Document:

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                                                                    EXHIBIT 10.8

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

                              AMENDED AND RESTATED
                       1997 EMPLOYEE STOCK INCENTIVE PLAN

                                       OF

                                 TELLIUM, INC.
                              (formerly MWD, Inc.)

                       ==================================
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<TABLE>
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                                                           TABLE OF CONTENTS

<S>                                                                                                              <C>
ARTICLE I.
         Definitions............................................................................................-1-

ARTICLE II.
         SHARES SUBJECT TO PLAN.................................................................................-5-
         2.1.     Shares Subject to Plan........................................................................-5-
                  ----------------------
         2.2.     Add-back of Awards............................................................................-5-
                  ------------------

ARTICLE III.
         GRANTING OF OPTIONS....................................................................................-6-
         3.1.     Eligibility...................................................................................-6-
                  -----------
         3.2.     Disqualification for Stock Ownership..........................................................-6-
                  ------------------------------------
         3.3      Qualification of Incentive Stock Options......................................................-6-
                  ----------------------------------------
         3.4      Granting of Options...........................................................................-6-
                  -------------------

ARTICLE IV.
         TERMS OF OPTIONS.......................................................................................-7-
         4.1.     Option Agreement..............................................................................-7-
                  ----------------
         4.2.     Option Price..................................................................................-7-
                  ------------
         4.3.     Option Term...................................................................................-8-
                  -----------
         4.4.     Option Vesting................................................................................-8-
                  --------------
         4.5.     Consideration.................................................................................-8-
                  -------------

ARTICLE V.
         EXERCISE OF OPTIONS....................................................................................-9-
         5.1.     Partial Exercise..............................................................................-9-
                  ----------------
         5.2.     Manner of Exercise............................................................................-9-
                  ------------------
         5.3.     Conditions to Issuance of Stock Certificates.................................................-10-
                  --------------------------------------------
         5.4.     Rights as Stockholders.......................................................................-10-
                  ----------------------
         5.5.     Ownership and Transfer Restrictions..........................................................-11-
                  -----------------------------------

ARTICLE VI.
         RESTRICTED STOCK......................................................................................-11-
         6.1.     Restricted Stock.............................................................................-11-
                  ----------------
         6.2.     Terms and Conditions.........................................................................-12-
                  --------------------
         6.3.     Agreements...................................................................................-13-
                  ----------

ARTICLE VII.
         ADMINISTRATION........................................................................................-13-
         7.1      Compensation Committee.......................................................................-13-
                  ----------------------
         7.2.     Duties and Powers of Committee...............................................................-13-
                  ------------------------------
         7.3.     Majority Rule; Unanimous Written Consent.....................................................-13-
                  ----------------------------------------
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         7.4.     Compensation; Professional Assistance; Good Faith Actions....................................-14-
                  ---------------------------------------------------------

ARTICLE VIII.
         MISCELLANEOUS PROVISIONS..............................................................................-14-
         8.1.     Not Transferable.............................................................................-14-
                  ----------------
         8.2.     Amendment, Suspension or Termination of this Plan............................................-14-
                  -------------------------------------------------
         8.3.     Changes in Common Stock or Assets of the Company, Acquisition
                  -------------------------------------------------------------
                  or Liquidation of the Company and Other Corporate Events.....................................-15-
                  --------------------------------------------------------
         8.4.     Approval of Plan by Stockholders.............................................................-17-
                  --------------------------------
         8.5.     Tax Withholding..............................................................................-18-
                  ---------------
         8.6.     Loans........................................................................................-18-
                  -----
         8.7.     Forfeiture Provisions........................................................................-18-
                  ---------------------
         8.8.     Limitations Applicable to Performance-Based Compensation.....................................-18-
                  --------------------------------------------------------
         8.9.     Effect of Plan Upon Options and Compensation Plans...........................................-18-
                  --------------------------------------------------
         8.10.    Compliance with Laws.........................................................................-18-
                  --------------------
         8.11.    Titles.......................................................................................-19-
                  ------
         8.12.    Governing Law................................................................................-19-
                  -------------
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                                      ii
<PAGE>

          THE AMENDED AND RESTATED 1997 EMPLOYEE STOCK INCENTIVE PLAN
                                      OF
                                 TELLIUM, INC.

     TELLIUM, INC. (formerly MWD, Inc.), a Delaware corporation (the "Company"),
has adopted the following amendment and restatement of its 1997 Employee Stock
Option Plan of MWD, Inc. (the "Plan"), effective October 18, 2000, for the
benefit of its eligible employees and consultants.

     The purposes of this Plan are as follows:

     (1) To provide an additional incentive for key Employees and consultants to
further the growth, development and financial success of the Company by
personally benefiting through the ownership of Options (as defined below) to
purchase Common Stock of the Company and/or Restricted Stock (as defined below).

     (2) To enable the Company to obtain and retain the services of key
Employees considered essential to the long range success of the Company by
offering them an opportunity to own Options to purchase Common Stock of the
Company and/or Restricted Stock.

     This amended and restated plan (a) increases the number of shares issuable
upon exercise of options granted under the Plan to 74,250,000 shares, (b)
provides for the issuance of the Restricted Stock, and (c) makes certain other
changes.

                                   ARTICLE I
                                  Definitions

     1.1. General.  Wherever the following terms are used in this Plan they
          -------
shall have the meanings specified below, unless the context clearly indicates
otherwise.  The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.

     1.2. Award.  "Award" shall mean an Option or Restricted Stock.
          -----

     1.3. Award Limit.  "Award Limit" shall mean 1,500,000 shares of Common
          -----------
Stock.

     1.4. Board.  "Board" shall mean the Board of Directors of the Company.
          -----

     1.5. Change in Control.  "Change in Control" shall mean a change in
          -----------------
ownership or control of the Company effected through either of the following
transactions:

          (a) any person or related group of persons (other than the Company or
a person that directly or indirectly controls, is controlled by, or is under
common control with, the Company) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
securities possessing more than fifty percent (50%) of the total
<PAGE>

combined voting power of the Company's outstanding securities pursuant to a
tender or exchange offer made directly to the Company's stockholders which the
Board does not recommend such stockholders to accept; or

          (b) there is a change in the composition of the Board over a period of
thirty-six (36) consecutive months (or less) such that a majority of the Board
members ceases, by reason of one or more proxy contests for the election of
Board members, to be comprised of individuals who either (i) have been Board
members continuously since the beginning of such period or (ii) have been
elected or nominated for election as Board members during such period by at
least a majority of the Board members described in clause (i) who were still in
office at the time such election or nomination was approved by the Board or by
persons who were nominated by such Board members.

     1.6.  Code.  "Code" shall mean the Internal Revenue Code of 1986, as
           ----
amended.

     1.7.  Committee.  "Committee" shall mean the Compensation Committee of the
           ---------
Board, or another committee of the Board, appointed as provided in Section 7.1.

     1.8.  Common Stock.  "Common Stock" shall mean the common stock of the
           ------------
Company, par value $0.001 per share, and any equity security of the Company
issued or authorized to be issued in the future, but excluding any preferred
stock and any warrants, options or other rights to purchase Common Stock.

     1.9.  Company.  "Company" shall mean Tellium, Inc., a Delaware corporation.
           -------

     1.10.  Corporate Transaction.  "Corporate Transaction" shall mean any of
            ---------------------
the following stockholder-approved transactions to which the Company is a party:

          (a) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the State in which the Company is incorporated, form a holding company or
effect a similar reorganization as to form whereupon this Plan and all Options
are assumed by the successor entity;

          (b) the sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, in complete liquidation or
dissolution of the Company in a transaction not covered by the exceptions to
clause (a) above; or

          (c) any reverse merger in which the Company is the surviving entity
but in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities are transferred or
issued to a person or persons different from those who held such securities
immediately prior to such merger.

     1.11.  Director.  "Director" shall mean a member of the Board.
            --------

                                       2
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     1.12.  Employee.  "Employee" shall mean any officer or other employee (as
            --------
defined in accordance with Section 3401(c) of the Code) of the Company, or of
any corporation which is a Subsidiary.

     1.13.  Exchange Act.  "Exchange Act" shall mean the Securities Exchange Act
            ------------
of 1934, as amended.

     1.14.  Fair Market Value.  "Fair Market Value" of a share of Common Stock
            -----------------
as of a given date shall be (i) the closing price of a share of Common Stock on
the principal exchange on which shares of Common Stock are then trading, if any
(or as reported on any composite index which includes such principal exchange),
on the trading day previous to such date, or if shares were not traded on the
trading day previous to such date, then on the next preceding date on which a
trade occurred, or (ii) if Common Stock is not traded on an exchange but is
quoted on NASDAQ or a successor quotation system, the mean between the closing
representative bid and asked prices for the Common Stock on the trading day
previous to such date as reported by NASDAQ or such successor quotation system,
or if shares were not traded on the trading day previous to such date, then on
the next preceding date on which a trade occurred; or (iii) if Common Stock is
not publicly traded on an exchange and not quoted on NASDAQ or a successor
quotation system, the fair market value of a share of Common Stock as
established by the Committee acting in good faith.

     1.15.  Grantee.  "Grantee" shall mean an Employee to whom an Award has been
            -------
granted under the Plan.

     1.16.  Incentive Stock Option.  "Incentive Stock Option" shall mean an
            ----------------------
option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Committee.

     1.17.  Non-Qualified Stock Option.  "Non-Qualified Stock Option" shall mean
            --------------------------
an Option which is not designated as an Incentive Stock Option by the Committee.

     1.18.  Option.  "Option" shall mean a stock option granted under Article
            ------
III of this Plan.  An Option granted under this Plan shall, as determined by the
Committee, be either a Non-Qualified Stock Option or an Incentive Stock Option.

     1.19.  Optionee.  "Optionee" shall mean an Employee granted an Option under
            --------
this Plan.

     1.20.  Performance Goals.  "Performance Goals" shall mean the performance
            -----------------
goals established by the Committee in connection with the grant of Restricted
Stock.  In the case of Qualified Performance-Based Awards, (i) such goals shall
be based on the attainment of specified levels of one or more of the following
measures: return on equity, return on assets, operating income, earnings per
share, net income, total shareholder return, share price, shareholder value
added, cash value added and/or achievement of pre-determined, objectively
defined strategic performance goals and (ii) such Performance Goals shall be set
by the

                                       3
<PAGE>

Committee within the time period prescribed by Section 162(m) of the Code and
related regulations. Performance Goals may be stated in the alternative or in
combination.

     1.21.  Plan.  "Plan" shall mean The 1997 Amended and Restated Employee
            ----
Stock Incentive Plan of Tellium, Inc.

     1.22.  QDRO.  "QDRO" shall mean a qualified domestic relations order as
            ----
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.

     1.23.  Qualified Performance Based Award.  "Qualified Performance Based
            ----------------------------------
Award" shall mean an Award of Restricted Stock designated as such by the
Committee at the time of grant based upon a determination that the Committee
wishes such Award to qualify for the exemption from deductibility imposed by
Section 162(m) of the Code.

     1.24.  Restricted Stock.  "Restricted Stock" shall mean any share of Common
            ----------------
Stock granted under Article VI of this Plan.

     1.25.  Rule 16b-3.  "Rule 16b-3" shall mean that certain Rule 16b-3 under
            ----------
the Exchange Act, as such Rule may be amended from time to time.

     1.26.  Subsidiary.  "Subsidiary" shall mean any corporation in an unbroken
            ----------
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing
50 percent or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.

     1.27.  Termination of Employment.  "Termination of Employment" shall mean
            -------------------------
the time when the employee-employer relationship between a Grantee and the
Company or any Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (i) terminations where
there is a simultaneous reemployment or continuing employment of an Optionee by
the Company or any Subsidiary, (ii) at the discretion of the Committee,
terminations which result in a temporary severance of the employee-employer
relationship, and (iii) at the discretion of the Committee, terminations which
are followed by the simultaneous establishment of a consulting relationship by
the Company or a Subsidiary with the former employee.  The Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether particular leaves of absence
constitute Terminations of Employment; provided, however, that, with respect to
                                       --------  -------
Incentive Stock Options, a leave of absence, change in status from an employee
to an independent contractor or other change in the employee-employer
relationship shall constitute a Termination of Employment if, and to the extent
that, such leave of absence, change in status or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and the then
applicable regulations and revenue rulings under said Section.  Notwithstanding
any other provision of this Plan, the Company or any Subsidiary has an

                                       4
<PAGE>

absolute and unrestricted right to terminate an Employee's employment at any
time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.

