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                        STANDARD FORM OF OFFICE LEASE
                   The Real Estate Board of New York, Inc.            

Agreement of Lease, made as of this 17th day of February 1998, between HUDSON
TELEGRAPH ASSOCIATES, a New York limited partnership, having an address c/o
Williams Real Estate Co. Inc., 380 Madison Avenue, New York, New York 10017
("Owner" or "Landlord") and Local Fiber, LLC, a New York corporation, having an
address at 121 Erie Canal Drive, Suite A, Rochester, New York 14626 ("Tenant")

Witnesseth: Owner hereby leases to Tenant and Tenant hereby hires from Owner a
portion of the nineteenth (19th) floor as shown hatched on Exhibit A annexed
hereto (the "premises" or "demised premises") in the building known as 60 Hudson
Street (the "Building" or "building"), in the Borough of Manhattan, City of New
York, for the term (the "Term") of approximately ten (10) years and eight (8)
months, to commence on the date hereof (the "Commencement Date") and to expire
on July 31, 2008 (the "Expiration Date")(or until such Term shall cease and
expire as hereinafter provided), at the fixed annual rental rate (the "Fixed
Rent") of $309,419.00 per annum, subject to adjustment as hereinafter provided,

which Tenant agrees to pay in lawful money of the United States which
shall be legal tender in payment of all debts and dues, public and private, at
the time of payment, in equal monthly installments in advance on the first day
of each month during said term, at the office of Owner or such other place as
Owner may designate, without any set off or deduction whatsoever, except that
Tenant shall pay the first _____ monthly installment(s) on the execution hereof
(unless this lease be a renewal).

      In the event that, at the commencement of the term of this lease, or
thereafter, Tenant shall be in default in the payment of rent to Owner pursuant
to the terms of another lease with Owner or with Owner's predecessor in
interest, Owner may at Owner's option and without notice to Tenant add the
amount of such arrears to any monthly installment of rent payable hereunder and
the same shall be payable to Owner as additional rent.

      The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:

Rent

      1. Tenant shall pay the rent as above and as hereinafter provided.

Occupancy

      2. Tenant shall use and occupy demised premises for general office
purposes, and, to the extent permitted by the certificate of occupancy for the
Building, for telecommunications facilities and ancillary uses, and for no other
purpose.

Tenant Alterations:

      3. Tenant shall make no changes in or to the demised premises of any
nature without Owner's prior written consent. Subject to the prior written
consent of Owner, and to the provisions of this article, Tenant at Tenant's
expense, may make alterations, installations, additions or improvements which
are non-structural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises by using
contractors or mechanics first approved by Owner. Tenant shall, before making
any alterations, additions, installations or improvement, at its expense, obtain
all permits, approvals and certificates required by any governmental or
quasi-governmental bodies and (upon completion) certificates of final approval
thereof and shall deliver promptly duplicates of all such permits, approvals and
certificates to Owner and Tenant agrees to carry and will cause Tenant's
contractors and sub-contractors to carry such workman's compensation, general
liability, personal and property damage insurance, as Owner may require. If any
mechanic's lien is filed against the demised premises, or the building of which
the same forms a part, for work claimed to have been done for, or material
furnished to, Tenant, whether or not done pursuant to this article, the same
shall be discharged by Tenant within thirty days thereafter, at Tenant's
expense, by filing the bond required by law. All fixtures and all paneling,
partitions, railings and like installations, installed in the premises at any
time, either by Tenant or by Owner in Tenant's behalf, shall, upon installation,
become the property of Owner and shall remain upon and be surrendered with the
demised premises unless Owner, by notice to Tenant no later than twenty days
prior to the date fixed as the termination of this lease, elects to relinquish
Owner's right thereto and to have them removed by the Tenant, in which event the
same shall be removed from the premises by Tenant prior to the expiration of the
lease, at Tenant's expense. Nothing in this Article shall be construed to give
Owner title to or to prevent Tenant's removal of trade fixtures, moveable office
furniture and equipment, but upon removal of any such from the premises or upon
removal of other installations as may be required by Owner, Tenant shall
immediately and at its expense, repair and restore the premises to the
condition existing prior to installation and repair any damage to the demised
premises or the building due to such removal. All property permitted or required
to be removed, by Tenant at the end of the term remaining in the premises after
Tenant's removal shall be deemed abandoned and may, at the election of Owner,
either be retained as Owner's property or may be removed from the premises by
Owner, at Tenant's expense.

Maintenance and Repairs:

      4. Tenant shall, throughout the term of this lease, take good care of the
demised premises and the fixtures and appurtenances therein. Tenant shall be
responsible for all damage or injury to the demised premises or any other part
of the building and the systems and equipment thereof, whether requiring
structural or non-structural repairs caused by or resulting from carelessness,
omission, neglect or improper conduct of Tenant, Tenant's subtenants, agents,
employees, invitees or licensees, or which arise out of any work, labor, service
or equipment done for or supplied to Tenant or any subtenant or arising out of
the installation, use or operation of the property or equipment of Tenant or any
subtenant. Tenant shall also repair all damage to the building and the demised
premises caused by the moving of Tenant's fixtures, furniture and equipment.
Tenant shall promptly make, at Tenant's expense, all repairs in and to the
demised premises for which Tenant is responsible, using only the contractor for
the trade or trades in question, selected from a list of at least two
contractors per trade submitted by Owner. Any other repairs in or to the
building or the facilities and systems thereof for which Tenant is responsible
shall be performed by Owner at the Tenant's expense. Owner shall maintain in
good working order and repair the exterior and the structural portions of the
building, including the structural portions of its demised premises, and the
public portions of the building interior and the building plumbing, electrical,
heating and ventilating systems (to the extent such systems presently exists)
serving the demised premises. Tenant agrees to give prompt notice of any
defective condition in the premises for which Owner may be responsible
hereunder. There shall be no allowance to Tenant for diminution of rental value
and no liability on the part of Owner by reason of inconvenience, annoyance or
injury to business arising from Owner or others making repairs, alterations,
additions or improvements in or to any portion of the building or the demised
premises or in and to the fixtures, appurtenances or equipment thereof. It is
specifically agreed that Tenant shall not be entitled to any setoff or reduction
of rent by reason of any failure of Owner to comply with the covenants of this
or any other article of this Lease. Tenant agrees that Tenant's sole remedy at
law in such instance will be by way of an action for damages for breach of
contract. The provisions of this Article 4 shall not apply in the case of fire
or other casualty which are dealt with in Article 9 hereof.

Window Cleaning:

      5. Tenant will not clean nor require, permit, suffer or allow any window
in the demised premises to be cleaned from the outside in violation of Section
202 of the Labor Law or any other applicable law or of the Rules of the Board of
Standards and Appeals, or of any other Board or body having or asserting
jurisdiction.

Requirements of Law, Fire Insurance, Floor Loads:

      6. Prior to the commencement of the lease term, if Tenant is then in
possession, and at all times thereafter, Tenant, at Tenant's sole cost and
expense, shall promptly comply with all present and future laws, orders and
regulations of all state, federal, municipal and local governments, departments,
commissions and boards and any direction of any public officer pursuant to law,
and all orders, rules and regulations of the New York Board of Fire
Underwriters, Insurance Services Office, or any similar body which shall impose
any violation, order or duty upon Owner or Tenant with respect to the demised
premises, whether or not arising out of Tenant's use or manner of use thereof,
(including Tenant's permitted use) or, with respect to the building if arising
out of Tenant's use or manner of use of the premises or the building (including
the use permitted under the lease). Nothing herein shall require Tenant to make
structural repairs or alterations unless Tenant has, by its manner of use of the
demised premises or method of operation therein, violated any such laws,
ordinances, orders, rules, regulations or requirements with respect thereto.
Tenant may, after securing Owner to

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Owner's satisfaction against all damages, interest, penalties and expenses,
including, but not limited to, reasonable attorney's fees, by cash deposit or by
surety bond in an amount and in a company satisfactory to Owner, contest and
appeal any such laws, ordinances, orders, rules, regulations or requirements
provided same is done with all reasonable promptness and provided such appeal
shall not subject Owner to prosecution for a criminal offense or constitute a
default under the lease or mortgage under which Owner may be obligated, or cause
the demised premises or any part thereof to be condemned or vacated. Tenant
shall not do or permit any act or thing to be done in or to the demised premises
which is contrary to law, or which will invalidate or be in conflict with public
liability, fire or other policies of insurance at any time carried by or for the
benefit of Owner with respect to the demised premises or the building of which
the demised premises form a part, or which shall or might subject Owner to any
liability or responsibility to any person or for property damage. Tenant shall
not keep anything in the demised premises except as now or hereafter permitted
by the Fire Department, Board of Fire Underwriters, Fire Insurance Rating
Organization or other authority having jurisdiction, and then only in such
manner and such quantity so as not to increase the rate for fire insurance
applicable to the building, nor use the premises in a manner which will increase
the insurance rate for the building or any property located therein over that in
effect prior to the commencement of Tenant's occupancy. Tenant shall pay all
costs, expenses, fines, penalties, or damages, which may be imposed upon Owner
by reason of Tenant's failure to comply with the provisions of this article and
if by reason of such failure the fire insurance rate shall, at the beginning of
this lease or at any time thereafter, be higher than it otherwise would be, then
Tenant shall reimburse Owner, as additional rent hereunder, for that portion of
all fire insurance premiums thereafter paid by Owner which shall have been
charged because of such failure by Tenant. In any action or proceeding wherein
Owner and Tenant are parties, a schedule or "make-up" of rate for the building
or demised premises issued by the New York Fire Insurance Exchange, or other
body making fire insurance rates applicable to said premises shall be conclusive
evidence of the facts therein stated and of the several items and charges in the
fire insurance rates then applicable to said premises. Tenant shall not place a
load upon any floor of the demised premises exceeding the floor load per square
foot area which it was designed to carry and which is allowed by law. Owner
reserves the right to prescribe the weight and position of all safes, business
machines and mechanical equipment. Such installations shall be placed and
maintained by Tenant, at Tenant's expense, in settings sufficient, in Owner's
judgment, to absorb and prevent vibration, noise and annoyance.

Subordination:

      7. This lease is subject and subordinate to all ground or underlying
leases and to all mortgages which may now or hereafter affect such leases or the
real property of which demised premises are a part and to all renewals,
modifications, consolidations, replacements and extensions of any such
underlying leases and mortgages. This clause shall be self-operative and no
further instrument of subordination shall be required by any ground or
underlying lessor or by any mortgagee, affecting any lease or the real property
of which the demised premises are a part. In confirmation of such subordination,
Tenant shall from time to time execute promptly any certificate that Owner may
request.

Property Loss, Damage Reimbursement Indemnity:

      8. Owner or its agent shall not be liable for any damage to any property
of Tenant or of others entrusted to employees of the building, nor for loss of
or damage to any property of Tenant by theft or otherwise, nor for any injury or
damage to persons or property resulting from any cause of whatsoever nature,
unless caused by or due to the negligence of Owner, its agents, servants or
employees. Owner or its agents will not be liable for any such damage caused by
other tenants or persons in, upon or about said building or caused by operations
in construction of any private, public or quasi public work. If at any time any
windows of the demised premises are temporarily closed, darkened or bricked up
(or permanently closed, darkened or bricked up, if required by law) for any
reason whatsoever including, but not limited to Owner's own acts, Owner shall
not be liable for any damage Tenant may sustain thereby and Tenant shall not be
entitled to any compensation therefore nor abatement or diminution of rent nor
shall the same release Tenant from its obligations hereunder nor constitute an
eviction. Tenant shall indemnify and save harmless Owner against and from all
liabilities, obligations, damages, penalties, claims, costs and expenses for
which Owner shall not be reimbursed by insurance, including reasonable attorneys
fees, paid, suffered or incurred as a result of any breach by Tenant, Tenant's
agents, contractors, employees, invitees, or licensees, of any covenant or
condition of this lease, or the carelessness, negligence or improper conduct of
the Tenant, Tenant's agents, contractors, employees, invitees or licensees.
Tenant's liability under this lease extends to the acts and omissions of any
sub-tenant, and any agent, contractor, employee, invitee or licensee of any
sub-tenant. In case any action or proceeding is brought against Owner by reason
of any such claim, Tenant, upon written notice from Owner, will, at Tenant's
expense, resist or defend such action or proceeding by counsel approved by Owner
in writing, such approval not to be unreasonably withheld.

Destruction, Fire and Other Casualty:

      9. (a) If the demised premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall gave immediate notice thereof to Owner and
this lease shall continue in full force and effect except as hereinafter set
forth. (b) If the demised premises are partially damaged or rendered partially
unusable by fire or other casualty, the damages thereto shall be repaired by and
at the expense of Owner and the rent, until such repair shall be substantially
completed, shall be apportioned from the day following the casualty according to
the part of the premises which is usable. (c) If the demised premises are
totally damaged or rendered wholly unusable by fire or other casualty, then the
rent and other items of additional rent as hereinafter expressly provided shall
be proportionately paid up to the time of the casualty and thenceforth shall
cease until the date when the premises shall have been repaired and restored by
Owner (or sooner reoccupied in part by Tenant then rent shall be apportioned as
provided in subsection (b) above) subject to Owner's right to elect not to
restore the same as hereinafter provided. (d) If the demised premises are
rendered wholly unusable or (whether or not the demised premises are damaged in
whole or in part) if the building shall be so damaged that Owner shall decide to
demolish it or to rebuild it, then, in any of such events, Owner may elect to
terminate this lease by written notice to Tenant, given within 90 days after
such fire or casualty, or 30 days after adjustment of the insurance claim for
such fire or casualty, whichever is sooner, specifying a date for the expiration
of the lease, which date shall not be more than 60 days after the giving of such
notice, and upon the date specified in such notice the term of this lease shall
expire as fully and completely as if such date were the date set forth above for
the termination of this lease and Tenant shall forthwith quit, surrender and
vacate the premises without prejudice however, to Landlord's rights and remedies
against Tenant under the lease provisions in effect prior to such termination,
and any rent owing shall be paid up to such date and any payments of rent made
by Tenant which were on account of any period subsequent to such date shall be
returned to Tenant. Unless Owner shall serve a termination notice as provided
for herein, Owner shall make the repairs and restorations under the conditions
of (b) and (c) hereof, with all reasonable expedition, subject to delays due to
adjustment of insurance claims, labor troubles and causes beyond Owner's
control. After any such casualty, Tenant shall cooperate with Owner's
restoration by removing from the premises as promptly as reasonably possible,
all of Tenant' salvageable inventory and movable equipment, furniture, and other
property. Tenant's liability for rent shall resume five (5) days after written
notice from Owner that the premises are substantially ready for Tenant's
occupancy. (e) Nothing contained hereinabove shall relieve Tenant from liability
that may exist as a result of damage from fire or other casualty.
Notwithstanding the foregoing, including Owner's obligation to restore under
subparagraph (b) above, each party shall look first to any insurance in its
favor before making any claim against the other party for recovery for loss or
damage resulting from fire or other casualty, and to the extent that such
insurance is in force and collectible and to the extent permitted by law, Owner
and Tenant each hereby releases and waives all right of recovery with respect to
subparagraphs (b), (d), and (e) above, against the other or any one claiming
through or under each of them by way of subrogation or otherwise. The release
and waiver herein referred to shall be deemed to include any loss or damage to
the demised premises and/or to any personal property, equipment, trade fixture,
goods and merchandise located therein. The foregoing release and waiver shall be
in force only if both releasor's insurance policies contain a clause providing
that such a release or waiver shall not invalidate the insurance. If, and to the
extent, that such waiver can be obtained only by the payment of additional
premiums, then the party benefitting from the waiver shall pay such premium
within ten days after written demand or shall be deemed to have agreed that the
party obtaining insurance coverage shall be free of any further obligation under
the provisions hereof with respect to waiver of subrogation. Tenant acknowledges
that Owner will not carry insurance on Tenant's furniture and/or furnishings or
any fixtures or equipment, improvements, or appurtenances removable by Tenant
and agrees that Owner will not be obligated to repair any damage thereto or
replace the same. (f) Tenant hereby waives the provisions of Section 227 of the
Real Property Law and agrees that the provisions of this article shall govern
and control in lieu thereof.

