<PAGE>   1
         AGREEMENT OF LEASE, made as of the ____ day of June, 1998, between
Landlord and Tenant.


                              W I T N E S S E T H :

         The parties hereto, for themselves, their legal representatives,
successors and assigns, hereby covenant as follows.


                                   DEFINITIONS

         "Affiliate" shall mean a Person which shall (1) Control, (2) be under
the Control of, or (3) be under common Control with the Person in question.

         "Alteration Fee" shall have the meaning set forth in Section 3.2
hereof.

         "Alterations" shall mean alterations, installations, improvements,
additions or other physical changes (other than decorations) in or about the
Premises.

         "Applicable Rate" shall mean the lesser of (x) two (2) percentage
points above the then current Base Rate, and (y) the maximum rate permitted by
applicable law.

         "Assessed Valuation" shall have the meaning set forth in Section 27.1
hereof.

         "Assignment Proceeds" shall have the meaning set forth in Section 12.8
hereof.

         "Assignment Statement" shall have the meaning set forth in Section 12.8
hereof.

         "Bankruptcy Code" shall mean 11 U.S.C. Section 101 et seq., or any
statute of similar nature and purpose.

         "Base Operating Expenses" shall have the meaning set forth in Section
27.1 hereof.

         "Base Operating Year" shall have the meaning set forth in Section 27.1
hereof.

         "Base Rate" shall mean the rate of interest publicly announced from
time to time by The Chase Manhattan Bank, N.A., or its successor, as its "prime
lending rate" (or such other term as may be used by The Chase Manhattan Bank,
N.A., from time to time, for the rate presently referred to as its "prime
lending rate"), which rate was 8.50% on May 12, 1998.

         "Base Taxes" shall have the meaning set forth in Section 27.1 hereof.

         "Broker" shall have the meaning set forth in Article 34 hereof.
<PAGE>   2
         "Building" shall mean all the buildings, equipment and other
improvements and appurtenances of every kind and description now located or
hereafter erected, constructed or placed upon the land and any and all
alterations, and replacements thereof, additions thereto and substitutions
therefor, known by the address of 570 Lexington Avenue, New York, New York.

         "Building Systems" shall mean the mechanical, gas, electrical,
sanitary, heating, air conditioning, ventilating, elevator, plumbing,
life-safety and other service systems of the Building.

         "Business Days" shall mean all days, excluding Saturdays, Sundays and
all days observed by either the State of New York or the Federal Government and
by the labor unions servicing the Building as legal holidays.

         "Commencement Date" shall mean the date on which items 1, 2 and 4 of
Landlord's Work shall be Substantially Completed; provided, however, if Landlord
shall be delayed in Substantially Completing Landlord's Work by reason of a
delay due to Tenant, Tenant's agents, licensees, invitees, contractors or
employees, the Commencement Date shall mean the date on which Landlord's Work
would have been Substantially Completed but for such delay.

         "Consumer Price Index" shall mean the Consumer Price Index for All
Urban Consumers published by the Bureau of Labor Statistics of the United States
Department of Labor, New York, N.Y. - Northeastern N.J. Area, All Items (1982-84
= 100), or any successor index thereto, appropriately adjusted. In the event
that the Consumer Price Index is converted to a different standard reference
base or otherwise revised, the determination of adjustments provided for herein
shall be made with the use of such conversion factor, formula or table for
converting the Consumer Price Index as may be published by the Bureau of Labor
Statistics or, if said Bureau shall not publish the same, then with the use of
such conversion factor, formula or table as may be published by Prentice-Hall,
Inc., or any other nationally recognized publisher of similar statistical
information. If the Consumer Price Index ceases to be published, and there is no
successor thereto, such other index as Landlord and Tenant shall agree upon in
writing shall be substituted for the Consumer Price Index. If Landlord and
Tenant are unable to agree as to such substituted index, such matter shall be
submitted to the American Arbitration Association or any successor organization
for determination in accordance with the regulations and procedures thereof then
obtaining for commercial arbitration.

         "Control" or "control" shall mean ownership of more than fifty percent
(50%) of the outstanding voting stock of a corporation or other majority equity
and control interest if not a corporation and the possession of power to direct
or cause the direction of the management and policy of such corporation or other
entity, whether through the ownership of voting securities, by statute or
according to the provisions of a contract.
<PAGE>   3
         "Deficiency" shall have the meaning set forth in Section 17.2 hereof.

         "Electric Rate" shall have the meaning set forth in Section 13.2
hereof.

         "Electricity Additional Rent" shall have the meaning set forth in
Section 13.2 hereof.

         "Electricity Fee" shall have the meaning set forth in Section 13.3
hereof.

         "Electricity Inclusion Charge" shall have the meaning set forth in
Section 13.3 hereof.

         "Electricity Statement" shall have the meaning set forth in Section
13.3 hereof.

         "Escalation Rent" shall mean, individually or collectively, the Tax
Payment and the Operating Payment.

         "Event of Default" shall have the meaning set forth in Section 16.1
hereof.

         "Expiration Date" shall mean the Fixed Expiration Date or such earlier
date on which the Term shall sooner end pursuant to any of the terms, conditions
or covenants of this Lease or pursuant to law.

         "1st Rental Period" shall have the meaning set forth in Section 1.1
hereof.

         "Fixed Expiration Date" shall have the meaning set forth in Section 1.1
hereof.

         "Fixed Rent" shall have the meaning set forth in Section 1.1 hereof.

         "Governmental Authority (Authorities)" shall mean the United States of
America, the State of New York, the City of New York, any political subdivision
thereof and any agency, department, commission, board, bureau or instrumentality
of any of the foregoing, or any quasi-governmental authority, now existing or
hereafter created, having jurisdiction over the Real Property or any portion
thereof.

         "HVAC" shall mean heat, ventilation and air conditioning.

         "HVAC Systems" shall mean the Building Systems providing HVAC.

         "Indemnitees" shall mean Landlord, the partners comprising Landlord and
its and their partners, shareholders, officers, directors, employees, agents and
contractors, Lessors and Mortgagees.

         "Initial Alterations" shall mean the Alterations to be made by Tenant
to initially prepare the Premises for Tenant's occupancy.

         "Landlord", on the date as of which this Lease is made, shall mean 570
<PAGE>   4
Lexington Company, L.P., a New York limited partnership having an office c/o
Mendik Management Company Inc., at 330 Madison Avenue, New York, New York, but
thereafter, "Landlord" shall mean only the fee owner of the Real Property or if
there shall exist a Superior Lease, the tenant thereunder.

         "Landlord's Work" shall have the meaning set forth in Section 19.1
hereof.

         "Lessor(s)" shall mean a lessor under a Superior Lease.

         "Letter of Credit" shall have the meaning set forth in Article 31
hereof.

         "Long Lead Work" shall mean any item which is not a stock item and must
be specially manufactured, fabricated or installed or is of such an unusual,
delicate or fragile nature that there is a substantial risk that

                  (i) there will be a delay in its manufacture, fabrication,
         delivery or installation, or

                  (ii) after delivery, such item will need to be reshipped or
         redelivered or repaired

so that in Landlord's reasonable judgment the item in question cannot be
completed when the standard items are completed even though the item of Long
Lead Work in question is (1) ordered together with the other items required and
(2) installed or performed (after the manufacture or fabrication thereof) in the
order and sequence that such Long Lead Work and other items are normally
installed or performed in accordance with good construction practice. In
addition, "Long Lead Work" shall include any standard item which in accordance
with good construction practice should be completed after the completion of any
item of work in the nature of the items described in the immediately preceding
sentence.

         "Mortgage(s)" shall mean any trust indenture or mortgage which may now
or hereafter affect the Real Property, the Building or any Superior Lease and
the leasehold interest created thereby, and all renewals, extensions,
supplements, amendments, modifications, consolidations and replacements thereof
or thereto, substitutions therefor, and advances made thereunder.

         "Mortgagee(s)" shall mean any trustee, mortgagee or holder of a
Mortgage.

         "Operating Expenses" shall have the meaning set forth in Section 27.1
hereof.

         "Operating Payment" shall have the meaning set forth in Section 27.4
hereof.

         "Operating Statement" shall have the meaning set forth in Section 27.1
hereof.

         "Operating Year" shall have the meaning set forth in Section 27.1
hereof.
<PAGE>   5
         "Operation of the Property" shall mean the maintenance, repair and
management of the Real Property and the curbs, sidewalks and areas adjacent
thereto.

         "Overtime Periods" shall have the meaning set forth in Section 28.3
hereof.

         "Parties" shall have the meaning set forth in Section 37.2 hereof.

         "Partner" or "partner" shall mean any partner of Tenant, any employee
of a professional corporation which is a partner comprising Tenant, and any
shareholder of Tenant if Tenant shall become a professional corporation.

         "Partnership Tenant" shall have the meaning set forth in Article 29
hereof.

         "Person(s) or person(s)" shall mean any natural person or persons, a
partnership, a corporation and any other form of business or legal association
or entity.

         "Premises" shall mean, subject to the provisions of Section 14.5
hereof, the portion of the third (3rd) floor of the Building as set forth on the
floor plans attached hereto and made a part hereof as Exhibit "A".

         "Prevailing Rate" shall have the meaning set forth in Section 12.6
hereof.

         "Real Property" shall mean the Building, together with the plot of land
upon which it stands.

         "Recapture Space" shall have the meaning set forth in Section 12.6
hereof.

         "Recapture Sublease" shall have the meaning set forth in Section 12.6
hereof.

         "Related Entity" shall have the meaning set forth in Section 12.4
hereof.

         "Rental" shall mean and be deemed to include Fixed Rent, Escalation
Rent, all additional rent and any other sums payable by Tenant hereunder.

         "Rent Commencement Date" shall mean November 1, 1998;

         "Rent Per Square Foot" shall have the meaning set forth in Section 12.7
hereof.

         "Requirements" shall mean all present and future laws, rules, orders,
ordinances, regulations, statutes, requirements, codes and executive orders,
extraordinary as well as ordinary, of all Governmental Authorities now existing
or hereafter created, and of any and all of their departments and bureaus, and
of any applicable fire rating bureau, or other body exercising similar
functions, affecting the Real Property or any portion thereof, or any street,
avenue or sidewalk comprising a part of or in front thereof or any vault in or
under the same, or requiring removal of any encroachment, or affecting the
maintenance, use or occupation of the Real Property or any portion thereof.
<PAGE>   6
         "Rules and Regulations" shall mean the rules and regulations annexed
hereto and made a part hereof as Schedule A, and such other and further rules
and regulations as Landlord or Landlord's agents may from time to time adopt on
such notice to be given as Landlord may elect, subject to Tenant's right to
dispute the reasonableness thereof as provided in Article 8 hereof.

         "Space Factor" shall mean Eight Thousand Eight Hundred Ninety (8,890)
as the same may be increased or decreased pursuant to the terms hereof.

         "Specialty Alterations" shall mean Alterations consisting of kitchens,
executive bathrooms, raised computer floors, computer installations, vaults,
libraries, internal staircases, dumbwaiters, pneumatic tubes, vertical and
horizontal transportation systems, and other Alterations of a similar character.

         "Sublease Expenses" shall have the meaning set forth in Section 12.7
hereof.

         "Sublease Profit" shall have the meaning set forth in Section 12.7
hereof.

         "Sublease Rent" shall have the meaning set forth in Section 12.7
hereof.

         "Sublease Rent Per Square Foot" shall have the meaning set forth in
Section 12.7 hereof.

         "Substantial Completion" or "Substantially Completed" or words of
similar import shall mean that Landlord's Work has been substantially completed,
it being agreed that Landlord's Work shall be deemed substantially complete
notwithstanding the fact that (a) minor or insubstantial details of construction
or demolition and/or mechanical adjustment and/or decorative items remain to be
performed, and (b) any Long Lead Work remains to be performed.

         "Superior Lease(s)" shall mean all ground or underlying leases of the
Real Property or the Building and all renewals, extensions, supplements,
amendments and modifications thereof.

         "Taxes" shall have the meaning set forth in Section 27.1 hereof.

         "Tax Payment" shall have the meaning set forth in Section 27.2 hereof.

         "Tax Statement" shall have the meaning set forth in Section 27.1
hereof.

         "Tax Year" shall have the meaning set forth in Section 27.1 hereof.

         "Telecommunications License Agreement" shall mean that certain
Telecommunications License Agreement, dated March 1, 1997, between Fibernet
Equal Access, LLC, as Licensee and 570 Lexington Company, L.P./Mendik 
<PAGE>   7
Management Company Inc., as Licensor, as the same may hereafter amended.

         "Tenant" on the date as of which this Lease is made, shall mean
Fibernet Telecom Group, Inc. a Nevada corporation, having an office at 121 Erie
Canal Drive, Suite A, Rochester, New York 14626, but thereafter "Tenant" shall
mean only the tenant under this Lease at the time in question; provided,
however, that the originally named tenant and any assignee of this Lease shall
not be released from liability hereunder in the event of any assignment of this
Lease.

         "Tenant Fund" shall have the meaning set forth in Section 3.5 hereof.

         "Tenant Statement" shall have the meaning set forth in Section 12.6
hereof.

         "Tenant's Engineer" shall have the meaning set forth in Section 13.2
hereof.

         "Tenant's Property" shall mean Tenant's movable fixtures and movable
partitions, telephone and other equipment, furniture, furnishings, decorations,
trade fixtures and other items of personal property.

         "Tenant's Share" shall mean One and Nine Thousand Seven Hundred
Fifty-Five ten thousandths percent (1.9755%) as the same may be increased or
decreased pursuant to the terms hereof.

         "Tentative Monthly Escalation Charge" shall have the meaning set forth
in Section 27.4 hereof.

         "Term" shall mean a term which shall commence on the Commencement Date
and shall expire on the Expiration Date.

         "Three Month Average" shall have the meaning set forth in Section 13.3
hereof.

         "Unavoidable Delays" shall have the meaning set forth in Article 25
hereof.
<PAGE>   8
                                    ARTICLE 1
                          DEMISE, PREMISES, TERM, RENT


         Landlord hereby leases to Tenant and Tenant hereby hires from Landlord
the Premises for the Term to commence on the date hereof (the "Commencement
Date") and to end on the date (the "Fixed Expiration Date") that shall be the
last day of the month in which the day immediately preceding the tenth (10th)
anniversary of the Rent Commencement Date shall occur, at an annual rent (the
"Fixed Rent") of:

                  (1) Two Hundred Seventy-Five Thousand Five Hundred Ninety
Dollars ($275,590) for the period (the "1st Rental Period") commencing on the
Rent Commencement Date and ending on the day immediately preceding the fifth
(5th) anniversary of the Rent Commencement Date, or if the Rent Commencement
Date shall occur other than on the first day of the month, ending on the last
day of the month in which the fifth (5th) anniversary of the Rent Commencement
Date occurs payable in equal monthly installments in advance of Twenty-Two
Thousand Nine Hundred Sixty-Five and 83/100 Dollars ($22,965.83);

                  (2) Three Hundred Eleven Thousand One Hundred Fifty Dollars
($311,150) for the period commencing on the day next succeeding the end of the
1st Rental Period and ending on the Fixed Expiration Date payable in equal
monthly installments in advance of Twenty-Five Thousand Nine Hundred Twenty-Nine
and 17/100 Dollars ($25,929.17);

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 advance, on the first (1st) day of each calendar month during the
Term commencing on the Rent Commencement Date, at the office of Landlord or such
other place as Landlord may designate, without any set-off, offset, abatement or
deduction whatsoever, except that Tenant shall pay the first full monthly
installment on the execution hereof. At the request of Landlord, Fixed Rent
shall be payable when due by wire transfer of funds to an account designated
from time to time by Landlord.


                                    ARTICLE 2
                                USE AND OCCUPANCY

         Section 2.1. Tenant shall use and occupy the Premises as general and
executive offices, and, to the extent permitted by applicable Requirements and
the certificate of occupancy for the Building, incidental and ancillary to such
use as general and executive offices, for a so-called "node room" with
fiberoptics, uses incidental thereto and for no other purpose. Tenant expressly
acknowledges and agrees that Landlord has made no representation or assurances
in any manner whatsoever that any such incidental and ancillary use is permitted
by applicable Requirements.
<PAGE>   9
         Section 2.2. (A) Tenant shall not use the Premises or any part thereof,
or permit the Premises or any part thereof to be used, (1) for the business of
photographic, multilith or multigraph reproductions or offset printing, except
in connection with, either directly or indirectly, Tenant's own business and/or
activities, (2) for a banking, trust company, depository, guarantee or safe
deposit business, (3) as a savings bank, a savings and loan association, or as a
loan company, (4) for the sale of travelers checks, money orders, drafts,
foreign exchange or letters of credit or for the receipt of money for
transmission, (5) as a stockbroker's or dealer's office or for the underwriting
or sale of securities, (6) by the United States government, the City or State of
New York, any foreign government, the United Nations or any agency or department
of any of the foregoing or any other Person having sovereign or diplomatic
immunity, (7) as a restaurant or bar or for the sale of confectionery, soda or
other beverages, sandwiches, ice cream or baked goods or for the preparation,
dispensing or consumption of food or beverages in any manner whatsoever, except
for consumption by Tenant's officers, employees and business guests, (8) as an
employment agency, executive search firm or similar enterprise, labor union,
school, or vocational training center (except for the training of employees of
Tenant intended to be employed at the Premises), or (9) as a barber shop or
beauty salon.

                  (B) In connection with, and incidental to, Tenant's use of the
Premises for general and executive offices as provided in this Article 2,
Tenant, at its sole cost and expense and upon compliance with all applicable
Requirements, may install a "dwyer" or similar unit in the Premises (which
includes a microwave oven) for the purpose of warming food for the officers,
employees and business guests of Tenant (but not for use as a public
restaurant), provided that Tenant shall obtain all permits required (if any) by
any Governmental Authorities for the operation thereof and such installation
shall comply with the provisions of this Lease, including, without limitation,
Article 3 hereof. Tenant may also install, at its sole cost and expense and
subject to and in compliance with the provisions of Articles 3 and 4 hereof,
vending machines for the exclusive use of the officers, employees and business
guests of Tenant, each of which vending machines (if it dispenses any beverages
or other liquids or refrigerates) shall have a waterproof pan located
thereunder, connected to a drain.


                                    ARTICLE 3
                                   ALTERATIONS

         Section 3.1. (A) Except as provided in Section 3.4 hereof, Tenant shall
not make any Alterations without Landlord's prior consent. Landlord shall not
unreasonably withhold or delay its consent to any proposed nonstructural
Alterations, provided that such Alterations (i) are not visible from the outside
of the Building, (ii) do not affect any part of the Building other than the
Premises or require any alterations, installations, improvements, additions or
other physical changes to be performed in or made to any portion of the Building
or the Real Property other than the Premises, (iii) do not affect any service
required to be furnished by Landlord to Tenant or to any other tenant or
<PAGE>   10
occupant of the Building, (iv) do not affect the proper functioning of any
Building System, (v) do not reduce the value or utility of the Building, and
(vi) do not affect the certificate of occupancy for the Building or the
Premises. Landlord shall not be deemed to be unreasonable with respect to
withholding its consent to any proposed nonstructural Alteration which meets the
criteria set forth in this Section 3.1(A) if the Lessor or Mortgagee, as the
case may be, shall withhold its consent.

                  (B) (1) Prior to making any Alterations, including, without
limitation, the Initial Alterations, Tenant shall (i) 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 (except with respect to any nonstructural Alteration referred to
in Section 3.4 hereof for which Landlord's approval is not required), which, in
the case of nonstructural Alterations which meet the criteria set forth in
Section 3.1(A) above, shall not be unreasonably withheld or delayed, (ii) at
Tenant's expense, obtain all permits, approvals and certificates required by any
Governmental Authorities, it being agreed that all filings with Governmental
Authorities to obtain such permits, approvals and certificates shall be made, at
Tenant's expense, by a Person designated by Landlord (provided the rates of such
Person are commercially competitive), and (iii) furnish to Landlord duplicate
original policies or certificates thereof of worker's compensation (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 approve, naming Landlord
and its agents, any Lessor and any Mortgagee, 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
Authority and shall furnish Landlord with copies thereof, together with the
"as-built" plans and specifications for such Alterations, it being agreed that
all filings with Governmental Authorities to obtain such permits, approvals and
certificates shall be made, at Tenant's expense, by a Person designated by
Landlord (provided the rates of such Person are commercially competitive). All
Alterations shall be made and performed substantially in accordance with the
plans and specifications therefor as approved by Landlord, all Requirements, the
Rules and Regulations, and all rules and regulations relating to Alterations
promulgated by Landlord in its reasonable judgment. All materials and equipment
to be incorporated in the Premises as a result of any Alterations or a part
thereof shall be first quality and no such materials or equipment (other than
Tenant's Property) shall be subject to any lien, encumbrance, chattel mortgage
or title retention or security agreement. In addition, no Alteration shall be
undertaken prior to Tenant's delivering to Landlord either (i) a performance
bond and labor and materials payment bond (issued by a surety company and in
form reasonably satisfactory to Landlord), each in an amount equal to 120% of
the cost of such Alteration (as reasonably estimated by Landlord's architect,
engineer, or contractor), or (ii) such other security as shall be reasonably
satisfactory to Landlord or required by any Mortgagee or Lessor. If, as a result
of any Alterations performed by Tenant, including, without limitation, the
Initial Alterations, any alterations, installations, improvements, 
<PAGE>   11
additions or other physical changes are required to be performed or made to any
portion of the Building or the Real Property other than the Premises in order to
comply with any Requirement(s), which alterations, installations, improvements,
additions or other physical changes would not otherwise have had to be performed
or made pursuant to applicable Requirement(s) at such time, Landlord, at
Tenant's sole cost and expense, may perform or make such alterations,
installations, improvements, additions or other physical changes and take such
actions as Landlord shall deem reasonably necessary to comply with such
Requirement and Tenant, within five (5) days after demand therefor by Landlord,
shall provide Landlord with such security as Landlord shall reasonably require,
in an amount equal to 120% of the cost of such alterations, installations,
improvements, additions or other physical changes, as reasonably estimated by
Landlord's architect, engineer or contractor. All Alteration(s) requiring the
consent of Landlord shall be performed only under the supervision of an
independent licensed architect approved by Landlord, which approval shall not be
unreasonably withheld. Landlord hereby approves The Phillips Group, P.C. as
Tenant's architect for the performance of the Initial Alterations.

                  (2) Provided Tenant's final plans and specifications for any
Alteration submitted to Landlord are of a scope and scale reasonably susceptible
of review, any disapproval given by Landlord with respect to such plans and
specifications shall be accompanied by a statement of the reasons for such
disapproval. Landlord reserves the right to disapprove any plans and
specifications in part, to reserve approval of items shown thereon pending its
review and approval of other plans and specifications, and to condition its
approval upon Tenant making revisions to the plans and specifications or
supplying additional information. Any review or approval by Landlord of any
plans and/or specifications or any preparation or design of any plans by
Landlord's architect or engineer (or any architect or engineer designated by
Landlord) with respect to any Alteration is solely for Landlord's benefit, and
without any representation or warranty whatsoever to Tenant or any other Person
with respect to the compliance thereof with any Requirements, the adequacy,
correctness or efficiency thereof or otherwise.

         (C) Tenant shall be permitted to perform Alterations during the hours
of 8:00 A.M. to 6:00 P.M. on Business Days, provided that such work shall not
interfere with or interrupt the operation and maintenance of the Building or
unreasonably interfere with or interrupt the use and occupancy of the Building
by other tenants in the Building. Otherwise, Alterations shall be performed at
such times and in such manner as Landlord may from time to time reasonably
designate. All Tenant's Property installed by Tenant and all Alterations in and
to the Premises which may be made by Tenant at its own cost and expense prior to
and during the Term, shall remain the property of Tenant. Upon the Expiration
Date, Tenant shall remove Tenant's Property from the Premises and, at Tenant's
option, Tenant also may remove, at Tenant's cost and expense, all Alterations
made by Tenant to the Premises, provided, however, in any case, that Tenant
shall repair and restore in a good and workerlike manner to good condition any
damage to the Premises or the Building caused by such removal. Notwithstanding
the foregoing, however, Landlord, upon notice given at least thirty (30) days
prior to the Fixed Expiration Date or upon such shorter notice as is reasonable
under the circumstances upon the earlier expiration of the Term, may require
Tenant to remove any Specialty Alterations, and to repair and restore in a good
and workerlike manner to good condition any damage to the Premises or the
Building caused by such removal. It is expressly understood and agreed that
Tenant shall remove upon the Expiration Date the "node" room and related
equipment therein that Tenant may elect to install and repair and restore in a
good and workerlike manner to good condition any damage to the Premises or the
Building caused by such removal.

         (D) (1) All Alterations shall be performed, at Tenant's sole cost and
expense, by Landlord's contractor(s) or by contractors, subcontractors or
mechanics approved by Landlord (which approval shall not be unreasonably
withheld). Prior to making an Alteration, at Tenant's request, Landlord shall
furnish Tenant with a list of contractors who may perform Alterations to the
Premises on behalf of Tenant (it being agreed that the list of contractors
approved by Landlord with respect to the performance of the Initial Alterations
is attached hereto and made a part hereof as Exhibit "C"). If Tenant engages any
contractor set forth on the list, Tenant shall not be required to obtain
Landlord's consent for such contractor unless, prior to the earlier of (a)
entering into a contract with such contractor, and (b) the commencement of work
by such contractor, Landlord shall notify Tenant that such contractor has been
removed from the 
<PAGE>   12
list.

                           (2) Notwithstanding the foregoing, with respect to
any Alteration affecting any Building System, (i) Tenant shall select a
contractor from a list of approved contractors furnished by Landlord to Tenant
(containing at least three (3) contractors) and (ii) the Alteration shall, at
Tenant's cost and expense, be designed by Tenant's engineer for the relevant
Building System approved by Landlord.

                  (E) Any mechanic's lien filed against the Premises or the Real
Property for work claimed to have been done for, or materials claimed to have
been furnished to, Tenant shall be discharged by Tenant within thirty (30) days
after Tenant shall have received notice thereof (or such shorter period if
required by the terms of any Superior Lease or Mortgage), at Tenant's expense,
by payment or filing the bond required by law. 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 Premises, whether in
connection with any Alteration or otherwise, if such employment would 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, or of any adjacent property owned by Landlord. 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.

                  (F) TENANT EXPRESSLY ACKNOWLEDGES THAT THE REAL PROPERTY HAS
BEEN DESIGNATED A LANDMARK SITE, THAT THE PREMISES ARE SUBJECT TO THE
JURISDICTION OF THE LANDMARK PRESERVATION COMMISSION AND, IN ACCORDANCE WITH
SECTION 25-322b OF THE CHAPTER 3 (LANDMARKS PRESERVATION AND HISTORIC DISTRICTS)
OF THE ADMINISTRATIVE CODE OF NEW YORK, AS AMENDED (THE "CHAPTER"), TENANT
FURTHER EXPRESSLY ACKNOWLEDGES AND AGREES TO OBTAIN A PERMIT FROM THE COMMISSION
(AS SUCH TERM IS DEFINED IN THE CHAPTER) IN ACCORDANCE WITH SECTIONS 25-305,
25-306, 25-309 AND 25-310 OF THE CHAPTER AND THE RULES SET FORTH IN TITLE 63 OF
THE RULES OF THE CITY OF NEW YORK, BEFORE COMMENCING ANY DEMOLITION,
CONSTRUCTION, RECONSTRUCTION, ALTERATIONS OR MINOR WORK ON THE BUILDING OR THE
REAL PROPERTY AS DESCRIBED IN SUCH SECTIONS AND RULES. TENANT HEREBY
ACKNOWLEDGES AND AGREES THAT SUCH DEMOLITION, CONSTRUCTION, RECONSTRUCTION,
ALTERATIONS OR MINOR WORK INCLUDES, BUT IS NOT LIMITED TO (i) WORK TO THE
EXTERIOR OF THE PREMISES INVOLVING WINDOWS, SIGNS, AWNINGS, FLAGPOLES, BANNERS
AND STOREFRONT ALTERATIONS AND (ii) INTERIOR WORK TO THE PREMISES THAT (a)
REQUIRES A PERMIT FROM THE DEPARTMENT OF BUILDINGS, OR (b) 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. NOTWITHSTANDING ANYTHING CONTAINED IN
THIS LEASE TO THE CONTRARY, (a) PRIOR TO MAKING ANY ALTERATIONS, INCLUDING,
WITHOUT LIMITATION, THE INITIAL ALTERATIONS, TENANT SHALL (i) AT ITS SOLE COST
AND EXPENSE, OBTAIN OR CAUSE TO BE OBTAINED ALL PERMITS, CONSENTS AND APPROVALS
FROM THE COMMISSION, AS REQUIRED PURSUANT TO THE CHAPTER, IN CONNECTION WITH THE
MAKING OF SUCH ALTERATIONS, AND (ii) FURNISH
<PAGE>   13
LANDLORD WITH COPIES THEREOF AND (b) TENANT HEREBY INDEMNIFIES AND SAVES
HARMLESS LANDLORD AND LANDLORD'S AGENTS AGAINST AND FROM ANY AND ALL CLAIMS,
PENALTIES, FINES, LOSS, COST, DAMAGE, LIABILITY OR EXPENSE (INCLUDING, WITHOUT
LIMITATION, ATTORNEYS' FEES AND DISBURSEMENTS) RESULTING FROM OR ARISING OUT OF
ANY FAILURE BY TENANT TO COMPLY WITH THE REQUIREMENTS OF THE CHAPTER.

