<PAGE>   1

                                                                   EXHIBIT 10.29


               Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

                              One Financial Center
                           Boston, Massachusetts 02111

Daniel O. Gaquin                                                617 542 6000
                                                                617 542 2241 fax
Direct dial 617 348 1874
dgaquin@mintz.com

                                         February 15, 2000

     BY OVERNIGHT MAIL
     Jason Karp, Assistant Vice President
     Regulatory and Legal
     NET 2000 COMMUNICATIONS
     2180 Fox Mill Road
     Herndon, VA 20171

             Re:    Philadelphia Switch Site Lease
                    401 North Broad Street, Philadelphia, PA

     Dear Jason:

             Enclosed are the following:

             1.     Four (4) execution counterparts of the proposed switch site
                    lease at 401 North Broad St., Philadelphia;

             2.     Four (4) execution counterparts of a Memorandum of Lease
                    Agreement;

             3.     Proposed cover letter for your execution which details the
                    agreement on post-signing matters;

             4.     Marked Master Lease SNDA; and

             5.     Nortel Consent and Subordination Agreement.

             Also, a current lease Plan should be attached to the Leases as
Exhibit A.

             We have revised the term and rent commencement dates from February
1 to March 1 and also deleted the reference to ground rents in the Operating
Costs by handwritten changes on pages 1, 2 and 3. These changes should be
initialed by Net 2000's signer.





                        Boston Washington Reston New York


<PAGE>   2


MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.


Jason Karp
February 15, 2000
Page 2


             Also, note that the Leases should be accompanied by a check for the
Security Deposit and the first month's rent.

             Please call me with any questions or comments.

                                                  Sincerely,


                                                  /s/ DANIEL O. GAQUIN

                                                  Daniel O. Gaquin

DOG/jd
Enclosures
cc:          Troy A. Giammarco (w/enc.) (by overnight mail)
             Douglas B. McLaughlin, Esq. (w/enc.)


<PAGE>   3



                  [NET 2000 COMMUNICATIONS REAL ESTATE, INC.]



                                             February 15, 2000


Callowhill Management, Inc.
401 North Broad St.
Philadelphia, PA 19108

     RE:     Lease between Callowhill Management, Inc. and
             Net 2000 Communications Real Estate, Inc.;
             401 North Broad St., Philadelphia, PA

Gentlemen:

     Enclosed are (i) four (4) counterparts of the proposed Lease between
Callowhill Management, Inc. as Landlord, and Net 2000 Communications Real
Estate, Inc. ("Net 2000"), as Tenant, for space at 401 North Broad Street,
Philadelphia, all of which have been signed on behalf of Net 2000, (ii) four (4)
counterparts of a Memorandum of Lease Agreement for recording purposes, and
(iii) a check for $127,383.33, covering the rent for the first month of the Term
and the Security Deposit.

     Please note that we have made handwritten changes on pages 1, 2 and 3,
which should be initialed by the Landlord. Also, a plan of the demised premises
must attached as Exhibit A.

     As previously agreed with Troy Giammarco, the enclosed Leases are being
delivered to you for execution by the Landlord on the following understanding
and agreed:

     1)      The Landlord will obtain from the Master Lessor a Subordination and
Non-Disturbance Agreement in the form of the marked-up version which is enclosed
herewith;

     2)      The Landlord will use its best efforts to obtain a subordination
and non-disturbance agreement from the existing fee mortgagee in a form mutually
acceptable to such mortgagee and Net 2000;

     3)      The Landlord agrees to sign a Consent and Subordination Agreement
with Nortel Networks. Inc., or any successor to Nortel, in substantially the
form of the version enclosed herewith;

     4)      Following the signing of the Lease, the Landlord will cooperate
with Net 2000 to make reasonable changes to the Lease to correct language
conflicts which may have resulted from the addition of suggested revisions by
Net 2000 without the corresponding deletion of conflicting language; and



<PAGE>   4


     5)      Net 2000 will be given immediate access to the premises for the
purposes of preparing the premises for its occupancy, and that prior to the
commencement date of the Lease, such occupancy shall be upon all of the terms
and conditions of the Lease, except for the payment of rent and other charges.

     Would you please countersign this letter and return it together with
two (2) fully executed counterparts of the Lease and the Memorandum of Lease
Agreement. Thank you for your cooperation.



                                                  Very truly yours,

                                                  /s/ JASON KARP

                                                  Jason Karp


The terms of this letter are hereby acknowledged and agreed
to by the Landlord, Callowhill Management, Inc.


Callowhill Management, Inc.




By: ___________________

<PAGE>   5
                         MEMORANDUM OF LEASE AGREEMENT


           NAME AND ADDRESS
           OF LANDLORD:               CALLOWHILL MANAGEMENT, INC.
                                      401 North Broad Street
                                      Philadelphia, Pennsylvania 9108


           NAME AND ADDRESS
           OF TENANT:                 NET2000 COMMUNICATIONS REAL ESTATE, INC.
                                      2180 Fox Hill Road
                                      Herndon, Virginia 20171


           DATE OF LEASE:             December 15, 1999


           DESCRIPTION OF THE
           LEASED PREMISES:           23,000 square feet of space on the second
                                      floor and 1,800 square feet of space on
                                      the track level of the building located
                                      on the property at 401 North Broad Street,
                                      Philadelphia, Pennsylvania, which property
                                      is more particularly described in Exhibit
                                      A hereto.


           TERM OF LEASE:             Fifteen (15) years commencing on March 1,
                                      2000 and expiring at midnight on February
                                      28, 2015.


       Landlord and Tenant are entering into this Memorandum of Lease Agreement
pursuant to the provisions of the Act of General Assembly of Pennsylvania of
June 2, 1959, P.L. 454.

       This Memorandum of Lease Agreement is intended for recording
purposes only and does not supercede, diminish, add to or change the terms of
the Lease referred to herein.

       The parties hereto do hereby agree that this Memorandum of Lease
Agreement shall be interpreted in accordance with the laws of the Commonwealth
of Pennsylvania and shall be binding upon and inure to the benefit of the
parties herein, their heirs, personal representatives, successors and assigns.


<PAGE>   6


      IN WITNESS WHEREOF, the parties hereto have caused these
presents to be executed the ______ day of February, 2000.



                                                LANDLORD:

                                                CALLOWHILL MANAGEMENT, INC.



                                                By:
                                                    -------------------------
                                                    Name:
                                                    Its:

                                                TENANT:

                                                NET2000 COMMUNICATIONS REAL
                                                ESTATE, INC.


                                                By: /s/ JASON KARP
                                                    -------------------------
                                                    Name: Jason Karp
                                                    Its:  Asst. VP Reg. & Law
<PAGE>   7


                         COMMONWEALTH OF PENNSYLVANIA

County of_______________                                       ____________,2000


       Then personally appeared the above-named ____________________,
___________________ of Callowhill Management, Inc. and acknowledged the
foregoing instrument to be his/her free act and deed and the free act and deed
of Callowhill Management, Inc., before me,



                                          --------------------------------------
                                          Notary Public
                                          My commission expires:


                               STATE OF VIRGINIA

County of Fairfax                                                      2/25/2000

       Then personally appeared the above-named Jason Karp, ___________________
of Net2000 Communications Real Estate, Inc. and acknowledged the foregoing
instrument to be his/her free act and deed and the free act and deed of Net2000
Communications Real Estate, Inc., before me,



                                          /s/ SUSAN J. KERWIN
                                          --------------------------------------
                                          Notary Public
                                          My commission expires:



                                                    Susan J. Kerwin
                                                     Notary Public
                                                Commonwealth of Virginia
                                          My Commission Expires Dec. 31, 2001

<PAGE>   8


                                   EXHIBIT A

                               LEGAL DESCRIPTION
<PAGE>   9
                         SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

                                                      CALLOWHILL MANAGMENT, INC.

   THIS AGREEMENT,dated the ___ day of April, 1998, between (hereinafter called
"Master Lessee"), GERALD S. KAUFMAN CORP., with an office at 39 S. LaSalle
Street, Suite 1010, Chicago, Illinois 60603 (hereinafter called "GSK Corp"), and
NET 2000 COMMUNICATIONS REAL ESTATE, INC., a Delaware corporation, with an
office at 2180 Fox Hill Road, Herndon, VA 20171, (hereinafter called "Tenant").

                                  BACKGROUND:

A. Commerce Building of Philadelphia Inc., as lessor, entered into a certain
   lease agreement dated September 3, 1959 (the "Master Lease") with Rose
   Iacovone, as lessee, covering the building located at 401 North Broad Street,
   Philadelphia, PA (the "Property").

B. GSK Corp. (hereinafter called "Master Lessor") is the successors-in-interest
   to Commerce Building of Philadelphia Inc. pursuant to an assignment of the
   Master Lease, and Callowhill Management Inc. is the successor in interest to
   Rose Iacovone and the current holder of the lessee interest in and to the
   Master Lease.

C. Master Lessee and Tenant have entered into a certain lease of a portion of
   the Property (the "Lease").
<PAGE>   10
1. The Lease is and shall be subject and subordinate to the Master Lease insofar
   as it affects the real and personal property of which the Leased Premises
   forms a part, but only so long as this Agreement shall remain in full force
   and effect provided nothing contained in the Master Lease shall be deemed to
   adversely affect the rights of Tenant or increase the obligations of Tenant.

2. In the event Master Lessor takes possession of the Property and/or Leased
   Premises by termination of the Master Lease, or otherwise, Master Lessor
   agree not to affect or disturb Tenant's right to possession of the Leased
   Premises and any of its other rights under the Lease in the exercise of
   Master Lessor's rights so long as Tenant is not then in default, after
   applicable notice and/or grace periods, under any of the terms, covenants, or
   conditions of the Lease.

3. In the event that Master Lessor succeeds to the interest of Master Lessee or
   any other landlord under the Lease and/or to title to the Property and/or
   Leased Premises, Master Lessor and Tenant hereby agree after such succession
   to be bound to one another under all of the terms, covenants and conditions
   of the Lease' accordingly, from and after such event, Master Lessor and
   Tenant shall have the same remedies against one another for the breach of an
   agreement contained in the Lease as Tenant and Master Lessee had before
   Master Lessor succeeded to the interest of Master Lessee; provided, however,
   that Master Lessor shall not be:

  a) bound by any rent or additional rent which Tenant might have paid for more
     than the one month in advance to any prior landlord (including Master
     Lessee); or

  b) bound by any material amendment or modification of the Lease made without
     Master Lessor's written consent, which consent shall not be unreasonably
     withheld or delayed or
<PAGE>   11
   provided, however, that with respect to any default of Master Lessee (or the
   then landlord) under the Lease which cannot be remedied within such time (but
   which is capable of remedy), if Master Lessor commences to cure such default
   within such time and thereafter diligently proceeds and continues with such
   efforts, Master Lessor shall have such time as is reasonably necessary to
   complete curing such default.

6. Master Lessor agrees to make insurance and condemnation proceeds available
   for restoration as provided in the Lease notwithstanding any provisions in
   the Master Lease or any other document to the contrary.

7. In the event the Property or any part thereof shall be taken for public
   purposes by condemnation or transfer in lieu thereof or the same are damaged
   or destroyed, the rights of the parties to any condemnation award or
   insurance proceeds shall be determined and controlled by the applicable
   provisions of the Lease.

8. Should any action or proceeding be commenced to enforce any of the provisions
   of this Agreement or in connection with its meaning, the prevailing party in
   such action shall be awarded, in addition to any other relief it may obtain,
   its reasonable costs and expenses, including, without limitation, reasonable
   attorneys' fees and costs.

9. Tenant shall not be enjoined as a party/defendant in any action or proceeding
   which may be instituted or taken by reason of any default by Master Lessee
   (or the then landlord) in the performance of the terms, covenants, conditions
   and agreements set forth in the Master Lease.

10.
<PAGE>   12
11. This Agreement shall be binding upon and shall extend to and benefit the
    successors and assigns of the parties hereto (and to the permitted
    subtenants and concessionaires or Tenant) during the term of the Lease and
    any extension or renewal thereof. The term "Master Lessor" when used in
    this Agreement shall be deemed to include any person or entity which
    acquires title to or the right to possession of the Property and/or Leased
    Premises by, through or under Master Lessor and/or the Master Lease,
    whether directly or indirectly.

             IN WITNESS WHEREOF, the parties hereto have executed this Agreement
by their duly authorized officers the day and year first above written.

                                 MASTER LESSEE:
                                 CALLOWHILL MANAGEMENT, INC.

                                 BY:
                                    -----------------------
                             ATTEST:
                                    -----------------------

                                 /s/
                                ---------------------------


                                 /s/
                                ---------------------------
<PAGE>   13


STATE OF       :

               :   SS

COUNTY OF      :

       On this the ______ day of ______________, before me, the undersigned
Notary Public personally appeared Gerald S. Kaufman, who acknowledged himself to
be the President of Gerard S. Kaufman Corp. and that he as such President being
authorized to do so, executed the foregoing instrument for the purposes therein
contained by signing his name as President.

     Witness my hand and official seal.


     -----------------------------------
     Notary Public


STATE OF       :

               :   SS

COUNTY OF      :

       On this the ______ day of ______________, before me, the undersigned
Notary Public personally appeared _________________, who acknowledged himself
to be the ___________ of CALLOWHILL MANAGEMENT INC., a corporation, and that he
as such ______________, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself as _____________.

<PAGE>   14

                  LANDLORD CONSENT AND SUBORDINATION AGREEMENT

       This Landlord Consent and Subordination Agreement (this "Agreement") is
executed effective as of _________, 2000, by CALLOWHILL MANAGEMENT, INC. (the
"Landlord") to and for the benefit of NORTEL NETWORKS INC., both in its
individual capacity and as agent for the Lenders (hereinafter defined) and as a
Lender under the Credit Agreement (hereinafter defined) (in each such capacity,
hereinafter called "Nortel Networks"), and the Lenders.

                                   RECITALS:

       A. Pursuant to that certain Lease dated December 15, 1999 (as amended,
supplemented, restated or replaced from time to time, the "Lease") by and
between the Landlord, as lessor, and NET2000 COMMUNICATIONS REAL ESTATE, L.L.C.
(presently known as Net2000 Communications Real Estate, Inc.), as tenant or
lessee (the "Lessee"), the Landlord leased certain real property and related
interests (the "Premises"), to the Lessee, which Premises include approximately
24,800 square feet located on the second floor of the building located at 401
North Broad Street, Philadelphia, Pennsylvania, the legal description of which
is attached hereto as Exhibit A.