                                   ARTICLE II
                             SHARES SUBJECT TO PLAN

     2.1.  Shares Subject to Plan.
           ----------------------

          (a) The shares of stock subject to Awards shall be Common Stock,
initially shares of the Company's Common Stock, par value $0.001 per share.  The
aggregate number of such shares which may be available for grant under the Plan
shall not exceed seventy-four million two hundred fifty thousand (74,250,000).
The shares of Common Stock issuable upon exercise of Options or as Restricted
Stock may be either previously authorized but unissued shares or treasury
shares.

          (b) The maximum number of shares which may be subject to Options
granted under the Plan to any individual in any calendar year shall not exceed
the Award Limit.  To the extent required by Section 162(m) of the Code, shares
subject to Options which are canceled continue to be counted against the Option
Limit and if, after grant of an Option, the price of shares subject to such
Option is reduced, the transaction is treated as a cancellation of the Option
and a grant of a new Option and both the Option deemed to be canceled and the
Option deemed to be granted are counted against the Award Limit.

     2.2.  Add-back of Awards.  If any Option expires or is canceled without
           ------------------
having been fully exercised, or is exercised in whole or in part for cash as
permitted by this Plan, or if any share of Restricted Stock is forfeited,
expires or is canceled, the number of shares subject to such Award but as to
which such Option was not exercised prior to its expiration or cancellation, or
with respect to which such Restricted Stock expired, was canceled or forfeited,
may again be optioned, granted or awarded hereunder, subject to the limitations
of Section 2.1.  Furthermore, any shares subject to Awards which are adjusted
pursuant to Section 8.3 and become exercisable with respect to shares of stock
of another corporation shall be considered canceled and may again be subject to
Awards, subject to the limitations of Section 2.1.  Shares of Common Stock which
are delivered by the Optionee or withheld by the Company upon the exercise of
any Option under this Plan, in payment of the exercise price thereof, may again
be subject to Awards hereunder, subject to the limitations of Section 2.1.
Notwithstanding the provisions of this Section 2.2, no shares of Common Stock
may again be optioned if such action would cause an Incentive Stock Option to
fail to qualify as an incentive stock option under Section 422 of the Code.

                                  ARTICLE III
                              GRANTING OF OPTIONS

     3.1.  Eligibility.  Any Employee or consultant selected by the Committee
           -----------
pursuant to Section 3.4(a)(i) shall be eligible to be granted an Option.

                                       5
<PAGE>

     3.2.  Disqualification for Stock Ownership.  No person may be granted an
           ------------------------------------
Incentive Stock Option under this Plan if such person, at the time the Incentive
Stock Option is granted, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
then existing Subsidiary or parent corporation (within the meaning of Section
422 of the Code) unless such Incentive Stock Option conforms to the applicable
provisions of Section 422 of the Code as they relate to Incentive Stock Options
held by stockholders owning stock possessing more than 10% of the total combined
voting power of the capital stock of the Company.

     3.3  Qualification of Incentive Stock Options.  No Incentive Stock Option
          ----------------------------------------
shall be granted to any person who is not an Employee of the Company.

     3.4  Granting of Options.
          -------------------

          (a) The Committee shall from time to time, in its absolute discretion,
and subject to applicable limitations of this Plan:

               (i) Determine which Employees are key Employees and select from
          among the key Employees and consultants (including Employees who have
          previously received Options or other awards under this Plan) such of
          them as in its opinion should be granted Options;

               (ii) Subject to the Award Limit, determine the number of shares
          to be subject to such Options granted to the selected key Employees;

               (iii)  Subject to Section 3.3, determine whether such Options are
          to be Incentive Stock Options or Non-Qualified Stock Options and
          whether such Options are to qualify as performance-based compensation
          as described in Section 162(m)(4)(C) of the Code; and

               (iv) Determine the terms and conditions of such Options,
          consistent with this Plan; provided, however, that the terms and
                                     --------  -------
          conditions of Options intended to qualify as performance-based
          compensation as described in Section 162(m)(4)(C) of the Code shall
          include, but not be limited to, such terms and conditions as may be
          necessary to meet the applicable provisions of Section 162(m) of the
          Code.

          (b) Upon the selection of a key Employee or consultant to be granted
an Option, the Committee shall instruct the Secretary of the Company to issue
the Option and may impose such conditions on the grant of the Option as it deems
appropriate.  Without limiting the generality of the preceding sentence, the
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of an Option to an Employee or consultant
that the Employee or consultant surrender for cancellation some or all of the
unexercised Options which have been previously granted to him under this Plan or
otherwise.  An Option, the grant of

                                       6
<PAGE>

which is conditioned upon such surrender, may have an option price lower (or
higher) than the exercise price of such surrendered Option, may cover the same
(or a lesser or greater) number of shares as such surrendered Option, may
contain such other terms as the Committee deems appropriate, and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, exercise period or any other term or condition of such
surrendered Option.

          (c) Any Incentive Stock Option granted under this Plan may be modified
by the Committee to disqualify such option from treatment as an "incentive stock
option" under Section 422 of the Code.

                                   ARTICLE IV
                                TERMS OF OPTIONS

     4.1.  Option Agreement.  Each Option shall be evidenced by a written Stock
           ----------------
Option Agreement, which shall be executed by the Optionee and an authorized
officer of the Company and which shall contain such terms and conditions as the
Committee shall determine, consistent with this Plan.  Stock Option Agreements
evidencing Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code.  Stock Option Agreements evidencing Incentive Stock Options
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.

     4.2.  Option Price.  The price per share of the shares subject to each
           ------------
Option shall be set by the Committee; provided, however, that such price shall
                                      --------  -------
be no less than the par value of a share of Common Stock, unless otherwise
permitted by applicable state law, and (i) in the case of Incentive Stock
Options and Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code, such price shall not be less than
100% of the Fair Market Value of a share of Common Stock on the date the Option
is granted; and (ii) in the case of Incentive Stock Options granted to an
individual then owning (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation thereof (within the meaning of
Section 422 of the Code) such price shall not be less than 110% of the Fair
Market Value of a share of Common Stock on the date the Option is granted.

     4.3.  Option Term.  The term of an Option shall be set by the Committee in
           -----------
its discretion; provided, however, that in the case of Incentive Stock Options,
                --------  -------
the term shall not be more than ten (10) years from the date the Incentive Stock
Option is granted, or five (5) years from such date if the Incentive Stock
Option is granted to an individual then owning (within the meaning of Section
424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary or parent corporation thereof
(within the meaning of Section 422 of the Code).  Except as it may cause a
disqualifying disposition under Section 421 of the Code and regulations and
rulings thereunder applicable to Incentive Stock Options, the Committee may
extend the term of any outstanding Option in connection with any

                                       7
<PAGE>

Termination of Employment of the Optionee, or amend any other term or condition
of such Option relating to such a termination.

     4.4.  Option Vesting.
           --------------

          (a) Unless otherwise determined by the Committee in its sole
discretion, options granted under the Plan shall become exercisable in
cumulative installments, 1/4th on the first anniversary of the date of Option
grant, and the remainder in 36 equal monthly installments, commencing on the
first day of the thirteenth month following the date of Option grant.  At any
time after grant of an Option, the Committee may, in its sole and absolute
discretion and subject to whatever terms and conditions it selects, accelerate
the period during which an Option vests.

          (b) No portion of an Option which is unexercisable at Termination of
Employment, shall thereafter become exercisable, except as may be otherwise
provided by the Committee either in the Stock Option Agreement or by action of
the Committee following the grant of the Option.

          (c) To the extent that the aggregate Fair Market Value of stock with
respect to which "incentive stock options" (within the meaning of Section 422 of
the Code, but without regard to Section 422(d) of the Code) are exercisable for
the first time by an Optionee during any calendar year (under the Plan and all
other incentive stock option plans of the Company and any Subsidiary) exceeds
$100,000, such Options shall be treated as Non-Qualified Options to the extent
required by Section 422 of the Code.  The rule set forth in the preceding
sentence shall be applied by taking Options into account in the order in which
they were granted.  For purposes of this Section 4.4(c), the Fair Market Value
of stock shall be determined as of the time the Option with respect to such
stock is granted.

     4.5.  Consideration.  Unless the Committee determines otherwise in its sole
           -------------
discretion, in consideration of the granting of an Option, the Optionee shall
agree, in the written Stock Option Agreement, to remain in the employ of the
Company or any Subsidiary for a period of at least one year (or such shorter
period as may be fixed in the Stock Option Agreement or by action of the
Committee following grant of the Option) after the Option is granted.  Nothing
in this Plan or in any Stock Option Agreement hereunder shall confer upon any
Optionee any right to continue in the employ of, or as a consultant for, the
Company or any Subsidiary or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Optionee at any time for any reason whatsoever, with or without
good cause.

                                   ARTICLE V
                              EXERCISE OF OPTIONS

     5.1.  Partial Exercise.  An exercisable Option may be exercised in whole or
           ----------------
in part.  However, an Option shall not be exercisable with respect to fractional
shares and the Committee may require that, by the terms of the Option, a partial
exercise be with respect to a minimum number of shares.

                                       8
<PAGE>

     5.2.  Manner of Exercise.  All or a portion of an exercisable Option shall
           ------------------
be deemed exercised upon delivery of all of the following to the Secretary of
the Company or his office:

          (a) A  written notice complying with the applicable rules established
by the Committee (or the Board, in the case of Options granted to Independent
Directors) stating that the Option, or a portion thereof, is exercised.  The
notice shall be signed by the Optionee or other person then entitled to exercise
the Option or such portion;

          (b) Such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations.  The Committee may, in its
absolute discretion, also take whatever additional actions it deems appropriate
to effect such compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer notices to agents and registrars;

          (c) In the event that the Option shall be exercised pursuant to
Section 5.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option; and

          (d) Full cash payment to the Secretary of the Company for the shares
with respect to which the Option, or portion thereof, is exercised.  However,
the Committee may in its discretion (i) allow a delay in payment up to thirty
(30) days from the date the Option, or portion thereof, is exercised; (ii) allow
payment, in whole or in part, through the delivery of shares of Common Stock
owned by the Optionee, duly endorsed for transfer to the Company with a Fair
Market Value on the date of delivery equal to the aggregate exercise price of
the Option or exercised portion thereof; (iii) allow payment, in whole or in
part, through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value on the date of Option exercise
equal to the aggregate exercise price of the Option or exercised portion
thereof; (iv) allow payment, in whole or in part, through the delivery of
property of any kind which constitutes good and valuable consideration; (v)
allow payment, in whole or in part, through the delivery of a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code) and payable upon such terms
as may be prescribed by the Committee; (vi) allow payment, in whole or in part,
through the delivery of a notice that the Optionee has placed a market sell
order with a broker with respect to shares of Common Stock then issuable upon
exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; or (vii) allow payment through any
combination of the consideration provided in the foregoing subparagraphs (ii),
(iii), (iv), (v) and (vi).  In the case of a promissory note, the Committee may
also prescribe the form of such note and the security to be given for such note.
The Option may not be exercised, however, by delivery of a promissory note or by
a loan from the Company when or where such loan or other extension of credit is
prohibited by law.

                                       9
<PAGE>

     5.3.  Conditions to Issuance of Stock Certificates.  The Company shall not
           --------------------------------------------
be required to issue or deliver any certificate or certificates for shares of
stock purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:

          (a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed;

          (b) The completion of any registration or other qualification of such
shares under any state or federal law, or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental regulatory body
which the Committee, in its absolute discretion, deems necessary or advisable;

          (c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable;

          (d) The lapse of such reasonable period of time following the exercise
of the Option as the Committee may establish from time to time for reasons of
administrative convenience; and

          (e) The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax.

     5.4.   Rights as Stockholders.  The holders of Options shall not be, nor
            ----------------------
have any of the rights or privileges of, stockholders of the Company in respect
of any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such holders.

     5.5.  Ownership and Transfer Restrictions.  The Committee, in its absolute
           -----------------------------------
discretion, may impose such restrictions on the ownership and transferability of
the shares purchasable upon the exercise of an Option as it deems appropriate.
Any such restriction shall be set forth in the respective Stock Option Agreement
and may be referred to on the certificates evidencing such shares.  The
Committee may require the Employee to give the Company prompt notice of any
disposition of shares of Common Stock acquired by exercise of an Incentive Stock
Option within (i) two years from the date of granting such Option to such
Employee or (ii) one year after the transfer of such shares to such Employee.
The Committee may direct that the certificates evidencing shares acquired by
exercise of an Option refer to such requirement to give prompt notice of
disposition.