Eminent Domain:

      10. If the whole or any part of the demised premises shall be acquired or
condemned by Eminent Domain for any public or quasi public use or purpose, then
and in the event, the term of this lease shall cease and terminate from the date
of title vesting in such proceeding and Tenant shall have no claim for the value
of any unexpired term of said lease and assigns to Owner, Tenant's entire
interest in any such award. Tenant shall have the right to make an independent
claim to the condemning authority for the value of Tenant's moving expenses and
personal property, trade fixtures and equipment, provided Tenant is entitled
pursuant to the terms of the lease to remove such property, trade fixture and
equipment at the end of the term and provided further such claim does not reduce
Owner's award.

Assignment, Mortgage, Etc.:

      11. Tenant, for itself, its heirs, distributees, executors,
administrators, legal representatives, successors and assigns, expressly
covenants that it shall not assign, mortgage or encumber this agreement, nor
underlet, or suffer or permit the demised premises or any part thereof to be
used by others, without the prior written consent of Owner in each instance.
Transfer of the majority of the stock of a corporate Tenant or the majority
partnership interest of a partnership Tenant shall be deemed an assignment. If
this lease be assigned, or if the demised premises or any part thereof be
underlet or occupied by anybody other than Tenant, Owner may, after default by
Tenant, collect rent from the assignee, under-tenant or occupant, and apply the
net amount collected to the rent herein reserved, but no such assignment,
underletting, occupancy or collection shall be deemed a waiver of this covenant,
or the acceptance of the assignee, under-tenant or occupant as tenant, or a
release of Tenant from the further performance by Tenant of covenants on the
part of Tenant herein contained. The consent by Owner to an assignment or
underletting shall not in any wise be construed to relieve Tenant from obtaining
the express consent in writing of Owner to any further assignment or
underletting.

Electric Current:

      12. Rates and conditions in respect to submetering or rent inclusion, as
the case may be, to be added in RIDER* attached hereto. Tenant covenants and
agrees that at all times its use of electric current shall not exceed the
capacity of existing feeders to the building or the risers or wiring
installations and Tenant may not use any electrical equipment which, in Owner's
opinion, reasonably exercised, will overload such installations or interfere
with the use thereof by other tenants of the building. The change at any time of
the character of electric service shall in no way make Owner liable or
responsible to Tenant, for any loss, damages or expenses which Tenant may
sustain.

Access to Premises:

      13. Owner or Owner's agents shall have the right (but shall not be
obligated) to enter the demised premises in any emergency at any time, and, at
other reasonable times, to examine the same and to make such repairs,
replacements and improvements as Owner may deem necessary and reasonably
desirable to the demised premises or to any other portion of the building or
which Owner may elect to perform. Tenant shall permit Owner to use and maintain
and replace pipes and conduits in and through the demised premises and to erect
new pipes and conduits therein provided they are concealed within the walls,
floor, or ceiling. Owner may, during the progress of any work in the demised
premises, take all necessary materials and equipment into said premises without
the same constituting an eviction nor shall the Tenant be entitled to any
abatement of rent while such work is in progress nor to any damages by reason of
loss or interruption of business or otherwise. Throughout the term hereof Owner
shall have the right to enter the demised premises at reasonable hours for the
purpose of showing the same to prospective purchasers or mortgagees of the
building, and during the last six months of the term for the purpose of showing
the

----------
* Rider to be added if necessary

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same to prospective tenants. If Tenant is not present to open and permit an
entry into the demised premises, Owner or Owner's agents may enter the same
whenever such entry may be necessary or permissible by master key or forcibly
and provided reasonable care is exercised to safeguard Tenant's property, such
entry shall not render Owner or its agents liable therefor, nor in any event
shall the obligations of Tenant hereunder be affected. If during the last month
of the term Tenant shall have removed all or substantially all of Tenant's
property therefrom Owner may immediately enter, alter, renovate or redecorate
the demised premises without limitation or abatement of rent, or incurring
liability to Tenant for any compensation and such act shall have no effect on
this lease or Tenant's obligations hereunder.

Vault, Vault Space, Area:

      14. No Vaults, vault space or area, whether or not enclosed or covered,
not within the property line of the building is leased hereunder, anything
contained in or indicated on any sketch, blue print or plan, or anything
contained elsewhere in this lease to the contrary notwithstanding. Owner makes
no representation as to the location of the property line of the building. All
vaults and vault space and all such areas not within the property line of the
building, which Tenant may be permitted to use and/or occupy, is to be used
and/or occupied under a revocable license, and if any such license be revoked,
or if the amount of such space or area be diminished or required by any federal,
state or municipal authority or public utility, Owner shall not be subject to
any liability nor shall Tenant be entitled to any compensation or diminution or
abatement of rent, nor shall such revocation, diminution or requisition be
deemed constructive or actual eviction. Any tax, fee or charge of municipal
authorities for such vault or area shall be paid by Tenant.

Occupancy:

      15. Tenant will not at any time use or occupy the demised premises in
violation of the certificate of occupancy issued for the building of which the
demised premises are a part. Tenant has inspected the premises and accepts them
as is, subject to the riders annexed hereto with respect to Owner's work, if
any. In any event, Owner makes no representation as to the condition of the
premises and Tenant agrees to accept the same subject to violations, whether or
not of record.

Bankruptcy:

      16. (a) Anything elsewhere in this lease to the contrary notwithstanding,
this lease may be cancelled by Owner by the sending of a written notice to
Tenant within a reasonable time after the happening of any one or more of the
following events: (1) the commencement of a case in bankruptcy or under the laws
of any state naming Tenant as the debtor; or (2) the making by Tenant of an
assignment or any other arrangement for the benefit of creditors under any state
statute. Neither Tenant nor any person claiming through or under Tenant, or by
reason of any statute or order of court, shall thereafter be entitled to
possession of the premises demised but shall forthwith quit and surrender the
premises. If this lease shall be assigned in accordance with its terms, the
provisions of this Article 16 shall be applicable only to the party then owning
Tenant's interest in this lease.

      (b) it is stipulated and agreed that in the event of the termination of
this lease pursuant to (a) hereof, Owner shall forthwith, notwithstanding any
other provisions of this lease to the contrary, be entitled to recover from
Tenant as and for liquidated damages an amount equal to the difference between
the rent reserved hereunder for the unexpired portion of the term demised and
the fair and reasonable rental value of the demised premises for the same
period. In the computation of such damages the difference between any
installment of rent becoming due hereunder after the date of termination and the
fair and reasonable rental value of the demised premises for the period for
which such installment was payable shall be discounted to the date of
termination at the rate of four percent (4%) per annum. If such premises or any
part thereof be re-let by the Owner for the unexpired term of said lease, or any
part thereof, before presentation of proof of such liquidated damages to any
court, commission or tribunal, the amount of rent reserved upon such re-letting
shall be deemed to be the fair and reasonable rental value for the part or the
whole of the premises so re-let during the term of the re-letting. Nothing
herein contained shall limit or prejudice the right of the Owner to prove for
and obtain as liquidated damages by reason of such termination, an amount equal
to the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to, or less than the amount of the
difference referred to above.

Default:

      17. (1) If Tenant defaults in fulfilling any of the covenants of this
lease other than the covenants for the payment of rent or additional rent; or if
the demised premises becomes vacant or deserted; or if any execution or
attachment shall be issued against Tenant or any of Tenant's property whereupon
the demised premises shall be taken or occupied by someone other than Tenant; or
if this lease be rejected under ss. 235 of Title 11 of the U.S. Code (bankruptcy
code); or if Tenant shall fail to move into or take possession of the premises
within thirty (30) days after the commencement of the term of this lease, then,
in any one or more of such events, upon Owner serving a written fifteen (15)
days notice upon Tenant specifying the nature of said default and upon the
expiration of said fifteen (15) days, if Tenant shall have failed to comply with
or remedy such default, or if the said default or omission complained of shall
be of a nature that the same cannot be completely cured or remedied within the
said fifteen (15) day period, and if Tenant shall not have diligently commenced
curing such default within such fifteen (15) day period, and shall not
thereafter with reasonable diligence and in good faith, proceed to remedy or
cure such default, then Owner may serve a written five (5) days' notice of
cancellation of this lease upon Tenant, and upon the expiration of said five (5)
days this lease and the term thereunder shall end and expire as fully and
completely as if the expiration of such five (5) day period were the day herein
definitely fixed for the end and expiration of this lease and the term thereof
and Tenant shall then quit and surrender the demised premises to Owner but
Tenant shall remain liable as hereinafter provided.

      (2). If the notice provided for in (1) hereof shall have been given, and
the term shall expire as aforesaid; or if Tenant shall make default in the
payment of the rent reserved herein or any item of additional rent herein
mentioned or any part of either or in making any other payment herein required;
then and in any of such events Owner may without notice, re-enter the demised
premises either by force or otherwise, and disposess Tenant by summary
proceedings or otherwise, and the legal representative of Tenant or other
occupant of demised premises and remove their effects and hold the premises as
if this lease had not been made, and Tenant hereby waives the service of notice
of intention to re-enter or to institute legal proceedings to that end. If
Tenant shall make default hereunder prior to the date fixed as the commencement
of any renewal or extension of this lease, Owner may cancel and terminate such
renewal or extension agreement by written notice.

Remedies of Owner and Waiver of Redemption:

      18. In case of any such default, re-entry, expiration and/or dispossess by
summary proceedings or otherwise, (a) the rent shall become due thereupon and be
paid up to the time of such re-entry, dispossess and/or expiration, (b) Owner
may re-let the premises or any part or parts thereof, either in the name of
Owner or otherwise, for a term or terms, which may at Owners's option be less
than or exceed the period which would otherwise have constituted the balance of
the term of this lease and may grant concessions or free rent or charge a higher
rental than that in this lease, and/or (c) Tenant or the legal representatives
of Tenant shall also pay Owner as liquidated damages for the failure of Tenant
to observe and perform said Tenant's covenants herein contained, any deficiency
between the rent hereby reserved and/or convenanted to be paid and the net
amount, if any, of the rents collected on account of the lease or leases of the
demised premises for each month of the period which would otherwise have
constituted the balance of the term of this lease. The failure of Owner to
re-let the premises or any part or parts thereof shall not release or affect
Tenant's liability for damages. In computing such liquidated damages there shall
be added to the said deficiency such expenses as Owner may incur in connection
with re-letting, such as legal expenses, reasonable attorneys' fees, brokerage,
advertising and for keeping the demised premises in good order or for preparing
the same for re-letting. Any such liquidated damages shall be paid in monthly
installments by Tenant on the rent day specified in this lease and any suit
brought to collect the amount of the deficiency for any month shall not
prejudice in any way the rights of Owner to collect the deficiency for any month
shall not prejudice in any way the rights of Owner to collect the deficiency for
any subsequent month by a similar proceeding. Owner, in putting the demised
premises in good order or preparing the same for re-rental may, at Owner's
option, make such alterations, repairs, replacements, and/or decorations in the
demised premises as Owner, in Owner's sole judgment, considers advisable and
necessary for the purpose of re-letting the demised premises, and the making of
such alterations, repairs, replacements, and/or decorations shall not operate or
be construed to release Tenant from liability hereunder as aforesaid. Owner
shall in no event be liable in any way whatsoever for failure to re-let the
demised premises, or in the event that the demised premises are re-let, for
failure to collect the rent thereof under such re-letting, and in no event shall
Tenant be entitled to receive any excess, if any, of such net rents collected
over the sums payable by Tenant to Owner hereunder. In the event of a breach or
threatened breach by Tenant of any of the covenants or provisions hereof, Owner
shall have the right of injunction and the right to invoke any remedy allowed at
law or in equity as if re-entry, summary proceedings and other remedies were not
herein provided for. Mention in this lease of any particular remedy, shall not
preclude Owner from any other remedy, in law or in equity. Tenant hereby
expressly waives any and all rights of redemption granted by or under any
present or future laws in the event of Tenant being evicted or dispossessed for
any cause, or in the event of Owner obtaining possession of demised premises, by
reason of the violation by Tenant of any of the covenants and conditions of this
lease, or otherwise.

Fees and Expenses:

      19. If Tenant shall default in the observance or performance of any term
or covenant on Tenant's part to be observed or performed under or by virtue of
any of the terms or provisions in any article of this lease, after notice if
required and upon expiration of any applicable grace period of any (except in an
emergency), then, unless otherwise provided elsewhere in this lease, Owner may
immediately or at any time thereafter and without notice perform the obligation
of Tenant thereunder. If Owner, in connection with the foregoing or in
connection with any default by Tenant in the covenant to pay rent hereunder,
makes any expenditures or incurs any obligations for the payment of money,
including but not limited to attorney's fees, in instituting, prosecuting or
defending any action or proceeding, and prevails in any such action or
proceeding then Tenant will reimburse Owner for such sums so paid or obligations
incurred with interest and costs. The foregoing expenses incurred by reason of
Tenant's default shall be deemed to be additional rent hereunder and shall be
paid by Tenant to Owner within ten (10) days of rendition of any bill or
statement to Tenant therefor. If Tenant's lease term shall have expired at the
time of making of such expenditures or incurring of such obligations, such sums
shall be recoverable by Owner, as damages.

Building Alterations and Management:

      20. Owner shall have the right at any time without the same constituting
an eviction and without incurring liability to Tenant therefor to change the
arrangement and/or location of public entrances, passageways, doors, doorways,
corridors, elevators, stairs, toilets or other public parts of the building and
to change the name, number or designation by which the building may be known.
There shall be no allowance to Tenant for diminution of rental value and no
liability on the part of Owner by reason of inconvenience, annoyance or injury
to business arising from Owner or other Tenants making any repairs in the
building or any such alterations, additions and improvements. Furthermore,
Tenant shall not have any claim against Owner by reason of Owner's imposition of
such controls of the manner of access to the building by Tenant's social or
business visitors as the Owner may deem necessary for the security of the
building and its occupants.