       B. The Lessee is a wholly owned subsidiary of Net2000 Communications
Group, Inc. ("NCGI").

       C. Nortel Networks and NCGI are parties to that certain Master Purchase
Agreement dated as of November 2, 1998 (as amended, supplemented or restated
from time to time, the "Supply Agreement") pursuant to which Nortel Networks has
sold and/or will sell and NCGI has purchased and/or will purchase certain
equipment and services.

       D. Nortel Networks, individually as a lender and as administrative agent
for certain other lenders to be identified (collectively, including Nortel
Networks and the successors and assigns of such other lenders and Nortel
Networks, the "Lenders") and NCGI have entered into that certain Amended and
Restated Credit Agreement dated as of July 30, 1999 (as amended, modified,
supplemented, and/or restated from time to time, the "Amended Credit Agreement")
pursuant to which the Lenders have agreed to make loans and perhaps provide
other credit extensions to the Lessee to, among other things, finance NCGI's
purchase of equipment under the Supply Agreement (the "Equipment").

       E. The Lessee has provided guarantees for such loans and liens on its
assets to secure such obligations related thereto pursuant to that certain
Amended and Restated Guaranty Agreement and Amended and Restated Pledge and
Security Agreement, both dated as of July 30, 1999, by and between Nortel
Networks and the Lessee.

       F. All amounts at any time owed or owing by NCGI to Nortel Networks under
the Supply Agreement and all loans and other extensions of credit that may be
made by the Lenders to NCGI pursuant to the Credit Agreement are or would be,
respectively, secured by various assets,

<PAGE>   15

including, without limitation, the Equipment and other personal property of the
Lessee and NCGI and/or Nortel Networks now or hereafter located on or about the
Premises.

       G. Nortel Networks requires that this Agreement be executed by the
Landlord in connection with the Supply Agreement and the Credit Agreement.

       NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Landlord hereby covenants and agrees with Nortel Networks and
the Lenders as follows (notwithstanding anything to the contrary contained in
the Lease):

       1.     Subordination of Liens, etc. (a) All equipment (including,
without limitation, the Equipment) and other property of the Lessee and/or
Nortel Networks from time to time located on or about the Premises (the
"Personal Property") is and shall remain personal property of the Lessee and/or
Nortel Networks (as applicable, as the Lessee and Nortel Networks may agree)
and shall not become any part of the Premises regardless of the manner of the
affixation thereto, and Nortel Networks and/or any Lender may at any time and
from time to time enter upon and otherwise have access to the Premises to
inspect, guard, maintain, prepare for sale, sell, repossess and/or remove the
Personal Property from the Premises in accordance with the terms of this
Agreement and/or the Lease, which sale, repossession and/or removal shall be
free and clear of any lien, security interest, right or claim ("Lien") which
the Landlord may now or hereafter have, such right and remedy of Nortel
Networks and the Lenders being independent of any other right or remedy Nortel
Networks and/or any Lender may have, and the Landlord will not in any manner
hinder, interfere or prevent any of the foregoing if carried out in accordance
with the terms of this Agreement. Notwithstanding the foregoing provisions of
this subparagraph (a), Nortel Networks and the Lenders may not, without the
prior written consent of the Landlord (which consent shall not be unreasonably
withheld, conditioned or delayed), enter upon or otherwise have access to the
Premises for the foregoing purposes at any time after the expiration of the
Access Period. For purposes hereof, the term "Access Period" shall mean the
period of time ending on the date that is the later to occur of (i) 45 days
after the initial date upon which the Lease is terminated and Nortel Networks
(or any successor "Administrative Agent" under the Credit Agreement) has
received written notice from the Landlord that such termination has occurred
(which notice may not be given prior to the date of termination of the Lease)
or (ii) the date upon which the Landlord recovers possession of the Premises
from the Lessee, whether by eviction in accordance with the laws of the
District of Columbia or the voluntary surrender of possession of the Premises
by the Lessee to the Landlord. Nortel Networks and the Lenders agree that they
will, from time to time promptly after any request by the Landlord to do so,
reimburse the Landlord for any and all damages directly caused by their removal
of the Personal Property from the Premises or repair such damages.

              (b)   Any and all liens, security interests, rights and claims of
every kind (whether contractual, statutory or otherwise) which the Landlord may
now or hereafter have with respect to the Personal Property or any portion
thereof (collectively, the "Landlord Liens"), and any and all rights or
remedies of every kind (whether contractual, statutory or otherwise) which the
Landlord may now or hereafter have to levy or distrain upon any Personal
Property or any interests therein or to claim or assert title to the Personal
Property or any portion thereof or to make any other claim

                                     -2-
<PAGE>   16

against the Personal Property or any portion thereof, are in each case hereby
expressly made and shall be subject and subordinate in every respect to any and
all liens, security interests, rights and claims and rights and remedies of
every kind (whether contractual, statutory or otherwise) which Nortel Networks
and/or any Lender may now or hereafter have with respect to the Personal
Property or any portion thereof (whether the same secure the indebtedness,
liabilities and/or obligations of the Lessee under the Supply Agreement and/or
the Credit Agreement or otherwise) (collectively, the "Nortel Networks Liens"),
including, without limitation, any rights to seize, hold, restrain, levy upon,
take possession of, sell or otherwise transfer or dispose of the Personal
Property. All Nortel Networks Liens in and to any Personal Property or proceeds
thereof shall in all respects be senior to and have priority over all Landlord's
Liens in and to any Personal Property or proceeds thereof irrespective of the
time or order of the creation or perfection of any Landlord's Liens.

              (c)   If at any time the Landlord comes into possession or control
of any proceeds of any Personal Property, such proceeds shall be held by the
Landlord for the benefit of Nortel Networks and the Lenders, to the extent of
their interests therein, and the same shall forthwith be paid and delivered to
Nortel Networks.

       2.     Assignment of Lease, etc. (a) The Lessee shall be permitted to
transfer and assign all right, title and interest of the Lessee in and to the
Lease to Nortel Networks and/or the Lenders and/or their successors and assigns
and, in the event of any such transfer or assignment, and provided Nortel
Networks and/or the Lenders and/or their successors or assigns (as applicable)
expressly assume in writing and agree to perform each of the Lessee's covenants,
duties and obligations which will arise and accrue from and after the date of
such transfer or assignment, the Landlord agrees that it will recognize Nortel
Networks and/or the Lenders and/or their successors and assigns (as applicable)
as the successor(s)-in-interest to the Lessee under the Lease as if Nortel
Networks and/or the Lenders and/or their successors or assigns (as applicable)
were the Lessee under the Lease; provided, however, that the Landlord shall not
be obligated to recognize Nortel Networks or any Lender as successor-in-interest
to the Lessee under the Lease unless such successor-in-interest is at least as
credit worthy as was the Lessee as of the initial date of the Lease.

              (b)   The Landlord hereby (i) confirms the existence and validity
of the Lease, (ii) confirms that the Landlord is the owner and holder of the
Lease, (iii) confirms that, to the Landlord's current, actual knowledge, no
monetary default and no other default has occurred under the terms of the Lease,
(iv) agrees to provide Nortel Networks (or its successors or assigns), at its
address specified below (or at the address of its successors or assigns of
which the Landlord is subsequently notified), a copy of any notice of default
delivered to the Lessee under the Lease substantially concurrently with the
delivery of such notice to the Lessee and, whether or not any notice of default
is delivered to the Lessee, agrees to notify Nortel Networks (or its successors
or assigns), at its address specified below (or at the address of its successors
or assigns of which the Landlord is subsequently notified), in writing within 30
days after the Lessee initially becomes in default under the Lease, and (v)
agrees that, prior to any termination of the Lease as a result of a default of
the Lessee thereunder, the Landlord will provide written notice of such default
to Nortel Networks (or its successors or assigns), at its address specified
below (or at the address of its successors or assigns of which the Landlord is
subsequently notified), and afford Nortel Networks (or its successors or
assigns) and the Lenders a period of time, after notice of such default is given

                                      -3-








<PAGE>   17
to Nortel Networks (or its successors or assigns), equal to the greater of (A)
the applicable cure period specified in the Lease or (B) 45 days after Nortel
Networks' receipt of such notice within which to cure such default. For purposes
of this Paragraph 2, the address of Nortel Networks is as follows:

          Nortel Networks Inc.
          GMS 991 15 A40
          2221 Lakeside Blvd.
          Richardson, Texas 75082-4399
          Attention:    Charles M. Helm, Esq.
          Telephone:    (972) 685-7839
          Telecopier:   (972) 684-3679

In addition, within ten business days after written request by Nortel Networks
(or its successors or assigns) or any Lender (which request may not occur more
often than twice during any calendar year in the case of an estoppel
certificate or other instrument referred to in clause (A) succeeding), the
Landlord will execute and deliver in favor of Nortel Networks (or its successors
or assigns) and/or the Lenders (as may be requested) (A) an estoppel certificate
or other instrument in form reasonably acceptable to Nortel Networks (or its
successors or assigns) or such Lender (as applicable) pursuant to which the
Landlord will, as of the then current date, reconfirm each of the matters
referred to in clauses (i), (ii) and (iii) preceding (or specify any facts which
prevent any such reconfirmation) and (B) in the event that Nortel Networks (or
its successors or assigns) or any Lender has succeeded to the rights of the
Lessee under the Lease in accordance with Section 2(a) hereof, a new lease with
respect to the Premises in form and substance essentially identical to the Lease
naming Nortel Networks (or its successor or assigns) and/or the Lenders (as may
be requested) as lessee and the Landlord as lessor.

          3. No Obligation of Nortel Networks or Lenders. Nothing contained
herein shall be deemed or construed to obligate Nortel Networks or any Lender to
take any action hereunder or under or with respect to the Lease or to perform or
discharge any indebtedness, liability, obligation or duty of the Lessee under
the Lease.

          4. Successors and Assigns. This Agreement shall inure to the benefit
of Nortel Networks and the Lenders and their successors and assigns, including
any person or entity who shall have succeeded to Nortel Networks' or any
Lender's interest by, through or under judicial foreclosure or private sale or
other proceedings, or deed in lieu of foreclosure, or otherwise. Without
limiting the generality of the foregoing, all rights, remedies, benefits and
privileges of Nortel Networks under this Agreement shall inure to the benefit of
the "Administrative Agent" and the "Lenders", as such terms are defined in the
Credit Agreement, under the Credit Agreement, and all such rights, remedies,
benefits and privileges may, at any time at the option of Nortel Networks and
without the necessity of any consent or approval of the Landlord or the Lessee,
be transferred or assigned to the "Administrative Agent" as such term is defined
in the Credit Agreement.



                                       -4-


<PAGE>   18




            Executed as of the date first above written.

                                             LANDLORD:

                                             CALLOWHILL MANAGEMENT, INC.

                                             By:
                                                ------------------------
                                             Name:
                                                  ----------------------
                                             Title:
                                                   ---------------------

            The foregoing Agreement is hereby agreed to and consented to by the
Lessee.

                                             LESSEE:

                                             NET2000 COMMUNICATIONS REAL
                                               ESTATE, INC. (formerly known as
                                               Net2000 Communications Real
                                               Estate, L.L.C.)

                                             By:
                                                ------------------------
                                             Name:
                                                  ----------------------
                                             Title:
                                                   ---------------------


                                       -5-


<PAGE>   19






STATE OF ___________)
                    )
COUNTY OF___________)

            This instrument was acknowledged before me on ____________ , 2000,
by ____________________, _________________________ of Callowhill Management,
Inc., a ________________________, on behalf of said entity.

                                        ----------------------------------------
                                        Notary Public for the State of_______

                                        ----------------------------------------
                                        Print Name of Notary

My Commission Expires:
                      ------

STATE OF ____________)
                     )
COUNTY OF____________)

            This instrument was acknowledged before me on _______________, 2000,
by ___________________, ________________ of Net2000 Communications Real Estate,
Inc., a Delaware corporation, on behalf of said entity.

                                        ----------------------------------------
                                         Notary Public for the State of______

                                        ----------------------------------------
                                        Print Name of Notary

My Commission Expires:
                       -------




                                       -6-




<PAGE>   20






                                    EXHIBIT A

                          LEGAL DESCRIPTION OF PREMISES










                                       -7-
<PAGE>   21

                            401 NORTH BROAD STREET
                          PHILADELPHIA, PENNSYLVANIA

THIS AGREEMENT OF LEASE ("Lease") is made this 15th day of December 1999, by (i)
CALLOWHILL MANAGEMENT, INC. (hereinafter referred to as "Landlord") and (ii) NET
2000 COMMUNICATIONS REAL ESTATE, INC. (hereinafter referred to as "Tenant")

WHEREAS, Tenant desires to lease space in the building located at 401 North
Broad Street, Philadelphia, Pennsylvania (the "Building") and Landlord is
willing to rent Tenant space in the Building, upon the terms, conditions,
covenants and agreements set forth herein.

NOW, THEREFORE, the parties hereto, intending legally to be bound, hereby
covenant and agree as set forth below.

THE PREMISES 1. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord, for the term and upon the terms, conditions, covenants and agreements
hereinafter provided, 23,000 square feet of space, located on the 2nd floor and
1,800 square feet of space, located at the track level, of the Building (such
space being hereinafter referred to as the "premises"). The premises are
outlined in red on Exhibit A attached hereto and made a part hereof. The lease
of the premises includes the right, together with other tenants of the Building
and members of the public, to use the common public areas of the Building, but
includes no other rights not specifically set forth herein. Promptly following
the execution hereof, Landlord shall finish the premises as set forth in Exhibit
B attached hereto and made a part hereof. It is understood and agreed that
Landlord will not make, and is under no obligation to make, any structural or
other alterations, decorations, additions or improvements in or to the premises
except as set forth in Exhibits B.

TERM 2. The term of this Lease (hereinafter referred to as the "term") shall be
for a period commencing on March 1, 2000 (The "Lease Commencement Date") and
expiring at midnight on February 28, 2015 (the "Lease Expiration Date"). If,
pursuant to the provisions of the Lease, the term of this Lease begins on a date
other than the Lease Commencement Date indicated above, then Landlord shall
advise Tenant in writing of such shall be such date and thereafter the Lease
Commencement Date shall be such specified date. The Lease Expiration Date shall
remain unchanged. Tenant shall have the right to enter the Premises after the
execution hereof and prior to the Commencement Date to make alterations and
improvements and generally to prepare the Premises for Tenant's use and
occupancy. Such entry shall be upon all of the terms and conditions of this
lease, except that Tenant shall not be required to pay any Base Rent,
additional rent or other charges during or for such period, except for charges
for utilities.

