of its property for
the benefit of its creditors; or (f) a receiver, custodian or other similar
officer for Tenant or any Guarantor shall be appointed and not be discharged
within ninety (90) days; or (g) the estate hereby created shall be taken by
execution or by other process of law and is not redeemed by Tenant within thirty
(30) days thereafter, or (h) an assignment or sublease in violation of the terms
of this Lease; or in an Event of Default shall occur under Section 2.5(b); or
(j) Tenant shall fail to deliver any agreement, document or certificate required
pursuant to Article IX within the time period provided therein and such failure
is not cured within ten (10) days after notice to Tenant.

     Section 12.2 Landlord's Remedies.
     --------------------------------

          (a)  Upon the occurrence of an Event of Default and after the lapse of
any applicable period of cure, Landlord may, provided such is done in accordance
with applicable laws, immediately or at any time thereafter (notwithstanding any
license or waiver of any former breach or waiver of the benefit hereof, or
consent in a former instance), and without demand or notice, in person or by
agent or attorney, enter the Premises or any part thereof and repossess the same
as of its former estate, or terminate this Lease by written notice to Tenant,
and in either event expel Tenant and those claiming through or under it and
remove their effects (forcibly, if necessary) without being deemed guilty of any
manner of trespass and without prejudice to any remedy which might otherwise be
used for arrears of Base Rent or Additional Rent or breach of covenant, and upon
entry or written notice of termination, or automatic termination, both as
aforesaid, this Lease shall terminate and Landlord, in addition to all other
remedies which it may have at law or equity, and not in limitation thereof,
shall have the remedies provided in this Article XII.

          (b)  If this Lease shall be terminated as provided in Section 12.2(a)
hereof, Tenant shall forthwith pay to Landlord as damages, in addition to all
sums which were due prior
<PAGE>

to the date of such termination, a sum equal to the amount by which the Base
Rent and Additional Rent for the remainder of the Lease Term exceeds the fair
rental value of the Premises for the remainder of the Lease Term. For the
purposes of computing damages payable pursuant to this Section 12.2, it is
agreed that there shall be payable to Landlord as part of such damages at the
time of such termination the product of the Additional Rent due with respect to
Taxes, Insurance Costs and Operating Costs for the most recently ended fiscal,
calendar or lease year, as the case may be, times the number of years remaining
of the Lease Term, it being assumed that the amount of such Additional Rent
payments so payable for the most recently ended fiscal, calendar year or lease
year would have remained constant for each subsequent year of the Lease Term.
Tenant also (i) will indemnify and save Landlord harmless from and against all
reasonable expenses which Landlord may incur, including, without limitation,
legal expenses, reasonable attorneys' fees, brokerage fees, and the cost of
putting the Premises in the condition required to be maintained hereunder or
preparing the same for rental; and (ii) agrees that Landlord may re-let the
Premises or any part or parts thereof, either in the name of Landlord or
otherwise for a term or terms which may, at Landlord's option, be less than or
exceed the period which would otherwise have constituted the balance of the
Lease Term and may grant concessions or free rent. The good faith failure of
Landlord to re-let the Premises or any part or parts thereof, or, if the
Premises are re-let, for the good faith failure to collect the rents due under
such re-letting, shall not release or affect Tenants liability for damage so
long as Landlord does not act arbitrarily or capriciously. Any suit brought to
collect the amount of deficiency for any month or other period shall not
prejudice in any way the tight of Landlord to collect the deficiency for any
subsequent month or period by a similar proceeding. Landlord, at Landlord's
option, may make such alterations, repairs, replacements and decorations on the
Premises as Landlord in Landlord's reasonable judgment considers advisable and
necessary for the purpose of re-letting the Premises, and the making of such
alterations or decorations shall not operate or be construed to release Tenant
from liability hereunder. Landlord shall in no event be liable in any way for
the good faith failure to re-let the Premises, or. if the Premises are re-let,
for the good faith failure to collect the rents due under such re-letting,
provided always that Landlord does not act arbitrarily or capriciously.

     Section 12.3 Reimbursement of Landlord.  In the event of any default by
     --------------------------------------
Tenant in the payment of any Base Rent or Additional Rent, Tenant will, in
addition to paying Landlord all amounts due under the terms and provisions of
this Lease, including, without limitation, Section 12.9, reimburse Landlord for
all reasonable expenses incurred by Landlord in collecting such rent or in
obtaining possession of, or in re-letting the Premises, or in defending any
action, including expenses for reasonable counsel fees and commissions. Tenant
further agrees that, if on termination of this Lease by expiration or otherwise,
Tenant shall fail to remove any of its property from the Premises as provided
for herein, Landlord shall be authorized, in its sole option, and in Tenant's
name and an its behalf, either (a) to cause such property to be removed and
placed in storage for the account and at the expense of Tenant; or (b) to sell
such property at public or private sale, with or without notice, and to apply
the proceeds thereof, after the payment of all expenses of removal, storage and
sale, to the indebtedness, if any, of Tenant to Landlord, the surplus, if any,
to be paid to Tenant; prior to the removal of such property Landlord may charge
Tenant a fair rental amount for the storage of such property. All sums payable
by Tenant under this Article XII shall be deemed Additional Rent.
<PAGE>