No Representations by Owner:

      21. Neither Owner nor Owner's agents have made any representations or
promises with respect to the physical condition of the building, the land upon
which it is erected or the demised premises, the rents, leases, expenses of
operation or any other matter or thing affecting or related to the premises
except as herein expressly set forth and no rights, easements or licenses are
acquired by Tenant by implication or otherwise except as expressly set forth in
the provisions of this lease. Tenant has inspected the building and the demised
premises and is thoroughly acquainted with their condition and agrees to take
the same "as is" and acknowledges that the taking of possession of the demised
premises by Tenant shall be conclusive evidence that the said premises and the
building of which the same form a part were in good and satisfactory condition
at the time such possession was to taken, except as to latent defects. All
understandings and agreements heretofore made between the parties hereto are
merged in this contract, which alone fully and completely expresses the
agreement between Owner and Tenant and any executory agreement 

<PAGE>   4

hereafter made shall be ineffective to change, modify, discharge or effect an
abandonment of it in whole or in part, unless such executory agreement is in
writing and signed by the party against whom enforcement of the change,
modification, discharge or abandonment is sought.

End of Term:

      22. Upon the expiration or other termination of the term of this lease,
Tenant shall quit and surrender to Owner the demised premises, broom clean, in
good order and condition, ordinary wear and damages which Tenant is not required
to repair as provided elsewhere in this lease excepted, and Tenant shall remove
all its property. Tenant's obligation to observe or perform this covenant shall
survive the expiration or other termination of this lease. If the last day of
the term of this Lease or any renewal thereof, falls on Sunday, this lease shall
expire at noon on the preceding Saturday unless it be a legal holiday in which
case it shall expire at noon on the preceding business day.

Quiet Enjoyment:

      23. Owner covenants and agrees with Tenant that upon Tenant paying the
rent and additional rent and observing and performing all the terms, covenants
and conditions, on Tenant's part to be observed and performed, Tenant may
peaceably and quietly enjoy the premises hereby demised, subject, nevertheless,
to the terms and conditions of this lease including, but not limited to, Article
31 hereof and to the ground leases, underlying leases and mortgages hereinbefore
mentioned.

Failure to Give Possession:

      24. If Owner is unable to give possession of the demised premises on the
date of the commencement of the term hereof, because of the holding-over or
retention of possession of any tenant, undertenant or occupants or if the
demised premises are located in a building being constructed, because such
building has not been sufficiently completed to make the premises ready for
occupancy or because of the fact that a certificate of occupancy has not been
procured or for any other reason, Owner shall not be subject to any liability
for failure to give possession on said date and the validity of the lease shall
not be impaired under such circumstances, nor shall the same be construed in any
wise to extend the term of this lease, but the rent payable hereunder shall be
abated (provided Tenant is not responsible for Owner's inability to obtain
possession or complete construction) until after Owner shall have given Tenant
written notice that the Owner is able to deliver possession in condition
required by this lease. If permission is given to Tenant to enter into the
possession of the demised premises or to occupy premises other than the demised
premises prior to the date specified as the commencement of the term of this
lease, Tenant covenants and agrees that such possession and/or occupancy shall
be deemed to be under all the terms, covenants, conditions and provisions of
this lease except the obligation to pay the fixed annual rent set forth in the
preamble to this lease. The provisions of this article are intended to
constitute "an express provision to the contrary" within the meaning of Section
223-a of the New York Real Property Law.

No Waiver:

      25. The failure of Owner to seek redress for violation of, or to insist
upon the strict performance of any covenant or condition of this lease or of any
of the Rules or Regulations, set forth or hereafter adopted by Owner, shall not
prevent a subsequent act which would have originally constituted a violation
from having all the force and effect of an original violation. The receipt by
Owner of rent and/or additional rent with knowledge of the breach of any
covenant of this lease shall not be deemed a waiver of such breach and no
provision of this lease shall be deemed to have been waived by Owner unless such
waiver be in writing signed by Owner. No payment by Tenant or receipt by Owner
of a lesser amount than the monthly rent herein stipulated shall be deemed to be
other than on account of the earlier stipulated rent, nor shall any endorsement
or statement of any check or any letter accompanying any check or payment as
rent be deemed an accord and satisfaction, and Owner may accept such check or
payment without prejudice to Owner's right to recover the balance of such rent
or pursue any other remedy in this lease provided. No act or thing done by Owner
or Owner's agents during the term hereby demised shall be deemed an acceptance
of a surrender of said premises, and no agreement to accept such surrender shall
be valid unless in writing signed by Owner. No employee of Owner or Owner's
agent shall have any power to accept the keys of said premises prior to the
termination of the lease and the delivery of keys to any such agent or employee
shall not operate as a termination of the lease or a surrender of the premises.

Waiver of Trial by Jury:

      26. It is mutually agreed by and between Owner and Tenant that the
respective parties hereto shall and they hereby do waive trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other (except for personal injury or property damage) on any matters
whatsoever arising out of or in any way connected with this lease, the
relationship of Owner and Tenant, Tenant's use of or occupancy of said premises,
and any emergency statutory or any other statutory remedy. It is further
mutually agreed that in the event Owner commences any proceeding or action for
possession including a summary proceeding for possession of the premises, Tenant
will not interpose any counterclaim of whatever nature or description in any
such proceeding including a counterclaim under Article 4 except for statutory
mandatory counterclaims.

Inability to Perform:

      27. This Lease and the obligation of Tenant is pay rent hereunder and
perform all of the other covenants and agreements hereunder on part of Tenant to
be performed shall in no wise be affected, impaired or excused because Owner is
unable to fulfill any of its obligations under this lease or to supply or is
delayed in supplying any service expressly or impliedly to be supplied or is
unable to make, or is delayed in making any repair, additions, alterations or
decorations or is unable to supply or is delayed in supplying any equipment,
fixtures, or other materials if Owner is prevented or delayed from so doing by
reason of strike or labor troubles or any cause whatsoever including, but not
limited to, government preemption or restrictions or by reason of any rule,
order or regulation of any department or subdivision thereof of any government
agency or by reason of the conditions which have been or are affected, either
directly or indirectly, by war or other emergency.

Bills and Notices:

      28. Except as otherwise in this lease provided, a bill, statement, notice
or communication which Owner may desire or be required to give to Tenant, shall
be deemed sufficiently given or rendered if, in writing, delivered to Tenant
personally or sent by registered or certified mail addressed to Tenant at the
building of which the demised premises form a part or at the last known
residence address or business address of Tenant or left at any of the aforesaid
premises addressed to Tenant, and the time of the rendition of such bill or
statement and of the giving of such notice or communication shall be deemed to
be the time when the same is delivered to Tenant, mailed, or left at the
premises as herein provided. Any notice by Tenant to Owner must be served by
registered or certified mail addressed to Owner at the address first hereinabove
given or at such other address as Owner shall designate by written notice.

Services Provided by Owners:

      29. As long as Tenant is not in default under any of the covenants of this
lease beyond the applicable grace period provided in this lease for the curing
of such defaults, Owner shall provide: (a) necessary elevator facilities on
business days from 8 a.m. to 6 p.m. and have one elevator subject to call at all
other times; (c) water for ordinary lavatory purposes, but if Tenant uses or
consumes water for any other purposes or in unusual quantities (of which fact
Owner shall be the sole judge), Owner may install a water meter at Tenant's
expense which Tenant shall thereafter maintain at Tenant's expense in good
working order and repair to register such water consumption and Tenant shall pay
for water consumed as shown on said meter as additional rent as and when bills
are rendered; (d) the demised premises are to be kept clean by Tenant, at
Tenant's sole expense, in a manner reasonably satisfactory to Owner and no one
other than persons approved by Owner shall be permitted to enter said premises
or the building of which they are a part for such purpose. Tenant shall pay
Owner the cost of removal of any of Tenant's refuse and rubbish from the
building; (f) Owner reserves the right to stop services of the heating,
elevators, plumbing, air-conditioning, power systems or cleaning or other
services, if any, when necessary by reason of accident or for repairs,
alterations, replacements or improvements necessary or desirable in the judgment
of Owner for as long as may be reasonably required by reason thereof. If the
building of which the demised premises are a part supplies manually operated
elevator service, Owner at any time may substitute automatic control elevator
service and proceed diligently with alterations necessary therefor without in
any wise affecting this lease or the obligation of Tenant hereunder.

Captions:

      30. The Captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this lease nor
the intent of any provisions thereof.

Definitions: 

      31. The term "office," or "offices," wherever used in this lease, shall
not be construed to mean premises used as a store or stores, for the sale or
display, at any time, of goods, wares or merchandise, of any kind, or as a
restaurant, shop, booth, bootblack or other stand, barber shop, or for other
similar purposes or for manufacturing. The term "Owner" means a landlord or
lessor, and as used in this lease means only the owner, or the mortgagee in
possession, for the time being of the land and building (or the owner of a lease
of the building or of the land and building) of which the demised premises form
a part, so that in the event of any sale or sales of said land and building or
of said lease, or in the event of a lease of said building, or of the land and
building, the said Owner shall be and hereby is entirely freed and relieved of
all covenants and obligations of Owner hereunder, and it shall be deemed and
construed without further agreement between the parties or their successors in
interest, or between the parties and the purchaser, at any such sale, or the
said lessee of the building, or of the land and building, that the purchaser or
the lessee of the building has assumed and agreed to carry out any and all
covenants and obligations of Owner, hereunder. The words "re-enter" and
"re-entry" as used in this lease are not restricted to their technical legal
meaning. The term "business days" as used in this lease shall exclude Saturdays,
Sundays and all days observed by the State or Federal Government as legal
holidays and those designated as holidays by the applicable building service
union employees service contract or by the applicable Operating Engineers
contract with respect to HVAC service. Wherever it is expressly provided in this
lease that consent shall not be unreasonably witheld, such consent shall not be
unreasonably delayed.

Adjacent Excavation--Shorting:

      32. If an excavation shall be made upon land adjacent to the demised
premises, or shall be authorized to be made, Tenant shall afford to the person
causing or authorized to cause such excavation, license to enter upon the
demised premises for the purpose of doing such work as said person shall deem
necessary to preserve the wall or the building of which demised premises form a
part from injury or damage and to support the same by proper foundations without
any claim for damages or indemnity against Owner, or diminution or abatement of
rent.

Rules and Regulations:

      33. Tenant and Tenant's servants, employees, agents, visitors, and
licensees shall observe faithfully, and comply strictly with, the Rules and
Regulations and such other and further reasonable Rules and Regulations as Owner
or Owner's agents may from time to time adopt. Notice of any additional rules or
regulations shall be given in such manner as Owner may elect. In case Tenant
disputes the reasonableness of any additional Rule or Regulation hereafter made
or adopted by Owner or Owner's agents, the parties hereto agree to submit the
question of the reasonableness of such Rule or Regulation for decision to the
New York office of the American Arbitration Association, whose determination
shall be final and conclusive upon the parties hereto. The right to dispute the
reasonableness of any additional Rule or Regulation upon Tenant's part shall be
deemed waived unless the same shall be asserted by service of a notice, in
writing upon Owner within fifteen (15) days after the giving of notice thereof.
Nothing 

<PAGE>   5

in this lease contained shall be construed to impose upon Owner any duty or
obligation to enforce the Rules and Regulations or terms, covenants or
conditions in any other lease, as against any other tenant and Owner shall not
be liable to Tenant for violation of the same by any other tenant, its
servants, employees, agents, visitors or licensees.

Security:

      34. Tenant has deposited with Owner the sum of $* as security for the
faithful performance and observance by Tenant of the terms, provisions and
conditions of this lease; it is agreed that in the event Tenant defaults in
respect of any of the terms, provisions and conditions of this lease, including,
but not limited to, the payment of rent and additional rent, Owner may use,
apply or retain the whole or any part of the security so deposited to the extent
required for the payment of any rent and additional rent or any other sum as to
which Tenant is in default or for any sum which Owner may expend or may be
required to expend by reason of Tenant's default in respect of any of the terms,
covenants and conditions of this lease, including but not limited to, any
damages or deficiency in the re-letting of the premises, whether such damages or
deficiency occurred before or after summary proceedings or other re-entry by
Owner. In the event that Tenant shall fully and faithfully comply with all of
the terms, provisions, covenants and conditions of this lease, the security
shall be returned to Tenant after the date fixed as the end of the Lease and
after delivery of entire possession of the demised premises to Owner. In the
event of a sale of the land and building or leasing of the building, of which
the demised premises form a part, Owner shall have the right to transfer the
security to the vendee or lessee and Owner shall thereupon be released by Tenant
from all liability for the return of such security; and Tenant agrees to look to
the new Owner solely for the return of said security, and it is agreed that the
provisions hereof shall apply to every transfer or assignment made of the
security to a new Owner. Tenant further covenants that it will not assign or
encumber or attempt to assign or encumber the monies deposited herein as
security and that neither Owner nor its successors or assigns shall be bound by
any such assignment, encumbrance, attempted assignment or attempted encumbrance.

Estoppel Certificate:

      35. Tenant, at any time, and from time to time, upon at least 10 days'
prior notice by Owner, shall execute, acknowledge and deliver to Owner, and/or
to any other person, firm or corporation specified by Owner, a statement
certifying that this Lease is unmodified and in full force and effect (or, if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications), stating the dates to which the rent and
additional rent have been paid, and stating whether or not there exists any
default by Owner under this Lease, and, if so, specifying each such default.

Successors and Assigns:

      36. The covenants, conditions and agreements contained in this lease shall
bind and insure to the benefit of Owner and Tenant and their respective heirs,
distributors, executors, administrators, successors, and except as otherwise
provided in this lease, their assigns. Tenant shall look only to Owner's estate
and interest in the land and building, for the satisfaction of Tenant's remedies
for the collection of a judgment (or other judicial process) against Owner in
the event of any default by Owner hereunder, and no other property or assets of
such Owner (or any partner, member, officer or director thereof, disclosed or
undisclosed), shall be subject to levy, execution or other enforcement procedure
for the satisfaction of Tenant's remedies under enforcement procedure for the
satisfaction of Tenant's remedies under or with respect to this lease, the
relationship of Owner and Tenant hereunder, or Tenant's use and occupancy of the
demised premises.

----------
* $168,162.50 (the "Security Deposit")

In Witness Whereof, Owner and Tenant have respectively signed and sealed this
lease as of the day and year first above written.


                        HUDSON TELEGRAPH ASSOCIATES
                        By: PMFWH Newcorp., Inc., General Partner
                            
Witness for Owner:
                        By: /s/ Nicholas Sardone
---------------------       -------------------------------------------
                            Name: Nicholas Sardone
                            Title: Vice President


                        Local Fiber, LLC
Witness for Tenant:
                        By: /s/ John J. Marchaesi
---------------------       -------------------------------------------
                            Name: John J. Marchaesi
                            Title: Sr. VP Finance
                            Employer ID No.: 11-3361849

                                 ACKNOWLEDGEMENTS

CORPORATE OWNER 
STATE OF NEW YORK, ss.:
County of 

      On this    day of    , 19   , before me personally came                   
to me known, who being by me duly sworn, did depose and say that he resides     
in                                                                             ;
that he is the                of                                                
the corporation described in and which executed the foregoing instrument, as
OWNER; that he knows the seal of said corporation; the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his name thereto by
like order.

                                           ----------------------------
INDIVIDUAL OWNER
STATE OF NEW YORK, ss.:
County of 

      On this    day of          , 19  , before me personally came             ,
to be known and known to me to be the individual                                
described in and who, as OWNER, executed the foregoing instrument and
acknowledged to me that                    he executed the same.

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

CORPORATE TENANT
STATE OF NEW YORK, ss.:
County of 

      On this    day of          , 19  , before me personally came             ,
to me known, who being by me duly sworn, did depose and say that he resides     
in                                                                             ;
that be is the                of                                               
the corporation described in and which executed the foregoing instrument, as
TENANT; that he knows the seal of said corporation; the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his name thereto by
like order.