                  (G) Tenant shall commence performance of the Initial
Alterations by not later than thirty (30) days after the Commencement Date,
shall thereafter diligently continuously prosecute the same to completion, and
shall substantially complete the Initial Alterations by not later than one
hundred twenty (120) days after the Commencement Date.

         Section 3.2. Tenant shall pay to Landlord or to Landlord's agent, as
additional rent, all actual, commercially reasonable, third party out-of pocket
costs and expenses incurred by Landlord or Landlord's agent in connection with
any Alterations, including, without limitation, the Initial Alterations (the
"Alteration Fee"). The Alteration Fee shall be paid by Tenant within ten (10)
Business Days after demand therefor. Tenant also shall pay any fee charged by
any Lessor or Mortgagee in reviewing the plans and specifications for such
Alterations or inspecting the progress of completion of the same.

         Section 3.3. Upon the request of Tenant, Landlord, at Tenant's cost and
expense, shall join in any applications for any permits, approvals or
certificates required to be obtained by Tenant in connection with any permitted
Alteration (provided that the provisions of the applicable Requirement shall
require that Landlord join in such application) and shall otherwise cooperate
with Tenant in connection therewith, provided that Landlord shall not be
obligated to incur any cost or expense, including, without limitation,
attorneys' fees and disbursements, or suffer any liability in connection
therewith.

         Section 3.4. Anything contained in this Lease to the contrary
notwithstanding, Landlord's consent shall not be required with respect to any
nonstructural Alteration, provided that (a) consent for such Alteration is not
required under the terms of any Superior Lease or Mortgage, and (b) such
Alteration (i) is not visible from the outside of the Building, (ii) does not
affect any part of the Building other than the Premises or require any
alterations, installations, improvements, additions or other physical changes to
be performed in or made to any portion of the Building or the Real Property
other than the Premises, (iii) does not affect any service required to be
furnished by Landlord to any other tenant or occupant of the Building, (iv) does
not affect the proper functioning of any Building System, (v) does not impair or
diminish the value or utility of the Building, (vi) does not affect or violate
the provisions of the certificate of occupancy for the Building or the Premises,
and (vii) the estimated cost of the labor and materials for which shall not
exceed Twenty-Five Thousand Dollars ($25,000), which amount shall be increased
on the third (3rd) anniversary of the Commencement Date and annually thereafter
by the annual percentage increase, if any, in the Consumer Price Index from that
in effect on the date immediately preceding the Commencement Date, either
individually or in the aggregate with other nonstructural Alterations
constructed 
<PAGE>   14
within any twelve (12) month period; provided, however, that at least ten (10)
days prior to making any such nonstructural Alteration, Tenant shall submit to
Landlord for informational purposes only the detailed plans and specifications
for such Alteration, as required by Section 3.1(B)(1)(i) hereof, and any such
Alteration shall otherwise be performed in compliance with the provisions of
this Article 3.

         Section 3.5. (A) Landlord shall contribute an amount not to exceed
Three Hundred Eleven Thousand One Hundred Fifty Dollars ($311,150) (the "Tenant
Fund") toward (i) the "hard" cost of the Initial Alterations, and (ii)
architect's and engineering fees, permit fees, expediter's fees and designers'
fees in connection with the Initial Alterations (such "soft costs" and related
costs referred to in this clause (ii) incurred by Tenant in connection with the
Initial Alterations being collectively referred to herein as "Related Costs").

                  (B) Landlord shall disburse a portion of the Tenant Fund to
Tenant from time to time, within thirty (30) Business Days after receipt of the
items set forth in Section 3.5(C) hereof, provided that on the date of a request
and on the date of disbursement from the Tenant Fund no Event of Default shall
have occurred and be continuing. Disbursements from the Tenant Fund shall not be
made more frequently than monthly, and shall be in an amount equal to the
aggregate amounts theretofore paid or payable (as certified by the Chief
Financial Officer of Tenant and Tenant's independent, licensed architect) to
Tenant's contractors, subcontractors and materialmen which have not been the
subject of a previous disbursement from the Tenant Fund multiplied by a
fraction, the numerator of which is Two Hundred Ninety Thousand Six Hundred
Seventy-Five Dollars ($290,675) and the denominator of which is the total cost
of the Initial Alterations as estimated by Tenant's independent licensed
architect and as approved by Landlord (which approval shall not be unreasonably
withheld), which fraction shall be subject to readjustment as provided by
Section 3.5(C) hereof (but in no event shall such fraction be greater than one
(1)); provided, however, that in no event shall disbursements of the Tenant Fund
on account of Related Costs exceed Thirty-One Thousand One Hundred Fifteen
Dollars ($31,115).

                  (C) Landlord's obligation to make disbursements from the
Tenant Fund shall be subject to Landlord's reasonable verification of the total
cost of the Initial Alterations as estimated by Tenant's independent licensed
architect and receipt of: (a) a request for such disbursement from Tenant signed
by the Chief Financial Officer of Tenant, together with the certification
required by Section 3.5(B) hereof, (b) copies of all receipts, invoices and
bills for the work completed and materials furnished in connection with the
Initial Alterations and incorporated in the Premises which are to be paid from
the requested disbursement or which have been paid by Tenant and for which
Tenant is seeking reimbursement, (c) copies of all contracts, work orders,
change orders and other materials relating to the work or materials which are
the subject of the requested disbursement or reimbursement, (d) if requested by
Landlord, waivers of lien from all contractors, subcontractors and materialmen
involved in the performance of the Initial Alterations relating to the portion
of the Initial Alterations theretofore performed and materials theretofore
provided and for which previous disbursements and/or the
<PAGE>   15
requested disbursement has been or is to be made (except to the extent such
waivers of lien were previously furnished to Landlord upon a prior request), (e)
a certificate of Tenant's independent licensed architect stating (i) that, in
his opinion, the portion of the Initial Alterations theretofore completed and
for which the disbursement is requested was performed in a good and workerlike
manner and substantially in accordance with the final detailed plans and
specifications for such Initial Alterations, as approved by Landlord, (ii) the
percentage of completion of the Initial Alterations as of the date of such
certificate, and (iii) the revised estimated total cost to complete the Initial
Alterations and (f) the amount of the Alteration Fee then payable pursuant to
Section 3.2 hereof. If the revised estimated total cost of the Initial
Alterations increases above the original estimated total cost of the Initial
Alterations by more than five percent (5%), then the denominator of the fraction
referred to in Section 3.5(B) hereof shall be adjusted appropriately.

                  (D) In no event shall the aggregate amount paid by Landlord to
Tenant under this Section 3.5 exceed the amount of the Tenant Fund. Upon the
completion of the Initial Alterations and satisfaction of the conditions set
forth in Section 3.5(E) hereof, any amount of the Tenant Fund which has not been
previously disbursed shall be retained by Landlord. Upon the disbursement of the
entire Tenant Fund (or the portion thereof if upon completion of the Initial
Alterations the Tenant Fund is not exhausted), Landlord shall have no further
obligation or liability whatsoever to Tenant for further disbursement of any
portion of the Tenant Fund to Tenant. It is expressly understood and agreed that
so long as Landlord disburses the Tenant Fund to Tenant pursuant the terms
hereof if Landlord shall be obligated to so disburse such Tenant Fund, Tenant
shall complete, at its sole cost and expense, the Initial Alterations, whether
or not the Tenant Fund is sufficient to fund such completion. Any costs to
complete the Initial Alterations in excess of the Tenant Fund shall be the sole
responsibility and obligation of Tenant.

                  (E) Within forty-five (45) days after completion of the
Initial Alterations, Tenant shall deliver to Landlord general releases and
waivers of lien from all contractors, subcontractors and materialmen involved in
the performance of the Initial Alterations and the materials furnished in
connection therewith (unless same previously were furnished pursuant to Section
3.5(C) hereof), and a certificate from Tenant's independent licensed architect
certifying that (i) in his opinion the Initial Alterations have been performed
in a good and workerlike manner and completed in accordance with the final
detailed plans and specifications for such Initial Alterations as approved by
Landlord and (ii) all contractors, subcontractors and materialmen have been paid
for the Initial Alterations and materials furnished through such date.

                  (F) Tenant warrants and covenants that it shall incur costs
and expenses in excess of Two Hundred Eighty Thousand Thirty-Five Dollars
($280,035) toward the "hard" cost of the Initial Alterations.

<PAGE>   16
                                    ARTICLE 4
                               REPAIRS-FLOOR LOAD

         Section 4.1. Landlord shall operate, maintain and make all necessary
repairs (both structural and nonstructural) to the part of Building Systems
which provide service to the Premises (but not to the distribution portions of
such Building Systems located within the Premises) and the public portions of
the Building, both exterior and interior, in conformance with standards
applicable to first class office buildings in Manhattan. Tenant, at Tenant's
sole cost and expense, shall take good care of the Premises and the fixtures,
equipment and appurtenances therein and the distribution systems and shall make
all nonstructural repairs thereto as and when needed to preserve them in good
working order and condition, except for reasonable wear and tear, obsolescence
and damage for which Tenant is not responsible pursuant to the provisions of
Article 10 hereof. Notwithstanding the foregoing, all damage or injury to the
Premises or to any other part of the Building and Building Systems, or to its
fixtures, equipment and appurtenances, whether requiring structural or
nonstructural repairs, caused by or resulting from omission (where this Lease or
applicable law imposes a duty to act), neglect or wilful misconduct of, or
Alterations made by, Tenant, Tenant's agents, employees, invitees or licensees,
shall be repaired at Tenant's sole cost and expense, by Tenant to the reasonable
satisfaction of Landlord (if the required repairs are nonstructural in nature
and do not affect any Building System), or by Landlord (if the required repairs
are structural in nature or affect any Building System). All of the aforesaid
repairs shall be of first quality and of a class consistent with first class
office building work or construction and shall be made in accordance with the
provisions of Article 3 hereof. If Tenant fails after ten (10) days' notice (or
such shorter period as Landlord may be permitted pursuant to any Superior Lease
or Mortgage or such shorter period as may be required due to an emergency) to
proceed with due diligence to make repairs required to be made by Tenant, the
same may be made by Landlord at the expense of Tenant, and the expenses thereof
incurred by Landlord, with interest thereon at the Applicable Rate, shall be
forthwith paid to Landlord as additional rent after rendition of a bill or
statement therefor. Tenant shall give Landlord prompt notice of any defective
condition in the Building or in any Building System, located in, servicing or
passing through the Premises.

         Section 4.2. Tenant shall not place a load upon any floor of the
Premises exceeding sixty (60) pounds per square foot "live load". Tenant shall
not move any safe, heavy machinery, heavy equipment, business machines, freight,
bulky matter or fixtures into or out of the Building without Landlord's prior
consent, which consent shall not be unreasonably withheld, and shall make
payment to Landlord of Landlord's costs in connection therewith. If such safe,
machinery, equipment, freight, bulky matter or fixtures requires special
handling, Tenant shall employ only persons holding a Master Rigger's license to
do said work. All work in connection therewith shall comply with all
Requirements and the Rules and Regulations, and shall be done during such hours
as Landlord may reasonably designate. Business machines and mechanical equipment
shall be placed and maintained by Tenant at Tenant's expense in settings
sufficient in Landlord's reasonable judgment to absorb and prevent vibration,
noise and annoyance. Except as expressly provided in this Lease, there shall be
no allowance to Tenant for a 
<PAGE>   17
diminution of rental value and no liability on the part of Landlord by reason of
inconvenience, annoyance or injury to business arising from Landlord, Tenant or
others making, or failing to make, any repairs, alterations, additions or
improvements in or to any portion of the Building or the Premises, or in or to
fixtures, appurtenances or equipment thereof.

         Section 4.3. Landlord shall use its reasonable efforts to minimize
interference with Tenant's use and occupancy of the Premises in making any
repairs, alterations, additions or improvements; provided, however, that
Landlord shall have no obligation to employ contractors or labor at so-called
overtime or other premium pay rates or to incur any other overtime costs or
expenses whatsoever, except that Landlord, at its expense but subject to
recoupment pursuant to Article 27 hereof, shall employ contractors or labor at
so-called overtime or other premium pay rates if necessary to make any repair
required to be made by it hereunder to remedy any condition that either (i)
results in a denial of access to the Premises, (ii) threatens the health or
safety of any occupant of the Premises, or (iii) except in the case of a fire or
other casualty, materially interferes with Tenant's ability to conduct its
business in the Premises. In all other cases, at Tenant's request, Landlord
shall employ contractors or labor at so-called overtime or other premium pay
rates and incur any other overtime costs or expenses in making any repairs,
alterations, additions or improvements, and Tenant shall pay to Landlord, as
additional rent, within ten (10) Business Days after demand, an amount equal to
the difference between the overtime or other premium pay rates and the regular
pay rates for such labor and any other overtime costs or expenses so incurred.


                                    ARTICLE 5
                                 WINDOW CLEANING

         Tenant shall not clean, nor require, permit, suffer or allow any window
in the Premises to be cleaned from the outside in violation of Section 202 of
the Labor Law, or any other Requirement, or of the rules of the Board of
Standards and Appeals, or of any other board or body having or asserting
jurisdiction.

                                    ARTICLE 6
                               REQUIREMENTS OF LAW

         Section 6.1. (A) Tenant, at its sole cost and expense, shall comply
with all Requirements applicable to the use and occupancy of the Premises,
including, without limitation, those applicable to the making of any Alterations
therein or the result of the making thereof and those applicable by reason of
the nature or type of business operated by Tenant in the Premises except that
(other than with respect to the making of Alterations or the result of the
making thereof) Tenant shall not be under any obligation to make any Alteration
in order to comply with any Requirement applicable to the mere general "office"
use (as opposed to the manner of use) of the Premises, unless otherwise
expressly required herein. Tenant shall not do or permit to be done 
<PAGE>   18
any act or thing upon the Premises which will invalidate or be in conflict with
a standard "all-risk" insurance policy; and shall not do, or permit anything to
be done in or upon the Premises, or bring or keep anything therein, except as
now or hereafter permitted by the New York City Fire Department, New York Board
of Fire Underwriters, the Insurance Services Office or other authority having
jurisdiction and then only in such quantity and manner of storage as not to
increase the rate for fire insurance applicable to the Building, or use the
Premises in a manner (as opposed to mere use as general "offices") which shall
increase the rate of fire insurance on the Building or on property located
therein, over that in similar type buildings or in effect on the Commencement
Date. If by reason of Tenant's failure to comply with the provisions of this
Article, the fire insurance rate shall be higher than it otherwise would be,
then Tenant shall desist from doing or permitting to be done any such act or
thing and shall reimburse Landlord, as additional rent hereunder, for that part
of all fire insurance premiums thereafter paid by Landlord which shall have been
charged because of such failure by Tenant, and shall make such reimbursement
upon demand by Landlord. In any action or proceeding wherein Landlord and Tenant
are parties, a schedule or "make up" of rates for the Building or the Premises
issued by the Insurance Services Office, or other body fixing such fire
insurance rates which is promulgated prior to the questioned action or use by
Tenant, shall be conclusive evidence of the facts therein stated and of the
several items and charges in the fire insurance rates then applicable to the
Building.

                  (B) Landlord, at its sole cost and expense (but subject to
recoupment as provided in Article 27 hereof), shall comply with all Requirements
applicable to the Premises and the Building which affect Tenant's use or
occupancy of the Premises other than those Requirements with respect to which
Tenant or other tenants or occupants of the Building shall be required to
comply, subject to Landlord's right to contest the applicability or legality
thereof.

         Section 6.2. Tenant, at its sole cost and expense and after notice to
Landlord, may contest by appropriate proceedings prosecuted diligently and in
good faith, the legality or applicability of any Requirement affecting the
Premises, provided that (a) Landlord (or any Indemnitee) shall not be subject to
imprisonment or to prosecution for a crime, nor shall the Real Property or any
part thereof be subject to being condemned or vacated, nor shall the certificate
of occupancy for the Premises or the Building be suspended or threatened to be
suspended by reason of non-compliance or by reason of such contest; (b) before
the commencement of such contest, if Landlord or any Indemnitee may be subject
to any civil fines or penalties or other criminal penalties or if Landlord may
be liable to any independent third party as a result of such noncompliance,
Tenant shall furnish to Landlord either (i) a bond of a surety company
satisfactory to Landlord, in form and substance reasonably satisfactory to
Landlord, and in an amount equal to one hundred twenty percent (120%) of the sum
of (A) the cost of such compliance, (B) the criminal or civil penalties or fines
that may accrue by reason of such non-compliance (as reasonably estimated by
Landlord), and (C) the amount of such liability to independent third parties (as
reasonably estimated by Landlord), and shall indemnify Landlord (and any
Indemnitee) against the cost of such compliance and liability resulting from or
incurred in connection with such contest or non-compliance 
<PAGE>   19
(except that Tenant shall not be required to furnish such bond to Landlord if it
has otherwise furnished any similar bond required by law to the appropriate
Governmental Authority and has named Landlord as a beneficiary thereunder) or
(ii) other security reasonably satisfactory in all respects to Landlord; (c)
such non-compliance or contest shall not constitute or result in a violation
(either with the giving of notice or the passage of time or both) of the terms
of any Mortgage or Superior Lease, or if such Superior Lease or Mortgage shall
condition such non-compliance or contest upon the taking of action or furnishing
of security by Landlord, such action shall be taken or such security shall be
furnished at the expense of Tenant; and (d) Tenant shall keep Landlord regularly
advised as to the status of such proceedings. Without limiting the applicability
of the foregoing, Landlord (or any Indemnitee) shall be deemed subject to
prosecution for a crime if Landlord (or any Indemnitee), a Lessor, a Mortgagee
or any of their officers, directors, partners, shareholders, agents or employees
is charged with a crime of any kind whatsoever, unless such charges are
withdrawn ten (10) days before Landlord (or any Indemnitee), such Lessor or such
Mortgagee or such officer, director, partner, shareholder, agent or employee, as
the case may be, is required to plead or answer thereto.


                                    ARTICLE 7
                                  SUBORDINATION

         Section 7.1. This Lease shall be subject and subordinate to each and
every Superior Lease and to each and every Mortgage. This clause shall be
self-operative and no further instrument of subordination shall be required from
Tenant to make the interest of any Lessor or Mortgagee superior to the interest
of Tenant hereunder; however, Tenant shall execute and deliver promptly any
instrument, in recordable form, that Landlord, any Mortgagee or Lessor may
request to evidence and confirm such subordination. If the date of expiration of
any Superior Lease shall be the same day as the Expiration Date, the Term shall
end and expire twelve (12) hours prior to the expiration of the Superior Lease.
Tenant shall not omit to do anything that Tenant is obligated to do under the
terms of this Lease so as to cause Landlord to be in default under any Superior
Lease or Mortgage. If, in connection with the financing of the Real Property,
the Building or the interest of the lessee under any Superior Lease, or if in
connection with the entering into of a Superior Lease, any lending institution
or Lessor shall request reasonable modifications of this Lease that do not
increase Tenant's monetary obligations under this Lease, adversely affect or
diminish the rights (other than to a de minimis extent), or increase the other
obligations of Tenant under this Lease (other than to a de minimis extent),
Tenant shall make such modifications.

         Section 7.2. If at any time prior to the expiration of the Term, any
Superior Lease shall terminate or be terminated for any reason or any Mortgagee
comes into possession of the Real Property or the Building or the estate created
by any Superior Lease by receiver or otherwise, Tenant agrees, at the election
and upon demand of any owner of the Real Property or the Building, or of the
Lessor, or of any Mortgagee in possession of the Real Property or the Building,
to attorn, from time to time, to any such 
<PAGE>   20
owner, Lessor or Mortgagee or any person acquiring the interest of Landlord as a
result of any such termination, or as a result of a foreclosure of the Mortgage
or the granting of a deed in lieu of foreclosure, upon the then executory terms
and conditions of this Lease, subject to the provisions of Section 7.1 hereof
and this Section 7.2, for the remainder of the Term, provided that such owner,
Lessor or Mortgagee, or receiver caused to be appointed by any of the foregoing,
as the case may be, shall then be entitled to possession of the Premises and
provided further that such owner, Lessor or Mortgagee, as the case may be, or
anyone claiming by, through or under such owner, Lessor or Mortgagee, as the
case may be, including a purchaser at a foreclosure sale, shall not be:

                           (1) liable for any act or omission of any prior
landlord (including, without limitation, the then defaulting landlord), or

                           (2) subject to any defense or offsets which Tenant
may have against any prior landlord (including, without limitation, the then
defaulting landlord), or

                           (3) bound by any payment of Rental which Tenant may
have made to any prior landlord (including, without limitation, the then
defaulting landlord) more than thirty (30) days in advance of the date upon
which such payment was due, or

                           (4) bound by any obligation to make any payment to or
on behalf of Tenant, including, without limitation, payments on account of any
Tenant Fund, or

                           (5) bound by any obligation to perform any work or to
make improvements to the Premises, except for (i) repairs and maintenance
pursuant to the provisions of Article 4, the need for which repairs and
maintenance first arises or continues after the date upon which such owner,
Lessor, or Mortgagee shall be entitled to possession of the Premises, (ii)
repairs to the Premises or any part thereof as a result of damage by fire or
other casualty pursuant to Article 10 hereof, but only to the extent that such
repairs can be reasonably made from the net proceeds of any insurance actually
made available to such owner, Lessor or Mortgagee, and (iii) repairs to the
Premises as a result of a partial condemnation pursuant to Article 11 hereof,
but only to the extent that such repairs can be reasonably made from the net
proceeds of any award made available to such owner, Lessor or Mortgagee, or

                           (6) bound by any amendment or modification of this
Lease made without its consent, or

                           (7) bound to return Tenant's security deposit, if
any, until such deposit has come into its actual possession and Tenant would be
entitled to such security deposit pursuant to the terms of this Lease.

The provisions of this Section 7.2 shall enure to the benefit of any such owner,
Lessor or Mortgagee, shall apply notwithstanding that, as a matter of law, this
Lease may terminate upon the termination of any Superior Lease, shall be
self-operative upon any such demand, and no further instrument shall be required
to give effect to said 
<PAGE>   21
provisions. Tenant, however, upon demand of any such owner, Lessor or Mortgagee,
shall execute, at Tenant's expense, from time to time, instruments, in
recordable form, in confirmation of the foregoing provisions of this Section
7.2, satisfactory to any such owner, Lessor or Mortgagee, acknowledging such
attornment and setting forth the terms and conditions of its tenancy. Nothing
contained in this Section 7.2 shall be construed to impair any right otherwise
exercisable by any such owner, Lessor or Mortgagee. Notwithstanding the
provisions of this Section 7.2, this Lease shall not terminate by reason of the
termination of any Superior Lease without the prior written consent of the
Mortgagee of the Mortgage which is a first mortgage on Landlord's interest in
the Real Property or the leasehold estate created by such Superior Lease.

         Section 7.3. From time to time, within seven (7) days next following
request by Landlord, any Mortgagee or any Lessor, Tenant shall deliver to
Landlord, such Mortgagee or such Lessor a written statement executed by Tenant,
in form reasonably satisfactory to Landlord, such Mortgagee or such Lessor, (1)
stating that this Lease is then in full force and effect and has not been
modified (or if modified, setting forth all modifications), (2) setting forth
the date to which the Fixed Rent, Escalation Rent and other items of Rental have
been paid, (3) stating whether or not, to the best knowledge of Tenant, Landlord
is in default under this Lease, and, if Landlord is in default, setting forth
the specific nature of all such defaults, and (4) as to any other matters
reasonably requested by Landlord, such Mortgagee or such Lessor. Tenant
acknowledges that any statement delivered pursuant to this Section 7.3 may be
relied upon by any purchaser or owner of the Real Property or the Building, or
Landlord's interest in the Real Property or the Building or any Superior Lease,
or by any Mortgagee, or by an assignee of any Mortgagee, or by any Lessor.

         Section 7.4. From time to time, within seven (7) days next following
request by Tenant, Landlord shall deliver to Tenant a written statement executed
by Landlord (i) stating that this Lease is then in full force and effect and has
not been modified (or if modified, setting forth all modifications), (ii)
setting forth the date to which the Fixed Rent, Escalation Rent and any other
items of Rental have been paid, (iii) stating whether or not, to the best
knowledge of Landlord (but without having made any investigation), Tenant is in
default under this Lease, and, if Tenant is in default, setting forth the
specific nature of all such defaults, and (iv) as to any other matters
reasonably requested by Tenant and related to this Lease.

         Section 7.5. As long as any Superior Lease or Mortgage shall exist,
Tenant shall not seek to terminate this Lease by reason of any act or omission
of Landlord until Tenant shall have given written notice of such act or omission
to all Lessors and Mortgagees at such addresses as shall have been furnished to
Tenant by such Lessors and Mortgagees and, if any such Lessor or Mortgagee, as
the case may be, shall have notified Tenant within ten (10) Business Days
following receipt of such notice of its intention to remedy such act or
omission, until a reasonable period of time shall have elapsed following the
giving of such notice, during which period such Lessors and Mortgagees shall
have the right, but not the obligation, to remedy such act or omission.

         Section 7.6. Tenant hereby irrevocably waives any and all right(s) it
may have in 
<PAGE>   22
connection with any zoning lot merger or transfer of development rights with
respect to the Real Property including, without limitation, any rights it may
have to be a party to, to contest, or to execute, any Declaration of
Restrictions (as such term is defined in Section 12-10 of the Zoning Resolution
of The City of New York effective December 15, 1961, as amended) with respect to
the Real Property, which would cause the Premises to be merged with or unmerged
from any other zoning lot pursuant to such Zoning Resolution or to any document
of a similar nature and purpose, and Tenant agrees that this Lease shall be
subject and subordinate to any Declaration of Restrictions or any other document
of similar nature and purpose now or hereafter affecting the Real Property. In
confirmation of such subordination and waiver, Tenant shall execute and deliver
promptly any certificate or instrument that Landlord reasonably may request.


                                    ARTICLE 8
                              RULES AND REGULATIONS

         Tenant and Tenant's contractors, employees, agents, visitors, invitees
and licensees shall comply with the Rules and Regulations. Tenant shall have the
right to dispute the reasonableness of any additional Rule or Regulation
hereafter adopted by Landlord. If Tenant disputes the reasonableness of any
additional Rule or Regulation hereafter adopted by Landlord, the dispute shall
be determined by arbitration in the City of New York in accordance with the
rules and regulations then obtaining of the American Arbitration Association or
its successor. Any such 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 upon Landlord within thirty (30) days after
receipt by Tenant of notice of the adoption of any such additional Rule or
Regulation. Nothing in this Lease contained shall be construed to impose upon
Landlord any duty or obligation to enforce the Rules and Regulations or terms,
covenants or conditions in any other lease against any other tenant, and
Landlord shall not be liable to Tenant for violation of the same by any other
tenant, its employees, agents, visitors or licensees, except that Landlord shall
not enforce any Rule or Regulation against Tenant which Landlord shall not then
be enforcing against all other office tenants in the Building (other than
Landlord or its Affiliates).