     Section 12.4 Landlord's Right to Perform Tenant's Covenants.  Tenant
     -----------------------------------------------------------
covenants and agrees that, if it shall at any time fail to make any payment or
perform any other act on its part to be made or performed as in this Lease
provided beyond the cure period set forth below in this Section 12.4, Landlord,
in its sole discretion may after due notice to, or demand upon, Tenant, make any
payment or perform any other act on the part of Tenant to be made and performed
as in this Lease provided, in such manner and to such extent as Landlord may
reasonably deem desirable, and in exercising any such rights, Landlord may pay
necessary and incidental costs and expenses, employ counsel, and incur and pay
reasonable attorneys' fees. The making of any such payment or the performing of
any other act by Landlord pursuant to this Article shall not waive, or release
Tenant from, any obligations of Tenant in this Lease contained. All sums so paid
by Landlord and all reasonably necessary and incidental costs and expenses in
connection with the performance of any such act by Landlord shall, except as
otherwise in this Lease expressly provided, be payable to Landlord on demand,
and Tenant covenants to pay any such sum or sums promptly, and Landlord shall
have (in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of the non-payment thereof by Tenant as in the case of
default by Tenant in the payment of the Base Rent. Whenever practicable,
Landlord, before proceeding as provided in this Section 12.4, shall give Tenant
notice in writing of the failure of Tenant which Landlord proposes to remedy,
and shall allow Tenant such length of time as may be reasonable in the
circumstances, consistent with any grace periods contained herein, but not
exceeding thirty (30) days from the giving of notice, to remedy the failure
itself and, if Tenant shall not remedy the failure in the time so allowed,
Landlord shall be deemed to have given "due notice" and may proceed as provided
in this Section 12.4; provided, however, that nothing in this Section shall
prevent Landlord from acting without notice to Tenant in case of any emergency
wherein there is danger to property or person or where there may exist any
violation of legal requirements including but not limited to the presence of
Hazardous Materials, in which event no notice shall be required.

     Section 12.5 Cumulative Remedies.  The specified remedies to which Landlord
     --------------------------------
may resort under the terms of this Lease, or under the provisions of applicable
law, are cumulative and not intended to be exclusive of any other remedies or
means of redress to which Landlord may be lawfully entitled in case of any
breach or threatened breach by Tenant of any provisions of this Lease.  The
failure of Landlord to insist in any one or more cases upon the strict
performance of any of the covenants of this Lease or to exercise any option
contained herein shall not be construed as a waiver or a relinquishment for the
future of such covenant or option.  Receipt by Landlord of any Base Rent or
Additional Rent payment with knowledge of the breach of any covenants hereof
shall not be deemed a waiver of such breach.  No waiver by either party of any
provision of this Lease shall be deemed to have been made unless expressed in
writing and signed by it.  In addition to the other remedies provided in this
Lease, Landlord shall be entitled to restraint by injunction of any violation or
attempted or threatened violation of any of the covenants, conditions or
provisions of this Lease.

     Section 12.6 Expenses of Enforcement.  Tenant agrees to pay all reasonable
     ------------------------------------
expenses and reasonable attorneys' fees incurred by Landlord in enforcing any
obligation or any remedies hereunder including, without limitation, in
connection with collection of Base Rent or Additional Rent, recovery by Landlord
of the Premises, or in any litigation in which Landlord shall become
<PAGE>

involved by reason of any act or negligence of Tenant Invitees or any breach of
this Lease by Tenant.

     Section 12.7 Landlord's Default.  Landlord shall not be deemed to be in
     --------------------------------
default hereunder unless such default shall remain uncured for more than thirty
(30) days following written notice from Tenant to Landlord specifying the nature
of such default, or such longer period as may be reasonably required to correct
such default provided that Landlord is diligently pursuing cure of same.
Landlord's liability to keep, maintain, and repair shall always be limited to
the cost of making such repair or accomplishing such maintenance or repair. In
no event whatsoever shall Landlord be liable for consequential or any indirect
damages. The provisions of this Section 12.7 are further subject to the
provisions of Articles X and XI dealing with eminent domain and fire and other
casualty.