                                           ----------------------------
INDIVIDUAL TENANT
STATE OF NEW YORK, ss.:
County of 

      On this    day of          , 19  , before me personally came             ,
to be known and known to me to be the individual                                
described in and who, as TENANT, executed the foregoing instrument and
acknowledged to me that                    he executed the same.

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

<PAGE>   6

                                    GUARANTY

      FOR VALUE RECEIVED, and in consideration for, and as an inducement to
Owner making the within lease with Tenant, the undersigned guarantees to Owner,
Owner's successors and assigns, the full performance and observance of all the
covenants, conditions and agreements, therein provided to be performed and
observed by Tenant, including the "Rules and Regulations" as therein provided,
without requiring any notice of non-payment, non-performance, or non-observance,
or proof, or notice, or demand, whereby to charge the undersigned therefor, all
of which the undersigned hereby expressly waives and expressly agrees that the
validity of this agreement and the obligations of the guarantor hereunder shall
in no wise be terminated, affected or impaired by reason of the assertion by
Owner against Tenant of any of the rights or remedies reserved to Owner pursuant
to the provisions of the within lease. The undersigned further covenants and
agrees that this guaranty shall remain and continue in full force and effect as
to any renewal, modification or extension of this lease and during any period
when Tenant is occupying the premises as a "statutory tenant." As a further
inducement to Owner to make this lease and in consideration thereof, Owner and
the undersigned covenant and agree that in any action or proceeding brought by
either Owner or the undersigned against the other on any matters whatsoever
arising out of, under, or by virtue of the terms of this lease or of this
guarantee that Owner and the undersigned shall and do hereby waive trial by
jury.

      Dated: __________________ 19__


---------------------------------------------
Guarantor

---------------------------------------------
Witness

---------------------------------------------
Guarantor's Residence

---------------------------------------------
Business Address

---------------------------------------------
Firm Name

STATE OF NEW YORK, ) ss.:
COUNTY OF          )

On this ___ day of ________________, 19__, before me personally came ___________
_______________________________________________________________________________,
to me known and known to me to be the individual described in, and who executed
the foregoing Guaranty and acknowledged to me that he executed the same.

                                        ________________________________________
                                                          Notary


                            IMPORTANT - PLEASE READ

                     RULES AND REGULATIONS ATTACHED TO AND
                           MADE A PART OF THIS LEASE
                         IN ACCORDANCE WITH ARTICLE 33.

      1. The sidewalks, entrances, driveways, passages, courts, elevators,
vestibules, stairways, corridors or halls shall not be obstructed or encumbered
by any Tenant or used for any purpose other than for ingress or egress from the
demised premises and for delivery of merchandise and equipment in a prompt and
efficient manner using elevators and passageways designated for such delivery by
Owner. There shall not be used in any space, or in the public hall of the
building, either by any Tenant or by jobbers or others in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and sideguards. If said premises are situated on the ground floor of the
building, Tenant thereof shall further, at Tenant's expense, keep the sidewalk
and curb in front of said premises clean and free from ice, snow, dirt and
rubbish.

      2. The water and wash closets and plumbing fixtures shall not be used
for any purposes other than those for which they were designed or constructed
and no sweepings, rubbish, rags, acids or other substances shall be deposited
therein, and the expense of any breakage, stoppage, or drainage resulting from
the violation of this rule shall be borne by the Tenant who, or whose clerks,
agents, employees or visitors, shall have caused it.

      3. No carpet, rug or other article shall be hung or shaken out of any
window of the building and no Tenant shall sweep or throw or permit to be swept
or thrown from the demised premises any dirt or other substances into any of the
corridors or halls, elevators, or out of the doors or windows or stairways of
the building and Tenant shall not use, keep or permit to be used or kept any
foul or noxious gas or substance in the demised premises, or permit or suffer
the demised premises to be occupied or used in a manner offensive or
objectionable to Owner or other occupants of the buildings by reason of noise,
odors, and/or vibrations, or interfere in any way with other Tenants or those
having business therein, nor shall any bicycles, vehicles, animals, fish, or
birds be kept in or about the building. Smoking or carrying lighted cigars or
cigarettes in the elevators of the building is prohibited.

      4. No awnings or other projections shall be attached to the outside walls
of the building without the prior written consent of Owner.

      5. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any Tenant on any part of the outside of the
demised premises or the building or on the inside of the demised premises if the
same is visible from the outside of the premises without the prior written
consent of Owner, except that the name of Tenant may appear on the entrance door
of the premises. In the event of the violation of the foregoing by any Tenant,
Owner may remove same without any liability, and may charge the expense incurred
by such removal to Tenant or Tenants violating this rule. Interior signs on
doors and directory tablet shall be inscribed, painted or affixed for each
Tenant by Owner at the expense of such Tenant, and shall be of a size, color and
style acceptable to Owner.

      6. No Tenant shall mark, paint, drill into, or in any way deface any part
of the demised premises or the building of which they form a part. No boring,
cutting or stringing of wires shall be permitted, except with the prior written
consent of Owner, and as Owner may direct. No Tenant shall lay linoleum, or
other similar floor covering, so that the same shall come in direct contact with
the floor of the demised premises, and, if linoleum or other similar floor
covering is desired to be used an interlining of builder's deadening felt shall
be first affixed to the floor, by a paste or other material, soluble in water,
the use of cement or other similar adhesive material being expressly prohibited.

      7. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by any Tenant, nor shall any changes be made in existing
locks or mechanism thereof. Each Tenant must, upon the termination of his
Tenancy, restore to Owner all keys of stores, offices and toilet rooms, either
furnished to, or otherwise procured by, such Tenant, and in the event of the
loss of any keys, so furnished, such Tenant shall pay to Owner the cost thereof.

      8. Freight, furniture, business equipment, merchandise and bulky matter of
any description shall be delivered to and removed from the premises only on the
freight elevators and through the service entrances and corridors, and only
during hours and in a manner approved by Owner. Owner reserves the right to
inspect all freight to be brought into the building and to exclude from the
building all freight which violates any of these Rules and Regulations of the
lease or which these Rules and Regulations are a part.

      9. Canvassing, soliciting and peddling in the building is prohibited and
each Tenant shall cooperate to prevent the same.

      10. Owner reserves the right to exclude from the building, all persons who
do not present a pass to the building signed by Owner. Owner will furnish passes
to persons for whom any Tenant requests same in writing. Each Tenant shall be
responsible for all persons for whom he requests such pass and shall be liable
to Owner for all acts of such persons. Tenant shall not have a claim against
Owner by reason of Owner excluding from the building any person who does not
present such pass.

      11. Owner shall have the right to prohibit any advertising by any Tenant
which in Owner's opinion, tends to impair the reputation of the building or its
desirability as a building for offices, and upon written notice from Owner,
Tenant shall refrain from or discontinue such advertising.

      12. Tenant shall not bring or permit to be brought or kept in or on the
demised premises, any inflammable, combustible, explosive or hazardous fluid,
material, chemical or substance, or cause or permit any odors of cooking or
other processes, or any unusual or other objectionable odors to permeate in or
emanate from the demised premises.

      13. If the building contains central air conditioning and ventilation,
Tenant agrees to keep all windows closed at all times and to abide by all rules
and regulations issued by the Owner with respect to such services. If Tenant
requires air conditioning or ventilation after the usual hours, Tenant shall
give notice in writing to the building superintendent prior to 3:00 p.m. in the
case of services required on week days, and prior to 3:00 p.m. on the day prior
in case of after hours service required on weekends or on holidays. Tenant shall
cooperate with Owner in obtaining maximum effectiveness of the cooling system by
lowering and closing venetian blinds and/or drapes and curtains when the sun's
rays fall directly on the windows of the demised premises.

      14. Tenant shall not move any safe, heavy machinery, heavy equipment,
bulky matter, or fixtures into or out of the building without Landlord's prior
written consent. If such safe, machinery, equipment, bulky matter or fixtures
requires special handling, all work in connection therewith shall comply with
the Administrative Code of the City of New York and all other laws and
regulations applicable thereto and shall be done during such hours as Owner may
designate.

      15. Refuse and Trash. (1) Compliance by Tenant. Tenant covenants and
agrees, at its sole cost and expense, to comply with all present and future
laws, orders, and regulations of all state, federal , municipal, and local
governments, departments, commissions and boards regarding the collection,
sorting, separation and recycling of waste products, garbage, refuse and trash.
Tenant shall sort and separate such waste products, garbage, refuse and trash
into such categories as provided by law. Each separately sorted category of
waste products, garbage, refuse and trash shall be placed in separate
receptacles reasonably approved by Owner. Such separate receptacles may, at
Owner's option, be removed from the demised premises in accordance with a
collection schedule prescribed by law. Tenant shall remove, or cause to be
removed by a contractor acceptable to Owner, at Owner's sole discretion, such
items as Owner may expressly designate. (2) Owner's Rights in Event of
Noncompliance. Owner has the option to refuse to collect or accept from Tenant
waste products, garbage, refuse or trash (a) that is not separated and sorted as
required by law or (b) which consists of such items as Owner may expressly
designate for Tenant's removal, and to require Tenant to arrange for such
collection at Tenant's sole cost and expense, utilizing a contractor
satisfactory to Owner. Tenant shall pay all costs, expenses, fines, penalties,
or damages that may be imposed on Owner or Tenant by reason of Tenant's failure
to comply with the provisions of this Building Rule 15, and, at Tenant's sole
cost and expense, shall indemnity, defend and hold Owner harmless (including
reasonable legal fees and expenses) from and against any actions, claims and
suits arising from such noncompliance, utilizing counsel reasonably satisfactory
to Owner.


Address

Premises
================================================================================


                                       TO


================================================================================

                                STANDARD FORM OF
[LOGO]                               OFFICE                               [LOGO]
                                     LEASE

                     The Real Estate Board of New York, Inc.
                    (c) Copyright 1994. All rights Reserved.
                  Reproduction in whole or in part prohibited.

================================================================================

Dated _______________________________ 19__

Rent Per Year __________________________________________________________________

Rent Per Month _________________________________________________________________

Term ___________________________________________________________________________

From ___________________________________________________________________________

To _____________________________________________________________________________

Drawn by ________________________________ Checked by ___________________________

Entered by ______________________________ Approved by __________________________

================================================================================

<PAGE>   7

              RIDER TO LEASE DATED AS OF FEBRUARY 17, 1998 BETWEEN
                 HUDSON TELEGRAPH ASSOCIATES, AS LANDLORD, AND
                           LOCAL FIBER, LLC, AS TENANT

      If and to the extent that any of the provisions of this rider conflict or
are otherwise inconsistent with any of the printed provisions of this lease,
whether or not such inconsistency is expressly noted in this rider, the
provisions of this rider shall prevail.

37. Definitions

      The following terms contained in this Article 37 shall have the meanings
hereinafter set forth as such terms are used throughout this lease, including
the exhibits, schedules and riders hereto (if any).

      (A)   "Base Tax Year" shall mean the tax fiscal year July 1, 1997 to June
            30, 1998.

      (B)   "Base Year Taxes" shall mean the Real Estate Taxes as finally
            determined for the Base Tax Year.

      (C)   "Subsequent Tax Year" shall mean any tax fiscal year commencing on
            or after July 1, 1998.

      (D)   "Tenant's Proportionate Share" shall mean 1.602%.

      (E)   "Base Labor Month" shall mean January, 1998.

      (F)   "Multiplication Factor" shall mean 13,453.

      (G)   "Labor Rate Multiple" shall mean one.

      (H)   "Broker" shall mean Williams Real Estate Co. Inc.

      (I)   "Rent Commencement Date" shall mean August 1, 1998.

      (J)   "Law" shall mean any law, rule, order, ordinance, regulation or
            requirement of any governmental authority having or asserting
            jurisdiction or any order, rule, requirement or regulation of any
            utility company, insurer of Landlord or the Board of Fire
            Underwriters (or successor organization), whether now or hereafter
            in effect, and all amendments thereto.

38. Rental Payments

      (A) All payments other than Fixed Rent to be made by Tenant pursuant to
this lease shall be deemed additional rent and, in the event of any non-payment
thereof, Landlord shall have all rights and remedies provided for herein or by
law for non-payment of rent.

      (B) All payments of Fixed Rent and additional rent (collectively, "rent"
or "rental") to be made by Tenant pursuant to this lease shall be made by checks
drawn upon a New York City bank that is a member of the New York Clearing House
Association or any successor thereto.

      (C) Unless Landlord shall otherwise expressly agree in writing, acceptance
of Fixed Rent or additional rent from anyone other than Tenant shall not relieve
Tenant of any of its obligations under this lease, including the obligation to
pay Fixed Rent and additional rent, and Landlord shall have the right at any
time, upon notice to Tenant, to require Tenant to pay the Fixed Rent and
additional rent payable hereunder directly to Landlord. Furthermore, such
acceptance of Fixed Rent or additional rent shall not be deemed to constitute
Landlord's consent to an assignment of this lease or a subletting or other
occupancy of the demised
<PAGE>   8

premises by anyone other than Tenant, nor a waiver of any of Landlord's rights
or Tenant's obligations under this lease.

      (D) Landlord's failure to timely bill all or any portion of any amount
payable pursuant to this lease for any period during the Term shall neither
constitute a waiver of Landlord's right to ultimately collect such amount or to
bill Tenant at any subsequent time retroactively for the entire amount so
unbilled, which previously unbilled amount shall be payable within thirty (30)
days after being so billed.

39. Tax Escalation

      (A) For purposes of this lease, "Real Estate Taxes" shall mean all the
real estate taxes and assessments imposed by any governmental authority having
jurisdiction over the Building and the land upon which it is located ("Land")
(including specifically, but without limitation, so-called "BID" taxes) or any
tax or assessment hereafter imposed in whole or in part in substitution for such
real estate taxes and/or assessments.

      (B) If the Real Estate Taxes for any Subsequent Tax Year during the Term
exceed the Base Year Taxes (as initially imposed, if not finally determined when
a payment is due pursuant to this Section (B)), Tenant shall pay Landlord
Tenant's Proportionate Share of such excess within fifteen (15) days after
Landlord shall furnish to Tenant a statement (the "Tax Statement") setting forth
the amount thereby due and payable by Tenant. If Real Estate Taxes are payable
by Landlord to the applicable taxing authority in installments, then Landlord
shall bill Tenant for Tenant's Proportionate Share of increased Real Estate
Taxes in corresponding installments, such that Tenant's payment is due not more
than fifteen (15) days prior to the date when Landlord is obligated to pay the
Real Estate Taxes to the applicable taxing authority. If the actual amount of
Real Estate Taxes is not known to Landlord as of the date of Landlord's Tax
Statement, then Landlord may nevertheless bill Tenant for such installment on
the basis of a good faith estimate, in which event Tenant shall pay the amount
so estimated within fifteen (15) days after receipt of such bill, subject to
prompt refund by Landlord, or payment by Tenant, upon a supplemental billing by
Landlord once the amount actually owed by Tenant is determined. Upon Tenant's
request, Landlord shall provide Tenant with a copy of the current tax bill used
in the preparation of the Tax Statement.