                                  ARTICLE VI
                               RESTRICTED STOCK

     6.1.  Restricted Stock.  The Committee may from time to time cause the
           ----------------
Company to grant pursuant to the Plan Awards of Restricted Stock to Employees
and consultants for such

                                       10
<PAGE>

consideration, if any, as the Committee shall determine, subject to such
restrictions, conditions and other terms as the Committee may determine.

          (a) Certificates.  The Company shall issue, in the name of each
              ------------
Grantee to whom shares of Restricted Stock have been granted, certificates
representing the total number of shares of Restricted Stock granted to the
Grantee, as soon as reasonably practicable after the grant.  The Company, at the
direction of the Committee, shall hold such certificates, properly endorsed for
transfer, for the recipient's benefit until such time as the shares of
Restricted Stock are forfeited to the Company or the restrictions lapse.  Each
such certificate shall bear the following legend, in addition to such other
legends as counsel to the Corporation may require:

          THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER AND
          OTHER RESTRICTIONS UNDER THE AMENDED AND RESTATED 1997 EMPLOYEE STOCK
          INCENTIVE PLAN OF TELLIUM, INC. AND UNDER A RESTRICTED STOCK AGREEMENT
          WITH THE CORPORATION.  NO INTEREST IN  THE SHARES REPRESENTED HEREBY
          MAY BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE PROVISIONS OF SUCH
          PLAN AND AGREEMENT.

          (b) Rights of Grantee.  Except as provided in this Article VI or as
              -----------------
otherwise determined by the Committee,  holders of Restricted Stock shall have
the rights of a stockholder of the Company holding the class or series of Common
Stock that is the subject of the Restricted Stock, including, if applicable, the
right to vote such Restricted Stock and the right to receive any distributions
of regular cash dividends with respect to such shares.  If so determined by the
Committee in the applicable Restricted Stock Agreement and subject to Article
II, (A) cash dividends or distributions of property other than Common Stock with
respect to the class or series of Common Stock that is the subject of the
Restricted Stock Award shall be automatically deferred and reinvested in
additional Restricted Stock, held subject to the vesting of the underlying
Restricted Stock, or held subject to meeting Performance Goals applicable only
to dividends, and (B) dividends payable in Common Stock shall be paid in the
form of Restricted Stock of the same class as the Common Stock with which such
dividend was paid, held subject to the vesting of the underlying Restricted
Stock, or held subject to meeting Performance Goals applicable only to
dividends.

          (c) Delivery of Restricted Stock.  Upon the expiration or termination
              ----------------------------
of the Restricted Period and the satisfaction of any Performance Goals and any
other conditions prescribed by the Committee, the restrictions applicable to the
Restricted Stock shall lapse and a certificate for the number of Shares with
respect to which the restrictions have lapsed shall be delivered, free of all
such restrictions, to the Grantee.

     6.2.  Terms and Conditions.  Shares of Restricted Stock shall be subject to
           --------------------
the following terms and conditions:

                                       11
<PAGE>

          (a)  The Committee may, prior to or at the time of grant, designate an
Award of Restricted Stock as a Qualified Performance-Based Award, in which event
it shall condition the grant or vesting, as applicable, of such Restricted Stock
upon the attainment of Performance Goals. If the Committee does not designate an
Award of Restricted Stock as a Qualified Performance-Based Award, it may also
condition the grant or vesting thereof upon the attainment of Performance Goals.
Regardless of whether an Award of Restricted Stock is a Qualified Performance-
Based Award, the Committee may also condition the grant of vesting thereof upon
the continued service of the Grantee.  The conditions for grant or vesting and
the other provisions of Restricted Stock Awards (including without limitation
any applicable Performance Goals) need not be the same with respect to each
recipient.  The Committee may at any time, in its sole discretion, accelerate or
waive, in whole of in part, any of the foregoing restrictions; provided,
                                                               --------
however, that (except as otherwise provided in Section 6.2(c) or 8.3 in the case
-------
of Restricted Stock that is a Qualified Performance-Based Award) the applicable
Performance Goals have been satisfied;

          (b)  Subject to the provisions of the Plan and the Restricted Stock
Agreement, during the period, if any, set by the Committee, commencing with the
date of such Award for which such continued service is required (the
"Restriction Period"), and until either, as determined by the Committee, the
later of (i) the expiration of the Restriction Period and (ii) the date the
applicable Performance Goals (if any) are satisfied, the Grantee shall not be
permitted to sell, assign, transfer, pledge or otherwise encumber shares of
Restricted Stock;

          (c)  except to the extent otherwise provided in the applicable
Restricted Stock Agreement or this Article VI, upon a Termination of Employment
for any reason during the Restriction Period or before the applicable
Performance Goals are satisfied, all shares still subject to restriction shall
be forfeited by the Grantee; provided, however, that the Committee shall have
the discretion to waive, in whole of in part, any of all remaining restrictions
(other than, in the case of Restricted Stock which is a Qualified Performance-
Based Award, satisfaction of the applicable Performance Goals unless the
employment is terminated by reason of death or Disability) with respect to any
or all of such shares of Restricted Stock;

     6.3.  Agreements.  Restricted Stock Awards granted under the Plan shall be
           ----------
evidenced by written documents ("Restricted Stock Agreements") in such form as
the Committee shall, from time to time, approve, which Restricted Stock
Agreements shall contain such provisions, not inconsistent with the provisions
of the Plan.  Each Grantee shall enter into, and be bound by, the terms of the
Restricted Stock Agreement.

                                  ARTICLE VII.
                                 ADMINISTRATION

     7.1  Compensation Committee.  Prior to the Company's initial registration
          ----------------------
of Common Stock under Section 12 of the Exchange Act, the Compensation Committee
shall be appointed by the Board and may consist of one or members of the Board
or the entire Board .  Following such registration, the Compensation Committee
(or another committee or a subcommittee of the Board assuming the functions of
the Committee under this Plan) shall

                                       12
<PAGE>

consist solely of two or more persons appointed by and holding office at the
pleasure of the Board, each of whom is both a "non-employee director" as defined
by Rule 16b-3 and an "outside director" for purposes of Section 162(m) of the
Code. Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may be filled by the Board.

     7.2.  Duties and Powers of Committee.  It shall be the duty of the
           ------------------------------
Committee to conduct the general administration of this Plan in accordance with
its provisions.  The Committee shall have the power to interpret this Plan and
the agreements pursuant to which Awards are granted, and to adopt such rules for
the administration, interpretation, and application of this Plan as are
consistent therewith and to interpret, amend or revoke any such rules.  Any such
grant under this Plan need not be the same with respect to each Grantee.  Any
such interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code.  In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under this Plan except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee.

     7.3.  Majority Rule; Unanimous Written Consent.  The Committee shall act by
           ----------------------------------------
a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.

     7.4.  Compensation; Professional Assistance; Good Faith Actions.  Members
           ---------------------------------------------------------
of the Committee shall receive such compensation for their services as members
as may be determined by the Board.  All expenses and liabilities which members
of the Committee incur in connection with the administration of this Plan shall
be borne by the Company.  The Committee may, with the approval of the Board,
employ attorneys, consultants, accountants, appraisers, brokers, or other
persons.  The Committee, the Company and the Company's officers and Directors
shall be entitled to rely upon the advice, opinions or valuations of any such
persons.  All actions taken and all interpretations and determinations made by
the Committee or the Board in good faith shall be final and binding upon all
Grantees, the Company and all other interested persons.  No members of the
Committee or Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to this Plan or Awards, and all
members of the Committee and the Board shall be fully protected by the Company
in respect of any such action, determination or interpretation.

                                 ARTICLE VIII.
                            MISCELLANEOUS PROVISIONS

     8.1.  Not Transferable.  Awards under this Plan may not be sold, pledged,
           ----------------
assigned, or transferred in any manner other than by will or the laws of descent
and distribution or, in the case of Restricted Stock or Non-Qualified Stock
Options, pursuant to a QDRO, unless and until, in the case of Options, shares
underlying such Options have been issued, and in the case of

                                       13
<PAGE>

Restricted Stock, such shares have vested. No Award or interest or right therein
shall be liable for the debts, contracts or engagements of the Grantee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.

     During the lifetime of the Optionee, only he may exercise an Option (or any
portion thereof) granted to him under the Plan, unless it has been disposed of
pursuant to a QDRO.  After the death of the Optionee, any exercisable portion of
an Option may, prior to the time when such portion becomes unexercisable under
the Plan or the applicable Stock Option Agreement, be exercised by his personal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.

     8.2.  Amendment, Suspension or Termination of this Plan.  Except as
           -------------------------------------------------
otherwise provided in this Section 8.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board or the Committee.  However, without approval of the
Company's stockholders given within twelve months before or after the action by
the Board or the Committee, no action of the Board or the Committee may, except
as provided in Section 8.3, increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under this Plan or modify the Award
Limit, and no action of the Board or the Committee may be taken that would
otherwise require stockholder approval as a matter of applicable law, regulation
or rule.  No amendment, suspension or termination of this Plan shall, without
the consent of the holder of Awards, alter or impair any rights or obligations
under any Awards theretofore granted, unless the award itself otherwise
expressly so provides.  No Awards may be granted during any period of suspension
or after termination of this Plan, and in no event may any Incentive Stock
Option be granted under this Plan after the first to occur of the following
events:

          (a) The expiration of ten years from the date the Plan is adopted by
the Board; or

          (b) The expiration of ten years from the date the Plan is approved by
the Company's stockholders under Section 8.4.

     8.3.  Changes in Common Stock or Assets of the Company, Acquisition or
           ----------------------------------------------------------------
Liquidation of the Company and Other Corporate Events.
-----------------------------------------------------

          (a) Subject to Section 8.3(d), in the event that the Committee
determines that any dividend or other distribution (whether in the form of cash,
Common Stock, other securities, or other property), recapitalization,
reclassification, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, liquidation,
dissolution, or sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company (including, but not limited to, a
Corporate Transaction), or exchange of

                                       14
<PAGE>

Common Stock or other securities of the Company, issuance of warrants or other
rights to purchase Common Stock or other securities of the Company, or other
similar corporate transaction or event, in the Committee's sole discretion,
affects the Common Stock such that an adjustment is determined by the Committee
to be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to an Award, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of

               (i) the number and kind of shares of Common Stock (or other
          securities or property) with respect to which Awards may be granted
          under the Plan (including, but not limited to, adjustments of the
          limitations in Section 2.1 on the maximum number and kind of shares
          which may be issued and adjustments of the Award Limit),

               (ii) the number and kind of shares of Common Stock (or other
          securities or property) subject to outstanding Awards, and

               (iii)  the grant or exercise price with respect to any Award.

          (b) Subject to Section 8.3(d), in the event of any Corporate
Transaction or other transaction or event described in Section 8.3(a) or any
unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations, or accounting
principles, the Committee in its discretion is hereby authorized to take any one
or more of the following actions whenever the Committee determines that such
action is appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan or
with respect to any Award under this Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:

               (i) In its sole and absolute discretion, and on such terms and
          conditions as it deems appropriate, the Committee may provide, either
          by the terms of the agreement or by action taken prior to the
          occurrence of such transaction or event and either automatically or
          upon the Optionee's request, for either the purchase of any such
          Option for an amount of cash equal to the amount that could have been
          attained upon the exercise of such Option or realization of the
          Optionee's rights had such Option been currently exercisable (less the
          exercise price) or the replacement of such Option with other rights or
          property selected by the Committee in its sole discretion;

               (ii) In its sole and absolute discretion, the Committee may
          provide, either by the terms of such Option or by action taken prior
          to the occurrence of such transaction or event that it cannot be
          exercised after such event;

               (iii)  In its sole and absolute discretion, and on such terms and
          conditions as it deems appropriate, the Committee may provide, either
          by the

                                       15
<PAGE>

          terms of such Option or by action taken prior to the occurrence of
          such transaction or event, that for a specified period of time prior
          to such transaction or event, such Option shall be exercisable as to
          all shares covered thereby, notwithstanding anything to the contrary
          in Section 4.4 hereof or the provisions of such Option;

               (iv) In its sole and absolute discretion, and on such terms and
          conditions as it deems appropriate, the Committee may provide, either
          by the terms of such Award or by action taken prior to the occurrence
          of such transaction or event, that upon such event, such Award be
          assumed by the successor or survivor corporation, or a parent or
          subsidiary thereof, or shall be substituted for by similar options,
          rights or awards covering the stock of the successor or survivor
          corporation, or a parent or subsidiary thereof, with appropriate
          adjustments as to the number and kind of shares and prices;

               (v)  In its sole and absolute discretion, and on such terms and
          conditions as it deems appropriate, the Committee may provide, either
          by the terms of such Restricted Stock or by action taken prior to the
          occurrence of such transaction or event, that upon such event, the
          restrictions and deferral limitations applicable to any outstanding
          Restricted Stock shall lapse, and such Restricted Stock shall become
          free of all restrictions and become fully vested and transferable to
          the  full extent of the original grant; and

               (vi) In its sole and absolute discretion, and on such terms and
          conditions as it deems appropriate, the Committee may make adjustments
          in the number and type of shares of Common Stock (or other securities
          or property) subject to outstanding Awards and/or in the terms and
          conditions of (including the exercise price with respect to Options)
          and the criteria included in, outstanding Awards and Awards which may
          be granted in the future.

