<PAGE>
 
                                                                   EXHIBIT 10.17

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                                 LEASE BETWEEN

                         EVERGREEN AMERICA CORPORATION

                                   LANDLORD

                                      AND

                       FOCAL COMMUNICATIONS CORPORATION
                     OF NEW JERSEY, A DELAWARE CORPORATION


                                    TENANT


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<PAGE>
 
                                     INDEX

<TABLE>
<S>                                                                     <C>
  ARTICLE 1  -- CERTAIN TERMS..........................................   4

  ARTICLE 2  -- DEMISED PREMISES.......................................   6

  ARTICLE 3  -- PREPARATION OF THE DEMISED PREMISES....................   7

  ARTICLE 4  -- WHEN DEMISED PREMISES ARE READY FOR
                OCCUPANCY AND COMMENCEMENT DATE........................   8

  ARTICLE 5  -- RENT...................................................   8

  ARTICLE 6  -- EXPENSE ESCALATION.....................................   9

  ARTICLE 7  -- ELECTRICAL ENERGY......................................  16

  ARTICLE 8  -- VENTILATION AND AIR CONDITIONING.......................  16

  ARTICLE 9  -- LANDLORD'S OTHER SERVICES..............................  18

  ARTICLE 10 -- USE....................................................  20

  ARTICLE 11 -- ACCESS, CHANGES IN BUILDING FACILITIES, NAME...........  22

  ARTICLE 12 -- TENANT'S CHANGES.......................................  23

  ARTICLE 13 -- TENANT'S PROPERTY......................................  25

  ARTICLE 14 -- REPAIRS AND MAINTENANCE................................  26

  ARTICLE 15 -- SECURITY DEPOSIT.......................................  27

  ARTICLE 16 -- INSURANCE..............................................  27

  ARTICLE 17 -- SUBORDINATION, ATTORNMENT,
                NOTICE TO LESSOR AND MORTGAGEES........................  29

  ARTICLE 18 -- ASSIGNMENT, MORTGAGING, SUBLETTING.....................  31

  ARTICLE 19 -- COMPLIANCE WITH LAWS AND REQUIREMENTS OF PUBLIC
                AUTHORITIES: RULES & REGULATIONS.......................  33

  ARTICLE 20 -- QUIET ENJOYMENT........................................  34

  ARTICLE 21 -- NON-LIABILITY & INDEMNIFICATION........................  34

  ARTICLE 22 -- DESTRUCTION AND DAMAGE.................................  35

  ARTICLE 23 -- EMINENT DOMAIN.........................................  36

  ARTICLE 24 -- SURRENDER..............................................  38

  ARTICLE 25 -- CONDITIONS OF LIMITATION...............................  38

  ARTICLE 26 -- RE-ENTRY BY LANDLORD -- DEFAULT PROVISIONS.............  39

  ARTICLE 27 -- DAMAGES................................................  40

  ARTICLE 28 -- WAIVERS................................................  41
</TABLE> 
 

                                      -2-
<PAGE>
 
<TABLE> 
<S>                                                                     <C>  
  ARTICLE 29  -- NO OTHER WAIVERS OR MODIFICATIONS.....................  42

  ARTICLE 30  -- CURING TENANT'S DEFAULTS, ADDITIONAL RENT.............  43

  ARTICLE 31  -- NOTICES -- SERVICE OF PROCESS.........................  44

  ARTICLE 32  -- ESTOPPEL CERTIFICATE, MEMORANDUM......................  44

  ARTICLE 33  -- NO OTHER REPRESENTATIONS, CONSTRUCTION, GOVERNING
                 LAW...................................................  45

  ARTICLE 34  -- PARTIES BOUND.........................................  45

  ARTICLE 35  -- SHORING AND NOTICE OF ACCIDENTS AND DAMAGE............  46

  ARTICLE 36  -- VAULT, VAULT SPACE, AREA..............................  46

  ARTICLE 37  -- INABILITY TO PERFORM..................................  47

  ARTICLE 38  -- LIABILITY OF LANDLORD.................................  47

  ARTICLE 39  -- BROKERAGE.............................................  47

  ARTICLE 40  -- FIRST RENEWAL OPTION..................................  47

  ARTICLE 41  -- SECOND RENEWAL OPTION.................................  48

  ARTICLE 42  -- MISCELLANEOUS PROVISIONS..............................  49

  EXHIBIT A-1 -- DEMISED PREMISES......................................  51

  EXHIBIT A-2 -- EMERGENCY STAND-BY GENERATOR SPACE....................  52

  EXHIBIT A-3 -- ROOF SPACE............................................  53

  EXHIBIT B   -- RULES AND REGULATIONS.................................  54

  EXHIBIT C   -- TENANT'S WORK.........................................  58

  EXHIBIT C-1 -- BUILDING RULES AND REGULATIONS FOR TRADES CONDUCTING
                 OPERATIONS IN THE BUILDING............................  59

  EXHIBIT C-2 -- INSURANCE REQUIREMENTS FOR TRADES CONDUCTING
                 OPERATIONS IN THE BUILDING............................  61

  EXHIBIT D   -- CLEANING STANDARDS....................................  62

  EXHIBIT E   -- SUBORDINATION, NON DISTURBANCE AND ATTORNMENT
                 AGREEMENT.............................................  68
</TABLE>

                                      -3-
<PAGE>
 
                                 OFFICE LEASE

AGREEMENT OF LEASE, made the 19th day of February, 1999, between EVERGREEN
AMERICA CORPORATION, A New Jersey Corporation, (hereinafter called the
"Landlord") and FOCAL COMMUNICATIONS CORPORATION OF NEW JERSEY, A DELAWARE
CORPORATION "Tenant", as hereinafter defined.

                          ARTICLE 1 -- CERTAIN TERMS

     1.01  The following terms shall have the meanings set forth opposite each
of them, provided that if "None" is set forth opposite any term, then the
provision of the Lease applicable to such term shall be considered deleted and
of no force and effect.

"Tenant" --

     a corporation organized under the laws of the State of Delaware having its
     principal office at 200 N. Lasalle Street, Chicago, Illinois 60601, and
     licensed to do business in the State of New Jersey.

"Term" --

     The period beginning on the Commencement Date and ending at noon on the
     Expiration Date.

"Commencement Date" --

     March 1, 1999 or the date on which the Demised Premises are ready for
     occupancy as provided in Article 4 hereof.

"Expiration Date" --

     The last day of the calendar month in which occurs the end of a ten (10)
     year period from the Commencement Date (if the Commencement Date shall
     occur on a day other than the first day of a calendar month such period
     shall run and be measured from the first day of the calendar month
     following the Commencement Date) or ending on an earlier date on which this
     Lease may expire or be cancelled or terminated pursuant to the terms of
     this Lease.

"Fixed Rent" --

     Years One through Five (5) Five Hundred Twenty Six Thousand Three Hundred
     Twenty Five Dollars ($526,325.00) per year, payable in monthly installments
     of $43,860.42, (as adjusted in accordance with this Lease).

     Years Six (6) through Ten (10) Six Hundred Eleven Thousand Fifty Five
     Dollars ($611,055.00) per year, payable in monthly installments of
     $50,921.25 (as adjusted in accordance with this Lease).

"Building" --

     The Building located in the City of Jersey City, County of Hudson and State
     of New Jersey and known as One Evertrust Plaza, Jersey City, New Jersey.

                                      -4-
<PAGE>
 
"Demised Premises" --

     The entire seventeenth (17th) floor of the Building delineated on the floor
     plan attached hereto as Exhibit A, the total area of which is the Tenant's
     Floor Space.

"Tenant's Floor Space" --

     The total number of rentable square feet of space in the Demised Premises,
     which, for purposes of this Lease, the parties agree and stipulate is
     18,500 square feet.

"Total Building Floor Space" --

     The total number of rentable square feet of space in the Building, which,
     for purposes of this Lease, the parties agree and stipulate is 314,503
     square feet.

"Tenant's Share" --

     5.882%; which is the percentage resulting from dividing the Tenant's Floor
     Space by the Total Building Floor Space.

"Security Deposit" --
 
     See Article 15 hereof.

"Permitted Use" --

     The Demised Premises may be used for professional offices, and for the
     installation, operation and maintenance of equipment, and facilities in
     connection with Tenant's telecommunications business.

"A.C. Charge" --

     $75.00 per hour for additional air conditioning pursuant to Article 8.01
     hereof.

"H. Charge" --

     $75.00 per hour additional heating pursuant to Article 8.01 hereof.

"Broker" --

     Dolan Realty, Inc. and Grubb & Ellis which Tenant represents and warrants
     are the sole Brokers with whom it has dealt in this transaction, and based
     thereupon Landlord agrees to pay a brokerage commission in accordance with
     a separate agreement between Landlord and Brokers.

"Regular Business Hours" --

     8:00 a.m. to 6:00 p.m. Monday through Friday; 8:30 a.m. to 12:30 p.m. on
     Saturday, except where such days are observed by the Federal or the New
     Jersey State government as legal holidays, or as union holidays.

"Number of Parking Spaces" --

     Tenant shall have the right to lease up to eighteen (18) exterior parking
     spaces at additional rent of $140.00 for each parking space, payable
     monthly. Notwithstanding the foregoing, Landlord may increase the rent for
     exterior parking spaces from time to time during the term of this Lease
     after the first year of the Term of this Lease. In the event Landlord
     builds a parking structure, which will be constructed at Landlord's sole
     cost and expense, Tenant's parking shall be relocated to such parking
     structure and Tenant shall have the right to lease up to the same number of
     exterior parking spaces leased by Tenant prior to the building of the
     parking structure at additional rent as determined by Landlord for each
     parking space, payable monthly. Notwithstanding the foregoing, Landlord may
     increase the rent for parking spaces in a parking structure from time to

                                      -5-
<PAGE>
 
     time during the term of this Lease after the first year of operation of the
     parking structure.

     1.02  Electrical energy consumed by Tenant in the Demised Premises through
wall and floor outlets, for lighting and business equipment shall be purchased
by Tenant as provided in Article 7.

                         ARTICLE 2 -- DEMISED PREMISES

     2.01  Landlord hereby leases to Tenant, and Tenant hereby hires from
Landlord, the Demised Premises for the Term, for the rents hereinafter reserved
and upon and subject to the conditions (including limitations, restrictions and
reservations) and covenants hereinafter provided. Each party hereto agrees to
observe and perform all of the conditions and covenants herein contained on its
part to be observed and performed.

     2.02  The general location, size and layout of the Demised Premises are
outlined on Exhibit A-1, but Exhibit A-1 shall not be deemed to be a warranty,
representation or agreement on the part of Landlord that the Demised Premises
and the Building will be exactly as indicated on Exhibit A-1.

     2.03  Nothing herein contained shall be construed as a grant or demise by
Landlord to Tenant of the roof or exterior walls of the Building, of the space
above and below the Demised Premises, of the parcel of land on which the Demised
Premises are located, and/or of any parking or other areas adjacent to the
Building except as follows:

     (i)   Tenant, at Tenant's sole cost and expense shall be permitted to
install a diesel fuel emergency stand-by generator UP TO 600 Kilowatts in size
and an enclosed diesel fuel storage tank not exceeding 6,000 gallons for
Tenant's exclusive use. Tenant shall be entitled to the use of the area
described on Exhibit A-2 attached hereto for the purpose of locating therein an
emergency stand-by generator and diesel fuel tank (with necessary conduit,
wiring or cabling) and other facilities consistent with Tenant's use of its
Demised Premises for continuous uninterrupted telecommunications services, all
at Tenant's sole cost and expense. Tenant shall have exclusive distribution
rights to said generator. In connection with the use of said generator Tenant
shall have the right to store gel cell batteries.

           Tenant shall have the right to conduct periodic tests of the
emergency stand-by generator after normal business hours at any time, provided
that Landlord is given reasonable notice, and that such tests will not interfere
with the operations of any other tenants, or the Building. Landlord shall work
with Tenant to establish a time mutually acceptable during non business hours to
accommodate Tenant's testing.

           Tenant shall install such emergency stand-by generator and related
items in accordance with all applicable municipal, State and Federal laws, rules
and regulations. Landlord shall have no responsibility or liability for the
installation, operation or maintenance of such emergency stand-by generator and
related items and Tenant shall employ required engineers on site to maintain and
service such emergency stand-by generator and related items. Tenant shall pay
directly to Landlord, as and for Additional Rent under the Lease, Sixty Thousand
Dollars ($60,000.00) per year for such stand-by emergency generator and related
items, payable $5,000.00 per month, commencing on the Commencement Date and
ending on the Lease Expiration Date.

                                      -6-
<PAGE>
 
     (ii)  Tenant shall have the use of up to Three Hundred (300) square feet of
roof space of the Building described in Exhibit A-3 attached hereto for the
purpose of the installation of a satellite dish/GPS receiver and air cooling
equipment at no additional charge. In the event Tenant requires roof space in
excess of Three Hundred (300) square feet for its satellite dish/GPS receiver
and air cooling equipment up to a maximum of Six Hundred (600) square feet,
Tenant shall pay directly to Landlord, as and for additional Rent under the
Lease, Two Hundred Fifty Dollars ($250.00) per square foot of additional roof
space yearly, payable in equal monthly installments commencing on the
Commencement Date and ending on the Lease Expiration Date.

     (iii) Tenant shall have the right to install, maintain and replace from
time to time a satellite dish/GPS receiver on the roof space of the Building as
set forth in Exhibit A-3 at Tenant's sole cost and expense and all of Tenant's
rights and duties set forth in Article 12 (relating to Tenant's duties and
obligations in making Tenant's changes) shall be applicable to and binding upon
Tenant with respect to such work, and Landlord shall furnish Tenant a right of
way between the rooftop and the Demised Premises for Tenant's wires on conduits
in connection therewith.

     (iv)  Landlord and Tenant agree that Tenant's communication, HVAC,
electrical and other various equipment will require Tenant to use Building
shafts, risers, chases, utility entrances, equipment rooms, and distribution
areas or conduits between the Demised Premises and other parts of the Building
(including the roof). Tenant shall be afforded the right to use where available,
and or construct conduits to connect Tenant's equipment.

     (v)   Tenant shall have the right to utilize and/or install four (4) four
inch (4") conduits from the telephone service point of entry to designated areas
within the Tenant's Demised Premises. Landlord will cooperate in locating points
of entry to provide redundancy of access for telecommunications services and
providers to the Building.

               ARTICLE 3 -- PREPARATION OF THE DEMISED PREMISES

     3.01  Tenant shall cause to be substantially performed all the work in the
Demised Premises as set forth in Exhibit C to be annexed hereto and made a part
hereof (the "Tenant's Work"), upon the terms and conditions specified therein.
Landlord shall provide a work allowance in the amount of $277,500.00 payable to
the contractor as part of the cost of the work. Tenant shall pay to the
contractor the balance of the cost of Work. Payments by each party shall be in
proportion to the total cost of the Work divided into each party's contribution,
payable to the Contractor against each invoice submitted for costs actually
incurred or materials actually delivered upon delivery to each party of evidence
of the Work completed.

     3.02  All of Tenant's duties and obligations set forth in Article 12
(relating to Tenant's duties and obligations in making Tenant's Changes) shall
be applicable to and binding upon Tenant with respect to any such work.

     3.03  Tenant's final plans, specifications and drawings covering all such
work are to be attached hereto as Exhibit C. Tenant shall not commence any work
referred to in Exhibit C until such plans, specifications, and drawings have
been received, receipted and approved by Landlord in accordance with the

                                      -7-
<PAGE>
 
provisions of Exhibit C. Landlord shall not unreasonably withhold or delay such
approval.

               ARTICLE 4 -- WHEN DEMISED PREMISES ARE READY FOR
                        OCCUPANCY AND COMMENCEMENT DATE

     4.01  The Commencement Date shall be March 1, 1999. Tenant shall not use or
occupy the Demised Premises for the permitted use until Tenant has received a
Certificate of Occupancy (temporary or final) issued by the appropriate
department of the municipality where the Building is located not inconsistent
with the Permitted Uses and with the restrictions set forth in Article 11
hereof.

     4.02  On the Commencement Date or at such time as Tenant shall take actual
possession of the whole or part of the Demised Premises, whichever shall be
earlier, it shall be conclusively presumed that the same were as of the
Commencement Date or the date or dates of such taking of possession, in the
condition in which Landlord was required to deliver the Demised Premises under
this Lease, unless within thirty (30) days after such date Tenant shall have
given Landlord notice specifying in which respects the Demised Premises were not
in satisfactory condition. However, nothing contained in this Section shall be
deemed to relieve Landlord from, and Landlord shall perform its obligations to
correct any latent defects and to complete, with reasonable speed and diligence,
such details of construction, mechanical adjustment and decoration, if any, as
Landlord shall be required to perform under this Lease and as shall have been
unperformed at the time Tenant took actual possession, but Tenant shall not be
entitled to any rent abatement on account of any such incomplete work.

     4.03  Upon the signing of this Lease by the parties, Tenant may enter the
Demised Premises to conduct Tenant's Work. Landlord shall have no liability or
obligation for the care or preservation of Tenant's property and Tenant shall
not interfere with Landlord or Landlord's contractors.

     4.04  Landlord agrees to provide access by the telephone company during the
course of construction to permit Tenant's installation of telephone lines,
cables, wires and equipment to service Tenant's office areas. Notwithstanding
the foregoing, the parties agree that the failure by the telephone company to
complete the telephone installation and to provide service on the date that the
Demised Premises are otherwise substantially complete (as hereinabove defined)
or occupied by Tenant, shall not delay or defer the determination of the
Commencement Date and the obligation to pay rent thereafter.

     4.05  When Tenant takes possession of the Demised Premises, it shall be
deemed to have accepted the Demised Premises as substantially completed as of
the date of such possession, subject to Landlord's obligations under Section
4.02 above.

                               ARTICLE 5 -- RENT

     5.01  Except as expressly provided herein, Tenant shall pay to Landlord
without notice or demand and without abatement, deduction or set-off, in lawful
money of the United States of America, at the office of the Landlord as set
forth in Article 1 hereof, or at such other place as Landlord may designate, the
Fixed Rent reserved under this Lease for each year of the Term, payable in equal
monthly installments in advance on the first day of each and every calendar
month during the Term; and additional rent consisting of 

                                      -8-
<PAGE>
 
all such other sums of money as shall become due from and payable by Tenant to
Landlord hereunder (for default in payment of which Landlord shall have the same
remedies as for a default in payment of Fixed Rent).

     5.02  Tenant shall pay the Fixed Rent and additional rent herein reserved
promptly as and when the same shall become due and payable under this Lease and
shall be liable to the Landlord for an administrative charge of 4% for rent paid
five (5) days subsequent to the date set in Article 5.01. If the Commencement
Date shall occur on a day other than the first day of a calendar month the Fixed
Rent, and additional rent shall be prorated for the period from the Commencement
Date to the last day of the said calendar month and shall be due and payable on
the Commencement Date. Notwithstanding the provisions of the next preceding
sentence, Tenant shall pay on account toward the first full calendar month
installment(s) of Fixed Rent, on the execution of this Lease, the Rent
Prepayment specified in Article 1 hereof.

     5.03  Whenever used in this Lease, the term (insofar as it pertains to this
Lease) "fixed rent", "minimum rent", "base rent", or "basic rent", or any such
term using the word "rental", "rents", or "rentals" in lieu of "rent", shall
mean Fixed Rent; and whenever used in this Lease, the term (insofar as it
pertains to this Lease) "rent", "rental", "Rent" or the plural of any of them,
shall mean Fixed Rent and additional rent.

                        ARTICLE 6 -- EXPENSE ESCALATION

     6.01  Tenant shall pay to Landlord, as additional rent, Expense Escalation
in accordance with this Article:

     A. Definitions: for the purpose of this Article, the following definitions
     shall apply:

     (i)   The term "Expense Base Factor" shall mean the Expenses as hereinafter
defined for the calendar year 1999.

     (ii)  The term "comparative year" shall mean the full calendar year in
which the term of this Lease commences, and each subsequent calendar year during
the Term of this Lease.

     (iii) The term "Expenses" shall mean the total of all the costs and
expenses incurred or borne by Landlord with respect to the operation and
maintenance of the Building and the services provided tenants therein including,
but not limited to, the costs and expenses incurred for and with respect to:
water rates and sewer rents; air-conditioning, ventilation and heating; any and
all electricity costs not paid directly to the Landlord by the tenants of the
Building (including Tenant); maintenance of the Building's exterior surfaces;
elevator cabs, lobby maintenance and cleaning; protection and security; lobby
decoration and interior and exterior landscape maintenance; repairs,
replacements and improvements which are appropriate for the continued operation
of the Building as a first-class office Building; maintenance; painting of non-
tenant areas; insurance; supplies; employee salaries and benefits;
administrative expenses; and the annual fee for management of the Building.

     Provided, however, that the foregoing costs and expenses shall exclude or
have deducted from them, as the case may be and as shall be appropriate:

     (a) leasing commissions and other leasing expenditures;

                                      -9-
<PAGE>
 
     (b) expenditures of capital improvements except those which under generally
accepted real estate practice are expensed or regarded as deferred expenses and
except for capital expenditures required by law, in either of which case the
cost thereof shall be included in Expenses for the comparative year in which the
costs are incurred and subsequent comparative years, on a straight line basis,
to the extent that such items are amortized over an appropriate period, but not
more than five years, with an interest factor equal to the prime rate of
Citibank at the time of Landlord's having incurred said expenditure.