      (C) If the Base Year Taxes ultimately are reduced to less than the Real
Estate Taxes initially imposed upon the Land and the Building for the Base Tax
Year, Tenant shall pay Landlord, promptly upon demand, any additional amount
thereby payable pursuant to Section (B) for all applicable Subsequent Tax Years.

      (D) If Landlord receives any refund of Real Estate Taxes for any
Subsequent Tax Year for which Tenant has made a payment pursuant hereto,
Landlord shall (after deducting from such refund all expenses incurred in
connection therewith) pay Tenant, if not in default hereunder, Tenant's
Proportionate Share of the net refund. Tenant shall pay Landlord Tenant's
Proportionate Share of the costs and expenses of any nature (including, without
limitation, consulting, appraisal, legal and accounting fees) incurred by
Landlord in good faith in connection with any tax protest or other proceeding or
arrangement leading or intending to lead to a reduction in Real Estate Taxes,
whether before or after the initial assessment thereof.

      (E) If any Subsequent Tax Year is only partially within the Term, all
payments pursuant hereto shall be appropriately prorated, based on the portion
of the Subsequent Tax Year that is within the Term. Except as limited by
Articles 9 and 10: (1) Tenant's obligation to make the payments required by
Sections (B), (C) and (D) shall survive the Expiration Date or any sooner
termination of this lease; and (2) Landlord's obligation to make the payments


                                      -2-
<PAGE>   9

required by Section (D) shall survive the Expiration Date or any sooner
termination of this lease pursuant to Articles 9 and 10.

      (F) Each Tax Statement given by Landlord pursuant to Section (B) shall be
binding upon Tenant unless, within thirty (30) days after its receipt of such
Tax Statement, Tenant notifies Landlord of its disagreement therewith,
specifying the portion thereof with which Tenant disagrees. Pending resolution
of such dispute, Tenant shall, without prejudice to its rights, pay all amounts
determined by Landlord to be due, subject to prompt refund by Landlord (without
interest) upon any contrary determination.

40. Expense Escalation

      (A) For purposes of the formula and other provisions set forth in this
Article and elsewhere in this lease:

            (1) "Rate" shall mean the minimum regular hourly wage rate,
including adjustments of every kind and nature (not including, however,
so-called "fringe benefits") prescribed for Porters (as hereinafter defined) for
Class A office buildings (or any successor category), pursuant to the present
and any successor agreement between the Realty Advisory Board on Labor
Relations, Inc. (or any successor thereto) and Local 32B - 32J of the Service
Employees International Union, AFL-CIO (or any successor thereto), covering the
wage rates for Porters in such buildings ("Agreement"), provided, however, that,
(a) if, at any time during the Term, regular employment of Porters occurs on
days or during hours when overtime or other premium pay rates are in effect
pursuant to the Agreement, "Rate" shall mean the average hourly wage rate,
including adjustments of every kind and nature (not including, however,
so-called fringe benefits) for the hours in a calendar week during which Porters
are regularly employed (e.g., if, pursuant to the Agreement, the regular weekly
employment of Porters is for forty hours, at a regular hourly wage rate (not
including so-called fringe benefits), of $12.00 for the first thirty hours and
an overtime hourly wage rate (not including so-called fringe benefits), of
$15.00 for the remaining ten hours, the average hourly wage rate (not including
so-called fringe benefits), for the applicable period shall, before adjustment
pursuant to the provisions of Section (B), be the weekly wage rate of $510.00,
divided by the number of regular hours of employment, to wit, forty, or $12.75),
and that, (b) if, at any time during the Term, no Agreement exists, Rate shall
mean the average minimum regular hourly wage rate, including adjustments of
every kind and nature (not including, however, so-called fringe benefits)
actually payable to Porters by Landlord or the contractor performing cleaning
services in the Building, or, if no Porters are employed at the Building, such
rate for Porters employed at Class A office buildings (as such buildings are
presently described in the Agreement).

            (2) "Base Rate" shall mean the Rate in effect during the Base Labor
Month.

            (3) "Porters" shall mean those employees engaged in the general
maintenance and operation of office buildings, classified as "Others" in the
current Agreement, who have been employed for twenty-five (25) years or more, or
failing such classification in any subsequent Agreement, the most nearly
comparable classification in such Agreement.

      (B) In determining the Base Rate and/or the Rate on each applicable
occasion pursuant to this lease, the Base Rate and the Rate shall be calculated
on the basis of the number of hours that would be actually worked by Porters
during the applicable calendar year pursuant to the Agreement assuming all time
which Porters were entitled not to work, if all relevant circumstances provided
for in the Agreement occurred, actually was not worked [e.g., if the Agreement
is predicated on a 2,080 hour work year (40 hours X 52 weeks) and Porters are
paid for the following time which they are


                                      -3-
<PAGE>   10

entitled not to work if all relevant circumstances provided for in the Agreement
occur (Vacation - 120 hours, Holidays - 88 hours, Birthday - 8 hours, Medical
Checkup - 16 hours, Sick Days - 80 hours, Disaster Day - 8 hours and Relief Time
- 148.5 hours), then the Base Rate and the Rate shall be calculated on the basis
of Porters actually working 1,611.5 hours (2,080 hours less 468.5 hours)].

      (C) If, in any period during the Term, the Rate exceeds the Base Rate,
Tenant shall pay Landlord an amount ("Expense Escalation") equal to the product
of (1) the Multiplication Factor, multiplied by (2) the Labor Rate Multiple,
multiplied by (3) the amount by which the Rate exceeds the Base Rate. The
Expense Escalation shall be appropriately adjusted for any such period that is
only partially within the Term. The Expense Escalation shall be payable in equal
monthly installments, commencing with the first installment of Fixed Rent due on
or after the effective date of any increase in the Rate and continuing
thereafter until the effective date of any subsequent increase, whereupon such
installments shall be appropriately adjusted. Landlord shall furnish Tenant with
a statement itemizing Tenant's liability pursuant to this subdivision whenever
such liability arises or changes. Except as limited by Articles 9 and 10,
Tenant's obligation to make such payments shall survive the Expiration Date or
any sooner termination of this lease. Notwithstanding the foregoing, if, by
reason of any law, or any rule, order, regulation or requirement of any
governmental or quasi-governmental authority having or asserting jurisdiction
(collectively, "PW Law"), an increase in the Rate is reduced or does not take
effect, or increases in the Rate are limited or prohibited, then, for the period
covered by the PW Law ("Law Period"), the Rate for purposes of this Article
shall be deemed to increase by the same percentage and for the same period as
comprehended by the most recent increase in the Rate prior to the effective date
of the PW Law, which periodic increase shall be deemed to continue throughout
the Law Period.

      (D) Each statement given by Landlord pursuant to Section (C) shall be
binding upon Tenant unless, within thirty (30) days after its receipt of such
statement, Tenant notifies Landlord of its disagreement therewith, specifying
the portion thereof with which Tenant disagrees. Pending resolution of such
dispute, Tenant shall, without prejudice to its rights, pay all amounts
determined by Landlord to be due, subject to prompt refund by Landlord (without
interest) upon any contrary determination.

      (E) As used herein:

            (1) "Fuel Cost" shall mean Landlord's cost for all fuel (including
steam and/or oil) used in the operation of the Building.

            (2) "Electricity Cost" shall mean Landlord's cost for all
electricity used in lighting all the public and service areas of the Building
and operating all of the service facilities of the Building (as determined by an
independent electrical engineer or consultant selected by Landlord);

            (3) "Utilities Cost" shall mean the sum of the Fuel Cost and the
Electricity Cost;

            (4) "Base Utilities Cost" shall mean the Utilities Cost for the
initial Utility Year (i.e., 1998); and

            (5) "Utility Year" shall mean each calendar year, beginning with
1998, all or any part of which falls within the Term.

      (F) If the Utilities Cost for any Utility Year shall be greater than the
Base Utilities Cost, Tenant shall pay Landlord Tenant's Proportionate Share of
such excess ("Utilities Payment"). Any such liability shall be appropriately
prorated for the final

                                      -4-
<PAGE>   11

Utility Year. Tenant's obligation to make such payment shall survive the
expiration or sooner termination of this lease.

      (G) After the initial Utility Year, Landlord shall forward Tenant an
itemized statement ("Utilities Statement") of the Base Utilities Cost.
Thereafter, Landlord shall forward Tenant a Utilities Statement of the Utilities
Cost for the prior Utility Year and a computation of the amount payable by
Tenant pursuant to Section (F).

      (H) With each installment of Fixed Rent payable during the second Utility
Year, Tenant shall pay Landlord, on account of the amount payable pursuant to
this Article for such Utility Year, Tenant's Proportionate Share of the product
of (i) five percent (5%) of the Base Utilities Cost, and (ii) one-twelfth)
(1/12). Such payments shall be deferred until Landlord forwards the applicable
Utilities Statement of Base Utilities Cost, whereupon Tenant promptly shall pay
all deferred payments and thereafter commence such payments.

      (I) With each installment of Fixed Rent payable during and after the third
Utility Year, Tenant shall pay to Landlord on account of the amount payable
pursuant to this Article for the then Utility Year,

            (1) until Landlord forwards the applicable Utilities Statement for
the preceding Utility Year, the amount of the monthly payment during December of
such preceding Utility Year; and

            (2) after Landlord forwards the applicable Utilities Statement for
the preceding Utility Year, one-twelfth of the amount payable pursuant to
Section (F) for such preceding Utility Year.

      (J) Once Landlord forwards the applicable Utilities Statement for the
preceding Utility Year, Landlord and/or Tenant, as the case may be, promptly
shall make appropriate payment to the other (without interest) of any amount
overpaid by Tenant or owing to Landlord for such Utility Year based on the
amount due pursuant to such Utilities Statement and amounts theretofore paid by
Tenant for such preceding Utility Year.

      (K) Landlord's Utilities Statement for any Utility Year shall be
conclusive and binding upon Tenant unless within thirty (30) days after receipt
of such Utilities Statement, Tenant notifies Landlord that it disputes the
correctness of the Utilities Statement, specifying the respects in which it is
claimed to be incorrect. In the event of any such dispute, pending the
determination thereof, Tenant shall make payment in accordance with Landlord's
Utilities Statement, without prejudice to its position. If such dispute is
determined in Tenant's favor, Landlord shall forthwith pay Tenant (without
interest) the amount so overpaid by Tenant.

41. Abatement and Adjustments of Fixed Rent

      Anything herein to the contrary notwithstanding:

      (A) Provided this lease shall be in full force and effect and Tenant shall
not be in default hereunder beyond any applicable notice and grace period, the
Fixed Rent shall abate from the Commencement Date through the date that is one
day prior to the Rent Commencement Date; and

      (B) Effective on August 1, 2003, the Fixed Rent (exclusive of the Fixed
Rent payable pursuant to Article 68) shall be increased to $336,325.00 per
annum.

                                      -5-
<PAGE>   12

42. Electricity

      (A) Landlord shall furnish, at a location designated by Landlord, for
Tenant's use in the demised premises three hundred fifty (350) amps at four
hundred eighty (480) volts. Said power exceeds the standard Landlord provision
of fifteen (15) watts of power per rentable square foot at one hundred
twenty/two hundred eight (120/208) volts by one hundred forty-eight (148) amps.
Such additional power shall be provided by Landlord to Tenant at the cost of one
hundred fifty ($150.00) dollars per amp or twenty two thousand two hundred
($22,200.00) dollars to be paid upon execution of this lease and subject to the
terms and conditions set forth in this Article 42. In bringing such current from
such designated location to the premises, Tenant shall use only such electrical
contractors as are then on the approved list for the Building. Any additional
current required by Tenant shall be provided by Landlord, if available, at a
cost of one hundred fifty ($150.00) dollars per amp if provided during the
twelve (12) month period after the date hereof, and, if later provided, at
Landlord's then standard charge. If at any time during the Term, whether before
or after Tenant's power is increased or decreased, Landlord reasonably
determines that Tenant is not using any portion of the electric capacity then
servicing the demised premises, then Landlord shall have the right, after not
less than fifteen (15) days notice to Tenant, to recapture any such power not
then being used by Tenant without compensation to Tenant. If Landlord so
recaptures any power and, at a later date, Tenant requires provision of
additional power, Landlord shall use all reasonable efforts to provide the same
and Tenant will not be required to pay the per amp charge referred to above for
such part of the additional power as had been recaptured. Tenant's consumption
of electrical energy at the demised premises shall be measured by submeters
installed by Landlord at Tenant's expense.

      (B) (1) From and after the Commencement Date, Tenant shall purchase all
electric current consumed in or in connection with the demised premises from
Landlord or Landlord's designated agent and pay therefor an amount equal to
105% of Landlord's Average Cost (as hereinafter defined) applied to all
electricity consumed in or in connection with the demised premises during the
applicable billing period, as measured by the submeters in the demised premises.

          (2) "Landlord's Average Cost" for all purposes of this lease shall
be determined by dividing (y) the total dollar amount billed to Landlord for the
Building by the entity providing electric current to the Building (the "Electric
Company") for the relevant billing period (including, without limitation, all
charges for "demand," fuel, "on-peak" and "off-peak" usage, "time of day" usage
and any and all other relevant adjustments and charges) by (z) the total
kilowatt hours utilized by the Building for such billing period.

      (C) Where more than one submeter measures Tenant's consumption of
electricity, the service rendered through each submeter may be computed and
billed separately in accordance with the provisions hereof. Bills therefor shall
be rendered at such times as Landlord may elect and shall be payable on demand
as additional rent. In the event that such bills are not paid within thirty (30)
days after the same are rendered, Landlord may, without further notice,
discontinue the service of electric current to the demised premises without
releasing Tenant from any liability under this lease and without Landlord's
agent incurring any liability for any damage or loss sustained by Tenant by such
discontinuance of service.

      (D) Landlord shall not in any way be liable or responsible to Tenant for
any loss, damage or expense that Tenant may sustain or incur if either the
quantity or character of electric service is changed or is no longer available
or suitable for Tenant's requirements. Tenant's use of electric current shall
never exceed


                                      -6-
<PAGE>   13

the capacity of existing feeders or risers to, or wiring installations in, the
Building and the demised premises. Any riser or risers to supply Tenant's
electrical requirements will, upon written request of Tenant, be installed by
Landlord at the sole cost and expense of Tenant if, in Landlord's reasonable
judgment, the same are necessary and will not cause adverse damage or injury to
the Building or the operation thereof or the demised premises, cause or create a
dangerous or hazardous condition, entail excessive or unreasonable alterations,
repairs or expense or interfere with or disturb other tenants or occupants. In
addition to the installation of such riser or risers, Landlord will also, at the
sole cost and expense of Tenant, install all other equipment proper and
necessary in connection therewith, subject to the aforesaid terms and
conditions. All of such costs and expense shall be paid by Tenant to Landlord
within fifteen (15) days after rendition of any bill or statement to Tenant
therefore.