                                    ARTICLE 9
                INSURANCE, PROPERTY LOSS OR DAMAGE; REIMBURSEMENT

         Section 9.1. (A) Any Building employee to whom any property shall be
entrusted by or on behalf of Tenant shall be deemed to be acting as Tenant's
agent with respect to such property and neither Landlord nor its agents shall be
liable for any damage to property of Tenant or of others entrusted to employees
of the Building, nor for the loss of or damage to any property of Tenant by
theft or otherwise. Neither Landlord nor its agents shall be liable for any
injury (or death) to persons or damage to property, or interruption of Tenant's
business, resulting from fire or other casualty; nor shall Landlord or its
agents be liable for any such injury (or death) to persons or 
<PAGE>   23
damage caused by other tenants or persons in the Building or caused by
construction of any private, public or quasi-public work; nor shall Landlord be
liable for any injury (or death) to persons or damage to property or
improvements, or interruption of Tenant's business, resulting from any latent
defect in the Premises or in the Building (provided that the foregoing shall not
relieve Landlord from its obligations, if any, to repair such latent defect
pursuant to the provisions of Article 4 hereof or affect Tenant's right, if any,
regarding an abatement of the Fixed Rent and the Escalation Rent as set forth in
Section 14.2 hereof). Anything in this Article 9 to the contrary
notwithstanding, except as set forth in Articles 4, 10, 13, 28 and 35 of this
Lease and otherwise as expressly provided herein, Landlord shall not be relieved
from responsibility directly to Tenant for any loss or damage caused directly to
Tenant wholly or in part by the negligent acts or omissions of Landlord. Nothing
in the foregoing sentence shall affect any right of Landlord to the indemnity
from Tenant to which Landlord may be entitled under Article 35 hereof in order
to recoup for payments made to compensate for losses of third parties.

                  (B) If at any time any windows of the Premises are temporarily
closed, darkened or bricked-up due to any Requirement or by reason of repairs,
maintenance, alterations, or improvements to the Building, or any of such
windows are permanently closed, darkened or bricked-up due to any Requirement,
Landlord shall not be liable for any damage Tenant may sustain thereby and
Tenant shall not be entitled to any compensation therefor, nor abatement or
diminution of Fixed Rent or any other item of Rental, nor shall the same release
Tenant from its obligations hereunder, nor constitute an actual or constructive
eviction, in whole or in part, by reason of inconvenience or annoyance to
Tenant, or injury to or interruption of Tenant's business, or otherwise, nor
impose any liability upon Landlord or its agents. If at any time the windows of
the Premises are temporarily closed, darkened or bricked-up, as aforesaid, then,
unless Tenant is required pursuant to the Lease to perform the repairs,
maintenance, alterations, or improvements, or to comply with the Requirements,
which resulted in such windows being closed, darkened or bricked-up, Landlord
shall perform such repairs, maintenance, alterations or improvements and comply
with the applicable Requirements with reasonable diligence and otherwise take
such action as may be reasonably necessary to minimize the period during which
such windows are temporarily closed, darkened, or bricked-up. Tenant expressly
acknowledges that the windows of the Premises on the westerly side of the
Building are "lot line" windows and therefore may have to be temporarily or
permanently closed, darkened or bricked-up during the Term.

                  (C) Tenant shall immediately notify Landlord of any fire or
accident in the Premises.

         Section 9.2. Tenant shall obtain and keep in full force and effect (i)
an "all risk" insurance policy for Tenant's Specialty Alterations and Tenant's
Property at the Premises in an amount equal to one hundred percent (100%) of the
replacement value thereof, and (ii) a policy of commercial general liability and
property damage insurance on an occurrence basis, with a broad form contractual
liability endorsement. Such 
<PAGE>   24
policies shall provide that Tenant is named as the insured. Landlord, Landlord's
managing agent, Landlord's agents and any Lessors and any Mortgagees (whose
names shall have been furnished to Tenant) shall be added as additional
insureds, as their respective interests may appear, with respect to the
insurance required to be carried pursuant to clauses (i) and (ii) above. Such
policy with respect to clause (ii) above shall include a provision under which
the insurer agrees to indemnify, defend and hold Landlord, Landlord's managing
agent, Landlord's agents and such Lessors and Mortgagees harmless from and
against, subject to the limits of liability set forth in this Section 9.2, all
cost, expense and liability arising out of, or based upon, any and all claims,
accidents, injuries and damages mentioned in Article 35. In addition, the policy
required to be carried pursuant to clause (ii) above shall contain a provision
that (a) no act or omission of Tenant shall affect or limit the obligation of
the insurer to pay the amount of any loss sustained and (b) the policy shall be
non-cancellable with respect to Landlord, Landlord's managing agent, Landlord's
agents and such Lessors and Mortgagees (whose names and addresses shall have
been furnished to Tenant) unless thirty (30) days' prior written notice shall
have been given to Landlord by certified mail, return receipt requested, which
notice shall contain the policy number and the names of the insured and
additional insureds. In addition, upon receipt by Tenant of any notice of
cancellation or any other notice from the insurance carrier which may adversely
affect the coverage of the insureds under such policy of insurance, Tenant shall
immediately deliver to Landlord and any other additional insured hereunder a
copy of such notice. The minimum amounts of liability under the policy of
insurance required to be carried pursuant to clause (ii) above shall be a
combined single limit with respect to each occurrence in an amount of $5,000,000
for injury (or death) to persons and damage to property, which amount shall be
increased from time to time to that amount of insurance which in Landlord's
reasonable judgment is then being customarily required by prudent landlords of
non-institutional first class buildings in New York City. All insurance required
to be carried by Tenant pursuant to the terms of this Lease shall be effected
under valid and enforceable policies issued by reputable and independent
insurers permitted to do business in the State of New York, and rated in Best's
Insurance Guide, or any successor thereto (or if there be none, an organization
having a national reputation) as having a general policyholder rating of "A" and
a financial rating of at least "XIII".

         Section 9.3. Landlord shall obtain and keep in full force and effect
insurance against loss or damage by fire and other casualty to the Building,
including Tenant's Alterations (exclusive of Specialty Alterations), as may be
insurable under then available standard forms of "all-risk" insurance policies,
in an amount equal to one hundred percent (100%) of the replacement value
thereof or in such lesser amount as will avoid co-insurance (including an
"agreed amount" endorsement). Notwithstanding the foregoing, Landlord shall not
be liable to Tenant for any failure to insure, replace or restore any
Alterations unless Tenant shall have notified Landlord of the completion of such
Alterations and of the cost thereof, and shall have maintained adequate records
with respect to such Alterations to facilitate the adjustment of any insurance
claims with respect thereto. Tenant shall cooperate with Landlord and Landlord's
insurance companies in the adjustment of any claims for any damage to the
Building or such 
<PAGE>   25
Alterations.

         Section 9.4. On or prior to the Commencement Date, each party shall
deliver to the other party appropriate certificates of insurance, including
evidence of waivers of subrogation required pursuant to Section 10.5 hereof,
required to be carried by each party pursuant to this Article 9. Evidence of
each renewal or replacement of a policy shall be delivered by each party to the
other party at least twenty (20) days prior to the expiration of such policy.

         Section 9.5. Tenant acknowledges that Landlord shall not carry
insurance on, and shall not be responsible for damage to, Tenant's Property or
Specialty Alterations, and that Landlord shall not carry insurance against, or
be responsible for any loss suffered by Tenant due to, interruption of Tenant's
business; it being expressly understood and agreed that the foregoing shall not
affect Tenant's right, if any, regarding an abatement of the Fixed Rent and
Escalation Rent pursuant to Section 14.2 hereof.

         Section 9.6. If notwithstanding the recovery of insurance proceeds by
Tenant for loss, damage or destruction of its property (or rental value or
business interruptions) Landlord is liable to Tenant with respect thereto or is
obligated under this Lease to make replacement, repair or restoration, then, at
Landlord's option, either (i) the amount of the net proceeds of Tenant's
insurance against such loss, damage or destruction shall be offset against
Landlord's liability to Tenant therefor, or (ii) shall be made available to
Landlord to pay for replacement, repair or restoration.


                                   ARTICLE 10
                         DESTRUCTION-FIRE OR OTHER CAUSE

         Section 10.1. (A) If the Premises (including Alterations other than
Specialty Alterations) shall be damaged by fire or other casualty, and if Tenant
shall give reasonably prompt notice thereof to Landlord, the damage, with such
modifications as shall be required in order to comply with Requirements shall be
diligently repaired by and at the expense of Landlord to substantially the
condition prior to the damage, and until such repairs which are required to be
performed by Landlord (excluding Long Lead Work) shall be substantially
completed (of which substantial completion Landlord shall promptly notify
Tenant) the Fixed Rent, Escalation Rent and Space Factor shall be reduced in the
proportion which the area of the part of the Premises which is not usable by
Tenant, and is actually not used by Tenant bears to the total area of the
Premises immediately prior to such casualty. Upon the substantial completion of
such repairs (excluding Long Lead Work), Landlord shall diligently prosecute to
completion any items of Long Lead Work remaining to be completed. Landlord shall
have no obligation to repair any damage to, or to replace, any Specialty
Alterations or Tenant's Property, which Tenant shall complete promptly after
substantial completion of Landlord's repair obligations under this Article 10.
In addition, Landlord shall not be obligated to repair any damage to, or to
replace, any Alterations unless, if Landlord's insurers shall
<PAGE>   26
required notice of the completion of such Alterations and the maintenance of
adequate records in connection therewith (of which requirement Landlord shall
advise Tenant promptly after request therefor), Tenant shall have notified
Landlord of the completion of such Alterations and the cost thereof, and shall
have maintained adequate records with respect to such Alterations. Tenant shall
make all necessary repairs to the Specialty Alterations and same shall be
completed promptly after substantial completion of Landlord's repair obligations
under this Article 10. Landlord shall use its reasonable efforts to minimize
interference with Tenant's use and occupancy in making any repairs pursuant to
this Section. Anything contained herein to the contrary notwithstanding, if the
Premises (including any Alterations) are damaged by fire or other casualty at
any time prior to the completion of the Initial Alterations, Landlord's
obligation to repair the Premises (and any Alterations) shall be limited to
repair of the part of the Building Systems serving the Premises on the
Commencement Date, but not the distribution portions of such Building Systems
located within the Premises, the floor and ceiling slabs of the Premises and the
exterior walls of the Premises, all to substantially the same condition which
existed on the Commencement Date, with such modifications as shall be required
in order to comply with Requirements.

                  (B) Prior to the substantial completion of Landlord's repair
obligations set forth in Section 10.1 (A) hereof, Landlord shall provide Tenant
and Tenant's contractor, subcontractors and materialmen access to the Premises
to perform Specialty Alterations (or Alterations, if Landlord is not obligated
to repair same pursuant to the provisions hereof), on the following terms and
conditions (but not to occupy the same for the conduct of business):

                           (1) Tenant shall not commence work in any portion of
the Premises until the date specified in a notice from Landlord to Tenant
stating that the repairs required to be made by Landlord have been or will be
completed to the extent reasonably necessary, in Landlord's discretion, to
permit the commencement of the Specialty Alterations (or Alterations, if
Landlord is not obligated to repair same pursuant to the provisions hereof) then
prudent to be performed in accordance with good construction practice in the
portion of the Premises in question without interference with, and consistent
with the performance of, the repairs remaining to be performed.

                           (2) Such access by Tenant shall be deemed to be
subject to all of the applicable provisions of this Lease, including, without
limitation, Tenant's obligation to pay to Landlord fifty percent (50%) of the
Electricity Additional Rent, the Electricity Fee or the Electricity Inclusion
Charge, as the case may be, except that there shall be no obligation on the part
of Tenant solely because of such access to pay any Fixed Rent or Escalation Rent
with respect to the affected portion of the Premises for any period prior to
substantial completion of the repairs.

                           (3) It is expressly understood that if Landlord shall
be delayed from substantially completing the repairs due to any acts of Tenant,
its agents, servants, employees or contractors, including, without limitation,
by reason of the performance of any Specialty Alteration (or Alteration, if
Landlord is not obligated to repair same 
<PAGE>   27
pursuant to the provisions hereof), by reason of Tenant's failure or refusal to
comply or to cause its architects, engineers, designers and contractors to
comply with any of Tenant's obligations described or referred to in this Lease,
or if such repairs are not completed because under good construction scheduling
practice such repairs should be performed after completion of any Specialty
Alteration (or Alteration, if Landlord is not obligated to repair same pursuant
to the provisions hereof), then such repairs shall be deemed substantially
complete on the date when the repairs would have been substantially complete but
for such delay and the expiration of the abatement of the Tenant's obligations
hereunder shall not be postponed by reason of such delay. Any additional costs
to Landlord to complete any repairs occasioned by such delay shall be paid by
Tenant, as additional rent, to Landlord within ten (10) days after demand
therefor provided Landlord shall have delivered the appropriate bills, invoices,
receipts and other backup documentation relating thereto.

         Section 10.2. Anything contained in Section 10.1 hereof to the contrary
notwithstanding, if the Building shall be so damaged by fire or other casualty
that, in Landlord's good faith opinion, substantial alteration, demolition, or
reconstruction of the Building shall be required (whether or not the Premises
shall have been damaged or rendered untenantable), then Landlord, at Landlord's
option, may, not later than ninety (90) days following the damage, give Tenant a
notice in writing terminating this Lease, provided that if the Premises are not
substantially damaged or rendered substantially untenantable, Landlord may not
terminate this Lease unless it shall elect to terminate leases (including this
Lease), affecting at least sixty-six percent (66%) of the rentable area of the
Building (excluding any rentable area occupied by Landlord or its Affiliates).
If Landlord elects to terminate this Lease, the Term shall expire upon a date
set by Landlord, but not sooner than the tenth (10th) day after such notice is
given, and Tenant shall vacate the Premises and surrender the same to Landlord
in accordance with the provisions of Article 20 hereof. Upon the termination of
this Lease under the conditions provided for in this Section 10.2, the Fixed
Rent and Escalation Rent shall be apportioned and any prepaid portion of Fixed
Rent and Escalation Rent for any period after such date shall be refunded by
Landlord to Tenant.

         Section 10.3. (A) Within forty-five (45) days after notice to Landlord
of any damage described in Section 10.1 hereof, Landlord shall deliver to Tenant
a statement prepared by a reputable contractor setting forth such contractor's
estimate as to the time required to repair such damage, exclusive of time
required to repair any Specialty Alterations (which are Tenant's obligation to
repair) or to perform Long Lead Work. If the estimated time period exceeds
twelve (12) months from the date of such statement, Tenant may elect to
terminate this Lease by notice to Landlord not later than thirty (30) days
following receipt of such statement. If Tenant makes such election, the Term
shall expire upon the thirtieth (30th) day after notice of such election is
given by Tenant, and Tenant shall vacate the Premises and surrender the same to
Landlord in accordance with the provisions of Article 20 hereof. If Tenant shall
not have elected to terminate this Lease pursuant to this Article 10 (or is not
entitled to terminate this Lease pursuant to this Article 10), the damages shall
be promptly and diligently repaired by and at the expense of Landlord as set
forth in Section 10.1 hereof.
<PAGE>   28
                  (B) Notwithstanding the foregoing, if the Premises shall be
substantially damaged during the last year of the Term, Landlord or Tenant may
elect by notice, given within thirty (30) days after the occurrence of such
damage, to terminate this Lease and if either party makes such election, the
Term shall expire upon the thirtieth (30th) day after notice of such election is
given by such party and Tenant shall vacate the Premises and surrender the same
to Landlord in accordance with the provisions of Article 20 hereof.

                  (C) Except as expressly set forth in this Section 10.3, Tenant
shall have no other options to cancel this Lease under this Article 10.

         Section 10.4. This Article 10 constitutes an express agreement
governing any case of damage or destruction of the Premises or the Building by
fire or other casualty, and Section 227 of the Real Property Law of the State of
New York, which provides for such contingency in the absence of an express
agreement, and any other law of like nature and purpose now or hereafter in
force shall have no application in any such case.

         Section 10.5. The parties hereto shall procure an appropriate clause
in, or endorsement on, any fire or extended coverage insurance covering the
Premises, the Building and personal property, fixtures and equipment located
thereon or therein, pursuant to which the insurance companies waive subrogation
or consent to a waiver of right of recovery and having obtained such clauses or
endorsements of waiver of subrogation or consent to a waiver of right of
recovery, will not make any claim against or seek to recover from the other for
any loss or damage to its property or the property of others resulting from fire
or other hazards covered by such fire and extended coverage insurance, provided,
however, that the release, discharge, exoneration and covenant not to sue herein
contained shall be limited by and be coextensive with the terms and provisions
of the waiver of subrogation clause or endorsements or clauses or endorsements
consenting to a waiver of right of recovery. If the payment of an additional
premium is required for the inclusion of such waiver of subrogation provision,
each party shall advise the other of the amount of any such additional premiums
and the other party at its own election may, but shall not be obligated to, pay
the same. If such other party shall not elect to pay such additional premium,
the first party shall not be required to obtain such waiver of subrogation
provision. If either party shall be unable to obtain the inclusion of such
clause even with the payment of an additional premium, then such party shall
attempt to name the other party as an additional insured (but not a loss payee)
under the policy. If the payment of an additional premium is required for naming
the other party as an additional insured (but not a loss payee), each party
shall advise the other of the amount of any such additional premium and the
other party at its own election may, but shall not be obligated to, pay the
same. If such other party shall not elect to pay such additional premium or if
it shall not be possible to have the other party named as an additional insured
(but not loss payee), even with the payment of an additional premium, then (in
either event) such party shall so notify the first party and the first party
shall not have the obligation to name the other party as an

<PAGE>   29
additional insured. Tenant acknowledges that Landlord shall not carry insurance
on and shall not be responsible for damage to, Tenant's Property or Specialty
Alterations or any other Alteration prior to the completion of the Initial
Alterations, and that Landlord shall not carry insurance against, or be
responsible for any loss suffered by Tenant due to, interruption of Tenant's
business.


                                   ARTICLE 11
                                 EMINENT DOMAIN

         Section 11.1. If the whole of the Real Property, the Building or the
Premises shall be acquired or condemned for any public or quasi-public use or
purpose, this Lease and the Term shall end as of the date of the vesting of
title with the same effect as if said date were the Expiration Date. If only a
part of the Real Property and not the entire Premises shall be so acquired or
condemned then, (1) except as hereinafter provided in this Section 11.1, this
Lease and the Term shall continue in force and effect, but, if a part of the
Premises is included in the part of the Real Property so acquired or condemned,
from and after the date of the vesting of title, the Fixed Rent and the Space
Factor shall be reduced in the proportion which the area of the part of the
Premises so acquired or condemned bears to the total area of the Premises
immediately prior to such acquisition or condemnation and Tenant's Share shall
be redetermined based upon the proportion in which the ratio between the
rentable area of the Premises remaining after such acquisition or condemnation
bears to the rentable area of the Building remaining after such acquisition or
condemnation; (2) whether or not the Premises shall be affected thereby,
Landlord, at Landlord's option, may give to Tenant, within sixty (60) days next
following the date upon which Landlord shall have received notice of vesting of
title, a thirty (30) days' notice of termination of this Lease if Landlord shall
elect to terminate leases (including this Lease), affecting at least sixty-six
percent (66%) of the rentable area of the Building (excluding any rentable area
leased by Landlord or its Affiliates); and (3) if the part of the Real Property
so acquired or condemned shall contain more than fifteen percent (15%) of the
total area of the Premises immediately prior to such acquisition or
condemnation, or if, by reason of such acquisition or condemnation, Tenant no
longer has reasonable means of access to the Premises, Tenant, at Tenant's
option, may give to Landlord, within sixty (60) days next following the date
upon which Tenant shall have received notice of vesting of title, a thirty (30)
days' notice of termination of this Lease. If any such thirty (30) days' notice
of termination is given by Landlord or Tenant, this Lease and the Term shall
come to an end and expire upon the expiration of said thirty (30) days with the
same effect as if the date of expiration of said thirty (30) days were the
Expiration Date. If a part of the Premises shall be so acquired or condemned and
this Lease and the Term shall not be terminated pursuant to the foregoing
provisions of this Section 11.1, Landlord, at Landlord's expense, shall restore
that part of the Premises not so acquired or condemned to a self-contained
rental unit inclusive of Tenant's Alterations (other than Specialty
Alterations), except that if such acquisition or condemnation occurs prior to
completion of the Initial Alterations, Landlord shall only be required to
restore that part of the Premises not so acquired or condemned to a
self-contained rental unit exclusive
<PAGE>   30
of Tenant's Alterations. Upon the termination of this Lease and the Term
pursuant to the provisions of this Section 11.1, the Fixed Rent and Escalation
Rent shall be apportioned and any prepaid portion of Fixed Rent and Escalation
Rent for any period after such date shall be refunded by Landlord to Tenant.

         Section 11.2. In the event of any such acquisition or condemnation of
all or any part of the Real Property, Landlord shall be entitled to receive the
entire award for any such acquisition or condemnation, Tenant shall have no
claim against Landlord or the condemning authority for the value of any
unexpired portion of the Term and Tenant hereby expressly assigns to Landlord
all of its right in and to any such award. Nothing contained in this Section
11.2 shall be deemed to prevent Tenant from making a separate claim in any
condemnation proceedings for the then value of any Tenant's Property included in
such taking, and for any moving expenses.

         Section 11.3. If the whole or any part of the Premises shall be
acquired or condemned temporarily during the Term for any public or quasi-public
use or purpose, Tenant shall give prompt notice thereof to Landlord and the Term
shall not be reduced or affected in any way and Tenant shall continue to pay in
full all items of Rental payable by Tenant hereunder without reduction or
abatement, and Tenant shall be entitled to receive for itself any award or
payments for such use, provided, however, that:

                  (i) if the acquisition or condemnation is for a period not
                  extending beyond the Term and if such award or payment is made
                  less frequently than in monthly installments, the same shall
                  be paid to and held by Landlord as a fund which Landlord shall
                  apply from time to time to the Rental payable by Tenant
                  hereunder, except that, if by reason of such acquisition or
                  condemnation changes or alterations are required to be made to
                  the Premises which would necessitate an expenditure to restore
                  the Premises, then a portion of such award or payment
                  considered by Landlord as appropriate to cover the expenses of
                  the restoration shall be retained by Landlord, without
                  application as aforesaid, and applied toward the restoration
                  of the Premises as provided in Section 11.1 hereof; or

                  (ii) if the acquisition or condemnation is for a period
                  extending beyond the Term, such award or payment shall be
                  apportioned between Landlord and Tenant as of the Expiration
                  Date; Tenant's share thereof, if paid less frequently than in
                  monthly installments, shall be paid to Landlord and applied in
                  accordance with the provisions of clause (i) above, provided,
                  however, that the amount of any award or payment allowed or
                  retained for restoration of the Premises shall remain the
                  property of Landlord if this Lease shall expire prior to the
                  restoration of the Premises.
<PAGE>   31
                               ARTICLE 12
                     ASSIGNMENT, SUBLETTING, MORTGAGE, ETC.

         Section 12.1. (A) Except as expressly permitted herein, Tenant, without
the prior consent of Landlord in each instance, shall not (a) assign its rights
or delegate its duties under this Lease (whether by operation of law, transfers
of interests in Tenant or otherwise), mortgage or encumber its interest in this
Lease, in whole or in part, (b) sublet, or permit the subletting of, the
Premises or any part thereof, or (c) permit the Premises or any part thereof to
be occupied or used for desk space, mailing privileges or otherwise, by any
Person other than Tenant.

                  (B) If this Lease is assigned to any person or entity pursuant
to the provisions of the Bankruptcy Code, any and all monies or other
consideration payable or otherwise to be delivered in connection with such
assignment shall be paid or delivered to Landlord, shall be and remain the
exclusive property of Landlord and shall not constitute property of Tenant or of
the estate of Tenant within the meaning of the Bankruptcy Code. Any and all
monies or other consideration constituting Landlord's property under the
preceding sentence not paid or delivered to Landlord shall be held in trust for
the benefit of Landlord and shall be promptly paid to or turned over to
Landlord.

         Section 12.2. (A) If Tenant's interest in this Lease is assigned in
violation of the provisions of this Article 12, such assignment shall be void
and of no force and effect against Landlord; provided, however, that Landlord
may collect an amount equal to the then Fixed Rent plus any other item of Rental
from the assignee as a fee for its use and occupancy, and shall apply the net
amount collected to the Fixed Rent and other items of Rental reserved in this
Lease. If the Premises or any part thereof are sublet to, or occupied by, or
used by, any Person other than Tenant, whether or not in violation of this
Article 12, Landlord, after default by Tenant under this Lease, including,
without limitation, a subletting or occupancy in violation of this Article 12,
may collect any item of Rental or other sums paid by the subtenant, user or
occupant as a fee for its use and occupancy, and shall apply the net amount
collected to the Fixed Rent and other items of Rental reserved in this Lease. No
such assignment, subletting, occupancy or use, whether with or without
Landlord's prior consent, nor any such collection or application of Rental or
fee for use and occupancy, shall be deemed a waiver by Landlord of any term,
covenant or condition of this Lease or the acceptance by Landlord of such
assignee, subtenant, occupant or user as tenant hereunder. The consent by
Landlord to any assignment, subletting, occupancy or use shall not relieve
Tenant from its obligation to obtain the express prior consent of Landlord to
any further assignment, subletting, occupancy or use.

                  (B) Tenant shall reimburse Landlord within ten (10) days after
demand therefor for any commercially reasonably out-of-pocket costs that may be
incurred by Landlord in connection with any proposed assignment of Tenant's
interest in this Lease or any proposed subletting of the Premises or any part
thereof, including, without limitation, any reasonable processing fee,
reasonable attorneys' fees and disbursements and the reasonable costs of making
investigations as to the acceptability of the proposed subtenant or the proposed
assignee.

                  (C) Neither any assignment of Tenant's interest in this Lease
nor any 
<PAGE>   32
subletting, occupancy or use of the Premises or any part thereof by any Person
other than Tenant, nor any collection of Rental by Landlord from any Person
other than Tenant as provided in this Section 12.2, nor any application of any
such Rental as provided in this Section 12.2 shall, in any circumstances,
relieve Tenant of its obligations under this Lease on Tenant's part to be
observed and performed.

                  (D) Any Person to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed without further act or deed to
have assumed all of the obligations arising under this Lease on and after the
date of such assignment. Any such assignee shall execute and deliver to Landlord
upon demand an instrument confirming such assumption. No assignment of this
Lease shall relieve Tenant of its obligations hereunder and, subsequent to any
assignment, Tenant's liability hereunder shall continue notwithstanding any
subsequent modification or amendment hereof or the release of any subsequent
tenant hereunder from any liability, to all of which Tenant hereby consents in
advance.

         Section 12.3. (A) If Tenant assumes this Lease and proposes to assign
the same pursuant to the provisions of the Bankruptcy Code to any Person who
shall have made a bona fide offer to accept an assignment of this Lease on terms
acceptable to Tenant, then notice of such proposed assignment shall be given to
Landlord by Tenant no later than twenty (20) days after receipt by Tenant, but
in any event no later than ten (10) days prior to the date that Tenant shall
make application to a court of competent jurisdiction for authority and approval
to enter into such assignment and assumption. Such notice shall set forth (a)
the name and address of such Person, (b) all of the terms and conditions of such
offer, and (c) adequate assurance of future performance by such Person under the
Lease as set forth in Paragraph (B) below, including, without limitation, the
assurance referred to in Section 365(b)(3) of the Bankruptcy Code. Landlord
shall have the prior right and option, to be exercised by notice to Tenant given
at any time prior to the effective date of such proposed assignment, to accept
an assignment of this Lease upon the same terms and conditions and for the same
consideration, if any, as the bona fide offer made by such Person, less any
brokerage commissions which would otherwise be payable by Tenant out of the
consideration to be paid by such Person in connection with the assignment of
this Lease.

                  (B) The term "adequate assurance of future performance" as
used in this Lease shall mean that any proposed assignee shall, among other
things, (a) deposit with Landlord on the assumption of this Lease the sum of the
then Fixed Rent as security for the faithful performance and observance by such
assignee of the terms and obligations of this Lease, which sum shall be held by
Landlord in accordance with the provisions of Article 31 hereof, (b) furnish
Landlord with financial statements of such assignee for the prior three (3)
fiscal years, as finally determined after an audit and certified as correct by a
certified public accountant, which financial statements shall show a net worth
of at least six (6) times the then Fixed Rent for each of such three (3) years,
(c) grant to Landlord a security interest in such property of the proposed
assignee as Landlord shall deem necessary to secure such assignee's future
performance under this Lease, and (d) provide such other information or take
such
<PAGE>   33
action as Landlord, in its reasonable judgment shall determine is necessary to
provide adequate assurance of the performance by such assignee of its
obligations under the Lease.