          (c) Subject to Sections 8.3(d) and 8.8, the Committee may, in its
discretion, include such further provisions and limitations in any Award
agreement or certificate, as it may deem equitable and in the best interests of
the Company.

          (d) With respect to Incentive Stock Options intended to qualify as
performance-based compensation under Section 162(m), no adjustment or action
described in this Section 8.3 or in any other provision of the Plan shall be
authorized to the extent that such adjustment or action would cause the Plan to
violate Section 422(b)(1) of the Code or would cause such Option to fail to so
qualify under Section 162(m), as the case may be, or any successor provisions
thereto.  Furthermore, no such adjustment or action shall be authorized to the
extent such adjustment or action would result in short-swing profits liability
under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the
Committee determines that the Award is not to comply with such exemptive
conditions.  The number of shares of Common Stock subject to any Award shall
always be rounded to the next whole number.

                                       16
<PAGE>

     8.4. Approval of Plan by Stockholders.  The Plan became effective on
          --------------------------------
October 18, 2000.  This amendment and restatement of the Plan is effective as of
October 18, 2000; provided, however, that no Award granted in excess of the
                  --------  -------
shares previously reserved for issuance upon exercise of Awards granted
hereunder shall be exercisable by a Grantee unless and until the amendments
hereto increasing the number of shares subject to the Plan to 74,250,000 shall
have been approved by the stockholders of the Company in accordance with the
provisions of its Certificate of Incorporation and By-laws, which approval shall
be obtained within twelve (12) months after the adoption of such amendment by
the Board.  This Plan will be submitted for the approval of the Company's
stockholders within twelve months after the date of the Board's initial adoption
of this Plan.  Awards may be awarded prior to such stockholder approval,
provided that Options shall not be exercisable prior to the time when this Plan
is approved by the stockholders, and provided further that if such approval has
not been obtained at the end of said twelve-month period, all Awards previously
granted under this Plan shall thereupon be canceled and become null and void.

     8.5. Tax Withholding.  The Company shall be entitled to require payment in
          ---------------
cash or deduction from other compensation payable to each Optionee of any sums
required by federal, state or local tax law to be withheld with respect to the
issuance, vesting or exercise of any Option.  The Committee may in its
discretion and in satisfaction of the foregoing requirement allow such Optionee
to elect to have the Company withhold shares of Common Stock otherwise issuable
under such Option (or allow the return of shares of Common Stock) having a Fair
Market Value equal to the sums required to be withheld.

     8.6. Loans.  The Committee may, in its discretion, extend one or more loans
          -----
to key Employees in connection with the exercise or receipt of an Award granted
under this Plan.  The terms and conditions of any such loan shall be set by the
Committee.

     8.7. Forfeiture Provisions.  Pursuant to its general authority to determine
          ---------------------
the terms and conditions applicable to Options under the Plan, the Committee
shall have the right to provide in the terms of Options, or to require the
recipient to agree by separate written instrument, that the Option shall
terminate and any unexercised portion of such Option (whether or not vested)
shall be forfeited, if (a) a Termination of Employment occurs prior to a
specified date, or within a specified time period following exercise of the
Option, or (b) the recipient at any time, or during a specified time period,
engages in any activity in competition with the Company, or which is inimical,
contrary or harmful to the interests of the Company, as further defined by the
Committee.

     8.8. Limitations Applicable to Performance-Based Compensation.  Except as
          --------------------------------------------------------
set forth in Sections 6.2 and 8.3(b), any Award intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall be subject to any additional limitations set forth in Section 162(m) of
the Code (including any amendment to Section 162(m) of the Code) or any
regulations or rulings issued thereunder that are requirements for qualification
as performance-based compensation as described in Section 162(m)(4)(C) of the
Code, and this Plan shall be deemed amended to the extent necessary to conform
to such requirements.

                                       17
<PAGE>

     8.9. Effect of Plan Upon Options and Compensation Plans.  The adoption of
          --------------------------------------------------
this Plan shall not affect any other compensation or incentive plans in effect
for the Company or any Subsidiary.  Nothing in this Plan shall be construed to
limit the right of the Company (i) to establish any other forms of incentives or
compensation for Employees, Directors or consultants of the Company or any
Subsidiary or (ii) to grant or assume options or other rights otherwise than
under this Plan in connection with any proper corporate purpose including, but
not by way of limitation, the grant or assumption of options in connection with
the acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, limited liability
company, firm or association.

     8.10.  Compliance with Laws.  This Plan, the granting and vesting of Awards
            --------------------
and the issuance and delivery of shares of Common Stock and the payment of money
under this Plan or under Awards granted hereunder are subject to compliance with
all applicable federal and state laws, rules and regulations (including but not
limited to state and federal securities law and federal margin requirements) and
to such approvals by any listing, regulatory or governmental authority as may,
in the opinion of counsel for the Company, be necessary or advisable in
connection therewith.  Any securities delivered under this Plan shall be subject
to such restrictions, and the person acquiring such securities shall, if
requested by the Company, provide such assurances and representations to the
Company as the Company may deem necessary or desirable to assure compliance with
all applicable legal requirements.  To the extent permitted by applicable law,
the Plan and Awards granted hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.

     8.11.  Titles.  Titles are provided herein for convenience only and are not
            ------
to serve as a basis for interpretation or construction of this Plan.

     8.12.  Governing Law.  This Plan and any agreements hereunder shall be
            -------------
administered, interpreted and enforced under the internal laws of the State of
Delaware without regard to conflict of laws principles thereof.

                                    * * * *

     I hereby certify that the foregoing Amended and Restated Plan was duly
adopted by the Board of Directors of Tellium, Inc. on October 18, 2000.

     Executed on this ___ day of _______, 2000.

                                    ____________________________________
                                    Michael J. Losch
                                    Secretary

                                       18<PAGE>

                                                                   Exhibit 10.19

                                LEASE AGREEMENT

                                    BETWEEN

                          G.B. LTD., L.L.C., LANDLORD

                                      AND

                             TELLIUM, INC., TENANT
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<S>                                                                         <C>
1.  GENERAL................................................................  1
2.  LEASE PARTICULARS......................................................  2
3.  LEASE AND RENT.........................................................  3
4.  USE....................................................................  3
5.  CHANGE OF COMMENCEMENT DATE............................................  3
6.  ACCEPTANCE.............................................................  4
7.  COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS........................  4
8.  PERSONAL PROPERTY TAXES................................................  4
9.  COMMON CHARGES.........................................................  4
10. UTILITIES; TRASH REMOVAL; RECYCLING....................................  6
11. TENANT ELECTRIC........................................................  6
12. PARKING................................................................  7
13. ENTRY..................................................................  7
14. MAINTENANCE............................................................  7
15. ALTERATIONS............................................................  8
16. TRANSFERS OF TENANT'S INTEREST.........................................  9
17. SURRENDER..............................................................  9
18. HOLDING OVER...........................................................  9
19. RESERVED...............................................................  9
20. QUIET ENJOYMENT........................................................  9
21. AIR AND LIGHT..........................................................  9
22. DEFAULT................................................................  9
23. SUBORDINATION AND ESTOPPEL............................................. 11
24. CASUALTY AND CONDEMNATION.............................................. 12
25. CHANGES SURROUNDING BUILDING........................................... 13
26. TENANT'S PROPERTY...................................................... 13
27. NOTICE................................................................. 13
28. DISCLAIMER BY AND INDEMNIFICATION OF LANDLORD.......................... 13
29. INSURANCE.............................................................. 14
30. TENANT'S LIABILITY..................................................... 14
31. RULES AND REGULATIONS.................................................. 14
32. MISCELLANEOUS.......................................................... 15
33. MANAGING AGENT......................................................... 16
34. LANDLORD'S RIGHT TO MODIFY............................................. 16
35. CORPORATE TENANTS...................................................... 16
36. SUCCESSORS & ATTACHMENTS............................................... 17
</TABLE>

                                       i
<PAGE>

     This LEASE is made (this 9th day of February, 1998 between G.B. Ltd.,
L.L.C., 63 West Main Street, P. O. Box 5008, Freehold, New Jersey 07728,
hereinafter referred to as "Landlord" and Tellium, Inc., whose address is 31
Northfield Avenue, Edison, New Jersey 08837, hereinafter referred to as
"Tenant".

                                  WITNESSETH:

     For and in consideration of the covenants herein contained, and upon the
terms and conditions herein set forth, Landlord and Tenant agree as follows:

     1.   GENERAL.

     1.1  Definitions: Except where the context otherwise connotes, for all
purposes of this Lease and all agreements supplemental thereto or modifying this
Lease, the following terms shall have the meanings specified:

     (a)  "Additional Rent" shall mean all sums payable by Tenant to Landlord
pursuant to the various Articles herein in which said term is used.

     (b)  "Basic Rent" shall mean the rent per annum so designated in Section
2.1 hereof which may be payable in equal monthly installments on the first day
of each month during the Term, in advance, in the amount per month set forth in
Section 2.1 hereof. The Basic Rent shall be paid at the office of Landlord, or
such other place as Landlord may designate, without any set-off or deduction
whatsoever.

     (c)  "Broker" shall mean the real estate broker, if any, named in Section
2.2 hereof.

     (d)  "Building" shall mean the building designated in Section 2.3 hereof.

     (e)  "Building Holiday" shall mean President's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day and New Year's Day
as each of said holidays are celebrated in the State in which the Real Property
is located.

     (f)  "Building Hours of Operation" shall mean weekdays between the hours of
8 a.m. through 6 p.m. excluding Building Holidays.

     (g)  "Commencement Date" shall mean the date determined in accordance with
Section 5.

     (h)  "Estimated Commencement Date" shall mean the date so designated in
Section 2.4 hereof.

     (i)  "Excusable Delay" shall mean a delay caused by strike, lockout, act of
God, inability to obtain labor, materials, governmental restrictions, enemy
action, civil commotion, fire, unavoidable casualty or any other cause similar
or dissimilar, beyond the reasonable control of either Landlord or Tenant, as
the case may be or due to the passing of time while waiting for an adjustment of
insurance proceeds. The term "Excusable Delay" shall not include any inability
of Landlord or Tenant to make any payment or incur any cost required of such
party in this Lease.

     (j)  "Governmental Authority" shall mean the municipal, county, state or
federal government, or any agency or quasi-governmental agency, or any fire
insurance rating organization having jurisdiction over the Real Property.

     (k)  "Parking Spaces" shall mean the parking spaces made available for
Tenant's nonexclusive use on the Real Property.

     (1)  "Premises" shall mean the area cross-hatched on the floor plan of the
Building annexed hereto as Exhibit A and made a part hereof.

     (m)  "Real Property" shall mean the land upon which the Building is located
and all of the Buildings collectively, a metes and bounds description of which
is attached hereto as Exhibit E, or such smaller portion of land as constitutes
the Real Property from time to time.

                                       1
<PAGE>

     (n)  "Rentable Area of Building" shall mean the number of square feet so
designated in Section 2.5 hereof.

     (o)  "Rentable Area of the Premises" shall mean the number of square feet
so designated in Section 2.7 hereof.

     (p)  "Security Deposit" shall mean the sum so designated in Section 2.10
hereof which is being deposited by Tenant with Landlord simultaneously herewith.

     (q)  "Structural Repairs" shall mean repairs to the roof, foundation, floor
slabs, exterior walls and support columns of the Buildings and the plumbing,
electric and HVAC conduits.

     (r)  "Term" shall mean a period of time beginning on the Commencement
Date containing the number of consecutive months set forth in Section 2.11
hereof, not including any portion of a month for which Rent is prorated as per
        ---
Section 1.2.

     (s)  "Termination Date" shall mean the last day of the Term.

     1.2  Proration: In the event the Commencement Date shall fall on a day
other than (the first day of the month, the Basic Rent and Additional Rent
payable hereunder for the balance of the calendar month in which the
Commencement Date falls shall be apportioned based on the number of days
remaining in that month.

     1.3  Entire Agreement: This Lease consists of this Lease Agreement and the
attachments listed in the last Section of this Lease Agreement.