      (E) Landlord may discontinue such service of electric current upon sixty
(60) days notice to Tenant without being liable to Tenant therefor or without in
any way affecting this lease or the liability of Tenant hereunder or causing a
diminution of Fixed Rent. Such discontinuance shall not be deemed to be a
lessening or diminution of service within the meaning of any law, rule or
regulation now or hereafter enacted, promulgated or issued. In the event
Landlord gives such notice of discontinuance, Landlord shall permit Tenant to
receive such service direct from the Electric Company, in which event Tenant
shall, at its own cost and expense, furnish and install all risers, service
wiring, switches and other equipment necessary for such installation and
required by the Electric Company and, at its own cost and expense, maintain and
keep in good repair all such risers, wiring, switches and equipment. Provided
that Tenant proceeds promptly and diligently after receipt of Landlord's notice
to arrange to obtain electric current directly from the Electric Company,
Landlord may not discontinue electric service until Tenant is able to obtain
service directly from the Electric Company (unless Landlord is compelled to do
so by Law or the Electric Company).

      (F) Tenant shall make no alterations or additions to the electric
equipment and/or appliances presently installed in the demised premises without
the prior written consent of Landlord in each instance. Rigid conduit only will
be allowed.

      (G) If any tax is imposed upon Landlord's receipt from the sale or resale
of electric energy to Tenant by any federal, state or municipal authority, where
permitted by law, Tenant's pro-rata share of such taxes shall be paid by Tenant
to Landlord.

      (H) Anything in Section (B) to the contrary notwithstanding, if the
Commencement Date shall occur prior to the installation and proper calibration
of the submeters, then (i) Tenant shall pay Landlord for Tenant's consumption of
electricity in the demised premises at the rate of $1,681.63 per month during
any period when construction is taking place in the demised premises; and (ii)
from and after the date on which Tenant occupies all or a portion of the demised
premises for the conduct of business and until the installation and proper
calibration of the submeters, Tenant shall pay Landlord $3,363.25 per month on
account, such payments to be retroactively adjusted based on the average
kilowatts and kilowatt hours consumed over the first three (3) months after
installation and proper calibration of the submeters. In addition, if during any
time during the Term, it shall be determined that the submeters servicing the
demised premises were malfunctioning, or if Tenant's power is increased prior to
the installation and proper calibration of any required additional meters,
Tenant shall pay Landlord an amount reasonably estimated by Landlord's
electrical consultant to be the amount that would have been payable by Tenant
had such malfunction not occurred or had the additional power been properly
metered, as the case may be.


                                      -7-
<PAGE>   14

43. Restrictions on Use 

      (A) Anything in Article 2 to the contrary notwithstanding, Tenant shall
not use or permit all or any part of the demised premises to be used for the:
(1) storage for purpose of sale of any alcoholic beverage in the demised
premises; (2) storage for retail sale of any product or material in the demised
premises; (3) conduct of a manufacturing, printing or electronic data processing
business, except that Tenant may operate business office reproducing equipment,
electronic data processing equipment and other business machines for Tenant's
own requirements (but shall not permit the use of any such equipment by or for
the benefit of any party other than Tenant); (4) rendition of any health or
related services, conduct of a school or conduct of any business that results in
the presence of the general public in the demised premises; (5) conduct of the
business of an employment agency or executive search firm; (6) conduct of any
public auction, gathering, meeting or exhibition; (7) conduct of a stock
brokerage office or business; or (8) occupancy of a foreign, United States,
state, municipal or other governmental or quasi-governmental body, agency or
department or any authority or other entity that is affiliated therewith or
controlled thereby.

      (B) Tenant shall not use or permit all or any part of the demised premises
to be used in any manner that is inconsistent with a first class office building
or so as to impose any additional burden upon Landlord in its operation.

      (C) Tenant shall not obtain or accept for use in the demised premises
towel, barbering, boot blacking, floor polishing, lighting maintenance, cleaning
or other similar services from any party not theretofore approved by Landlord
(which party's charges shall not be excessive) and Landlord will not
unreasonably withhold such approval. Such services shall be furnished only at
such hours, in such places within the demised premises and pursuant to such
regulations as Landlord prescribes.

44. Assignment, Etc.

      Supplementing Article 11:

      (A) Tenant shall neither: (i) publicly advertise the availability of all
or any part of the demised premises at a rental rate less than the rental rate
at which Landlord is then offering to lease comparable space in the Building; or
(ii) assign this lease to or sublet to or permit the occupancy of all or any
part of the demised premises by any other party that is then a tenant,
subtenant, licensee or occupant of any space in the Building or that has
negotiated with Landlord for space in the Building within the twelve (12) month
period preceding the date of Landlord's receipt of Tenant's Notice pursuant to
Section (B) (nor shall Tenant accept an assignment of a lease or sublet space
from any tenant, subtenant, licensee or occupant of any space in the Building).
Tenant shall designate Williams Real Estate Co. Inc. (or the then rental agent
for the Building) as its exclusive agent in connection with any subletting of
all or any part of the premises or any assignment of this lease.

      (B) If Tenant wishes to assign this lease (a transfer of more than a fifty
percent (50%) beneficial interest in Tenant, whether such transfer occurs at
one time, or in a series of related transactions, and whether of stock,
partnership interest or otherwise, by any party in interest being deemed an
assignment of this lease), sublet all or any part of the demised premises or
permit the demised premises to be occupied by any other party, Tenant shall
first notify Landlord ("Tenant's Notice"), specifying the name of the proposed
assignee, subtenant or occupant, the name of and character of its business, its
proposed use of the premises, the terms of the proposed assignment, sublease or
occupancy (including, without limitation, the commencement and expiration


                                      -8-
<PAGE>   15

dates thereof) and current information as to the financial responsibility and
standing of the proposed assignee, sublessee or occupant and shall provide
Landlord with such other information as it reasonably requests. If only a
portion of the demised premises (not constituting an entire floor of the
Building) is to be so sublet or occupied, Tenant's Notice shall be accompanied
by a reasonably accurate floor plan, indicating such portion. The portion of the
demised premises to which such proposed assignment, sublease or occupancy is to
be applicable is hereinafter referred to as the "Space."

      (C) Landlord may, within sixty (60) days after its receipt of Tenant's
Notice, by notice to Tenant ("Landlord's Notice"), require that (i) Tenant
sublease the Space to Landlord or its nominee, on the terms set forth in Section
(D), or (ii) this lease be terminated as to the Space for the period specified
in Tenant's Notice, on the terms set forth in Section (E). If Tenant's proposed
assignment or sublease is for more than fifty percent (50%) of the demised
premises or the then balance of the Term is three (3) years or less, Landlord
also may, by Landlord's Notice, terminate this lease as of the proposed
commencement date for such assignment, sublease or occupancy. If Landlord fails
to exercise such option, it shall not unreasonably withhold its consent to the
proposed assignment, sublease or occupancy (provided that the proposed use of
the premises by the proposed assignee, subtenant or occupant complies with the
terms of this lease, including, without limitation, Articles 2 and 43 hereof),
but such consent shall be deemed of no effect if such assignment, sublease or
occupancy is not consummated upon the terms set forth in Tenant's Notice and
within thirty (30) days after such consent is given.

      (D) If Landlord requires that Tenant execute a sublease ("Sublease")
pursuant to clause (C) (i), the Sublease shall be upon the same terms as this
lease, except for such terms thereof as are inapplicable and except that: (i)
the term of the Sublease shall be the term specified in Tenant's Notice
commencing, at Landlord's option, on (a) the commencement date set forth in
Tenant's Notice, or (b) a date designated by Landlord which shall not be more
than thirty (30) days after the date of Landlord's Notice; (ii) the Fixed Rent
for the Sublease shall be the lesser of (a) the pro rata Fixed Rent for the
Space Tenant is then paying Landlord hereunder, or (b) the Fixed Rent set forth
in Tenant's Notice; (iii) Tenant's Proportionate Share and the Multiplication
Factor for the Sublease shall be determined based on the relative sizes of the
Space and the initial demised premises; (iv) the subtenant under the Sublease
shall have the unrestricted right to assign the Sublease or any interest
therein, to further sublet all or any part of the Space and/or to make any
alterations, decorations, additions or improvements in and to the Space (all or
any part of which may be removed, at Landlord's option, at any time, provided
Landlord repairs all damage caused by such removal); (v) Tenant, as sublandlord
under the Sublease, shall, at its expense: (a) erect all partitions required to
separate the Space from the remainder of the demised premises and install a
separate submeter to measure the consumption of electricity in the Space (or, in
the alternative, the parties shall agree on an equitable method to allocate
electricity charges between the Space and the balance of the premises) and (b)
to the extent necessitated by the Sublease, install all doors required for
independent access from the Space to the elevators, lavatories and staircases on
the floor and install all equipment and facilities (including, without
limitation, men's and women's toilets) required to comply with all applicable
Laws and to enable Landlord to maintain and service the Space and permit the
Space to be used as an independent unit; (vi) the Sublease shall provide that
the termination of all or any portion of this lease by merger is not thereby
intended; and (vii) at the expiration of the Sublease, the Space shall, subject
to clause (iv), be returned to Tenant as then existing.

      (E) If Landlord requires that this lease be terminated as to the Space
pursuant to clause (C) (ii), then Landlord and Tenant


                                      -9-
<PAGE>   16

shall execute and deliver a supplementary agreement modifying this lease by
eliminating the Space from the demised premises for the term specified in
Tenant's Notice commencing, at Landlord's option, on (a) the commencement date
set forth in Tenant's Notice, or (b) a date designated by Landlord which shall
not be more than thirty (30) days after the date of Landlord's Notice, and, for
such period, reducing the Fixed Rent and additional rent payable hereunder on a
pro rata basis.

      (F) Anything herein to the contrary notwithstanding, Tenant may not assign
this lease or sublet all or any part of the demised premises prior to the
expiration of the first year of the Term.

      (G) No assignment of this lease shall be effective unless and until Tenant
delivers to Landlord duplicate originals of the instrument of assignment
(wherein the assignee assumes the performance of Tenant's obligations under this
lease) and any accompanying documents.

      (H) In the event of any such assignment, Landlord and the assignee may
modify this lease in any manner, without notice to Tenant or Tenant's prior
consent, without thereby terminating Tenant's liability for the performance of
its obligations under this lease, except that any such modification which, in
any way, increases any of such obligations shall not, to the extent of such
increase only, be binding upon Tenant.

      (I) No sublease of all or any part of the demised premises (except a
Sublease) shall be effective unless and until Tenant delivers to Landlord
duplicate originals of the instrument of sublease (containing the provision
required by Section (J)) and any accompanying documents. Any such sublease shall
be subject and subordinate to this lease.

      (J) Any such sublease shall contain substantially the following
provisions:

            (1) "In the event of a default under any underlying lease of all or
any portion of the premises demised hereby that results in the termination of
such lease, the subtenant hereunder shall, at the option of the lessor under any
such lease ("Underlying Lessor"), attorn to and recognize the Underlying Lessor
as landlord hereunder and shall, promptly upon the Underlying Lessor's request,
execute and deliver all instruments necessary or appropriate to confirm such
attornment and recognition. Notwithstanding such attornment and recognition, the
Underlying Lessor shall not (a) be liable for any previous act or omission of
the landlord under this sublease, (b) be subject to any offset, not expressly
provided for in this sublease, that shall have accrued to the subtenant
hereunder against said landlord, or (c) be bound by any modification of this
sublease or by any prepayment of more than one month's rent, unless such
modification or prepayment shall have been previously approved in writing by the
Underlying Lessor. The subtenant hereunder hereby waives all rights under any
present or future law to elect, by reason of the termination of such underlying
lease, to terminate this sublease or surrender possession of the premises
demised hereby.

            (2) This sublease may not be assigned or the premises demised
hereunder further sublet, in whole or in part, without the prior written
consent of the Underlying Lessor." 

      (K) No assignment or sublease, whether or not consented to by Landlord and
whether or not any such consent is required, shall release Tenant from its
liability for the performance of Tenant's obligations hereunder during the
balance of the Term. Landlord's consent to any assignment or sublease shall not
constitute its consent to any (i) further assignment of this lease or of any
permitted sublease or (ii) further sublease of all or any portion of the
premises demised hereunder or under any permitted sublease. If a sublease to
which Landlord has consented is assigned or all or


                                      -10-
<PAGE>   17

any portion of the premises demised thereunder is sublet without the consent of
Landlord in each instance obtained, Tenant shall immediately terminate such
sublease, or arrange for the termination thereof, and proceed expeditiously to
have the occupant thereunder dispossessed.

      (L) Tenant shall pay to Landlord, promptly upon demand therefor, all costs
and expenses (including, without limitation, reasonable attorneys' fees and
disbursements) incurred by Landlord in connection with any assignment of this
lease or sublease of all or any part of the demised premises.

      (M) If Landlord shall give its consent to any assignment of this lease or
to any sublease or if Tenant shall otherwise enter into any assignment or
sublease permitted hereunder, Tenant shall in consideration therefor, pay to
Landlord, as and when payable to Tenant

            (1) in the case of an assignment, fifty (50%) percent of all sums
and other considerations paid to Tenant by the assignee for or by reason of such
assignment (including, but not limited to, sums paid for the sale of Tenant's
fixtures, leasehold improvements, equipment, furniture, furnishings or other
personal property, less the then fair market value thereof); and

            (2) in the case of a sublease, fifty (50%) percent of the amount, if
any, by which (i) any rents, additional charges or other consideration payable
under the sublease to Tenant by the subtenant (including, but not limited to,
sums paid for the sale or rental of Tenant's fixtures, leasehold improvements,
equipment, furniture or other personal property, less the then fair market value
thereof) exceeds (ii) the Fixed Rent and additional rent accruing during the
term of the sublease in respect of the Space (at the rate per square foot
payable by Tenant hereunder) pursuant to the terms of this lease.

      (N) Landlord acknowledges that the business to be conducted by Tenant in
the demised premises requires the installation of certain communications
equipment owned by customers of Tenant in the demised premises, in order for
such customers to interconnect with Tenant's terminal facilities. Landlord
expressly agrees that Tenant may license the use of portions of the demised
premises to its customers solely for the purpose of locating equipment therein
without Landlord's' further consent; provided, however, that such license shall
be granted only upon the execution by Tenant and its customers of an agreement
that expressly provides that (i) such license and the rights of such licensee
shall at all times be subordinate to this lease and shall not be binding on
Landlord; (ii) such license will expire no later than the day prior to the
expiration or earlier termination of this lease; and (iii) such license shall be
for equipment only and shall not grant to the licensee the right to occupy any
portion of the Building or the demised premises. No such license shall become
effective unless and until Tenant has delivered a fully executed counterpart
thereof to Landlord.

45. Brokerage

      Tenant represents that it dealt only with the Broker as broker in
connection with this lease and Landlord shall pay the Broker's commission
therefor pursuant to separate agreement. Tenant shall indemnify Landlord against
all loss, damage, liability, cost and expense (including reasonable attorney's
fees) pertaining to any other brokerage commission or like compensation that is
based on alleged actions of Tenant or its agents or representatives. Tenant's
liability hereunder shall survive any expiration or termination of this lease.


                                      -11-
<PAGE>   18

46. Building Directory

      (A) Landlord shall, upon Tenant's request, list on the Building's
directory ("Directory"), the names of Tenant, any other party occupying any part
of the demised premises pursuant hereto and their officers or employees,
provided the number of Directory lines so provided by Landlord does not exceed
Tenant's Proportionate Share of the Directory's capacity.

      (B) The listing of any party's name other than Tenant's shall neither
grant such party any right or interest in this lease and/or the demised premises
nor constitute Landlord's consent to any assignment or sublease to or occupancy
by such party. Such listing may be terminated by Landlord at any time, without
prior notice. The initial listing(s) on the Directory shall be provided by
Landlord without charge to Tenant. Thereafter, Tenant shall pay Landlord's
standard fee for any work performed in connection with any additions, deletions
or changes to the Directory.