RENT 3. Tenant shall pay as rent for the premises the following amounts (each of
which shall be considered rent and all of which are collectively referred to
herein as "rent"):

        (a) BASIC RENT. For the period commencing March 1, 2000 and expiring
February 28, 2005, the sum of seven hundred ninety-three thousand six hundred
and 00/100 Dollars ($793,600.00) annually, payable in equal monthly
installments, in advance, of sixty-six thousand one hundred thirty-three and
33/100 Dollars


                                       1
<PAGE>   22


($66,133.33) each, and for the period commencing March 1, 2005 and expiring
February 28, 2010, the sum of eight hundred sixty-eight thousand and 00/100
dollars ($868,000.00) annually, payable in equal monthly installments, in
advance, of seventy-two thousand three hundred thirty-three and 33/100 dollars
($72,333.33) each, and for the period commencing March 1, 2010 and expiring
February 28, 2015, the sum of nine hundred seventeen thousand six hundred and
00/100 dollars ($917,600.00) annually, payable in equal monthly installments,
in advance, of seventy-six thousand four hundred sixty-six and 67/100 dollars
($76,466.67) each, the first payment to be made upon the signing of this Lease
by Tenant, and the second and subsequent monthly payments to be made on the
first day of each and every calendar month (beginning with the second month)
during the term hereof. If the term of this Lease begins on a date other than
on the first day of a month, rent from such date until the first day of the
following month shall be prorated at the rate of one-thirtieth (1/30th) of the
fixed monthly rental for each day, payable in advance. Tenant will pay said
rent to Landlord, at the office of Landlord or to such other party or to such
other address as Landlord may designate from time to time by written notice to
Tenant.

       (b) INCREASE IN REAL ESTATE TAXES. Tenant shall pay to Landlord one and
eight tenths percent (1.8%) (being the approximate and agreed upon proportions
which the floor area of the premises bears to the total rentable floor area of
the premises bears to the total rentable floor area above grade of the Building)
of the increase in real estate taxes (including special assessments, if any, and
any other taxes now or hereafter imposed which are in the nature of or in
substitution for real estate taxes) levied on the Building and the land on
which the Building is situated (the "Land") over the "Base Real
Estate Taxes". For purposes hereof, the Base Real Estate Taxes are the annual
real estate taxes levied on the later of (i) the calendar year 2000 or (ii) the
calendar year of the Lease Commencement Date. At any time or times after the
year in which the Base Real Estate Taxes are determined, Landlord may submit to
Tenant a statement of Landlord's estimate of any such tax increase over the Base
Real Estate Taxes and within thirty (30) days after delivery of such statement
(including any statement delivered after the expiration or termination of this
Lease), and each month thereafter, Tenant shall pay to Landlord, as additional
monthly rent, an amount equal to one-twelfth (1/12) of the amount determined to
be Tenant's aforesaid percentage of such increase in annual real estate taxes.
Within ninety (90) days after the expiration of each calendar year in which
Tenant's monthly rent is increased pursuant to this paragraph, Landlord shall
submit, a statement showing the determination of the total increase and Tenant's
proportionate share of such increase. If such statement shows that Tenant's
monthly payments pursuant to this paragraph exceeded Tenant's share of the
actual increase incurred for the preceding calendar year, then Tenant may deduct
such overpayment from its next payment or payments of monthly rent. If such
statement shows that Tenant's share of Landlord's actual increase exceeded
Tenant's monthly payments for the preceding calendar year, then Tenant shall,
within thirty (30) days, pay the total amount of such deficiency to Landlord. In
the event that the Lease Expiration Date is not December 31st, the increase to
be paid by Tenant for the calendar year in which the Lease Expiration Date
occurs shall be determined by multiplying the amount of Tenant's share thereof
for the full calendar year by a fraction with the number of days during such
calendar year prior to the Lease Expiration Date as the numerator, and with 365
as the denominator. Any special


                                       2
<PAGE>   23

assessments or betterments shall be amortized over the longest period allowed by
law. Landlord warrants and represents that the Base Real Estate Taxes represent
a full and final assessment for the applicable Base Year (2000), without
abatement, reduction or deduction, and that such taxes are not subject to
abatement. Tenant shall not be liable for any Real Estate Taxes which are not
billed to Tenant within one (1) year after the year for which such taxes are
payable under the Lease. If Landlord receives a tax abatement for any year for
which taxes were paid by Tenant, Landlord shall promptly pay to Tenant Tenant's
pro-rata share of such abatement, less the reasonable costs and expenses
incurred to obtain the same. Landlord shall provide Tenant with a copy of
Landlord's tax bill with the annual statement.

       (c) INCREASE IN OPERATING COSTS. Tenant shall pay to Landlord one and
eight tenths (1.8%) (being the approximate and agreed upon proportion which the
floor area of the premises bears to the total rentable floor area above grade of
the Building) of the increase during the term of this Lease in Annual Operating
Charges (as hereinafter defined) over the Base Operating Charges (as hereinafter
defined). The Annual Operating Charges are hereby defined as the sum of the
following costs and expenses related directly to the operation and maintenance
of the common areas and facilities of the Building: (i) gas, electricity,
water, sewer and other utility charges (including surcharges) of whatever
nature, (ii) insurance, (iii) building personnel costs, including, but not
limited to, salaries, wages, fringe benefits and other direct and indirect
costs of engineers, superintendents, watchmen, porters and any other building
personnel, provided such costs are for on-site personnel involved directly in
building maintenance or personnel at the level of building manager or below,
(iv) costs of arms length third party service and maintenance contracts,
including, but not limited to, chillers, boilers, controls, elevators, mail
chute, window, janitorial and general cleaning, security services, and
management fee, (v) all other maintenance and repair expenses and supplies
which are deducted by Landlord in computing its Federal Income tax liability,
as permitted by federal law, (vi) any other costs and expenses (i.e. items
which are not capital improvements) incurred by Landlord in operating the
Building and (vii) the cost of any additional services not provided to the
Building at the Lease Commencement Date but thereafter provided by Landlord in
the prudent management of the Building. If, after determination of the Base
Operating Charges, Landlord installs energy saving devices designed to reduce
the level of consumption of one or more utility services provided in the
Building, then for purposes of subsection (i) of this Paragraph 3(a), the
charges for each such affected utility service shall be the lesser of either
the actual cost of such utility service plus the amortized cost of purchasing
and installing the energy saving device (as used by Landlord for federal income
tax purposes), or the present cost of providing the same level of such utility
service as was consumed in the twelve (12) month period immediately preceeding
the installation of the energy saving device(s) (level of service multiplied by
present rate charges for such service). In the event that any business, rent or
other taxes which are now or hereafter levied upon Tenant's use or occupancy of
the premises or Tenant's business at the premises or on Landlord specifically
and directly by virtue of Tenant's occupancy of the premises, are enacted,
changed or altered so that any of such taxes are levied against Landlord or the
mode of collection of such taxes is changed so that Landlord

                                      3
<PAGE>   24

is responsible for collection or payment such taxes, any and all such taxes
shall be deemed to be a part of the Annual Operating Charges and Tenant shall
pay the taxes that would otherwise be imposed on it to Landlord. Annual
Operating Charges shall not include (i) principal encumbrances, (ii) leasing
commissions payable by Landlord, (iii) deductions for depreciation of the
Building, (iv) capital improvements which are not deducted by Landlord in
computing its Federal Income tax liability, (v) leasehold improvement,
alterations and decorations or other work done for tenants of the Building, and
services (such as painting) performed for any tenant (including Tenant) of the
Building, whether at the expense of Landlord or such tenant, (to the extent that
such work or services are in excess of the work or services which Landlord is
required to furnish to Tenant under this Lease at Landlord's expense, (vi) costs
incurred in connection with the making of repairs which are the obligation of
another tenant of the Building, (vii) advertising and promotional expenditures
or contributions or gifts, (viii) costs incurred in connection with Landlord's
preparation, negotiation and/or enforcement of leases, including court costs and
attorneys' fees and disbursements in connection with any summary proceeding to
dispossess any tenant, (ix) financing and refinancing costs in respect of any
mortgage placed upon the Property, including points and commissions in
connection therewith, (x) interest or penalties for any late payments by
Landlord, (xi) costs (including, without limitation, attorneys' fees and
disbursements) incurred in connection with any judgment, settlement or
arbitration award resulting from any tort liability, (xii) compensation paid to
any Building employee to the extent that the same is not fairly allocable to the
work or service provided by such employee to the Property, (xiii) costs relating
to any retail, residential, garage or storage space in the Building, (xiv)
estate, franchise, succession, inheritance, profit, use, occupancy, gross
receipts, rental, capital gains, and transfer taxes imposed upon Landlord, the
Building or the Land, (xv) leasing and brokerage fees and commissions, (xvi)
costs of installing, operating and maintaining any specialty service such as an
observatory, park, broadcasting facilities, luncheon club, athletic or
recreational club, (xvii) costs (including increased Taxes and Operating Costs)
of any additions to the Building after the original construction, (xviii) costs
of any repairs, alterations, additions, changes, replacements and other terms
which, under generally accepted accounting principles, are classified properly
as capital expenditures, (xix) interest or amortization on any loan or mortgage
with respect to the Land or the Building, (xx) depreciation, amortization and/or
other non-cash charges, (xxi) costs of repairs or replacements incurred by
reason of fire or other casualty or caused by the exercise of the right of
eminent domain whether or not insurance proceeds or a condemnation award are
recovered or adequate for such purposes, (xxii) costs of any heating,
ventilating, air-conditioning, janitorial or other Building services provided to
other tenants during other than operating hours, (xxiii) management fees in
excess of the level of fair market management fees for comparable properties
(and in no event greater than three percent (3%) of gross rental collections per
year), (xxiv) rent or imputed rent on any portion of the Building used in
connection with the management or operation of the Building, (xxv) legal and
auditing fees or other professional fees, other than those reasonably incurred
in connection with the maintenance and routine operation of the Land and
Building, (xxvi) any rent, additional rent or other charge under any lease
                                       4

<PAGE>   25
or sublease to or assumed by Landlord, (xxvii) salaries and frinqe benefits of
personnel above the grade of building manager, wages, salaries and other
compensation paid for clerks or attendants in concession or newsstands operated
by Landlord, (xxviii) rent or other charges payable under any ground or
underlying lease, (xxix) costs of any item which are reimbursable to Landlord by
other tenants or third parties, (xxx) lease payments for rented equipment, the
cost of which equipment would constitute a capital expenditure if the equipment
were to have been purchased (except to the extent that amortization of any such
capital expenditure would be permitted as an Operating Expense pursuant to this
section), (xxxi) the cost of furnishing and installing replacement light bulbs
and ballasts in any tenanted areas of the Building, (xxxii) any expenditures on
account of Landlord' s acquisition of air or similar development rights,
(xxxiii) there shall be deducted from Operating Costs an amount equal to all
amounts received by Landlord through proceeds of insurance to the extent the
proceeds are compensation for expenses which (a) are included in Operating
Expenses hereunder, (b) are included in Operating Expenses for the Operating
Year in which the insurance proceeds are received or (c) will be included as
Operating Expenses in a subsequent Operating Year, (xxxiv) costs end expenses of
governmental licenses and permits, or renewals thereof, unless the same are for
governmental licenses or permits normal to the operation or maintenance of the
Land or Building, (xxxv) costs of any work or service performed for any facility
or property other than the Building, (xxxvi) costs of tools and equipment
purchased in connection with the initial operation, repair, decoration or
maintenance of the Land or Building, (xxxvii) costs related exclusively to the
garage or to any retail or storage space in, on or about the Building or
appurtenant or adjacent thereto, (xxxvii) any costs which are not an armslength
competitive market prices for goods or services including any amounts paid to
any person, firm or corporation related or otherwise affiliated with landlord or
any general partner, officer or director of Landlord or any of its general
partners, (xxxviii) costs relating to maintaining Landlord's existence, either
as a corporation, partnership, or other entity, such as trustee's fees, annual
fees, partnership organization or administration expenses, deed recordation
expenses, legal and accounting fees (other than with respect of Building
operations), (xxxix) costs incurred to contain, encapsulate, remove, or remedy
any hazardous or toxic wastes, materials or substances from either the Building
or Land and/or any tests or surveys obtained in connection with the above. The
Base Operating Charges are hereby defined as the Annual Operating Charges for
the later to occur of (i) the calendar years in which the Lease Commencement
Date occurs or (ii) or calendar year 2000. At any time or times after the year
in which the Base Operating Charges are determined, Landlord may submit to
Tenant an estimate of the increase of the Annual Operating Charges over the Base
Operating Charges and within thirty (30) days after the delivery of such
statement, and each month thereafter, Tenant will pay to Landlord, an additional
monthly rent, an amount equal to one-twelfth (1/12th) of the amount determined
to be Tenant's aforesaid percentage of the increases in Annual Operating
Charges. Within ninety (90) days after the expiration of each calendar year in
which Tenant's monthly rent is increased pursuant to this paragraph, Landlord
may submit, or upon the request of Tenant, Landlord shall submit, a statement
showing the determination of the total increase and Tenant's proportionate share
of such increase. If such statement shows

                                       5
<PAGE>   26

that Tenant's monthly payments pursuant to this paragraph exceeded Tenant's
share of the actual increase incurred for the preceding calendar year, then
Tenant may deduct such overpayment from its next payment or payments of monthly
rent. If such statement shows that Tenant's share of Landlord's actual increase
exceeded Tenant's monthly payments for the preceding calendar year, then Tenant
shall pay the total amount of such deficiency to Landlord within thirty (30)
days of receiving Landlord's statement. Such deficiency shall constitute
additional rent hereunder due and payable with the first monthly installment of
rent due after rendition of said statement, or if payments have been accelerated
pursuant to Paragraph 17(b)(iv) below, within thirty (30) days after rendition
of such statement. In the event that the Lease Expiration Date is not December
31st, the increase to be paid by Tenant for the calendar year in which the Lease
Expiration Date occurs shall be determined by multiplying the amount of Tenant's
share thereof for the full calendar year by a fraction with the number of days
during such calendar year prior to the Lease Expiration Date as the numerator,
and with 365 as the denominator.

     Tenant shall have the right to review and audit Landlord's books and
records from time to time, not more than once per calendar year, upon request,
to verify and reconcile the Real Estate Taxes and Operating Charges payable by
Tenant hereunder. Landlord agrees to cooperate with Tenant and provide Tenant
with reasonable substantiation of charges upon request, including copies of
invoices, and with access to Landlord's books and records during business hours
upon reasonable prior notice.

     If Tenant's review or audit discloses any overpayment by Tenant,
Landlord shall promptly refund the same to Tenant or Tenant may deduct such
amount from its next payment or payments of rent.

     Tenant shall not be liable to Landlord for any Operating Charges billed to
Tenant more than one (1) year after the year for which such charges were
incurred and are payable under this Lease.