     Section 12.8 Limitation of Landlord's Liability.  The obligations of
     -----------------------------------------------
Landlord hereunder shall be binding upon Landlord and each succeeding owner of
Landlord's interest hereunder only during the period of such ownership, and
Landlord and each succeeding owner shall have no liability whatsoever except for
its obligations during each such respective period. Tenant hereby agrees for
itself and each succeeding holder of Tenant's interest, or any portion thereof,
hereunder, that any judgment, decree or award obtained against Landlord or any
succeeding owner of Landlord's interest, which is in any manner related to this
Lease, the Premises or Tenant's use and occupancy of the Premises or other
portions of Landlord's Property, whether at law or in equity, shall be satisfied
out of Landlord's equity in the land and buildings then comprising Landlord's
Property owned by Landlord to the extent then owned by Landlord and such
succeeding owner and available insurance proceeds, and further agrees to look
only to such assets and to no other assets of Landlord, or such succeeding
owner, for satisfaction. Neither Landlord nor any Person executing this Lease on
behalf of Landlord, nor any partner, limited or general, or any officer,
director, employee, member, trustee, beneficiary, or owner of Landlord, nor any
subsequent Landlord, or any partner, limited or general, or any officer,
director, employee, member, trustee, beneficiary, or owner of any subsequent
Landlord shall have any personal liability hereunder. The remedies provided to
Tenant in this Lease are exclusive, and Landlord will not be liable under any
theory of recovery, whether based on contract, tort or otherwise.

     Section 12.9 Late Payment and Administrative Expense.  If Tenant shall fail
     ----------------------------------------------------
to pay Base Rent, Additional Rent or other charges after the same become due and
payable under this Lease, such unpaid amounts shall bear interest from the due
date thereof to the date of payment at the Applicable Interest Rate ("Interest
                                                                      --------
Payment").  In addition, if Landlord is required to redeposit any check which is
-------
returned for insufficient funds or if Tenant shall fail to pay Base Rent,
Additional Rent or other charges on or before the date on which the same become
due and payable, then Tenant shall also pay to Landlord an administrative
expense charge ("Administrative Expense") of five percent (5.0%) of the amount
                 ----------------------
thereof for each calendar month or part thereof after the due date of such
payment until such payment is received by Landlord.  The provisions herein for
Interest Payment and Administrative Expense shall not be construed to relieve
Tenant of the obligation to pay Base Rent, Additional Rent and all other charges
when due under this Lease and shall be in addition to and not in limitation of
Landlord's other remedies as provided for in this Lease.
<PAGE>

                                ARTICLE XIII
                                ------------
                           MISCELLANEOUS PROVISIONS
                           ------------------------

     Section 13.1 Brokers.  Tenant and Landlord each represents to the other
     --------------------
that it has not dealt with any Person in connection with the Premises or the
negotiation or execution of this Lease other than officers, employees and
attorneys of Landlord and the Brokers.  Each of Tenant and Landlord shall
indemnify and save harmless the other from and against all claims, liabilities,
costs and expenses incurred as a result of any breach of the foregoing
representation by it.  The broker's fees payable to Brokers for this Lease shall
be payable by Landlord subject to and in accordance with the terms of separate
agreements between Landlord and Brokers.

     Section 13.2 Quiet Enjoyment.  Tenant shall, upon paying all Base Rent and
     ----------------------------
Additional Rent due hereunder and observing and performing all of the terms,
covenants and conditions on Tenant's part to be observed and performed,
peaceably and quietly have and hold the Premises without hindrance or
molestation by any Person or Persons lawfully claiming by, through or under,
Landlord, subject, however, to the terms of this Lease.

     Section 13.3. [intentionally omitted].
     ------------

     Section 13.4 Notices.  Any notice, demand, request or statement required or
     --------------------
intended to be given or delivered under the terms of this Lease shall be in
writing, shall be addressed to the party to be notified at the address or
addresses set forth in the Summary of Basic Terms or at such other address in
the continental United States as each party may designate for itself from time
to time by notice hereunder, and shall be deemed to have been given, delivered
or served upon the earliest of (a) three (3) days following deposit in the U.S.
Mail, with proper postage prepaid, certified or registered, return receipt
requested, (b) the next business day after delivery to a regularly scheduled
overnight delivery carrier with delivery fees either prepaid or an arrangement,
satisfactory with such carrier, made for the payment of such fees, or (c)
receipt of notice given by telecopy or personal delivery.

     Section 13.5 Waiver of Subrogation.  Landlord and Tenant hereby release
     ----------------------------------
each other, to the extent of their respective insurance coverages, from any and
all liability for any loss or damage caused by fire, any of the extended
coverage casualties, or other casualties insured against, even if such fire or
other casualty shall be brought about by the fault or negligence of the party
benefited by the release or its agents, provided, however, this release shall be
in force and effect only with respect to loss or damage occurring during such
time as the policies of fire, extended coverage and other insurance, maintained
by the releasing party shall contain a clause, or be subject to a statutory
provision to the effect that such release shall not affect said policies or the
right of the releasing party to recover thereunder.  Landlord and Tenant agree
that their respective fire, extended coverage, and other insurance policies will
include such a clause.  To the extent that Tenant is a self-insurer with respect
to personal property, the provisions of Section 7.8 hereof shall be applicable.
The provisions in favor of Landlord under this Section 13.6 are in addition to,
and not in lieu of, the other terms of this Lease.  In the event that either
party fails to maintain the insurance coverage required under this Lease, it
shall be deemed, for purposes of
<PAGE>

this Section 13.5, to have received the amount which it would have received had
such insurance coverage been in place.