     (c) amounts received by Landlord through proceeds of insurance to the
extent that the proceeds are compensation for expenses which would be or were
previously included in Expenses hereunder;

     (d) cost of repairs or replacements incurred by reason of fire or other
casualty or eminent domain;

     (e) advertising and promotional expenditures;

     (f) legal fees for disputes with tenants and legal and auditing fees, other
than legal and auditing fees reasonably incurred in connection with the
maintenance and operation of the Building or in connection with the preparation
of statements required pursuant to additional rent or lease escalation
provisions;

     (g) costs incurred in performing work or furnishing services for individual
tenants (including Tenant) at such tenant's expense to the extent that such work
or service is in excess of any work or service Landlord at its expense is
obligated to furnish to Tenant;

     (h) The cost of future renovations to the building, including without
limitation, the cost of any exterior renovations to the building;

     (i) "Takeover Expenses" (i.e., expenses incurred by Landlord with respect
to space located in another building of any kind or nature in connection with
the leasing of space in the Building);

     (j) Any amounts payable by Landlord by way of indemnity or for damages or
which constitute a fine, interest, or penalty, including interest or penalties
for any late payments of operating costs or pursuant to indemnities given by
Landlord to any Tenant pursuant to its Lease;

     (k) The operating costs incurred by Landlord relative to retail stores,
parking garage or any specialty service in the building;

     (l) The cost of correcting defects in construction or the removal or
encapsulation of asbestos containing materials;

     (m) The cost of overtime or other expense to Landlord in curing its
defaults;

     (n) The cost of any investigation, cleanup or remediation of any
environmental condition for which Lessee is not responsible under the Lease,
including costs of any penalties or fines in connection therewith;

     (o) The cost of any work or service performed for any tenant of space
(including Tenant) in the Building (i) at Landlord's cost and expense to the
extent that such work or service is in excess of any work or service which
Landlord is obligated to furnish hereunder to Tenant at Landlord's cost and
expense, or (ii) for which Landlord 

                                      -10-
<PAGE>
 
is reimbursed (other than through operation of this Article or similar
provisions in other leases of space in the Building);

     (p) The cost of any judgment, settlement, or arbitration award resulting
from any liability of Landlord (other than a liability for amounts otherwise
includable in Expenses hereunder) and all expenses incurred in connection
therewith;

     (q) Costs relating to withdrawal liability or unfunded pension liability
under the Multi-Employer Pension Plan Act or similar law;

     (r) Any interest, fine, penalty or other late charges payable by Landlord
(not due to Tenant's default);

     (s) Costs incurred by Landlord which result from Landlord's or other
Building tenants' breach of a lease or Landlord's tortious or negligent conduct;
and

     (t) Costs incurred by Landlord to assure building Systems are Year 2000
compatible.

     Without limiting the generality of the foregoing, capital expenditures
incurred by Landlord to comply with existing or future federal, state or local
laws, rules or regulations of governmental authorities having jurisdiction over
the Building, including without limitations, the American with Disabilities Act,
as now in effect.

     If Landlord shall purchase any item of capital equipment or make any
capital expenditure designed to result in savings or reductions in Expenses,
then the costs for same shall be included in Expenses. The costs of capital
equipment or capital expenditures are so to be included in Expenses for the
comparative year in which the costs are incurred and subsequent comparative
years, on a straight line basis, to the extent that such items are amortized
over such period of time as reasonably can be estimated as the time in which
such savings or reductions in Expenses are expected to equal Landlord's costs
for such capital equipment or capital expenditure, with an interest factor equal
to the prime rate of Citibank at the time of Landlord's having incurred said
costs. If Landlord shall lease any such item of capital equipment designed to
result in savings or reductions in Expenses, then the rentals and other costs
paid pursuant to such leasing shall be included in Expenses for the comparative
year in which they were incurred.

     6.02  Commencing with the second comparative year, if the Expenses
estimated in the manner provided in Article 6.03 for a comparative year shall be
greater than Expense Base Factor, Tenant shall pay to Landlord, additional rent
for such comparative year, in the manner hereinafter provided, an amount equal
to The Tenant's Share of the excess of the Expenses for such comparative year
over the Expense Base Factor (such amount being hereafter called the "Expense
Payment").

     6.03  Commencing with the second comparative year, and each year thereafter
for the balance of the Lease term, thirty (30) days prior to the commencement of
each comparative year, Landlord will submit to Tenant Landlord's Certified
Public Accountant's estimate of projected expenses for such year as provided in
Article 6.04. The estimate shall also set forth the total projected expenses, if
any, due to Landlord from Tenant for such year pursuant to Article 6.02. The
rendition of such estimate shall constitute prima facie proof of the accuracy
thereof. If such statement shows an Expense Payment due to Landlord with respect
to the forthcoming comparative

                                      -11-
<PAGE>
 
year, one-twelfth of this amount shall be payable monthly as additional rent,
commencing with the first month of such comparative year.

     No later than sixty (60) days after the conclusion of each comparative year
Landlord shall deliver to Tenant a final statement from its Certified Public
Accountant as provided in Article 6.04 setting forth the actual Expenses for the
preceding year. Within thirty (30) days of Tenant's receipt of such statement
Landlord and Tenant will make an appropriate cash adjustment for any
underestimate or overestimate of Landlord's Expenses for the preceding
comparative year (which underestimate shall result in additional rent payable as
herein provided).

     6.04  The estimated and final statements of Expenses to be furnished by
Landlord as provided above shall be certified by Landlord, and shall be prepared
in reasonable detail for the Landlord by a Certified Public Accountant (who may
be the Certified Public Accountant now or then employed by Landlord for the
audit of its accounts); said Certified Public Accountant may rely on Landlord's
allocations and estimates wherever operating cost allocations or estimates are
needed for this Article. The statements thus furnished to Tenant shall
constitute a final determination as between Landlord and Tenant of the Expenses
for the period represented thereby, unless Tenant within ninety (90) days after
they are furnished shall give a notice to Landlord that it disputes their
accuracy or their appropriateness, which notice shall specify the particular
respects in which the statement is accurate. Pending the resolution of such
dispute, Tenant as herein provided shall pay the additional rent to Landlord in
accordance with the statements furnished by Landlord. After payment of said
additional rent, Tenant shall have the right, during reasonable business hours
and upon not less than five (5) business days' prior written notice to Landlord,
to have Tenant's Certified Public Accountant or other authorized agent or
representative examine Landlord's books and records with respect to the
foregoing, provided such examination is commenced within thirty (30) days and
concluded within sixty (60) days following the rendition of the statement in
question.

     6.05  In any such dispute as to said statement Landlord and Tenant or their
respective Certified Public Accountants shall select a national "Big Six"
accounting firm whose determination shall be conclusive in the resolution of the
dispute. In the event the Big Six accounting firm's determination results in a
finding that the amount of Expenses due is within five (5%) percent of the
amount claimed by Landlord, Tenant shall pay the cost of said Big Six accounting
firm. If the amount due is determined to be more than five (5%) percent less
than the amount claimed by Landlord, Landlord shall pay the cost of said Big Six
accounting firm.

     6.06  Real Estate Tax Increase Payment.

     (1)  For each Tax Year (hereinafter defined) after the tax year ending
December 31, 1999 during the Term, Tenant shall pay, as additional rent, the Tax
Payment (hereinafter defined) for such Tax Year.

     (2)  Tax Definitions:

     (a)  The term "Real Estate Taxes" shall mean the sum of the real estate
taxes and assessments and special assessments imposed upon the Building and the
plot of land on which the Building stands (the "Land") and any rights or
interests appurtenant thereto payable by Landlord during any Tax Year or any
service charges or

                                      -12-
<PAGE>
 
other payments in lieu of taxes imposed by any tax abatement granted the
Landlord and payable by the Landlord. If at any time during the Term the methods
of taxation prevailing at the time of the commencement thereof shall be altered
so that in lieu of or as an addition to or as a substitute for the whole or any
part of the taxes, assessments, levies, impositions or charges now levied,
assessed or imposed, there shall be levied, assessed or imposed a tax,
assessment, levy, imposition or charge wholly or partially as a capital levy or
on the rents, licenses or other charges received with respect to the Term, the
Land or the Building, then all such taxes, assessments, levies, impositions or
charges payable shall be deemed to be included within the term "Real Estate
Taxes" for the purposes hereof. Except as provided above, Real Estate Taxes
shall not include franchise, income or similar taxes of Landlord. A copy of the
tax bill of The City of Jersey City or other taxing authority imposing Real
Estate Taxes on the Land or the Building shall be sufficient evidence of the
amount of Real Estate Taxes. Notwithstanding the fact that the aforesaid
additional rent is measured by Real Estate Taxes, such amount is additional rent
and shall be paid by Tenant as provided herein regardless of the fact that
Tenant may be exempt, in whole or in part, from the payment of any Real Estate
Taxes by reason of Tenant's diplomatic status or for any other reason
whatsoever.

     (b)  The term "Base Tax Year" shall mean the tax year ending December 31,
1999.

     (c)  The term "Tax Year" shall mean each real estate fiscal tax year of the
City of Jersey City, New Jersey, following the Base Tax Year, any portion of
which occurs during the Term.

     (d)  The term "Tax Payment" shall mean Tenant's Share for the Demised
Premises of the amount by which the Real Estate Taxes payable for a Tax Year
exceed the Real Estate Taxes payable for the Base Tax Year, whether such
increase results from a higher tax rate or an increase in the assessed valuation
of the Land or the Building, or both or from any other cause or reason
whatsoever. Notwithstanding the foregoing, if there is an increase in assessed
valuation of the Building resulting from an addition or improvement to the
Building by another tenant, then any increase in Real Estate Taxes attributable
to such increase shall not be included in the computation of Tax Payment
hereunder.

     (3)  With respect to each Tax Year occurring in whole or in part during the
term of the Term, Tenant shall pay to Landlord the Tax Payment, in equal monthly
installments during the calendar year in which such Tax Year commences in the
manner hereinafter described. At any time during the calendar year in which a
Tax Year commences, Landlord may furnish to Tenant a written estimate (a "Tax
Estimate") of the Tax Payment for such Tax Year ("Estimated Tax Payment"). Such
estimate shall be determined by Landlord by applying to the most recently
announced assessed value of the Land and Building (whether final or otherwise)
such tax rate as Landlord shall anticipate is the tax rate to be finally
determined for such Tax Year, but such rate shall in no event exceed by more
than ten (10%) percent the then current tax rate. Subject to adjustment as
hereinafter provided, Tenant shall pay to Landlord on the first day of each
calendar month during such calendar year, an amount equal to one-twelfth (1/12)
of the Estimated Tax Payment for the Tax Year commencing during such calendar
year. If Landlord furnishes a Tax Estimate for a Tax Year subsequent to the
commencement of the calendar year in which such Tax Year begins, then

     (a)  until the first day of the month following the month in which the Tax
Estimate is furnished to Tenant, Tenant shall 

                                      -13-
<PAGE>
 
continue to pay to Landlord on the first day of each month an amount equal to
the monthly sum payable by Tenant to Landlord with respect to the next previous
Tax Year.

     (b)   promptly after the Tax Estimate is furnished to Tenant, Landlord
shall give notice to Tenant stating whether the amount previously paid by Tenant
to Landlord during such calendar year was greater or less than the installments
of the Estimated Tax Payment to be paid during such calendar year in accordance
with the Tax Estimate, and

     (i)   if there shall be a deficiency, Tenant shall pay the amount thereof
within thirty (30) days after demand therefor, or

     (ii)  if there shall have been an overpayment, Landlord shall credit the
amount thereof against the next monthly installments of the Fixed Annual Rent
payable under this Lease, and

     (c)   on the first day of the month following the furnishing of Tenant of
the Tax Estimate, and monthly thereafter until the rendering to Tenant of a Tax
Statement (hereinafter defined) for such Tax Year, Tenant shall pay to Landlord
an amount equal to one twelfth (1/12) of the amount shown on such Tax Estimate.
Promptly after the amount of Real Estate Taxes is established for a Tax Year,

     (i)   Landlord shall furnish to Tenant a written statement (a "Tax
Statement") setting forth the Tax Payment for such Tax Year, and stating whether
the sum of the installments previously paid by Tenant to Landlord pursuant to
the Tax Estimate or otherwise for such Tax Year was greater or less than the sum
of the installments of the Tax Payment to be paid for such Tax Year in
accordance with the Tax Statement,

     (ii)  any deficiency or overpayment shall be disposed of in the manner of a
deficiency or overpayment in Estimated Tax Payment, and

     (iii) on the first day of the month following the month in which the Tax
Statement is furnished to the Tenant, and monthly thereafter until a new Tax
Estimate or Tax Statement is furnished to Tenant, Tenant shall pay to Landlord
an amount equal to one-twelfth (1/12) of the Tax Payment shown on the Tax
Statement.

     (4)   The Tax Estimates and Tax Statements to be furnished by Landlord as
provided above shall be certified by Landlord and a statement thus furnished to
Tenant shall constitute a final determination as between Landlord and Tenant of
the Estimated Tax Payment or Tax Payment, as the case may be, for the period
represented thereby, unless Tenant within sixty (60) days after the statement is
furnished shall give a notice to Landlord that Tenant disputes the
reasonableness, accuracy or appropriateness of such statement, which notice
shall specify the particular respects in which the statement is unreasonable,
inaccurate or inappropriate. Pending the resolution of such dispute, Tenant as
herein provided shall make the Estimated Tax Payment or Tax Payment, as the case
may be, to Landlord without prejudice to Tenant's position. In any such dispute
as to a Tax Estimate or Tax Statement, Landlord and Tenant shall, within ten
(10) days after the giving of Tenant's notice disputing the reasonableness,
accuracy or appropriateness of such statement, select a national "Big Six"
accounting firm whose determination shall be conclusive in the resolution of the
dispute. If the dispute shall be determined in Tenant's favor, Landlord shall
forthwith pay to Tenant the amount of Tenant's overpayment resulting from
compliance with Landlord's statement and shall pay for the cost of the
accounting firm. In the event overpayment is greater than five (5%) percent,
Landlord shall pay interest to

                                      -14-
<PAGE>
 
Tenant on such overpayment at the rate of 2% in excess of the prime interest
rate as set forth from time to time by Citibank, N.A. from the date of payment
of such amounts by Tenant until repayment of such overpayment by Landlord. If
the dispute shall be determined in Landlord's favor, Tenant shall pay for the
costs of the accounting firm.

     (5)   Only Landlord shall be eligible to institute tax reduction or other
proceedings to reduce the assessed valuation of the Land or the Building. Should
Landlord be successful in any such reduction proceedings and obtain a rebate for
any Tax Year for which Tenant has paid installments of the Tax Payment,
Landlord, after deducting the expenses incurred in obtaining such rebate
including, without limitation, attorneys' fees, court, or other administrative
costs and disbursements, shall credit Tenant's Share of such rebate against the
next monthly installment of the Fixed Annual Rent payable under this Lease or in
the case of the last month of the Term, pay such amount to Tenant. In the event
that the assessed valuation which had been utilized in computing the Real Estate
Taxes payable for the Base Tax Year is reduced (as a result of settlement, final
determination of legal proceedings or otherwise) then

     (i)   the Real Estate Taxes for the Base Tax Year shall be retroactively
adjusted to reflect such reduction;

     (ii)  the monthly installments of Additional Rent shall be adjusted
accordingly; and

     (iii) all retroactive Additional Rent resulting from such adjustment shall
be payable by Tenant within thirty (30) days after the rendition of a bill
therefor.

     6.07  In no event shall the Fixed Rent due under this Lease be reduced by
virtue of this Article.

     6.08  If the Commencement Date of the term of this Lease is not the first
day of the first comparative year, then the additional rent due hereunder for
such first comparative year shall be a proportionate share of said additional
rent for the entire comparative year, said proportionate share to be based upon
the length of time that the Lease term shall have been in existence during such
first comparative year. Upon the date of any expiration or termination of this
Lease (except termination because of Tenant's default) whether the same be the
date hereinabove set forth for the expiration of the Term or any prior or
subsequent date, a proportionate share of said additional rent for the
comparative year during which such expiration or termination occurs shall
immediately become due and payable by Tenant to Landlord, if it was not
theretofore already billed and paid. The said proportionate share shall be based
upon the length of time that this Lease shall have been in existence during such
comparative year.

     6.09  Subject to the provisions of Section 6.10 below, Landlord's and
Tenant's obligation to make the adjustments referred to in this Article shall
survive any expiration or termination of this Lease.

     6.10  Any delay or failure of Landlord in billing any expense escalation
hereinabove provided shall not constitute a waiver of or in any way impair the
continuing obligation of Tenant to pay such expense escalation hereunder
provided however, if Landlord fails to bill Tenant within twenty-four (24)
months after the end of a tax or expense year, right to bill for such year shall
be waived.

                                      -15-
<PAGE>
 
                        ARTICLE 7 -- ELECTRICAL ENERGY

     7.01  Electrical energy consumed by Tenant in the Demised Premises through
wall and floor outlets, for lighting and business equipment and the Tenant's
auxiliary HVAC system shall be separately metered and purchased by Tenant from
the utility supplying electricity to the Building. Tenant shall install as part
of Tenant's Work the electrical meter(s) for the Demised Premises. Landlord
shall install at its own cost the risers, conduits, feeders and wiring
installations in the Building and to the Demised Premises sufficient to provide
the Demised Premises with electrical energy, in a safe and suitable manner,
equal to 200 amps at 480 volts, which is approximately one hundred fifty (150)
Kilowatts. Electricity for heating, ventilating and air conditioning including
for any fan used in connection therewith during Regular Business Hours shall not
be included on such meter and shall be paid for by the Landlord. Tenant shall
pay to Landlord, as additional rent, the cost of electricity for heating,
ventilating and air conditioning including for any fan used in connection
therewith, in the Demised Premises during other than Regular Business Hours
pursuant to Article 8.01.

     7.02  Tenant, at Tenant's sole cost and expense and subject to all of
Tenant's duties and obligations set forth in Article 12 (relating to Tenant's
duties and obligations in making Tenant's changes), shall be afforded access to
the Building's electrical supply located in the basement of the Building. Tenant
may connect existing power in the basement of the Building to Tenant's dedicated
electrical feed and conduit to be installed at Tenant's sole cost and expense,
to obtain a minimum of five hundred (500) Kilowatts of power to the Demised
Premises. Landlord represents and warrants that the Building has sufficient
capacity to provide five hundred (500) Kilowatts of power during the Term of the
Lease.

     7.03  Tenant shall have the right at any time during the Term of the Lease,
to upgrade the Building's electrical service at Tenant's sole cost and expense
and subject to all of Tenant's duties and obligations set forth in Article 12
(relating to Tenant's duties and obligations in making Tenant's changes).

     7.04  Landlord's and Tenant's obligations to make the adjustments and
payments referred to in this Article shall survive any expiration or termination
of this Lease.

     7.05  Subject to Section 7.01 above, Tenant covenants and agrees that at
all times its use of electrical current shall not exceed the capacity of
existing feeders to the Building or the risers, conduits, or wiring installation
in the Building, and Tenant shall not use any electrical equipment which, in
Landlord's opinion reasonably exercised, will overload such installations or
interfere with the use thereof by other tenants of the Building.

     7.06  Tenant may purchase from Landlord, at Landlord's option, all
replacements of electric fluorescent tubing and shall pay Landlord for
installing same.

                 ARTICLE 8 -- VENTILATION AND AIR CONDITIONING

     8.01  There shall be installed in the Demised Premises, as part of the work
provided for in Section 3.01, the Building heating, ventilating and air-
conditioning systems described and designed to substantially meet the following
performance specifications:

                                      -16-
<PAGE>
 
                               Inside Condition
                               ----------------
                       Cooling Season 75 degrees F.D.B.
                          Heating Season 68 degrees F

                               Outside Condition
                               -----------------
                Cooling Season 91 degrees F.D.B./76 degrees FWB
                         Heating Season 10 degrees F.

     Landlord shall be under no liability to Tenant if such performance
specifications should not be able to be met prior to the said systems being
balanced. Landlord, at its expense, shall maintain and operate such systems and
shall furnish heat, ventilation and air-conditioning in the Demised Premises
through such systems, subject to Article 9.07, in compliance with such
performance specifications, during Regular Business Hours. If Tenant shall
require ventilating and air-conditioning service or heating service at any other
time other than Regular Business Hours (hereinafter called "after hours"),
Landlord shall furnish after hours ventilating and air-conditioning service or
heating service upon reasonable advance notice from Tenant, and Tenant shall pay
Landlord therefore, as additional rent upon rendition of a bill, the A.C. charge
and the H. charge. The A.C. charge and the H. charge shall be subject to
adjustment upward from time to time, to reflect the actual increase in
Landlord's reasonable out of pocket costs in providing services to extent not
included in expenses.