     (d) INCREASE IN COST OF LIVING. DELETED

     (a)   DEMAND; TIME. Each of the foregoing amounts of rent shall be paid to
Landlord without demand and without deduction, set-off or counterclaim on the
first (1st) day of every month during the term of this Lease, except as
otherwise provided herein. If Landlord shall at any time or times accept rent
after it shall become due and payable, such acceptance shall not excuse a delay
upon subsequent occasions, or constitute, or be construed as, a waiver of any or
all of Landlord's rights hereunder.

USE OF PREMISES 4. Tenant will use and occupy the Premises solely for the
conduct of the following business: general office use and the installation,
operation and maintenance of equipment and facilities in connection with
Tenant's telecommunication business, including, without limitation, co-location
and the installation and use of racks, switches, conduits, cabling, and other
telecommunications equipment, and only in accordance with the uses permitted
under applicable zoning and other municipal regulations; without the prior
written consent of Landlord, the premises will not be used for any other
purpose. Tenant will not use or occupy the premises for any unlawful purpose,
and will comply with all present and future laws, ordinances, regulations, and
orders of the United States of America, the City of Philadelphia, and any other
public or quasi-public authority having jurisdiction over the Premises, relative
to

                                       6
<PAGE>   27

Tenant's specific manner of use. Landlord warrants and represents to Tenant that
the Building is zoned to permit Tenant's use of the Premises as a
telecommunications switch site as a matter of right. Landlord's consent to any
change of use shall not be unreasonably withheld or delayed.

ASSIGNMENT AND SUBLETTING 5. (a) Landlord's Consent Required. Tenant (or its
representatives, successors, or assigns) will not assign, transfer, mortgage or
otherwise encumber this Lease or sublet or rent (or permit occupancy or use of)
the premises, or any part thereof, without obtaining the prior written consent
of Landlord, which consent shall not be unreasonably withheld, delayed, or
conditioned, nor shall any assignment or transfer of this Lease or the right of
occupancy hereunder be effectuated by operation of law or otherwise without the
prior written consent of Landlord.

       (b)    Prerequisites to Sublease. Landlord shall not unreasonably
withhold its consent hereunder to any sublease by Tenant, provided that all of
the following conditions are met:

           (i) Tenant must first notify Landlord, in writing, of any proposed
sublease, at least sixty (60) days prior to the effective date of such proposed
sublease. Such notice must include a copy of the proposed sublease, and an
audited copy of the proposed subtenant's most recent financial statement, if
available, or other financial information satisfactory to Landlord in his
reasonable judgment, prepared by a certified public accountant.

           (ii) The subtenant must have a credit rating satisfactory to
Landlord (in Landlord's sole but reasonable judgment).

           (iii) The sublease must be specifically subject and subordinate to
this Lease, require that any subtenant must abide by all of the terms of this
Lease, and provide that any termination of this Lease shall extinguish the
sublease as well.

           (iv) The rent per square foot for any subleased space shall be no
less than the rate being charged Tenant for the premises. If the rent per square
foot for the subleased space exceeds the rate being charged Tenant for the
premises, or Tenant receives any other consideration in addition to the rent for
the subleased space, the sublease must provide that one-half of the amount of
such excess and/or additional consideration be paid to Landlord each month as
additional rent under this Lease due and payable on the first day of each month,
provided Tenant shall first be entitled to recoup any costs or expenses incurred
to effect the sublease, including brokerage commissions, attorneys' fees,
allowances or instructions or incentives.

           (v) The subtenant may not change the use of the premises, or
propose to conduct its business in a manner which, in Landlord's reasonable
judgment, is not appropriate for a buildinq in Downtown Philadelphia.

           (vi) The subtenant may not be a tenant, subtenant, or other occupant
of any part of the Building.

           (vii) The Tenant may not be in material default hereunder, or have
committed two events of default during the previous twelve (12) months, after
notice and expiration of any applicable cure period.

           (viii) DELETED

           (ix) DELETED

       (c) Option to Reclaim Premises. Except in the case of a permitted
transfer, if Tenant proposes to sublet 50% or more of the Premises, Landlord
shall have the option to reclaim any portion of the premises which Tenant
proposes to sublease, by giving written notice to Tenant within sixty (60) days
of Landlord's receipt of the notice specified in 5 (b)(i). Upon the


                                       7

<PAGE>   28

exercise of such option, Tenant shall, on the date when the proposed sublease
was to commence, surrender that portion of the premises to be reclaimed, and the
rent pursuant to 3(a), 3(b), and 3(c) above shall be reduced proportionately.
All other terms and conditions of this Lease shall otherwise remain in force and
effect. Landlord may make any alterations, modifications, or improvements to the
premises it deems necessary for the reclaiming of any portion of the premises,
provided Tenant's use and acceptance of the remaining premises or its access
thereto is not impaired.

       (d)    No Waiver or Release. The consent by Landlord to any assignment or
subletting shall not be construed as a waiver or release of Tenant from the
terms of any covenant or obligation under this Lease, nor shall the collection
or acceptance of rent from any such assignee, subtenant or occupant constitute
a waiver or release of Tenant of any covenant or obligation contained in this
Lease, nor shall any such assignment or subletting be construed to relieve
Tenant (or its representatives, successors, or assigns) from obtaining the
consent in writing of Landlord to any further assignment or subletting. In the
event that Tenant defaults hereunder, Tenant hereby assigns to Landlord the rent
due from any subtenant of Tenant and hereby authorizes each such subtenant to
pay said rent directly to Landlord.

       (e)    Notwithstanding anything to the contrary in this Lease, Tenant
shall be permitted to assign the Lease, or sublease all or any portion of the
premises, to an affiliate without Landlord's consent. Affiliates shall include
entities which; (i) are controlled by or are under common control with Tenant;
or (ii) result from a merger or consolidation of tenant; or (iii) acquires the
business being conducted on the premises.

       (f)    Notwithstanding anything to the contrary in Section 5 of this
Lease, Landlord's consent shall not be required with respect to the following:

              (1)    transactions with an entity into which Tenant is merged or
consolidated, or to which all or substantially all of the stock or assets of
Tenant are transferred, or to which all or substantially all of Tenant's
business at the premises is transferred;

              (2)    transactions with an entity which controls, is controlled
by or is under common control with Tenant;

              (3)    an initial public offering of Tenant's stock or the
trading of Tenant's stock on a nationally recognized securities exchange; or

              (4)    the collocation or licensing of telecommunications services
in any form, including the subletting of cabinets, racks and other equipment.

MAINTENANCE BY TENANT 6. (a) Obligations of Landlord and Tenant. Landlord shall
maintain and repair the public portions of the Building, both exterior and
interior, and keep them in good clean order and condition. All bulbs, tubes and
lighting fixtures for the premises shall be provided and installed by Tenant at
Tenant's cost and expense. Tenant will keep the interior and non-structural
portions of premises and fixtures and equipment therein in clean, safe and
sanitary condition, will take good care thereof, will suffer no waste or injury
thereto, and will, at the expiration or other termination of the term of this
Lease, surrender the same, broom clean, in the same order and condition in which
they are on the Lease Commencement Date, ordinary wear and tear and unavoidable
damage by the elements excepted.

                                        8


<PAGE>   29


       (b)    Damage to Premises or Building. All damage or injury to the
premises or to any other part of the Building, or to its fixtures, equipment and
appurtenances, whether requiring structural or nonstructural repairs, caused by
or resulting from carelessness, omission, neglect or improper conduct of Tenant,
Tenant's agents, employees, contractors, invitees or licensees, shall be
repaired promptly, at Tenant's sole cost and expense, by either Landlord, or by
Tenant subject to Landlord's direction and supervision (and in accordance with 7
hereof), at Landlord's option. If Landlord gives Tenant written notice that it
will be required to make such repairs, and Tenant fails within ten days of the
giving of such notice to proceed with due diligence to make the required
repairs, the same may be made by Landlord. All expenses incurred by Landlord in
making repairs or replacements under this 6(b) shall be collectible as
additional rent due and payable pursuant to 17(d) below; provided that Tenant
shall not be liable hereunder to the extent that Landlord is insured for such
hazards and damages under a policy containing a waiver of subrogation clause and
is reimbursed by its insurer for its losses.

       (c)    Notice of Defective Condition. Tenant shall give Landlord prompt
notice of any defective condition in any plumbing, heating system or electrical
lines located in, servicing or passing through the premises of which Tenant
becomes aware. Following such notice Landlord shall remedy the condition with
due diligence. Except if caused by Landlord's gross negligence or willful
misconduct, there shall be no allowance to Tenant for a diminution of rental
value and no liability on the part of Landlord by reason of inconvenience,
annoyance or injury to business arising from Landlord, Tenant or others, making
or failing to make any repairs, alterations, additions, or improvements in or to
a portion of the Building or the premises or in or to the fixtures,
appurtenances or equipment therof.

TENANT ALTERATIONS 7. (a) The original improvement of the premises by Landlord
for Tenant shall be in accordance with Exhibit B attached hereto. Except for
Tenant's Initial Improvements Tenant will not make or permit anyone to make any
alterations, decorations, additions or improvements, structural or otherwise
(hereafter the "Alterations"), in or to the premises or the Building, without
the prior written consent of Landlord, which shall not be unreasonably
withheld, conditioned, or delayed. Landlord may condition its original consent,
and may demand that Tenant post an additional security deposit to guarantee
such performance. Any Alterations, permitted by Landlord must be done by
licensed and insured contractors or mechanics approved by Landlord (whose
approval will not be unreasonably withheld), must conform to all rules and
regulations established from time to time by the Underwriters' Association of
Philadelphia and conform to all requirements of the Federal and City of
Philadelphia governments. Tenant (and its contractors and/or subcontractors),
before making any Alteration shall obtain, at its expense, all necessary
permits, certificates (including certificates of final approval upon
completion) and approvals, and shall deliver duplicates of same to Landlord.
Tenant will carry and will cause its contractors and subcontractors to carry,
such worker's compensation, liability, personal and property damage insurance
as is legally required. As an additional condition precedent to such written
consent of Landlord, Tenant agrees to obtain and deliver to Landlord written
and unconditional waivers of mechanics' and materialmens' liens upon the Land
and Building of which the


                                       9

<PAGE>   30
premises are a part, for all work, labor and services to be performed, and
materials to be furnished, by them in connection with such work, signed by
Tenant's general contractor, subcontractors, materialmen and laborers who
become involved in such work. If, notwithstanding the foregoing, any mechanic's
or matarialmen's lien is filed against the premises, the Building and or the
Land, for work claimed to have been done for, or materials claimed to have been
furnished to, Tenant, such lien shall be discharged by Tenant within twenty
(20) days thereafter, at Tenant's sole cost and expense by the payment thereof
or by filing any bond required by law. If Tenant shall fail to discharge any
such mechanic's or materialmen's lien, Landlord may, at its option, discharge
the same and treat the cost thereof as additional rent payable with the monthly
installment of rent next becoming due; it being hereby expressly covenanted and
agreed that such discharge by Landlord shall not be deemed to waive, or release,
the default of Tenant and not on behalf of Landlord, and that Tenant shall be
deemed to be the "owner" (and not the "agent" of Landlord). It is further
understood and agreed by Landlord and Tenant that any such Alterations shall be
conducted on behalf of Tenant and not on behalf of Landlord, and that Tenant
shall be deemed to be the "owner" (and not the "agent" of Landlord). It is
further understood and agreed that in the event Landlord shall give its written
consent to Tenant's making any such Alterations, such written consent shall not
be deemed to be an agreement or consent by Landlord to subject Landlord's
interest in the premises, the Building or the Land to any mechanic's or
materialmen's liens which may be filed in respect of any such alterations made
by or on behalf of Tenant. Landlord and Tenant agree that:

             (1) Tenant shall have the license and right, in preparing the
Premises for Tenant's occupancy and during the term of this Lease (i) to
utilize existing risers and conduit and/or install new conduit to all floors of
the Building, and (ii) to install cable, HVAC piping, electric wiring, fuel
lines and control circuitry through such risers and conduits as necessary to
connect Tenant's equipment and facilities. All work in such common areas will
be done by the Building designated contractor, at the expense of Tenant. The
installation of new conduit may include the removal and replacement of curbing
and/or sidewalks. There shall be no additional compensation payable by Tenant
for such right to use and place conduit and cable.

             (2) Any conduit and cable installed by Tenant shall become the
property of Landlord and shall be surrendered with the premises upon the
expiration of the Lease.

             (3) Tenant shall have the right to core drill from the premises to
the lowest level of the Building as necessary to install new conduit. The
scheduling of all core drilling shall be coordinated with the Landlord.

             (4) Tenant shall have the right to install HVAC equipment in the
premises or on the track level of the Building after such plans have been
submitted for approval.

             (5) Tenant shall have the right to install drains for HVAC
equipment.

             (6) Tenant shall have the right to relocate and reconnect primary
air ductwork and/or secondary water piping located in the premises, subject to
Landlord's approval, not to be unreasonably withheld, conditioned or delayed.

             (7) Tenant, at its sole cost and expense, shall provide to Tenant's
premises, Tenant's required electric capacity on a separate breaker with bus
duct dedicated to Tenant (such equipment will be designated by Landlord).

                                       10
<PAGE>   31



             (8) Tenant shall have the right to install a generator plug on the
track level adjacent to the loading dock area for the purpose of connecting the
premises to a portable generator in the event of a Building power failure.

             (9)  Tenant shall have the right to install a diesel generator and
fuel storage tanks at the track level of the Building.

             (10) Tenant shall have the right to install a fire suppression
system independent of the Building's systems. Such system shall be connected to
the building's life safety system.

             (11) Tenant shall have the right to modify the Building's sprinkler
system serving its premises to a dry system.

             (12) Tenant shall have the right, at no additional charge, during
the term of this Lease, to use a portion of the roof-top area of not more than
ten (10) square feet for the installation of one (1) GPS antenna (herein the
"Roof Area"). Subsequent installations shall be at Landlord's reasonable
discretion and at Tenant's sole cost and expense. Tenant's use of any portions
of the Building beyond the premises shall be the Tenant's sole risk, cost and
expense and Landlord shall have no responsibility therefore and no liability
on account of any damage to or interference with Tenant's equipment except to
the extent caused by the gross negligence or willful misconduct of Landlord or
any of its agents, employees or contractors. Tenant shall be solely responsible
for installing, operating, maintaining and repairing its equipment at its own
expense in a manner that causes no material interference with or damage to the
roof itself or any other person's or tenant's use of the roof (including
non-interference with other tenants' antennae). Tenant shall perform all of such
work in such a way as to not damage any Building systems or void any warranty
or guaranty relating thereto, and Landlord may require that Tenant use
contractors reasonably approved by Landlord in performing such work.