     Section 13.6 Entire Agreement: Execution;  Time of the Essence and Headings
     -----------------------------------------  --------------------------------
and Table of Contents.  This Lease together with all Exhibits referred to herein
---------------------
and the Summary of Basic Terms, sets forth the entire agreement between the
parties hereto and cannot be modified or amended, except in a writing duly
executed by the respective parties.  This Lease, together with all Exhibits
referred to herein and the Summary of Basic Terms, supersedes all previous
written and oral negotiations, understandings. and agreements regarding the
subject matter of this Lease.  Neither Landlord nor any Person acting on behalf
of Landlord has made any representations to Tenant on which Tenant has relied in
entering into this Lease except any representations expressly stated in this
Lease.  This Lease is executed as a sealed instrument and in multiple
counterparts, all copies of which are identical, and any one of which is to be
deemed to be complete in itself and may be introduced in evidence or used for
any purpose without the production of any other copy.  Time is of the essence of
the obligations of each party to be performed within a specific time frame in
this Lease.  The headings throughout this Lease and the Table of Contents are
for convenience of reference only, and shall in no way be held or deemed to
define, limit, explain, describe, modify or add to the interpretation,
construction or meaning of any provision of this Lease.

     Section 13.7 Partial Invalidity.  If any term or condition of this Lease or
     -------------------------------
its application to any Person or circumstance shall to any extent be in
violation of or unenforceable under any law, rule, regulation or order
(including any court order) now existing or hereafter enacted or entered by any
court or other governmental entity having competent jurisdiction (including
after all appeals therefrom), the remainder of this Lease, or the application of
such term or condition to Persons or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected thereby and shall be
enforceable to the fullest extent not prohibited by law.

     Section 13.8 No Waiver.  No assent, express or implied, by either party to
     ----------------------
any breach of any agreement or condition herein contained on the part of the
other party to be performed or observed, and no waiver, express or implied, of
any such agreement or condition shall be deemed to be a waiver of or an assent
to any succeeding breach of the same or any other agreement or condition; the
acceptance by Landlord of Base Rent or Additional Rent due hereunder (whether
such payment is made by Tenant or another Person), or silence by either party as
to any breach, shall not be construed as waiving any of its fights hereunder
unless such waiver shall be in writing.  No payment by Tenant or acceptance by
Landlord of a lesser amount than shall be due Landlord from Tenant shall be
deemed to be anything but payment on account, and the acceptance by Landlord of
a check for a lesser amount with an endorsement or statement thereon, or upon a
letter accompanying said check, that said lesser amount is payment in full shall
not be deemed an accord and satisfaction, and Landlord may accept said check
without prejudice to recover the balance due or pursue any other remedy.

     Section 13.9 Holdover.  If Tenant remains in the Premises beyond the
     ---------------------
expiration of this Lease at the end of the Lease Term, or sooner following an
early termination as provided for herein, such holding over shall not be deemed
to create any tenancy, but Tenant shall be a daily Tenant at sufferance only
subject to all of Tenant's obligations set forth herein, but at a daily rate
<PAGE>

equal to one and one-half (1 1/2) times the Base Rent, then in effect, and
Additional Rent and other charges provided for under this Lease.  The acceptance
of a purported rent check following termination shall not constitute the
creation of a tenancy at will, it being agreed that Tenant's status shall remain
that of a daily Tenant at sufferance, at the aforesaid daily rate.  Tenant shall
also pay to Landlord all damages, if any, sustained by reason of any such
holding over.  Otherwise. such holding over shall be on the terms and conditions
set forth in this Lease as far as applicable.

     Section 13.10 When Lease Becomes Binding.  The submission of this document
     ----------------------------------------
for examination and negotiation does not constitute an offer to lease or a
reservation or an option for the Premises, and this document shall become
effective and binding only upon the execution and delivery hereof by both
Landlord and Tenant and the receipt by Landlord of the first month's
installments of Tenant's Electricity Costs and Base Rent, along with the
Security Deposit.  All negotiations, considerations, representations and
understandings between Landlord and Tenant are incorporated herein and may be
modified or altered only by agreement in writing between Landlord and Tenant,
and no act or omission of any employee or agent of Landlord shall alter, change
or modify any of the provisions hereof.

     Section 13.11 No Recordation.  Tenant shall not record this Lease with any
     ----------------------------
registry of deeds or land court, and any recordation of this Lease or any
memorandum, short form or notice of this Lease will be void and constitute an
Event of Default under this Lease.