         Section 12.4. (A) As long as Fibernet Telecom Group, Inc. is Tenant,
Tenant shall have the privilege, subject to the terms and conditions hereinafter
set forth, without the consent of Landlord but subject to Tenant's satisfaction
of conditions set forth in clauses (1), (4) and (5) of Section 12.8(A) hereof,
and without Landlord having the right granted in Section 12.8(B) hereof to
recapture, to assign its interest in this Lease (i) to any corporation which is
a successor to Tenant either by merger or consolidation, (ii) to a purchaser of
all or substantially all of Tenant's assets (provided such purchaser shall have
also assumed substantially all of Tenant's liabilities) or (iii) to a Person
which shall (1) Control, (2) be under the Control of, or (3) be under common
Control with Tenant (any such Person referred to in this clause (iii) being a
"Related Entity"). As long as Fibernet Telecom Group, Inc. is Tenant, Tenant
also shall have the privilege, subject to the terms and conditions hereinafter
set forth, without the consent of Landlord but subject to Tenant's satisfaction
of conditions set forth in clauses (3), (6) through (8) and (10) of Section
12.6(A) and without Landlord having the right granted in Section 12.6(B) hereof
to recapture, to sublease all or any portion of the Premises to a Related Entity
or to NESCO Industries, Inc. (provided that with respect to a sublease to NESCO
Industries, Inc., (a) no default under the Agreement of Lease between Landlord,
as landlord, and NESCO Industries, Inc., as tenant, shall have occurred and be
continuing, and (b) Tenant and NESCO Industries, Inc. shall be under not less
than the common ownership of Tenant and NESCO Industries, Inc. existing as of
the Commencement Date). Any assignment or subletting described above may only be
made upon the condition that (a) any such assignee or subtenant shall continue
to use the Premises in accordance with the terms of this Lease, (b) the
principal purpose of such assignment or sublease is not the acquisition of
Tenant's interest in this Lease or to circumvent the provisions of Section 12.1
of this Article (except if such assignment or sublease is made to a Related
Entity and is made for a valid intracorporate business purpose and is not made
to circumvent the provisions of Section 12.1 of this Article), and (c) in the
case of an assignment, any such assignee shall have a net worth and annual
income and cash flow, determined in accordance with generally accepted
accounting principles, consistently applied, after giving effect to such
assignment, equal to the greater of Tenant's net worth and annual income and
cash flow, as so determined, on (i) the date immediately preceding the date of
such assignment, and (ii) the Commencement Date. Tenant shall, within ten (10)
Business Days after execution thereof, deliver to Landlord either (x) a
duplicate original instrument of assignment in form and substance reasonably
satisfactory to Landlord, duly executed by Tenant, together with an instrument
in form and substance reasonably satisfactory to Landlord, duly executed by the
assignee, in which such assignee shall assume observance and performance of, and
agree to be personally bound by, all of the terms, covenants and conditions of
this Lease on Tenant's part to be observed and performed, or (y) a duplicate
original sublease in form and substance reasonably satisfactory to Landlord,
duly executed by Tenant and the subtenant.
<PAGE>   34
                  (B) If Tenant is a partnership, the admission of new Partners,
the withdrawal, retirement, death, incompetency or bankruptcy of any Partner, or
the reallocation of partnership interests among the Partners shall not
constitute an assignment of this Lease, provided the principal purpose of any of
the foregoing is not to circumvent the restrictions on assignment set forth in
the provisions of this Article 12. The reorganization of Tenant from a
professional corporation into a partnership or the reorganization of a Tenant
from a partnership into a professional corporation, shall not constitute an
assignment of this Lease, provided that immediately following such
reorganization the Partners of Tenant shall be the same as the shareholders of
Tenant existing immediately prior to such reorganization, or the shareholders of
Tenant shall be the same as the Partners of Tenant existing immediately prior to
such reorganization, as the case may be. If Tenant shall become a professional
corporation, each individual shareholder in Tenant and each employee of a
professional corporation which is a shareholder in Tenant shall have the same
personal liability as such individual or employee would have under this Lease if
Tenant were a partnership and such individual or employee were a Partner in
Tenant. If any individual Partner in Tenant is or becomes an employee of a
professional corporation, such individual shall have the same personal liability
under this Lease as such individual would have if he and not the professional
corporation were a Partner of Tenant.

                  (C) Except as set forth above, either a transfer (including
the issuance of treasury stock or the creation and issuance of new stock or a
new class of stock) of a controlling interest in the shares of Tenant (if Tenant
is a corporation or trust) or a transfer of a majority of the total interest in
Tenant (if Tenant is a partnership or other entity) at any one time or over a
period of time through a series of transfers, shall be deemed an assignment of
this Lease and shall be subject to all of the provisions of this Article 12,
including, without limitation, the requirement that Tenant obtain Landlord's
prior consent thereto. The transfer of shares of Tenant (if Tenant is a
corporation or trust) for purposes of this Section 12.4 shall not include the
sale of shares by persons other than those deemed "insiders" within the meaning
of the Securities Exchange Act of 1934, as amended, which sale is effected
through the "over-the-counter market" or through any recognized stock exchange.

         Section 12.5. If, at any time after the originally named Tenant herein
may have assigned Tenant's interest in this Lease, this Lease shall be
disaffirmed or rejected in any proceeding of the types described in paragraph
(E) of Section 16.1 hereof, or in any similar proceeding, or in the event of
termination of this Lease by reason of any such proceeding or by reason of lapse
of time following notice of termination given pursuant to said Article 16 based
upon any of the Events of Default set forth in such paragraph, any prior Tenant,
including, without limitation, the originally named Tenant, upon request of
Landlord given within thirty (30) days next following any such disaffirmance,
rejection or termination (and actual notice thereof to Landlord in the event of
a disaffirmance or rejection or in the event of termination other than by act of
Landlord), shall (1) pay to Landlord all Fixed Rent, Escalation Rent and other
items of Rental due and owing by the assignee to Landlord under this Lease to
and including the date of such disaffirmance, rejection or termination, and (2)
as "tenant", enter into a new lease 
<PAGE>   35
with Landlord of the Premises for a term commencing on the effective date of
such disaffirmance, rejection or termination and ending on the Expiration Date,
unless sooner terminated as in such lease provided, at the same Fixed Rent and
upon the then executory terms, covenants and conditions as are contained in this
Lease, except that (a) Tenant's rights under the new lease shall be subject to
the possessory rights of the assignee under this Lease and the possessory rights
of any person claiming through or under such assignee or by virtue of any
statute or of any order of any court, (b) such new lease shall require all
defaults existing under this Lease to be cured by Tenant with due diligence, and
(c) such new lease shall require Tenant to pay all Escalation Rent reserved in
this Lease which, had this Lease not been so disaffirmed, rejected or
terminated, would have accrued under the provisions of Article 27 hereof after
the date of such disaffirmance, rejection or termination with respect to any
period prior thereto. If any such prior Tenant shall default in its obligation
to enter into said new lease for a period of ten (10) days next following
Landlord's request therefor, then, in addition to all other rights and remedies
by reason of such default, either at law or in equity, Landlord shall have the
same rights and remedies against such Tenant as if such Tenant had entered into
such new lease and such new lease had thereafter been terminated as of the
commencement date thereof by reason of such Tenant's default thereunder.

         Section 12.6. (A) Notwithstanding the provisions of Section 12.1
hereof, if Landlord shall not exercise its rights pursuant to paragraph (B) of
this Section 12.6, Landlord shall not unreasonably withhold its consent to any
subletting of the Premises, provided that:

                           (1) the Premises shall not, without Landlord's prior
consent, have been listed or otherwise publicly advertised for subletting at a
rental rate less than the prevailing rental rate set by Landlord for comparable
space in the Building or if there is no comparable space the prevailing rental
rate reasonably determined by Landlord (the "Prevailing Rate"), nor shall Tenant
advise any broker, agent, finder or prospective subtenant that Tenant intends to
sublet the Premises at a rate less than the Prevailing Rate;

                           (2) Intentionally Omitted Prior to Execution;

                           (3) no Event of Default shall have occurred and be
continuing;

                           (4) upon the date Tenant delivers the Tenant
Statement to Landlord and upon the date immediately preceding the commencement
date of any sublease approved by Landlord, the proposed subtenant shall have a
financial standing (taking into consideration the obligations of the proposed
subtenant under the sublease) reasonably satisfactory to Landlord, be of a
character, be engaged in a business, and propose to use the Premises in a manner
in keeping with the standards in such respects of the other tenancies in the
Building;

                           (5) the proposed subtenant (or any Person who
directly or indirectly, Controls, is Controlled by or is under common Control
with the proposed 
<PAGE>   36
subtenant) shall not be a tenant or subtenant of any space in the Building, nor
shall the proposed subtenant (or any Person who directly or indirectly,
Controls, is Controlled by or is under common Control with the proposed
subtenant) be a Person with whom Landlord is negotiating or discussing to lease
space in the Building; if Tenant shall propose to sublease space and is about to
commence negotiations with a tenant, subtenant or prospective subtenant, Tenant
shall advise Landlord of the identity of such prospective subtenant and Landlord
shall promptly advise Tenant if the execution of a sublease with such tenant,
subtenant or prospective subtenant would violate the provisions of this clause
(5);

                           (6) the character of the business to be conducted or
the proposed use of the Premises by the proposed subtenant shall not (a) be
likely to increase Landlord's operating expenses beyond that which would be
incurred for use by Tenant or for use in accordance with the standards of use of
other tenancies in the Building; (b) increase the burden on existing cleaning
services or elevators over the burden prior to such proposed subletting; (c)
violate any provision or restrictions herein relating to the use or occupancy of
the Premises; (d) require any alterations, installations, improvements,
additions or other physical changes to be performed in or made to any portion of
the Building or the Real Property other than the Premises; or (e) violate any
provision or restrictions in any other lease for space in the Building or in any
Superior Lease or Mortgage; if Landlord shall have consented to a sublease and,
as a result of the use and occupancy of the subleased portion of the Premises by
the subtenant, operating expenses are increased, then Tenant shall pay to
Landlord, within ten (10) days after demand, as additional rent, all resulting
increases in operating expenses;

                           (7) the subletting shall be expressly subject to all
of the terms, covenants, conditions and obligations on Tenant's part to be
observed and performed under this Lease and the further condition and
restriction that the sublease shall not be modified without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or
delayed, or assigned (by operation of law or otherwise; for purposes of this
clause (7), the transfer of a majority of the issued and outstanding capital
stock of any corporate subtenant or the transfer of a majority of the total
interest in a subtenant (if a partnership or other entity), however
accomplished, whether in a single transaction or in a series of related or
unrelated transactions, shall be deemed an assignment of the sublease, except
that the transfer of the outstanding capital stock of a corporate subtenant
shall be deemed not to include the sale of such stock by persons other than
those deemed "insiders" within the meaning of the Securities Exchange Act of
1934, as amended, which sale is effected through the "over-the-counter market"
or through any recognized stock exchange) encumbered or otherwise transferred or
the subleased premises further sublet by the subtenant in whole or in part, or
any part thereof suffered or permitted by the subtenant to be used or occupied
by others, without the prior written consent of Landlord in each instance;

                           (8) the subletting shall end no later than one (1)
day before the Expiration Date and shall not be for a term of less than two (2)
years unless it commences less than two (2) years before the Expiration Date;
<PAGE>   37
                           (9) no subletting shall be for less than Two Thousand
(2,000) contiguous rentable square feet and at no time shall there be more than
Three (3) occupants, including Tenant, on any one (1) floor of the Premises; and

                           (10) such sublease shall expressly provide that in
the event of termination, re-entry or dispossess of Tenant by Landlord under
this Lease, Landlord may, at its option, take over all of the right, title and
interest of Tenant, as sublessor under such sublease, and such subtenant, at
Landlord's option, shall attorn to Landlord pursuant to the then executory
provisions of such sublease, except that Landlord shall not be:

                           (i) liable for any act or omission of Tenant under
such sublease, or

                           (ii) subject to any defense or offsets which such
subtenant may have against Tenant, or

                           (iii) bound by any previous payment which such
subtenant may have made to Tenant more than thirty (30) days in advance of the
date upon which such payment was due, unless previously approved by Landlord, or

                           (iv) bound by any obligation to make any payment to
or on behalf of such subtenant, or

                           (v) bound by any obligation to perform any work or to
make improvements to the Premises, or portion thereof demised by such sublease,
or

                           (vi) bound by any amendment or modification of such
sublease made without its consent, or

                           (vii) bound to return such subtenant's security
deposit, if any, until such deposit has come into its actual possession and such
subtenant would be entitled to such security deposit pursuant to the terms of
such sublease.

If Tenant proposes to sublet a portion of the Premises then, unless the context
otherwise requires, references in this Section 12.6 to the Premises shall be
deemed to refer to the portion of the Premises proposed to be sublet by Tenant.

                  (B) At least fifteen (15) days prior to any proposed
subletting of all or any portion of the Premises, Tenant shall submit a
statement to Landlord (a "Tenant Statement") containing the following
information: (a) the name and address of the proposed subtenant, (b) a
description of the portion of the Premises to be sublet, (c) the terms and
conditions of the proposed subletting, including, without limitation, the rent
payable and the value (including cost, overhead and supervision) of any
improvements (including any demolition to be performed) to the Premises for
occupancy by such subtenant, (d) the nature and character of the business of the
proposed subtenant, and 
<PAGE>   38
(e) any other information that Landlord may reasonably request, together with a
statement specifically directing Landlord's attention to the provisions of this
Section 12.6(B) requiring Landlord to respond to Tenant's request within fifteen
(15) days after Landlord's receipt of the Tenant Statement. Landlord shall have
the right, exercisable by notice to Tenant within fifteen (15) days after
Landlord's receipt of the Tenant Statement, to sublet (in its own name or that
of its designee) such portion of the Premises ("Recapture Space") from Tenant on
the terms and conditions set forth in the Tenant Statement, subject to the
further provisions of paragraph (C) of this Section 12.6. If Landlord shall fail
to notify Tenant within said fifteen (15) day period of Landlord's intention to
exercise its rights pursuant to this Section 12.6(B) hereof or of Landlord's
consent to or disapproval of the proposed subletting pursuant to the Tenant
Statement as contemplated by Section 12.6(A) hereof, or if Landlord shall have
consented to such subletting as provided in Section 12.6(A) hereof, Tenant shall
have the right to sublease that portion of the Premises to such proposed
subtenant on the same material terms and conditions set forth in the Tenant
Statement, subject to the terms and conditions of this Lease, including, without
limitation, paragraph (A) of this Section 12.6. If Tenant shall not enter into
such sublease within ninety (90) days after the delivery of the Tenant Statement
to Landlord, then the provisions of Section 12.1 hereof and this Section 12.6
shall again be applicable to any other proposed subletting. If Tenant shall
enter into such sublease within ninety (90) days as aforesaid, Tenant shall
deliver a true, complete and fully executed counterpart of such sublease to
Landlord within five (5) days after execution thereof.

                  (C) If Landlord exercises its option to sublet the Recapture
Space, such sublease to Landlord or its designee as subtenant (each, a
"Recapture Sublease") shall:

                           (1) be at a rental equal to the lesser of (x) the
Rent Per Square Foot multiplied by the number of rentable square feet of the
Recapture Space and (y) the sublease rent set forth in the Tenant Statement, be
upon the same terms and conditions as those contained in this Lease (as modified
by the Tenant Statement, except such as are irrelevant or inapplicable and
except as otherwise expressly set forth to the contrary in this paragraph (C);

                           (2) give the subtenant the unqualified and
unrestricted right, without Tenant's permission, to assign such sublease and to
further sublet the Recapture Space or any part thereof and to make any and all
changes, alterations, and improvements in the Recapture Space;

                           (3) provide in substance that any such changes,
alterations, and improvements made in the Recapture Space may be removed, in
whole or in part, prior to or upon the expiration or other termination of the
Recapture Sublease provided that any material damage and injury caused thereby
shall be repaired (it being expressly understood and agreed that Tenant shall
not be required to remove any Alterations which Landlord or its designee as
subtenant under the Recapture Sublease shall install in the Recapture Space);
<PAGE>   39
                           (4) provide that (i) the parties to such Sublease
expressly negate any intention that any estate created under such Sublease be
merged with any other estate held by either of said parties, (ii) prior to the
commencement of the term of the Recapture Sublease, Landlord, at its sole cost
and expense (to the extent provided in the Tenant Statement), shall make such
alterations as may be required or reasonably deemed necessary by the subtenant
to physically separate the Recapture Space, if such Space constitutes a portion
of the Premises, from the balance of the Premises and to provide appropriate
means of ingress to and egress thereto and to the public portions of the balance
of the floor such as toilets, janitor's closets, telephone and electrical
closets, fire stairs, elevator lobbies, etc., (iii) at the expiration of the
term of such Sublease, Tenant shall accept the Recapture Space in its then
existing condition, broom clean; and

                           (5) provide that the subtenant or occupant may use
and occupy the Recapture Space for any lawful purpose (without regard to any
limitation set forth in the Tenant Statement).

                  (D) Performance by Landlord, or its designee, under a
Recapture Sublease shall be deemed performance by Tenant of any similar
obligation under this Lease and Tenant shall not be liable for any default under
this Lease or deemed to be in default hereunder if such default is occasioned by
or arises from any act or omission of the subtenant under the Recapture Sublease
or is occasioned by or arises from any act or omission of any occupant under the
Recapture Sublease.

                  (E) If Landlord is unable to give Tenant possession of the
Recapture Space at the expiration of the term of the Recapture Sublease by
reason of the holding over or retention of possession of any tenant or other
occupant, then (w) Landlord shall, each month, pay on account of use and
occupancy of the Recapture Space one and one-half (1 1/2) times the aggregate of
the monthly fixed rent and additional rent on account of tax and operating
expense escalation and shall continue to comply with all other obligations,
under the Recapture Sublease until the date upon which Landlord shall give
Tenant possession of the Recapture Space free of occupancies, (x) neither the
Expiration Date nor the validity of this Lease shall be affected, (y) Tenant
waives any rights under Section 223-a of the Real Property Law of New York, or
any successor statute of similar import, to rescind this Lease and further
waives the right to recover any damages from Landlord which may result from the
failure of Landlord to deliver possession of the Recapture Space at the end of
the term of the Recapture Sublease, and (z) Landlord, at Landlord's expense,
shall use its reasonable efforts to deliver possession of the Recapture Space to
Tenant and in connection therewith, if necessary, shall institute and diligently
and in good faith prosecute holdover and any other appropriate proceedings
against the occupant of such Space; if Landlord fails to prosecute such
proceedings in such manner and such failure continues after reasonable notice
thereof by Tenant, Tenant may prosecute such proceedings in Landlord's name and
at Landlord's expense.
<PAGE>   40
                  (F) The failure by Landlord to exercise its option under
Section 12.6(B) with respect to any subletting shall not be deemed a waiver of
such option with respect to any extension of such subletting or any subsequent
subletting of the Premises affected thereby.

         Section 12.7. (A) In connection with any subletting of all or any
portion of the Premises Tenant shall pay to Landlord an amount equal to fifty
percent (50%) of any Sublease Profit derived therefrom. Anything contained
herein to the contrary notwithstanding Tenant shall not be entitled to any
proceeds derived from or relating to (directly or indirectly) any subletting of
the Recapture Space by Landlord or its designee to a subtenant. All sums payable
hereunder by Tenant shall be calculated on an annualized basis, but shall be
paid to Landlord, as additional rent, within ten (10) days after receipt thereof
by Tenant.

                  (B) For purposes of this Lease:

                           (1) "Rent Per Square Foot" shall mean the sum of the
then Fixed Rent, Escalation Rent and Electricity Additional Rent divided by the
Space Factor.

                           (2) "Sublease Profit" shall mean the product of (x)
the Sublease Rent Per Square Foot less the Rent Per Square Foot, and (y) the
number of rentable square feet constituting the portion of the Premises sublet
by Tenant.

                           (3) "Sublease Rent" shall mean any rent or other
consideration paid to Tenant directly or indirectly by any subtenant or any
other amount received by Tenant from or in connection with any subletting
(including, but not limited to, sums paid for the sale or rental, or
consideration received on account of any contribution, of Tenant's Property or
sums paid in connection with the supply of electricity or HVAC) other than any
amounts included within "Gross Revenues" pursuant to the Telecommunications
License Agreement (as such quoted term is defined in the Telecommunications
Agreement) less the Sublease Expenses.

                           (4) "Sublease Expenses" shall mean: (i) in the event
of a sale of Tenant's Property, the then unamortized or undepreciated cost
thereof determined on the basis of Tenant's federal income tax returns, (ii) the
reasonable out-of-pocket costs and expenses of Tenant in making such sublease,
such as brokers' fees, attorneys' fees, and advertising fees paid to unrelated
third parties, (iii) any sums paid to Landlord pursuant to Section 12.2(B)
hereof, (iv) the cost of improvements or alterations made by Tenant expressly
and solely for the purpose of preparing that portion of the Premises for such
subtenancy if not used by Tenant subsequent to the expiration of the term of the
sublease, and (v) the unamortized or undepreciated cost of any Tenant's Property
leased to and used by such subtenant. In determining Sublease Rent, the costs
set forth in clauses (ii), (iii) and (iv) shall be amortized on a straight-line
basis over the term of such sublease and the costs set forth in clause (v) shall
be amortized on a straight line basis over the greater of the longest useful
life of such improvements, alterations or Property (as permitted pursuant to the
Internal Revenue Code of 1986, as amended) 
<PAGE>   41
and the term of such sublease.

                           (5) "Sublease Rent Per Square Foot" shall mean the
Sublease Rent divided by the rentable square feet of the space demised under the
sublease in question.

                           (6) Sublease Profit shall be recalculated from time
to time to reflect any corrections in the prior calculation thereof due to (i)
subsequent payments received or made by Tenant, (ii) the final adjustment of
payments to be made by or to Tenant, and (iii) mistake. Promptly after receipt
or final adjustment of any such payments or discovery of any such mistake,
Tenant shall submit to Landlord a recalculation of the Sublease Profit, and an
adjustment shall be made between Landlord and Tenant, on account of prior
payments made or credits received pursuant to this Section 12.7. In addition, if
Sublease Expenses utilized for the purpose of calculating Sublease Profit
included an amount attributable to the cost of the improvements made by Tenant
expressly and solely for the purpose of preparing the Premises or a portion
thereof for the occupancy of the subtenant and subsequent to the expiration of
the sublease such improvements and/or alterations were not demolished and/or
removed, Sublease Profits shall be recalculated as if the cost of such
improvements and/or alterations were not incurred by Tenant and Tenant promptly
shall pay to Landlord fifty percent (50%) of the additional amount of such
Sublease Profit resulting from such recalculation.

         Section 12.8.(A) Notwithstanding the provisions of Section 12.1
hereof, if Landlord shall not exercise its rights pursuant to paragraph (B)(2)
of this Section 12.8, Landlord shall not unreasonably withhold its consent to an
assignment of this Lease in its entirety provided that:

                           (1) no Event of Default shall have occurred and be
continuing;

                           (2) upon the date Tenant delivers the Assignment
Statement to Landlord and upon the date immediately preceding the date of any
assignment approved by Landlord, the proposed assignee shall have a financial
standing (taking into consideration the obligations of the proposed assignee
under this Lease) satisfactory to Landlord, be of a character, be engaged in a
business, and propose to use the Premises in a manner in keeping with the
standards in such respects of the other tenancies in the Building;

                           (3) the proposed assignee (or any Person who directly
or indirectly, Controls, is Controlled by or is under common Control with the
proposed assignee) shall not be a person or entity with whom Landlord is
negotiating to lease space in the Building at the time of receipt of an
Assignment Statement;

                           (4) the character of the business to be conducted or
the proposed use of the Premises by the proposed assignee shall not (a) be
likely to increase Landlord's operating expenses beyond that which would be
incurred for use by Tenant or for use in accordance with the standards of use of
other tenancies in the Building; (b)
<PAGE>   42
increase the burden on existing cleaning services or elevators over the burden
prior to such proposed assignment; (c) violate any provision or restrictions
herein relating to the use or occupancy of the Premises; (d) require any
alterations, installations, improvements, additions or other physical changes to
be performed in or made to any portion of the Building or the Real Property
other than the Premises; or (e) violate any provision or restrictions in any
other lease for space in the Building or in any Superior Lease or Mortgage; if
Landlord shall have consented to an assignment and, as a result of the use and
occupancy of the Premises by Tenant/assignee, operating expenses are increased,
then Tenant shall pay to Landlord, within ten (10) days after demand, as
additional rent, all resulting increases in operating expenses; and

                           (5) the assignee shall agree to assume all of the
obligations of Tenant under this Lease from and after the date of the
assignment.

                  (B) (1) At least fifteen (15) Business Days prior to any
proposed assignment, Tenant shall submit a statement to Landlord (the
"Assignment Statement") containing the following information: (i) the name and
address of the proposed assignee, (ii) the essential terms and conditions of the
proposed assignment, including, without limitation, the consideration payable
for such assignment and the value (including cost, overhead and supervision) of
any improvements (including any demolition to be performed) to the Premises
proposed to be made by Tenant to prepare the Premises for occupancy by such
assignee, (iii) the nature and character of the business of the proposed
assignee, and (iv) any other information that Landlord may reasonably request,
together with a statement specifically directing Landlord's attention to the
provisions of this Section 12.8(B) requiring Landlord to respond to Tenant's
request within fifteen (15) Business Days after Landlord's receipt of the
Assignment Statement. The Assignment Statement shall be executed by Tenant and
the proposed assignee and shall indicate both parties' intent (but not
necessarily binding obligation) to enter into an assignment agreement conforming
to the terms and conditions of the Assignment Statement and on such other terms
and conditions to which the parties may agree which are not inconsistent with
the essential terms set forth in the Assignment Statement.

                           (2) Landlord shall have the right, exercisable within
fifteen (15) Business Days after Landlord's receipt of the Assignment Statement,
to take an assignment of this Lease (in its own name or that of its designee)
for the same consideration payable to Tenant pursuant to the terms of the
Assignment Statement (less the amount of any brokerage commission which would
have been payable on account of the assignment pursuant to the Assignment
Statement), provided Landlord shall take possession of the Premises "as is" in
its condition as of the date of such assignment and shall be entitled to a
credit against the consideration otherwise payable in the amount, if any, of the
value of any improvements, work or demolition proposed to be provided or
performed by Tenant pursuant to the Assignment Statement. If Landlord shall
exercise its rights pursuant to this Section 12.8(B)(2), then from and after the
date of such assignment to Landlord, Tenant shall have no further rights or
obligations pursuant to this Lease (other than those which expressly survive
such assignment and 
<PAGE>   43
the expiration or earlier termination of this Lease).

                           (3) If Landlord shall fail to notify Tenant within
said fifteen (15) Business Day period of Landlord's intention to exercise its
rights pursuant to paragraph (B)(2) of this Section 12.8 or of Landlord's
consent to or disapproval of the proposed assignment pursuant to the Assignment
Statement, or if Landlord shall have consented to such assignment as provided in
Section 12.8(A) hereof, Tenant shall be free to assign the Premises to such
proposed assignee on the same essential terms and conditions set forth in the
Assignment Statement. If Tenant shall not enter into such assignment within
sixty (60) days after the delivery of the Assignment Statement to Landlord, then
the provisions of this Section 12.8 shall again be applicable in their entirety
to any proposed assignment.

                           (4) If Tenant shall propose to assign this Lease and
is about to commence negotiations with a prospective assignee, Tenant shall
advise Landlord of the identity of such prospective assignee and Landlord shall,
within five (5) Business Days, advise Tenant if the execution of an assignment
agreement with such prospective assignee would violate the provisions of
paragraph (A)(3) of this Section 12.8.

                  (C) If Tenant shall assign this Lease, Tenant shall deliver to
Landlord, within five (5) days after execution thereof, (x) a duplicate original
instrument of assignment in form and substance reasonably satisfactory to
Landlord, duly executed by Tenant, and (y) an instrument in form and substance
reasonably satisfactory to Landlord, duly executed by the assignee, in which
such assignee shall assume observance and performance of, and agree to be
personally bound by, all of the terms, covenants and conditions of this Lease on
Tenant's part to be observed and performed.