             (13) Tenant and its affiliates shall have the non-exclusive right
to provide telecommunications services to other tenants in the Building and/or
any other buildings owned by Landlord or its affiliates. Such right shall not
be deemed to be an exclusive right to provide such services and Landlord and/or
any tenant shall be free to choose any telecommunication providers of their
choice. Tenant shall have the right to place the telecommunications equipment
of its customers on the premises and such placement shall not be deemed an
assignment or sublease.

               (14) Before the commencement of any Tenant alterations, Tenant
shall be required to put waterproofing on the floor of the entire premises.

    (b) Indemnification. Tenant will indemnify and hold Landlord harmless from
and against any and all expenses, liens, claims or damages to person or property
which may or might arise directly or indirectly by reason of the making of any
Alterations. If any Alteration is made without the prior written consent of
Landlord, Landlord may correct or remove the same, and Tenant shall be liable
for any and all expenses incurred by Landlord in the performance of this work,
which shall be deemed additional rent due and payable pursuant to Paragraph 17
(d) below. All Alterations in or to the premises or the Building made by either
party shall immediately become the property of Landlord and shall remain upon
and be surrendered with the premises as a part thereof at the end of the term
hereof without disturbance, molestation or injury, Tenant shall, have the right
to remove, prior to the expiration of the term of this Lease, all furniture,
movable furnishings, or movable equipment installed in the premises at the
expense of Tenant. Without limiting the

                                       11
<PAGE>   32



foregoing, Tenant shall have the right to remove its telecommunications
switches and related equipment. If such property of Tenant is not removed by
Tenant prior to the expiration or termination of this Lease the same shall
become the property of the Landlord and shall be surrendered with the premises
as a part thereof; or at Landlord's option may be removed from the premises by
Landlord at Tenant's expense.

SIGNS AND FURNISHINGS   8. (a) Signs. No sign, advertisement or notice shall be
inscribed, painted, affixed or otherwise displayed on any part of the outside
or the inside of the Building except on the directories and the doors of
offices, and then only in such place, number, size, color and style as is
approved by Landlord and provided by Landlord at Tenant's cost and expense; if
any such sign, advertisement or notice is nevertheless exhibited by Tenant,
Landlord shall have the right to remove the same and Tenant shall be liable for
any and all expenses incurred by Landlord in said removal. Landlord shall have
the right to prohibit any advertisement of Tenant which in its opinion tends to
impair the reputation of the Building or its desirability as a high-quality
building for offices or for financial, insurance and other institutions of like
nature, and upon written notice from Landlord, Tenant shall immediately refrain
from and discontinue any such advertisement. Landlord agrees that Tenant may
install premises identification using Tenant's standard logo, trade name and
trade dress.

   (b) Furnishings. Landlord shall have the right to prescribe the weight and
position of safes and other heavy equipment or fixtures, which shall, if
considered necessary by the Landlord, stand on plank strips to distribute the
weight. Tenant shall not place a load upon any floor of the premises exceeding
either the floor load per square foot area which the floor of the premises was
designed to carry, or any maximum floor load allowed by law. Any and all
damage or injury to the premises or the Building caused by moving the property
of Tenant into, in or out of the premises, or due to the same being on the
premises, shall be repaired at the sole cost and expense of Tenant, by either
Landlord, or by Tenant under Landlord's direction and supervision (and in
accordance with Paragraph 7 hereof), at Landlord's option. No furniture,
equipment or other bulky matter of any description will be received into the
Building or carried in the elevators except as approved by Landlord, and all
such furniture, equipment, and other bulky matter shall be delivered only
through the designated delivery entrance of the Building. All moving of
furniture, equipment and other materials shall be performed by Tenant and its
contractors and shall be coordinated with Landlord who shall, however, not be
responsible for any damage to or charges for moving the same. Tenant agrees
promptly to remove from the sidewalks adjacent to the Building any of the
Tenant's furniture, equipment or other material there delivered or deposited.
Landlord warrants and represents to Tenant that the Building has a minimum
floor load of not less than 190 pounds per square foot. Landlord acknowledges
that Tenant's equipment includes very heavy equipment. Landlord will provide
Tenant with building plans and will coordinated with Tenant to chose the best
location for the placement of such equipment. Landlord shall also advise Tenant
of the location of similar equipment within the Building, including on floors
above the Premises. The delivery, moving and installation of such equipment
shall be under the direct supervision and control of Tenant, but shall be
scheduled and coordinated with Landlord.

                                      12
<PAGE>   33
TENANT'S EQUIPMENT   9.  Business machines and mechanical equipment belonging
to Tenant which cause noise or vibration that may be transmitted to the
structure of the Building or to any space herein to such a degree as to be
objectionable to Landlord or to any tenant in the Building, as those standards
are reasonably an commonly accepted in a telecommunications carrier hotel,
shall be installed and maintained by Tenant, at Tenant's expense, on vibration
eliminators or other devices sufficient to eliminate such noise and vibration.
Tenant covenants and agrees that at all times its use of electric current shall
not exceed the capacity of existing feeders to the building or the premises, or
the capacity of the risers or wiring installation in the Building or the
premises. Tenant may not use any electrical equipment which will overload such
installations or interfere with the use thereof by other tenants of the
Building.

ACCESS TO PREMISES   10.  Landlord or Landlord's agents shall have the right
(but shall not be obligated) to enter the Premises at any time during an
emergency, and at other reasonable times, to examine the Premises and to make
such repairs, replacements and improvements to the Premises or any portions of
the Building as Landlord may deem necessary and reasonably desirable or to
perform any work or effect any repairs which Tenant is obligated to perform
under this lease upon Tenant's failure to so perform, or for the purpose of
complying with laws, regulations and other directions of governmental
authorities. Tenant shall permit Landlord to use and maintain and replace pipes
and conduits in and through the premises.

       (a)  Landlord acknowledges that Tenant's Premises, including without
limitation, its switch site area, shall constitute a secure area. Tenant will
be installing elaborate security systems, which may include a palm-reader and a
card access system, to safeguard entry and access to the Premises. Except in
the event of extreme emergency, neither Landlord nor any of its agents or
contractors shall have access to the Premises except upon not less than 48
hours prior written notice to the Tenant, and then only in the presence of an
escort designated by Tenant. In the event of an extreme emergency (for example,
fire, bursting pipes, etc.), Landlord shall have access to the Premises,
provided that Landlord shall first attempt to notify Tenant of such entry by
phone, and Landlord shall be escorted by an employee of Tenant if one is
present on the Premises.

       (b)  Landlord acknowledges that in addition to Tenant's employees,
Tenant's customers shall have access to the Premises at all times, subject only
to such access and security systems and procedures as may be established by
Tenant from time to time. Landlord shall notify Tenant of any work conducted by
Landlord or other Tenants in the building, which may have an impact on the
Premises or Tenant's risers, feeders, or other electrical or telecommunication
equipment throughout the Building. Landlord agrees to coordinate any such work
with Tenant so as to avoid any interruption to the operation of Tenant's
business.

INSURANCE   11.  (a) Insurance Rating. Tenant will not conduct or permit to be
conducted, any activity, or place any equipment in or about the premises or the
Building, which will, in any way, increase the rate of fire insurance or other
insurance on the Building; and if any increase in the rate of fire insurance or
other insurance is stated by any insurance company or by the


                                       13
<PAGE>   34
applicable Insurance Rating Bureau to be due to any specific and unique
activity or equipment of Tenant in or about the premises or the Building, such
statement shall be conclusive evidence that the increase in such rate is due to
such activity or equipment and, as a result hereof, Tenant shall be liable for
such increase and shall reimburse Landlord therefor upon demand and any such sum
shall be considered additional rent due and payable pursuant to Paragraph 17
(d) below. Notwithstanding anything herein to the contrary, Landlord represents
that the Building is insured as a telecommunications switch site facility and
no such use by Tenant consistent therewith shall require Tenant to pay any
additional insurance charges.

       (b)  Liability Insurance.   Tenant shall carry public liability insurance
in a company or companies licensed to do business in the City of Philadelphia
and approved by Landlord, which approval shall not be unreasonably withheld
conditioned, or delayed. Said insurance shall be in minimum amounts approved by
Landlord from time to time (as set forth in the rules and regulations attached
hereto as Exhibit C), shall name Landlord as an additional insured, as its
interests may appear, and shall contain an endorsement that such policy shall
remain in full force and effect notwithstanding that the insured has waived his
right of action against any party prior to the occurrence of a loss. If
requested by Landlord, in writing, receipts evidencing payment for said
insurance shall be delivered to Landlord at least annually by Tenant. Each
policy shall contain an endorsement that will prohibit its cancellation prior to
the expiration of thirty (30) days after notice of such proposed cancellation to
Landlord.

SERVICES AND UTILITIES   12.  It is agreed that the Landlord will furnish
reasonably adequate heat and water. The Landlord will also provide elevator
service by means of automatically operated passenger elevators, provided,
however, that the Landlord shall have the right to temporarily remove elevators
from service as the same shall be required for servicing or maintaining the
elevators and/or the Building, as long as reasonable and safe alternative access
is provided during any such removal. The normal hours of operation of the
Building are 8:00 a.m. to 6:00 p.m. Monday through Friday (except legal
holidays). There are no normal hours of operation of the Building on Saturdays
or Sundays or legal holidays and Landlord shall not be obligated to maintain or
operate the Building at such time unless special arrangements are made by
Tenant. Landlord will furnish all services and utilities required by this Lease
only during the normal hours of operation of the Building, unless otherwise
specified herein. One automatically operated passenger elevator shall be subject
to call at all times. It is understood and agreed that Landlord shall not be
liable for failure to furnish, or for delays, suspensions or reduction in
furnishing, any of the utilities or services required to be performed by
Landlord caused by breakdown, maintenance, repairs, strikes, scarcity of labor
or materials, acts of God, Landlord's conformance to governmental legislation,
regulation, or judicial or administrative orders, except if caused by Landlord's
willful act or gross negligence, or from any other cause whatsoever.
Notwithstanding the above, Tenant shall have twenty-four (24) hour per day,
seven (7) days per week access to the Building and premises.

LIABILITY OF LANDLORD   13.  (a) No Liability, Landlord shall not be liable to
Tenant, its employees, agents, contractors, business invitees, licensees,
customers, clients, family


                                       14
<PAGE>   35
members, or guests for any damage, compensation or claim arising from the
necessity of repairing any portion of the premises or the Building, the
interruption in the use of the premises, accident or damage resulting from the
use or operation (by Landlord, Tenant, or any other person or persons
whatsoever) of elevators, or heating, cooling, electrical or plumbing equipment
or apparatus, or the termination of this Lease by reason of the destruction of
the premises, or from any fire, robbery, theft, and/or any other casualty, or
from any leakage in any part of the Building, or from any other cause
whatsoever. Tenant shall not be entitled to any abatement or diminution of rent
as a result of any of the foregoing occurrences, nor shall the same release
Tenant from its obligations hereunder nor constitute an eviction. Any goods,
property or personal effects, stored or placed by the Tenant in or about the
premises or Building, shall be at the risk of the Tenant, and the Landlord
shall not in any manner be held responsible therefor. Tenant acknowledges that
Landlord will not carry insurances on Tenant's furniture and/or furnishings or
any fixtures, equipment, improvements, or appurtenances removable by Tenant. It
is expressly agreed that Tenant shall look to its property damage insurance
policies, and not to Landlord or its agents or employees, for reimbursement for
any damages or losses incurred as a result of any of the foregoing occurrences,
and that said policies must contain waiver of subrogation clauses. Should
Tenant obtain a judgment against Landlord for any reason whatsoever, Tenant
agrees there shall be no recovery against Landlord in excess of Landlord's
specific partnership assets. The employees of the Landlord are prohibited from
receiving any packages or other articles delivered to the Building by Tenant.

       (b) Indemnity.  Tenant hereby agrees to indemnify and hold Landlord
harmless from and against any cost, damage, claim, liability or expense
(including attorney's fees) incurred by or claimed against Landlord, directly
or indirectly, as a result of or in any way arising from the use and occupancy
of the premises by Tenant or Tenant's employees, agents, contractors, invitees,
licensees, customers, clients, family members, or guests, or in any other
manner which relates to the business of Tenant; provided that Tenant shall not
be liable under this provision to the extent that Landlord is insured for such
hazards and damages under a policy which contains a waiver of subrogation
clause, and is reimbursed by its insurer for its costs, damages, claims,
liabilities or expenses. Tenant's liability under this lease extends to the
acts and omission's of any subtenant and any employee, agent, contractor,
invitee, licensee, customer, client, family ,member or guest of any subtenant.
An such cost, damage, claim, liability or expense incurred by Landlord, for
which Tenant is obligated to reimburse Landlord, shall be deemed additional
rent due and payable pursuant to Paragraph 17 (d) below.

       (c) Defense of any Action.  In case any action or proceeding is brought
against Landlord by reason of any claim under this Paragraph 13, Tenant, upon
written notice from Landlord, will at Tenant's expense, resist or defend such
action or proceeding by counsel approved by Landlord in writing, whose approval
will not  be unreasonably withheld.

RULES AND REGULATIONS   14.  Tenant, its agents, employees, invitees,
licensees, customers, clients, family members and guests shall at all times
abide by and observe the rules and regulations attached hereto as Exhibit C. In
addition, Tenant, its agents, employees, invitees, licensees, customers,
clients, family members and guests shall abide by ana observe such other


                                       15

<PAGE>   36

reasonable rules or regulations as may be promulgated from time to time by
Landlord , with a copy sent to Tenant, for the operation and maintenance of the
Building; provided, however, that the same are in conformity with common
practice and usage in similar buildings and are not inconsistent with the
provisions of this Lease. Nothing contained in this Lease shall be construed to
impose upon Landlord any duty or obligation to enforce such rules and
regulations, or the terms, conditions or covenants contained in any other
lease, as against any other tenant, and Landlord shall not be liable by Tenant
for violation of the same by any other tenant, its employees, agents, business
invitees, licensees, customers, clients, family members or guests, provided
Landlord agrees to enorce such rules and regulations consistently and uniformly
and in a non-discriminate manner. If there is any inconsistency between this
Lease and the rules and regulations set forth in Exhibit C, this Lease shall
govern.