     Section 13.12 As Is.  Except for Landlord's Work, the Tenant represents to
     --------------------
Landlord that it has leased the Premises after a full and complete examination
of the same, and by its execution and delivery of this Lease, Tenant hereby
acknowledges that neither Landlord, nor Landlord's agents, has made any
representation or promises with respect to the Premises, the Building, or the
land upon which it stands, and no rights, easements or licenses are acquired by
Tenant, by implication or otherwise, except as may be set forth expressly in
this Lease.  The execution and delivery of this Lease by Tenant shall be
conclusive evidence, as against the Tenant, that Tenant accepts the Premises "AS
IS", with all faults.

     Section 13.13 Financial Statements: Certain Representations and Warranties
     --------------------------------------------------------------------------
of Tenant.  Subject to the restrictions set forth in Section 9.5 (b), from time
---------
to time as requested by Landlord, Tenant shall provide to Landlord, any actual
or potential mortgagee and any actual or potential ground lessor or any
representative of any of the foregoing, copies of Tenant's (and any Guarantor's)
annual financial statements (audited or reviewed, if available) and quarterly
financial statements, all certified as true and correct by the president or
chief financial officer of Tenant (or any Guarantor, as applicable) and such
other information regarding Tenant's (and, any Guarantors) financial condition
as Landlord may reasonable request.  Tenant represents and warrants to Landlord,
its successors and assigns that: (a) all financial statements of Tenant and/or
any Guarantor previously provided to Landlord have been prepared in accordance
with GAAP, were true, complete and correct as of their respective dates and
fairly and accurately reflect the financial condition of Tenant and any
Guarantor, (b) there has been no material adverse change in the financial
condition of Tenant and/or any Guarantor subsequent to the date(s) of such
financial statements; (c) all financial statements of Tenant and/or any
Guarantor provided to Landlord after the date hereof will be prepared in
accordance with GAAP, will be true, complete
<PAGE>

and correct as of their respective dates and will fairly and accurately reflect
the financial conditions of the Tenant and any Guarantor, (d) Tenant is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware; (e) Tenant is qualified to do business in the Commonwealth of
Massachusetts; (f) the execution, delivery and performance of this Lease by
Tenant has been duly authorized by the shareholders and directors of Tenant; and
(g) this Lease is valid and binding upon the Tenant and is enforceable against
Tenant in accordance with the terms hereof.

     Section 13.14 Confidentiality.  Tenant acknowledges that the terms under
     -----------------------------
which Landlord has leased the Premises to Tenant, (including, without
limitation, the rental rate(s), term and other financial and business terms,
constitute confidential information of Landlord "Confidential Information").
                                                 ------------------------
Tenant covenants and agrees to keep the Confidential Information completely
confidential; provided, however, that (a) such Confidential Information may be
disclosed by Tenant to those of its officers, employees, attorneys, accountants,
lenders and financial advisors (collectively, "representatives") who need to
know such information in connection with Tenant's use and occupancy of the
Premises and for financial reporting and credit related activities (it being
understood that Tenant shall inform its representatives of the confidential
nature of such Confidential Information and that such representatives shall be
directed by Tenant, and shall each expressly agree, to treat such Confidential
Information confidentially in accordance with the terms of this Section), and
(b) unless required by applicable law, any other disclosure of such information
may only be made if Landlord consents in writing prior to any such disclosure.

     Section 13.15 Summary of Basic Terms.  The Summary of Basic Terms which is
     ------------------------------------
affixed to this Lease sets forth certain basic terms and information which is
thereafter referred to in the main text of this Lease.  Every reference to the
Summary of Basic Terms, or to a particular item thereon, shall have the effect
of incorporating the Summary, or the particular item thereof, into the main text
of this Lease.

     Section 13.16 [intentionally omitted].
     -------------------------------------

     Section 13.17 Year 2000 Compliance.  The Building will be delivered with
     ----------------------------------
all systems compliant with Year 2000.


                           [SIGNATURE PAGE FOLLOWS]
<PAGE>

     Tenant and Landlord, each by its duly authorized officer, has signed this
Lease as of the date first set forth above.

                              TENANT:

                              SmarterKids.com, Inc.


                              By: /s/ David A. Blohm
                                  -----------------------------
                              Name: DAVID A. BLOHM
                                   ----------------------------
                              Title: PRES/CEO
                                    ---------------------------
                                      Duly authorized

                              LANDLORD:

                              BHX, LLC, as Trustee of Crawford Realty Trust


                              By:  /s/ Robert A. Schlager
                                  -----------------------------
                              Name: ROBERT A. SCHLAGER
                                   ----------------------------
                              Title: Illegible
                                    ---------------------------
                                      Duly authorized
<PAGE>

                                   EXHIBIT A
                                   ---------

                             PROPERTY DESCRIPTION
                             --------------------

                               [To be attached]
<PAGE>

                                  SCHEDULE A


All that certain parcel of land situated in Needham, Norfolk County,
Massachusetts, bounded and described as follows:

Westerly       by Hampton Avenue, two hundred forth eight and 44/100 (248.44)
               feet;

Northwesterly  by the junction of said Hampton Avenue, and Crawford Street,
               ninety five and 06/100 (95.06) feet;

Northerly      by said Crawford Street, two hundred nine and 41/100 (209.41)
               feet;

Northeasterly  by Parcel No. 42TB, shown on plan filed with Certificate No.
               81403, five and 88/100 (5.88) feet;

Northeasterly  by the junction of said Crawford Street and Town Way, shown on
               plan filed with Certificate No. 49606, fifty nine and 90/100
               (59.09) fee;

Easterly       by the Westerly line of said Town Way, one hundred eighty one and
               28/100 (181.28) feet; and

Southeasterly  by lot numbered 7, shown on said plan filed with Certificate No.
               49606, two hundred ninety nine and 51.100(299.51) feet.