     8.02  Landlord will not be responsible for the failure of the air-
conditioning system to meet the performance specifications set forth above if
such failure results from the occupancy of the Demised Premises with more than
an average of one person for each 150 square feet of Tenant's Floor Space or if
Tenant installs and operates machines and appliances, the installed electrical
load of which when combined with the load of all lighting fixtures exceeds 3.5
watts per square foot of Tenant's Floor Space in any one room or other area. If
due to use of the Demised Premises in a manner exceeding the aforementioned
occupancy and electrical load criteria, or due to rearrangement of partitioning
after the initial preparation of the Demised Premises, interference with normal
operation of the air-conditioning in the Demised Premises results, necessitating
changes in the air-conditioning system servicing the Demised Premises, such
changes shall be made by Landlord upon written notice to Tenant at Tenant's sole
cost and expense. Tenant agrees to lower and close window coverings when
necessary because of the sun's position whenever the said air conditioning
system is in operation, and Tenant agrees at all times to cooperate fully with
Landlord and to abide by all the regulations and requirements which Landlord may
prescribe for the proper functioning and protection of the said air-conditioning
system. Landlord throughout the Term, shall have free and unrestricted access to
any and all air-conditioning facilities in the Demised Premises. Any such access
must be on prior reasonable notice to Tenant, except in emergency with a
representative of Tenant present and exercised so as not to interfere with
Tenant.

     8.03  Any damage caused to heating, air-conditioning, and ventilating
equipment, appliances or appurtenances thereto as a result of the negligence of,
or careless operation of, the same by Tenant or its agents, servants, employees,
licensees, invitees, or visitors, shall be repaired by Landlord, and the actual
reasonable out-of-pocket cost and expenses thereof shall be paid by Tenant as
additional rent, within thirty (30) days after being billed therefor.

                                      -17-
<PAGE>
 
                    ARTICLE 9 -- LANDLORD'S OTHER SERVICES

     9.01  Landlord shall provide public elevator service to the floor(s) on
which the Demised Premises are situated during Regular Business Hours, and shall
have at least one elevator subject to call at all other times. The elevator(s),
or any or all of them, if more than one, may be operated by automatic control
and/or by manual control, as Landlord shall determine at any time or from time
to time. Landlord shall not be obligated to furnish an operator for any
automatic elevator and shall have no liability to Tenant for discontinuing the
service of any operator theretofore furnished. If Tenant shall require after
hours service of elevator(s) or of the loading area in the Building under such
circumstances as, in Landlord's reasonable judgment, will require service or
attention by Landlord's personnel, Tenant shall pay Landlord, on demand, a
reasonable charge attributable to such service or attention.

     9.02  Provided that Tenant shall keep the Demised Premises in good order,
Landlord shall cause the Demised Premises, including the exterior and the
interior of the windows thereof (subject to Tenant maintaining unrestricted
access to such windows), to be cleaned in accordance with the standards set
forth in Exhibit D annexed hereto and made a part hereof. Tenant will not clean,
nor require, permit or allow any window in the premises to be cleaned from the
outside. Tenant shall pay to Landlord within thirty (30) days of notice the
costs incurred by Landlord for (a) cleaning work in the Demised Premises or the
Building required because of (i) misuse or neglect on the part of Tenant or its
employees or visitors, (ii) use of portions of the Demised Premises for
preparation, serving, or consumption of food or beverages, reproducing
operations, private lavatories or toilets or other special purposes requiring
greater or more difficult cleaning work than office area, (iii) interior glass
surfaces, (iv) non-Building standard materials or finishes installed by Tenant
or at its request, (v) increases in frequency or scope in any of the items set
forth in Exhibit D as shall have been requested by Tenant, and (b) removal from
the Demised Premises and the Building of (i) so much of any refuse and rubbish
of Tenant as shall exceed that properly accumulated daily in the routine or
ordinary business office and (ii) all of the refuse and rubbish of Tenant's
machines and the refuse and rubbish of any other eating facilities requiring
special handling (known as "wet garbage"). Landlord and its cleaning contractor
and their employees shall have after hours access to the Demised Premises and
the use of the Tenant's light, power and water in the Demised Premises as may be
reasonably required for the purpose of cleaning the Demised Premises.
Extraordinary waste (such as crates, cartons, boxes, etc. and used furniture or
equipment) shall be removed from the Building by Tenant at Tenant's own cost and
expense. At no time shall Tenant place any waste of any kind in any public
areas. If Tenant does so, the parties agree that everything so placed shall be
deemed abandoned and of no value to Tenant and Landlord may have the same
removed and disposed of at Tenant's expense. Such expenses shall be deemed
additional rent payable by Tenant within thirty (30) days after being billed
therefor together with reasonable back-up with respect to such expenses. This
remedy is in addition to any other remedies Landlord may have under this lease.

     9.03  Tenant reserves the right to obtain its own janitorial services from
a third party for the Demised Premises upon written notice to Landlord ("Third
Party Cleaning Service"). Landlord shall have the right to approve the party
providing the Third Party Cleaning Service in its reasonable discretion. In the
event that Tenant utilizes the Third Party Cleaning Service, janitorial 

                                      -18-
<PAGE>
 
service to any portion of the Building, except for common areas, shall not be
excluded from Expenses.

     9.04  Landlord, at its expense, shall furnish adequate hot and cold water
at ordinary lavatory temperature to each floor of the Building for drinking,
lavatory, and cleaning purposes, together with soap, towels and toilet tissue
for each lavatory. If Tenant uses water for any other purpose Landlord, at
Tenant's expense, may install meters to measure Tenant's consumption of cold
water and/or hot water for such other purposes and/or steam, as the case may be.
Tenant shall pay for the quantities of cold water and hot water shown on such
bills therefor. In connection with permitted kitchen use, the amount of hot
water demand shall not exceed the excess Building design capacity.

     9.05  Landlord, at its own expense, and at Tenant's request, shall insert
initial listings on the Building Directory of the names of Tenant, and any
affiliate, and the names of any of their officers and employees, provided that
the names so listed shall not take up more than Tenant's proportionate share of
the space on the Building Directory. All Building Directory changes made at
Tenant's request after the Tenant's initial listings have been placed on the
Building Directory shall be made by Landlord at the expense of Tenant, and
Tenant agrees to promptly pay to Landlord as additional rent the cost of such
changes within thirty (30) days after Landlord has submitted an invoice
therefor.

     9.06  With respect to parking of vehicles (if parking is provided under
Article 1 hereof):

     A.  Landlord represents that throughout the Term there will be a paved,
illuminated parking area for the Building with the number of Parking Spaces
specified in Article 1. If Landlord so elects, Tenant shall require its
personnel and visitors to park their vehicles only in Parking Spaces designated
by Landlord for Tenant's use for its personnel and visitors on a "first come,
first served" basis. Landlord reserves the right at all times to redesignate
such Parking spaces. Tenant, its personnel and visitors shall not at any time
park any trucks or delivery vehicles in any of the parking areas, except for the
loading dock area for deliveries.

     B.  All Parking Spaces and any other parking areas used by Tenant, its
personnel and visitors will be at their own risk, and Landlord shall not be
liable for any injury to person or property, or for loss or damage to any
automobile or its contents, resulting from theft, collision, vandalism or any
other cause whatsoever.

     C.  Tenant shall agree to all requests by Landlord that Tenant and its
employees and visitors remove their vehicles from the Parking Spaces to another
parking area provided by Landlord at reasonable periods for purposes of cleaning
and maintenance of such spaces or as required for purposes of snow removal,
provided that Landlord will perform such cleaning, maintenance and snow removal
and make such Parking Spaces available to Tenant and its employees and visitors
as promptly as possible.

     9.07  Landlord shall keep and maintain the public areas and the public
facilities of the Building and the grounds clean and in good order, and the
sidewalks and parking areas adjoining the Building shall be kept free of
accumulation of snow and ice (except any overnight parking area) or unlawful
obstruction.

     9.08  Landlord reserves the right, without any liability to Tenant, except
as otherwise expressly provided in this Lease, and without being in breach of
any covenant of this Lease, to stop,

                                      -19-
<PAGE>
 
interrupt or suspend service of any of the heating, ventilating, air
conditioning, electric, sanitary, elevator or other Building systems serving the
Demised Premises, or the rendition of any other services required of Landlord
under this Lease, whenever and for so long as may be necessary, by reason of
accidents, emergencies, the making of repairs or changes which Landlord is
required by this Lease or by law to make or in good faith deems advisable, or by
reason of unavoidable delays. In each instance Landlord shall exercise
reasonable diligence to eliminate the cause of stoppage and to effect
restoration of service and shall give Tenant reasonable prior notice, when
practicable, of the commencement and anticipated duration of such stoppage, and
if any work is required to be performed in or about the Demised Premises for
such purpose, the provision of Section 14.03 shall apply. Tenant shall not be
entitled to any diminution or abatement of rent or other compensation nor shall
this Lease or any of the obligations of Tenant be affected or reduced by reason
of the interruption, stoppage or suspension of any of the Building systems or
services arising out of the causes set forth in this Section.

                               ARTICLE 10 -- USE

     10.01  The "Permitted Use" of the Demised Premises for the purposes
specified in Article 1 hereof shall not in any event be deemed to include, and
Tenant shall not use, or permit the use of, the Demised Premises or any part
thereof for:

     (a) sale of, or traffic in, any spirituous liquors, wines, ale or beer kept
in the Demised Premises;

     (b) sale at retail of any other products or materials kept in the Demised
Premises, by vending machines or otherwise, or demonstrations to the public,
except as may be specifically agreed to by Landlord in writing;

     (c) manufacturing, printing, except for the operation of normal business
office reproducing and printing equipment and business machines incidental to
the conduct of Tenant's business and for Tenant's own requirements at the
Demised Premises, provided that such use shall not exceed that portion of the
mechanical or electrical capabilities of the Building equipment allocable to the
Demised Premises;

     (d) the rendition of medical, dental or other diagnostic or therapeutic
services;

     (e) the conduct of a public auction of any kind;

     (f) the conduct of a banking, trust company, savings bank, safe deposit,
savings and loan association or loan company business;

     (g) the issuance and sale of traveler's checks, foreign drafts, letters of
credit, foreign exchange or domestic money orders (except as incidentally
required in conduct of Tenant's normal business activity);

     (h) the receipt of money for transmission (except as is incidentally
required in conduct of Tenant's normal business activity); or

     (i) a restaurant, bar, or the sale of confectionery, tobacco, newspapers,
magazines, soda, beverages, sandwiches, ice cream, baked goods or similar items,
or the preparation, dispensing or consumption of food and beverages in any
manner whatsoever.

                                      -20-
<PAGE>
 
    10.02  Tenant shall not suffer or permit the Demised Premises or any part
thereof to be used in any manner, or anything to be done therein, or suffer or
permit anything to be brought into or kept therein, which would in any way (i)
violate any of the provisions of any grant, lease or mortgage to which this
Lease is subordinate, (ii) violate any laws or requirements of public
authorities, (iii) make void or voidable any fire or liability insurance policy
then in force with respect to the Building, (iv) make unobtainable from
reputable insurance companies authorized to do business in New Jersey at
standard rates any fire insurance with extended coverage, or liability, elevator
or boiler or other insurance required to be furnished by Landlord under the
terms of any lease or mortgage to which this Lease is subordinate, (v) cause or
in Landlord's opinion be likely to cause physical damage to the Building or any
part thereof, (vi) constitute a public or private nuisance, (vii) impair, in the
reasonable opinion of the Landlord, the appearance, character or reputation of
the Building, (viii) discharge objectionable fumes, vapors or odors into the
Building air conditioning system or into Building flues or vents not designed to
receive them or otherwise in such manner as may unreasonably offend other
occupants, (ix) impair or interfere with any of the Building services or the
proper and economic heating, cleaning, air conditioning or other servicing of
the Building or the Demised Premises or impair or interfere with or tend to
impair or interfere with the use of any of the other areas of the Building by,
or occasion annoyance or inconvenience to, Landlord or any of the other tenants
or occupants of the Building, or (x) cause Tenant to default in any of its other
obligations under this Lease.  The provisions of this Section, and the
application thereof, shall not be deemed to be limited in any way to or by the
provisions of any of the following Sections of this Article or any of the Rules
and Regulations referred to in Article 20 or Exhibit B attached hereto, except
as may therein be expressly otherwise provided.

    10.03  If any governmental license or permit, other than a Certificate of
Occupancy for the Building, shall be required for the proper and lawful conduct
of Tenant's business in the Demised Premises, or any part thereof, and if
failure to secure such license or permit would in any way affect Landlord, then
Tenant, at its expense, shall duly procure and thereafter maintain such license
or permit, but in no event shall failure to procure and maintain same by Tenant
affect Tenant's obligations hereunder.  Tenant shall not at any time use or
occupy, or suffer or permit anyone to use or occupy the Demised Premises, or do
or permit anything to be done in the Demised Premises, in violation of the
Certificate of Occupancy for the Demised Premises or for the Building.

    10.04  Except as provided in Exhibit C, Tenant shall not place a load upon
any floor of the Demised Premises exceeding the floor load per square foot which
such floor was designed to carry and which is allowed by certificate, rule,
regulation, permit or law, except that to the extent Tenant's floor loading
requirements shall, at any time, exceed the floor load per square foot, Tenant,
at Tenant's expense may reinforce the floor as required to accommodate Tenant's
requirements.  Landlord reserves the right to prescribe the weight and position
of all safes and vaults which must be placed by Tenant, at Tenant's expense.
Business machines and mechanical equipment shall be positioned and maintained by
Tenant, at Tenant's expense, in such manner as shall be sufficient in Landlord's
judgment to absorb and prevent vibration, noise and annoyance.

                                      -21-
<PAGE>
 
                       ARTICLE 11 -- ACCESS, CHANGES IN
                           BUILDING FACILITIES, NAME

    11.01  All walls, windows and doors bounding the Demised Premises (including
exterior Building walls, core corridor walls and doors and any core corridor
entrance), except the inside surfaces thereof, any terraces or roofs adjacent to
the Demised Premises, and space in or adjacent to the Demised Premises used for
shafts, stacks, pipes, conduits, fan rooms, ducts, electric or other utilities,
sinks or other Building facilities, and the use thereof, as well as access
thereto through the Demised Premises for the purposes of operating, maintenance,
decoration and repair, are reserved to Landlord, subject to Tenant's rights
under Article 2 above.

    11.02  Tenant shall permit Landlord to install, use and maintain pipes,
ducts and conduits within or through the Demised Premises, or through the walls,
columns and ceiling therein, provided that the installation work is performed at
such times and by such methods as will not unreasonably interfere with Tenant's
use and occupancy of the Demised Premises, or damage the appearance thereof, or
materially affect Tenant's layout.  Where access doors are required for
mechanical trades in or adjacent to the Demised Premises, Landlord shall furnish
and install such access doors at its expense, and confine their location
wherever practical to closets, coat rooms, toilet rooms, corridors, and kitchen
or pantry rooms.  Landlord and Tenant shall cooperate with each other in the
location of Landlord's and Tenant's facilities requiring such access doors.

    11.03  Landlord or Landlord's agents or employees shall have the right upon
request made on reasonable advance notice to Tenant, accompanied by an
authorized employee of Tenant at the Demised Premises, to enter and/or pass
through the Demised Premises or any part thereof, at reasonable times during
reasonable hours, (i) to examine the Demised Premises or to show them to lessors
of superior leases, holders of mortgages, insurance carriers, or prospective
purchasers, mortgagees or lessees of the land or the Building, or prospective
tenants, and (ii) for the purpose of making such repairs or changes in or to the
Demised Premises or in or to the Building or its facilities as may be provided
for by this Lease or as Landlord may deem necessary or as Landlord may be
required to make by law or in order to repair and maintain the Building or its
fixtures or facilities.  Landlord shall be allowed to take into and temporarily
store upon the Demised Premises all materials which may be reasonably required
for such repairs, changes or maintenance.  However, Landlord's rights under this
Section shall be exercised in such manner as will not unreasonably interfere
with Tenant's use and occupancy of the Demised Premises.  Landlord, its agents
or employees, shall also have the right to enter on and/or pass through the
Demised Premises, or any part thereof without notice at such times as such entry
shall be required by circumstances of emergency affecting the Demised Premises
or the Building.

    11.04  Landlord reserves the right, at any time after completion of the
Building, without incurring any liability to Tenant therefor, to make such
changes in or to the Building and the fixtures and equipment thereof, as well as
in or to the street entrances, halls passages, elevators and stairways thereof,
as it may deem necessary or desirable; provided that there be no unreasonably
lengthy interference with the use of the Demised Premises or in the services
furnished to the Demised Premises.

    11.05  Landlord may limit and restrict, as provided in the Rules and
Regulations attached hereto as Exhibit B, the means of

                                      -22-
<PAGE>
 
access to the Demised Premises outside of Regular Business Hours, so long as
Tenant's employees and authorized agents have reasonable access to all parts of
the Demised Premises. Tenant, and its agents, employees and visitors shall be
entitled to access from the Demised Premises to, and the right to use, the
toilets, lavatories and powder rooms only on the floor (or floors) on which the
Demised Premises are located.   24 hours, 7 days per week.

    11.06  Landlord reserves the right to select a name for the Building and to
make such change or changes of name as it may deem appropriate during Tenant's
occupancy, and Tenant agrees not to refer to the Building by any other name than
(i) the name as selected by Landlord, or (ii) the postal address approved by the
U.S. Post Office.


                        ARTICLE 12 -- TENANT'S CHANGES

    12.01  Tenant may, at any time and from time to time during the Term, at its
sole expense, make such other alterations, additions, installations,
substitutions, improvements and decorations (hereinafter collectively called
"Changes" and, as applied to changes provided for in this Article, "Tenant's
Changes") to the Demised Premises, including structural upgrades and/or
improvements to the Demised Premises or structural components of the Building to
the extent they are necessary for Tenant to conduct its telecommunications
business including the construction of walls or other such interior coverings
over some or all of the windows of the Demised Premises as may be necessary for
the operation of Tenant's telecommunications business excluding changes
affecting the mechanical systems, on the following conditions, and providing
such changes will not result in a violation of or require a change in the
Certificate of Occupancy applicable to the Demised Premises:  (a) The outside
appearance, character or use of the Building shall not be affected, and no
Tenant's Changes shall weaken or impair the structural strength or, in the
opinion of Landlord, lessen the value of the Building; (b) No part of the
Building outside of the Demised Premises shall be physically affected, except
for Roof Space, generator space and equipment associated with it; (c) The proper
functioning of any of the mechanical, electrical, sanitary and other service
systems of the Building shall not be adversely affected; (d) In performing the
work involved in making such changes Tenant shall be bound by and observe all of
the conditions and covenants contained in this Article; (e) At the Expiration
Date, Tenant shall on Landlord's written request restore the Demised Premises to
their condition prior to the making of any of the changes permitted by this
Article, excluding the removal of demising walls, interior partitions and
ceilings installed pursuant to this Article, reasonable wear and tear excepted,
and Landlord shall be entitled to additional security pursuant to Article 15 for
the performance of Tenant's obligation; (f) At least thirty (30) days prior to
proceeding with any change (exclusive of changes in items constituting "Tenant's
Property" as defined in Article 13) Tenant shall submit to Landlord plans and
specifications for the work to be done, for Landlord's approval in writing,
which approval shall not be unreasonably withheld, and, if such change requires
approval by or notice to the lessor of a superior lease or the holder of a
superior mortgage, Tenant shall not proceed with the change until such approval
has been received, or such notice has been given, as the case may be, and all
applicable conditions and provisions of said superior lease or superior mortgage
with respect to the proposed change or alteration have been met or complied with
at Tenant's expense; and Landlord if it approves the change, will request such
approval or give such notice, as the case may be.  Any change for which approval
has been received shall be performed

                                      -23-
<PAGE>
 
strictly in accordance with the approved plans and specifications, and no
amendments or additions to such plans and specifications shall be made without
the prior written consent of Landlord. Tenant shall not be permitted to install
and make part of the Demised Premises any materials, fixtures or articles which
are subject to liens, conditional sales contracts, security agreements or
chattel mortgages, (nothing herein shall limit Tenant's right to subject
Tenant's trade fixtures or personal property to any of the foregoing); and (g)
Tenant shall comply with all other terms and conditions of this Lease in
connection with Tenant's Changes.

    12.02  All Tenant's Changes shall at all times comply with laws, orders and
regulations of governmental authority having jurisdiction thereof, and all rules
and regulations of Landlord and Tenant, at its expense, shall obtain all
necessary  governmental permits and certificates for the commencement and
prosecution of Tenant's Changes and for final approval thereof upon completion,
and shall cause Tenant's Changes to be performed in compliance therewith and
with all applicable requirements of insurance bodies, and in good and first
class workmanlike manner, using materials and equipment at least equal in
quality and class to the original installations of the Building.  Tenant's
Changes shall be performed in such manner as not to interfere with the occupancy
of any other tenant in the Building nor delay, or impose any additional expense
upon Landlord in the construction, maintenance or operation of the Building, and
shall be performed by contractors or mechanics approved by Landlord which
approval shall not be unreasonably withheld or delayed and in accordance with
the Building Rules and Regulations for Trades Conducting Operations, attached
hereto as Exhibit C-1 and Insurance Requirements for Trades Conducting
Operations in the Building, attached hereto as Exhibit C-2.  Throughout the
performance of Tenant's Changes, Tenant, at its expense, shall carry, or cause
to be carried, workmen's compensation insurance in statutory limits, and general
liability insurance for any occurrence on, in or about the Building, in which
Landlord and its managing agent shall be named as parties insured, in such
limits as Landlord may reasonably prescribe (but not less than those specified
in Section 16.02), with insurers reasonably satisfactory to Landlord.  Tenant
shall furnish Landlord with reasonably satisfactory evidence that such insurance
is in effect at or before the commencement of Tenant's Changes and, on request,
at reasonable intervals thereafter during the continuance of Tenant's Changes.
No Tenant's Changes shall involve the removal of any fixtures, equipment or
other property in the Demised Premises which are not "Tenant's Property" (as
defined in Article 13), unless Landlord's prior written consent is first
obtained and unless such fixtures, equipment or other property shall be promptly
replaced, at Tenant's expense and free of superior title, liens and claims, with
fixtures, equipment or other property (as the case may be) of like utility and
at least equal value (which replaced fixtures, equipment or other property shall
thereupon become the property of Landlord), unless Landlord shall otherwise
consent in writing.