DAMAGE/CONDEMNATION   15.  (a) Damage to the Premises. If the Premises shall be
partially damaged by fire or other cause without the fault or neglect of
Tenant, its employees, agents, licensees, customers, clients, family members or
guests, Landlord shall diligently and as soon as practicable after such damage
occurs (taking into account the time necessary to effectuate a satisfactory
settlement with any insurance company involved) repair such damage at the
expense of Landlord; provided, however, that if the premises or Building is
damaged by fire or other cause to such extent that the damage cannot be fully
repaired within ninety (90) days from the date of such damage, Tenant, upon
written notice to Landlord, may terminate this Lease, in which event the rent
shall be apportioned and paid to the date of such damage. During the period
that Tenant is deprived of the use of the damaged portion of the premises,
Tenant shall be required to pay rent (as set forth in Paragraph 3) covering
only that part of the premises that Tenant is able to occupy and use for the
continuous conduct of Tenant's business and the rent for such space shall be
that portion of the total rent which the amount of square foot area remaining
that can be occupied by Tenant bears to the total square foot area of the
premises, subject however, to further adjustment based on the nature and extent
of any interference with the continuous conduct of Tenant's business. All
injury or damage to the premises or the Building caused by Tenant or its
agents, employees, contractors, licensees, or invitees, shall be repaired at
Tenant's sole cost and expense as provided in Paragraph 6 (b) above.
       (b) Condemnation.   If the whole or a substantial part (as hereinafter
defined) of the premises (or use or occupancy of the premises) shall be taken
or condemned by any governmental or quasi governmental authority for any public
or quasi-public use or purpose (including sale under threat of such a taking),
then the terms of this Lease shall cease and terminate as of the date when
title vests in such governmental or quasi-governmental authority, and the rent
shall be abated on the date when such title vests in such governmental or
quasi-governmental authority. If less than a substantial part of the premises
is taken or condemned by any governmental or quasi-governmental authority for
any public or quasi-public use or purpose (including sale under threat of such a
taking), the rent shall be equitably adjusted (on the basis of the number of
square feet before and after such event) on the date when title vests in such
governmental or quasi-governmental authority and the Lease shall otherwise
continue in full force and effect. Tenant shall



                                       16
<PAGE>   37

have no claim against Landlord (or otherwise) and hereby agrees to make no
claim against the condemning authority for any portion of the amount that may
be awarded as damage as a result of any governmental or quasi-governmental
taking or condemnation (or sale under threat of such taking or condemnation) or
for the value of any unexpired term of the Lease or for loss of profits or
moving expenses or for any other claim or cause of action. For purposes of this
Paragraph 15, a substantial part of the premises shall be considered to have
been taken if more than twenty-five percent (25%) of the premises, or if,
regardless of the amount of space taken, Tenant may not, in its reasonable
business judgment, efficiently operate its business from the remaining
premises, or if its telecommunication feds or equipment are impaired is
unusable by Tenant as a direct result of such taking.

BANKRUPTCY   16.  (a) Events of Bankruptcy. The following shall be Events of
Bankruptcy under this Lease.
         (i) Tenant's becoming insolvent, as that term is defined in Title II of
the United States Code, entitled Bankruptcy II U.S.C. 101 et seq. (the
"Bankruptcy Code"), or under the insolvency laws of any State, District,
Commonwealth or Territory of the United States ("Insolvency laws").
         (ii) the appointment of a receiver or custodian or any or all of
Tenant's property or assets, or the institution of a foreclosure action upon
any of Tenant's real or personal property;
         (iii) the filing of a voluntary petition under the provisions of the
Bankruptcy Code or Insolvency Laws;
         (iv) the filing of an involuntary petition against Tenant as the
subject debtor under the Bankruptcy Code or Insolvency Laws, which is either not
dismissed within thirty (30) days of filing, or results in the issuance of an
order for relief against the debtor, whichever is later; or
         (v) Tenant's making or consenting to an assignment for the benefit of
creditors or a common law composition of creditors.
       (b) Landlord's Remedies
         (i) Termination of Lease.   Upon the occurrence of an Event of
Bankruptcy, Landlord shall have the right to terminate this Lease by giving
written notice to Tenant; provided, however, that this Paragraph 16 (b)(i)
shall have no effect while a case in which Tenant is the subject debtor under
the Bankruptcy Code is pending, unless Tenant or its Trustees in bankruptcy is
unable to comply with the provisions of Paragraphs 16(v) and 16(vi) below.
Otherwise this Lease shall automatically cease and terminate, and Tenant shall
be immediately obligated to quit the premises upon the giving of notice
pursuant to this Paragraph 16(b)(i). Any other notice to quit, or notice of
Landlord's intention to re-enter is hereby expressly waived. If Landlord elects
to terminate this Lease, everything contained in this Lease on the part of
Landlord to be done and performed shall cease without prejudice, subject
however, to the right of Landlord to recover from Tenant all rent and any other
sums accrued up to the time of termination or recovery of possession by
Landlord, whichever is later and any other monetary damages or loss of reserved
rent sustained by Landlord.
       (ii)  Suit for Possession.   Upon termination of this Lease pursuant to
Paragraph 16(b)(i), Landlord may proceed to recover possession under and by
virtue of the Laws of the State of Pennsylvania, the City of Philadelphia, or
by such other proceedings, including reentry and possession, as may be
applicable.


                                      17
<PAGE>   38
      (iii) Reletting of Premises.   Upon termination of this Lease pursuant to
Paragraph 16(b)(i), the premises may be relet by Landlord for such rent and
upon such terms as are not unreasonable under the circumstances and, if the
full rental reserved under this Lease (and any of the costs, expenses, or
damages indicated below) shall not be realized by Landlord, Tenant shall be
liable for all damage sustained by Landlord, including, without limitation,
deficiency in rent, reasonable attorneys' fees, brokerage fees, and expenses of
placing the premises in first class rentable condition. Landlord, in putting
the premises in good order or preparing the same for rerental may, at
Landlord's option, make such alterations, repairs, of replacements in the
premises as Landlord, in Landlord's sole judgment, considers advisable and
necessary for the purpose of reletting the premises, and the making of such
alterations, repairs, or replacements shall not operate or be construed to
release Tenant from liability hereunder as aforesaid. Landlord shall in no
event be liable in any way whatsoever for failure to relet the premises, or in
the event that the premises are relet, for failure to collect the rent thereof
under such reletting, and in no event shall Tenant be entitled to receive any
excess, if any, of such net rent collected over the sums payable by Tenant to
Landlord hereunder.

      (iv) Monetary Damages.   Any damage or loss or rent sustained by Landlord
as a result of an Event of Bankruptcy may be recovered by Landlord, at
Landlord's option, at the time of the reletting, or in separate actions, from
time to time, as said damage shall have been made more easily ascertainable by
successive relettings, or, in a single proceeding deferred until the expiration
of the term of this Lease (in which event Tenant hereby agrees that the cause of
action shall not by deemed to have accrued until the date of expiration of said
term) or in a single proceeding prior to either the time of reletting or the
expiration of the term of this Lease, in which event Tenant agrees to pay
Landlord the difference between the present value of the rent reserved under
this Lease on the date of breach, discounted at eight percent (8%) per annum,
and the fair market value of the Lease on the date of breach. In the event
Tenant becomes the subject debtor in a case under the Bankruptcy Code, the
provisions of this Paragraph 16(b)(iv) may be limited by the limitations of
damage provisions of the Bankruptcy Code.

      (v) Assumption or Assignment by Trustee. In the event tenant becomes the
subject debtor in a case pending under the Bankruptcy Code, Landlord's right to
terminate this Lease Pursuant to this Paragraph 16 shall be subject to the
rights of the Trustee in bankruptcy to assume or assign this Lease unless the
Trustee (A) promptly cures all defaults under this Lease, (B) promptly
compensates Landlord for monetary damages, incurred as a result of such default,
and (C) provides adequate assurance of future performance.

      (vi) Adequate Assurance of Future Performance. Landlord and Tenant hereby
agree in advance that adequate assurance of future performance, as used in
Paragraph 16(b)(v) above, shall mean that all of the following minimum criteria
must be met: (A) the Trustee must pay to Landlord at the time the next payment
of rent is then due under this Lease, in addition to such payment of rent, an
amount equal to the next payment of rent due under this Lease, or the next three
(3) months rent due under this Lease, whichever is greater, said amount to be
held by Landlord in escrow until either the Trustee or Tenant defaults in its
payments of rent or other obligations under this Lease (whereupon Landlord shall
have the right to draw such escrowed funds) or until the expiration of this
Lease (whereupon


                                       18
<PAGE>   39
the funds shall be returned to the Trustee or Tenant); (B) The Tenant or Trustee
must agree to pay to Landlord, at any time the Landlord is authorized to and
does draw on the funds escrowed pursuant to Paragraph 16(b)(vi)(A) above, the
amount necessary to restore such escrow account to the original level required
by said provision; (c) Tenant must pay its estimated pro rata share of the cost
of all services provided by Landlord (whether directly or through agents or
contractors, and whether or not the cost of such services is to be passed
through to Tenant) in advance of the performance or provision of such services;
(D) The Trustee must agree that Tenant's business shall be conducted in a first
class manner, and that no liquidation sales, auctions, or other non-first class
business operations shall be conducted on the premises; (E) The Trustee must
agree that the use of the premises as stated in this Lease will remain
unchanged; (F) The Trustee must agree that the assumption or assignment of this
Lease will not violate or affect the rights of other tenants in the Building.

     (vii) Failure to Provide Adequate Assurance. In the event Tenant is unable
to (A) cure its defaults, (B) reimburse Landlord for its monetary damages, (C)
pay the rent due under this Lease, or any other payments required of Tenant
under this Lease, on time (or within five (5) days of the due date), or (D) meet
the criteria and obligations imposed by Paragraph 16(b)(vi) above, then Tenant
agrees in advance that it has not met its burden to provide adequate assurance
of future performance, and this Lease may be terminated by Landlord in
accordance with Paragraph 16(b)(vi) above.

DEFAULT OF TENANT 17. (a) Events of Default. The following shall be events of
Default under this Lease;

          (i) Tenant's failure to pay any monthly (or annual) installment of
rent (as required by Paragraph 3 or Paragraph 17(b)(iv) hereof) when due;
although no legal or formal demand has been therefor;

          (ii) Tenant's failure to timely make any other payment required under
this Lease, if such failure continues for a period of fifteen (15) days after
Landlord's written notice thereof to Tenant; provided that no such notice shall
be required if Landlord has sent Tenant a similar notice within one hundred
eighty (180) days of such failure; or

          (iii) Tenant's violation or failure to perform any of the other terms,
conditions, covenants or agreements herein made by Tenant, if such violation or
failure continued for a period of ten (10) days after Landlord's written notice
thereof to Tenant; provided that no such notice shall be required if Tenant has
received a similar notice within one hundred eighty (180) days of such violation
or failure. Provided that if any such default is not susceptible to being cured
within thirty (30) days, Tenant's cure period shall be extended for such time as
may be necessary to effect such cure with due diligence.

     (b) Landlord's Remedies. Should an Event or Default occur under this Lease,
Landlord may pursue any or all of the following remedies:

          (i) Termination of Lease. Landlord may terminate this Lease, by giving
written notice to Tenant. This Lease shall automatically cease and terminate,
and Tenant shall be immediately obligated to quit the premises, upon the giving
of notice pursuant to this Paragraph 17(b)(i). If Landlord elects to terminate
this Lease, everything contained in this Lease on the part of Landlord to be
done and performed shall cease without prejudice, subject however, to the right
of Landlord to recover from Tenant all rent and any other sums accrued up to


                                       19



<PAGE>   40





the time of termination or recovery of possession by Landlord, whichever is
later.

     (ii) Suit of Possession. Upon termination of this Lease pursuant to
Paragraph 17(b)(i), Landlord may proceed to recover possession under and by
virtue of the provisions of the State of Pennsylvania, the City of Philadelphia,
or by such other lawful proceedings, including re-entry and possession, as may
be applicable.

     (iii) Reletting of Premises. Should this Lease be terminated before the
expiration of the term of this Lease by reason of Tenant's default as
hereinabove provided, or if Tenant shall abandon or vacate the premises before
the expiration or termination of the term of this Lease without having paid
the rent for the remainder of such term, the premises may be relet by Landlord
for such rent and upon such commercially reasonable terms and, if the full
rental reserved under this Lease (and any of the costs, expenses or damages
indicated below) shall not be realized by Landlord, Tenant shall be liable for
all damages sustained by Landlord, including, without limitation, deficiency in
rent, reasonable attorneys' fees, reasonable brokerage fees, and expenses of
placing the premises in first class rentable condition. Landlord, in putting the
premises in good order or preparing the same for rerental may, at Landlord's
option, make such alterations, repairs, or replacements in the premises as
Landlord, in Landlord's sole reasonable judgment, considers advisable and
necessary for the purpose of reletting the premises, and the making of such
alterations, repairs, or replacements shall not operate or be construed to
release Tenant from liability hereunder as aforesaid. Landlord shall in no event
be liable in anyway whatsoever for failure to relet the demised premises, or in
the event that the demised premises are relet, for failure to collect the rent
thereof under such reletting, and on no event shall Tenant be entitled to
receive any excess, if any, of such net rent collected over the sums payable by
Tenant to Landlord hereunder. Landlord shall use reasonable efforts to mitigate
Tenant's damages and relet the Premises. In the event that the net rent received
by Landlord for any reletting exceeds the rent under this Lease, Tenant shall
not be entitled to such excess, however, any further damages to which Landlord
may be entitled against Tenant shall first be setoff against such excess.

     (iv) Acceleration of Payments. DELETED

     (v) Monetary Damages. Any damage or loss of rent sustained by Landlord may
be recovered by Landlord, at Landlord's option, at the time of the reletting, or
in separate actions, from time to time, as said damage shall have been made more
easily ascertainable by successive relettings, or, in a single proceeding
deferred until the expiration of the term of this Lease (in which event Tenant
hereby agrees that the cause of action shall not be deemed to have accrued until
the date of expiration of said term) or in a single proceeding prior to either
the time of reletting or the expiration of the term of this Lease, in which
event Tenant agrees to pay Landlord the difference between the present value of
the rent reserved under this Lease on the date of breach, discounted at eight
percent (8%) per annum, and the fair market value of the rent reserved under
Lease on the date of breach.