Said parcel comprises lots numbered 5 and 6 on a plan drawn by Frank L. Cheney,
Civil Engineer, dated November 7, 1953, as approved by the Land Court, filed in
the Land Registration Office as No. 21023C, a copy of a portion of which is
filed in Norfolk Registry District with Certificate No. 49606, Book 249; and lot
numbered 9 on a plan drawn by Mass. Dept. of Public Works, E.F. Sawyer, Officer
Engineer, dated September 1, 1953, as approved by the said Court, filed in the
Land Registration Office as No. 21023D, a copy of a portion of which is filed in
Norfolk Registry District with Certificate No. 81403, Book 408.
<PAGE>

                                   EXHIBIT B
                                   ---------

                                   SITE PLAN
                                   ---------

                               [To be attached]
<PAGE>

                              [COPY OF SITE PLAN]
<PAGE>

                                   EXHIBIT C
                                   ---------

                              BUILDING FLOOR PLAN
                              -------------------

                               [To be attached]
<PAGE>

                         [COPY OF BUILDING FLOOR PLAN]
<PAGE>

                                   EXHIBIT D
                                   ---------

                              BASE BUILDING WORK
                              ------------------

I.     Work per plans and specifications determined by Landlord's Architect (to
       be attached).

II.    Landlord shall perform the following work at Landlord's sole cost and
       expense and without charge against he Tenant Improvements Allowance.

1.   Landlord shall make at least one set of restrooms on each floor of the
     building handicap accessible and ADA-compliant and install new finishes in
     all restrooms.

2.   Remove all remaining plant material and clean the walls, windows and
     structural elements of the atrium. Clean vestibule lobby and rear garage
     area. Install new floor tiles in lobby. Garage area should be in good
     operational condition (lighting, HVAC, etc.).

3.   Remove directory from wall and install sheetrock with wood panel wainscoat.

4.   Replace those pieces of plan material in the lobby planter which are in
     poor condition with new plantings or remove completely at Tenant's
     election.

5.   New lighting fixtures for lobby overhead, sidewalls and second floor
     balcony area.

6.   Replace lobby-ceiling tiles (under balcony area) with new tiles. Convert
     acrylic fixture to downlights.

7.   Landlord will remove "steel monuments" from the front of the Building and
     reconfigure front entrance of building to be ADA compliant.

8.   Replace garage door (facing the parking lot) to a standard, which is
     mutually agreeable between Landlord and Tenant.
<PAGE>

                                   EXHIBIT E
                                   ---------

                 TENANT IMPROVEMENTS PLANS AND SPECIFICATIONS
                 --------------------------------------------

                               [To be attached]
<PAGE>

             [COPY OF TENANT IMPROVEMENT PLANS AND SPECIFICATIONS]
<PAGE>

                                   EXHIBIT F
                                   ---------

                                 TENANT'S WORK
                                 -------------

1.   Tenant will perform any work necessary to equip and open its office in
     accordance with all applicable building codes and other laws.  Work shall
     be performed as provided in Section 3.2 of this Lease.  Work shall include
     but not be limited to any computer or telephone cables, wiring, jack
     locations and the like, and supplying and installation of such furnishings,
     trade fixtures and equipment as Tenant may elect which are necessary or
     desirable for the conduct by Tenant of its business in the Premises
     consistent with the terms and conditions of this Lease.

2.   Tenant shall only use contractors approved by Landlord (such approval not
     to be unreasonably withheld or delayed) to perform Tenant's Work.  In the
     event Tenant uses Landlord's contractors, Tenant shall pay Landlord, as
     Additional Rent, an administrative fee for such contractors in the amount
     of 15% of the estimated cost of Tenant's Work, payable within 30 days of
     Landlord's billing to Tenant therefor.