                  (D) Tenant shall pay to Landlord, upon receipt thereof, an
amount equal to fifty percent (50%) of all Assignment Proceeds. For purposes of
this paragraph (D), "Assignment Proceeds" shall mean all consideration payable
to Tenant, directly or indirectly, by any assignee, including Landlord pursuant
to paragraph (B) of this Section 12.8, or any other amount received by Tenant
from or in connection with any assignment (including, but not limited to, sums
paid for the sale or rental, or consideration received on account of any
contribution, of Tenant's Property) after deducting therefrom: (i) in the event
of a sale (or contribution) of Tenant's Property, the then unamortized or
undepreciated cost thereof determined on the basis of Tenant's federal income
tax returns, (ii) the reasonable out-of-pocket costs and expenses of Tenant in
making such assignment, such as brokers' fees, attorneys' fees, and advertising
fees paid to unrelated third parties, (iii) any payments required to be made by
Tenant in connection with the assignment of its interest in this Lease pursuant
to Article 31-B of the Tax law of the State of New York or any real property
transfer tax of the United States or the City or State of New York (other than
any income tax), (iv) any sums paid by Tenant to Landlord pursuant to Section
12.2(B) hereof, (v) the cost of improvements or alterations made by Tenant
expressly and solely for the purpose of preparing the Premises for such
assignment, as determined by Tenant's federal income tax returns, (vi) the
unamortized or undepreciated cost of any Tenant's Property leased
<PAGE>   44
to and used by such assignee, and (vii) the then unamortized or undepreciated
cost of the Alterations determined on the basis of Tenant's federal income tax
returns less the Tenant Fund. If the consideration paid to Tenant for any
assignment shall be paid in installments, then the expenses specified in this
paragraph (D) shall be amortized over the period during which such installments
shall be payable. If Landlord exercises its right to take an assignment of this
Lease pursuant to the provisions of Section 12.8(B) hereof, in no event shall
Tenant be entitled to any proceeds derived from or relating to (directly or
indirectly) any lease or sublease of the Premises by Landlord or further
assignment of the Lease.

         Section 12.9. Notwithstanding any other provision of this Lease,
neither Tenant nor any direct or indirect assignee or subtenant of Tenant may
enter into any lease, sublease, license, concession or other agreement for use,
occupancy or utilization of space in the Premises which provides for a rental or
other payment for such use, occupancy or utilization based in whole or in part
on the net income or profits derived by any person from the property leased,
occupied or utilized, or which would require the payment of any consideration
which would not fall within the definition of "rents from real property", as
that term is defined in Section 856(d) of the Internal Revenue Code of 1986, as
amended.


                                   ARTICLE 13
                                   ELECTRICITY

         Section 13.1. Tenant shall at all times comply with the rules,
regulations, terms and conditions applicable to service, equipment, wiring and
requirements of the public utility supplying electricity to the Building. The
riser serving the Premises shall be capable of supplying six (6) watts of
electricity per rentable square foot of the Premises (exclusive of Building
HVAC) and Tenant shall not use any electrical which, in Landlord's reasonable
judgment, would exceed such capacity or which will overload such installations
or interfere with the electrical service to other tenants of the Building. In
the event that, in Landlord's sole judgment, Tenant's electrical requirements
necessitate installation of an additional riser, risers or other proper and
necessary equipment, Landlord shall so notify Tenant of same. Within five (5)
Business Days after receipt of such notice, Tenant shall either cease such use
of such additional electricity or shall request that additional electrical
capacity (specifying the amount requested) be made available to Tenant.
Landlord, in Landlord's sole judgment shall determine whether to make available
such additional electrical capacity to Tenant and the amount of such additional
electrical capacity to be made available. If Landlord shall agree to make
available additional electrical capacity and the same necessitates installation
of an additional riser, risers or other proper and necessary equipment,
including, without limitation, any switchgear, the same shall be installed by
Landlord. Any such installation shall be made at Tenant's sole cost and expense,
and shall be chargeable and collectible as additional rent and paid within ten
(10) days after the rendition of a bill to Tenant therefor. Landlord shall not
be liable in any way to Tenant for any failure or defect in the supply or
character of electric service furnished to the Premises by reason 
<PAGE>   45
of any requirement, act or omission of the utility serving the Building or for
any other reason not attributable to the gross negligence of Landlord, whether
electricity is provided by public or private utility or by any electricity
generation system owned and operated by Landlord.

         Section 13.2.(A) Unless Landlord is required to have Tenant obtain
electricity from the public utility company furnishing electricity to the
Building pursuant to the provisions of Section 13.4 hereof, subject to the
provisions of Section 13.3 hereof, electricity shall be furnished by Landlord to
the Premises and Tenant shall pay to Landlord, as additional rent for such
service, during the Term, an amount (the "Electricity Additional Rent") equal to
(i) the amount Landlord actually pays to the utility company to provide
electricity to the Premises, including all applicable surcharges, demand
charges, time-of-day charges, energy charges, fuel adjustment charges, rate
adjustment charges, taxes and other sums payable in respect thereof and net of
any rebates or credits actually received by Landlord in respect of such
electricity supplied to the Premises, based on Tenant's demand and/or
consumption of electricity (and/or any other method of quantifying Tenant's use
of or demand for electricity as set forth in the utility company's tariff) as
registered on a meter or submeter (installed by Landlord at Tenant's sole cost
and expense) for purposes of measuring such demand, consumption and/or other
method of quantifying Tenant's use of or demand for electricity (it being agreed
that such meter or submeter shall measure demand and consumption, and off-peak
and on-peak use, in either case to the extent such factors are relevant in
making the determination of Landlord's cost) plus (ii) an amount equal to the
actual third party out-of-pocket costs and expenses incurred by Landlord in
connection with reading such meters and preparing the bills therefor (which
shall not exceed two percent (2%) of the amount set forth in clause (i) above).
Tenant, from time to time, shall have the right to review Landlord's meter
readings, and Landlord's calculation of the Electricity Additional Rent, at
reasonable times and on reasonable prior notice, by giving notice thereof to
Landlord on or prior to the ninetieth (90th) day after the date when Landlord
gives Tenant a bill or statement for the for the Electricity Additional Rent.
Tenant shall pay to Landlord, as additional rent, the cost to install Tenant's
meter or submeter in the Premises, within ten (10) days after demand therefor.

                  (B) Where more than one meter measures the electricity
supplied to Tenant, the electricity rendered through each meter may be computed
and billed separately in accordance with the provisions hereinabove set forth.
Bills for the Electricity Additional Rent shall be rendered to Tenant at such
time as Landlord may elect (but not more frequently than once per month), and
Tenant shall pay the amount shown thereon to Landlord within ten (10) days after
receipt of such bill. Landlord agrees to endeavor to render bills for
Electricity Additional Rent on a monthly basis. Tenant expressly acknowledges
that in connection with the installation of the meters or submeters, the
electricity being supplied to the Premises shall be temporarily interrupted.
Landlord shall use reasonable efforts to minimize interference with the conduct
of Tenant's business in connection with such installation; provided, however,
that Landlord shall have no obligation to employ contractors or labor at
so-called overtime or other premium pay rates or to incur any other overtime
costs or expenses 
<PAGE>   46
whatsoever.

         Section 13.3.(A) (i) If prior to Landlord's installation of meters or
submeters and such meters or submeters becoming operational for the purpose of
measuring Tenant's consumption of electricity in the Premises (which meters
Landlord agrees to promptly order, and upon receipt to promptly commence and
install with due diligence), Tenant shall be provided access to the Premises or
portion thereof for the purpose of performing Tenant's Initial Alterations,
Tenant shall pay to Landlord a fee (the "Electricity Fee") in consideration of
Landlord furnishing electricity to the Premises for construction lighting and
for power for normal construction tools. The Electricity Fee shall only be
payable with respect to the period prior to Landlord's installation of meters
and submeters in the Premises and such meters or submeters becoming operational.
Upon such installation by Landlord, and thereafter, Tenant shall pay Electricity
Additional Rent based upon the demand and consumption shown on such meters or
submeters, as more particularly set forth in Section 13.2 hereof. The
Electricity Fee shall be an amount equal to the product of (x)Thirty-Six and
53/100 Dollars ($36.53) (provided, however, that if Landlord shall provide
Tenant with access to less than the entire Premises, the Electricity Fee shall
be proportionately reduced based on the area of the Premises to which Tenant has
been given access), and (y) the number of calendar days on which Tenant shall
have access to the Premises or portion thereof for the purpose of performing
Tenant's Initial Alterations. Landlord shall render a bill to Tenant for such
Electricity Fee from time to time, but not more frequently than monthly, and
Tenant shall pay such Electricity Fee to Landlord, as additional rent, within
ten (10) days after receipt of such bill.

                           (ii) If Tenant shall occupy the Premises, or any
portion thereof, for the conduct of its business (as opposed to for the
performance of Initial Alterations) prior to Landlord's installation of such
meters or submeters in any portion of the Premises so occupied and such meters
or submeters becoming operational, Tenant shall pay the Electricity Inclusion
Charge, rather than the Electricity Fee, for such portion of the Premises with
respect to the period prior to the date such meters or submeters are installed
and operational. Upon such installation by Landlord, and thereafter and such
meters or submeters becoming operational, Tenant shall pay Electricity
Additional Rent pursuant to Section 13.2 hereof.

                  (B) If prior to the installation of the electric meters or
submeters in the Premises and such meters or submeters becoming operational,
Tenant shall occupy all or any portion of the Premises for the conduct of
business, Landlord shall furnish electric current to the Premises on a "rent
inclusion" basis, until said meters or submeters are installed and operational.
The Fixed Rent set forth in this Lease does not include a charge for such
electric service. Accordingly, Tenant shall pay to Landlord on the first day of
each month during such inclusion period, in the same manner as Fixed Rent is
payable hereunder, an amount equal to One Thousand Eight Hundred Fifty-Two and
08/100 Dollars ($1,852.08) (the "Electricity Inclusion Charge"). If such
inclusion period shall commence on a date other than the first (1st) day of any
calendar month, Tenant shall pay to Landlord on the date such inclusion period
commences an 
<PAGE>   47
amount equal to the product of (i) Sixty and 89/100 Dollars ($60.89), and (ii)
the number of calendar days in the period from the beginning of such inclusion
period to the last day of the month in which such date shall occur, both dates
inclusive. If Landlord is supplying electricity to only a portion of the
Premises on a "rent inclusion" basis as aforesaid, the Electricity Inclusion
Charge shall be proportionately reduced based on the area of the Premises being
supplied with electricity on a "rent inclusion" basis. The parties agree that
although the charge for furnishing electrical energy is reflected in the
Electricity Inclusion Charge on a so called "rent inclusion" basis, the value to
Tenant of such service may not be accurately reflected in such Electricity
Inclusion Charge. Accordingly, Landlord and Tenant agree that after the meters
and/or submeters are installed and operational and electricity is being
furnished to such portion of the Premises pursuant to Section 13.2 hereof for a
three (3) month period, the Electricity Inclusion Charge shall be adjusted based
on the average of the Electricity Additional Rent ("Three Month Average")
payable by Tenant for such three (3) month period with respect to the portion of
the Premises which was previously being furnished with electricity on a "rent
inclusion" basis. If the Three Month Average shall exceed the Electricity
Inclusion Charge, Tenant, within ten (10) Business Days after demand therefor,
shall pay such excess to Landlord, and if the Electricity Inclusion Charge shall
exceed the Three Month Average, Landlord, at its option, shall either promptly
refund to Tenant such excess or shall credit such excess against immediately
subsequent monthly installments of Fixed Rent next becoming due and payable
hereunder.

         Section 13.4. If Landlord shall be required by Requirements or the
public utility serving the Premises to discontinue furnishing electricity to
Tenant this Lease shall continue in full force and effect and shall be
unaffected thereby, except only that from and after the effective date of such
discontinuance, Landlord shall not be obligated to furnish electricity to Tenant
and Tenant shall not be obligated to pay the Electricity Additional Rent or the
Electricity Inclusion Charge, as the case may be. If Landlord so discontinues
furnishing electricity to Tenant, Tenant shall use diligent efforts to obtain
electric energy directly from the public utility furnishing electric service to
the Building. The costs of such service shall be paid by Tenant directly to such
public utility. Such electricity may be furnished to Tenant by means of the
existing electrical facilities serving the Premises, at no charge, to the extent
the same are available, suitable and safe for such purposes as determined by
Landlord. All meters and all additional panel boards, feeders, risers, wiring
and other conductors and equipment which may be required to obtain electricity
shall be installed by Landlord at Tenant's expense. Provided Tenant shall use
and continue to use diligent efforts to obtain electric energy directly from the
public utility, Landlord, to the extent permitted by applicable Requirements,
shall not discontinue furnishing electricity to the Premises until such
installations have been made and Tenant shall be able to obtain electricity
directly from the public utility.
<PAGE>   48
                                   ARTICLE 14
                               ACCESS TO PREMISES

         Section 14.1.(A) Tenant shall permit Landlord, Landlord's agents,
representatives, contractors and employees and public utilities servicing the
Building to erect, use and maintain, concealed ducts, pipes and conduits in and
through the Premises. Landlord, Landlord's agents, representatives, contractors,
and employees and the agents, representatives, contractors, and employees of
public utilities servicing the Building shall have the right to enter the
Premises (except Secure Areas) at all reasonable times upon reasonable prior
notice (except in the case of an emergency in which event Landlord and
Landlord's agents, representatives, contractors, and employees may enter the
Premises (including the Secure Areas, provided Landlord, Landlord's agents,
representatives, contractors and employees are accompanied into the Secure Areas
by a member of the Fire Department or Police Department) without prior notice to
Tenant and without being accompanied by a representative of Tenant), which
notice may be oral, to examine the same, to show them to prospective purchasers,
or prospective or existing Mortgagees or Lessors, and to make such repairs,
alterations, improvements, additions or restorations (i) as Landlord may deem
necessary or desirable to the Premises or to any other portion of the Building,
or (ii) which Landlord may elect to perform following ten (10) days after
notice, except in the case of an emergency (in which event Landlord and
Landlord's agents, representatives, contractors, and employees may enter without
prior notice to Tenant), following Tenant's failure to make repairs or perform
any work which Tenant is obligated to make or perform under this Lease, or (iii)
for the purpose of complying with any Requirements, a Superior Lease or a
Mortgage, and Landlord shall be allowed to take all material into and upon the
Premises that may be required therefor without the same constituting an eviction
or constructive eviction of Tenant in whole or in part and the Fixed Rent (and
any other item of Rental) shall in no wise abate (except to the extent expressly
set forth in Section 14.2 hereof) while said repairs, alterations, improvements,
additions or restorations are being made, by reason of loss or interruption of
business of Tenant, or otherwise For purposes hereof, "Secure Areas" shall mean
those portion of the Premises as sworn by hatching on the floor plan attached
hereto and made a part hereof as Exhibit "D". Except as otherwise provided in
this Article 14 in the case of emergency, Landlord shall not have access to
Secure Areas without being accompanied by a designated representative of Tenant.
Tenant shall have the right (except in the case of an emergency) to have a
representative of Tenant accompany Landlord in the Premises when access is
permitted hereunder.

                  (B) Any work performed or installations made pursuant to this
Article 14 shall be made with reasonable diligence and otherwise pursuant to the
provisions of Section 4.3 hereof. Landlord shall cause any debris or refuse to
be removed from the work area in the Premises at the end of each day and, upon
completion of any such work, Landlord shall clean all areas of the Premises
affected by Landlord's activities and, upon completion of such work, subject to
the provisions of Section 14.1(A) hereof, shall remove from the Premises all
tools, equipment and materials relating to such work.

                  (C) Except as hereinafter provided, any pipes, ducts, or
conduits installed in or through the Premises pursuant to this Article 14 shall
be concealed behind, beneath or within partitioning, columns, ceilings or floors
located or to be located in the Premises. Notwithstanding the foregoing, any
such pipes, ducts, or conduits may be furred at points immediately adjacent to
partitioning columns or ceilings located or to be located in the Premises,
<PAGE>   49
provided that the same are completely furred and that the installation of such
pipes, ducts, or conduits, when completed, shall not reduce the usable area of
the Premises beyond a de minimis amount.

         Section 14.2. If due to any work or installation performed by Landlord
hereunder or failure by Landlord to perform its obligations hereunder (other
than by reason of Unavoidable Delays, (i) Tenant shall be unable for at least
ten (10) consecutive Business Days to operate its business in the Premises in
substantially the same manner as such business was operated prior to the
performance of such work or installation or such failure, (ii) such interruption
shall occur during business hours, and (iii) Tenant shall have been unable,
after using reasonable efforts, to relocate its employees and property located
in that portion of the Premises which is the subject of such work or
installation or such failure so as to have been able to have continued so to
operate its business, the Fixed Rent and the Escalation Rent shall be reduced on
a per diem basis in the proportion in which the area of the portion of the
Premises which is unusable bears to the total area of the Premises for each day
subsequent to the aforesaid ten (10) Business Day period that such portion of
the Premises remains unusable.

         Section 14.3. During the twelve (12) month period prior to the
Expiration Date, Landlord may exhibit the Premises to prospective tenants
thereof.

         Section 14.4. If Tenant shall not be present when for any reason entry
into the Premises shall be necessary or permissible, Landlord or Landlord's
agents, representatives, contractors or employees may enter the same without
rendering Landlord or such agents liable therefor if during such entry Landlord
or Landlord's agents shall accord reasonable care under the circumstances to
Tenant's Property, and without in any manner affecting this Lease. Nothing
herein contained, however, shall be deemed or construed to impose upon Landlord
any obligation, responsibility or liability whatsoever, for the care,
supervision or repair of the Building or any part thereof, other than as herein
provided.

         Section 14.5. Landlord also shall have the right at any time, without
the same constituting an actual or constructive eviction and without incurring
any liability to Tenant therefor, to change the arrangement or location of
entrances or passageways, doors and doorways, and corridors, elevators, stairs,
toilets, or other public parts of the Building and to change the name, number or
designation by which the Building is commonly known, provided any such change
does not (a) unreasonably reduce, interfere with or deprive Tenant of access to
the Building or the Premises or (b) reduce the rentable area (except by a de
minimis amount) of the Premises. All parts (except surfaces facing the interior
of the Premises) of all walls, windows and doors bounding the Premises
(including exterior Building walls, exterior core corridor walls, exterior doors
and entrances), all balconies, terraces and roofs adjacent to the Premises, all
space in or adjacent to the Premises used for shafts, stacks, stairways, chutes,
pipes, conduits, ducts, fan rooms, heating, air cooling, plumbing and other
mechanical facilities, service closets and other Building facilities are not
part of the Premises, and 
<PAGE>   50
Landlord shall have the use thereof, as well as access thereto through the
Premises for the purposes of operation, maintenance, alteration and repair.


                                   ARTICLE 15
                            CERTIFICATE OF OCCUPANCY

         Tenant shall not at any time use or occupy the Premises in violation of
the certificate of occupancy at such time issued for the Premises or for the
Building and in the event that any department of the City or State of New York
shall hereafter contend or declare by notice, violation, order or in any other
manner whatsoever that the Premises are used for a purpose which is a violation
of such certificate of occupancy, Tenant, upon written notice from Landlord or
any Governmental Authority, shall immediately discontinue such use of the
Premises. On the Commencement Date a temporary or permanent certificate of
occupancy covering the Premises will be in force permitting the Premises to be
used as offices, provided, however, neither such certificate, nor any provision
of this Lease, nor any act or omission of Landlord, shall be deemed to
constitute a representation or warranty that the Premises, or any part thereof,
lawfully may be used or occupied for any particular purpose or in any particular
manner, in contradistinction to mere "office" use.


                                   ARTICLE 16
                                     DEFAULT

         Section 16.1. Each of the following events shall be an "Event of
Default" hereunder:

                  (A) If Tenant shall default in the payment when due of any
installment of Fixed Rent and such default shall continue for three (3) Business
Days after notice of such default is given to Tenant, or in the payment when due
of any other item of Rental and such default shall continue for three (3)
Business Days after notice of such default is given to Tenant, except that if
Landlord shall have given two (2) such notices in any twelve (12) month period,
Tenant shall not be entitled to any further notice of its delinquency in the
payment of Rental until such time as twelve (12) consecutive months shall have
elapsed without Tenant having defaulted in any such payment, or

                  (B) if Tenant or NESCO Industries, Inc. or Fibernet Equal
Access LLC (or any entities affiliated with either of them) shall default in the
observance or performance of any term, covenant or condition on Tenant's, NESCO
Industries, Inc. or Fibernet Equal Access LLC's or such entities' part (as the
case may be) to be observed or performed under any other lease or license with
Landlord or Landlord's predecessor in interest of space in the Building
(including, without limitation, the Telecommunications License Agreement and the
Agreement of Lease between Landlord, as landlord, and NESCO Industries, Inc., as
tenant) and such default shall continue beyond any grace period set forth in
such other lease or license for the remedying of such default; or,
<PAGE>   51

                  (C) if the Premises shall become deserted or abandoned (for
the purposes of this Section 16.1(C), the term "abandoned" shall mean that
Tenant shall (i) have vacated the Premises with no intention to return (ii) not
be actively seeking a prospective subtenant of the Premises or assignee of the
Lease, and (iii) not be maintaining the Premises in accordance with good
business practice); or

                  (D) if Tenant's interest or any portion thereof in this Lease
shall devolve upon or pass to any person, whether by operation of law or
otherwise, except as expressly permitted under Article 12 hereof; or

                  (E) (1) if Tenant shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become due; or

                           (2) if Tenant shall commence or institute any case,
proceeding or other action (A) seeking relief on its behalf as debtor, or to
adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to it or its debts under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property; or

                           (3) if Tenant shall make a general assignment for the
benefit of creditors; or

                           (4) if any case, proceeding or other action shall be
commenced or instituted against Tenant (A) seeking to have an order for relief
entered against it as debtor or to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts under
any existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, or (B) seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its property, which in either of such
cases (i) results in any such entry of an order for relief, adjudication of
bankruptcy or insolvency or such an appointment or the issuance or entry of any
other order having a similar effect or (ii) remains undismissed for a period of
ninety (90) days; or

                           (5) if any case, proceeding or other action shall be
commenced or instituted against Tenant seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its property which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within ninety (90) days from the entry thereof; or

                           (6) if Tenant shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clauses (2),
<PAGE>   52
(3), (4) or (5) above; or

                           (7) if a trustee, receiver or other custodian is
appointed for any substantial part of the assets of Tenant which appointment is
not vacated or stayed within seven (7) Business Days; or

                  (F) if Tenant shall fail more than six (6) times during any
twelve (12) month period to pay any installment of Fixed Rent or any item of
Rental when due after receipt of the notice and the expiration of the applicable
grace period pursuant to the provisions of paragraph (A) above, if such notice
and grace period are then required; or

                  (G) if Tenant shall fail to pay any installments of Fixed Rent
or items of Rental when due as required by this Lease, and Landlord shall bring
more than two (2) summary dispossess proceeding during any twelve (12) month
period; or

                  (H) if this Lease is assigned (or all or a portion of the
Premises are subleased) to a Related Entity and such Related Entity shall no
longer (i) Control, (ii) be under common Control with, or (iii) be under the
Control of Tenant (or any permitted successor by merger, consolidation or
purchase as provided herein); or

                  (I) if Landlord shall present the Letter of Credit to the bank
which issued the same in accordance with the provisions of Article 31 hereof,
and the bank shall fail to honor the Letter of Credit and pay the proceeds
thereof to Landlord for any reason whatsoever; or

                  (J) if Tenant shall default in the observance or performance
of any other term, covenant or condition of this Lease on Tenant's part to be
observed or performed and Tenant shall fail to remedy such default within twenty
(20) days after notice by Landlord to Tenant of such default, or if such default
is of such a nature that it cannot with due diligence be completely remedied
within said period of twenty (20) days and Tenant shall not commence within said
period of twenty (20) days, or shall not thereafter diligently prosecute to
completion, all steps necessary to remedy such default.

         Section 16.2.(A) If an Event of Default (i) described in Section
16.1(E) hereof shall occur, or (ii) described in Sections 16.1(A), (B), (C),
(D), (F), (G), (H), (I) or (J) shall occur and Landlord, at any time thereafter,
at its option gives written notice to Tenant stating that this Lease and the
Term shall expire and terminate three (3) days after the date Landlord shall
give Tenant such notice, then this Lease and the Term and all rights of Tenant
under this Lease shall expire and terminate as if the date on which the Event of
Default described in clause (i) above occurred or three (3) days after the date
of such notice, pursuant to clause (ii) above, as the case may be, were the
Fixed Expiration Date and Tenant immediately shall quit and surrender the
Premises, but Tenant shall nonetheless be liable for all of its obligations
hereunder, as provided for in Articles 17 and 18 hereof. Anything contained
herein to the contrary notwithstanding, if such termination shall be stayed by
order of any court having jurisdiction over any proceeding
<PAGE>   53
described in Section 16.1(E) hereof, or by federal or state statute, then,
following the expiration of any such stay, or if the trustee appointed in any
such proceeding, Tenant or Tenant as debtor-in-possession shall fail to assume
Tenant's obligations under this Lease within the period prescribed therefor by
law or within one hundred twenty (120) days after entry of the order for relief
or as may be allowed by the court, or if said trustee, Tenant or Tenant as
debtor-in-possession shall fail to provide adequate protection of Landlord's
right, title and interest in and to the Premises or adequate assurance of the
complete and continuous future performance of Tenant's obligations under this
Lease as provided in Section 12.3(B), Landlord, to the extent permitted by law
or by leave of the court having jurisdiction over such proceeding, shall have
the right, at its election, to terminate this Lease on five (5) days' notice to
Tenant, Tenant as debtor-in-possession or said trustee and upon the expiration
of said five (5) day period this Lease shall cease and expire as aforesaid and
Tenant, Tenant as debtor-in-possession or said trustee shall immediately quit
and surrender the Premises as aforesaid.

                  (B) If an Event of Default described in Section 16.1(A) hereof
shall occur, or this Lease shall be terminated as provided in Section 16.2(A)
hereof, Landlord, without notice, may reenter and repossess the Premises using
such force for that purpose as may be necessary without being liable to
indictment, prosecution or damages therefor and may dispossess Tenant by summary
proceedings or otherwise.

         Section 16.3. If at any time, (i) Tenant shall be comprised of two (2)
or more persons, or (ii) Tenant's obligations under this Lease shall have been
guaranteed by any person other than Tenant, or (iii) Tenant's interest in this
Lease shall have been assigned, the word "Tenant", as used in Section 16.1(E),
shall be deemed to mean any one or more of the persons primarily or secondarily
liable for Tenant's obligations under this Lease. Any monies received by
Landlord from or on behalf of Tenant during the pendency of any proceeding of
the types referred to in Section 16.1(E) shall be deemed paid as compensation
for the use and occupation of the Premises and the acceptance of any such
compensation by Landlord shall not be deemed an acceptance of Rental or a waiver
on the part of Landlord of any rights under Section 16.2.


                                   ARTICLE 17
                              REMEDIES AND DAMAGES

         Section 17.1.(A) If there shall occur any Event of Default, and this
Lease and the Term shall expire and come to an end as provided in Article 16
hereof:

                           (1) Tenant shall quit and peacefully surrender the
Premises to Landlord, and Landlord and its agents may immediately, or at any
time after such default or after the date upon which this Lease and the Term
shall expire and come to an end, re-enter the Premises or any part thereof,
without notice, either by summary proceedings, or by any other applicable action
or proceeding, or by force or otherwise (without being liable to indictment,
prosecution or damages therefor), and may
<PAGE>   54
repossess the Premises and dispossess Tenant and any other persons from the
Premises and remove any and all of their property and effects from the Premises;
and

                           (2) Landlord, at Landlord's option, may relet the
whole or any portion or portions of the Premises from time to time, either in
the name of Landlord or otherwise, to such tenant or tenants, for such term or
terms ending before, on or after the Expiration Date, at such rental or rentals
and upon such other conditions, which may include concessions and free rent
periods, as Landlord, in its sole discretion, may determine; provided, however,
that Landlord shall have no obligation to relet the Premises or any part thereof
and shall in no event be liable for refusal or failure to relet the Premises or
any part thereof, or, in the event of any such reletting, for refusal or failure
to collect any rent due upon any such reletting, and no such refusal or failure
shall operate to relieve Tenant of any liability under this Lease or otherwise
affect any such liability, and Landlord, at Landlord's option, may make such
repairs, replacements, alterations, additions, improvements, decorations and
other physical changes in and to the Premises as Landlord, in its sole
discretion, considers advisable or necessary in connection with any such
reletting or proposed reletting, without relieving Tenant of any liability under
this Lease or otherwise affecting any such liability.

         (B) Tenant hereby waives the service of any notice of intention to
re-enter or to institute legal proceedings to that end which may otherwise be
required to be given under any present or future law. Tenant, on its own behalf
and on behalf of all persons claiming through or under Tenant, including all
creditors, does further hereby waive any and all rights which Tenant and all
such persons might otherwise have under any present or future law to redeem the
Premises, or to re-enter or repossess the Premises, or to restore the operation
of this Lease, after (a) Tenant shall have been dispossessed by a judgment or by
warrant of any court or judge, or (b) any re-entry by Landlord, or (c) any
expiration or termination of this Lease and the Term, whether such dispossess,
re-entry, expiration or termination shall be by operation of law or pursuant to
the provisions of this Lease. The words "re-enter," "re-entry" and "re-entered"
as used in this Lease shall not be deemed to be restricted to their technical
legal meanings. In the event of a breach or threatened breach by Tenant, or any
persons claiming through or under Tenant, of any term, covenant or condition of
this Lease, Landlord shall have the right to enjoin such breach and the right to
invoke any other remedy allowed by law or in equity as if re-entry, summary
proceedings and other special remedies were not provided in this Lease for such
breach. The right to invoke the remedies hereinbefore set forth are cumulative
and shall not preclude Landlord from invoking any other remedy allowed at law or
in equity.