     (vi) Anticipatory Breach; Cumulative Remedies. DELETED

    (c) Waiver. If, under the provisions hereof, Landlord shall institute
proceedings against Tenant and a compromise or settlement thereof shall be made,
the same shall not constitute a waiver of any other covenant, condition or
agreement herein contained, nor of any of Landlord's rights hereunder. No waiver

                                       20


<PAGE>   41


by Landlord of any breach of any covenant, condition or agreement herein
contained shall operate as a waiver of such covenant, condition, or agreement
itself, or of any subsequent breach thereof. No payment by Tenant or receipt by
Landlord of a lesser amount than the monthly installments of rent here in
stipulated shall be deemed to be other than on account of the earliest
stipulated rent, nor shall any endorsement or statement on any check or letter
accompanying a check for payment of rent be deemed in accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance of such rent or to pursue any other remedy provided
in the Lease. No re-entry by Landlord, and no acceptance by Landlord of keys
from Tenant, shall be considered an acceptance of a surrender of the Lease. In
the event it is necessary for Landlord to consult legal counsel or file suit
against Tenant, Tenant shall pay any reasonable attorney's fees incurred by
Landlord, and same shall be additional rent due and payable pursuant to
Paragraph 17(d) below. If, under the provisions hereof, Tenant shall institute
proceedings against Landlord and a compromise or settlement thereof shall be
made, the same shall not constitute a waiver of any other covenant, condition or
agreement herein contained, nor any of Tenant's rights hereunder. No waiver by
Tenant of any breach of any covenant, condition or payment herein contained
shalloperated as a waiver of such covenant, condition or agreement itself, or
any subsequent breach thereof.

     (d) Right of Landlord to Cure Tenant's Default. If Tenant defaults in the
making of any payment or in the doing of any act herein required to be made or
done by Tenant, then, after notice and the expiration of any applicable cure
period, Landlord may, but shall not be required to, make such payment or do such
act, and charge the amount of the expense thereof, if made or done by Landlord,
with interest thereon at the rate per annum which is two percent (2%) greater
than the "prime rate" then in effect at Citibank, N.A. in New York City, from
the date paid by Landlord to the date of payment thereof by Tenant; provided,
however, that nothing herein contained shall be construed or implemented in such
a manner as to allow Landlord to charge or receive interest in excess of the
maximum legal rate then allowed by law. Such payment and interest shall
constitute additional rent hereunder due and payable with the first monthly
installment of rent due after rendition of a statement or bill therefor, or if
payments have been accelerated pursuant to Paragraph 17(b)(iv) above, within
fifteen (15) days after rendition of such statement or bill; provided that the
making of such payment or the taking of such action by Landlord shall not
operate to cure such default or to estop Landlord from the pursuit of any remedy
to which Landlord would otherwise be entitled.

     (e) Late Payment. If Tenant fails to pay any installment of rent (in
accordance with Paragraph 3, and together with any additional rent due
therewith) on or before the seventh (7th) day of the calendar month when such
installment becomes due and payable, Tenant shall pay to Landlord a late charge
of five percent (5%) of the amount of such installment, and, in addition, such
unpaid installment shall bear interest at the rate per annum which is two
percent (2%) greater than the "prime rate" then in effect at Citibank, N.A. in
New York City from the date such installment became due and payable to the date
of payment thereof by Tenant; provided, however, that nothing herein contained
shall be construed or implemented in such a manner as to allow Landlord to
charge or receive interest in excess of the maximum legal rate then allowed by
law. Such late charge and interest shall constitute additional rent hereunder


                                       21
<PAGE>   42
due and payable with the next monthly installment of rent due, or if payments
have been accelerated pursuant to Paragraph 17(b)(iv) above, due and payable
immediately.

     (f) Lien on Personal Property. DELETED

SUBORDINATION ATTORNMENT 18. This Lease is subject and subordinate to all ground
or underlying leases and to all mortgages which may now or hereafter affect such
leases on the real property of which the demised premises are a part and all
renewals, modifications, consolidations, replacements and extensions of any such
underlying leases and mortgages. This clause shall be self-operative and no
further instrument of subordination shall be required by any ground or
underlying leases or by any mortgages, affecting any lease or the real property
of which the demised premises are a part. In confirmation of such subordination,
Tenant shall execute promptly any certificate that Landlord may request. If, in
connection with the obtaining, continuing or renewing of financing for which the
real property of which the demised premises are a part represents collateral in
whole or in part, a banking, insurance or other lender shall request reasonable
modifications of this Lease as a condition of such financing, Tenant will not
unreasonably withhold or delay its consent thereto, provided that such
modifications do not increase the obligations of Tenant hereunder or materially
and adversely affect the rights of Tenant under this Lease.

If at any time prior to the expiration of the term, any underlying lease of the
property of which the demised premises are a part shall terminate or be
terminated for any reason, or if the holder of any superior mortgage on such
underlying lease or on such real property shall become the lessee under such
underlying lease or become the owner of such real property as a result of
foreclosure of its mortgage or by reason of a conveyance of such real property,
or if the holder of any superior mortgage shall obtain a new lease in lieu of
any terminated underlying lease by foreclosure or otherwise, or shall become a
mortgagee in possession of such real property, upon the occurrence of any such
event Tenant agrees, at the election and upon demands of any such owner of the
real property, or of any such holder of any superior mortgage (including a
leasehold mortgage) in possession of such real property, or of any such lessee
under any other underlying lease, covering premises which include the demised
premises, to attorn, from time to time, to any such owner, holder, or lessee,
upon the then executory terms and conditions of the lease, provided that such
owner, holder or lessee, as the case may be, shall then be entitled to
possession of the demised premises. The foregoing provisions of this Article
shall enure to the benefit of any such owner, holder or lessee, shall apply
notwithstanding that, as a matter of law, this lease may terminate upon the
termination of any underlying lease, shall be self-operative upon any such
demand, and no further instrument shall be required to give effect to said
provisions. Tenant, however, upon demand of any such owner, holder or lessee,
agrees to execute, from time to time, instruments in confirmation of the
foregoing provisions of this Article, satisfactory to any such owner, holder or
lessee, acknowledging such attornment and setting forth the terms and conditions
of its tenancy. Nothing contained in this Article shall be construed to impair
any right otherwise exercisable by any such owner, holder or lessee. Landlord
agrees that, prior to the Commencement Date, Landlord shall obtain for Tenant a
Subordination and Non-Disturbance

                                       22
<PAGE>   43
Agreement from any existing mortgagee of the Property, under which Tenant shall
agree to subordinate this Lease to said mortgage provided that the mortgagee
shall agree not to disturb Tenant's possession and to recognize this Lease in
the event of foreclosure or other action in lieu thereof, as long as the Tenant
continues to pay and perform its obligations hereunder in accordance with the
terms hereof.

POSSESSION/HOLDING OVER   19. (a) Possession.  DELETED
     (b)  Holding Over.  In the event that Tenant shall not immediately
surrender the premises on the date of expiration of the term hereof, Tenant
shall, by virtue of the provisions hereof, become a tenant by the month at one
hundred fifty percent (150%) of the monthly rent, including all additional
rent, in effect during the last month of the term of this Lease, which said
monthly tenancy shall commence with the first day next after the expiration of
the term of this Lease. Tenant, as a monthly tenant, shall by subject to all of
the terms, conditions, covenants and agreements of this Lease.  Tenant shall
give to Landlord at least thirty (30) days written notice of any intention to
quit the premises, and Tenant shall be entitled to thirty (30) days written
notice to quit the premises.

SECURITY DEPOSIT  20.  Simultaneously with the execution of the Lease, Tenant
shall deposit with the Landlord the sum of sixty-one thousand two hundred fifty
and 00/100 Dollars ($61,250.00), as a security deposit.  Such security deposit
(which shall not bear interest to Tenant unless required to do so by any
provision of law) shall be considered as security for the payment and
performance by Tenant of all of Tenant's obligations, covenants, conditions
and agreements under the Lease.  Upon the expiration of the term hereof (or any
renewal or extension thereof in accordance with this Lease), Landlord shall
(provided that Tenant is not in default under the terms hereof) return and pay
back such security deposit to Tenant, less such portion thereof as Landlord
shall have appropriated to make good any default by Tenant with respect to any
of Tenant's aforesaid obligations, covenants, conditions or agreements.  In the
event of any default by Tenant hereunder during the term of this Lease,
Landlord shall have the right, but shall not be obligated, to apply all of any
portion of the security deposit to cure such default, in which event Tenant
shall be obligated promptly to deposit with Landlord the amount necessary to
restore the security deposit to its original amount.  In the event of the sale
or transfer of Landlord's interest in the Building, Landlord shall have the
right to transfer the security deposit to such purchaser or transferee, in
which event Tenant shall look only to the new landlord for the return of the
security deposit and Landlord shall thereupon be released from all liability to
Tenant for the return of such security deposit.

COVENANTS OF LANDLORD  21.  (a) Quiet Enjoyment.  Landlord covenants that it
has the right to make this Lease for the term aforesaid, and that if Tenant
shall pay the rent and perform all of the covenants, terms, conditions and
agreements of this Lease to be performed by Tenant, Tenant shall, during the
term hereby created, freely, peaceably and quietly occupy and enjoy the full
possession of the premises without molestation or hinderance by Landlord or any
party claiming through or under Landlord, subject to provisions of Paragraph
(b) hereof.
     (b) Reservation.  Landlord hereby reserves to itself and its successors
and assigns the following rights (all of which are

                                       23
<PAGE>   44
hereby consented to by Tenant); (i) to change the street address and/or name of
the Building and/or the arrangement and/or location of entrances, passageways,
doors, doorways, corridors, elevators, stairs, toilets, or other public parts of
the Building, (ii) to use and maintain pipes and conduits in and through the
premises, and (iii) to grant to anyone the exclusive right to conduct any
particular business or undertaking in the Building.  No action taken by Landlord
pursuant to this Section shall interfere with them Tenant's business, use of the
Premises, or any of its telecommunications equipment, nor shall the granting of
any exclusive right to any other Tenant take precedence over Tenant's right to
conduct its business on the Premises, or any other lawful use permitted
hereunder.  No change made by Landlord shall interfere with Tenant's use of or
access to Premises and the appurtenances thereto, including Tenant's
telecommunications equipment, nor unreasonably inconvenience Tenant or
substantially diminish the useable space leased to Tenant.

MISCELLANEOUS  22. (a) No Representations by Landlord.  Tenant acknowledges that
neither Landlord nor any broker, agent or employee of Landlord has made any
representations or promises with respect to the premises or the Building except
as herein expressly set forth, and no rights, privileges, easements or
licenses are acquired by Tenant except as herein expressly set forth.  The
Tenant, by taking possession of the premises, shall accept the same "as is".
If, prior to taking possession of the premises, Tenant inspects the premises
and discovers any defects in the premises or violations of the building code
or other applicable law, Tenant shall not have the option of terminating this
Lease but shall immediately notify Landlord in writing of such defect, or
violation, and Landlord shall have thirty (30) days to cure such defect or
violation, which period may be extended if such defect or violation cannot
reasonably be cured in such thirty (30) day period and Landlord has taken
appropriate action during such period to cure same.

     (b)  No Partnership.  Nothing contained in this Lease shall be deemed or
construed to create a partnership or joint venture of or between Landlord and
Tenant, or to create any other relationship between the parties hereto other
than that of Landlord and Tenant.

     (c)  Brokers.  Landlord recognizes Colliers, Lanard & Axilbund and
Insignia Jackson Cross as the brokers procuring this Lease and shall pay said
broker a commission therefor pursuant to a separate agreement between said
broker and Landlord.  Landlord and Tenant each represent and warrant one to
another that except as set forth herein neither of them has employed any
broker, agent or finder in carrying on the negotiations relating to this
Lease.  Landlord shall indemnify and hold Tenant harmless, and Tenant shall
indemnify and hold Landlord harmless, from and against any claim or claims for
brokerage or other commission arising from or out of any breach of the foregoing
representation and warranty by the respective indemnitors.

    (d)  Estoppel Certificates.  Each party agrees, at any time and from time to
time, upon not less than ten (10) days prior written notice from the other
party, to execute, acknowledge and deliver to Landlord written statements or
other documents (i) certifying that this Lease is unmodified and in full force
and effect (or if there have been modifications, that the Lease is in full
force and effect as modified and stating the modifications), (ii) stating the
dates to which the rent and any other charges hereunder have been paid by
Tenant, (iii)

                                       24
<PAGE>   45
stating whether or not to the best of its knowledge of Tenant, Landlord is in
default in the performance of any covenant, agreement or condition contained in
this Lease, and if so specifying each such default of which such party may have
knowledge, (iv) stating that this Lease is subject and subordinate to the Lien
of any deed of trust, mortgage, or other security instrument which may in the
future encumber or affect the Building, and any renewals, extensions,
modifications, recastings or refinancings thereof, and that if requested to do
so, Tenant will attorn to a secured party or purchaser that succeeds to
Landlord's interests as a result of any foreclosure action on the Building, and
(v) stating the address to which notices to Tenant should be sent. Any such
statement delivered pursuant hereto may be relied upon by any owner of the
Building or the Land, any prospective purchaser of the Building or the Land, any
mortgage or prospective mortgagee of the Building or the Land or of Landlord's
interest in either, or any prospective assignee of any such mortgagee.

       (e) Waiver of Jury Trial. Landlord and Tenant hereby waive trial by jury
in any action, proceeding or counterclaim brought by either of the parties
hereto against the other on or in respect of any matter whatsoever arising out
of or in any way connected with this Lease, the relationship of Landlord and
Tenant hereunder, Tenant's use or occupancy of the premises, and/or any claim of
injury or damage.

       (f) Notices. All notices or other communications hereunder shall be in
writing and shall be deemed duly given if hand delivered (with receipt
therefor), or if delivered by certified or registered mail, return receipt
requested, first-class, postage prepaid, or by a nationally recognized
overnight delivery service providing evidence of receipt, (i) if to Landlord at
Callowhill Management, Inc., 401 North Broad Street, Philadelphia, Pennsylvania
19108, with copy to Callowhill Management, Inc., c/o The Stillman Group, 670
White Plains Road, Scarsdale, New York 10583, and (ii) if to Tenant, at Net2000
Communications Services, Inc., 2180 Fox Mill Road, Herndon, Virginia 20171,
Attention: Legal Department, unless notice of a change of address is given
pursuant to the provisions of this article. If any notice sent by certified or
registered mail is returned to the sender by the United States Post Office as
undeliverable, notice shall be deemed duly given when mailed.

       (g) Governing Law. This Lease shall be construed and enforced in
accordance with the laws of the city of Philadelphia and State of Pennsylvania.
It is expressly understood that if any present or future law, ordinance,
regulation or order requires an occupancy permit for the premises, Tenant will
obtain such permit at Tenant's own expense.

       (h) Invalidity of Particular Provisions. If any provision 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 to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and be enforced to the fullest extent permitted by
law.

       (i) Gender and Number. Feminine or neuter pronouns shall be substituted
for those of the masculine form, and the plural shall be substituted for the
singular number, in any place or places herein in which the context may require
such substitution.

       (j) Benefit and Burden. The provisions of this Lease shall be binding
upon, and shall inure to the benefit of, the parties hereto and each of their
respective representatives, successors

                                       25
<PAGE>   46
and assign. Landlord may freely and fully assign its interest hereunder,
provided the assignee assumes Landlord's obligations hereunder.