                               [To be attached]
<PAGE>

                                   EXHIBIT G
                                   ---------

                             RULES AND REGULATIONS
                             ---------------------


     BHX, LLC, a Massachusetts limited liability company, as Trustee of Crawford
Realty Trust, under Declaration of Trust dated June 9, 1997 and filed with the
Norfolk Registry District of the Land Court on June 9, 1997 as Document No.
764674 ("Landlord"), hereby promulgates the rules and regulations (the "Rules
         --------                                                       -----
and Regulations") set forth below with respect to the use of the office building
---------------
(the "Building"), parking areas and related amenities located at and known as
      --------
15-19 Crawford Street, Needham, Massachusetts (the "Property") by
                                                    --------
SmarterKids,.com, a Delaware corporation (the "Tenant") of the Building.  All
                                               ------
space within the Building leased by Tenant is called the "Premises."  The Rules
                                                          --------
and Regulations are as follows:

     1.   Sidewalks, doorways, vestibules, stairways, elevators, corridors,
halls and other similar areas within the Property shall not be obstructed by
Tenant or used for any purpose other than ingress and egress to and from the
Premises and for going from one part of the Property to another part of the
Property.

     2.   No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by Tenant on or to any window, door, corridor or
other part of the Building which is visible from outside of the Building without
the prior written consent of Landlord.

     3.   Tenant shall be entitled to maintain a director in the lobby of the
Building, the design and location of which is subject to Landlord's approval,
identifying the names and locations of its employees.

     4.   Movement of furniture, office equipment or any bulky material shall be
subject to such restrictions as Landlord may reasonably impose.

     5.   Landlord shall have the authority to limit the weight of, and to
prescribe and restrict the positioning and manner of installation of, safes,
file cabinets and other heavy equipment.

     6.   Tenant shall not use, or permit any person making or receiving any
delivery to the Premises to use, any hand trucks except those equipped with
rubber tires and side guards.

     7.   All locks for doors in the Premises shall be building standard and
Tenant shall not place any additional lock or locks on any door without
Landlord's prior written consent. All requests for duplicate keys shall be made
through Landlord and charged to Tenant. Upon termination of Tenant's tenancy,
the Tenant shall deliver to Landlord all keys to the Premises, to interior doors
within the Premises and to exterior Building doors which have been furnished to
or obtained by the Tenant.

     8.   Tenant shall lock all doors at the close of its working day.
<PAGE>

     9.   No curtains, blinds, draperies or other window treatments shall be
attached to or hung in any window of the Premises, on an exterior wall of the
Building without the prior written consent of Landlord, which consent shall not
be unreasonably withheld.

     10.  Plumbing fixtures and appliances shall be used only for the purposes
for which they were designed and constructed, and no sweepings rubbish, rages or
other material shall be thrown or placed therein. The cost of repairing any
damage resulting from misuse of the plumbing fixtures or appliances by Tenant or
its employees, agents or invitees shall be borne by Tenant.

     11.  Tenant shall not use or permit the use of Premises, or any part
thereof, for lodging, for manufacturing, for any immoral, "adult" or illegal
purpose, or for any other purpose which is not permitted by the terms of its
lease.

     12.  Tenant shall, at its expense, provide artificial light and electric
current for the employees of Landlord and/or Landlord's contractors while
performing janitorial or other cleaning, maintenance or repair services in the
Premises.

     13.  Tenant shall not cause any unnecessary janitorial labor or services by
reason of the Tenant's willful misconduct or carelessness or indifference in the
preservation of good order and cleanliness.

     14.  With the exception of so-called "seeing-eye" dogs necessary for the
assistance of the visually-impaired, no animals of any kind shall be brought
onto or kept on the Property.

     15.  Without the prior written consent of Landlord, Tenant shall not use
the name of the Building or any picture of the Building in any materials
promoting or advertising the business of the Tenant, except that each Tenant may
use the address of the Building as the address of its business.

     16.  Tenant shall cooperate with Landlord to assure the effective operation
of the heating and air conditioning systems serving the Building. Without
limiting the generality of the immediately preceding sentence, Tenant will, at
the request of Landlord, close its window treatments when the sun's rays fall
directly on windows of the Premises.

     17.  Neither Landlord nor the Property manager will be responsible for lost
or stolen money, jewelry or other personal property from any areas of the
Property, regardless of whether the loss or theft occurs when the area in
question is locked.

     18.  Landlord may, in its discretion, institute security measures in the
operation of the Property, and Tenant will comply with all such security
measures.  Such security measures may include, but are not limited to, requiring
persons entering the Building or the Property to identify themselves to a
watchman or other person designated by Landlord and to sign in and sign out of
the Property, denying access to persons who are not properly identified or
appear suspicious, and conducting fire or other emergency drills.  The exercise
of such security measures by Landlord and any resulting interruption of Tenant's
business shall not constitute an eviction or disturbance
<PAGE>

of Tenant's use and possession of the Premises, render Landlord liable to Tenant
for damages, or relive Tenant from its obligations under its lease.

     19.  No bicycles or vehicles shall be brought into or kept in the Building
(except bicycles and vehicles may be brought into the Storage Space).  All
bicycles and vehicles brought onto the Property shall be driven and parked only
in designated, paved areas.