         Section 17.2.(A) If this Lease and the Term shall expire and come to
an end as provided in Article 16 hereof, or by or under any summary proceeding
or any other action or proceeding, or if Landlord shall re-enter the Premises as
provided in Section 17.1, or by or under any summary proceeding or any other
action or proceeding, then, in any of said events:

                           (1) Tenant shall pay to Landlord all Fixed Rent,
Escalation Rent
<PAGE>   55
and other items of Rental payable under this Lease by Tenant to Landlord to the
date upon which this Lease and the Term shall have expired and come to an end or
to the date of re-entry upon the Premises by Landlord, as the case may be;

                           (2) Tenant also shall be liable for and shall pay to
Landlord, as damages, any deficiency (referred to as "Deficiency") between the
Rental for the period which otherwise would have constituted the unexpired
portion of the Term and the net amount, if any, of rents collected under any
reletting effected pursuant to the provisions of clause (2) of Section 17.1(A)
for any part of such period (first deducting from the rents collected under any
such reletting all of Landlord's expenses in connection with the termination of
this Lease, Landlord's re-entry upon the Premises and with such reletting,
including, but not limited to, all repossession costs, brokerage commissions,
legal expenses, attorneys' fees and disbursements, alteration costs,
contribution to work and other expenses of preparing the Premises for such
reletting); any such Deficiency shall be paid in monthly installments by Tenant
on the days specified in this Lease for payment of installments of Fixed Rent;
Landlord shall be entitled to recover from Tenant each monthly Deficiency as the
same shall arise, and no suit to collect the amount of the Deficiency for any
month shall prejudice Landlord's right to collect the Deficiency for any
subsequent month by a similar proceeding; and

                           (3) whether or not Landlord shall have collected any
monthly Deficiency as aforesaid, Landlord shall be entitled to recover from
Tenant, and Tenant shall pay to Landlord, on demand, in lieu of any further
Deficiency as and for liquidated and agreed final damages, a sum equal to the
amount by which the Rental for the period which otherwise would have constituted
the unexpired portion of the Term (commencing on the date immediately succeeding
the last date with respect to which a Deficiency, if any, was collected) exceeds
the then fair and reasonable rental value of the Premises for the same period,
both discounted to present worth at the Base Rate; if, before presentation of
proof of such liquidated damages to any court, commission or tribunal, the
Premises, or any part thereof, shall have been relet by Landlord for the period
which otherwise would have constituted the unexpired portion of the Term, or any
part thereof, the amount of rent reserved upon such reletting shall be deemed,
prima facie, to be the fair and reasonable rental value for the part or the
whole of the Premises so relet during the term of the reletting.

                  (B) If the Premises, or any part thereof, shall be relet
together with other space in the Building, the rents collected or reserved under
any such reletting and the expenses of any such reletting shall be equitably
apportioned for the purposes of this Section 17.2. Tenant shall in no event be
entitled to any rents collected or payable under any reletting, whether or not
such rents shall exceed the Fixed Rent reserved in this Lease. Solely for the
purposes of this Article 17, the term "Escalation Rent" as used in Section
17.2(A) shall mean the Escalation Rent in effect immediately prior to the
Expiration Date, or the date of re-entry upon the Premises by Landlord, as the
case may be, adjusted to reflect any increase pursuant to the provisions of
Article 27 hereof for the Operating Year immediately preceding such event.
Except as expressly provided in Section 17.2(A)(3) hereof (in which the parties
agree to liquidated final
<PAGE>   56
damages) nothing contained in Article 16 hereof or this Article 17 shall be
deemed to limit or preclude the recovery by Landlord from Tenant of the maximum
amount allowed to be obtained as damages by any statute or rule of law, or of
any sums or damages to which Landlord may be entitled in addition to the damages
set forth in this Section 17.2.

                                   ARTICLE 18
                           LANDLORD FEES AND EXPENSES

         Section 18.1. If an Event of Default shall have occurred and be
continuing or if Tenant shall do or permit to be done any act or thing upon the
Premises which would cause Landlord to be in default under any Superior Lease or
Mortgage, Landlord may (1) as provided in Section 14.1 hereof, perform the same
for the account of Tenant, or (2) make any expenditure or incur any obligation
for the payment of money, including, without limitation, reasonable attorneys'
fees and disbursements in instituting, prosecuting or defending any action or
proceeding, and the cost thereof, with interest thereon at the Applicable Rate,
shall be deemed to be additional rent hereunder and shall be paid by Tenant to
Landlord within ten (10) days of rendition of any bill or statement to Tenant
therefor and if the term of this Lease shall have expired at the time of making
of such expenditures or incurring of such obligations, such sums shall be
recoverable by Landlord as damages.

         Section 18.2. If Tenant shall fail to pay any installment of Fixed
Rent, Escalation Rent or any other item of Rental within five (5) days after any
of the same shall be due, Tenant shall pay to Landlord, in addition to such
installment of Fixed Rent, Escalation Rent or other item of Rental, as the case
may be, as a late charge and as additional rent, a sum equal to interest at the
Applicable Rate on the amount unpaid, computed from the date such payment was
due to and including the date of payment.


                                   ARTICLE 19
                         NO REPRESENTATIONS BY LANDLORD

         Section 19.1. Landlord and Landlord's agents and representatives have
made no representations or promises with respect to the Building, the Real
Property or 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 herein. Tenant shall accept possession of the Premises in
the condition which shall exist on the Commencement Date "as is" (subject to the
provisions of Section 4.1 hereof), and Landlord shall have no obligation to
perform any work or make any installations in order to prepare the Premises for
Tenant's occupancy except for the items set forth on Exhibit "B" attached hereto
and made a part hereof ("Landlord's Work").

         Section 19.2. Landlord has made and makes no representation as to the
date on which it will complete Landlord's Work. No delay in completing
Landlord's Work
<PAGE>   57
shall in any way affect the validity of this Lease or the obligations of Tenant
hereunder or give rise to a claim for damages by Tenant or a claim for
rescission of this Lease, nor shall the same be construed in any wise to extend
the Term hereof. Landlord agrees that, subject to Unavoidable Delay, each item
of Landlord's Work shall be prosecuted with due diligence; provided, however,
that nothing contained in this Article 19 shall be deemed to impose upon
Landlord any obligations to employ contractors or labor at so-called overtime or
other premium pay rates or to incur any other overtime costs or expenses
whatsoever. Landlord shall have the right to enter the Premises subsequent to
the Commencement Date to complete Landlord's Work and the payment of Fixed Rent
and Escalation Rent shall not be affected thereby. Landlord and Tenant agree to
cooperate with each other in accordance with good construction practice and
scheduling to permit Landlord's Work to be performed simultaneously with the
Initial Alterations.


                                   ARTICLE 20
                                   END OF TERM

         Upon the expiration or other termination of this Lease, Tenant shall
quit and surrender to Landlord the Premises, vacant, broom clean, in good order
and condition, ordinary wear and tear and damage by fire or other casualty or
condemnation which Tenant is not responsible under the terms of this Lease
excepted, and otherwise in compliance with the provisions of Article 3 hereof.
If the last day of the Term or any renewal thereof falls on Saturday or Sunday,
this Lease shall expire on the Business Day immediately succeeding. Tenant
expressly waives, for itself and for any person claiming through or under
Tenant, any rights which Tenant or any such person may have under the provisions
of Section 2201 of the New York Civil Practice Law and Rules and of any
successor law of like import then in force in connection with any holdover
summary proceedings which Landlord may institute to enforce the foregoing
provisions of this Article 20. Tenant acknowledges that possession of the
Premises must be surrendered to Landlord on the Expiration Date. Tenant agrees
to indemnify and save Landlord harmless from and against all claims, losses,
damages, liabilities, costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements) resulting from delay by Tenant in
so surrendering the Premises, including, without limitation, any claims made by
any succeeding tenant founded on such delay. The parties recognize and agree
that the damage to Landlord resulting from any failure by Tenant to timely
surrender possession of the Premises as aforesaid will be extremely substantial,
will exceed the amount of the monthly installments of the Fixed Rent and Rental
theretofore payable hereunder, and will be impossible to accurately measure.
Tenant therefore agrees that if possession of the Premises is not surrendered to
Landlord within twenty-four (24) hours after the Expiration Date, in addition to
any other rights or remedies Landlord may have hereunder or at law, and without
in any manner limiting Landlord's right to demonstrate and collect any damages
suffered by Landlord and arising from Tenant's failure to surrender the Premises
as provided herein, Tenant shall pay to Landlord on account of use and occupancy
of the Premises for each month and for each portion of any month during which
Tenant holds
<PAGE>   58
over in the Premises after the Expiration Date, a sum equal to the greater of
(i) one and one-half (1 1/2) times the aggregate of that portion of the Fixed
Rent, Escalation Rent and Rental which was payable under this Lease during the
last month of the Term, and (ii) the then fair market rental value for the
Premises. Nothing herein contained shall be deemed to permit Tenant to retain
possession of the Premises after the Expiration Date or to limit in any manner
Landlord's right to regain possession of the Premises through summary
proceedings, or otherwise, and no acceptance by Landlord of payments from Tenant
after the Expiration Date shall be deemed to be other than on account of the
amount to be paid by Tenant in accordance with the provisions of this Article
20. The provisions of this Article 20 shall survive the Expiration Date.


                                   ARTICLE 21
                                 QUIET ENJOYMENT

         Provided no Event of Default has occurred and is continuing, Tenant may
peaceably and quietly enjoy the Premises subject, nevertheless, to the terms and
conditions of this Lease.


                                   ARTICLE 22
                           FAILURE TO GIVE POSSESSION


         Tenant waives any right to rescind this Lease under Section 223-a of
the New York Real Property Law or any successor statute of similar nature and
purpose then in force and further waives the right to recover any damages which
may result from Landlord's failure for any reason to deliver possession of the
Premises on the date set forth in Section 1.1 hereof for the commencement of the
Term. 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 such failure to give possession on the date set forth in
Section 1.1 hereof for the commencement of the Term shall in any wise affect the
validity of this Lease or the obligations of Tenant hereunder or give rise to
any claim for damages by Tenant or claim for rescission of this Lease, nor shall
the same be construed in any wise to extend the Term.


                                   ARTICLE 23
                                    NO WAIVER

         Section 23.1. No act or thing done by Landlord or Landlord's agents
during the Term shall be deemed an acceptance of a surrender of the Premises,
and no agreement to accept such surrender shall be valid unless in writing
signed by Landlord. No employee of Landlord or of Landlord's agents shall have
any power to accept the keys of the Premises prior to the termination of this
Lease. The delivery of keys to any employee of Landlord or of Landlord's agents
shall not operate as a termination of this
<PAGE>   59
Lease or a surrender of the Premises. In the event Tenant at any time desires to
have Landlord sublet the Premises for Tenant's account, Landlord or Landlord's
agents are authorized to receive said keys for such purpose without releasing
Tenant from any of the obligations under this Lease, and Tenant hereby relieves
Landlord of any liability for loss of or damage to any of Tenant's effects in
connection with such subletting.

         Section 23.2. The failure of Landlord to seek redress for violation of,
or to insist upon the strict performance of, any covenant or condition of this
Lease, or any of the Rules and Regulations set forth or hereafter adopted by
Landlord, shall not prevent a subsequent act, which would have originally
constituted a violation of the provisions of this Lease, from having all of the
force and effect of an original violation of the provisions of this Lease. The
receipt by Landlord of Fixed Rent, Escalation Rent or any other item of Rental
with knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach. The failure of Landlord to enforce any of the Rules and
Regulations set forth, or hereafter adopted, against Tenant or any other tenant
in the Building shall not be deemed a waiver of any such Rules and Regulations.
No provision of this Lease shall be deemed to have been waived by Landlord,
unless such waiver be in writing signed by Landlord. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Fixed Rent or other item
of Rental herein stipulated shall be deemed to be other than on account of the
earliest stipulated Fixed Rent or other item of Rental, or as Landlord may elect
to apply same, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as Fixed Rent or other item of Rental be
deemed an accord and satisfaction, and Landlord may accept such check or payment
without prejudice to Landlord's right to recover the balance of such Fixed Rent
or other item of Rental or to pursue any other remedy provided in this Lease.
This Lease contains the entire agreement between the parties and all prior
negotiations and agreements are merged herein. Any executory agreement hereafter
made shall be ineffective to change, modify, discharge or effect an abandonment
of this Lease 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.

         Section 23.3. The failure of Tenant to seek redress for violation of,
or to insist upon the strict performance of, any covenant or condition of this
Lease on Landlord's part to be performed, shall not be deemed a waiver of such
breach or prevent a subsequent act which would have originally constituted a
violation of the provisions of this Lease from having all of the force and
effect of an original violation of the provisions of this Lease. The payment by
Tenant of Fixed Rent, Escalation Rent or any other item of Rental or performance
of any obligation of Tenant hereunder with knowledge of any breach of any
covenant of this Lease shall not be deemed a waiver of such breach, and payment
of the same by Tenant shall be without prejudice to Tenant's right to pursue any
remedy against Landlord in this Lease provided.
<PAGE>   60
                                   ARTICLE 24
                             WAIVER OF TRIAL BY JURY

         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 Landlord and Tenant, Tenant's use or occupancy of the Premises,
or for the enforcement of any remedy under any statute, emergency or otherwise.
If Landlord commences any summary proceeding against Tenant, Tenant will not
interpose any counterclaim of whatever nature or description in any such
proceeding (unless failure to impose such counterclaim would preclude Tenant
from asserting in a separate action the claim which is the subject of such
counterclaim), and will not seek to consolidate such proceeding with any other
action which may have been or will be brought in any other court by Tenant.


                                   ARTICLE 25
                              INABILITY TO PERFORM

         This Lease and the obligation of Tenant to pay Rental hereunder and
perform all of the other covenants and agreements hereunder on the part of
Tenant to be performed shall in no wise be affected, impaired or excused because
Landlord is unable to fulfill any of its obligations under this Lease expressly
or impliedly to be performed by Landlord or because Landlord is unable to make,
or is delayed in making any repairs, additions, alterations, improvements or
decorations or is unable to supply or is delayed in supplying any equipment or
fixtures, if Landlord is prevented or delayed from so doing by reason of strikes
or labor troubles or by accident, or by any cause whatsoever beyond Landlord's
control, including, but not limited to, laws, governmental preemption in
connection with a national emergency or by reason of any Requirements of any
Governmental Authority or by reason of failure of the HVAC, electrical,
plumbing, or other Building Systems in the Building, or by reason of the
conditions of supply and demand which have been or are affected by war or other
emergency ("Unavoidable Delays").


                                   ARTICLE 26
                                BILLS AND NOTICES

         Except as otherwise expressly provided in this Lease, any bills,
statements, consents, notices, demands, requests or other communications given
or required to be given under this Lease shall be in writing and shall be deemed
sufficiently given or rendered if delivered by hand (against a signed receipt)
or if sent by registered or certified mail (return receipt requested) addressed

                  if to Tenant (a) at Tenant's address set forth in this Lease,
                  Attn.: _________________________, if mailed prior to Tenant's
                  taking possession of the Premises, or (b) at the Building,
                  Attn.:
<PAGE>   61
                  _________________________, if mailed subsequent to Tenant's
                  taking possession of the Premises, or (c) at any place where
                  Tenant or any agent or employee of Tenant may be found if
                  mailed subsequent to Tenant's vacating, deserting, abandoning
                  or surrendering the Premises, in each case with a copy to
                  ______________________, Attn.: __________________, Esq., or
                  
                  if to Landlord at Landlord's address set forth in this Lease,
                  Attn.: Mr. Kevin R. Wang, and with copies to (y) Proskauer
                  Rose LLP, 1585 Broadway, New York, New York 10036, Attn.:
                  Lawrence J. Lipson, Esq., and (z) each Mortgagee and Lessor
                  which shall have requested same, by notice given in accordance
                  with the provisions of this Article 26 at the address
                  designated by such Mortgagee or Lessor, or

to such other address(es) as Landlord, Tenant or any Mortgagee or Lessor may
designate as its new address(es) for such purpose by notice given to the other
in accordance with the provisions of this Article 26. Any such bill, statement,
consent, notice, demand, request or other communication shall be deemed to have
been rendered or given on the date when it shall have been hand delivered or
three (3) Business Days from when it shall have been mailed as provided in this
Article 26. Anything contained herein to the contrary notwithstanding, any
Operating Statement, Tax Statement or any other bill, statement, consent,
notice, demand, request or other communication from Landlord to Tenant with
respect to any item of Rental (other than any "default notice" if required
hereunder) may be sent to Tenant by regular United States mail.


                                   ARTICLE 27
                                   ESCALATION

         Section 27.1. For the purposes of this Article 27, the following terms
shall have the meanings set forth below.

                  (A) "Assessed Valuation" shall mean the amount for which the
Real Property is assessed pursuant to applicable provisions of the New York City
Charter and of the Administrative Code of the City of New York for the purpose
of calculating all or any portion of the Taxes payable with respect to the Real
Property.

                  (B) "Base Operating Expenses" shall mean the Operating
Expenses for the Base Operating Year.

                  (C) "Base Operating Year" shall mean the calendar year ending
December 31, 1998.

                  (D) "Base Taxes" shall mean the Taxes payable for the Tax Year
commencing July 1, 1998 and ending June 30, 1999.
<PAGE>   62
                  (E) (1) "Operating Expenses" shall mean the aggregate of those
costs and expenses (and taxes, if any, thereon, including without limitation,
sales and value added taxes) paid or incurred by or on behalf of Landlord
(whether directly or through independent contractors) in respect of the
Operation of the Property which, are properly chargeable to the Operation of the
Property together with and including (without limitation) the costs of gas, oil,
steam, water, sewer rental, electricity (for the portions of the Real Property
not leased to and occupied by tenants or available for occupancy), HVAC and
other utilities furnished to the Building and utility taxes, and the expenses
incurred in connection with the Operation of the Property such as insurance
premiums, reasonable attorneys' fees and disbursements, auditing and other
professional fees and expenses, and all expenses (including customary attorneys'
fees and disbursements, experts' and other witnesses' fees) incurred in
contesting the validity or amount of any Taxes or in obtaining a refund of any
Taxes, but specifically excluding:

                                    (i)      Taxes,

                                    (ii)     franchise or income taxes imposed
upon Landlord,

                                    (iii)    debt service on Mortgages,

                                    (iv)     leasing commissions,

                                    (v)      capital improvements (except as
otherwise provided herein),

                                    (vi)     the cost of electrical energy
furnished directly to Tenant and other tenants of the Building,

                                    (vii)    the cost of tenant installations
incurred in connection with preparing space for a new tenant,

                                    (viii)   salaries of personnel above the
grade of building manager and such building manager's supervisor,

                                    (ix)     rent paid under Superior Leases
(other than in the nature of Rent consisting of Taxes or Operating Expenses),

                                    (x)      any expense for which Landlord is
otherwise compensated through the proceeds of insurance or is otherwise
compensated by any tenant (including Tenant) of the Building for services in
excess of the services Landlord is obligated to furnish to Tenant hereunder,

                                    (xi)     legal fees and disbursements
incurred in connection with any negotiation of, or disputes arising out of, any
space lease in the Building,
<PAGE>   63
                                    (xii)    depreciation, except as provided
herein,

                                    (xiii)   Landlord's advertising and
promotional costs for the Building,

                                    (xiv)    any fee or expenditure paid (a) to
any Person which shall Control, be under the Control of, or be under common
Control with Landlord, or in which Landlord directly or indirectly owns not less
than a fifty (50%) percent interest or (b) to any shareholder owning at least
fifty (50%) percent of the common stock, any general partner, any officer above
the rank of vice president, or member of any Board of Directors of Landlord or
of any Person described in this clause (xiv) or (c) to any person who is a
relative by blood (to the first degree of consanguinity, lineal or lateral) or
marriage of any such persons, in each case in excess of the amount which would
be paid in the absence of such relationship.

                                    (xv) costs incurred with respect to a sale
of all or any portion of the Building or any interest therein (including,
without limitation, transfer, sales, and/or gains taxes) or in connection with
the purchase or sale of any air or development or easement rights,

                                    (xvi) lease takeover costs incurred by
Landlord in connection with the entering into of space leases in the Building
and costs incurred by Landlord to relocate tenants in the Building in order to
consummate a specific space lease or to accommodate a specific tenant's request,

                                    (xvii)   to the extent any costs includable
in Operating Expenses are incurred with respect to both the Building and other
properties (including, without limitation, salaries, fringe benefits and other
incentive compensation of Landlord's personnel who provide services to both the
Building and other properties), there shall be excluded from Operating Expenses
a fair and reasonable percentage thereof which is properly allocable to such
other properties,

                                    (xviii)  costs relating to withdrawal
liability or unfunded pension liability under the Multi-Employer Pension Act or
similar law,

                                    (xix)    the costs of installing, operating
and maintaining any specialty service such as an observatory, broadcasting
facility, luncheon club, or athletic or recreational club if such facility is
operated by Landlord and not leased to a third party and is not available to all
tenants in the Building,

                                    (xx)     interest, fines, penalties and late
charges incurred by Landlord for late payment except to the extent the same
shall be due to the act or omission of Tenant,

                                    (xxi)    the cost of maintaining, organizing
or reorganizing the
<PAGE>   64
entity that is Landlord,

                                    (xxii)   lease payments for rented
equipment, to the extent the cost of such equipment would constitute a capital
expenditure not includable in Section 27.1E(3)(a) or 27.1E(3)(b) hereof if such
equipment were purchased,

                                    (xxiii)  expenses incurred for retail
tenants, and

                                    (xxiv)   the cost of any judgment,
settlement or arbitration award resulting from any liability of Landlord,

except, however, that if Landlord is not furnishing any particular work or
service (the cost of which if performed by Landlord would constitute an
Operating Expense) to a tenant who has undertaken to perform such work or
service in lieu of the performance thereof by Landlord, Operating Expenses shall
be deemed to be increased by an amount equal to the additional Operating
Expenses which reasonably would have been incurred during such period by
Landlord if it had at its own expense furnished such work or services to such
tenant. Any insurance proceeds received with respect to any item previously
included as an Operating Expense shall be deducted from Operating Expenses for
the Operating Year in which such proceeds are received; provided, however, to
the extent any insurance proceeds are received by Landlord in any Operating Year
with respect to any item which was included in Operating Expenses during the
Base Operating Year, the amount of insurance proceeds so received shall be
deducted from Base Operating Expenses and (x) the Base Operating Expenses shall
be retroactively adjusted to reflect such deduction and (y) all retroactive
Operating Payments resulting from such retroactive adjustment shall be due and
payable when billed by Landlord. Until such time as the electricity supplied to
each floor of the Building and the common and public areas of the Building
(including, without limitation, the Building Systems) shall be separately
metered or submetered, Operating Expenses shall include an amount equal to (x)
(i) Landlord's cost (utilizing the electrical rates applicable to the Building
including energy charges, demand charges, time-of-day charges, fuel adjustment
charges, rate adjustment charges, sales tax and any other factors used by the
public utility in computing its charges to Landlord) of furnishing electric
current to the entire Building, multiplied by (ii) the number of kilowatt hours
of electric current furnished to the public and common areas of the Building
(including, without limitation, the Building Systems) and other areas not
available for occupancy as determined by a survey prepared by an independent,
reputable electrical engineer selected by Landlord, plus (y) an amount equal to
Landlord's out-of-pocket costs in connection with same.

                           (2) In determining the amount of Operating Expenses
for any Operating Year, if less than all of the Building rentable area shall
have been occupied by tenant(s) at any time during any such Operating Year,
Operating Expenses shall be determined for such Operating Year to be an amount
equal to the like expenses which would normally be expected to be incurred had
all such areas been occupied throughout such Operating Year.
<PAGE>   65
                  (3) (a) If any capital improvement is made during any
Operating Year in compliance with a Requirement, whether or not such Requirement
is valid or mandatory, or in lieu of a repair, then the cost of such improvement
shall be included in Operating Expenses for the Operating Year in which such
improvement was made; provided, however, to the extent the cost of such
improvement is required to be capitalized for federal income tax purposes, such
cost shall be amortized over the useful economic life of such improvement
determined in accordance with generally accepted accounting principles,
consistently applied, and the annual amortization, together with interest
thereon at the then Base Rate, of such improvement shall be deemed an Operating
Expense in each of the Operating Years during which such cost of the improvement
is amortized.

                           (b) If any capital improvement is made during any
Operating Year either for the purpose of saving or reducing Operating Expenses
(as, for example, a labor-saving improvement), then the cost of such improvement
shall be included in Operating Expenses for the Operating Year in which such
improvement was made; provided, however, such cost shall be amortized over such
period of time as Landlord reasonably estimates such savings or reduction in
Operating Expenses will equal the cost of such improvement and the annual
amortization, together with interest thereon at the then Base Rate, of such
improvement shall be deemed an Operating Expense in each of the Operating Years
during which such cost of the improvement is amortized.

                  (F) "Operating Statement" shall mean a statement in reasonable
detail setting forth a comparison of the Operating Expenses for an Operating
Year with the Base Operating Expenses and the Escalation Rent for the preceding
Operating Year pursuant to the provisions of this Article 27.

                  (G) "Operating Year" shall mean the calendar year within which
the Commencement Date occurs and each subsequent calendar year for any part or
all of which Escalation Rent shall be payable pursuant to this Article 27.

                  (H) "Taxes" shall mean the aggregate amount of real estate
taxes and any general or special assessments (exclusive of penalties and
interest thereon) imposed upon the Real Property (including, without limitation,
(i) assessments made upon or with respect to any "air" and "development" rights
now or hereafter appurtenant to or affecting the Real Property, (ii) any fee,
tax or charge imposed by any Governmental Authority for any vaults, vault space
or other space within or outside the boundaries of the Real Property, and (iii)
any taxes or assessments levied after the date of this Lease in whole or in part
for public benefits to the Real Property or the Building, including, without
limitation, any Business Improvement District taxes and assessments) without
taking into account any discount that Landlord may receive by virtue of any
early payment of Taxes; provided, that if because of any change in the taxation
of real estate, any other tax or assessment, however denominated (including,
without limitation, any franchise, income, profit, sales, use, occupancy, gross
receipts or rental tax) is imposed upon Landlord or the owner of the Real
Property or the Building, or the occupancy,
<PAGE>   66
rents or income therefrom, in substitution for any of the foregoing Taxes, such
other tax or assessment shall be deemed part of Taxes computed as if Landlord's
sole asset were the Real Property. Anything contained herein to the contrary
notwithstanding, Taxes shall not be deemed to include, (v) transfer taxes or
mortgage recording taxes payable in connection with the financing, sale or
conveyance of the Building or the Real Property or any interest therein, (w) any
taxes on Landlord's income, (x) franchise taxes, (y) estate or inheritance taxes
or (z) any similar taxes imposed on Landlord, unless such taxes are levied,
assessed or imposed in lieu of or as a substitute for the whole or any part of
the taxes, assessments, levies, impositions which now constitute Taxes.

                  (I) "Tax Statement" shall mean a statement in reasonable
detail setting forth a comparison of the Taxes for a Tax Year with the Base
Taxes.

                  (J) "Tax Year" shall mean the period July 1 through June 30
(or such other period as hereinafter may be duly adopted by the Governmental
Authority then imposing taxes as its fiscal year for real estate tax purposes),
any portion of which occurs during the Term.

         Section 27.2. (A) If the Taxes payable for any Tax Year (any part or
all of which falls within the Term from and after October 31, 1999) shall
represent an increase above the Base Taxes, then Tenant shall pay as additional
rent for such Tax Year and continuing thereafter until a new Tax Statement is
rendered to Tenant, Tenant's Share of such increase (the "Tax Payment") as shown
on the Tax Statement with respect to such Tax Year. Tenant shall be obliged to
pay the Tax Payment regardless of whether Tenant is exempt in whole or part,
from the payment of any Taxes by reason of Tenant's diplomatic status or for any
other reason whatsoever. The Taxes shall be computed initially on the basis of
the Assessed Valuation in effect at the time the Tax Statement is rendered (as
the Taxes may have been settled or finally adjudicated prior to such time)
regardless of any then pending application, proceeding or appeal respecting the
reduction of any such Assessed Valuation, but shall be subject to subsequent
adjustment as provided in Section 27.3 hereof.