    12.03  Tenant, at its expense, and with diligence and dispatch, shall
procure the cancellation or discharge of all notices of violation arising from
or otherwise connected with Tenant's Changes which shall be issued by the
appropriate department of the municipality in which the Building is located or
any other public authority having jurisdiction.  Tenant shall defend, indemnify
and save harmless Landlord against any and all mechanics and other liens in
connection with Tenant's Changes, repairs or installations, including but not
limited to the liens of any conditional sales of, or chattel mortgages upon, any
materials, fixtures, or articles so installed in and constituting part of the

                                      -24-
<PAGE>
 
Demised Premises and against all costs, attorney's fees, fines, expenses and
liabilities reasonably incurred in connection with any such lien, conditional
sale or chattel mortgage or any action or proceeding brought thereon.  Tenant,
by bonding or otherwise, at its expense, shall procure the satisfaction or
discharge of all such liens within thirty (30) days of the filing of such lien
against the Demised Premises or the Building.  If Tenant shall fail to cause
such lien to be discharged within the period aforesaid, then, in addition to any
other right or remedy, Landlord may, but shall not be obligated to, discharge
the same either by paying the amount claimed to be due or by procuring the
discharge of such lien by deposit or by bonding proceedings, and in any such
event Landlord shall be entitled, if Landlord so elects, to compel the
prosecution of any action for the foreclosure of such lien by the lienor and to
pay the amount of the judgment in favor of the lienor with interest, costs and
allowances.  Any amount so paid by Landlord and all costs and expenses incurred
by Landlord in connection therewith, together with interest thereon at the
lesser of the maximum permitted by law or 1 1/2% per month or portion thereof
from the respective dates of Landlord's making of the payment or incurring of
the cost and expense shall constitute additional rent payable by Tenant under
this Lease and shall be paid by Tenant within thirty (30) days of bill.  If
Tenant makes any such payment it shall not be entitled to any set-off against
rent due hereunder.  Tenant agrees that it will not at any time prior to or
during the Term, either directly or indirectly, use any contractors, labor or
materials in the Demised Premises, if the use of such contractors, labor or
materials would, in the Landlord's reasonable judgment, create any difficulty
with other contractors or labor engaged by Tenant or Landlord or would in any
way disturb harmonious labor relations in the construction, maintenance or
operation of the Building or any part thereof or any other building owned or
operated by Landlord or any affiliate of Landlord.

    12.04  If Tenant requires Landlord to perform work during other than Regular
Working Hours, or if Tenant desires to perform work through its contractors,
agents or employees during other than Regular Working Hours, Tenant shall pay as
additional rent, the reasonable actual out-of-pocket cost of employing such
additional help as shall be required under the rules and regulations of unions
employed in connection with the Building.  Payment shall be made by Tenant to
Landlord within thirty (30) days after being billed therefor, together with
reasonable substantion of such costs.

    12.05  In the event Landlord does not perform the work for Tenant, Tenant
shall pay to Landlord a supervisory fee (which shall include the cost of review
of the proposed Tenant's Changes) equal to Landlord's actual out-of-pocket
expenses for such supervision.


                        ARTICLE 13 -- TENANT'S PROPERTY

    13.01  All fixtures, equipment, improvements and appurtenances attached to
or built into the Demised Premises including without limitation demising walls,
ceiling and flooring, shall be deemed the property of Landlord and shall not be
removed by Tenant except as hereinafter in this Article expressly provided.

    13.02  All fixtures, furnishings and equipment, whether or not attached to
or built into the Demised Premises, which are installed in the Demised Premises
by or for the account of Tenant, may be removed by it at any time during the
Term; provided that if any of Tenant's Property is removed, Tenant shall repair
or pay the cost of repairing any damage to the Demised Premises or to the
Building resulting from such removal.  Any fixtures, equipment or other

                                      -25-
<PAGE>
 
property for which Landlord shall have granted any allowance to the Tenant as a
credit or substitution in kind shall not be deemed to have been installed by or
for the account of the Tenant without expense to Landlord, and shall not be
considered Tenant's Property. Landlord shall not be obligated to return and/or
reinstall any partitions supplied to Tenant which are returned by Tenant to
Landlord due to enlargement, reduction or change in the Demised Premises.

    13.03  At or before the expiration of this Lease, Tenant shall remove, at
its expense, from the Demised Premises, all of Tenant's Property and shall
repair any damage and make any replacements to the Demised Premises or the
Building resulting from or necessitated by such removal, and shall pay all other
costs of such removal.

    13.04  Any items of Tenant's Property which shall remain in the Demised
Premises after the expiration of this Lease, may, at the option of the Landlord,
be deemed to have been abandoned, and in such case either may be retained by
Landlord as its property or may be disposed of, without accountability to Tenant
in such manner as Landlord may see fit.  Tenant agrees to reimburse Landlord for
the costs of removal and for the cost of repairing any damage to the Demised
Premises or the Building arising out of Tenant's failure to remove Tenant's
Property pursuant to the terms of this Lease.


                     ARTICLE 14 -- REPAIRS AND MAINTENANCE

    14.01  Tenant shall take good care of the Demised Premises and the fixtures
and appurtenances therein, and at its sole cost and expense shall make all
repairs thereto, as and when needed to preserve them in good working order and
condition except as otherwise provided in Section 14.02 hereof.  In addition,
Tenant, at its expense, shall promptly make all repairs, ordinary or
extraordinary, interior or exterior, structural or otherwise, in and about the
Demised Premises and the Building as shall be required by reason of (i) the
performance or existence of work by Tenant necessary to suit the Demised
Premises to Tenant's initial occupancy or in connection with Tenant's Changes,
(ii) the installation, use or operation of Tenant's Property in the Demised
Premises, (iii) the moving of Tenant's Property in or out of the Building, or
(iv) the misuse or neglect of Tenant or any of its employees, agents or
contractors.  Tenant shall not be responsible, and Landlord shall be
responsible, for any repairs to the Demised Premises as are required by reason
of Landlord's neglect or other fault in the manner of performing any Work
provided for in Article 3 which Landlord is to perform in Tenant's Changes which
may be undertaken by Landlord for Tenant's account or are otherwise required by
reason of neglect or other fault of Landlord or its employees, agents or
contractors.

    14.02  Landlord shall keep and maintain the Building and its fixtures,
appurtenances, systems and facilities (including the heating, ventilating and
air-conditioning systems and the central or core elevator and plumbing systems),
serving the Demised Premises, in good working order, condition and repair and
shall make all structural repairs, interior and exterior, except as indicated in
the second sentence of Section 14.01, as and when needed in the Building, except
for those repairs for which Tenant is responsible pursuant to any other
provisions of this Lease, and subject to all other provisions of this Lease,
including but not limited to the provisions of Article 22. Landlord to maintain
building as first class office building - in compliance with laws including ADA.

                                      -26-
<PAGE>
 
    14.03  Except as expressly otherwise provided in this Lease, except for
gross negligence or wilful misconduct of Landlord, its agents, employees or
contractors, Landlord shall have no liability to Tenant by reason of any
inconvenience, annoyance, interruption or injury to business arising from
Landlord or any tenant making any repairs or changes or performing maintenance
services, whether or not Landlord is required or permitted by this Lease or by
law to make such repairs or changes or to perform such services in or to any
portion of the Building or Demised Premises, or in to the fixtures, equipment or
appurtenances of the Building or the Demised Premises, provided that Landlord
shall be reasonably diligent with respect thereto and shall perform such work,
except in case of emergency, at times reasonably convenient to Tenant and
otherwise in such manner and to the extent practical as will not unreasonably
interfere with Tenant's use and occupancy of the Demised Premises.

    14.04  When used in this Lease the term "repair" shall be deemed to include
restoration and replacements as may be necessary to achieve and/or maintain good
working order and condition.

                        ARTICLE 15 -- SECURITY DEPOSIT

    Tenant shall not be required to deposit any security at this time.  However,
in the event that Tenant shall fail to pay Rent when due, beyond any applicable
grace period, on two (2) occasion during any twelve (12) consecutive month
period of the Term of this Lease, then, Tenant shall deposit with Landlord an
amount equal to twice the then applicable monthly Fixed Rent as security for the
punctual performance by Tenant of each and every obligation of it under this
Lease, including the restoration of the Premises pursuant to Article 12.01.  In
the event of any default by Tenant not cured within applicable grace period,
Landlord may apply or retain all or any part of the security to cure the default
or to reimburse Landlord for any sum which Landlord may spend by reason of the
default.  In the case of every such application or retention Tenant shall,
within five (5) days of notice, pay to Landlord the sum so applied or retained
which shall be added to the Security Deposit so that the same shall be restored
to its original amount.  If at the end of the Term Tenant shall not be in
default under this Lease, the Security Deposit, or any balance thereof, shall be
returned to Tenant, within thirty (30) days after the Expiration Date.  In the
event of a sale of the land and Building or leasing of the Building, of which
the Demised Premises form a part, Landlord shall have the right to transfer the
security to the vendor or lessee and Landlord shall thereupon be released by
Tenant from all liability for the return of such security; and Tenant agrees to
look to the new Landlord solely for the return of said security; and it is
agreed that the provision hereof shall apply to every transfer or assignment of
the security to a new Landlord.  Tenant further covenants that it will not
assign or encumber or attempt to assign or encumber the monies deposited herein
as security and neither the Landlord nor its successors or assign shall be bound
by any such assignment, encumbrance, attempted assignment or attempted
encumbrance.


                            ARTICLE 16 -- INSURANCE

    16.01  Tenant shall not violate, or permit the violation of, any condition
imposed by the standard fire insurance policy then issued for office Buildings
in the area in which the Building is located and shall not do, or permit
anything to be done, or keep or permit anything to be kept in the Demised
Premises which would increase the fire or other casualty insurance rate on the
Building

                                      -27-
<PAGE>
 
or the property therein over the rate which would otherwise than be in effect
(unless Tenant pays the resulting increased amount of premium) or which would
result in insurance companies of good standing refusing to insure the Building
or any of such property in amounts and at normal rates reasonably satisfactory
to Landlord. However, Tenant shall not be subject to liability or obligation
under this Section by reason of the proper use of the Demised Premises for the
Permitted Use.

    16.02  Tenant shall obtain and keep in full force and effect during the Term
at its own cost and expense, Public Liability insurance, such insurance to
afford protection in an amount of not less than $1,000,000.00 for injury or
death to any one person, $3,000,000.00 for injury or death arising out of any
one occurrence, and $500,000.00 for damage to property, protecting the Landlord
and the Tenant as insureds against any and all claims for personal injury, death
or property damage occurring in, upon, adjacent, or connected with the Demised
Premises and any part thereof.  Said insurance is to be written by insurance
companies admitted to do business in the State of New Jersey which shall be
reasonably satisfactory to the Landlord.  The original insurance policies or
appropriate certificates shall be deposited with Landlord together with any
renewals, replacements or endorsements to the end that said insurance shall be
in full force and effect for the benefit of the Landlord during the Term.  In
the event Tenant shall fail to procure and place such insurance, the Landlord
may, but shall not be obligated to, procure and place same, in which event the
amount of the premium paid shall be paid by Tenant to Landlord within thirty
(30) days of demand and shall in each instance be collectible on the first day
of the month or any subsequent month following the date of payment by Landlord,
in the same manner as though, and same shall be considered to be additional rent
reserved hereunder.

    16.03  In the event that any dispute should arise between Landlord and
Tenant concerning insurance rates, a schedule or "make up" of rates for the
Building or the Demised Premises, as the case may be, issued by the Fire
Insurance Rating Organization of New Jersey or other similar body making rates
for fire insurance and extended coverage for the premises concerned, shall be
presumptive evidence of the facts therein stated and of the several items and
charges in the fire insurance rates with extended coverage then applicable to
such premises.

    16.04  Each party agrees to use its best efforts to include in each of its
insurance policies insuring the Building and Landlord's property therein and
rental value thereof, in the case of Landlord and insuring Tenant's Property and
business interest in the Demised Premises (business interruption insurance) in
the case of Tenant, against loss, damage or destruction by fire or other
casualty, a waiver of the insurer's right of subrogation against the other
party, or if such waiver should be unobtainable or unenforceable (a) an express
agreement that such policy shall not be invalidated if the insured waives the
right of recovery against any party responsible for a casualty covered by the
policy before the casualty or (b) any other form of permission for the release
of the other party.  If such waiver, agreement or permission shall not be, or
shall cease to be, obtainable without additional charge or at all, the insured
party shall so notify the other party promptly after learning thereof.  In such
case, if the other party shall so elect and shall pay the insurer's additional
charge therefore, such waiver, agreement or permission shall be included in the
policy, or the other party shall be named as an additional insured in the
policy, but not the loss payee.  Each such policy which shall so name a party
hereto as an additional insured shall contain

                                      -28-
<PAGE>
 
agreements by the insurer that the policy will not be cancelled without at least
twenty (20) days prior notice to both insureds and that the act or omission of
one insured will not invalidate the policy as to the other insured. Any failure
by Tenant, if named as an additional insured promptly to endorse to the order of
Landlord, without recourse, any instrument for the payment of money under or
with respect to the policy of which Landlord is the owner or original or primary
insured, shall be deemed a default under this Lease.

    16.05  Each party hereby releases the other party with respect to any claim
(including a claim for negligence) which it might otherwise have against the
other party for loss, damage or destruction with respect to its property
(including rental value or business interruption) occurring during the Term and
with respect and to the extent to which it is insured under a policy or policies
containing a waiver of subrogation or permission to release liability or naming
the other party as an additional insured as provided in Sections 16.04.  If
notwithstanding the recovery of insurance proceeds by either party for loss,
damage or destruction of its property (or rental value or business interruption)
the other party is liable to the first party with respect thereto or is
obligated under this Lease to make replacement, repair or restoration or
payment, then provided the first party's right of full recovery under its
insurance policies is not thereby prejudiced or otherwise adversely affected,
the amount of the net proceeds of the first party's insurance against such loss,
damage or destruction shall be offset against the second party's liability to
the first party therefor, or shall be made available to the second party to pay
for replacement, repair or restoration, as the case may be.

    16.06  The waiver of subrogation or permission for release referred to in
Section 16.04 shall extend to the agents of each party and its and their
employees and, in the case of Tenant, shall also extend to all persons and
entities occupying, using or visiting the Demised Premises in accordance with
the terms of this Lease, but only if and to the extent that such waiver or
permission can be obtained without additional charge (unless such party shall
pay such charge).  The releases provided for in Section 16.05 shall likewise
extend to such agents, employees and other persons and entities, if and to the
extent that such waiver or permission is effective as to them.   Nothing
contained in Section 16.05 shall be deemed to relieve either party of any duty
imposed elsewhere in this Lease to repair, restore or rebuild or to nullify any
abatement of rents provided for elsewhere in this Lease.  Except as otherwise
provided in Section 16.02, nothing contained in Section 16.04 and 16.05 shall be
deemed to impose upon either party any duty to procure or maintain any of the
kinds of insurance referred to therein or any particular amounts or limits of
any such kinds of insurance.


                   ARTICLE 17 -- SUBORDINATION, ATTORNMENT,
                        NOTICE TO LESSOR AND MORTGAGEES

    17.01  Subject to Tenant's receipt of Non-Disturbance Agreement in the
substantially the form of Exhibit E attached hereto, which shall be delivered to
Tenant within sixty (60) days of the signing of this Lease by all parties, this
Lease, and all rights of Tenant hereunder, are and shall be subject and
subordinate in all respects to all present and future ground leases, over-riding
leases and underlying leases and/or grants of terms of the land and/or the
Building or the portion thereof in which the Demised Premises are located in
whole or in part now or hereafter existing ("superior

                                      -29-
<PAGE>
 
leases") and to all mortgages and Building loan agreements, which may now or
hereafter affect the land and/or the Building and/or any of such leases
("superior mortgages") whether or not the superior leases or superior mortgages
shall also cover other lands and/or Buildings, to each and every advance made or
hereafter to be made under the superior mortgages, and to all renewals,
modifications, replacements and extensions of the superior leases and superior
mortgages and spreaders, consolidations and correlations of the superior
mortgages. This Section shall be self-operative and no further instrument of
subordination shall be required. In confirmation of such subordination, Tenant
shall promptly execute and deliver at its own cost and expense any instrument,
in recordable form if required, that Landlord, the lessor of any superior lease
or the holder of any superior mortgage or any of their respective successors in
interest may reasonably request to evidence such subordination, and Tenant
hereby constitutes and appoints Landlord attorney-in-fact for Tenant to execute
any such instrument for and on behalf of Tenant, provided they have entered into
Subordination, Non-Disturbance and Attornment Agreement.

    17.02  In the event that the lessor of a superior lease or the holder of a
superior mortgage shall succeed to the rights of the Landlord under this lease,
whether through possessory or foreclosure action or proceeding or through
delivery of a new lease, then at the request of any such party, the Tenant shall
attorn to and recognize such party as its Landlord under this Lease.  In any
such event, this Lease shall continue in full force and effect as if it were a
direct lease between such party and the Tenant upon all of the terms, covenants
and conditions set forth in this Lease and shall be applicable after such
attornment, except that such party shall not (a) be obligated to perform any
work in the Building, except such obligations of Landlord to operate, maintain
and repair the Building and its systems including the Demised Premises or
prepare them for occupancy; (b) be obligated to repair, replace, rebuild or
restore the Building, or the Demised Premises in the event of damage or
destruction, beyond such repair, replacement, rebuilding or restoration as can
reasonably be accomplished from the net proceeds of insurance actually received
by, or made available to, such party; (c) be liable for any previous act or
omission by Landlord; (d) be subject to any liability or offset which shall
theretofore accrue to the Tenant against Landlord; (e) be bound by any previous
modification or extension of this Lease unless filed with such party and made at
arms length, in good faith and in the honest exercise of reasonable business
judgment; (f) be bound by any previous pre-payment of more than one month's
fixed rent or other charge, or (g) be bound by any cancellation or surrender of
this Lease or any eviction of the Tenant by Landlord unless made at arms length,
in good faith and in the honest exercise of reasonable business judgment.

    17.03  Tenant agrees to waive the provisions of any statute or rule or law
now or hereafter in effect which may give or purport to give Tenant any right of
election to terminate this Lease or to surrender possession of the Demised
Premises in the event a superior lease is terminated or a superior mortgage is
foreclosed, and that unless and until said lessor, or holder, as the case may
be, shall elect to terminate this Lease, this Lease shall not be affected in any
way whatsoever by any such proceeding or termination, and Tenant shall take no
steps to terminate this Lease without giving written notice to said lessor under
the superior lease, or holder of a superior mortgage and a reasonable
opportunity to cure (without such lessor or holder being obligated to cure), any
default on the part of the Landlord under this Lease.

                                      -30-
<PAGE>
 
               ARTICLE 18 -- ASSIGNMENT, MORTGAGING, SUBLETTING

    18.01  Neither this Lease nor the Term and estate hereby granted, nor any
part hereof or thereof, nor the interest of Tenant in any sublease or the
rentals thereunder, shall be assigned, mortgaged, pledged, encumbered or
otherwise transferred by Tenant by operation of law or otherwise, and neither
the Demised Premises nor any part thereof, shall be encumbered in any manner by
reason of any act or omission on the part of the Tenant or anyone claiming under
or through Tenant, or shall be sublet or be used or occupied or permitted to be
used or occupied, or utilized for desk space or for mailing privileges, by
anyone other than Tenant or for any purpose other than as permitted by this
Lease, without the prior written consent of Landlord in every case, except as
expressly otherwise provided in this Article.

    18.02  If this Lease be assigned, whether or not in violation of the
provisions of this Lease, Landlord may collect rent from the assignee.  If the
Demised Premises or any part thereof be sublet or be used or occupied by anybody
other than Tenant, whether or not in violation of this Lease, Landlord may,
after default by Tenant, and expiration of Tenant's time to cure such default,
collect rent from the subtenant or occupant.  In either event, Landlord may
apply the net amount collected to the rents herein reserved, but no such
assignment, subletting, occupancy or collection shall be deemed a waiver of any
of the provisions of Section 18.01, or the acceptance of the assignee, subtenant
or occupant as tenant, or a release of Tenant from the further performance by
Tenant of Tenant's obligations under this Lease.  The consent by Landlord to
assignment, mortgaging or subletting, or use or occupancy by others shall not be
considered to relieve Tenant from obtaining the express written consent of
Landlord to any other or further assignment, mortgaging, or subletting or use or
occupancy by others not expressly permitted by this Article.  Tenant agrees to
pay to Landlord reasonable counsel fees incurred by Landlord in connection with
any proposed assignment of Tenant's interest in this Lease or any proposed
subletting of the Demised Premises or any part thereof, not to exceed $2,000.00
per request.  References in this Lease to use or occupancy by others, that is
anyone other than Tenant, shall not be construed as limited to subtenants and
those claiming under or through Tenant, immediately or remotely.