     2.   LEASE PARTICULARS.

     2.1  Basic Rent:  The Basic Rent shall be paid in monthly installments on
the first day of each month in advance, without offset or deduction, in
accordance with the attached Exhibits B and C.

     2.2  Broker: Byron Real Estate Co., Inc, and Resource Realty of Central
N.J., Inc.

     2.3  Building: Building C, 2 Crescent Place, Oceanport, New Jersey.

     2.4  Estimated Commencement Date: April 1, 1998.

     2.5  Rentable Area of Building: 67,000 Square Feet.

     2.6  Rentable Area of all Buildings on Real Property: 288,000 Square Feet.

     2.7  Rentable Area of Premises: Initially 42,831 rentable Square Feet
measured outside wall to outside wall (the corridor wall between Buildings A and
C is an outside wall) and to the center line of all shared interior walls, and
including a common area floor factor of 5%; subject to adjustment as set forth
herein, and the initial square footage to be measured by Landlord's architect.

     2.8  Tenant's Proportionate Share of Building: Initially 63.4%, subject to
adjustment as set forth herein.

     2.9  Tenant's Proportionate Share of Real Property: Initially 14.8%,
subject to adjustment as set forth herein.

     2.10 Security Deposit: $51,754.00

     2.11 Number of Consecutive Months in Term: Sixty (60) months.

     2.12 Uses: Office, production, assembly and warehouse. Attached hereto as
Exhibit F is a Schedule of permitted uses for the B and I districts in the
Borough of Oceanport. Landlord represents that the Real Property is in the
industrial or I district.

                                       2
<PAGE>

     2.13 Initial Electric Service Contribution: $7,138.00.

     2.14 Insurance:  $2,000,000.00 combined single limit liability coverage
for personal injury and property damage arising out of a single incident.

     2.15 Preparation of Premises: Promptly following the full execution of
this Lease Agreement and the Tenant's payment of the Security Deposit and first
month's Basic Rent, Landlord shall, at its own cost and expense, hire an
architect to prepare construction plans and specifications based upon Tenant's
floor plan, a copy of which is attached hereto as Exhibit 6. (Landlord and
Tenant acknowledge that said floor plan may be subject to some modification as a
result of architectural and structural limitations, to the extent that any
aspect of the floor plan is not feasible.) Based upon the architect's plans and
specifications, Landlord shall cause the following fit up work to be completed
at its own cost and expense except that Tenant shall contribute $25,000.00
toward the cost of same, as more particularly set forth in Section 2.15A below:

     (a)  Construct a new main entrance and two employee entrances for a total
cost not to exceed $50,000.

     (b)  Raise all ceilings in the office area marked with crosshatching on
Exhibit A, to approximately ten (10) feet and extend the height of the affected
walls.

     (c)  Sheetrock walls in the office area as needed and enclose any columns,
roof drains or utility cabinets in the office area with sheetrock.

     (d)  Replace ceiling tiles and repair ceiling grids in the office area
as needed, to provide a functional ceiling with a presentable appearance.

     (e)  Install new lenses in the florescent lights in the office area.

     (f)  Install new exterior windows in the offices within the office area so
that each office will have one window (subject to structural and aesthetic
considerations). These windows will be similar to the windows installed in the
CommVault space.

     (g)  Repair roof to be watertight and paint all exposed ceilings white.

     (h)  Install new building standard carpet or tile (see Exhibit H) in the
office area, including the hallways.

     (i)  Remove the evaporator, install drop ceiling and install new building
standard carpet in the approximately 24'X 30' and 30' X 40' rooms located to the
right of the existing entrance fronting on Eatontown Boulevard.

     (j)  Remove drop power poles as requested by Tenant.

     (k)  Add new restrooms in the office area at the locations shown on Exhibit
G, to meet all governmental requirements including, without limitation, the
requirements of the Americans With Disabilities Act.

     (l)  The HVAC equipment and distribution system as currently configured
will be in good working condition, satisfactory to maintain a year round
temperature of 70 degrees for cooling and 72 degrees for heating, if the entire
Premises were being utilized for normal office use.

     (m)  Bring in the plumbing for one kitchen break room at the location shown
on the attached Exhibit G.

     (n)  All seals and bumpers at the three (3) loading docks will be repaired
or replaced as needed, and the dock elevator will be in good working condition.

     (o)  The tile floor in the production area will be cleaned, and any cracked
or stained tiles

                                       3
<PAGE>

will be repaired or replaced.

     2.15A  Tenant's Contribution Toward the Landlord's Fit Up Work: In
consideration of the additional bathroom facilities and office modifications to
be constructed by Landlord, which were not originally contemplated by Landlord,
Tenant agrees to pay the sum of $25,000.00 toward Landlord's fit up work. This
sum shall be paid by Tenant to Landlord upon the execution of this Lease.

     2.16   Access to Building:  Notwithstanding the Building Hours defined
above, Landlord and Tenant acknowledge that Tenant may have access to the
Building at any time, 24 hours a day, 7 days a week.

     2.17   Use of Expansion Space: As more particularly set forth below, Tenant
shall have the option to lease the remaining approximately 24,500 rentable
square feet in Building C during the first six (6) to twelve (12) months of the
Term (the "Expansion Space"). For so long as Tenant is not renting the Expansion
Space, and for so long as the Expansion Space has not been leased to a third
party, Tenant shall be permitted to move their product from the shipping and
receiving room to the production area through the Expansion Space.
Simultaneously with completing its initial fit up work as described in Section
2.15 above, Landlord will (at its sole cost) open up any necessary walls between
the Expansion Space and the Premises to permit this use of the Expansion Space
by Tenant. At such time that all or the relevant portion of the Expansion Space
is going to be leased to a third party, then Landlord shall so notify Tenant,
Landlord shall close up the walls between the Premises and the Expansion Space
(and widen the doorway leading from the shipping and receiving room to the
hallway, so that Tenant's forklift may safely access the hallway); and
thereafter, Tenant shall use the existing hallway between Buildings A and C to
move their product from the shipping room to the production area.

     2.18   Option to Rent Expansion Space:  During the first six (6) months
of the Term, Tenant shall have the option to rent the Expansion Space, subject
to the following terms and conditions:

     (a)    Tenant's option to rent the Expansion Space shall be void and of no
force or effect if the Tenant should be in default (and any applicable cure or
grace periods have expired) at the time that Tenant notifies Landlord that it
wishes to exercise its option to rent that space.

     (b)    At such time that Tenant wishes to exercise this option to rent the
Expansion Space, it shall so notify Landlord in writing, which notice shall be
accompanied by a check in the appropriate amount (see Section 2.18(c) below)
representing the Security Deposit, first month's Basic Rent and first month's
Common Charges for the Expansion Space. Upon receipt of Tenant's notice and
check, Landlord shall, at its own cost and expense, expeditiously prepare all
necessary plans and specifications, and file for all required permits in order
to complete the fit up work to the Expansion Space that is described in Section
2.20 below. As soon as Landlord's fit up work is completed, and Landlord
obtains, at its sole expense, a final or conditional final approval from the
Oceanport construction official for its work that allows Tenant to occupy the
Expansion Space, Tenant shall begin paying Basic Rent and its proportionate
share of all Common Charges (as defined in Section 9 below), with respect to the
Expansion Space. All other terms and conditions of this Lease Agreement shall
apply to Tenant's tenancy in the Expansion Space as well, including but not
limited to the Renewal Options set forth in Section 2.21.

     (c)    At such time that Tenant rents the Expansion Space, it shall remit
to Landlord a security deposit in the amount of two times the initial monthly
Basic Rent for that space. The Basic Rent for the Expansion Space during the
initial Term shall be calculated in accordance with the attached Exhibit C.
Tenant shall also pay its proportionate share of Common Charges with respect to
the Expansion Space, in accordance with provisions of Section 9. In the event
that Tenant only rents a portion of the Expansion Space in accordance with
Section 2.19 below, tile square footage calculations shall be adjusted
accordingly.

     2.19   Extension of Option to Rent Expansion Space: In the event that
Tenant does not exercise its option to rent the Expansion Space within the first
six (6) months of the Term, Tenant shall be permitted to extend the option
period for an additional six (6) months (i.e., for the balance of the first year
                                         ----
of the Term), under the following terms and conditions:

                                       4
<PAGE>

     (a)   Tenant must provide to Landlord written notice of its exercise of
this extension of the option to rent the Expansion Space, not later than the
last day of the fifth (5th) month of the Term.

     (b)   Tenant's fight to extend this option period for the rental of the
Expansion Space shall be void and of no force or effect if the Tenant should be
in default (and any applicable cure or grace periods have expired) at the time
that it notifies Landlord of the exercise of this Extension Period.

     (c)   During this second six month option period, Tenant shall pay to
Landlord the sum of $3,062.50 per month as consideration for the extension of
this option to rent the Expansion Space, through and including the twelfth month
of the Term, unless the Expansion Space is sooner rented to either Tenant herein
or to a third party in accordance with the provisions of this Section 2.19.

     (d)   If Tenant wishes to rent the Expansion Space during this second six
(6) month period, the provisions of Section 2.18 above shall be applicable.

     (e)   In the event that Landlord obtains a proposal to rent all or any
portion of the Expansion Space to another tenant before Tenant has served
Landlord with notice or its intent to rent the Expansion Space, Landlord shall
so notify Tenant of the other proposal, and then Tenant shall have ten (10)
business days from the receipt of Landlord's notice within which to notify
Landlord that it will rent that same area of the Expansion Space at that time.
If Tenant chooses to rent that same area of the Expansion Space, it will start
paying Basic Rent, Common Charges and utilities for same calculated in
accordance with the terms of this Lease, on the same date that the Landlord's
other prospective tenant would have started paying same; provided, however, that
in no event shall Tenant be required to commence payment of Basic Rent, Common
Charges and utilities prior to Landlord's completion of its work in the
Expansion Space as required by Section 2.20. If Tenant does not take that area
of the Expansion Space at that time, Landlord may rent it to the other party and
this Tenant's option to rent same shall cease, and Tenant's monthly payments
under Section 2.19(c) hereof shall be prorated accordingly or ceased entirely if
the entire Expansion Space is rented to another tenant.

     (f)   In the event that Landlord rents all or any portion of the Expansion
Space to another party other than Tenant, then the existing bathroom facilities
adjacent to the hallway between Buildings A and C shall be available for use by
the other tenants in common with Tenant, and the square footage of Tenant's
Premises and its proportionate shares of the Building and the Real Property
shall be adjusted accordingly, i.e., by reducing Tenant's square footage and
                               ----
increasing the common area space by the same amount.

     2.20  Fit Up of Expansion Space: At such time that Tenant exercises its
option to Rent all or the remaining portion of the Expansion Space, Tenant shall
take the space "as is", except that the Landlord shall complete the following
fit up work at Landlord's own cost and expense:

     (a)   Within ten (10) days of Tenant's notice to Landlord that it will
be renting all or the remaining portion of the Expansion Space, Tenant shall
advise Landlord of any interior, nonbearing walls that it would like removed,
and Landlord shall cause such walls to be removed.

     (b)   Fill the floor to grade level in the existing "pool" area.

     (c)   Paint all of the interior and perimeter walls and ceilings.

     (d)   Install new building standard floor tile (see Exhibit H).

     2.21  Renewal Option:  At the expiration of the initial Term, Tenant
shall have one option to renew this Lease for an additional term of five (5)
years.  At the expiration of the first renewal term, Tenant shall have one
additional option to renew this Lease for another five (5) year term.  Provided,
however, that these renewal options shall be of no force or effect if Tenant is
in default (and any applicable cure or grace periods have expired) under the
terms of this Lease at the time the option is exercised or thereafter through
the expiration of the then ending Term; and further provided that these options
shall be of no force or effect if Tenant has been late in the

                                       5
<PAGE>

payment of any rent or additional rent due (i.e., payment received by Landlord
more than ten days after it was due), more than three times during the last
eighteen (18) months of the then ending Term. If Tenant wishes to exercise any
renewal option, it shall do so by so notifying the Landlord in writing in
accordance with the "Notices" section of this Lease. In order to exercise the
first option, Tenant shall give Landlord not less than twelve (12) months notice
prior to the expiration of the initial Term. In order to exercise the second
option, Tenant shall give Landlord not less than fifteen (15) months notice
prior to the expiration of the first renewal term. If Tenant exercises any
renewal option, this tenancy shall continue to be governed by the same terms and
conditions as set forth herein, except that the total amount of annual and
monthly payments of Basic Rent for each renewal term shall be adjusted as
follows:

     (a)   During the first renewal term, the Basic Rent shall be calculated
at $9.60/square foot/annum for the initial Premises and $8.40/square foot/annum
for the Expansion Space.