                  (B) At any time during or after the Term, Landlord may render
to Tenant a Tax Statement or Statements showing (i) a comparison of the Taxes
for the Tax Year with the Base Taxes and (ii) the amount of the Tax Payment
resulting from such comparison. On the first day of the month following the
furnishing to Tenant of a Tax Statement, Tenant shall pay to Landlord a sum
equal to 1/12th of the Tax Payment shown thereon to be due for such Tax Year
multiplied by the number of months of the Term then elapsed since the
commencement of such Tax Year. Tenant shall continue to pay to Landlord a sum
equal to one-twelfth (1/12th) of the Tax Payment shown on such Tax Statement on
the first day of each succeeding month until the first day of the month
following the month in which Landlord shall deliver to Tenant a new Tax
Statement. If Landlord furnishes a Tax Statement for a new Tax Year subsequent
to the commencement thereof, promptly after the new Tax Statement is furnished
to Tenant, Landlord shall give notice to Tenant stating whether the amount
previously paid
<PAGE>   67
by Tenant to Landlord for the current Tax Year was greater or less than the
installments of the Tax Payment for the current tax year in accordance with the
Tax Statement, and (a) if there shall be a deficiency, Tenant shall pay the
amount thereof within ten (10) days after demand therefor, or (b) if there shall
have been an overpayment, Landlord shall credit the amount thereof against the
next monthly installments of the Fixed Rent payable under this Lease. Tax
Payments shall be collectible by Landlord in the same manner as Fixed Rent.
Landlord's failure to render a Tax Statement shall not prejudice Landlord's
right to render a Tax Statement during or with respect to any subsequent Tax
Year, and shall not eliminate or reduce Tenant's obligation to make Tax Payments
for such Tax Year. Whenever so requested (but not more than once per year),
Landlord shall furnish Tenant with a reproduced copy of the tax bill (or
receipted bill) for the Taxes for the current or next succeeding Tax Year (if
theretofore issued by the Governmental Authority and received by Landlord).
Notwithstanding anything to the contrary contained in this Article 27, Landlord
shall be deemed to have waived its right to collect the Tax Payment for a Tax
Year if Landlord shall have failed to deliver the Tax Statement with respect to
such Tax Year by the date which is two (2) years after the later to occur of (x)
the date on which Landlord shall have received the appropriate bill from the
Governmental Authority, and (y) the date which is the last day of the Tax Year
in question.

         Section 27.3. (A) Only Landlord shall be eligible to institute tax
reduction or other proceedings to reduce the Assessed Valuation. In the event
that, after a Tax Statement has been sent to Tenant, an Assessed Valuation which
had been utilized in computing the Taxes for a Tax Year is reduced (as a result
of settlement, final determination of legal proceedings or otherwise), and as a
result thereof a refund of Taxes is actually received by or on behalf of
Landlord, then, promptly after receipt of such refund, Landlord shall send
Tenant a Tax Statement adjusting the Taxes for such Tax Year (taking into
account the expenses mentioned in Section 27.1(H) hereof) and setting forth
Tenant's Share of such refund and Tenant shall be entitled to receive such
Share, at Landlord's option, either by way of a credit against the Fixed Rent
next becoming due after the sending of such Tax Statement or by a prompt refund
to the extent no further Fixed Rent is due; provided, however, that Tenant's
Share of such refund shall be limited to the portion of the Tax Payment, if any,
which Tenant had theretofore paid to Landlord attributable to increases in Taxes
for the Tax Year to which the refund is applicable on the basis of the Assessed
Valuation before it had been reduced.

                  (B) In the event that, after a Tax Statement has been sent to
Tenant, the Assessed Valuation which had been utilized in computing the Base
Taxes is reduced (as a result of settlement, final determination of legal
proceedings or otherwise) then, and in such event: (i) the Base Taxes shall be
retroactively adjusted to reflect such reduction, and (ii) all retroactive Tax
Payments resulting from such retroactive adjustment shall be due and payable
when billed by Landlord. Landlord promptly shall send to Tenant a statement
setting forth the basis for such retroactive adjustment and Tax Payments.

         Section 27.4. (A) If the Operating Expenses for any Operating Year (any
part or
<PAGE>   68
all of which falls within the Term from and after October 31, 1999) shall be
greater than the Base Operating Expenses, then Tenant shall pay as additional
rent for such Operating Year and continuing thereafter until a new Operating
Statement is rendered to Tenant, Tenant's Share of such increase (the "Operating
Payment") as hereinafter provided.

                  (B) At any time during or after the Term Landlord may render
to Tenant an Operating Statement or Statements showing (i) a comparison of the
Operating Expenses for the Operating Year in question with the Base Operating
Expenses, and (ii) the amount of the Operating Payment resulting from such
comparison. Landlord's failure to render an Operating Statement during or with
respect to any Operating Year in question shall not prejudice Landlord's right
to render an Operating Statement during or with respect to any subsequent
Operating Year, and shall not eliminate or reduce Tenant's obligation to make
payments of the Operating Payment pursuant to this Article 27 for such Operating
Year.

                  (C) On the first day of the month following the furnishing to
Tenant of an Operating Statement, Tenant shall pay to Landlord a sum equal to
1/12th of the Operating Payment shown thereon to be due for the preceding
Operating Year multiplied by the number of months (and any fraction thereof) of
the Term then elapsed since the commencement of such Operating Year in which
such Operating Statement is delivered, less Operating Payments theretofore made
by Tenant for such Operating Year and thereafter, commencing with the then
current monthly installment of Fixed Rent and continuing monthly thereafter
until rendition of the next succeeding Operating Statement, Tenant shall pay on
account of the Operating Payment for such Year an amount equal to 1/12th of the
Operating Payment shown thereon to be due for the preceding Operating Year. Any
Operating Payment shall be collectible by Landlord in the same manner as Fixed
Rent. Notwithstanding anything to the contrary contained in this Article 27,
Landlord shall be deemed to have waived its right to collect the Operating
Payment for an Operating Year if Landlord shall have failed to deliver the
Operating Statement with respect to such Operating Year by the date which is two
(2) years after the last day of the Operating Year in question.

                  (D) (1) As used in this Section 27.4, (i) "Tentative Monthly
Escalation Charge" shall mean a sum equal to 1/12th of the product of (a)
Tenant's Share, and (b) the difference between (x) the Base Operating Expenses
and (y) Landlord's estimate of Operating Expenses for the Current Year, and (ii)
"Current Year" shall mean the Operating Year in which a demand is made upon
Tenant for payment of a Tentative Monthly Escalation Charge.

                           (2) At any time in any Operating Year, Landlord, at
its option, in lieu of the payments required under Section 27.4(C) hereof, may
demand and collect from Tenant, as additional rent, a sum equal to the Tentative
Monthly Escalation Charge multiplied by the number of months in said Operating
Year preceding the demand and reduced by the sum of all payments theretofore
made under Section 27.4(C) with respect to said Operating Year, and thereafter,
commencing with the month in which the
<PAGE>   69
demand is made and continuing thereafter for each month remaining in said
Operating Year, the monthly installments of Fixed Rent shall be deemed increased
by the Tentative Monthly Escalation Charge. Any amount due to Landlord under
this Section 27.4(D) may be included by Landlord in any Operating Statement
rendered to Tenant as provided in Section 27.4(B) hereof.

                  (E) (1) After the end of the Current Year and at any time that
Landlord renders an Operating Statement or Statements to Tenant as provided in
Section 27.4(B) hereof with respect to the comparison of the Operating Expenses
for said Operating Year or Current Year, with the Base Operating Expenses, as
the case may be, the amounts, if any, collected by Landlord from Tenant under
Section 27.4(C) or (D) on account of the Operating Payment or the Tentative
Monthly Escalation Charge, as the case may be, shall be adjusted, and, if the
amount so collected is less than or exceeds the amount actually due under said
Operating Statement for the Operating Year, a reconciliation shall be made as
follows: Tenant shall be debited with any Operating Payment shown on such
Operating Statement and credited with the amounts, if any, paid by Tenant on
account in accordance with the provisions of subsection (C) and subsection
(D)(2) of this Section 27.4 for the Operating Year in question. Tenant shall pay
any net debit balance to Landlord within fifteen (15) days next following
rendition by Landlord of an invoice for such net debit balance; any net credit
balance shall be applied against the next accruing monthly installments of Fixed
Rent unless the Term shall have expired in which event Landlord shall promptly
refund to Tenant any such net credit balance.

                           (2) If the sum of the Tentative Monthly Escalation
Charges and payments made by Tenant in accordance with subsection (C) of this
Section 27.4 for any Operating Year shall have exceeded the Operating Payment
for such Operating Year by more than ten percent (10%), interest at the
Applicable Rate on the portion of the overpayment that exceeds the applicable
Operating Payment by more than ten percent (10%) determined as of the respective
dates of such payments by Tenant and calculated from such respective dates to
the dates on which such amounts are credited against the monthly installments of
Fixed Rent, shall be so credited. Any amount owing to Tenant subsequent to the
Term shall be paid to Tenant within ten (10) Business Days after a final
determination has been made of the amount due to Tenant.

         Section 27.5. Any Operating Statement sent to Tenant shall be
conclusively binding upon Tenant unless, within one hundred eighty (180) days
after such Statement is sent, Tenant shall send a written notice to Landlord
objecting to such Statement and specifying the respects in which such Statement
is disputed. If such notice is sent, Tenant (together with its independent
certified public accountants, provided they are a firm of certified public
accountants approved by Landlord, which approval shall not be withheld or
delayed) may examine Landlord's books and records relating to the Operation of
the Property to determine the accuracy of the Operating Statement. Tenant
recognizes the confidential nature of such books and records and agrees to
maintain the information obtained from such examination in strict confidence. If
after such examination, Tenant still disputes such Operating Statement, either
party may
<PAGE>   70
refer the decision of the issues raised to a reputable independent firm of
certified public accountants, selected by Landlord and approved by Tenant, which
approval shall not be unreasonably withheld or delayed as long as such firm of
certified public accountants is one of the so-called "big-six" public accounting
firms or if at such time there is no group of accounting firms commonly referred
to as "big-six", then a nationally recognized firm of at least one hundred fifty
(150) partners or principals who are certified public accountants, and the
decision of such accountants shall be conclusively binding upon the parties. The
fees and expenses involved in such decision shall be borne by the unsuccessful
party (and if both parties are partially successful, such fees and expenses
shall be apportioned between Landlord and Tenant in inverse proportion to the
amount by which such decision is favorable to each party). Notwithstanding the
giving of such notice by Tenant, and pending the resolution of any such dispute,
Tenant shall pay to Landlord when due the amount shown on any such Operating
Statement, as provided in Section 27.4 hereof.

         Section 27.6. Except as expressly set forth herein, the expiration or
termination of this Lease during any Operating Year or Tax Year shall not affect
the rights or obligations of the parties hereto respecting any payments of, or
refund of, Operating Payments for such Operating Year and any payments of, or
refunds of, Tax Payments for such Tax Year, and any Operating Statement relating
to such Operating Payment and any Tax Statement relating to such Tax Payment,
may be sent to Tenant subsequent to, and all such rights and obligations shall
survive, any such expiration or termination. In determining the amount of the
Operating Payment for the Operating Year or the Tax Payment for the Tax Year in
which the Term shall expire, the payment of the Operating Payment for such
Operating Year or the Tax Payment for the Tax Year shall be prorated based on
the number of days of the Term which fall within such Operating Year or Tax
Year, as the case may be. Any payments due under such Operating Statement or Tax
Statement shall be payable within twenty (20) days after such Statement is sent
to Tenant.


                                   ARTICLE 28
                                    SERVICES

         Section 28.1. (A) Landlord shall provide passenger elevator service to
the Premises on Business Days from 8:00 A.M. to 6:00 P.M. and have an elevator
subject to call at all other times. Subject to Landlord's reasonable security
procedures and rules, Landlord shall provide access to the Building or the
Premises twenty-four (24) hours per day, three hundred sixty-five (365) days per
year.

                  (B) There shall be one (1) freight elevator serving the
Premises and the entire Building on call on a "first come, first served" basis
on Business Days from 8:00 A.M. to 12:00 P.M. and from 1:00 P.M. to 5:00 P.M.,
and on a reservation, "first come, first served" basis from 12:00 P.M. to 1:00
P.M. and from 5:00 P.M. to 8:00 A.M. on Business Days and at any time on days
other than Business Days. If Tenant shall use the freight elevators serving the
Premises between 12:00 P.M. and 1:00 P.M. and
<PAGE>   71
between 5:00 P.M. and 8:00 A.M. on Business Days or at any time on any other
days, Tenant shall pay Landlord, as additional rent for such use, the standard
rates then fixed by Landlord for the Building, or if no such rates are then
fixed, at reasonable rates. Notwithstanding the foregoing, Landlord shall
provide Tenant, at no cost to Tenant with free freight elevator service during
Tenant's initial move into the Premises not to exceed twelve (12) hours.

                  (C) Landlord shall not be required to furnish any freight
elevator services during the hours from 12:00 P.M. to 1:00 P.M. and from 5:00
P.M. to 8:00 A.M. on Business Days and at any time on days other than Business
Days unless Landlord has received advance notice from Tenant requesting such
services prior to 2:00 P.M. of the day upon which such service is requested or
by 2:00 P.M. of the last preceding Business Day if such periods are to occur on
a day other than a Business Day.

         Section 28.2. Landlord, at Landlord's expense (but subject to
recoupment pursuant to Article 27 hereof), shall furnish (a) the Building
standard air-cooled air conditioning unit serving the Premises electricity to
provide air-conditioning, and (b) the Building standard water cooled
air-conditioning unit serving the Premises condenser water, in each case when
required for the comfortable occupancy of the Premises in accordance with the
specifications set forth in Schedule C annexed hereto and made a part hereof, on
a year round basis from 8:30 A.M. to 6:00 P.M. on Business Days and 8:30 A.M. to
1:00 P.M. on Saturdays. In addition, Landlord shall provide perimeter heating
through the existing radiators when required for the comfortable occupancy of
the Premises from 8:30 A.M. to 6:00 P.M. on Business Days. Landlord, throughout
the Term, shall have free access to any and all mechanical installations of
Landlord, including, but not limited to, air-cooling, fan, ventilating and
machine rooms and electrical closets; Tenant shall not construct partitions or
other obstructions which may interfere with Landlord's free access thereto, or
interfere with the moving of Landlord's equipment to and from the enclosures
containing said installations. Neither Tenant, nor its agents, employees or
contractors shall at any time enter the said enclosures or tamper with, adjust
or touch or otherwise in any manner affect said mechanical installations. Tenant
shall use good faith efforts to draw and close the draperies or blinds for the
windows of the Premises whenever the HVAC System is in operation and the
position of the sun so requires and shall at all times cooperate fully with
Landlord and abide by all of the regulations and requirements which Landlord may
prescribe for the proper functioning and protection of the HVAC System. If
Tenant shall fail to draw and close the draperies or blinds for the windows of
the Premises, Landlord shall not be responsible for the proper functioning of
the HVAC System in accordance with Schedule C to the extent the improper
functioning of the HVAC System results from such failure.

         Section 28.3. The Fixed Rent does not reflect or include any charge to
Tenant for the furnishing of any electricity to provide air conditioning or
condenser water, as the case may be, to the air-cooled and water-cooled Building
standard air conditioning units serving the Premises or perimeter heating to the
Premises during periods other than the hours and days set forth above ("Overtime
Periods"). Accordingly, if Landlord shall
<PAGE>   72
furnish such electricity to provide air conditioning or condenser water, as the
case may be, to the air-cooled and water-cooled Building standard air
conditioning units serving the Premises or perimeter heating to the Premises at
the request of Tenant during Overtime Periods, Tenant shall pay Landlord
additional rent for such services at the standard rates then fixed by Landlord
for the Building, or if no such rates are then fixed, at reasonable rates.
Landlord shall not be required to furnish any such services during any Overtime
Periods unless Landlord has received advance notice from Tenant requesting such
services prior to 2:00 P.M. of the day upon which such services are requested or
by 2:00 P.M. of the last preceding Business Day if such Overtime Periods are to
occur on a day other than a Business Day. If Tenant fails to give Landlord such
advance notice, then, failure by Landlord to furnish or distribute any such
services during such Overtime Periods shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of Rental, or relieve Tenant from any of its obligations under
this Lease, or impose any liability upon Landlord or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business or otherwise. If more than one tenant utilizing the same system as
Tenant requests the same Overtime Periods for the same services as Tenant, the
charge to Tenant shall be adjusted pro rata.

         Section 28.4. Provided Tenant shall keep the Premises in order,
Landlord, at Landlord's expense, subject to recoupment pursuant to Article 27
hereof, shall cause the Premises, excluding any portions thereof used for the
storage, preparation, service or consumption of food or beverages, to be
cleaned, substantially in accordance with the standards set forth in Schedule B
annexed hereto and made a part hereof. Tenant shall pay to Landlord the cost of
removal of any of Tenant's refuse and rubbish from the Premises and the Building
to the extent that the same exceeds the refuse and rubbish usually attendant
upon the use of such Premises as offices. Bills for the same shall be rendered
by Landlord to Tenant at such time as Landlord may elect and shall be due and
payable when rendered as additional rent. Tenant, at Tenant's sole cost and
expense, shall cause all portions of the Premises used for the storage,
preparation, service or consumption of food or beverages to be cleaned daily in
a manner satisfactory to Landlord, and to be exterminated against infestation by
vermin, rodents or roaches regularly and, in addition, whenever there shall be
evidence of any infestation. Any such exterminating shall be done at Tenant's
sole cost and expense, in a manner satisfactory to Landlord, and by Persons
approved by Landlord. If Tenant shall perform any cleaning services in addition
to the services provided by Landlord as aforesaid, Tenant shall employ the
cleaning contractor providing cleaning services to the Building on behalf of
Landlord or such other cleaning contractor as shall be approved by Landlord.
Tenant shall comply with any recycling program and/or refuse disposal program
(including, without limitation, any program related to the recycling, separation
or other disposal of paper, glass or metals) which Landlord shall impose or
which shall be required pursuant to any Requirements.

         Section 28.5. If the New York Board of Fire Underwriters or the
Insurance Services Office or any Governmental Authority, department or official
of the state or city government shall require or recommend that any changes,
modifications, alterations or
<PAGE>   73
additional sprinkler heads or other equipment be made or supplied by reason of
Tenant's business, or the location of the partitions, trade fixtures, or other
contents of the Premises, Landlord, at Tenant's cost and expense, shall promptly
make and supply such changes, modifications, alterations, additional sprinkler
heads or other equipment.

         Section 28.6. Landlord shall provide to the core of the Premises hot
and cold water for ordinary drinking, cleaning and lavatory purposes. If Tenant
requires, uses or consumes water for any purpose in addition to ordinary
drinking, cleaning or lavatory purposes, Landlord may install a water meter and
thereby measure Tenant's water consumption. In such event (1) Tenant shall pay
Landlord for the cost of the meter and the cost of the installation thereof and
through the duration of Tenant's occupancy Tenant shall keep said meter and
equipment in good working order and repair at Tenant's own cost and expense; (2)
Tenant shall pay for water consumed as shown on said meter, as additional rent,
and on default in making such payment Landlord may pay such charges and collect
the same from Tenant; and (3) Tenant shall pay the sewer rent, charge or any
other tax, rent, levy or charge which now or hereafter is assessed, imposed or
shall become a lien upon the Premises or the Real Property of which they are a
part pursuant to any Requirement made or issued in connection with any such
metered use, consumption, maintenance or supply of water, water system, or
sewage or sewage connection or system. The bill rendered by Landlord for the
above shall be based upon Tenant's consumption and shall be payable by Tenant as
additional rent within ten (10) days after rendition.

         Section 28.7. Landlord reserves the right to stop service of the HVAC
System or the elevator, electrical, plumbing or other Building Systems when
necessary, by reason of accident or emergency, or for repairs, additions,
alterations, replacements or improvements in the judgment of Landlord desirable
or necessary to be made, until said repairs, alterations, replacements or
improvements shall have been completed (which repairs, additions, alterations,
replacements and improvements shall be performed in accordance with Section 4.3
hereof). Landlord shall have no responsibility or liability for interruption,
curtailment or failure to supply HVAC, elevator, electrical, plumbing or other
Building Systems when prevented by Unavoidable Delays or by any Requirement of
any Governmental Authority or due to the exercise of its right to stop service
as provided in this Article 28. The exercise of such right or such failure by
Landlord shall not constitute an actual or constructive eviction, in whole or in
part, or entitle Tenant to any compensation or to any abatement or diminution of
Rental, or relieve Tenant from any of its obligations under this Lease, or
impose any liability upon Landlord or its agents by reason of inconvenience or
annoyance to Tenant, or injury to or interruption of Tenant's business, or
otherwise.

         Section 28.8. Landlord shall make available to Tenant the computerized
directory in the lobby of the Building for up to ______________ (___) listings.
The initial programming shall be without charge to Tenant. From time to time,
but not more frequently than once every three (3) months, Landlord shall
reprogram the computerized directory to reflect such changes in the listings
therein as Tenant shall request, and Tenant promptly after request shall pay to
Landlord a reasonable
<PAGE>   74
reprogramming charge for each reprogramming Tenant requests. If Landlord
replaces the computerized directory with a standard directory in the lobby of
the Building, Tenant shall be entitled to Tenant's Share of such listings on
such directory.


                                   ARTICLE 29
                               PARTNERSHIP TENANT

         If Tenant is a partnership (including, without limitation, a limited
liability partnership) or a limited liability company or a professional
corporation (or is comprised of two (2) or more Persons, individually or as
co-partners of a partnership (including, without limitation a limited liability
partnership), as members of a limited liability company or as shareholders of a
professional corporation) or if Tenant's interest in this Lease shall be
assigned to a partnership (including, without limitation, a limited liability
partnership) a limited liability company or a professional corporation (or to
two (2) or more Persons, individually or as co-partners of a partnership, as
members of a limited liability company or shareholders of a professional
corporation) pursuant to Article 12 hereof (any such partnership, professional
corporation and such Persons are referred to in this Article 29 as "Partnership
Tenant"), the following provisions shall apply to such Partnership Tenant: (a)
the liability of each of the parties comprising Partnership Tenant shall be
joint and several; (b) each of the parties comprising Partnership Tenant hereby
consents in advance to, and agrees to be bound by (x) any written instrument
which may hereafter be executed by Partnership Tenant or any successor entity,
changing, modifying, extending or discharging this Lease, in whole or in part,
or surrendering all or any part of the Premises to Landlord, and (y) any
notices, demands, requests or other communications which may hereafter be given
by Partnership Tenant or by any of the parties comprising Partnership Tenant;
(c) any bills, statements, notices, demands, requests or other communications
given or rendered to Partnership Tenant or to any of such parties shall be
binding upon Partnership Tenant and all such parties; (d) if Partnership Tenant
shall admit new partners, shareholders or members, as the case may be,
Partnership Tenant shall give Landlord notice of such event not later than ten
(10) Business Days prior to the admission of such partner(s), shareholder(s) or
member(s) together with an assumption agreement in form and substance
satisfactory to Landlord pursuant to which each of such new partners,
shareholders or members, as the case may be, shall, by their admission to
Partnership Tenant, agree to assume joint and several liability for the
performance of all of the terms, covenants and conditions of this Lease (as the
same may have been or thereafter be amended) on Tenant's part to be observed and
performed; it being expressly understood and agreed that each such new partner,
shareholder or member (as the case may be) shall be deemed to have assumed joint
and several liability for the performance of all of the terms, covenants and
conditions of this Lease (as the same may have been or thereafter be amended),
whether or not such new partner, shareholder or member shall have executed such
assumption agreement, and that neither Tenant's failure to deliver such
assumption agreement nor the failure of any such new partner or shareholder, as
the case may be, to execute or deliver any such agreement to Landlord shall
vitiate the provisions of this clause (d) of this Article 29).
<PAGE>   75
                                   ARTICLE 30
                                   VAULT SPACE

         Notwithstanding anything contained in this Lease or indicated on any
sketch, blueprint or plan, any vaults, vault space or other space outside the
boundaries of the Real Property are not included in the Premises. Landlord makes
no representation as to the location of the boundaries of the Real Property. All
vaults and vault space and all other space outside the boundaries of the Real
Property which Tenant may be permitted to use or occupy are to be used or
occupied under a revocable license, and if any such license shall be revoked, or
if the amount of such space shall be diminished or required by any Governmental
Authority or by any public utility company, such revocation, diminution or
requisition shall not constitute an actual or constructive eviction, in whole or
in part, or entitle Tenant to any abatement or diminution of Rental, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Landlord. Any fee, tax or charge imposed by any Governmental Authority for
any such vaults, vault space or other space occupied by Tenant shall be paid by
Tenant.


                                   ARTICLE 31
                                    SECURITY

         Tenant shall deposit with Landlord on the signing of this Lease the sum
of One Hundred Fifty-Five Thousand Five Hundred Seventy-Four and 99/100 Dollars
($155,574.99), or at Tenant's option, a "clean," unconditional, irrevocable and
transferable letter of credit (the "Letter of Credit") in the same amount,
satisfactory to Landlord, issued by and drawn on a bank satisfactory to Landlord
and which is a member of the New York Clearing House Association, for the
account of Landlord, for a term of not less than one (1) year, as security for
the faithful performance and observance by Tenant of the terms, covenants,
conditions and provisions of this Lease, including, without limitation, the
surrender of possession of the Premises to Landlord as herein provided. If an
Event of Default shall occur and be continuing, Landlord may apply the whole or
any part of the security so deposited, or present the Letter of Credit for
payment and apply the whole or any part of the proceeds thereof, as the case may
be, (i) toward the payment of any Fixed Rent, Escalation Rent or any other item
of Rental as to which Tenant is in default, (ii) toward any sum which Landlord
may expend or be required to expend by reason of Tenant's default in respect of
any of the terms, covenants and conditions of this Lease, including, without
limitation, any damage, liability or expense (including, without limitation,
reasonable attorneys' fees and disbursements) incurred or suffered by Landlord,
and (iii) toward any damage or deficiency incurred or suffered by Landlord in
the reletting of the Premises, whether such damages or deficiency accrue or
accrues before or after summary proceedings or other re-entry by Landlord. If
Landlord applies or retains any part of the proceeds of the Letter of Credit or
the security so deposited, as the case may be, Tenant, upon demand, shall
deposit with Landlord the amount so applied or retained so that Landlord
<PAGE>   76
shall have the full deposit on hand at all times during the Term. If Tenant
shall fully and faithfully comply with all of the terms, provisions, covenants
and conditions of this Lease, the Letter of Credit or the security, as the case
may be, shall be returned to Tenant after the Expiration Date and after delivery
of possession of the Premises to Landlord. In the event of a sale or leasing of
the Real Property or the Building, Landlord shall have the right to transfer the
Letter of Credit or security, as the case may be, to the vendee or lessee and
Landlord shall thereupon be released by Tenant from all liability for the return
of such security or the Letter of Credit, as the case may be, and Tenant shall
cause the bank which issued the Letter of Credit to issue an amendment to the
Letter of Credit or issue a new Letter of Credit naming the vendee or lessee as
the beneficiary thereunder. Tenant shall look solely to the new landlord for the
return of the Letter of Credit or the security, as the case may be. The
provisions hereof shall apply to every transfer or assignment of the Letter of
Credit or security made to a new landlord. Tenant shall not assign or encumber
or attempt to assign or encumber the monies deposited herein as security and
neither Landlord nor its successors or assigns shall be bound by any such
assignment, encumbrance, attempted assignment or attempted encumbrance. Tenant
shall renew any Letter of Credit from time to time, at least thirty (30) days
prior to the expiration thereof, and deliver to Landlord a new Letter of Credit
or an endorsement to the Letter of Credit, and any other evidence required by
Landlord that the Letter of Credit has been renewed for a period of at least one
(1) year. If Tenant shall fail to renew the Letter of Credit as aforesaid,
Landlord may present the Letter of Credit for payment and retain the proceeds
thereof as security in lieu of the Letter of Credit.


                                   ARTICLE 32
                                    CAPTIONS

         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 provision thereof.


                                   ARTICLE 33
                                  PARTIES BOUND

         The covenants, conditions and agreements contained in this Lease shall
bind and inure to the benefit of Landlord and Tenant and their respective legal
representatives, successors, and, except as otherwise provided in this Lease,
their assigns.