    18.03  Tenant may, upon written notice to Landlord, but without Landlord's
written consent, permit any corporations or other business entities which (i)
control, are controlled by, or are under common control with Tenant, (ii)
resulting from a merger or consolidation with Tenant, (iii) an entity succeeding
substantially to all of the business and assets of Tenant at the Demised
Premises, or (iv) a public offering of shares of Tenant or sale of shares
(herein called "related entity") to use the whole or part of Demised Premises
for any purposes permitted to Tenant or to sublet or assign all or part of the
premises to a related entity, subject however to compliance with Tenant's
obligations under the Lease.  Such use shall not be deemed to release, relieve,
discharge or modify any of Tenant's obligations hereunder.

    18.04  Other than in accordance with the provisions of Section 18.03, with
respect to any proposed assignment of this Lease or proposed subletting of all
or a portion of the Demised Premises:

    (A) Tenant shall submit to the Landlord a request for consent to such
assignment or sublease together with the name and address of the proposed
assignee or sublessee and such information as to its financial responsibility
and standing as Landlord may require.  Upon receipt of such request and upon the
furnishing of such

                                      -31-
<PAGE>
 
information by the Tenant, Landlord shall have the option to cancel and
terminate this Lease (i) completely, if the request was for an assignment of
this Lease or subletting of all of the Demised Premises, or (ii) if such request
was for a subletting of a portion of the Demised Premises, then with respect to
such portion.

    (B)  Landlord shall exercise such option to cancel and terminate by notice
in writing to that effect to Tenant within ten (10) days from receipt of
Tenant's request and the information set forth above, and Landlord's notice
shall set forth the date of cancellation, which date shall be no less than sixty
(60) nor more than ninety (90) days from the date of the service of Landlord's
notice. If such option is so exercised, and Tenant does not notify Landlord in
writing within five (5) days of Landlord's notice of such cancellation, then
upon such date of cancellation the Lease for the entire Demised Premises or
specified portion thereof, as the case may be, shall cease and terminate with
the same force and effect as though the date set forth in the notice were the
date set forth in this Lease as the expiration of the Term, and the Tenant shall
surrender possession of the entire Demised Premises, or portion thereof, as the
case may be, in accordance with the provisions of the Lease relating to
surrender of the Demised Premises at the expiration of the Term. If Landlord
exercises the option to cancel the Lease as to a portion of the Demised Premises
only, the terms of this Lease shall remain in full force as to the remainder of
the Demised Premises, for the balance of the Term, except to the extent that the
area of the Demised Premises is reduced with a proportionate reduction in rent.

    (C)  If Landlord does not exercise its option to cancel as aforementioned
than Tenant may assign or sublet all or a portion of the Demised Premises,
provided that Landlord has given its prior written consent, which shall not be
unreasonably withheld or delayed and provided further that: (i) the Tenant is
not then in default in curing a default for which Tenant shall have received
notice hereunder; (ii) the Demised Premises are to be used for the Permitted Use
only by a person, firm or corporation engaged in a lawful commercial business
(other than a business operating data processing machinery in the Demised
Premises larger than desk top size), but not for the practice of medicine, (iii)
such assignee or sublessee shall be financially responsible and of good
reputation; (iv) the business of such assignee or sublessees or the use to which
such Demised Premises shall be put shall not be violation of any restriction
against competition contained in any other lease to which Landlord is a party;
(v) the assignee or sublessee is not engaged in the containerized shipping
business or as a governmental agency of a communist agency and (vi) a duplicate
original of an instrument in writing assigning this Lease or subletting the
Demised Premises, duly executed by the assignor or sublessor and assignee or
sublessee, as the case may be, in recordable form, containing therein an
assumption by said assignee or an agreement by said sublessee to take subject to
(and an agreement by Tenant to remain liable to Landlord for) all the terms and
conditions of this Lease on the part of the Tenant to be performed.  In the
event the rental provided for in such assignment or sublease is in excess of the
rental in effect pursuant to this Lease, Landlord shall be aid such excess
monthly, less Tenant's reasonable expenses incurred in connection with such
assignment or sublease.

    (D)  The provisions of this Article 18 shall apply to each such proposed
subletting, none of which shall be effective until all of the foregoing shall
have been complied with.  Notwithstanding any subletting, Tenant and any future
sublessor shall remain liable for the full performance of all the terms and
conditions of this Lease on the part of the Tenant to be performed.

                                      -32-
<PAGE>
 
    18.05  Tenant shall not offer to assign or sublet either the entire Demised
Premises or a specified portion thereof to any other Tenant in the Building or
to any party in negotiations with Landlord to lease a portion of the Building.

    18.06  Tenant specifically agrees that it will not, at any time, without
Landlord's prior written consent which shall not be unreasonably withheld or
delayed, advertise or publicize in any way the availability of all or part of
the Demised Premises, or list or publicly advertise the Demised Premises for
subletting, whether through a broker, agent, representative or otherwise.

    18.07  Landlord acknowledges that Tenant's business to be conducted in the
Demised Premises requires the installation in the Demised Premises of certain
communications equipment by telecommunications customers of Tenant ("Customers")
in order for such Customers to interconnect with Tenants Terminal facilities.
Landlord agrees that no consent shall be required for any license agreement or
"co-location agreement" between Tenant or any such Customer for the purposes of
permitting such a telecommunications connection, so long as (i) such Customer
agrees in writing to comply with all obligations of Tenant under this Lease to
the extent relating to the portion of the Demised Premises in question, and (ii)
each such license or co-location agreement is in writing, is consistent with the
provisions of this Lease.  Co-location shall not be deemed under any
circumstances, a sublet or assignment of the Demised Premises.


              ARTICLE 19 -- COMPLIANCE WITH LAWS AND REQUIREMENTS
                  OF PUBLIC AUTHORITIES:  RULES & REGULATIONS

    19.01  Tenant shall promptly notify Landlord of any written notice it
receives of the violation of any law or requirements which shall, with respect
to the Building or the Demised Premises or the use and occupation thereof or the
abatement of any nuisance, impose any violation, order or duty on Landlord or
Tenant, arising from (i) Tenant's use of the Demised Premises, (ii) the manner
of conduct of Tenant's business or operation of its installations, equipment or
other property therein, (iii) any cause or condition created by or at the
instance of Tenant, or (iv) breach of any of Tenant's obligations hereunder.

    19.02  Tenant and its employees and agents shall faithfully observe and
comply with the Rules and Regulations annexed hereto as Exhibit "B", and such
reasonable changes therein (whether by modification, elimination or addition) as
Landlord at any time or times hereafter may make and communicate in writing to
Tenant, which do not unreasonably affect the conduct of Tenant's business in the
Demised Premises; provided, however, that in case of any conflict or
inconsistency between the provisions of this Lease and any Rules and Regulations
changed subsequent to the date of this Lease the provisions of this Lease shall
control.

    19.03  Nothing in this Lease contained shall be construed to impose upon
Landlord any duty or obligation to Tenant to enforce the Rules and Regulations
or the terms, covenants or conditions in any other lease, as against any other
tenant unless requested to do so by Tenant, but Landlord shall not be liable to
Tenant for violation of the same by any other tenant or its employees, agents

                                      -33-
<PAGE>
 
or visitors. Landlord shall not enforce the Rules and Regulations in a
discriminatory manner.


                         ARTICLE 20 -- QUIET ENJOYMENT

     20.01  Landlord covenants that if, and so long as, Tenant pays all of the
Fixed Rent and additional rent due hereunder, and keeps and performs each and
every covenant, agreement, term, provision and condition herein contained on the
part and on behalf of Tenant to be kept and performed, Tenant shall quietly
enjoy the Demised Premises without hinderance or molestation by Landlord or any
other person lawfully claiming the same, subject to the covenants, agreements,
terms, provisions and conditions of this Lease and to any superior leases and/or
superior mortgages.


                 ARTICLE 21 -- NON-LIABILITY & INDEMNIFICATION

     21.01  Neither Landlord nor any agent or employee of Landlord shall be
liable to Tenant, its employees, agents, contractors and licensees, and Tenant
shall hold Landlord harmless from any injury or damage to Tenant or to any other
persons for any damage to, or loss (by theft or otherwise) of, any property of
Tenant and/or of any other person, irrespective of the cause of such injury,
damage or loss, except to the extent caused by or due to the gross negligence of
Landlord, its agents or employees without contributory negligence on the part of
Tenant.  Landlord shall not be liable in any event for loss of, damage to, any
property entrusted to any of Landlord's employees or agents by Tenant without
Landlord's specific written consent.

     21.02  Tenant shall defend, indemnify and save harmless Landlord and its
agent and employees against and from all liabilities, obligations, damages,
penalties, claims, costs, charges and expenses, including reasonable experts'
and attorneys' fees, which may be imposed upon or incurred by or asserted
against Landlord and/or its agents by reason of any of the following occurring
during the Term, or during any period of time prior to the Commencement Date
that Tenant may have been given access to or possession of all or any part of
the Demised Premises:  (a) any work or thing done in on or about the Demised
Premises or any part thereof by or at the instance of Tenant, its agents,
contractors, subcontractors, servants, employees, licensees or invitees; (b) any
negligence or otherwise wrongful act or omission on the part of Tenant or any of
its agents, contractors, subcontractors, servants, employees, subtenants,
licensees, or invitees; (c) any accident, injury or damage to any person or
property occurring in on or about the Demised Premises or any part thereof, or
vault, passageway or space adjacent thereto; (d) any failure on the part of
Tenant to perform or comply with any of the covenants, agreements, terms,
provisions, conditions or limitations contained in this Lease on its part to be
performed or complied with; and (e) any accident, injury or damage to any person
or property arising out of the installation, operation or maintenance of the
Tenant's emergency stand-by generator and related items and Tenant's antennae
and air cooling equipment, except if such is caused by Landlord's agents,
contractors, subcontractors, servants or employees, licensees and invitees.  In
case any action or proceeding is brought against Landlord by reason of any such
claim, Tenant upon written notice from Landlord shall at Tenant's expense resist
or defend such action or proceeding by Counsel approved by Landlord in writing,
which approval Landlord shall not unreasonably withhold.

                                      -34-
<PAGE>
 
     21.03  Whenever either party shall be obligated under the terms of this
Lease to indemnify the other party, the indemnifying party may select legal
counsel (subject to the consent of the indemnified party, which consent shall
not be unreasonably withheld) and shall keep the indemnified party fully
appraised at all times of the status of such defense.  Legal counsel of the
insurer for either party is hereby deemed satisfactory to both parties.

     21.04  Except as otherwise expressly provided herein, this Lease and the
obligations of Tenant to pay rent hereunder and perform all of the other
covenants, agreements, terms, provisions and conditions 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 or is
unable to supply or is delayed in supplying any service, express or implied, to
be supplied or is unable to make or is delayed in supplying any equipment or
fixtures if Landlord is prevented or delayed from so doing by reason of any
Unavoidable Delays, as defined in Section 3.02 hereof; provided that Landlord
shall in each instance exercise reasonable diligence to effect performance when
and as soon as possible.  However, nothing contained in this Section shall be
deemed to extend or otherwise modify or affect any of the time limits and
conditions set forth in Section 22.03.


                     ARTICLE 22 -- DESTRUCTION AND DAMAGE

     22.01  If the Demised Premises and/or access thereto shall be partially or
totally damaged or destroyed by fire or other casualty, then, Landlord shall,
subject to its rights under Section 22.03 hereof, repair the damage and restore
and rebuild the Demised Premises and/or access thereto as nearly as may be
reasonably practical to its condition and character immediately prior to such
damage or destruction, with reasonable diligence after notice to it of the
damage or destruction.

     22.02  If the Demised Premises and/or access thereto shall be partially or
totally damaged or destroyed by fire or other casualty, the rents payable
hereunder shall be abated to the extent that the Demised Premises shall have
been rendered untenantable from the date of such damage or destruction to the
date the damage shall be substantially repaired or restored or rebuilt.  Should
Tenant reoccupy a portion of the Demised Premises during the period that the
repair, restoration, or rebuilding is in progress and prior to the date that the
same are made completely tenantable, rents allocable to such portion shall be
payable by Tenant from the date of such occupancy to the date the Demised
Premises are made tenantable.

     22.03  In case of substantial damage or destruction of the Demised
Premises, Tenant may terminate this Lease by notice to Landlord, if Landlord has
not completed the making of required repairs and restored and rebuilt the
Demised Premises and/or access thereto within 12 months from the date of such
damage or destruction, and such additional time after such date (but in no event
exceed 9 months) as shall equal the aggregate period Landlord may have been
delayed in doing so by adjustment of insurance or Unavoidable Delays.

     In case the Building shall be so damaged by such fire or other casualty
that substantial renovation, reconstruction or demolition of the Building shall,
in Landlord's opinion, be required (whether or not the Demised Premises shall
have been damaged by such fire or other casualty), then Landlord may, at its
option, terminate this Lease and the Term and estate hereby granted, by
notifying Tenant

                                      -35-
<PAGE>
 
of such termination, within sixty (60) days after the date of such damage. If at
any time prior to Landlord giving tenant the aforesaid notice of termination or
commencing the repair and restoration pursuant to Section 22.01, the holder of a
superior mortgage or the lessor of a superior lease or any person claiming under
or through the holder of such superior mortgage or the lessor of such superior
lease takes possession of the Building through foreclosure or otherwise, such
holder, lessor, or person shall have a further period of sixty (60) days from
the date of so taking possession to terminate this Lease by appropriate written
notice to Tenant. In the event that such a notice of termination shall be given
pursuant to either of the next two preceding sentences, this Lease and the Term
and estate hereby granted shall expire as of the date of such termination with
the same effect as if that were the date hereinabove set for the expiration of
the Term, and the Fixed Rent and additional rent due and to become due hereunder
shall be apportioned as of such date if not earlier abated pursuant to Section
22.02. Nothing contained in this Section 22.03 shall relieve Tenant from any
liability to Landlord or to its insurers in connection with any damage to the
Demised Premises or the Building by fire or other casualty if Tenant shall be
legally liable in such respect.

     22.04  No damages, compensation or claim shall be payable by Landlord for
inconvenience, loss of business or annoyance arising from any repair or
restoration of any portion of the Demised Premises or of the Building pursuant
to this Article.  Landlord shall use its best efforts to effect such repair or
restoration promptly and in such manner as not unreasonably to interfere with
Tenant's use and occupancy.

     22.05  Landlord will not carry insurance of any kind on Tenant's Property,
and, except as provided by law or its breach of any of its obligations
hereunder, shall not be obligated to repair any damage thereto or replace the
same.

     22.06  The provisions of this Article shall be considered an express
agreement governing any case of damage or destruction of the Demised Premises by
fire or other casualty, and any statute or regulation providing for such a
contingency in the absence of, an express agreement, now or hereafter in force,
shall have no application in such case.

     22.07  Notwithstanding any of the foregoing provisions of this Lease if
Landlord or the lessor of any superior lease or the holder of any superior
mortgage shall be unable to collect all of the insurance proceeds (including
rent insurance proceeds) applicable to damage or destruction of the Demised
Premises or the Building by fire or other cause, by reason of some action or
inaction on the part of Tenant or any of its employees, agents or contractors,
then, without prejudice to any other remedies which may be available against
Tenant, the abatement of Tenant's rents provided for in this Article shall not
be effective to the extent of the uncollected insurance proceeds.


                         ARTICLE 23 -- EMINENT DOMAIN

     23.01  In the event that the land, Building or any part thereof, or the
Demised Premises or any part thereof, shall be taken in condemnation proceedings
or by the exercise of any right of eminent domain or by agreement between any
superior lessors and lessees and/or Landlord on the one hand and any
governmental authority authorized to exercise such right on the other hand,
Landlord shall be entitled to collect from any condemnor the entire

                                      -36-
<PAGE>
 
award or awards that may be made in any such proceeding without deduction
therefrom for any estate hereby vested in or owned by Tenant, to be paid out as
in this Article provided. Tenant hereby expressly assigns to Landlord all of its
right, title and interest in or to every such award (with the exception of that
portion of the award specifically allocated as Tenant's moving expenses, to the
extent that the same does not decrease Landlord's award) and also agrees to
execute any and all further documents that may be required in order to
facilitate the collection thereof by Landlord.

     23.02  At any time during the Term if title to the whole or substantially
all of the land, Building and/or Demised Premises shall be taken in by
condemnation proceedings or by the exercise of any right of eminent domain or by
agreement between any superior lessors and lessees and/or Landlord on the one
hand and any governmental authority authorized to exercise such right on the
other hand, this Lease shall terminate and expire on the date of such taking and
the Fixed Rent and additional rent provided to be paid by Tenant shall be
apportioned and paid to the date of such taking.

     23.03  However, if substantially all of the land or Building is not so
taken and if only a part of the entire Demised Premises shall be so taken, this
Lease nevertheless shall continue in full force and effect, except that either
party may elect to terminate this Lease if that portion of the Demised Premises
then occupied by Tenant shall be reduced by more than 25%, by notice of such
election to the other party given not later than thirty (30) days after (i)
notice of such taking is given by the condemning authority, or (ii) the date of
such taking, whichever occurs later. Upon the giving of such notice this Lease
shall terminate on the date of service of such notice and the Fixed Rent and
additional rent due and to become due, shall be prorated and adjusted as of the
date of the taking. If both parties fail to give such notice upon such partial
taking, and this Lease continues in force as to any part of the Demised Premises
not taken, the rents apportioned to the part taken shall be prorated and
adjusted as of the date of taking and from such date the Fixed Rent and
additional rent shall be reduced to the amount apportioned to the remainder of
the Demised Premises, and the Tenant's Share shall be recomputed to reflect the
number of square feet of Tenant's Floor Space remaining in the Demised Premises
in relation to the number of square feet of Total Building Floor Space remaining
in the Building.

     23.04  Notwithstanding the foregoing provisions of this Article and subject
to the interest of any mortgagees or lessor or grantor under any superior
mortgage or superior lease, Tenant shall be entitled to appear, claim, prove and
receive in the proceedings relating to any taking mentioned in the preceding
Sections of this Article, such portion of each award made therein as represents
the then value of Tenant's Property.

     23.05  In the event of any such taking of less than the whole of the
Building which does not result in a termination of this Lease, Landlord, at its
expense, shall proceed with reasonable diligence to repair, alter and restore
the remaining part of the Building and the Demised Premises to substantially the
same condition as it was in immediately prior to such taking to the extent that
the same may be feasible, so as to constitute a tenantable Building and Demised
Premises, providing that Landlord's liability under this Section shall be
limited to the amount received by Landlord as an award arising out of such
taking.

                                      -37-
<PAGE>
 
                            ARTICLE 24 -- SURRENDER

    24.01  On the last day of the Term, or upon any earlier termination of this
Lease, or upon any re-entry by Landlord upon the Demised Premises, Tenant shall
quit and surrender the Demised Premises to the Landlord broom clean, in good
order, condition and repair except for ordinary wear and tear and damage by fire
or other insured casualty, restored as provided in Section 12.01.

    24.02  Prior to such surrender, Tenant shall (a) remove Tenant's Property
subject to the provisions of Article 13 hereof, (b) at Landlord's request,
remove from the Demised Premises all improvements, alterations, additions,
fixtures and equipment including Tenant's Work attached hereto as Exhibit C, and
the emergency standby generator and diesel fuel tank referred to in Article 2,
whether such work was performed by Tenant or by Landlord on Tenant's behalf, and
whether such additional work consisted of extra or special work or additional
items or quantities of Building standard work, and (c) at Landlord's request,
repair any damage and make any replacements to the Building or the Demised
Premises resulting from or necessitated by such removal, and restore those parts
of the Demised Premises from which the removal referred to in subparagraphs (a)
and (b) above occurred, to a condition which will blend with and be comparable
to adjacent areas.  Tenant's removal and repair obligations hereunder with
respect to the Demised Premises shall extend to the core area or any other part
of the Building where any additional work was performed by or on behalf of
Tenant.  If Tenant shall fail to perform as provided in this Section 24.02,
Landlord shall have the right to do so at Tenant's cost and expense, without
further notice or demand upon Tenant, and Tenant shall indemnify Landlord
against all loss or liability resulting therefrom, including, without
limitation, any delay in granting occupancy of the Demised Premises to a future
occupant.