     (b)   During the second renewal term, the annual Basic Rent shall be
calculated at the fair market rental value for the entire Premises over the five
(5) year renewal term.  If the Landlord and Tenant cannot agree upon the fair
market rental value for the Premises (which in no event shall be less than the
Basic Rent that was due for the tenth year of the Term) then the following
formula shall be utilized to make this determination:

     (i)   Not less than thirteen (13) months prior to the inception of the
second renewal term, Landlord shall furnish to Tenant a notice in writing
(hereinafter called "Landlord's Notice") stating what Landlord perceives to be
the fair market rent projected over the five (5) year term.  Landlord's Notice
shall be accompanied by a certification by an MAI or New Jersey State Certified
Real Estate Appraiser as to the fair market rent for the second renewal term.
If the Tenant accepts this fair market rent, it shall be effective throughout
the second renewal term.

     (ii)  If Tenant disagrees with the estimate submitted by Landlord with
Landlord's Notice, then within thirty (30) days after the date of receipt of
Landlord's Notice, Tenant shall (a) notify Landlord that Tenant is revoking its
exercise of the second renewal option; or (b) submit to Landlord an appraisal by
an MAI or New Jersey State Certified Real Estate Appraiser of the fair market
rent over the second renewal term.  If the two estimates are within 5% of one
another, the Basic Rent shall be established as the average of the two
appraisals.

     (iii) If the two appraisals are not within 5% of one another, the two
appraisers, acting on behalf of Landlord and Tenant, shall within fifteen (15)
days after Tenant's appraisal has been submitted, jointly appoint a third MAI or
New Jersey State Certified Real Estate Appraiser (the "Third Appraiser").  If
the two appraisers are unable to agree upon the selection of the Third
Appraiser, then the Third Appraiser shall be selected within fifteen (15) days
thereafter, by an arbitrator pursuant to the rules of the American Arbitration
Association.  The Third Appraiser shall furnish to the Landlord and Tenant, not
later than the date which is thirty (30) days after this selection, a written
appraisal of the fair market rent over the second renewal term.  If the estimate
as to fair market rent submitted by the Third Appraiser is not greater than the
higher of the first two appraisals, nor less than the lower of the first two
appraisals, then the appraisal of the Third Appraiser shall establish the Basic
Rent which shall be binding upon the Landlord and Tenant for the second renewal
term.  If the estimate of the Third Appraiser is greater than the higher of the
first two appraisals or less than the lower of the first two appraisals then the
estimate as to Basic Rent by the Third Appraiser shall be disregarded and the
average of the first two appraisals shall establish the Basic Rent which shall
be binding upon Landlord and Tenant.

     (iv)  Landlord and Tenant shall pay for their own appraisals, and in the
event of a third appraisal, the cost shall be shared equally by Landlord and
Tenant.

     (v)   It is agreed and understood that the fair market rent shall be
determined taking into account all factors relevant to such determination.

     3.    LEASE AND RENT.

     3.1   Duration:  Landlord hereby leases to Tenant and Tenant hereby
rents from Landlord the Premises for the Term.

                                       6
<PAGE>

     3.2   Rent:  Tenant hereby covenants and agrees to pay, when due, the
Basic Rent and all Additional Rent as herein provided.

     3.3   Late Payment:

           Should any installment or installments of Basic Rent or Additional
Rent not be paid and received at the Landlord's office on or before the 5th day
of the month (provided that Tenant has received written notice from Landlord by
fax or other accepted means of notification hereunder at least 24 hours ahead of
time), or on or before the 10th day of the month (if Landlord has not so
notified Tenant in writing that such installment is late), the Tenant agrees to
pay to the Landlord on demand a service charge equal to five percent (5%) of the
overdue amount.  All unpaid rent plus service charges thereon shall accrue
interest at the rate of ten percent (10%) per annum until paid, starting from
the eleventh (11th) day after such payment was due.  The service charge and any
amounts due as a result of applying the default interest rate shall be deemed to
be Additional Rent.  Tenant acknowledges and agrees that such late payment by
Tenant will cause Landlord to incur costs and expenses not contemplated by this
Lease, the exact amounts of which will be extremely difficult to ascertain, and
that such service charge and default interest rate represent a fair estimate of
the costs and expenses that Landlord would incur by reason of Tenant's late
payment.  Tenant further agrees that such service charge and default interest
rate will neither constitute a waiver of Tenant's default with respect to such
overdue amount nor prevent Landlord from exercising any other right or remedy
available to Landlord; provided, however, that if Landlord accepts payment of
all overdue amounts, together with full payment of such service charges and
default interest, Tenant shall be deemed to have cured any default associated
with such late payment.

     4.    USE.

     The Premises shall be used only for those uses listed in Section 2.12
hereof and for no other purposes.  Tenant shall not at any time use or occupy,
or do or permit anything to be done in the Promises, in violation of any law,
statutes or regulations of any Governmental Authority having jurisdiction over
the use and occupation of the Premises or the Building.

     5.    CHANGE OF COMMENCEMENT DATE.

     The Commencement Date shall be the date on which Landlord has completed its
fit up work as described in Section 2.15 above and on which date Landlord
obtains, at its sole expense, a final or conditional final approval from the
Oceanport construction official for its work and that allows Tenant to occupy
the Premises; and on which date Landlord shall deliver to Tenant written notice
that the work has been completed and Tenant may take possession. Tenant's Basic
Rent and Additional Rent obligations shall be prorated from that date to the end
of the calendar month in which such date occurs. Such prorated amounts shall be
paid by Tenant to Landlord within ten (10) days following the Commencement Date.

     6.    ACCEPTANCE.

     When Tenant takes possession of the Premises, Tenant shall be deemed to
have accepted the Premises as being satisfactory and in good condition as of the
date of such possession, subject to Tenant's right to inspect the Premises
during the first thirty (30) days following the Commencement Date, and to create
a "punch list" of any item that may have been improperly or insufficiently
completed by Landlord. Landlord will correct the punch list items as promptly as
is practicable.

     7.    COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS.

     7.1   During the Term hereof, the Tenant shall promptly comply with all
laws, ordinances, rules, regulations, requirements and directives of the
federal, state and municipal governments or public authorities and all of their
departments, bureaus and subdivisions, applicable to the use and occupancy of
the Premises by Tenant, including laws relating to the correction, prevention
and abatement of nuisances, violations and other grievances in, upon or
connected with the Premises caused by Tenant; and Tenant shall promptly comply
with all orders, regulations, requirements and directives of the Board of Fire
Underwriters or similar authority and of any companies which have issued or are
about to issue policies of insurance covering the

                                       7
<PAGE>

Premises and its contents or the Real Property, for the prevention of fire or
other casualty, damage or injury, all at the Tenant's own cost and expense.
Tenant shall also cause its employees, agents, invitees and guests to comply
with the provisions of this Section 7. In the event that the construction of any
modifications, alterations or improvements to the Premises that are required by
applicable law do not relate to Tenant's specific use thereof, Landlord shall
perform such modifications, alterations or improvements, and the cost thereof
shall be amortized with interest at prime plus 2% over the useful life of the
modification, alteration or improvement in question.

     7.2  Tenant shall not do, or permit anything to be done in or to the
Premises, or bring or keep anything therein which will, in any way, increase the
cost of fire or public liability insurance on the Real Property or invalidate or
conflict with the fire insurance or public liability insurance policies covering
the Real Property, and Building fixtures or any personal property kept therein,
or obstruct or interfere with the rights of Landlord or of other tenants, or in
any other way interfere with the other tenants' rights to quiet enjoyment, or
subject Landlord to any liability for injury to persons or damage to property,
or interfere with the good order of the Building, or conflict with the present
or future laws, rules or regulations of any Governmental Authority. Tenant
agrees that any increase in fire insurance premiums on the Building or contents
caused by the occupancy of Tenant and any expense or cost incurred in
consequence of negligence, carelessness or willful action of Tenant, Tenant's
agents, servants, employees, invitees, or licensees, shall be reimbursed to
Landlord within ten (10) days of demand therefore. Landlord shall have all the
rights and remedies for the collection of same as are conferred upon Landlord
for the collection of the Basic Rent provided to be paid pursuant to the terms
hereof.

     7.3  As may be mandated by federal and state statutes and regulations,
Tenant is expressly forbidden from releasing, threatening to release, dumping,
discharging, placing on or in the Real Property, generating, storing, treating,
using or disposing of, on the Real Property, any hazardous substances other than
in compliance with all applicable laws. For purposes of this Lease, "hazardous
substance" means any substance or material giving rise to liability or
responsibility under the Resource Conservation and Recovery Act (RCRA) 42 USC
                                                                          ---
Sec. 6901 et seq.; the Comprehensive Environmental Response Compensation and
          -------
Liability Act (CERCLA) 42 USC Section 9601 et seq. as amended by the Superfund
                          ---              -------
Amendment and Reauthorization Act of 1987 (SARA), 42 USC Sec. 9601 et seq.; the
                                                     ---           -------
Federal Clean Water Act, 33 USC Sec. 1301 et seq.; as well as the New Jersey
                            ---           -------
Spill Compensation and Control Act N.J.S.A. 58:10-23.11 et seq.; The New Jersey
                                   --------             -------
Solid Waste Management Act N.J.S.A. 13:1E-1 et seq.; and the New Jersey Water
                           --------         -------
Pollution Control Act N.J.S.A. 58:10A-1 et seq.; and any and all regulations
                      --------          -------
promulgated pursuant to said federal and state laws, or under any municipal
ordinances, or any common law theory of nuisance or strict liability.

     7.4  If applicable to any cessation of operations by Tenant at the Premises
or any transfer of operations at the Premises from Tenant to another, Tenant
shall, at Tenant's own expense, comply with the Industrial Site Recovery Act
N.J.S.A. 13:1K-6 et seq. and the regulations promulgated thereunder ("ISRA").
--------         -------
In that regard, Tenant shall, at Tenant's own expense, make all submissions to,
provide all information to, and comply with all requirements of, the Bureau of
Industrial Site Evaluation (the "Bureau") of the New Jersey Department of
Environmental Protection ("NJDEP"). Should the Bureau or any other division of
NJDEP determine that a cleanup plan must be prepared and that a cleanup must be
undertaken because of any spills or discharges of hazardous substances or wastes
at the Real Property which occur due to the act or omission of Tenant, Tenant's
agents, invitees, licensees, or employees, then Tenant shall, at Tenant's own
expense, prepare and submit the required plans and financial assurances, and
carry out the approved plans. Tenant's obligations under this paragraph shall
also arise if there is any closing, terminating or transferring of operations of
the Tenant's industrial establishment at the Real Property which are subject to
ISRA. Any submissions to the Bureau that are required by ISRA shall be made no
less than six (6) months before the end of the Tenant's occupancy of the Leased
Premises. Landlord shall be kept advised of each step in the ISRA submission
process, and the Tenant shall diligently pursue any cleanup plan required by the
NJDEP either before or immediately after the expiration of its lease term.

     7.5  At no expense to Landlord, Tenant shall promptly provide all
information requested by Landlord for preparation of ISRA non-applicability
affidavits and shall promptly sign such affidavits when requested by Landlord.
At no expense to Landlord, Tenant agrees to promptly provide any information
requested by Landlord regarding Tenant's use and occupancy at the

                                       8
<PAGE>

Premises, as may be needed to evidence compliance with the terms of applicable
laws and insurance policies; and Tenant agrees to promptly execute any
affidavits or other documents needed in confirmation of same.

     7.6  Tenant shall indemnify, defend and save harmless the Landlord from all
fines, suits, proceedings, claims and actions of any kind arising out of or in
any way connected with any spills or discharges of hazardous substances or
wastes at the Real Property which are attributable to Tenant's acts or
omissions; and from all fines, suits, proceedings, claims and actions of any
kind arising out of Tenant's failure to provide all information, make all
submissions and take all actions required by the provisions of this Section. If
Tenant fails to comply in any respect with the provisions of this Section,
Tenant shall be responsible for any and all damages, costs of remediation and
other costs, penalties, fines, losses and/or expenses (including but not limited
to actual attorney's fees and other professional and consultants' fees) arising
from or attributable to Tenant's non-compliance. Tenant's obligations and
liabilities under this Section shall continue so long as Landlord remains
responsible for any spills or discharges of hazardous substances or wastes at
the Real Property. Tenant's failure to abide by the terms of this Section shall
be restrainable by injunction, as Tenant acknowledges and stipulates that
failure to comply herewith will cause irreparable harm to the Landlord.

     7.7  Landlord hereby represents and warrants to Tenant that, at all times
prior to the Commencement Date, the Premises and its occupants have complied
with ISRA (and its predecessor statute).