                                   ARTICLE 34
                                     BROKER

         Each party represents and warrants to the other that it has not dealt
with any broker or Person in connection with this Lease other than
Insignia/Edward S. Gordon Co., Inc. ("Broker"). The execution and delivery of
this Lease by each party shall be conclusive evidence that such party has relied
upon the foregoing representation and warranty. Tenant shall indemnify and hold
Landlord harmless from and against any and all claims for commission, fee or
other compensation by any Person (other than Broker) who shall claim to have
dealt with Tenant in connection with this Lease and for any and all costs
incurred by Landlord in connection with such claims, including, without
limitation, reasonable attorneys' fees and disbursements. The provisions of this
Article 34 shall survive the Expiration Date.
<PAGE>   77
                                   ARTICLE 35
                                    INDEMNITY

         Section 35.1. (A) Tenant shall not do or permit any act or thing to be
done upon the Premises which may subject Landlord to any liability or
responsibility for injury, damages to persons or property or to any liability by
reason of any violation of any Requirement, and shall exercise such control over
the Premises as to fully protect Landlord against any such liability. Tenant
shall indemnify and save the Indemnitees harmless from and against (a) all
claims of whatever nature against the Indemnitees arising from any act, omission
or negligence of Tenant, its contractors, licensees, agents, servants,
employees, invitees or visitors, (b) all claims against the Indemnitees arising
from any accident, injury or damage whatsoever caused to any person or to the
property of any person and occurring during the Term in or about the Premises,
(c) all claims against the Indemnitees arising from any accident, injury or
damage occurring outside of the Premises but anywhere within or about the Real
Property, where such accident, injury or damage results or is claimed to have
resulted from an act, omission or negligence of Tenant or Tenant's contractors,
licensees, agents, servants, employees, invitees or visitors, and (d) any
breach, violation or non-performance of any covenant, condition or agreement in
this Lease set forth and contained on the part of Tenant to be fulfilled, kept,
observed and performed. This indemnity and hold harmless agreement shall include
indemnity from and against any and all liability, fines, suits, demands, costs
and expenses of any kind or nature (including, without limitation, attorneys'
fees and disbursements) incurred in or in connection with any such claim or
proceeding brought thereon, and the defense thereof but except with respect to
claims with respect to bodily injury or death, shall be limited to the extent
any insurance proceeds collectible by Landlord under policies owned by Landlord
or such injured party with respect to such damage or injury are insufficient to
satisfy same. Tenant shall have no liability for any consequential damages
suffered either by Landlord or by any party claiming through Landlord.

                  (B) Except as provided in Articles 4, 9, 10, 13, 28, 36 and 37
hereof and otherwise as expressly provided herein, Landlord shall indemnify and
save Tenant its shareholders, directors, officers, Partners, employees and
agents harmless from and against all claims against Tenant arising from any
direct damage to the Premises and any bodily injury to Tenant's employees,
agents or invitees resulting from the acts, omissions or negligence of Landlord
or its agents. This indemnity and hold harmless agreement shall include
indemnity from and against any and all liability, fines, suits, demands, costs
and expenses of any kind or nature (including, without limitation, reasonable
attorneys' fees and disbursements) incurred in or in connection with any such
claim or proceeding brought thereon, but shall be limited to the extent any
insurance proceeds collectible by Tenant or such injured party with respect to
such damage or injury are insufficient to satisfy same. Landlord shall have no
liability for any consequential damages suffered either by Tenant or by any
party claiming through Tenant.

         Section 35.2. If any claim, action or proceeding is made or brought
against either party, which claim, action or proceeding the other party shall be
obligated to indemnify such first party against pursuant to the terms of this
Lease, then, upon demand by the indemnified party, the indemnifying party, at
its sole cost and expense, shall resist or defend such claim, action or
proceeding in the indemnified party's name, if necessary, by such attorneys as
the indemnified party shall approve, which approval shall not be unreasonably
withheld. Attorneys for the indemnifying party's insurer are hereby deemed
approved for purposes of this Section 35.2. Notwithstanding the foregoing, an
indemnified party may retain its own attorneys to defend or assist in defending
any claim, action or proceeding involving potential liability of Five Million
Dollars ($5,000,000) or more, and the indemnifying party shall pay the
reasonable fees and disbursements of such attorneys. The provisions of this
Article 35 shall survive the expiration or earlier termination of this Lease.
<PAGE>   78
                                   ARTICLE 36
                           ADJACENT EXCAVATION-SHORING

         If an excavation shall be made upon land adjacent to the Premises, or
shall be authorized to be made, Tenant, upon reasonable advance notice, shall
afford to the person causing or authorized to cause such excavation, a license
to enter upon the Premises for the purpose of doing such work as said person
shall deem necessary to preserve the wall or the Building from injury or damage
and to support the same by proper foundations, without any claim for damages or
indemnity against Landlord, or diminution or abatement of Rental, provided that
Tenant shall continue to have access to the Premises and the Building.


                                   ARTICLE 37
                                  MISCELLANEOUS

         Section 37.1. This Lease is offered for signature by Tenant and it is
understood that this Lease shall not be binding upon Landlord or Tenant unless
and until Landlord and Tenant shall have executed and unconditionally delivered
a fully executed copy of this Lease to each other.

         Section 37.2. The obligations of Landlord under this Lease shall not be
binding upon Landlord named herein after the sale, conveyance, assignment or
transfer by such Landlord (or upon any subsequent landlord after the sale,
conveyance, assignment or transfer by such subsequent landlord) of its interest
in the Building or the Real Property, as the case may be, and in the event of
any such sale, conveyance, assignment or transfer, Landlord shall be and hereby
is entirely freed and relieved of (i) all covenants and obligations of Landlord
hereunder with respect to which performance of Landlord was due prior to the
date of such sale, conveyance, assignment or transfer, to the extent that such
transferee assumes the obligations of Landlord under this Lease, and (ii) all
covenants and obligations of Landlord hereunder with respect to which
performance of Landlord is due from and after the date of such sale, conveyance,
assignment or transfer. The partners, shareholders, directors, officers and
principals, direct and indirect, comprising Landlord (collectively, the
"Parties") shall not be liable for the performance of Landlord's obligations
under this Lease. Tenant shall look solely to Landlord to enforce Landlord's
obligations hereunder and shall not seek any damages against any of the Parties.
The liability of Landlord for Landlord's obligations under this Lease shall be
limited to Landlord's interest in the Real Property and Tenant shall not look to
any other property or assets of Landlord or the property or assets of any of the
Parties in seeking either to enforce Landlord's obligations under this Lease or
to satisfy a judgment for Landlord's failure to perform such obligations. After
any such sale, conveyance, assignment or transfer, the liability of the
immediately former Landlord hereunder that may continue pursuant to clause (i)
above shall be limited to the proceeds of such sale, conveyance, assignment or
transfer.
<PAGE>   79
         Section 37.3. Notwithstanding anything contained in this Lease to the
contrary, all amounts payable by Tenant to or on behalf of Landlord under this
Lease, whether or not expressly denominated Fixed Rent, Escalation Rent,
additional rent or Rental, shall constitute rent for the purposes of Section
502(b)(7) of the Bankruptcy Code.

         Section 37.4. Tenant's liability for all items of Rental shall survive
the Expiration Date.

         Section 37.5. Tenant shall reimburse Landlord as additional rent,
within ten (10) days after rendition of a statement, for all expenditures made
by, or damages or fines sustained or incurred by, Landlord, due to any Event of
Default by Tenant under this Lease, with interest thereon at the Applicable
Rate.

         Section 37.6.  This Lease shall not be recorded.

         Section 37.7. Tenant hereby waives any claim against Landlord which
Tenant may have based upon any assertion that Landlord has unreasonably withheld
or unreasonably delayed any consent or approval requested by Tenant, and Tenant
agrees that its sole remedy shall be an action or proceeding to enforce any
related provision or for specific performance, injunction or declaratory
judgment. In the event of a determination that such consent or approval has been
unreasonably withheld or delayed, the requested consent or approval shall be
deemed to have been granted; however, Landlord shall have no liability to Tenant
for its refusal or failure to give such consent or approval. Tenant's sole
remedy for Landlord's unreasonably withholding or delaying consent or approval
shall be as provided in this Section 37.7.

         Section 37.8. This Lease contains the entire agreement between the
parties and supersedes all prior understandings, if any, with respect thereto.
This Lease shall not be modified, changed, or supplemented, except by a written
instrument executed by both parties.

         Section 37.9. Tenant hereby (a) irrevocably consents and submits to the
jurisdiction of any Federal, state, county or municipal court sitting in the
State of New York in respect to any action or proceeding brought therein by
Landlord against Tenant concerning any matters arising out of or in any way
relating to this Lease; (b) irrevocably waives personal service of any summons
and complaint and consents to the service upon it of process in any such action
or proceeding by mailing of such process to Tenant at the address set forth
herein and hereby irrevocably designates __________ or other law firm located in
Manhattan if disclosed to Landlord in writing (or if not so located, then upon
any member of the law firm of ______________, or their successor, if so located
in Manhattan), to accept service of any process on Tenant's behalf and hereby
agrees that such service shall be deemed sufficient; (c) irrevocably waives all
objections as to venue and any and all rights it may have to seek a change of
venue with respect to any such action or proceedings; (d) agrees that the laws
of the State of New York shall govern in any such action or proceeding and
waives any defense to any
<PAGE>   80
action or proceeding granted by the laws of any other country or jurisdiction
unless such defense is also allowed by the laws of the State of New York; and
(e) agrees that any final judgment rendered against it in any such action or
proceeding shall be conclusive and may be enforced in any other jurisdiction by
suit on the judgment or in any other manner provided by law. Tenant further
agrees that any action or proceeding by Tenant against Landlord in respect to
any matters arising out of or in any way relating to this Lease shall be brought
only in the State of New York, county of New York. In furtherance of the
foregoing, Tenant hereby agrees that its address for notices given by Landlord
and service of process under this Lease shall be the Premises. Notwithstanding
the foregoing provisions of this Section 37.9, Tenant may, by written notice to
Landlord, change the designated agent for acceptance of service of process to
any other law firm located in the City, county and State of New York.

         Section 37.10. Unless Landlord shall render written notice to Tenant to
the contrary in accordance with the provisions of Article 26 hereof, Mendik
Management Company Inc. is authorized to act as Landlord's agent in connection
with the performance of this Lease, including, without limitation, the receipt
and delivery of any and all notices and consents in accordance with Article 26.
Tenant shall direct all correspondence and requests to, and shall be entitled to
rely upon correspondence received from, Mendik Management Company Inc., as agent
for the Landlord in accordance with Article 26. Tenant acknowledges that Mendik
Management Company Inc. is acting solely as agent for Landlord in connection
with the foregoing, and neither Mendik Management Company Inc. nor any of its
direct or indirect partners, officers, shareholders, directors or employees
shall have any liability to Tenant in connection with the performance of
Landlord's obligations under this Lease and Tenant waives any and all claims
against any such party arising out of, or in any way connected with, this Lease
or the Real Property.

         Section 37.11. (A) All of the Schedules and Exhibits attached hereto
are incorporated in and made a part of this Lease, but, in the event of any
inconsistency between the terms and provisions of this Lease and the terms and
provisions of the Schedules and Exhibits hereto, the terms and provisions of
this Lease shall control. Wherever appropriate in this Lease, personal pronouns
shall be deemed to include the other genders and the singular to include the
plural. All Article and Section references set forth herein shall, unless the
context otherwise specifically requires, be deemed references to the Articles
and Sections of this Lease.

                           (B) If any term, covenant, condition or provision of
this Lease, or the application thereof to any person or circumstance, shall ever
be held to be invalid or unenforceable, then in each such event the remainder of
this Lease or the application of such term, covenant, condition or provision to
any other Person or any other circumstance (other than those as to which it
shall be invalid or unenforceable) shall not be thereby affected, and each term,
covenant, condition and provision hereof shall remain valid and enforceable to
the fullest extent permitted by law.

                           (C) All references in this Lease to the consent or
approval of
<PAGE>   81
Landlord shall be deemed to mean the written consent or approval of Landlord and
no consent or approval of Landlord shall be effective for any purpose unless
such consent or approval is set forth in a written instrument executed by
Landlord.


                                   ARTICLE 38
                                  RENT CONTROL

         If at the commencement of, or at any time or times during the Term of
this Lease, the Rental reserved in this Lease shall not be fully collectible by
reason of any Requirement, Tenant shall enter into such agreements and take such
other steps (without additional expense to Tenant) as Landlord may request and
as may be legally permissible to permit Landlord to collect the maximum rents
which may from time to time during the continuance of such legal rent
restriction be legally permissible (and not in excess of the amounts reserved
therefor under this Lease). Upon the termination of such legal rent restriction
prior to the expiration of the Term, (a) the Rental shall become and thereafter
be payable hereunder in accordance with the amounts reserved in this Lease for
the periods following such termination, and (b) Tenant shall pay to
<PAGE>   82
Landlord, if legally permissible, an amount equal to (i) the items of Rental
which would have been paid pursuant to this Lease but for such legal rent
restriction less (ii) the rents paid by Tenant to Landlord during the period or
periods such legal rent restriction was in effect.

         IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Lease as of the day and year first above written.

                   570 LEXINGTON COMPANY, L.P., Landlord

                   By:     570 Lexington Associates, L.P., a general partner

                           By:      Vornado 570 Lexington L.L.C.,

                                    By:      Vornado Realty Trust as
                                             authorized signatory

                                    By:      ___________________________________
                                             Irwin Goldberg, Vice President and
                                             Chief Financial Officer


                   FIBERNET TELECOM GROUP, INC., Tenant

                   By:     _______________________________
                           Name:
                           Title:

                           Fed. Id. No. __________________
<PAGE>   83
STATE OF NEW YORK                   )
                                    ) ss.:
COUNTY OF NEW YORK                  )


          On the ____ day of June, 1998, before me personally came
_____________________, to me known, who, being by me duly sworn, did depose and
say that he resides at No. __________________________________________; that he
is the ________________________ of FIBERNET TELECOM GROUP, INC., the corporation
described and which executed the foregoing instrument; that he signed his name
thereto by order of the board of directors of said corporation.



                                  Notary Public
<PAGE>   84
                                   Schedule A

                              RULES AND REGULATIONS

         (1) The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors, or halls shall not be obstructed or encumbered by Tenant
or used for any purpose other than ingress and egress to and from the Premises
and for delivery of merchandise and equipment in prompt and efficient manner,
using elevators and passageways designated for such delivery by Landlord.

         (2) No awnings, air-conditioning units, fans or other projections shall
be attached to the outside walls of the Building. No curtains, blinds, shades,
or screens, other than those which conform to Building standards as established
by Landlord from time to time, shall be attached to or hung in, or used in
connection with, any window or door of the Premises, without the prior written
consent of Landlord which shall not be unreasonably withheld or delayed. Such
awnings, projections, curtains, blinds, shades, screens or other fixtures must
be of a quality, type, design and color, and attached in the manner reasonably
approved by Landlord. All electrical fixtures hung in offices or spaces along
the perimeter of the Premises must be of a quality, type, design and bulb color
approved by Landlord, which consent shall not be withheld or delayed
unreasonably unless the prior consent of Landlord has been obtained for other
lamping.

         (3) No sign, advertisement, notice or other lettering shall be
exhibited, inscribed, painted or affixed by Tenant on any part of the outside of
the Premises or Building or on the inside of the Premises if the same can be
seen from the outside of the Premises without the prior written consent of
Landlord 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 Tenant, if Tenant
has refused to remove same after reasonable notice from Landlord, Landlord may
remove same without any liability, and may charge the expense incurred by such
removal to Tenant. Interior signs on doors and directory tablet shall be of a
size, color and style reasonably acceptable to Landlord.

         (4) The exterior windows and doors that reflect or admit light and air
into the Premises or the halls, passageways or other public places in the
Building, shall not be covered or obstructed by Tenant.

         (5) No showcases or other articles shall be put in front of or affixed
to any part of the exterior of the Building, nor placed in the halls, corridors
or vestibules, nor shall any article obstruct any air-conditioning supply or
exhaust without the prior written consent of Landlord.

         (6) The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags, acids or other substances shall be deposited therein.
All damages resulting from any misuse of the fixtures shall be borne by Tenant.
<PAGE>   85
         (7) Subject to the provisions of Article 3 of this Lease, Tenant shall
not mark, paint, drill into, or in any way deface any part of the Premises or
the Building. No boring, cutting or stringing of wires shall be permitted,
except with the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed, and as Landlord may direct.

         (8) No space in the Building shall be used for manufacturing, for the
storage of merchandise, or for the sale of merchandise, goods or property of any
kind at auction or otherwise.

         (9) Tenant shall not make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this or neighboring
buildings or premises or those having business with them whether by the use of
any musical instrument, radio, television set, talking machine, unmusical noise,
whistling, singing, or in any other way.

         (10) Tenant, or any of Tenant's employees, agents, visitors or
licensees, shall not at any time bring or keep upon the Premises any
inflammable, combustible or explosive fluid, chemical or substance except such
as are incidental to usual office occupancy.

         (11) No additional locks or bolts of any kind shall be placed upon any
of the doors or windows by Tenant, nor shall any changes be made in existing
locks or the mechanism thereof, unless Tenant promptly provides Landlord with
the key or combination thereto. Tenant must, upon the termination of its
tenancy, return to Landlord all keys of stores, offices and toilet rooms, and in
the event of the loss of any keys furnished at Landlord's expense, Tenant shall
pay to Landlord the cost thereof.

         (12) No bicycles, vehicles or animals of any kind except for seeing eye
dogs shall be brought into or kept by Tenant in or about the Premises or the
Building.

         (13) All removals, or the carrying in or out of any safes, freight,
furniture or bulky matter of any description must take place in the manner and
during the hours which Landlord or its agent reasonably may determine from time
to time. Landlord reserves the right to inspect all safes, freight or other
bulky articles to be brought into the Building and to exclude from the Building
all safes, freight or other bulky articles which violate any of these Rules and
Regulations or the Lease of which these Rules and Regulations are a part.

         (14) Tenant shall not occupy or permit any portion of the Premises
demised to it to be occupied as an office for a public stenographer or typist,
or for the possession, storage, manufacture, or sale of liquor, narcotics, dope,
or as a barber or manicure shop, or as an employment bureau. Tenant shall not
engage or pay any employees on the Premises, except those actually working for
Tenant at the Premises, nor advertise for labor giving an address at the
Premises.

         (15) Tenant shall not purchase spring water, ice, towels or other like
service, or
<PAGE>   86
accept barbering or bootblacking services in the Premises, from any company or
persons not approved by Landlord, which approval shall not be withheld or
delayed unreasonably and at hours and under regulations other than as reasonably
fixed by Landlord.

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

         (17) Landlord reserves the right to exclude from the Building between
the hours of 6 P.M. and 8 A.M. and at all hours on days other than Business Days
all persons who do not present a pass to the Building signed or approved by
Landlord. Tenant shall be responsible for all persons for whom a pass shall be
issued at the request of Tenant and shall be liable to Landlord for all acts of
such persons.

         (18) Tenant shall, at its expense, provide artificial light for the
employees of Landlord while doing janitor service or other cleaning, and in
making repairs or alterations in the Premises.


         (19) The requirements of Tenant will be attended to only upon written
application at the office of the Building. Building employees shall not perform
any work or do anything outside of the regular duties, unless under special
instructions from the office of Landlord.

         (20) Canvassing, soliciting and peddling in the Building is prohibited
and Tenant shall cooperate to prevent the same.

         (21) There shall not be used in any space, or in the public halls of
the Building, either by Tenant or by jobbers or others, in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and side guards.

         (22) Except as specifically provided in Section 2.2 of this Lease,
Tenant shall not do any cooking, conduct any restaurant, luncheonette or
cafeteria for the sale or service of food or beverages to its employees or to
others, or cause or permit any odors of cooking or other processes or any
unusual or objectionable odors to emanate from the Premises. Tenant shall not
permit the delivery of any food or beverage to the Premises, except by such
persons delivering the same as shall be approved by Landlord, which approval
shall not be unreasonably withheld or delayed.

         (23) Tenant shall keep the entrance door to the Premises closed at all
times.

         (24) Landlord shall have the right to require that all messengers and
other Persons delivering packages, papers and other materials to Tenant (i) be
directed to deliver such packages, papers and other materials to a Person
designated by Landlord who will distribute the same to Tenant or (ii) be
escorted by a person designated by Landlord to
<PAGE>   87
deliver the same to Tenant.

         (25) Landlord and its agents reserve the right to inspect all packages,
boxes, bags, handbags, attache cases, suitcases, and other items carried into
the Building, and to refuse entry into the Building to any person who either
refuses to cooperate with such inspection or who is carrying any object which
may be dangerous to persons or property. In addition, Landlord reserves the
right to implement such further measures designed to ensure safety of the
Building and the persons and property located therein as Landlord shall deem
necessary or desirable.
<PAGE>   88
                                   Schedule B

                             CLEANING SPECIFICATIONS


GENERAL CLEANING:

NIGHTLY

         General Offices:

         1.       All hardsurfaced flooring to be swept using approved dustdown
                  preparation.

         2.       Carpet sweep all carpets, moving only light furniture (desks,
                  file cabinets, etc. not to be moved).

         3.       Hand dust and wipe clean all furniture, fixtures and window
                  sills.

         4.       Empty and clean all ash trays and screen all sand urns.

         5.       Empty and clean all waste disposal cans and baskets.

         6.       Dust interiors of all waste disposal cans and baskets.

         7.       Wash clean all water fountains and coolers.

         Public Lavatories (Base Building):

         1.       Sweep and wash all floors, using proper disinfectants.

         2.       Wash and polish all mirrors, shelves, bright work and enameled
                  surfaces.

         3.       Wash and disinfect all basins, bowls and urinals.

         4.       Wash all toilet seats.

         5.       Hand dust and clean all partitions, tile walls, dispensers and
                  receptacles in lavatories and restrooms.

         6.       Empty paper receptacles and remove wastepaper.

         7.       Fill and clean all soap, towel and toilet tissue dispensers as
                  needed, supplies therefore to be furnished by Landlord at a
                  reasonable charge to
<PAGE>   89
                  Tenant. If the Premises consists of a part of a rentable
                  floor, said charge to Tenant shall be that portion of a
                  reasonable charge for such supplies that is reasonably
                  allocable to Tenant.

         8.       Empty and clean sanitary disposal receptacles.


WEEKLY:

         1.       Vacuum clean all carpeting and rugs.

         2.       Dust all door louvres and other ventilating louvres within a
                  person's reach.

         3.       Wipe clean all brass and other bright work.


QUARTERLY:

High dust the Premises complete, including the following:

         1.       Dust all pictures, frames, charts, graphs and similar wall
                  hangings not reached in nightly cleaning.

         2.       Dust clean all vertical surfaces, such as walls, partitions,
                  doors and door bucks and other surfaces not reached in nightly
                  cleaning.

         3.       Dust all pipes, ventilating and air-conditioning louvres,
                  ducts, high mouldings and other high areas not reached in
                  nightly cleaning.

         4.       Dust all venetian blinds.


Wash exterior and interior of windows periodically, subject to weather
conditions and requirements of law.
<PAGE>   90
                                   Schedule C

                               HVAC Specifications

                                (attached hereto)
<PAGE>   91
                                   EXHIBIT "A"

                                   FLOOR PLAN

This floor plan is annexed to and made a part of this Lease solely to indicate
the Premises by outlining and diagonal marking. All areas, conditions,
dimensions and locations are approximate.
<PAGE>   92
                                   EXHIBIT "B"

                                 LANDLORD'S WORK

Landlord will, at its expense, perform the following work and installations, all
of which shall be of material, design, capacity, finish and color (if
applicable) of the standard adopted by Landlord for the Building (but in no
event more than the type and quantity of work set below):

         1. Install a demising wall in the Premises and deliver Premises in
broom clean condition.

         2. Install sprinkler "hook-up" (it being expressly understood and
agreed that Landlord shall not be obligated to install the sprinkler loop and
that Tenant, as part of the Initial Alterations shall install the sprinkler
loop).

         3. Refurbish the Building standard lavatories located on the floor of
the Building on which the Premises are located in compliance with the Americans
with Disabilities Act.

         4. Class "E" hook-up will be made available to the core. Landlord to
provide all necessary signal points.

         5. Install one (1) Building standard double single entrance door to the
Premises in a location approved by Landlord and Tenant.

         6. Deliver a Form ACP-5 with respect to the Premises.

         7. Install new radiator covers.

         8. Furnish and install Building standard finishes in corridor on the
floor of the Building on which the Premises are located.
<PAGE>   93
                                   EXHIBIT "C"

                     APPROVED CONTRACTORS IN CONNECTION WITH
                               INITIAL ALTERATIONS
<PAGE>   94
                                   EXHIBIT "D"

                          LOCATION OF THE "SECURE" AREA
<PAGE>   95





                               AGREEMENT OF LEASE

                                     between



                          570 LEXINGTON COMPANY, L.P.,

                                    Landlord

                                       and


                          FIBERNET TELECOM GROUP, INC.

                                     Tenant

                              570 Lexington Avenue
                               New York, New York




                               Proskauer Rose LLP
                                  1585 Broadway
                            New York, New York 10036
<PAGE>   96
                                TABLE OF CONTENTS

DEFINITIONS................................................................... 1

ARTICLE 1 -   DEMISE, PREMISES, TERM, RENT.................................... 8
ARTICLE 2 -   USE AND OCCUPANCY............................................... 8
ARTICLE 3 -   ALTERATIONS..................................................... 9
ARTICLE 4 -   REPAIRS-FLOOR LOAD............................................. 16
ARTICLE 5 -   WINDOW CLEANING................................................ 17
ARTICLE 6 -   REQUIREMENTS OF LAW............................................ 18
ARTICLE 7 -   SUBORDINATION.................................................. 19
ARTICLE 8 -   RULES AND REGULATIONS.......................................... 22
ARTICLE 9 -   INSURANCE, PROPERTY LOSS OR DAMAGE; REIMBURSEMENT.............. 23
ARTICLE 10 -  DESTRUCTION-FIRE OR OTHER CAUSE................................ 25
ARTICLE 11 -  EMINENT DOMAIN................................................. 29
ARTICLE 12 -  ASSIGNMENT, SUBLETTING, MORTGAGE, ETC.......................... 31
ARTICLE 13 -  ELECTRICITY  .................................................. 44
ARTICLE 14 -  ACCESS TO PREMISES............................................. 47
ARTICLE 15 -  CERTIFICATE OF OCCUPANCY....................................... 49
ARTICLE 16 -  DEFAULT........................................................ 50
ARTICLE 17 -  REMEDIES AND DAMAGES........................................... 53
ARTICLE 18 -  LANDLORD FEES AND EXPENSES..................................... 56
ARTICLE 19 -  NO REPRESENTATIONS BY LANDLORD................................. 56
ARTICLE 20 -  END OF TERM.................................................... 57
ARTICLE 21 -  QUIET ENJOYMENT................................................ 58
ARTICLE 22 -  FAILURE TO GIVE POSSESSION..................................... 58
ARTICLE 23 -  NO WAIVER...................................................... 58
ARTICLE 24 -  WAIVER OF TRIAL BY JURY........................................ 59
ARTICLE 25 -  INABILITY TO PERFORM........................................... 60
ARTICLE 26 -  BILLS AND NOTICES.............................................. 60
ARTICLE 27 -  ESCALATION..................................................... 61
ARTICLE 28 -  SERVICES....................................................... 70
ARTICLE 29 -  PARTNERSHIP TENANT............................................. 73
ARTICLE 30 -  VAULT SPACE.................................................... 74
ARTICLE 31 -  SECURITY....................................................... 75
ARTICLE 32 -  CAPTIONS....................................................... 76
ARTICLE 33 -  PARTIES BOUND.................................................. 76
ARTICLE 34 -  BROKER......................................................... 76
ARTICLE 35 -  INDEMNITY...................................................... 77
ARTICLE 36 -  ADJACENT EXCAVATION-SHORING.................................... 78
ARTICLE 37 -  MISCELLANEOUS.................................................. 78
ARTICLE 38 -  RENT CONTROL................................................... 81
<PAGE>   97
Schedule A  -  Rules and Regulations
Schedule B  -  Cleaning Specifications
EXHIBIT  "A"  -  Floor Plan
EXHIBIT  "B"  -  Landlord's Work
EXHIBIT  "C"  -  Approved Contractors In Connection With The Initial Alterations
EXHIBIT  "D"  -  Location of the "Secure" Area