       (k) Captions. The captions and headings herein are for convenience of
reference only and in no way define or limit the scope or content of this Lease
or any provision thereof.

       (l) Entire Agreement. This Lease, together with the Exhibits attached
hereto, contains and embodies the entire agreement of the parties hereto, and
no representations, inducements or agreements, oral or otherwise, between the
parties not contained in this Lease and the Exhibits, shall be of any force or
effect. This Lease may not be modified, changed or terminated in whole or in
part in any manner other than by an agreement in writing duly signed by both
parties hereto.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under seal on
the day and year first hereinabove written.

ATTEST:

---------------------------------------
(Corporate Seal)

LANDLORD: Callowhill Management, Inc.

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

TENANT: Net2000 Communications Real Estate, Inc.

By:             [SIG]
   ------------------------------------

       The undersigned Broker hereby executes this Lease solely to agree to the
provisions of Paragraph 22(e) hereof.


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

BROKER:

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

                                       26
<PAGE>   47
       RIDER TO LEASE AGREEMENT BETWEEN CALLOWHILL MANAGEMENT, INC. AND
          NET2000 COMMUNICATIONS REAL ESTATE, INC. DATED December 15,
                                      1999

ELECTRIC CURRENT 23. (a) In addition to all rent and other charges provided for
in this Lease, Tenant shall pay Landlord for all electric current consumed by
Tenant at the demised premises. The cost to Tenant of all such electric current
shall be calculated at the General Service (GS) Rate of PECO Energy (PECO)
without regard to any other electric current used in the building, as such
rates may from time to time be increased decreased by such utility company.

       (b) The electric current consumed by Tenant at the demised premises
shall be determined by Tenant's meter. The electric current consumed by Tenant
at the demised premises shall be measured by such meter. Any installation by
Landlord of such a meter shall be performed at the expense of Tenant.

       (c) Payment of all amounts due hereunder from Tenant to Landlord for
electric current, other than such amounts which are determined by metering,
shall be made monthly in advance together with the rent due under this Lease.
Payment of all amounts due hereunder from Tenant for electric current which are
determined by metering shall be made by Tenant within thirty (30) days of the
date of each bill submitted by Landlord to Tenant therefor. Landlord shall bill
Tenant for all such amounts determined by meters not more often than monthly.

       (d)       (e)

       (f) Tenant shall provide and install, at Tenant's sole cost and expense,
all lamps, tubes, bulbs, starters, ballasts, transformers and like items used
or required in the demised premises.

       (g) Landlord shall not be liable to Tenant for any loss, damage or
expense which Tenant may sustain if the quality or character of electric
service furnished to the demised premises is changed, or if such service is no
longer available or suitable for Tenant's requirements, or if the supply of
electric current ceases or is interrupted or reduced as a result of any cause
other than Landlord's negligence or willful default. At any time during the
term hereof, Landlord may upon thirty (30) days prior written notice to Tenant
discontinue furnishing electric current to the demised premises without thereby
affecting this Lease in any manner or otherwise incurring any liability to
Tenant and Landlord shall in such case no longer be obligated to furnish
electric current to the demised premises. If Landlord shall give Tenant notice
of such intention to cease furnishing electric current to the demised premises
Tenant may contract for and receive such electric current directly from the
utility company then serving the Building, and if Tenant does so, Landlord
shall permit Tenant, at Tenant's sole cost, to use the portion of Landlord's
electrical distribution system then serving the demised premises to bring
electric current to the demised premises to the extent that such portion of
such system is available, suitable and may be safely so used, consistent with
concurrent and anticipated future use of the same, by Landlord and other
tenants in the Building; provided however, that Tenant, at Tenant's cost and
expense, shall furnish and install at such location in the Building as Landlord
shall designals, and maintain and keep in repair, any necessary metering
equipment used in connection with measuring Tenant's consumption of electric
current so supplied directly to Tenant by such utility company and any
necessary additional panel board, feeders, risers, wiring and other conductors
and

                                       27
<PAGE>   48
equipment which may be required to enable Tenant to obtain such electric
current. Landlord shall supply electric current of not less than 65 amps at
13,200KV for Tenant's consumption. Tenant shall take the electric current from
the main building service entry and install its own switches, transformer,
panel, risers, feeders and other distribution equipment for Tenant's use.
Tenant shall also have the right to install a diesel generator and fuel storage
tanks in Tenant's space on the Track level for supplementary and/or emergency
service to the Premises. Notwithstanding anything herein to the contrary, if
the character or quality of electric service to the Premises is changed,
altered, reduced or impaired so as to materially adversely affect Tenant's
ability to conduct business from the Premises, or if electric service is
interrupted for a period of thirty (30) days or more, Tenant shall have the
following rights and remedies: (1) the right to terminate the Lease, without
recourse, or (2) the right to abate the Base Rent, additional rent and other
charges due hereunder in full until such time as the electric power to the
Premises is fully restored.

24. DELETED

25.  (a) DELETED
     (b) When this Lease shall be terminated or when and as soon as the Term
shall have expired, it shall be lawful for any attorney as attorney for Tenant
to file an agreement for entering in any competent Court an amicable action and
judgment in ejectment against Tenant and all persons claiming under Tenant for
the recovery by Landlord of possession of the Demised Premises, for which this
Lease shall be his sufficient warrant, whereupon, if Landlord so desires, a
writ of Execution or of Possession may issue forthwith, without any prior writ
or proceeding whatsoever, and provided that if for any reason after such action
shall have been commenced the same shall be terminated and the possession of
the Demised Premises remain in or be restored to Tenant, Landlord shall have
the right upon any subsequent termination or expiration of this Lease, to bring
one or more amicable action or actions as hereinbefore set forth to recover
possession of the Demised Premises.

26.  OPTIONS TO EXTEND. Tenant is hereby granted three (3) consecutive
five-year options to extend ("Options to Extend") this Lease under the terms,
conditions, and provisions of this Lease, except that the monthly basic rent
for each of the five-year extension terms shall be at then-current market rent.
If Tenant intends to exercise any of its Options to Extend, Tenant shall give
Landlord written notice of its election to exercise the applicable Option to
Extend not less than six (6) months prior to the termination of the Original
Term or the extended term, as applicable. If Tenant fails to exercise any
Option to Extend the Original Term, the succeeding Option(s) to Extend shall
terminate and be of no further force or effect.



                                       28
<PAGE>   49
                                   EXHIBIT B

                         WORK AGREEMENT AND ALLOWANCES


Reference is made to a certain Agreement of Lease dated December 15, 1999 (the
"Lease") to which this Work Agreement and Allowances is attached. Definition of
terms are set forth in the Lease.

Landlord shall, at Landlord's sole cost and expense, on or before the
commencement date, do the following work ("Landlord's Work):

1.  Deliver the premises demolished and broom-clean with all
    windows repaired or replaced, as necessary, to weathertight
    condition.

2.  Construct a building standard demising wall and entrance
    doors. Entrance doors will be in a location acceptable to
    Tenant.

3.  Remove any asbestos from the premises.

At the time of delivery, the Premises and Building shall be in compliance with
all applicable building and safety laws, rules and ordinances and the building
electrical, mechanical and utility systems to be used by Tenant shall be in
good working order and sufficient for Tenant's intended use. Tenant shall, at
Tenant's sole cost and expense, have the right to perform alterations to the
premises by selecting a general contractor, construction manager,
subcontractor, architect and engineer of its choice, subject to Landlord's
reasonable approval. Landlord shall not receive any profit or charge any
supervisory fees for Tenant's alterations.

Prior to commencing any alterations, Tenant shall submit plans and
specifications to Landlord for approval and, if Landlord fails to approve or
disapprove within five (5) business days after submission, the same shall be
deemed approved by Landlord. Landlord shall notify Tenant at the time of plan
approval of all fixtures and equipment which must be removed at the end of the
term.



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                                   EXHIBIT C

                             RULES AND REGULATIONS

Reference is made to a certain Agreement of Lease dated December 15, 1999, (the
"Lease") to which these rules and regulations are attached. Definition of terms
are set forth in the Lease.

The following rules and regulations have been formulated for the safety and
well being of all tenants of the Building and to insure compliance with all
municipal and other requirements. Strict adherence to these rules and
regulations is necessary to guarantee that each and every tenant will enjoy a
safe and unannoyed occupancy in the Building in accordance with the Lease. Any
continuing violation of these rules and regulations by Tenant, after notice
from Landlord, shall be sufficient cause for termination of the Lease, at the
option of Landlord.

Landlord may, upon request by any tenant, waive the compliance by such tenant
to any of the foregoing rules and regulations, provided that (i) no waiver
shall be effective unless signed by Landlord or Landlord's authorized agent,
(ii) any such waiver shall not relieve such tenant from the obligation to
comply with such rule or regulation in the future unless expressly consented to
the Landlord, (iii) no waiver granted to any tenant shall relieve any other
tenant from the obligation of complying with the rules and regulations unless
such other tenant has received a similar waiver in writing from the Landlord,
and (iv) any such waiver by Landlord shall not relieve Tenant from any
obligation or liability of Tenant to Landlord pursuant to the Lease for any
loss or damage occasioned as a result of Tenant's failure to comply with any
such rule or regulation.

  1.  The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls or other parts of the Building not occupied by
any tenant shall not be obstructed or encumbered by any tenant or used for any
purpose other than ingress and egress to and from the premises and if the
premises are situated on the ground floor of the Building, the tenant thereof
shall, at said tenant's own expense, keep the sidewalks and curb directly in
front of premises clean and free from ice and snow. Landlord shall have the
right to control and operate the public portions of the Building, and the
facilities furnished for common use of the tenants, in such manner as Landlord
deems best for the benefit of the tenants generally. No tenant shall permit the
visit to the premises of persons in such numbers or under such conditions as to
interfere with the use and enjoyment by other tenants of the entrances,
corridors, elevators and other public portions or facilities of the Building.

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



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3. No show cases or other articles shall be put in front of or affixed to any
part of the exterior of the Building, nor placed in the halls, corridors or
vestibules without the prior written consent of Landlord.

4. The water and wash closets and other plumbing fixtures shall not be used for
any purposes other than those for which they were constructed, and no sweepings,
rubbish, rags, or other substances shall be thrown 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.

5. There shall be no marking, painting, drilling into or in any way defacing the
Building or any part of the premises visible from public areas of the Building.
Tenant shall not construct, maintain, use or operate within the premises any
electrical device, wiring or apparatus in connection with a loud speaker system
or other sound system, except as reasonably required for its communication
system and approved prior to the installation thereof by Landlord. No such loud
speaker or sound system shall be constructed, maintained, used or operated
outside of the premises.

6. No bicycles, vehicles or animals, birds or pets of any kind shall be brought
into or kept in or about the premises, and no cooking (except for hot-plate
cooking by Tenant's employees for their own consumption, the location and
equipment of which is first approved by Landlord) shall be done or permitted by
any tenant on the premises. No tenant shall cause or permit any unusual or
objectionable odors to be produced upon or permeate from the premises.

7. No tenant shall make any unseemingly or disturbing noises or disturb or
interfere with occupants of this or neighboring buildings or premises or those
having business with them whether by the use of any musical instrument, radio,
talking machine, unmusical noise, whistling, singing, or in any other way. No
tenant shall throw anything out of the doors or windows or down the corridors or
stairs.

8. No inflammable, combustible or explosive fluid, chemical or substance shall
be brought or kept upon the premises.

9. No additional locks or bolts of any kind shall be placed upon any of the
doors, or windows by any tenant, nor shall any changes be made in existing locks
or the mechanism thereof. The doors leading to the corridors or main halls shall
be kept closed during business hours except as they may be used for ingress or
egress. Each tenant shall, upon the termination of his tenancy, restore to the
Landlord all keys of stores, offices, storage and toilet rooms either furnished
to, or otherwise procured by, such tenant, and in the event of the loss of any
keys so furnished, such tenant shall pay to Landlord the cost thereof. Tenant's
key system shall be separate from that for the rest of the Building.

10. Landlord reserves the right to inspect all freight to be brought into the
Building and to exclude from the Building all freight which violates any of
these rules and regulations on the Lease.

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11. No tenant shall pay any employees on the premises, except those actually
working for such tenant on the premises.

12. Landlord reserves the right to exclude from the Building at all times any
person who is not known or does not properly identify himself to the Building
management or watchman on duty. Landlord may, at its option, require all persons
admitted to or leaving the Building between the hours of 6:00 p.m. and 8:00
a.m., Monday through Friday, and at any hour, Saturdays, Sundays and legal
holidays, to register. Each tenant shall be responsible for all persons for whom
he authorizes entry into or exit out of the Building, and shall be liable to
Landlord for all acts or omissions of such persons.

13. The promises shall not, at any time, be used for lodging or sleeping or for
any immoral or illegal purpose.

14. Each tenant, before closing and leaving the premises at any tine, shall see
that all windows are closed and all lights turned off.

15. Landlord's employees shall not perform any work or do anything outside of
the regular duties, unless under special instruction from the management of the
Building. The requirements of tenants will be attended to only upon application
to Landlord and any such special requirements shall be billed to Tenant (and
paid with the next installment of rent due) at the schedule of charges
maintained by Landlord from time to time or at such charge as is agreed upon in
advance by Landlord and Tenant.

16. Canvassing, soliciting and peddling in the Building is prohibited and each
tenant shall cooperate to prevent the same.

17. There shall not be used in any space, or in the public halls of the
Building, either by any tenant or by jobbers or others, in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and side guards and Tenant shall be responsible to Landlord for any loss or
damage resulting from any deliveries of Tenant's to the Building.

18. Mats, trash or other objects shall not be placed in the public corridors.

19. Landlord does not maintain suite finishes which are nonstandard, such as
kitchens, bathrooms, wallpaper, special lights, etc. However, should the need
for repairs of items not maintained by Landlord arise, Landlord will arrange for
the work to be done at Tenant's expense.

20. Drapes installed by Landlord for the use of Tenant or drapes installed by
Tenant, which are visible from the exterior of the Building, must be cleaned by
Tenant at least once a year, without notice, at Tenant's own expense.

21. The amount of liability insurance required to be maintained by Tenant
pursuant to 11(b) of the lease is $500,000 for injury to one (1) person and $2
million for injury to a number of persons in a single occurrence and $100,000
for damage to property. Landlord may, from time to time require Tenant to
increase its insurance coverage to an amount determined by Landlord to be
satisfactory in Landlord's sole but reasonable

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judgment. All such insurance policies shall contain waiver of subrogation
clauses.

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Landlord

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Tenant

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