47. Exculpatory Clause

      (A) Anything herein to the contrary notwithstanding, the liability of
Landlord and the partners of, or any other party that holds any interest in,
Landlord for negligence, failure to perform lease obligations or otherwise under
or in connection with this lease shall be limited to each of their respective
interests in the Land and Building. Tenant shall neither seek to enforce nor
enforce any judgment or other remedy against any other asset of Landlord, any
partner of Landlord or any party that holds any interest in Landlord.

      (B) In any claim made by Tenant against Landlord alleging that Landlord
has acted unreasonably where Landlord had an obligation to act reasonably,
Tenant shall have no right to recover damages from Landlord and Tenant's sole
and exclusive recourse against Landlord shall be an action seeking specific
performance of Landlord's obligation to act reasonably.

48. Submission to Jurisdiction, Etc.

      (A) This lease shall be deemed to have been made in New York County, New
York, and shall be construed in accordance with the laws of the State of New
York. All actions or proceedings relating, directly or indirectly, to this lease
shall be litigated only in courts located within the County of New York. Tenant
and their respective successors and assigns hereby subject themselves to the
jurisdiction of any state or federal court located within such county, waive the
personal service of any process upon them in any action or proceeding therein
and consent that such process may be served by certified or registered mail,
return receipt requested, directed to Tenant and any successor at Tenant's
address hereinabove set forth, any successor and to any assignee at the address
set forth in the respective instruments. Such service shall be deemed made two
days after such process is so mailed.

      (B) Whenever any default by Tenant causes Landlord to incur attorneys'
fees and/or any other costs or expenses, Tenant agrees that it shall pay and/or
reimburse Landlord for such fees, costs or expenses within ten (10) days after
being billed therefor.

      (C) If any monies owing by Tenant under this lease are paid more than
fifteen (15) days after the date such monies are payable pursuant to the
provisions of this lease, Tenant shall pay Landlord interest thereon, at the
rate of two (2%) percent per annum over the so called "prime" or "base" interest
rate of Citibank N.A. from time to time in effect, for the period from the date
such monies were payable to the date such monies are paid.

      (D) The submission of this lease to Tenant shall not constitute an offer
by Landlord to execute and exchange a lease 


                                      -12-
<PAGE>   19

with Tenant and is made subject to Landlord's acceptance, execution and delivery
thereof.

49. Requests by Mortgagee or Others

      (A) If any present or prospective mortgagee of the Land, Building or any
leasehold interest therein requires, as a condition precedent to issuing or
extending its loan, the modification of this lease in such manner as does not
materially lessen Tenant's rights or increase its obligations hereunder, Tenant
shall not delay or withhold its consent to such modification and shall execute
and deliver such confirming documents therefor as such mortgagee requires.

      (B) If Landlord, in conjunction with any proposed sale or mortgaging of
all or any portion of the Land and Building or any leasehold interest therein,
requests the delivery of financial statements or other information relating to
the financial condition of Tenant, Tenant shall deliver such financial
statements or such other information within ten (10) days after Landlord's
written request therefor.

50. Delivery of Demised Premises

      Supplementing Article 21, the demised premises shall be leased to Tenant
in their "as is" condition on the Commencement Date and Landlord shall not be
required to perform any work to prepare the demised premises for Tenant's
occupancy, except that, with reasonable diligence after the execution and
exchange of this lease, Landlord will (i) demolish, in a Building standard
manner, the existing improvements in the premises, including the removal of
asbestos, if any, therein, but not including floor tile, even if
asbestos-containing, as to which Landlord will have no responsibility or
obligation, and (ii) construct a Building-standard demising wall and install a
Building-standard entrance door to the premises. The demised premises will be
delivered free of refuse and rubbish and the cracked panes of glass in the
windows will be replaced in a timely manner. The taking of possession of the
demised premises by Tenant shall be conclusive evidence as against Tenant that,
at the time such possession was so taken, the demised premises and the Building
were in good and satisfactory condition.

      With reasonable promptness after Tenant's request therefor, Landlord shall
provide up to two (2) clay ducts for Tenant's use at a one (1) time cost of
fifteen thousand ($15,000.00) dollars for each clay duct, to be paid upon
Tenant's request therefor.

      Tenant shall be permitted to remove the existing radiators from the
demised premises and return them to Landlord, provided that, in so doing, Tenant
will be deemed to have waived its right, pursuant to Article 29 of this lease,
to receive heat in the demised premises from Landlord.

51. Insurance

      During the Term, Tenant shall pay for and keep in force general liability
policies in standard form protecting against all liability occasioned by
accident or occurrence, subject to customary exclusions, and containing only
such "deductibles" as Landlord reasonably approves, such policies to be written
by recognized and well-rated insurance companies licensed to transact business
in the State of New York, authorized to issue such policies, and reasonably
approved by Landlord. The minimum limits of liability shall be a combined single
limit with respect to each occurrence in an amount of not less than $3,000,000
for injury (or death) and damage to property. If at any time during the Term it
appears that public liability or property damage limits in the City of New York
for buildings similarly situated, due regard being given to the use and
occupancy thereof, are higher than the foregoing limits, then Tenant shall
increase the foregoing limits


                                      -13-

<PAGE>   20

accordingly. Landlord (and each member thereof in the event Landlord is a
partnership, joint venture or other entity) and Landlord's managing agent
(Landlord's current managing agent is Williams Real Estate Co. Inc.) shall be
named as additional insured in the aforesaid insurance policies. Tenant shall
also secure and keep in force "all risk" property insurance, including loss by
fire and, by means of the standard extended coverage endorsement, loss or damage
by such other casualties as may be covered thereby, covering all of its personal
property, equipment, trade fixtures, goods, merchandise, furniture, furnishings
and other items removable by Tenant located in the premises for the full
replacement value thereof from time to time. All such policies shall provide
that Landlord shall be afforded not less than thirty (30) days' prior notice of
cancellation of said insurance. Tenant shall deliver Acord 27 certificates of
insurance evidencing such policies, or certified copies or duplicate originals
of the policies and reasonably satisfactory evidence of payment of premiums, if
requested by Landlord. All premiums and charges for the aforesaid insurance
shall be paid by Tenant. If Tenant shall fail to maintain any such required
insurance, or to pay the premiums therefor when due, Landlord may obtain such
insurance or make such payment and the cost thereof to Landlord shall be repaid
to Landlord by Tenant on demand as additional rent. Tenant shall not violate or
permit to be violated any condition of any of said policies and Tenant shall
perform and satisfy the requirements of the companies writing such policies.

52. Bankruptcy

      Without limiting any of the provisions of Articles 16, 17 or 18 hereof,
if, pursuant to the Bankruptcy Code of 1978, as the same may be amended, Tenant
is permitted to assign this lease in disregard of the obligations contained in
Articles 11 and 44 hereof, Tenant agrees that adequate assurance of future
performance by the assignee permitted under such Code shall mean the deposit of
cash security with Landlord in an amount equal to the sum of one year's Fixed
Rent then reserved hereunder plus an amount equal to all additional rent payable
under this lease for the calendar year preceding the year in which such
assignment is intended to become effective, which deposit shall be held by
Landlord, without interest, for the balance of the Term as security for the full
and faithful performance of all of the obligations under this lease on the part
of Tenant yet to be performed. If Tenant receives or is to receive any valuable
consideration for such an assignment of this lease, such consideration, after
deducting therefrom (A) the brokerage commissions, if any, and other expenses
reasonably incurred by Tenant for such assignment and (B) any portion of such
consideration reasonably designated by the assignee as paid for the purchase of
Tenant's property in the demised premises, shall be and become the sole and
exclusive property of Landlord and shall be paid over to Landlord directly by
such assignee. In addition, adequate assurance shall mean that any such assignee
of this lease shall have a net worth, exclusive of good will, equal to at least
fifteen (15) times the aggregate of the Fixed Rent reserved hereunder plus all
additional rent for the preceding calendar year as aforesaid.

53. Local Law 5/Required Alterations

      Supplementing Article 6:

      (A) All work performed or installations made by Tenant (or by Landlord at
Tenant's request and expense) in and to the demised premises shall be done in a
fashion such that the demised premises and the Building shall be in compliance
with the requirements of Local Law 5 of 1973 of The City of New York, as
heretofore and hereafter amended ("Local Law 5"). The foregoing shall include,
without limitation, (i) compliance with the compartmentalization requirements of
Local Law 5, (ii) relocation of existing fire detection devices, alarm signals
and/or communication devices necessitated by the alteration of the demised
premises, and (iii)


                                      -14-

<PAGE>   21

installation of such additional fire control or detection devices as may be
required by Law as a result of Tenant's manner of use of the demised premises.
In addition, Tenant shall cause the demised premises to be connected to the
Building "Class E" system and arrange to have the demised premises and Tenant
added to the "Class E" computer.

      (B) Landlord shall not be responsible for any damage to Tenant's fire
control or detection devices nor shall Landlord have any responsibility for the
maintenance or replacement thereof. Tenant shall indemnify Landlord from and
against all loss, damage, cost, liability or expense (including, without
limitation, reasonable attorneys' fees and disbursements) suffered or incurred
by Landlord by reason of the installation and/or operation of any such devices.

      (C) All work and installations required to be undertaken by Tenant
pursuant to this Article shall be performed at Tenant's sole cost and expense
and in accordance with plans and specifications and by contractors previously
approved by Landlord.

      (D) The fact that Landlord shall have heretofore consented to any
installations or alterations made by Tenant in the demised premises shall not
relieve Tenant of its obligations pursuant to this Article with respect to such
installations or alterations.

      (E) If any utility company or governmental or quasi-governmental authority
requires any work, installation or improvement to be made to the Building in
connection with any Alteration performed by Tenant, the installation or
operation of equipment or machinery in the demised premises or for any other
reason relating to Tenant's use or occupancy of the demised premises, Tenant
shall reimburse Landlord for the cost of such work, installation or improvement
on demand.

54. Tenant's Alterations

      (A) Tenant shall not make or perform, or permit the making or performance
of, any alterations, installations, improvements, additions or other physical
changes in or about the demised premises (collectively, "Alterations") without
Landlord's prior consent. Landlord agrees not unreasonably to withhold its
consent to any Alterations that are nonstructural and that do not affect the
Building's systems and facilities, provided that such Alterations are performed
only by contractors or mechanics first approved by Landlord, do not affect any
part of the Building other than the demised premises (including, without
limitation, the exterior thereof), do not adversely affect any service required
to be furnished by Landlord to Tenant or to any other tenant or occupant of the
Building and do not reduce the value or utility of the Building. All Alterations
shall be done at Tenant's expense and at such times and in such manner as
Landlord may from time to time reasonably designate pursuant to the conditions
for Alterations prescribed by Landlord for the Building ("Alteration
Regulations"). Prior to making any Alterations, Tenant (i) shall submit to
Landlord detailed plans and specifications (including layout, architectural,
mechanical and structural drawings) for each proposed Alteration and shall not
commence any such Alteration without first obtaining Landlord's approval of such
plans and specifications, (ii) shall, at its expense, obtain all permits,
approvals and certificates required by any governmental or quasi-governmental
bodies, and (iii) shall furnish to Landlord duplicate original policies of
worker's compensation insurance (covering all persons to be employed by Tenant
and Tenant's contractors and subcontractors in connection with such Alteration)
and comprehensive public liability (including property damage coverage)
insurance in such form, with such companies, for such periods and in such
amounts as Landlord may reasonably require, naming Landlord and its agents as
additional insureds. Upon completion of such Alteration, Tenant, at Tenant's
expense, shall obtain certificates of final approval of such Alteration required
by any governmental


                                      -15-
<PAGE>   22

or quasi-governmental bodies and shall furnish Landlord with copies thereof and
shall, within thirty (30) days of such completion, deliver a set of final "as
built" drawings to Landlord reflecting the Alteration. All Alterations shall be
made and performed in accordance with the Alteration Regulations. All materials
and equipment to be incorporated in the demised premises as a result of all
Alterations shall be new and first quality. No such materials or equipment shall
be subject to any lien, encumbrance, chattel mortgage, title retention or
security agreement. Tenant shall not, at any time prior to or during the Term,
directly or indirectly employ, or permit the employment of, any contractor,
mechanic or laborer in the demised premises, whether in connection with any
Alteration or otherwise, if, in Landlord's sole discretion, such employment
will interfere or cause any conflict with other contractors, mechanics, or
laborers engaged in the construction, maintenance or operation of the Building
by Landlord, Tenant or others. In the event of any such interference or
conflict, Tenant, upon demand of Landlord, shall cause all contractors,
mechanics or laborers causing such interference or conflict to leave the
Building immediately.

      (B) No approval of any plans or specifications by Landlord or consent by
Landlord allowing Tenant to make any Alterations or any inspection of
Alterations made by or for Landlord shall in any way be deemed, to be an
agreement by Landlord that the contemplated Alterations comply with any legal
requirements or insurance requirements or the certificate of occupancy for the
Building nor shall it be deemed to be a waiver by Landlord of the compliance by
Tenant of any provision of this lease.

      (C) Tenant shall promptly reimburse Landlord for all fees, costs and
expenses including, but not limited to, those of architects and engineers,
incurred by Landlord in connection with the review of Tenant's plans and
specifications and inspecting the Alterations to determine whether the same are
being or have been performed in accordance with the approved plans and
specifications therefor and with all legal and insurance requirements. Copies of
bills evidencing such fees, costs and expenses will be provided to Tenant in a
timely manner upon Tenant's request.

55. Estoppel Certificate

      Tenant, at any time, and from time to time, upon at least ten (10) days'
prior notice by Landlord, shall execute, acknowledge and deliver to Landlord,
and/or, to any other party, firm or corporation specified by Landlord
("Recipient"), a statement (1) certifying that this lease is unmodified and in
full force and effect (or, if there have been modifications, that the same is in
full force and effect as modified and stating the modifications), (2) stating
the dates to which Fixed Rent and additional rent have been paid, (3) stating
whether or not there exists any defaults by Landlord under this lease and, if
so, specifying each such default, (4) confirming (if such is the case) that
Tenant has accepted possession of and is currently occupying the demised
premises for the conduct of business and that all improvements required to be
made by Landlord (if any) have been completed to Tenant's satisfaction, (5)
stating the commencement and expiration dates of this lease, (6) stating whether
or not there are any existing defenses to or offsets against Landlord's
enforcement of this lease and Tenant's obligation to pay Fixed Rent and
additional rent hereunder, and (7) furnishing any other information that may be
reasonably requested by the Recipient.

56. Holdover

      In the event Tenant shall hold over after the expiration of the Term, the
parties hereby agree that Tenant's occupancy of the demised premises after the
expiration of the Term shall be upon all of the terms set forth in this lease
except that Tenant shall pay as a use and occupancy charge for the holdover
period an amount equal to the higher of (A) an amount equal to two times the pro


                                      -16-
<PAGE>   23

rata Fixed Rent and additional rent payable by Tenant during the last year of
the Term; or (B) an amount equal to the then market rental value for the demised
premises.