                    ARTICLE 25 -- CONDITIONS OF LIMITATION

    25.01  This Lease and the estate hereby granted are subject inter alia to
the limitation that whenever Tenant shall make an assignment for the benefit of
creditors, or shall file a voluntary petition under any bankruptcy or insolvency
law, or an involuntary petition alleging an act of bankruptcy or insolvency is
filed against Tenant, or whenever a petition shall be filed by or against Tenant
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or any future federal bankruptcy
act or any other present or future applicable federal, state or other statute or
law, or shall seek or consent to or acquiesce in the appointment of any trustee,
receiver or liquidator of Tenant or of all or any substantial part of its
properties, or whenever a permanent or temporary receiver of Tenant or of, or
for, the property of Tenant shall be appointed, or if Tenant shall plead
bankruptcy or insolvency as a defense in any action or proceeding, then,
Landlord, (a) at any time after receipt of notice of the occurrence of any such
event, or (b) if such event occurs without the acquiescence of Tenant, at any
time after the event continues for sixty (60) days, may give Tenant a notice of
intention to end the Term at the expiration of five (5) days from the service of
such notice of intention, and upon the expiration of said five (5) day period
Lease and the Term and estate hereby granted, whether or not the Term shall
theretofore have commenced, shall terminate with the same effect as if that day
were the Expiration Date, but Tenant shall remain liable for damages as provided
as in Article 27.

                                      -38-
<PAGE>
 
    25.02  This Lease and the Term and estate hereby granted and subject to the
further limitation that, (a) whenever Tenant shall default in the payment of any
installment of Fixed Rent, or in the payment of any additional rent, on any day
upon which the same shall be due and payable and such default shall continue for
ten (10) days after the giving of notice thereof by Landlord, or (b) whenever
Tenant shall do or permit anything to be done, whether by action or inaction,
contrary to any of Tenant's obligations hereunder, and if such situation shall
continue and shall not be remedied by Tenant within thirty (30) days after
Landlord shall have given to Tenant a notice specifying the same, or, in the
case of a happening or default which cannot with due diligence be cured within a
period of thirty (30) days and the continuance of which for the period required
for cure will not subject Landlord to the risk of criminal liability or
termination of any superior lease or foreclosure of any superior mortgage, if
Tenant shall not duly institute within such thirty (30) day period and promptly
and diligently prosecute to completion all steps necessary to remedy the same,
or (c) whenever any event shall occur or any contingency shall arise whereby
this Lease or any interest therein or the estate hereby granted or any portion
thereof or the unexpired balance of the Term hereof would, by operation of law
or otherwise, devolve upon or pass to any person, firm or corporation other than
Tenant, except as expressly permitted by Article 18; then in any such event
covered by subsections a, b or c of this Section 25.2 at any time thereafter,
Landlord may give to Tenant a notice of intention to end the Term of this Lease
at the expiration of three (3) days from the date of the service of such notice
of intention, and upon the expiration of said three (3) days this Lease and the
Term and the estate hereby granted, whether or not the Term shall theretofore
have commenced, shall terminate with the same effect as if that day were the
Expiration Date, but Tenant shall remain liable for damages as provided in
Article 27.

                     ARTICLE 26 -- RE-ENTRY BY LANDLORD --
                              DEFAULT PROVISIONS

    26.01  If this Lease shall terminate for any reason whatsoever, Landlord or
Landlord's agents and employees may, without further notice, immediately or at
any time thereafter, enter upon and re-enter the Demised Premises, or any part
thereof, and possess or repossess itself thereof either by summary dispossess
proceedings, ejectment or by any suitable action or proceeding at law, or by
agreement, or by force or otherwise, and may dispossess and remove Tenant and
all other persons and property from the Demised Premises without being liable to
indictment, prosecution or damages therefor, and may repossess the same, and may
remove any persons therefrom, to the end that Landlord may have, hold and enjoy
the Demised Premises and the right to receive all rental income again as and of
its first estate and interest therein.  The words "enter" or "re-enter",
"possess" or "repossess" as herein used, are not restricted to their technical
legal meaning.  In the event of the termination of this Lease, or of re-entry by
summary dispossess proceedings, ejectment or by any suitable action or
proceeding at law, or by agreement, or by force or otherwise by reason of
default hereunder on the part of Tenant, Tenant shall thereupon pay to Landlord
the Fixed Rent and additional rent due up to the time of such termination of
this Lease or of such recovery of possession of the Demised Premises by
Landlord, as the case may be, and shall also pay to Landlord damages as provided
in Article 27.

    26.02  In the event of any breach or threatened breach by Tenant of any of
the agreements, terms, covenants or conditions contained in this Lease, Landlord
shall be entitled to enjoin such

                                      -39-
<PAGE>
 
breach or threatened breach and shall have the right to invoke any right and
remedy allowed at law or in equity or by statute or otherwise as though re-
entry, summary proceedings, and other remedies were not provided for in this
Lease.

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

    26.04  If this Lease shall terminate under the provisions of Article 25, or
if Landlord shall re-enter the Demised Premises under the provisions of this
Article 26, or in the event of the termination of this Lease, or of re-entry, by
or under any summary dispossess or other proceeding or action or any provision
of law by reason of default hereunder on the part of Tenant, Landlord shall be
entitled to retain all monies, if any, paid by Tenant to Landlord, whether as
advance rent, security or otherwise, but such monies shall be credited by
Landlord against any Fixed Rent or additional rent due from Tenant under Article
27 or pursuant to law.


                             ARTICLE 27 -- DAMAGES

    27.01  If this Lease is terminated under the provisions of Article 25, or if
Landlord shall re-enter the Demised Premises under the provisions of Article 26
or in the event of the termination of this Lease, or of re-entry by summary
dispossess proceedings, ejectment or by any suitable action or proceeding at
law, or by agreement, or by force or otherwise, by reason of default hereunder
on the part of Tenant, Tenant shall pay to Landlord as damages, at the election
of Landlord, on demand either,

    (a)  a sum which at the time of such termination of this Lease or at the
time of any such re-entry by Landlord, as the case may be, represents the excess
of (1) the aggregate of the Fixed Rent and the additional rent payable hereunder
which would have been payable by Tenant (conclusively presuming the additional
rent to be the same as was payable for the year immediately preceding such
termination) for the period commencing with such earlier termination of this
Lease or the date of any such re-entry, as the case may be, and ending with the
expiration of the Term, had this Lease not so terminated or had Landlord not so
re-entered the Demised Premises over (2) the aggregate rental value (calculated
as of the date of such termination or re-entry) of the Demised Premises for the
same period, or,

    (b)  a sum equal to the Fixed Rent and the additional rent (as above
presumed) payable hereunder which would have been payable by Tenant had this
Lease not so terminated, or had Landlord not so re-entered the Demised Premises,
payable quarterly or otherwise upon the terms therefor specified herein
following such termination or such re-entry and until the expiration of the
Term, provided, however, that if Landlord shall relet the Demised Premises or
any portion or portions thereof during said period, Landlord shall credit Tenant
with the net rents such net rents to be determined by first deducting from the
gross rents as and when received by

                                     -40-
<PAGE>
 
Landlord from such reletting the expenses incurred or paid by Landlord in
terminating this Lease or in re-entering the Demised Premises and in securing
possession thereof, as well as the expenses of reletting, including altering and
preparing the Demised Premises or any portion or portions thereof for new
tenants, brokers' commissions, advertising expenses, attorneys' fees, and all
other expenses properly chargeable against the Demised Premises and the rental
therefrom; it being understood that any such reletting may be for a period
shorter or longer than the remaining Term of this Lease, but in no event shall
Tenant be entitled to receive any excess of such net rents over the sums payable
by Tenant to Landlord hereunder, nor shall Tenant be entitled in any suit for
the collection of damages pursuant to this Subsection to a credit in respect of
any net rents from a reletting, except to the extent that such net rents are
actually received by Landlord. If the Demised Premises or any part thereof
should be relet in combination with other space, then proper apportionment shall
be made of the rent received from such reletting and of the expenses of
reletting.

    If the Demised Premises or any part thereof be relet by Landlord for the
unexpired portion of the Term, or any part thereof, before presentation of proof
of such damages to any court, commission, or tribunal, the amount of rent
payable upon such reletting shall, prima facie, be the fair and reasonable
rental value for the Demised Premises or any part thereof or evidence of damage
for failure to collect any rent due upon any such reletting.

    27.02  Suit or suits for the recovery of such damages, or any installments
thereof, may be brought by Landlord from time to time at its election, and
nothing contained herein shall be deemed to require Landlord to postpone suit
until the date when the Term would have expired if it had not been so terminated
under the provision of Article 26, or under any provision of law, or had
Landlord not re-entered the Demised Premises.  Nothing herein contained shall be
construed to limit or preclude recovery by Landlord against Tenant of any sums
or damages to which, in addition to the damages particularly provided above,
Landlord may lawfully be entitled by reason of any default hereunder or
otherwise on the part of Tenant.  Nothing herein contained shall be construed to
limit or prejudice the right of the Landlord to prove and obtain as damages by
reason of the termination of this Lease or re-entry on the Demised Premises for
the default of Tenant under this Lease, an amount equal to the maximum allowed
by any statute or rule of law in effect at the time when, and governing the
proceedings in which, such damages are to be proved whether or not such amount
be greater, equal to, or less than any of the sums referred to Section 27.01.

    27.03  Anything in this Lease to the contrary notwithstanding, if Tenant
shall at any time be in default hereunder, and if Landlord shall institute an
action or summary proceeding against Tenant based upon such default, or if such
default results from non-payment of Fixed Rent or additional rent whether or not
such an action or proceeding is instituted, then the non-prevailing party shall
reimburse the prevailing party for the expense of attorneys' fees and
disbursements thereby incurred by the prevailing, so far as the same are
reasonable.


                             ARTICLE 28 -- WAIVERS

    28.01  Tenant, for itself, and on behalf of any and all persons claiming
through or under Tenant, including creditors of all kinds, does hereby waive and
surrender all right and privilege so far as 

                                      -41-
<PAGE>
 
is permitted by law, which they or any of them might have under or by reason of 
any present or future law, of the service of any notice of intention to re-enter
and also waives any and all right of redemption or re-entry or repossession in 
case Tenant shall be dispossessed or ejected by process of law, or in case of 
re-entry or repossession by Landlord, or in case of any expiration or 
termination of this Lease as herein provided.

     28.02  Tenant waives Tenant's rights, if any, to designate the items 
against which any payments made by Tenant are to be credited, and Tenant agrees 
that Landlord may apply any payments made by Tenant to any items against which 
any such payments shall be credited.

     28.03  Tenant waives Tenant's rights, if any, to assert a counterclaim in 
any summary proceeding brought by Landlord against Tenant, and Tenant agrees to 
assert any such claim against Landlord only by way of a separate action or 
proceeding.

     28.04  To the extent permitted by applicable law, Landlord and Tenant 
hereby waive trail by jury in any action, proceeding or counterclaim brought by 
either against the other on any matter whatsoever arising out of or in any way 
connected with this Lease, the relationship of Landlord and Tenant, or Tenant's 
use of occupancy of the Demised Premises, or any emergency or other statutory 
remedy with respect thereto.

     28.05  The provisions of Article 8 and 9 shall be considered express 
agreements governing the services to be furnished by Landlord, and Tenant agrees
that any laws and/or requirements of public authorities, now or hereafter in 
force, shall have no application in connection with any enlargement of 
Landlord's obligations with respect to such services.

                ARTICLE 29 -- NO OTHER WAIVERS OR MODIFICATIONS

     29.01  The failure of Landlord to insist on any one or more instances upon 
the strict performance of any one or more of the agreements, terms, covenants, 
conditions or obligations of this Lease, Exhibits and Riders thereto, or to 
exercise any right, remedy or election herein contained, shall not be construed 
as a waiver or relinquishment for the future of the performance of such one or 
more obligations of this Lease or of the right to exercise such election, but 
the same shall continue and remain in full force and effect with respect to any 
subsequent breach, act or omission. The manner of enforcement or the failure of 
Landlord to enforce any of the Rules and Regulations set forth herein, or 
hereafter adopted against the Tenant and/or any other tenant in the Building 
shall not be deemed a waiver of any such  Rules and Regulations. No executory 
agreement hereafter made between Landlord and Tenant shall be effective to 
change, modify, waive, release, discharge, terminate or affect an abandonment of
this Lease, in whole or in part, unless such executory agreement is in writing,
refers expressly to this Lease and is signed by the party against whom 
enforcement of the change, modification, waiver, release, discharge or 
termination or effectuation of the abandonment is sought.

     29.02  The following specific provisions of this Section shall not be
deemed to limit the generality of the foregoing provisions of this Article:

     (a)    no agreement to accept a surrender of all or any part of the Demised
Premises shall be valid unless in writing and signed by Landlord. The delivery 
of keys to an employee of Landlord or of

                                     -42-

    

<PAGE>
 
its agent shall not operate as a termination of this Lease or a surrender of the
Demised Premises. If Tenant shall at any time request Landlord to sublet the
Demised Premises for Tenant's account, Landlord or its agent is authorized to
receive said keys for such purposes without releasing Tenant from any of its
obligations under this Lease, and Tenant hereby releases Landlord from any
liability for loss or damage to any of Tenant's Property in connection with such
subletting.

     (b)    the receipt or acceptance by Landlord of rents with knowledge of 
breach by Tenant of any term, agreement, covenant, condition or obligation of 
this Lease shall not be deemed a waiver of such breach.

     (c)    no payment by Tenant or receipt by Landlord of a lesser amount that 
the correct Fixed Rent or additional rent due hereunder shall be deemed to be 
other than a payment on account, nor shall any endorsement or statement on any 
check or any letter accompanying any check or payment be deemed to affect or 
evidence an accord and satisfaction, and Landlord may accept such check or 
payment without prejudice to Landlord's right to recover the balance or pursue 
any other remedy in this Lease or provided at law.

     (d)    if, in connection with obtaining, continuing or renewing financing
for which the Building, land or a leasehold or any interest therein represents
collateral in whole or in part, a bank, insurance company or other lender shall
request reasonable modifications of this Lease as a condition of such financing,
Tenant will not unreasonably withhold, delay6 or defer its consent thereto,
provided that such modifications do not increase the obligations of Tenant
hereunder or adversely affect to a material degree the Tenant's leasehold
interest hereby created.

     ARTICLE 30 -- CURING TENANT'S DEFAULTS, ADDITIONAL RENT

     30.01  If Tenant shall default in the performance of any of its obligations
under this Lease, Landlord, without thereby waiving such default, may (but shall
not be obligated to) perform the same for the account and at the expense of 
Tenant, without notice, in a case of emergency, and in any other case, only if 
such default continues after the expiration of twenty (20) days from the date 
Landlord gives Tenant notice of intention so to do.

     30.02  Bills for any expenses incurred by Landlord in connection with any 
such performance by it for the account of Tenant, and bills for all costs, 
expenses and disbursements of every kind and nature whatsoever, including 
reasonable counsel fees, involved in collecting or endeavoring to collect the 
fixed rent or additional rent or any part thereof or enforcing or endeavoring to
enforce any rights against Tenant, under or in connection with this Lease, or 
pursuant to law, including any such cost, expense and disbursement involved in 
instituting and prosecuting summary proceedings involved in instituting and 
prosecuting summary proceedings, as well as bills for any property, material, 
labor or services provided, furnished, or rendered, by Landlord may be sent by 
Landlord to Tenant monthly, or presented immediately, at Landlord's option, and,
shall be due and payable in accordance with the terms of such bills but not less
than thirty (30) days of receipt thereof.



                                     -43-

<PAGE>
 
            ARTICLE 31 -- NOTICES -- SERVICE OF PROCESS

     31.01  Any notice, statement, demand, request or other communication 
required or permitted pursuant to this Lease or otherwise shall be in writing 
and shall be deemed to have been properly given if sent by registered or 
certified mail, return receipt requested, postage prepaid, addressed to the 
other party at the address hereinabove set forth (except that after the 
Commencement Date, Tenant's address, unless Tenant shall give notice to the 
contrary, shall be the Building), and shall be deemed to have been given on the 
expiration of five (5) business days after mailing. Either party may, by notice 
as aforesaid, designate a different address or addresses for notices, 
statements, demands or other communications intended for it. However, notices 
requesting after hours service pursuant to Sections 8.01 and 9.01 may be given, 
provided they are in writing, by delivery to the Building Superintendent or any 
other person in the Building designated by Landlord to receive such notices, and
notice of fire, accident or other emergency shall be given by telegram or by 
personal delivery of written notice to that address designated for this purpose 
from time to time by the respective parties hereto.

     31.02  Whenever either party shall consist of more than one person or 
entity, any notice, statement, demand, or other communication required or 
permitted, or any payment to be made shall be deemed duly given or paid if 
addressed to or by (or in the case of payment by check, to the order of) any 
such persons or entities who shall be designated from time to time as the 
authorized representative of such party. Such party shall promptly notify the 
other of the identify of such person or entity who is so to act on behalf of 
all persons and entities then comprising such party and of all changes in such 
identify.

     31.03  Tenant agrees to give any Mortgagee who has given a Non-Disturbance 
Agreement, by Certified Mail, a copy of any Notice of Default served upon the 
Landlord by Tenant provided that prior to such notice Tenant has been notified, 
in writing, (by way of Notice of Assignment of Rents and Leases, or otherwise) 
of the address of such Mortgages. Tenant further agrees that if Landlord shall 
have failed to cure such default within the time provided for in this Lease, 
then the Mortgagee shall have an additional thirty (30) days within which to 
cure such default or if such default cannot be cured within that time, then such
additional time as may be necessary if within such thirty (30) days, any 
Mortgagee has commenced and is diligently pursuing the remedies necessary to 
cure such default, (including but not limited to commencement of foreclosure 
proceedings, if necessary to effect such cure) in which event this lease  shall 
not be terminated while such remedies are being so diligently pursued.

          ARTICLE 32 -- ESTOPPEL CERTIFICATE, MEMORANDUM

     32.01  The parties agree, at any time and from time to time, as requested 
by a party, upon not less than ten (10) days' prior notice, to execute and 
deliver without cost or expense to the requesting party a statement certifying 
that this Lease is unmodified and in full force and effect (or if there have 
been modifications, that the same is in full force and effect except as modified
and stating the modifications), certifying the dates to which the Fixed Rent and
additional rent have been paid, and stating whether or not, to the best 
knowledge of the requested party, the  requesting party is in default in 
performance of any of its obligations under this Lease, and, if so, specifying 
each such default of which the requested party may have knowledge, it being


                                     -44-

<PAGE>
 
intended that any such statement delivered pursuant thereto may be relied upon 
by any other person with whom the Landlord may be dealing. The foregoing 
obligation shall be deemed a substantial obligation of the tenancy, the breach 
of which shall give Landlord those remedies herein provided for an event of 
default.

     32.02  Tenant agrees not to record this Lease. At the request of either
party, Landlord and Tenant shall promptly execute, acknowledge and deliver a
memorandum with respect to this Lease sufficient for recording which Tenant may
record. Such memorandum shall not in any circumstances be deemed to change or
otherwise affect any of the obligations or provision of this Lease.

                    ARTICLE 33 -- NO OTHER REPRESENTATIONS,
                          CONSTRUCTION, GOVERNING LAW


     33.01  Tenant expressly acknowledges and agrees that Landlord has not made 
and is not making, and Tenant, in executing and delivering this Lease, is not 
relying upon any warranties, representations, promises or statements, except to 
the extent that the same are expressly set forth in this Lease or in any other 
written agreement which may be made and executed between the parties 
concurrently with the execution and delivery of this Lease and shall expressly 
refer to this Lease. This Lease and said other written agreement(s) made 
concurrently herewith are hereinafter referred to as the "lease documents". It 
is understood and agreed that all understandings and agreements heretofore had 
between the parties are merged in the Lease documents, which alone fully and 
completely express their agreements and that the same are entered into after 
full investigation, neither party relying upon any statement or representation 
not embodied in the Lease documents, made by the other.

     33.02   If any of the provisions of this Lease, or the application thereof
to any person or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such provision
or provisions to persons or circumstances other than those as to whom or which
it is held invalid or unenforceable, shall not be affected thereby, and every
provision of this Lease shall be valid and enforceable to the fullest extent
permitted by law.

     33.03   This Lease shall be governed in all respects by the laws of the 
State of New Jersey.

                          ARTICLE 34 -- PARTIES BOUND
     
     34.01   The obligations of this Lease shall bind and benefit the successors
and assigns of the parties with the same effect as if mentioned in each instance
where a party is named or referred to, except that no violation of the
provisions of Article 18 shall operate to vest any rights in any successor or
assignee of Tenant, and the provisions of this Article shall not be construed as
modifying the conditions of limitation contained in Article 25. However, the
obligations of Landlord under this Lease shall not be binding upon Landlord
herein named with respect to any period subsequent to the transfer of its
interest in the Building as owner or lessee thereof and in the event of such
transfer said obligation shall thereafter be binding upon each transfer of the
interest of the Landlord herein named as such owner or lessee of the Building,
but only with respect to the period ending with a subsequent transfer within the
meaning of this Article and such transferee, by accepting such interest shall be
deemed to have assumed such
                                    - 45 -
       
<PAGE>
 
obligations except only as may be expressly otherwise provided elsewhere in this
Lease. A lease of Landlord's entire interest in the Building as owner or lessee 
thereof shall be deemed a transfer wherein the meaning of this Article 34.