     20.  Parking on the Property shall be subject to the restrictions set forth
in this paragraph and to any additional restrictions on parking set forth in
Tenant's lease. Tenant, its employees, agents and invitees shall have the right,
in connection with the conduct of Tenant's business at the Property, to park
passenger automobiles on portions of the Property which have been striped for
parking; provided, however that (a) Tenant, its employees or agents may not park
in any space marked "visitor," and (b) Tenant, its employees, agents or invitees
may not park in any space marked "reserved," unless reserved for such Tenant,
and (c) persons parking their vehicles will do so exclusively within the marked
parking space lines. Tenant, its employees, agents or invitees shall not have a
right to park vehicles on the Property overnight or for purposes other than in
connection with Tenant's business at the Property. Landlord shall have no
responsibility to Tenant, its employees, agents or invitees for any theft, loss
of or damage to any vehicle or its contents on the Property.

     21.  All vehicles brought onto the Property by Tenant, its employees,
agents, customers and invitees shall be in good condition and appearance and
shall be drivable. No such vehicles shall be leaking oil or other fluids.

     22.  Tenant will deposit its garbage, trash and refuse only in approved
trash containers within the Premises and in designated trash receptacles placed
on the Property by Landlord. Tenant shall not deposit any hazardous, flammable
or explosive substances in any trash receptacle on the Property.

     23.  Landlord reserves the right to rescind, alter or waive any of the
Rules and Regulations, and to adopt such additional rules and regulations as
part of the Rules and Regulations, from time to time as Landlord reasonably
deems it appropriate for the safety, protection, care and cleanliness of the
Property, the operation thereof, the preservation of good order therein or the
protection and comfort of Tenant, its employees, agents and invitees. In the
event that during the tenancy of Tenant, the Building becomes a multi-tenant
building, these Rules ad Regulations will be altered to provide for the
protection and comfort of other tenants, their employees, agents and invitees.
<PAGE>

                                   EXHIBIT H
                                   ---------

                            SECRETARY'S CERTIFICATE
                            -----------------------

                     [To be provided by Tenant's Counsel]
<PAGE>

                                   EXHIBIT I
                                   ---------

                           FORM OF LETTER OF CREDIT
                           ------------------------

                                  BANKBOSTON

                       Irrevocable Letter of Credit Form


                                                        Date:  September 7, 1999
                                                        Amount:  $500,000 USD

Letter of Credit No.  ________________

Beneficiary:   BHX, LLC, as Trustee of Crawford Realty Trust
               c/o The Bulfinch Companies, Inc.
               First Needham Place
               250 First Avenue, Suite 200
               Needham, MA  02494
               Attn:  Robert A. Schlager

Gentlemen:

          We hereby establish our unconditional, irrevocable Letter of Credit
No. __________ in your favor and for the account of ____________________ whereby
we irrevocably authorize you to draw on us from time to time at sight prior to
the expiration hereof, and in the manner provided herein, up to
__________________ and Five Hundred Thousand Dollars ($500,000 USD).  Such
drawing(s) will be unconditionally available to you upon your presentation of
your draft(s) (which draft(s) shall have been signed by one purporting to be a
duly authorized representative of the Beneficiary) on which shall be indicated
"Drawn under(Name of Financial Institution) Letter of Credit No. _______,"
together with your certification to us that either (i) an "Event of Default" has
occurred under a certain Lease between BHX, LLC, as Trustee of Crawford Realty
Trust and _________________ or (ii) you are otherwise entitled to draw upon this
Letter of Credit under the terms of said Lease.  Multiple partial drawings are
permitted.

          Each draft is to be accompanied by a copy of this Letter of Credit and
shall be honored when presented between 9:00 a.m. and 5:00 p.m. on any Business
Day (by which is meant any day other than Saturday, Sunday or any day (Name of
Financial Institution) is prohibited from conducting commercial banking
transactions) at (Name of Financial Institution) office at (Address of Financial
Institution).

          This Letter of Credit sets forth in full the terms of our undertaking
and such undertaking shall not in any way be modified, amended, or amplified by
reference to any documents, instruments, or agreements referred to herein, or in
which this Letter of Credit is referred, or to which this Letter of Credit
relates.  Any such reference shall not be deemed to incorporate herein the terms
of any such referenced documents, instruments, or agreements.
<PAGE>

          If a drawing by Beneficiary hereunder does not, in any instance,
conform to the terms and conditions of this Letter of Credit, we shall give
Beneficiary immediate notice that the attempted negotiation was not effected in
accordance with the terms and conditions of this Letter of Credit, sating the
reasons therefor, and that we are holding any documents at Beneficiary's
disposal or are returning same to Beneficiary, as we may elect.  Upon being
notified that the attempted negotiation was not effected in accordance with this
Letter of Credit, Beneficiary may attempt to correct any such non-conforming
demand for payment if, and to the extent that, Beneficiary is entitled (without
regard to the provisions of this sentence) and able to do so within the terms of
this Letter of Credit.

          This Letter of Credit may be transferred, in whole, but not in part,
without charge one or more times upon receipt of Beneficiary's written
instructions.