     7.8  Landlord hereby indemnifies and agrees to defend and save harmless
Tenant from all fines, suits, proceedings, claims and actions of any kind
arising out of or in any way connected with the use, handling, storage,
processing, disposal, spills or discharges of any hazardous substances or wastes
at the Real Property which occurred prior to the Commencement Date (including
without limitation the presence of any asbestos containing materials at the Real
Property).

     8.   PERSONAL PROPERTY TAXES.

     Tenant agrees to pay all taxes imposed on the personal property of Tenant,
the conduct of its business and its use and occupancy of the Premises.

     9.   COMMON CHARGES.

     9.1  Net Lease. This is an absolutely net Lease and it shall be the
Tenant's responsibility to pay for all charges and expenses attributable to the
Premises, and Tenant shall pay its proportionate share of all Common Charges
(herein so called) for the Building and the Real Property. The Tenant's
obligation to pay for Common Charges for the Building and the Real Property
shall be calculated in accordance with the Tenant's proportionate shares, as set
forth in Sections 2.8 and 2.9.

     9.2  Common Charges Defined. The Tenant hereby agrees to pay as Additional
Rent its proportionate shares of all Common Charges set forth below.

     (a)  "Real Estate Taxes" as set forth in this Section 9.2 shall mean those
taxes attributable to the Real Property, provided that, if because of any change
in the method of taxation of real estate, any other tax or assessment is imposed
upon Landlord or the owner of the land or the Building or both or upon or with
respect to the Landlord of the Building or of the rents or income therefrom in
substitution for or in lieu of any tax or assessment which would otherwise be a
real estate tax, such other tax or assessment shall be deemed real estate taxes
for the purposes of this Section. Notwithstanding anything in this Lease to the
contrary, to the extent that any Real Estate Taxes increase because of any
additional rentable structures placed on the Real Property that will not benefit
the Tenant but will benefit other occupants of the Real Property, Tenant shall
not be required to pay (through Common Charges or otherwise) any portion of such
increase.

     (b)  All gas, water, sewer and electric charges for the common areas of the
Real Property ("Utility Charges").

     (c)  All reasonable and necessary costs of maintaining and managing the
entire Real

                                       9
<PAGE>

Property, including but not limited to landscaping, cleaning services for the
common areas, snow removal, maintenance and cleaning of the parking lot, repairs
of any kind for which Landlord is not reimbursed (except repairs made solely for
the benefit of other occupants of the Real Property, other than Tenant herein),
painting, replacement of worn out or damaged mechanical equipment, management
fees not to exceed 4% of annual gross rents, building and janitorial supplies,
sales or use tax on supplies or services, wages and salaries of all persons
directly and to the extent engaged by Landlord in the operation, maintenance,
management and repair of the Real Property, and any other expense or cost
incurred in accordance with standard management practices for office and
commercial buildings comparable to the Real Property.

     (d)  All costs for repairs to the common areas and utility service systems,
including but not limited to repairs to the parking area and to the roof.
Provided, however, that specifically excluded are costs reimbursed by insurance,
the cost of work performed specifically for a tenant in any building on the Real
Property, costs in connection with preparing space for a new tenant, and real
estate brokers' commissions.

     (e)  Notwithstanding anything to the contrary in this Lease: (i) Common
Charges shall not include any expenses incurred in connection with the leasing
of space in the Building or other portions of the Real Property to any occupant
or the costs of enforcing the obligations of such occupants under their
respective leases; (ii) to the extent that any repair or replacement is
performed that would be required to be capitalized under generally accepted
accounting principles, Landlord shall only be allowed to include the cost of
such repair or replacement in Common Charges amortized with interest at prime
plus two (2%) percent, over the useful life of the repaired or replaced item;
and (iii) Tenant shall only be responsible for Common Charges incurred with
respect to the period of Tenant's occupancy of the Premises.

     9.3  Monthly Contribution Payments. On the first day of each month
following the Commencement Date of this Lease, Tenant shall pay to Landlord on a
monthly basis an estimated amount toward its share of the Landlord's Common
Charges. Landlord shall advise Tenant of the estimated monthly amount to be paid
initially, and that estimated amount may change from time to time, based upon
Landlord's evaluation of anticipated or actual increases or decreases in Common
Charges. Provided, however, that for the first year of the Term, Tenant's
contribution toward Common Charges other than Real Estate Taxes and Utility
Charges shall be capped at a maximum of $1.15 per square foot per annum. For the
second through fifth years of the Term, this cap on Tenant's contribution toward
Common Charges other than Real Estate Taxes and Utility Charges shall increase
by 4% of the dollar figure per square foot per annum (i.e., for the second year
                                                      -----
of the Term the cap would be $1.15 plus 4% = $1.20 per square foot for that
year). After the fifth year, there shall be no further caps on Tenant's Common
Charge contributions. These payments of Additional Rent shall be due and payable
with each monthly installment of Basic Rent.

     9.4  Year-End Reconciliation. Within ninety (90) days after the end of the
calendar year, Landlord shall submit to Tenant a statement showing Landlord's
Common Charges for the year. If Landlord's statement shows that Tenant's
proportionate share of Landlord's Common Charges is greater or less than the
amounts paid by Tenant during the year pursuant to Section 9.3 hereof, the
deficiency or excess, as the case may be, shall either be payable by Tenant to
Landlord within thirty (30) days as Additional Rent, or credited by Landlord to
Tenant. Provided that Tenant has paid in full any deficiency within said thirty
(30) day period, Tenant or its representative shall have the right to audit and
examine Landlord's books and records with respect to the items on the foregoing
Landlord's statement during normal business hours at any time within sixty (60)
days following the delivery by Landlord to Tenant of such Landlord's statement.
Unless Tenant shall take written exception to any item contained therein within
one hundred twenty (120) days after the delivery of same, such Landlord's
statement shall be considered as final and accepted by Tenant. If Landlord and
Tenant dispute the calculation of Common Charges properly payable by Tenant,
either party may submit the dispute to binding arbitration performed under the
rules of the American Arbitration Association.

     9.5  Modification of Proportionate Share. Notwithstanding the foregoing, in
the event that Landlord undertakes certain repairs or replacements to the common
areas of the Real Property or of the Building, that benefit only this Tenant, or
this Tenant and some but not all other tenants at the Real Property, then
Landlord may, at its sole discretion, apportion the cost of such repairs or
replacements among only those tenants benefitted thereby. This Tenant's share of
such costs shall

                                      10
<PAGE>

be calculated by dividing the total square footage of the Premises by the total
rentable square footage of the Building or the Real Property that is also
benefitted by the repair or replacement in question, and multiplying the cost of
said repair or replacement by that percentage. Amounts due to the Landlord for
such costs shall be payable at any time upon demand, or may be included in the
annual reconciliation provided for in Section 9.4 above.

     9.6   Limitation and Survival: In no event shall any adjustment in Tenant's
obligation to pay Additional Rent under this Section 9 result in a decrease in
the Basic Rent payable hereunder. Tenant's obligation to pay Additional Rent and
Landlord's obligation to credit to Tenant any amount referred to in this Section
9, for the final year of the Term, shall survive the Termination Date.

     10.   UTILITIES; TRASH REMOVAL; RECYCLING.

     10.1  Tenant shall pay when due all charges for utilities supplied, i.e.,
                                                                         ----
water, sewer, gas and electricity, including utilities for Tenant's heat,
ventilation and air conditioning requirements, to or for the exclusive benefit
of the Premises. If the Premises are separately metered, Tenant shall maintain
its own accounts with the suppliers of these utility services, and payment shall
be made directly to the supplier. If there is no separate metering, all
applicable charges will be paid to Landlord by Tenant, as Additional Rent, in
accordance with Tenant's usage. With respect to electric service, the provisions
of Section 11 shall apply if Tenant's Premises are not separately metered.

     10.2  Tenant shall arrange and pay for its own refuse removal in accordance
with any plan reasonably set by Landlord for this Real Property. Tenant shall
fully comply with all state, county and municipal laws regulating refuse
disposal and recycling.

     10.3  Tenant's Premises are not separately metered for electric service,
and the manner of billing Tenant for electric service is described at length in
Section 11 below. There is no gas service to the Premises at the present time.
With respect to water service, the water bill for the entire Real Property will
be allocated among the tenants, in accordance with each tenant's proportionate
share of the Real Property. With regard to sewer, the sewer company currently
charges $70.00 per quarter for the equivalent of every four full time employees
(if a tenant has part time employees, a calculation is done to equate a certain
number of part time employees to a full time employee, depending upon the number
of hours that they work.)

     11.   TENANT ELECTRIC.

     11.1  Unless and until the Premises are separately metered for electric
service, Landlord shall furnish the electric energy that Tenant shall require in
the Premises. Tenant shall pay to Landlord, as Additional Rent, for all electric
energy furnished to Tenant at the Premises. Additional Rent for such electric
energy shall be calculated and payable in the manner hereinafter set forth.

     11.2  The Landlord shall compute the Tenant's use of electricity to the
Premises via a computerized measuring system that effectively "submeters"
Tenant's usage, and shall compute the cost thereof for the quantity so
determined at the actual rates charged to Landlord (including any applicable
discounts or credits), taking into consideration all factors, including but not
limited to peak demand usages. Tenant shall pay Landlord the cost of such
electric energy, as so calculated, on a monthly basis, as Additional Rent,
together with its payment of Basic Rent.

     (a)   Until such time as Landlord shall complete the aforedescribed
computation, Tenant shall pay to Landlord, each and every month, as Additional
Rent, for and on account of Tenant's electrical consumption, the sum set forth
in Section 2.13 to be applied against Tenant's obligations hereunder. Upon
completion of the computation, there shall be an adjustment for the period from
the Commencement Date through the date that the results of the computation shall
be effectuated as shall be required. Thereafter, Tenant shall continue to pay a
monthly Electric Service Contribution, the amount of which shall be based upon
the Landlord's periodic computation of Tenant's actual electrical usage.

     (b)   Landlord shall submit to Tenant the results of its electric measuring
computation on

                                      11
<PAGE>

a periodic basis, and any deficiency or excess, as the case may be, shall either
be payable by Tenant to Landlord within ten (10) days as Additional Rent, or
credited by Landlord to Tenant. Provided that Tenant has paid in full any
deficiency within said ten (10) day period, and provided that Tenant continues
to pay its monthly Electric Service Contribution in the required amount, Tenant
or its representative shall have the right to object to any periodic computation
within sixty (60) days of the date that Landlord furnished Tenant with the
results of the computation. Unless Tenant takes written exception to the
computation with one hundred twenty (120) days after delivery of same, such
Landlord's computation shall be considered as final and accepted by Tenant. If
Landlord and Tenant dispute the periodic computation of Tenant's electric usage
charges payable by Tenant, either party may submit the dispute to binding
arbitration performed under the rules of the American Arbitration Association.

     11.3  Landlord shall not be liable in any way to Tenant for any failure or
defect in the supply or character of electric energy furnished to the Premises
by reason of any requirement, act or omission of the public utility serving the
Building with electricity, or for any other reason other than Landlord's fault,
negligence or failure to perform its obligations under this Lease.

     11.4  Tenant's use of electric energy in the Premises shall not at any time
exceed the capacity of any of the electrical conductors and equipment in or
otherwise serving the Premises. Landlord warrants and represents to Tenant that
the electric service presently available with the existing equipment is 1600
amps, 480 volt, 3 phase service.

     11.5  If the public utility rate schedule for the supply of electric
current to the Building shall change during the Term of this Lease, the
Additional Rent payable pursuant to Section 11.2 hereof shall be equitably
adjusted to reflect the resulting increase or decrease, as the case may be, in
Landlord's cost of furnishing electric service to the Premises effective as of
the date of any change.

     12.   PARKING.

     Tenant shall have the exclusive use of 15 parking spaces to the south of
their new main entrance. Provided, however, that if the Tenant does not rent the
Expansion Space, the five most southerly spaces will no longer be reserved for
their exclusive use. The Tenant shall also be permitted to use the rest of the
Parking Spaces in the parking area for the Building of which the Premises form a
part, in common with other tenants and occupants of the Real Property. There
shall be no charge for the use of these Parking Spaces. The Landlord reserves
the right from time to time to make reasonable rules and regulations as in its
judgment may be desirable for the safety, care and cleanliness of the parking
lot and for the preservation of good order therein, including but not limited to
the allocation of Parking Spaces among the tenants from time to time so that the
distribution thereof is fair to all of the tenants. Upon the making of such
rules and regulations and when notice thereof has been given to the Tenant, such
rules and regulations shall have the same force and effect as if originally made
a part of this Lease.