           ARTICLE 35 -- SHORING AND NOTICE OF ACCIDENTS AND DAMAGE

     35.01  If an excavation or other substructure work shall be undertaken or
authorized upon land adjacent to the Building, Tenant, without liability on the
part of Landlord therefor, shall afford to the person causing or authorized to
cause such excavation or other substructure work, license to enter upon the
Demised Premises for the purpose of doing such work as such person shall deem
necessary to protect or preserve any of the walls or structures of the Building
or surrounding lands from injury or damage and to support the same by proper
foundations, pinning and/or underpinning, and, except in case of emergency, if
so requested by Tenant such entry shall be accomplished in the presence of a
representative of Tenant, who shall be designated by Tenant promptly upon
Landlord's request. The said license to enter shall be afforded by Tenant
without any claim for damages or indemnity against Landlord and Tenant shall not
be entitled to any diminution or abatement of rent on account thereof.

     35.02  Tenant shall give notice to Landlord, promptly after Tenant learns 
thereof, of (i) any accident in or about the Demised Premises or the Building,
(ii) all fires in the Demised Premises, (iii) all damages to or defects in the
Demised Premises, including the fixtures, equipment and appurtenances thereto,
for the repair of which Landlord might be responsible or which constitutes
Landlord's property, and (iv) all damage to or defects in any parts or
appurtenances to the Building's sanitary, electrical, heating, ventilating, air
conditioning, elevator and other systems located in or passing through the
Demised Premises, provided that the Landlord shall be reasonably diligent with
respect thereto and shall perform such work, except in case of emergency, at
times reasonably convenient to Tenant and otherwise in such manner and to the
extent practical as will not unreasonably interfere with Tenant's use and
occupancy of the Demised Premises.

                    ARTICLE 36 -- VAULT, VAULT SPACE, AREA

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

                                     -46-
<PAGE>
 
                      ARTICLE 37 -- INABILITY TO PERFORM

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

                      ARTICLE 38-- LIABILITY OF LANDLORD

     Tenant shall look solely to the estate and interest of Landlord, its 
successors and assigns, in the land and Building for the collection of a 
judgement (or other judicial process) requiring the payment of money by Landlord
in the event of any default by Landlord hereunder, and no other property or 
assets of Landlord shall be subject to levy, execution or other enforcement 
procedure for the satisfaction of Tenant's remedies under or with respect to 
either this Lease, the relationship of Landlord and Tenant hereunder or Tenant's
use and occupancy of the Demised Premises. Neither the partners comprising 
Landlord (the "Partners"), nor the partners, shareholders, directors and 
officers of Landlord or the Partners shall be liable for the performance of 
Landlord's obligations under this Lease.

                            ARTICLE 39 -- BROKERAGE

     Tenant represents and warrant that it has dealt only with Dolan Realty, 
Inc. and Grubb & Ellis in connection with this Lease and Tenant does hereby 
agree to indemnify and hold harmless the Landlord of and from any and all loss, 
costs, damage or expense (including, without limitation, attorneys' fees and 
disbursements) incurred by the Landlord by reason of any claim of or liability 
to any other broker who shall claim to have dealt with Landlord or Tenant in 
connection with this Lease.

                      ARTICLE 40 -- FIRST RENEWAL OPTION

     40.01  If Tenant shall not be in default under any term, covenant and 
condition of this Lease on the part of Tenant to be performed beyond any 
applicable grace period after notice, Tenant may by notice in writing given to 
Landlord at least six (6) months before the Expiration Date (the "First Option 
Exercise Date") renew and extend this Lease for the further term of five (5) 
years (the "First Renewal Option Term") for the entire Demised Premises at 
Tenant's option according to the terms and conditions of this Lease, as amended 
hereunder, with Fixed Rent at the fair market Fixed Rent for the Demised 
Premises at the beginning of the First Renewal Option Term, plus additional rent
as provided in this Lease for the Demised Premises.

                                     -47-
<PAGE>
 
     40.02  If Tenant elects to exercise its option hereunder, the Term shall be
extended for the Demised Premises without execution of an extension or renewal 
lease. Within ten (10) days after a request of either party after the exercise 
of such option, Landlord and Tenant shall execute, acknowledge and deliver to 
each other duplicate originals of any instrument confirming that such option was
effectively exercised, but Tenant may not record such instrument.

     40.03  At least four (4) months prior to the First Option Exercise Date, 
the parties shall meet and seek to determine fair market Fixed Rent by mutual 
agreement. If the parties are unable to agree on the fair market Fixed Rent 
three (3) months before the First Option Exercise Date, the parties shall, 
within ten (10) days thereafter, choose a licensed real estate appraiser who 
shall have twenty (20) days to determine the fair market Fixed Rent. The cost of
said real estate appraiser shall be borne equally by the parties. If the parties
are unable to agree on a licensed real estate appraiser within such ten (10) day
period, each party shall, within five (5) days thereafter, select an appraiser 
who shall have twenty (20) days after selection to determine the fair market 
Fixed Rent. If the difference between the two appraisals is five (5%) percent or
less of the lower appraisal, then the fair market Fixed Rent which shall be 
binding on the parties shall be the average of the two appraisals. If the 
difference between the two appraisals is greater than five (5%) percent of the 
lower appraisal, the two appraisers shall, within five (5) days after completion
of the appraisals, select a third licensed real estate appraiser who shall, 
within twenty (20) days of selection, determine fair market Fixed Rent. In such 
case, the fair market Fixed Rent binding on the parties shall be either (i) the 
fair market Fixed Rent determined by the third appraiser, if his appraisal is 
higher than one of the other appraisals and lower than the other, or (ii) in any
other case, the fair market Fixed Rent determined by one of the other appraisers
which is closer to the fair market Fixed Rent determined by the third appraiser.
The cost of the third appraisal shall be borne equally by the parties.

                      ARTICLE 41 -- SECOND RENEWAL OPTION

     41.01  If Tenant elected to exercise the First Renewal Option and shall not
be in default under any term, covenant and condition of this Lease on the part 
of Tenant to be performed beyond any applicable grace period after notice, 
Tenant may by notice in writing given to Landlord at least six (6) months before
the Expiration Date of the First Renewal Option (the "Second Option Exercise 
Date") renew and extend this Lease for the further term of five (5) years (the  
"Second Renewal Option Term") for the entire Demised Premises at Tenant's option
according to the terms and conditions of this Lease, as amended hereunder, with 
Fixed Rent at the fair market. Fixed Rent for the Demised Premises at the 
beginning of the Second Renewal Option Term, plus additional rent as provided in
this Lease for the Demised Premises.

     41.02  If Tenant elects to exercise its option hereunder, the Term shall 
be extended for the Demised Premises without execution of an extension or 
renewal lease. Within ten (10) days after a request of either party after the 
exercise of such option, Landlord and Tenant shall execute, acknowledge and 
deliver to each other duplicate originals of any instrument confirming that such
option was effectively exercised, but Tenant may not record such instrument.

                                     -48-
<PAGE>
 
     41.03  At least four (4) months prior to the Second Option Exercise Date,
the parties shall meet and seek to determine fair market Fixed Rent by mutual
agreement. If the parties are unable to agree on the fair market Fixed Rent
three (3) months before the Second Option Exercise Date, the parties shall,
within ten (10) days thereafter, choose a licensed real estate appraiser who
shall have twenty (20) days to determine the fair market Fixed Rent. The cost of
said real estate appraiser shall be borne equally by the parties. If the parties
are unable to agree on a licensed real estate appraiser within such ten (10) day
period, each party shall, within five (5) days thereafter, select an appraiser
who shall have twenty (20) days after selection to determine the fair market
Fixed Rent. If the difference between the two appraisals is five (5%) percent or
less of the lower appraisal, then the fair market Fixed Rent which shall be
binding on the parties shall be the average of the two appraisals. If the
difference between the two appraisals is greater than five (5%) percent of the
lower appraisal, the two appraisers shall, within five (5) days after completion
of the appraisals, select a third licensed real estate appraiser who shall,
within twenty (20) days of selection, determine fair market Fixed Rent. In such
case, the fair market Fixed Rent binding on the parties shall be either (i) the
fair market Fixed Rent determined by the third appraiser, if his appraisal is
higher than one of the other appraisals and lower than the other, or (ii) in any
other case, the fair market Fixed Rent determined by one of the other appraisers
which is closer to the fair market Fixed Rent determined by the third appraiser.
The cost of the third appraisal shall be borne equally by the parties.

                    ARTICLE 42 -- MISCELLANEOUS PROVISIONS

     42.01  All work, including but not limited to, waxing or additional
cleaning that Tenant does or shall do in the Demised Premises, shall be done by
contractors employing union labor, approved in writing by Landlord and shall at
all times conform to the standards of the Building and shall comply with all
laws and/or requirements of public authorities. Tenant, as additional rent,
shall indemnify and hold harmless Landlord against any loss or damage Landlord
may sustain by reason of, and against, any order, decrees, judgments, attorney's
fees and expenses resulting from, failure of Tenant to comply with the
provisions hereof.

     42.02  The Article headings in this Lease and the Table of Contents 
prefixed to this Lease are inserted only as a matter of convenience or 
reference, and are not to be given any effect whatsoever in construing this 
Lease.

                                     -49-
<PAGE>
 
    IN WITNESS WHEREOF, the parties hereto have executed this instrument the day
and year first above written.

                                   LANDLORD:
                                        EVERGREEN AMERICA CORPORATION


                                        By: /s/ Howard Tung
                                           -------------------------------------
                                           HOWARD TUNG, Deputy Junior
                                           Vice President

/s/ Tony Wang
---------------------------------
TONY WANG
Witness for Landlord

                                   TENANT:
                                        FOCAL COMMUNICATIONS CORPORATION
                                        OF NEW JERSEY, A DELAWARE
                                        CORPORATION


                                        By: /s/ John R. Burnicle
                                           -------------------------------------


                                        Its:         C.O.O.
                                            ------------------------------------
                                            (Title)

/s/ [SIGNATURE ILLEGIBLE]^^
---------------------------------

Witness for Tenant

                                      -50-
<PAGE>
 
                                  EXHIBIT A-1
                                  -----------

                               DEMISED PREMISES




                           [FLOOR PLAN APPEARS HERE]

                                      -51-
<PAGE>
 
                                  EXHIBIT A-2
                                  -----------

                      EMERGENCY STAND-BY GENERATOR SPACE

                                      -52-
<PAGE>
 
                                  EXHIBIT A-3
                                  -----------

                                  ROOF SPACE

                                      -53-
<PAGE>
 
                      EXHIBIT B -- RULES AND REGULATIONS

     1)   The sidewalks, entrances, passages, lobby, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or encumbered by any
tenant or used for any purpose other than ingress and egress to and from the
Demised Premises and Tenant shall not permit any of its employees, agents or
invitees to congregate in any of said areas. No door mat of any kind whatsoever
shall be placed or left in any public hall or outside any entry door of the
Demised Premises.

     2)   No awnings or other projections shall be attached to the outside walls
of the Building.  No curtains, blinds, shades or screens shall be attached to or
hung in, or used in connection with, any window or door of the Demised Premises,
without the prior written consent of Landlord.  Such curtains, blinds, shades or
screens must be of a quality, type, design and color, and attached in the
manner, approved by Landlord.

     3)   No sign, insignia, advertisements, object, notice or other lettering
shall be exhibited, inscribed, painted or affixed by any tenant on any part of
the outside or inside of the Demised Premises or the Building without the prior
written consent of Landlord.  In the event of the violation of the foregoing by
any tenant, Landlord may remove the same without any liability, and may charge
the expense incurred in such removal to the tenant or tenants violating this
rule.  Interior signs and lettering on doors and the directory shall, if and
when approved by Landlord, be inscribed, painted or affixed for each tenant by
Landlord at the expense of such tenant, and shall be of a size, color and style
acceptable to Landlord.

     4)   The sashes, sash doors, skylights, windows and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the window sills.

     5)   No showcases or other articles shall be put in front of or affixed to
any part of the exteriors of the Building, nor placed in the halls, corridors or
vestibules.

     6)   The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were designed or
constructed, and no sweepings, rubbish, rags, acids or other substances shall be
thrown or deposited therein. All damages resulting from any misuse of the
fixtures shall be borne by the tenant who, or whose servants, employees, agents,
visitors or licensees shall have caused the same.

     7)   No tenant shall mark, paint, drill into or in any way deface any part
of the Demised Premises or the Building. No boring, cutting or stringing of
wires shall be permitted, except with the prior written consent of Landlord, and
as Landlord may direct. No tenant shall lay linoleum or other similar floor
covering, so that the same shall come in direct contact with the floor of the
Demised Premises, and, if linoleum or other similar floor covering is desired to
be used an interlining of builders deadening felt shall be first affixed to the
floor, by a paste or other material, soluble in water, the use of cement and
other similar adhesive material being expressly prohibited.

     8)   No bicycles, vehicles, animals, fish or birds of any kind shall be
brought into or kept in or about the premises.

                                      -54-
<PAGE>
 
     9)   No noise, including, but not limited to, music or the playing of
musical instruments, recordings, radio or television which, in the judgment of
Landlord, might disturb other tenants in the Building, shall be made or
permitted by any tenant. Nothing shall be done or permitted in the Demised
Premises by Tenant which would impair or interfere with the use or enjoyment by
any other tenant of any other space in the Building. No tenant shall throw
anything out of the doors, windows or skylights or down the passageways.

     10)  Tenant, its servants, employees, agents, visitors or licensees, shall
at no time bring or keep upon the Demised Premises any explosive fluid, chemical
or substance, nor any inflammable or combustible objects or materials except
subject to the provisions of Section 21.02(a) of the foregoing Lease.

     11)  Additional locks or bolts of any kind which shall not be operable by
the Grand Master Key for the Building shall not be placed upon any of the doors
or windows by any tenant, nor shall any changes be made in locks or the
mechanism thereof which shall make such locks inoperable by said Grand Master
Key.  Each tenant shall, upon the termination of its tenancy, turn over to
Landlord all keys of offices and toilet rooms, either furnished to, or otherwise
procured by, such tenant and in the event of the loss of any keys furnished by
Landlord, such tenant shall pay to Landlord the cost thereof.

     12)  All removals from the Demised Premises or the Building, or the moving
or carrying in or out of the Demised Premises or the Building of any safes,
freight, furniture, packages, boxes, crates or any other object or matter of any
description must take place during such hours and using such elevators as
Landlord or its agent may determine from time to time.  All deliveries of any
nature whatsoever to the Building or the Demised Premises must be made only
through Building entrances specified by Landlord for such deliveries.  Landlord
reserves the right to inspect all objects and matter to be brought into the
Building and to exclude from the Building all objects and matter which violate
any of these Rules and Regulations or the Lease of which these Rules and
Regulations are a part.  Landlord may require any person leaving the Building
with any package or other object or matter, to submit a pass, listing such
package or object or matter from the tenant from whose premises the package or
other object or matter is being removed, but the establishment and enforcement
of such requirement shall not impose any responsibility on the Landlord for the
protection of any tenant against the removal of property from the premises of
such tenant.  Landlord shall, in no way, be liable to Tenant for damages or loss
arising from the admission, exclusion or ejection of any person to or from the
Demised Premises or the Building under the provisions of this Rule 12 or Rule 16
hereof.

     13)  Tenant shall not occupy or permit any portion of the Demised Premises
to be occupied as an office for a public stenographer or public typist, or for
the possession, storage, manufacture, or sale of beer, wine or liquor,
narcotics, dope, tobacco in any form, or as a barber, beauty or manicure shop,
or as an employment bureau.  Tenant shall not engage or pay any employees on the
Demised Premises, except those actually working for Tenant on the Demised
Premises, nor advertise for laborers giving an address at the Demised Premises.
Tenant shall not use the Demised Premises or any part thereof, or permit the
Demised Premises or any part thereof to be used, for manufacturing, or for sale
at auction of merchandise, goods or property of any kind.

                                      -55-
<PAGE>
 
     14)  Tenant shall not obtain, purchase or accept for use in the Demised
Premises ice, drinking water, food, beverage, towel, barbering, boot blacking,
cleaning, floor polishing or other similar services from any persons not
authorized by Landlord in writing to furnish such services, provided always that
the charges for such services by persons authorized by Landlord are not
excessive.  Such services shall be furnished only at such hours, in such places
within the Demised Premises, and under such regulations as may be fixed by
Landlord.  Tenant shall not purchase or contract for waxing, rug shampooing,
venetian blind washing, furniture polishing, lamp servicing, cleaning of
electric fixtures, removal of garbage or towel service in the Demised Premises
except from contractors, companies or persons approved by the Landlord.

     15)  Landlord shall have the right to prohibit any advertising or
identifying sign by any tenant which in Landlord's judgment tends to impair the
reputation of the Building or its desirability as a Building for offices, and
upon written notice from Landlord, such tenant shall refrain from or discontinue
such advertising or identifying sign.

     16)  Landlord reserves the right to exclude from the Building during hours
other than Regular Business Hours (as defined in the foregoing Lease) all
persons who do not present a pass to the Building signed by Landlord.  All
persons entering and/or leaving the Building during hours other than Regular
Business Hours may be required to sign a register.  Landlord will furnish passes
to persons for whom any tenant requests such pass and shall be liable to
Landlord for all acts or omissions of such persons.

     17)  Tenant, before closing and leaving the Demised Premises at any time,
shall see that all lights are turned out.  All entrance doors in the Demised
Premises shall be left locked by Tenant when the Demised Premises are not in
use.  Entrance doors shall not be left open at any time.

     18)  Tenant shall, at Tenant's expense, provide artificial light and
electrical energy for the employees of Landlord and/or Landlord's contractors
while doing janitor service or other cleaning in the Demised Premises and while
making repairs or alterations in the Demised Premises.

     19)  The Demised Premises shall not be used for lodging or sleeping or for
any immoral or illegal purpose.

     20)  The requirements of tenants will be attended to only upon application
at the office of the Building.  Employees of Landlord shall not perform any work
or do anything outside of their regular duties, unless under special
instructions from Landlord.

     21)  Canvassing, soliciting and peddling in the Building are prohibited and
each tenant shall cooperate to prevent the same.

     22)  There shall not be used in any space, or in any lobbies, corridors,
public halls or other public areas of the Building, either by any tenant or by
jobbers or any others, in the moving or delivery or receipt of safes, freight,
furniture, packages, boxes, crates, paper, office material, or any other object
or thing, any hand trucks except those equipped with rubber tires, side guards,
and such other safeguards as Landlord shall require.  No move or delivery of any
object or thing of whatever nature, other than light-weight objects hand-carried
by not more than one person, shall be made without at least 24 hours' prior
written notice by Tenant to Landlord and without Tenant, prior to any such move
or delivery, laying (without affixation or attachment to any part of 

                                      -56-
<PAGE>
 
the floor or floor covering) adequate masonite or plywood sheets covering all
lobby, corridor, public hall and other public area floors of the Building
(whether carpeted or terrazzo) over which such move or delivery shall take
place.

     23)  Tenant shall not cause or permit any odors of cooking or other
processes or any unusual or objectionable odors to emanate from the Demised
Premises which would annoy other tenants or create a public or private nuisance.
No cooking shall be done in the Demised Premises except as is expressly
permitted in the foregoing Lease.

     24)  Tenant shall cooperate with Landlord in obtaining maximum
effectiveness of the cooling system by lowering and closing venetian blinds
and/or drapes and curtains when the sun's ray fall directly on the windows of
the Demised Premises. Tenant shall not permit the heating, air-conditioning and
ventilation system to become blocked by Tenant's curtains, drapes or other
installations.

     25)  Landlord reserves the right to rescind, alter or waive any rule or
regulation at any time prescribed for the Building when, in its judgment, if
deems it necessary or desirable for the reputation, safety, care or appearance
of the Building, or the preservation of good order therein, or the operation or
maintenance of the Building or the equipment thereof, or the comfort of tenants
or others in the Building.  No rescission, alteration or waiver of any rule or
regulation in favor of one tenant shall operate as a rescission, alteration or
waiver in favor of any other tenant.

     26)  Tenant shall not permit its personnel, agents or visitors to litter
any public areas of the Building or the land or improvements on the land on
which the Building is located (including, without limitation, the walkways and
parking areas located thereon), and Tenant shall be responsible to, and shall
pay Landlord for the cost of removal of such litter within ten (10) days of
notice thereof by Landlord.

     27)  Subject to the provisions of Paragraph 10.01(c) Landlord shall not
unreasonably withhold its consent to the installation, maintenance and operation
by Tenant in the Demised Premises of office duplicating machines, teletype
machines and other business machines and machinery customarily used in offices
in the ordinary course of business, provided, however, that Tenant shall comply
with all other obligations of this Lease that are applicable to or result from
such installation, or operation.

     28)  Landlord shall not unreasonably withhold from Tenant any approval
provided for in the Rules and Regulations.

     29)  Any moving of furniture or equipment into or out of the Demised
Premises must be done by Tenant at its own cost and expense, on Monday through
Friday after 6:00 p.m., or on Saturday, subject however, to the prior written
consent of Landlord.  If such move requires use of an elevator, such move shall
not be in excess of such elevator's load capacity.

                                      -57-
<PAGE>
 
                                   EXHIBIT C
                                   ---------

                                 TENANT'S WORK

                                      -58-
<PAGE>
 
                       EXHIBIT C-1 -- BUILDING RULES AND
                 REGULATIONS FOR TRADES CONDUCTING OPERATIONS
                                IN THE BUILDING


1.   All plans and specifications for any proposed Tenant Work must be submitted
     to the Building office for approval by the Landlord, which approval shall
     not be unreasonably withheld or delayed.