57. Conditional Limitation

      In the event that twice in any twelve (12) month period (A) a default of
the kind set forth in Section 17(1) shall have occurred or (B) Tenant shall have
defaulted in the payment of Fixed Rent or additional rent, or any part of
either, and Landlord shall have commenced a summary proceeding to dispossess
Tenant in each such instance, then, notwithstanding that such defaults may have
been cured at any time after the commencement of such summary proceeding, any
further default by Tenant within such twelve (12) month period shall be deemed
to be a violation of a substantial obligation of this lease by Tenant and
Landlord may serve a written three (3) days' notice of cancellation of this
lease upon Tenant and, upon the expiration of said three (3) days, this lease
and the Term shall end and expire as fully and completely as if the expiration
of such three (3). day period were the day herein definitely fixed for the end
and expiration of this lease and the Term and Tenant shall then quit and
surrender the demised premises to Landlord, but Tenant shall remain liable as
elsewhere provided in this Lease.

58. Limitation on Rent

      If on the Commencement Date, or at any time during the Term, the Fixed
Rent or additional rent reserved in this lease is not fully collectible by
reason of any federal, state, county or city law, proclamation, order or
regulation, or any direction of any public officer or body pursuant to law and
of general application (collectively, "Rent Law"), Tenant agrees to take such
lawful steps as Landlord may reasonably request to permit Landlord to collect
the maximum rents that may be legally permissible from time to time during the
continuance of such Rent Law (but not in excess of the amounts reserved therefor
under this lease). Upon the termination of the effectiveness of such Rent Law,
Tenant shall pay to Landlord, to the extent permitted by the Rent Law, an amount
equal to (A) the Fixed Rent and additional rent that would have been paid
pursuant to this lease but for such Rent Law, less (B) the Fixed Rent and
additional rent paid by Tenant to Landlord during the period such Rent Law was
in effect.

59. Acceptance of Keys

      If Landlord or Landlord's managing or rental agent accepts from Tenant one
or more keys to the demised premises in order to assist Tenant in showing the
demised premises for subletting or other disposition or for the performance of
work therein for Tenant or for any other purpose, the acceptance of such key or
keys shall not constitute an acceptance of a surrender of the demised premises
nor a waiver of any of Landlord's rights or Tenant's obligations under this
lease including, without limitation, the provisions relating to assignment and
subletting and the condition of the demised premises.

60. Security Deposit

      (A) Landlord shall deposit the Security Deposit, if in cash, in an
interest-bearing account. Provided that Tenant is not then in default hereunder
after expiration of any applicable notice and/or grace period, Landlord will pay
the accrued interest on the Security Deposit, less a one (1%) percent per annum
administrative fee, to Tenant on or about January 1 of each year beginning on
January 1, 1999.

      (B) Supplementing Article 34, Tenant may, at the execution of this lease
or at any time during the Term, replace the cash Security Deposit with an
irrevocable letter of credit (the "Letter of Credit") in the amount of the
Security Deposit issued by a New


                                      -17-
<PAGE>   24

York City commercial bank acceptable to Landlord in its sole discretion, and in
the form of the letter of credit annexed hereto as Exhibit B, to be held by
Landlord as the Security Deposit in accordance with Article 34 and this Article
60. The Letter of Credit shall (i) initially expire not less than one (1) year
from the Commencement Date or the date of issuance if delivered to Landlord
thereafter, (ii) provide for automatic renewals for periods of not less than one
(1) year, and (iii) have a final expiration date not less than four (4) months
after the Expiration Date. Tenant shall pay to Landlord, on demand and as
additional rent hereunder, all fees and charges paid by Landlord to the bank
issuing the Letter of Credit in connection with the transfer of same to any
future owner of the Building. In the event of a default by Tenant in the
performance of any of the terms, provisions and conditions of this lease,
Landlord shall be permitted to draw down any portion or the entire amount of the
Letter of Credit and apply the proceeds or any part thereof in accordance with
Article 34 of this lease and retain the balance for the Security Deposit.
Landlord shall also have the right to draw down any portion or the entire amount
of the Letter of Credit in the event that Landlord receives notice that the date
of expiry of the Letter of Credit will not be extended by the issuing bank and
retain the proceeds for the Security Deposit. If Landlord shall have drawn
against the Letter of Credit and applied all or any portion thereof, or if
Landlord shall have applied any portion of any cash Security Deposit, then
Tenant shall deposit with Landlord, upon demand, a sufficient amount of cash to
bring the balance of the monies held by Landlord to the amount of the Security
Deposit. Tenant's failure to comply with the preceding sentence will entitle
Landlord to exercise all the same remedies as are available in the event of a
default in the payment of Fixed Rent.

      If Tenant elects to replace the cash Security Deposit with an irrevocable
Letter of Credit, the provisions of Article 60 (A) of this lease shall not
apply.

61. Definitions of "Landlord" and "Owner"

      The terms "Owner" and "Landlord," whenever used in this lease (including,
without limitation, in Article 31), shall have the same meaning.

62. Landmark Designation

      Tenant is hereby notified that the premises are subject to the
jurisdiction of the Landmarks Preservation Commission. In accordance with
sections 25-305, 25-306, 25-309 and 25-310 of the Administrative Code of the
City of New York and the rules set forth in Title 63 of the Rules of the City of
New York, any demolition, construction, reconstruction, alteration or minor work
as described in such sections and such rules may not be commenced within or at
the premises without the prior written approval of the Landmarks Preservation
Commission. Tenant is notified that such demolition, construction,
reconstruction, alterations or minor work includes, but is not limited to, (a)
work to the exterior of the premises involving windows, signs, awnings,
flagpoles, banners and storefront alterations and (b) interior work to the
premises that (i) requires a permit from the Department of Buildings or (ii)
changes, destroys or affects an interior architectural feature of an interior
landmark or an exterior architectural feature of an improvement that is a
landmark or located on a landmark site or in a historic district.

63. Hazardous Materials

      Tenant shall not cause nor permit Hazardous Materials (as defined below)
to be used, transported, stored, released, handled, produced or installed in or
from the demised premises, except that inflammable or combustible (but not
explosive) items may be brought into and used within the demised premises in
limited quantities to the extent currently needed for the operation of customary
office


                                      -18-
<PAGE>   25

equipment, so long as done in compliance with all Laws. The term "Hazardous
Materials" shall mean, for the purposes hereof, any flammable, explosive or
radio-active materials, hazardous wastes, hazardous or toxic substances or
related materials, asbestos or any material containing asbestos, or any other
substance or material, as defined by any present or future Law, including,
without limitation, the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended, the Hazardous Materials Transportation Act,
as amended, the Resources Conservation and Recovery Act, as amended, Superfund
Amendment and Reauthorization Act of 1986 and in the regulations adopted and
publications promulgated pursuant to each of the foregoing. In the event of a
breach of the provisions of this Article 63, Landlord, in addition to all of its
rights and remedies under this lease and pursuant to Law, may require Tenant to
remove any such Hazardous Materials from the demised premises or the Building in
the manner prescribed for such removal by all requirements of Law. The
provisions of this Article 63 shall survive the expiration or sooner termination
of this lease.

64. Interconnections

      (A) Subject to Landlord's prior approval, which will not be unreasonably
withheld, Tenant shall have the right to install and run both vertical and
horizontal communication interconnections, via conduit, wave guide and ceramic
duct, provided that such installation is performed in accordance with all
applicable Laws and the relevant provisions of this lease including, without
limitation, Articles 3, 6 and 54 and in accordance with plans and specifications
previously approved by Landlord. Prior to any cable pulls being installed
through any conduits running through other tenant spaces, Tenant shall present a
copy of an agreement between Tenant and such other tenant (reasonably
satisfactory to Landlord) whereby such other tenant consents to Tenant making
the proposed connection or other installation.

      (B) All interconnections shall conform to the following specifications:

            (1)   The conduit shall be supported a minimum of every 10 linear
                  feet.

            (2)   The conduit shall be tagged each 15 linear feet, with letters
                  a minimum of 2-1/2 inches in height, as required by Landlord
                  in its approval letter.

            (3)   All penetrations of fire-rated partitions or slabs shall be
                  fire-stopped with a UL approved material of equal or greater
                  rating.

            (4)   Tenant shall inform the building manager on completion of the
                  installation for final inspection and approval.

            (5)   Tenant's sub-contractor must coordinate all work with the
                  building manager and other tenants affected by the work.

            (6)   All conduit shall be rigid conduit or elastic metal tubing.
                  Tenant acknowledges that the use of any other type of conduit
                  is inherently risky, particularly in an environment, like the
                  Building, that has very numerous conduit runs and that will
                  have many more. If, however, Tenant requests, and Landlord
                  permits, plastic flexible conduit (which will be permitted, if
                  at all, only for fiber cable), then Tenant acknowledges that
                  such installation will be at Tenant's sole risk, and Tenant
                  hereby agrees to indemnify Landlord and its partners, and the
                  respective directors, officers, agents and employees of
                  Landlord and its partners


                                      -19-
<PAGE>   26

                  (collectively, the "Landlord Parties"), and to hold the
                  Landlord Parties harmless, against and from all loss, damage,
                  cost, liability or expense (including, without limitation,
                  reasonable attorneys' fees and disbursements) suffered or
                  incurred by Landlord by reason of any claim arising from the
                  installation and/or use of any such conduit or any damage
                  resulting to any cable installed therein, whether or not
                  arising in whole or in part from the negligence of any
                  Landlord Party.

65. Landlord's Access

      Supplementing Article 13, upon reasonable prior notice to Tenant (which
need not be in writing), except in an emergency when no notice shall be
required, Landlord and other tenants, licensees and occupants of the Building
shall have access to the Building shafts and conduits located within the demised
premises.

66. Landlord's Option to Relocate Tenant

      At any time prior to the execution and delivery of this lease, Landlord
shall have the right to relocate Tenant to other space located in the Building
(the "Substitution Space") of substantially comparable size and condition as the
demised premises, in which event this lease shall be modified by (i) deleting
all reference to the demised premises and the insertion of the Substitution
Space in place thereof, (ii) adjusting the Fixed Rent to an amount equal to the
rent per rentable square foot payable by Tenant under this lease multiplied by
the number of rentable square feet in the Substitution Space, and (iii) a
modification of the definition of Tenant's Proportionate Share (as currently
defined in Article 37 hereof) to accurately represent the percentage by which
the rentable area of the Substitution Space bears to the total rentable area of
the Building, and (iv) a modification of the definition of the Multiplication
Factor to represent accurately the number of rentable square feet in the
Substitution Space. In all other respects, the terms and conditions contained in
this lease (including escalations and base years) shall remain unmodified.

67. Miscellaneous

      (A) Supplementing Article 13, Landlord agrees to consult with Tenant in
good faith in connection with the location of any water pipes that Landlord may
wish to install through the premises so as to minimize the potential for any
damage to Tenant's equipment.

      (B) Landlord agrees, except in the event of an emergency, to give Tenant
notice (which notice need not be in writing and may be given to a responsible
person occupying the premises) at least 72 hours in advance of any planned
electric outage controlled by Landlord.

      (C) Landlord will remove or cause to be removed the equipment presently
located on the set-back area adjacent to the demised premises promptly after the
owner thereof abandons its use of the same.

68. Set-Back Space

      (A) Tenant shall have the exclusive right to use two (2) portions of the
set-back space on the l9th floor of the Building for the sole purpose of
locating a generator, fuel tank and/or HVAC equipment thereon, such portion
being an agreed 1,786 usable square feet located as shown hatched on Exhibit C
(the "Set-Back Space"). Tenant shall pay Fixed Rent of $17,860 per annum for the
Set-Back Space from and after the Rent Commencement Date. To the extent
applicable, the Set-Back Space shall be deemed to be part of the demised
premises and all of the provisions of this lease, including, without limitation,
Article 8 hereof, shall be


                                      -20-
<PAGE>   27

applicable thereto. Tenant hereby agrees to repair any damage to the Set-Back
Space and to indemnify and save harmless Landlord from and against all loss,
damage, liability, cost and expense of any nature (including, without
limitation, reasonable attorneys' fees and expenses) by reason of accidents,
damage, injury or loss to any and all persons and property, or either,
whomsoever or whatsoever resulting from or arising in connection with Tenant's
use of the Set-Back Space.

      (B) Landlord makes no representations concerning the condition of the
Set-Back Space or the equipment, if any, located thereon. Tenant agrees to
accept the Set-Back Space in its "as is" condition on the date hereof. Landlord
shall not be required to perform any work to prepare the Set-Back Space for
Tenant's occupancy.


                                      -21-
<PAGE>   28

                                    EXHIBIT A

                                [GRAPHIC OMITTED]

                                   [FLOORPLAN]
<PAGE>   29

                                    EXHIBIT B

[Name and Address
of Landlord]

            Re: Irrevocable Clean Letter of Credit

Gentlemen:

      By order of our client, ____________________________, we hereby open our
clean irrevocable Letter of Credit No. ______ in your favor for an amount not to
exceed in the aggregate $__________ US Dollars effective immediately.

      Funds under this credit are available to you against your sight draft
drawn on us mentioning thereon our Credit No. _________________.

      This Letter of Credit shall expire one year from the date hereof;
provided, however, that it is a condition of this Letter of Credit that it shall
be deemed automatically extended, from time to time, without amendment, for one
year from the expiry date hereof and from each and every future expiry date,
unless at least sixty (60) days prior to any expiry date we shall notify you by
registered mail that we elect not to consider this Letter of Credit renewed for
any such additional period.

      This Letter of Credit is transferable and may be transferred one or more
times. However, no transfer shall be effective unless advice of such transfer is
received by us in the form attached signed by you.

      We hereby agree with you that all drafts drawn or negotiated in compliance
with the terms of this Letter of Credit will be duly and promptly honored upon
presentment and delivery of your draft to our office at ___________________ if
negotiated on or prior to the expiry date as the same may from time to time be
extended.

      Except as otherwise specified herein, this Letter of Credit is subject to
the Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500.

                                    Very truly yours,

                                    (Name of Bank)

                                    By:
                                       ---------------------------------

<PAGE>   30

                                   EXHIBIT B-1

               Re: Credit                            Issued by

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

Gentlemen:

      For value received, the undersigned beneficiary irrevocably transfers to:


--------------------------------------------------------------------------------
                          (Name of Second Beneficiary)


--------------------------------------------------------------------------------
                                    (Address)

all rights of the undersigned beneficiary to draw under the above Letter of
Credit in its entirety.

      By this transfer, all rights of the undersigned beneficiary in such letter
of Credit are transferred to the second beneficiary and the second beneficiary
shall have the sole rights as beneficiary thereof, including sole rights
relating to any amendments whether increases or extensions or other amendments
and whether now existing or hereafter made. All amendments are to be advised
direct to the second beneficiary without necessity of any consent of or notice
of the undersigned beneficiary.

      The advice of such Letter of Credit is returned herewith, and we ask you
to endorse the assignment on the reverse thereof and forward it directly to the
second beneficiary with your customary notice of transfer.

      Enclosed is remittance of $100.00 in payment of your transfer commission
and in addition thereto we agree to pay you on demand any expenses that may be
incurred by you in connection with this transfer.

                                                 Yours very truly,

SIGNATURE AUTHENTICATED

       (Bank)                                   Signature of Beneficiary

(Authorized Signature)

<PAGE>   31

                                    EXHIBIT C

                                [GRAPHIC OMITTED]

                                   [FLOORPLAN]