2.   Prior to the commencement of any work, all contractors must have a current
     insurance certificate on file in the Building office. (See attached
     insurance requirements for trades conducting operations at One Evertrust
     Plaza.)

3.   All work is to be performed in a safe and lawful manner, using contractors
     approved by the Landlord, which consent shall not be unreasonably withheld.
     All work must comply with applicable laws and all requirements and
     regulations of Municipal and other governmental or duly constituted bodies
     exercising authority, and this compliance shall include the filing of plans
     and other documents as required, and the procuring of any required licenses
     or permits prior to commencement of any work. Tenant shall submit the
     following certificates to Landlord upon completion of the work:

     A.   Approvals issued by the building department.

     B.   Certificate of Occupancy.

     C.   Air Balance Report.

4.   Any work which will require an electrical shutdown or drain down of the
     Building's chilled water, condenser water, or domestic water systems must
     be performed after 6:00 PM or on the weekends. A written request for this
     work to be performed must be received by the Building office at least five
     (5) business days prior to the commencement of this work. In addition to
     the above, this work must be supervised by a Building engineer, and the
     contractor must agree to pay the cost of employing the Building engineer on
     overtime at an hourly rate of $55.00 per man hour.

5.   No workers are permitted to make use of passenger elevators while
     transporting tools or materials of any kind. Gang boxes or hand trucks are
     not permitted on passenger elevators under any circumstances.

6.   For the duration of the work, the contractor must provide masonite
     protection for all walls and floors throughout all common areas which lead
     to the contractors area of work. Any damage to these walls and floors
     caused by the contractor is to be repaired immediately with no cost to the
     Landlord.

7.   Tenant's workmen and mechanics must work in harmony, and not interfere with
     any labor employed by the Landlord, Landlord's mechanics or contractors or
     by and other tenant or its contractors.

8.   All contractors shall comply with the rules of the Building as to the hours
     of availability of the Building elevators and the manner of handling
     materials, equipment, and debris to avoid conflict and interference with
     Building operation. Deliveries are not permitted between the following
     periods: 8 AM - 10 AM, 11:30 AM - 1 PM, 4 PM - 6 PM.

                                      -59-
<PAGE>
 
9.   Contractor shall be required to pay for the use of service elevators after
     business hours at Landlord's standard rate of $80.00 per hour.

10.  Demolition must be performed after 6:00 PM or on weekends. The delivery of
     materials, equipment, and removal of debris must be arranged to avoid any
     inconvenience and annoyance to other tenants. Cleaning must be controlled
     to prevent dirt and dust from infiltrating into adjacent tenant or
     mechanical areas.

11.  Contractor shall make available fire extinguishers based on the following: 

     Alterations up to 5,000 sq. ft. - one (1) fire extinguisher

     Alterations over 5,000 sq. ft. - one (1) fire extinguisher for every
     additional 5,000 sq. ft. thereover. Said fire extinguisher shall be 25 lb.
     type approved for type A, B, C, fires and shall be kept and maintained on
     the premises by Tenant's contractor for the duration of the work.

12.  Contractor shall be required to pay for the temporary use of electricity
     and water at the Landlord's standard rate of $15.00 per day.

13.  Landlord reserves the right to stop all work in the event of the breach of
     any of the terms or conditions listed above.

                                      -60-
<PAGE>
 
               EXHIBIT C-2 -- INSURANCE REQUIREMENTS FOR TRADES
                     CONDUCTING OPERATIONS IN THE BUILDING


1.  The Contractor will, throughout the duration of any contract or any work
    authorized under purchase order, at its expense, carry and from time to time
    renew, Workman's Compensation Insurance, Public Liability Insurance in the
    amount of $1,000,000 single limit covering both Bodily Injury and Property
    Damage including coverage for below noted indemnity agreement in such
    companies as may be approved by the Landlord which approval shall not be
    unreasonably withheld or delayed.  Certificates in the customary form,
    evidencing that premiums therefore have been paid, shall be delivered to the
    Landlord simultaneously with the execution of any contract and prior to
    performing any work authorized under a purchase order or contract, and
    within fifteen (15) days prior to expiration of such insurance like
    certificates shall be delivered to the Landlord evidencing the renewal of
    such insurance, together with evidence satisfactory to the Landlord of the
    payment of the premium.  All certificates must obtain a definite provision
                                                            ------------------
    that if such policies are cancelled or changed during the periods of
    coverage as stated therein, in such a manner as to affect this certificate,
    written notice will be mailed to the Landlord by registered mail ten (10)
    days prior to such cancellation or change.

2.  Provision must also be made as provided above to insure the Hold Harmless
    Agreement which reads as follows:

       "The Contractor hereby agrees to indemnify and save Harmless
       the Evergreen America Corporation and any of its subsidiaries
       from and against all liability claims and demands on account of
       injury to persons including death resulting therefrom and
       damage to property arising out of the performance of this
       contract by the Contractor, employees and agents of the
       Contractor and Contractor's property, except from and against
       such claims and demands which may arise out of the sole
       negligence of the owner, Evergreen America Corporation or any
       of its subsidiaries. The Contractor will at his or its own
       expense, defend any and all actions at law brought against the
       owner and/or the agent based thereon and shall pay all attorney
       fees and all other expenses, and promptly discharge any
       judgments arising therefrom. These conditions shall also apply
       to any subcontracted operations."

                                      -61-
<PAGE>
 
                        EXHIBIT D -- CLEANING STANDARDS

 I.    Plaza and Lobby Levels - Nightly
       --------------------------------

       The entrance lobbies are to be kept neat and clean at all times and the
       following minimum cleaning operations shall be maintained to attain this
       effect:

       a.  Sweep with chemically treated dust mop all granite floors, damp mop
           any spillage.

       b.  Wash and spray buff lobby floors nightly.

       c.  Damp wipe all cigarette urns and replace sand or water as necessary.

       d.  Damp wipe and dry the Reception Console Center.

       e.  Damp wipe Directory board plastic with a destatisizer.

       f.  Damp wipe and dry ledges of flower planters.

       g.  Damp wipe and dry all elevator starter panels.

       h.  Wash all metal doors, hand rails and all revolving doors and drums of
           revolving doors, interior and exterior.

       i.  Vacuum all carpeting.

       j.  Remove any graffiti or obscenities on metal or panels.

       k.  Remove gum from carpeting.

       l.  Vacuum floor saddles.

       m.  Dust mail depository and damp wipe fingerprints.

       n.  Dust walls and wash if soiled.

       o.  Wash all glass walls and doors.

       p.  Wash all rubber mats and/or vacuum carpet runners.

       Plaza/Lobby Areas - Periodic
       ----------------------------

       q.  High dust all ornamental decorations two times a year.

       r.  High dust and wash all electrical and air-conditioning diffusers two
           times a year.

 II.   Elevators
       ---------

       a.  Vacuum rugs of all elevators nightly and remove gum marks; wash, wax
           and polish if tiled.

       b.  Wipe down panels of elevator cabs nightly and remove any graffiti or
           obscenities.  Polish same weekly.

       c.  Wipe down all metal in cabs, indicators and elevator doors nightly
           using an approved cleaner.

       d.  Vacuum clean lobby elevator saddles and tracks nightly.

       e.  Wash and polish door saddles and frames on floors above lobby twice
           per month and vacuum tracks.

                                      -62-
<PAGE>
 
       f.  Remove foreign matter from top of light fixtures in elevator cabs
           nightly.

       g.  Vacuum tracks and wipe clean nightly.

III.   General Office Areas - Nightly
       ------------------------------

       a.  Sweep all hardsurfaced flooring using approved dustdown preparation
           and damp mop weekly marble terrazzo, wood or other untreated
           flooring.

       b.  Vacuum sweep all carpets and rugs, moving only light furniture
           (desks, file cabinets, etc. not to be moved.)

       c.  Hand dust and wipe clean with damp or chemically treated cloth all
           furniture, file cabinets, fixtures, window sills, and wash said sills
           and tops if necessary.

       d.  Dust and wipe clean all telephones.

       e.  Dust all chair rails, trim, etc.

       f.  Remove all gum and foreign matter on sight.  Spot clean floors.

       g.  Empty all waste receptacles and remove wastepaper and waste materials
           to a designated area.

       h.  Damp dust interiors of all waste disposal receptacles as necessary.

       i.  Empty and wipe clean all ashtrays and screen all sand urns; replace
           sand as necessary.

       j.  Wash clean all water fountains and water coolers.

       k.  Dust all glass furniture tops.

       l.  Remove hand marks on elevator hatchway doors.

       m.  Adjust vertical blinds to uniform standard.

       n.  Keep service corridors on each floor in clean and orderly condition.

       o.  Dust all door louvers within reach.

       p.  Remove finger smudges for all metal partitions and surfaces.

 IV.   Periodic
       --------

       a.  Hand dust all ventilating louvers.

       b.  Dust all baseboards once per month, remove stains if possible.

       c.  Dust all lamp shades monthly.

       d.  High dust and wash all electrical and air-conditioning diffusers
           twice a year.

       e.  High dust all ornamental decorations semi-annually.

                                      -63-
<PAGE>
 
       f.  Wash floors in public and private stairwells throughout the Building
           monthly.

       g.  Wash telephones monthly.

       h.  Dust quarterly all picture frames, charts and similar hangings which
           were not reached in nightly cleaning.

       i.  Dust all vertical surfaces such as walls, partitions, doors, window
           frames and other surfaces not reached in nightly cleaning four (4)
           times per year.

       j.  Dust exterior of lighting fixtures twice a year.

       k.  Dust all vertical blinds quarterly.

       l.  Dust quarterly all air-conditioning louvers, grills, etc. not reached
           in nightly cleaning and surrounding areas twice a year.

       m.  Clean all interior window metal and other unpainted interior metal
           surfaces of the Common Area of the perimeter walls once per year
           using a metal cleaning product.

       n.  Strip and polish lobby floors weekly.

       o.  Wash all cigarette urns weekly.

 V.    Lavatories - Nightly
       --------------------

       a.  Wash and disinfect all floors and baseboards.

       b.  Wash all mirrors and powder shelves.

       c.  Wash all bright work.

       d.  Wash all plumbing fixtures.

       e.  Wash and disinfect all toilet seats, both sides.

       f.  Scour, wash and disinfect all basins, toilet bowls and urinals.

       g.  Empty paper towel receptacles and remove paper to designated area.

       h.  Wipe and fill toilet tissue holders.

       i.  Wipe and fill soap, sanitary napkin and paper towel dispensers.

       j.  Empty and clean sanitary disposal receptacles.

       k.  Hand dust and clean all receptacles and dispensers.

       l.  Remove finger marks from painted surfaces.

       m.  Remove all graffiti.

       n.  Dust and clean partitions and walls.

       o.  Wash tile wall surfaces subject to splashing.

                                      -64-
<PAGE>
 
       p.  Report all mechanical deficiencies, i.e., dripping faucets, etc., to
           the Building Manager.

       Periodic
       --------

       a.  Wash all partitions and dispensers once a week.

       b.  Scrub floors as necessary but not less than once a week.

       c.  Hand dust and wash all tile walls once each month, more often if
           necessary.

       d.  High dusting to be done once each month which includes lights, walls,
           and grills; wash such fixtures, including lamps and lenses, twice
           every year.

 VI.   Public Areas
       ------------

       a.  Police all public area and stairwells throughout the entire Building
           and keep in clean condition, sweep daily and mop, as necessary, but
           at least once per month.

       b.  Clean firehoses, extinguishers and similar equipment as necessary but
           at least once per month.

       c.  Dust all ceilings, etc., weekly and high dust quarterly.

VII.   Building Service Areas
       ----------------------

       a.  Hose all ramps, loading dock, trucking areas, garbage storage room,
           etc., daily and scrub and steam clean as necessary, but at least once
           per month.

       b.  Keep loading docks and driveway entrance area, ramps and garage areas
           in a neat, clean condition at all times.  Keep wastepaper, cardboard
           and rubbish, etc., stored in approved receptacles or assigned rooms.
           Keep floors, walls, driveway, walkway and dock area clean of grease,
           oil and other stains.  Maintain an adequate stock of absorbent
           material for oil and grease stains.

       c.  Slop sinks are to be cleaned after use.  Mops, rags and equipment are
           to be cleaned and stored in racks.  Walls and floors are to be kept
           clean at all times.

       d.  Electric and telephone closets and storerooms are to be kept free
           from debris and material.  Floors are to be swept weekly and washed
           monthly.  Report storage of extraneous material and equipment to
           Building Manager.

       e.  Police main Building entrance lobby.

       f.  Police elevator cabs and clean, dust and rubdown walls as necessary.

       g.  Police men's lavatories and fill toilet tissue dispensers.

       h.  Set out rubber mats on rainy days; keep in clean condition.

       i.  Clean all cigarette urns and replace sand as necessary.

       j.  Clean all stairwells and fire tower; dust all handrails, spindles and
           wash stairs as necessary.

                                      -65-
<PAGE>
 
       k.  Sweep and wash lobby and common area floors daily.

       l.  Clean roof setbacks as necessary.

       m.  Keep frames of entrance doors in clean condition.

       n.  Clean standpipes and Siamese sprinkler connections as necessary.

       o.  Exterior metal work, marble, etc. of Building entrances to be kept in
           clean condition at all times.

       p.  Properly maintain exterior of Building at the ground level.

VIII.  Window Cleaning
       ---------------

       a.  Clean all windows on the outside and inside from the ground floor to
           the roof twice a year.  Window frames and associated metal to be
           wiped clean at the same time.

       b.  Partition glass throughout the Building interior in public areas, to
           be cleaned once per month.

       c.  Clean entrance doors two (2) times each day.

       d.  Clean directory glass daily.

       e.  Clean all glass on the first floor daily.

       f.  Clean all glass doors and panels daily.

       g.  Clean all mail chute glass as necessary.

 IX.  Walkways, Plaza
      ---------------

       a.  Police walkways and Plaza area two (2) times daily.

       b.  Remove all gum and foreign matter on sight.

       c.  Clean all Plaza areas, sidewalks and driveways.

 X.  Garage (If Applicable)
     ----------------------

       Police garage daily removing all accumulated debris.

 XI.   Pest Control
       ------------

       To be furnished as required to prevent infestation.

XII.   Duties of Day Matrons
       ---------------------

       a.  Police all ladies lavatories twice each day.

       b.  Fill toilet tissue dispensers with toilet tissue.

       c.  Fill paper towel dispensers with paper towels.

       d.  Fill sanitary napkin dispensers with sanitary napkins.

       e.  Fill soap dispensers with liquid hand soap.

                                      -66-
<PAGE>
 
XIII.  Duties of Day Porters
       ---------------------

       a.  Police Plaza entrance five (5) times a day, five (5) days a week.

       b.  Empty and strain all cigarette urns, three (3) times a day.

       c.  Elevator cab floors are to be vacuumed two (2) times a day - more
           often if necessary.

       d.  Wipe clean and remove finger marks from all metal and bright work
           throughout interior of Plaza and lobby and up to hand reach daily.

       e.  Sweep walkways, Plaza, ramps, loading dock, trucking area, etc. twice
           daily, more often as needed.

       f.  Lay down and remove lobby runners as necessary.

       g.  Police roof setbacks.

       h.  Sweep and dust the trafficked staircases daily.

       i.  Wash trafficked staircases weekly.

       j.  Wash the flooring in the trafficked main engine room, main pump room,
           etc., weekly.

       k.  Police all mens' lavatories two (2) times each day.

       l.  Fill all dispensers in mens' lavatories as required.

       m.  Keep all public telephones and their enclosures in a clean condition.

       n.  Empty waste receptacles on Plaza and clean daily.

       o.  Police grounds and pick up any loose debris.

       Unless otherwise specified, all of the cleaning services listed shall be
       done five (5) days each week, Monday through Friday, except on Building
       holidays.

                                      -67-
<PAGE>
 
                                   EXHIBIT E
                                   ---------

                        SUBORDINATION, NON DISTURBANCE
                           AND ATTORNMENT AGREEMENT


    THIS AGREEMENT is made this 26th, day of February, 1999, by and between
EVERGREEN AMERICA CORPORATION, a New Jersey Corporation, Grantor,
AND
FOCAL COMMUNICATIONS CORPORATION OF NEW JERSEY, Grantee
AND
BANK OF TAIWAN, Holder of the Superior Interest.

                                  WITNESSETH:

    WHEREAS, Holder of the Superior Interest is the mortgagee under a Mortgage
dated September 15, 1997 covering certain land and building(s) known as Lot PL.
A in Block 104-105 on the Tax Map of the City of Jersey City, County of Hudson
and State of New Jersey (hereinafter "Premises"), which Mortgage is recorded in
the Office of the Hudson County Register at Book 6345 of Mortgages on Page 1
and the mortgagee under a Mortgage dated September 15, 1997, covering certain
land and building(s) known as Lot PL.1 in Block 73.74 on the Tax Map of Jersey
City, County of Hudson and State of New Jersey (hereinafter "Premises"), which
Mortgage is recorded in the Office of the Hudson County Register at Book 6344 of
Mortgages on Page 315; and

    WHEREAS, Grantor has conveyed to Grantee a Lease Agreement dated February 1,
1999 (hereinafter Lease Agreement), under the terms covenants, conditions and
agreements set forth therein; and,

    WHEREAS, Grantee desires to receive certain assurances from Holder of
Superior Interest that its possession and use of the Premises will not be
disturbed by Holder of Superior Interest in the event of a foreclosure or in the
event of a possessory action

                                      -68-
<PAGE>
 
by Holder of Superior Interest, at any time during the period of the Lease
Agreement, and Holder of Superior Interest is willing to grant certain
assurances upon the terms and conditions hereinafter set forth.

    NOW THEREFORE, the parties hereto, in consideration of the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
covenant and agree as follows:

    (1)  The Lease Agreement, and all of the right of Grantee thereunder, shall
be and are hereby made, and at all times hereafter shall be subject and
subordinate in all respects to the Mortgage of Holder of Superior Interest.
Notwithstanding such subordination, Grantee hereby agrees with Holder of
Superior Interest, immediately upon written demand, to attorn to and to
recognize Holder of Superior Interest, and any purchaser at foreclosure sale, as
the Grantor of the Lease Agreement for the balance of the term of the Lease
Agreement in accordance with the terms and provisions thereof, but subject,
nevertheless, to paragraph 2 and other provisions of this Agreement shall be
controlling in the event of any conflict.

    (2)  Grantee hereby agrees that Holder of Superior Interest or any purchaser
at foreclosure sale shall not be:

    (a)  Liable for any act or omission of the Grantor under said Lease
Agreement;

    (b)  Subject to any offsets or defenses which Grantee may have at any
time hereafter against Grantor.

    (c)  Bound by any rent that Grantee may have paid for more than the current
month to Grantor or any prior Grantor.

                                      -69-
<PAGE>
 
    (d)  Bound by any agreement between Grantor and Grantee to which Holder of
the Superior Interest had not previously consented in writing.

    (3)  So long as Grantee complies with all of the terms, covenants,
conditions and agreements set forth in the Lease Agreement, Grantee's possession
and use of the Premises under said Lease Agreement shall not be disturbed or
interfered with by Holder of Superior Interest or any purchaser at foreclosure
sale and Grantee shall not be joined in any foreclosure or possessory
proceeding.

    (4)  Grantee hereby agrees that any person or entity which at any time
hereafter becomes the Grantor under the Lease Agreement, including without
limitation, Holder of Superior Interest, or the purchaser at foreclosure sale
shall be liable only for the performance of the obligations of the Grantor under
said Lease Agreement during the period that they are Grantor and shall not be
liable for any obligation of the Grantor under said Lease Agreement which arose
prior to such period.

    (5)  This Agreement, except as otherwise specifically provided herein, shall
inure to the benefit of and be binding upon Holder of Superior Interest, its
heirs, executors, administrators, successors and assigns, Grantor, its heirs,
executors, administrators, successors and assigns, and Grantee, its successors
and assigns.

    (6)  Grantee covenants that the Lease has not been modified or altered and
that the Lease Agreement shall not, without the prior written consent of Holder
of the Superior Interest, be terminated, surrendered, modified or altered
hereafter.

                                      -70-
<PAGE>
 
    (7)  Grantee agrees that it will notify Holder of the Superior Interest in
writing, by certified mail, of any default by Grantor under the Lease Agreement
and shall not cancel or terminate the Lease without providing Holder of the
Superior Interest thirty (30) days from the date of such notice within which to
cure said default.  If any default by Grantor is cured within the time period
described above, Grantee shall have not right to cancel or terminate the Lease
Agreement by virtue of said default.

                                   EVERGREEN AMERICA CORPORATION



                                   BY: /s/ Howard Tung
                                      ----------------------------------
                                      HOWARD TUNG, Deputy Junior
                                      Vice President


                                   BANK OF TAIWAN



                                   BY: /s/ David Wen-Hsiung Chang
                                      ----------------------------------
                                      DAVID WEN-HSIUNG CHANG
                                      Senior Vice President &
                                      General Manager

                                      -71-