     13.   ENTRY.

     13.1  Landlord's Right of Entry: Landlord and Landlord's agents and
representatives shall have the right to enter into or upon the Premises, or any
part thereof, at all reasonable hours for the following purposes:

     (a)   Examining the Premises and making such repairs or alterations therein
as may be necessary in Landlord's sole judgment for the safety and preservation
thereof, there being no obligation, however, upon Landlord to make such
examination and repairs (except to the extent otherwise specified in this
Lease).

     (b)   Erecting, maintaining, repairing or replacing wires, cables,
conduits, vents or plumbing equipment running in, to or through the Premises.

     (c)   On twenty four (24) hours notice, showing the Premises to prospective
new tenants during the last six (6) months of the Term, or to any present or
future mortgagees at any time.

     13.2  Notices: Landlord shall give Tenant reasonable prior written notice
before

                                      12
<PAGE>

commencing any non-emergency repair or alteration.

     13.3  Emergencies: Landlord may enter upon the Premises at any time in case
of emergency, without prior notice to Tenant.

     13.4  No Eviction: In exercising any of its rights under this Section 13,
the Landlord shall not be deemed guilty of an eviction, partial eviction or
disturbance of Tenant's use or possession of the Premises and shall not be
liable to Tenant for same.

     13.5  Interference: All work performed by or on behalf of Landlord in or on
the Premises pursuant to this Section 13 shall be performed with as little
inconvenience to Tenant's business as possible, and in such manner as not to
unreasonably interfere therewith.

     13.6  Damages: The Landlord shall be responsible for any damages to the
Tenant's property or business incurred by the Tenant due to the negligence or
improper conduct of the Landlord or any of the Landlord's agents, servants,
employees, invitees, etc. who have entered the Premises under this Section 13,
but nothing hereunder shall afford Tenant the right to withhold any payment of
Basic Rent or Additional Rent hereunder.

     14.   MAINTENANCE.

     14.1  Maintenance by Tenant:

     (a)   The Tenant shall take good care of the Premises and at the Tenant's
own cost and expense, make all repairs and replacements (other than those
required to be made by Landlord hereunder), including painting and decorating,
and shall maintain the Premises in good condition and state of repair, and at
the expiration of the Term hereof, shall deliver up the rented Premises in good
order and condition (but in no better condition than existed on the Commencement
Date), wear and tear from a reasonable use thereof, and damage by the elements
not resulting from the neglect or fault of the Tenant, excepted. The Tenant
shall neither encumber nor obstruct the sidewalks, driveways, yards, entrances,
hallways, and stairs, but shall keep and maintain the same in a clean condition,
free from debris, trash and refuse.

     (b)   In case of the destruction of or damage of any kind whatsoever to the
said Premises, caused by the negligence or willful misconduct on the part of the
Tenant or the Tenant's agents, employees, guests, licensees, invitees,
subtenants, assignees or successors, the Tenant shall repair the said damage or
replace or restore any destroyed parts of the Premises, as speedily as possible,
at the Tenant's own cost and expense; provided, however, that to the extent any
such damage is covered by insurance maintained by either Landlord or Tenant with
respect to the Premises, the parties agree that they will exhaust all insurance
proceeds before any claim will be made against Tenant with respect to such
damage.

     (c)   Throughout the Term of this Lease, and any renewal or extension
thereof, Tenant shall maintain in effect a maintenance and service contract for
its HVAC equipment and system, with a reputable contractor having all necessary
licenses for the same. At such time that Landlord leases all or any portion of
the Expansion Space to an entity other than Tenant, Landlord shall at its own
cost, make any modifications required to the HVAC system so that it will then
serve the Tenant's Premises exclusively.

     14.2  Maintenance by Landlord:

     (a)   Landlord shall be responsible for all Structural Repairs when
required, and maintain and make repairs to the common areas, and the exterior of
the Building, all of which work shall be done by Landlord, the cost of which
shall be included in Landlord's Common Charges. Provided, however, that if the
need for such repair work arises out of the negligence or willful misconduct of
the Tenant, its agents, employees, guests, licensees, invitees, subtenants,
assignees or successors, the Tenant shall be fully responsible for the necessary
repairs or restoration of any structural damage, damage to the common areas,
and/or damage to the exterior of the Building, and Tenant shall cause the same
to be repaired or restored as quickly as possible, at Tenant's own cost and
expense; and it being further provided that to the extent any such damage is
covered by insurance maintained by either Landlord or Tenant with respect to the
Premises, the parties agree that they

                                      13
<PAGE>

will exhaust all insurance proceeds before any claim will be made against Tenant
with respect to such damage.

     (b)   Landlord's obligation to keep the sidewalks and parking area free of
snow and ice shall be strictly limited to reasonable activity considering the
weather, the availability at such time and under then existing circumstances of
men and equipment and other factors outside the control of Landlord. The Tenant
accepts all risk of use of such facilities, and any act or action by the
Landlord or its agents shall not be deemed to create any liability of any kind
whatsoever, the Tenant hereby releasing the Landlord for the same as a condition
hereof, except under court order or an arbitration award.

     (c)   Notwithstanding any provision to the contrary elsewhere in this
Lease, for the first three years of the Term, in the event that the HVAC as it
exists on the Commencement Date requires the replacement of any major
components, Landlord shall be obligated to have such replacements made at its
own cost and expense (with such cost not to be included in Common Charges).
Provided, however, that if the need for such replacements to major components or
any of the HVAC units arises out of the negligence or willful misconduct of the
Tenant, its agents, employees, guests, licensees, invitees, subtenants,
assignees or successors, or due to the Tenant's failure to comply with the
provisions of Section 14.1(c) above, then Tenant shall be fully responsible for
the necessary replacements and restoration of any structural damage, damage to
the common areas, and or damage to the exterior of the Building arising out of
the making of such replacements, all at the Tenant's own cost and expense.

     15.   ALTERATIONS.

     15.1  Changes and Additions. Tenant shall make no changes or additions in
or to the Premises of any nature without Landlord's prior written consent, which
consent shall not be unreasonably withheld. If Landlord consents to Tenant's
proposed alterations, installations, and /or additional improvements in or to
the Premises (collectively "Alterations"), then in that event Landlord shall
cause such Alterations to be completed in a good and workmanlike manner at
Tenant's sole cost and expense. It is hereby agreed that painting, carpeting,
wallpapering and other cosmetic changes to the Premises are not considered
"Alterations" and may be performed by Tenant without any need for Landlord's
consent. The cost of such Alterations shall be at competitive market rates for
both labor and materials, and Landlord shall not make any profit thereon. Tenant
acknowledges that Landlord may use affiliated entities to perform all or a
portion of any Alterations requested by Tenant from time to time. If any
particular Alterations requested by Tenant and approved by Landlord shall cost
more than $10,000.00, Landlord agrees to put the job out to bid before awarding
a contract to any contractor. Unless agreed by Landlord and Tenant to the
contrary at the time Landlord approves of the making of an Alteration, all
Alterations shall become the property of the Landlord and shall be surrendered
with the Premises as a part thereof upon the expiration or sooner termination of
this Lease. If Landlord and Tenant so agree at the time of Landlord's approval
of an Alteration, Tenant shall, at its sole cost and expense remove such
Alteration and repair any resulting damage, upon the expiration or sooner
termination of this Lease.

     15.2  Trade Fixtures and Equipment. Nothing in this Section 15 shall be
construed to give Landlord title to or to prevent Tenant's installation or
removal of trade fixtures, moveable office furniture and equipment. On or before
the Termination Date, the Tenant shall remove its trade fixtures, furniture and
equipment, at Tenant's own expense, and Tenant shall repair any damage caused by
such removal.

     15.3  Abandoned Property. All property permitted or required to be removed
at the end of the Term and remaining on the Premises after the Termination Date
shall be deemed abandoned and may, at the election of Landlord, either be
retained as Landlord's property or may be removed from the Premises by Landlord
at Tenant's expense.

     15.4  Permits: Prior to the commencement of any Alterations, Landlord shall
obtain at Tenant's cost all required permits, approvals and certificates
required by all governmental authorities and upon completion of the Alterations,
certificates of final approval thereof. Landlord shall deliver duplicates of
same to Tenant. Landlord shall carry and will cause its contractors and
subcontractors to carry sufficient workmen's compensation, general liability,
personal injury and

                                      14
<PAGE>

property damage insurance.

     16.   TRANSFERS OF TENANT'S INTEREST.

     Tenant covenants and agrees that it shall not assign its interest in this
Lease, in whole or in part, nor shall Tenant, without Landlord's consent (not to
be unreasonably withheld), sublet or permit the subletting of the Premises or
any part thereof.

     17.   SURRENDER.

     On the Termination Date, or prior expiration of this Lease, Tenant shall
peaceably and quietly quit and surrender to Landlord the Premises, broom clean,
in as good condition as they were on the Commencement Date, ordinary wear and
tear, damage from the elements, repairs and replacements by Landlord, loss by
fire, casualty and other causes beyond Tenant's control, and alterations,
additions and improvements permitted hereunder, excepted. Tenant's obligation to
observe or perform this covenant shall survive the Termination Date or prior
expiration of the Term. If the Termination Date falls on a Sunday or a legal
holiday, this Lease shall expire at 12 noon on the business day next preceding
said date.

     18.   HOLDING OVER.

     If Tenant holds possession of the Premises beyond the Termination Date or
prior expiration of the Term, Tenant shall become a tenant from month-to-month
at one and one-half (1 1/2) times the then current Basic Rent, AND upon all
other terms and conditions of this Lease, and shall continue to be such month-to
month tenant until such tenancy shall be terminated by Landlord and such
possession shall cease. Nothing contained in this Lease shall be construed as a
consent by Landlord to the occupancy or possession by Tenant of the Premises
beyond the Termination Date or prior expiration of the Term, and Landlord shall
be entitled to the benefit of all legal remedies that now may be in force or may
be hereafter enacted relating to the speedy repossession of the Premises.

     19.   [RESERVED]

     20.   QUIET ENJOYMENT.

     Landlord covenants and agrees that, upon the performance by Tenant of all
of the covenants, agreements and provisions hereof on Tenant's part to be kept
and performed, Tenant shall have, hold and enjoy the Premises, subject and
subordinate to the rights set forth in Sections 13 and 23, free from any
interference whatsoever by, from or through the Landlord. Provided, however,
that under no circumstances does Landlord's violation of this Section 20 or any
other provision of this Lease, entitle or authorize the Tenant to withhold all
or any part of the Basic Rent or Additional Rent to which Landlord is otherwise
entitled, nor shall any such violation entitle or authorize the Tenant to any
abatement or deduction in the said rent; but Tenant's sole remedy to obtain
compensation or relief in regard to any such violation shall be by the
institution of an appropriate civil action against the Landlord.

     21.   AIR AND LIGHT.

     This Lease does not grant any right to air and light.

     22.   DEFAULT.

     22.1  Event of Default by Tenant: Each of the following shall constitute an
event of default hereunder:

     (a)   The filing of a petition by or against Tenant for adjudication as a
bankrupt, or for reorganization, or for an arrangement or for relief under any
bankruptcy or insolvency laws (provided, however, that in the case of any
involuntary bankruptcy petition filed against Tenant, and as long as Tenant is
not otherwise in default hereunder for non-payment or non-performance of its
leasehold obligations, Tenant shall have ninety (90) days from the date of
filing to obtain the dismissal of such petition before an event of default shall
be deemed to have occurred);

                                      15
<PAGE>

     (b)   The commencement of any action or proceeding for the dissolution or
liquidation of Tenant, whether instituted by or against Tenant, or for the
appointment of a receiver or trustee of the property of Tenant under any state
or federal law or statute for relief of debtors (provided, however, that in the
case of any involuntary action or proceeding instituted against Tenant, and as
long as Tenant is not otherwise in default hereunder for non-payment or non-
performance of its leasehold obligations, Tenant shall have ninety (90) days
from the date of commencement of such action, to obtain the dismissal of such
action or proceeding before an event of default shall be deemed to have
occurred);

     (c)   The making by Tenant of a general assignment for the benefit of
creditors;

     (d)   The permanent suspension of business by Tenant;

     (e)   The filing of a tax lien or a mechanics' lien against the Premises as
a result of the action of Tenant (provided, however, that Tenant shall have
thirty (30) days to obtain the dismissal of such tax lien or mechanic's lien
before an event of default shall be deemed to have occurred);

     (f)   Failure by Tenant to pay Landlord within ten (10) days after first
coming due the Basic Rent, the Additional Rent herein reserved, or any other sum
required to be paid by the terms of this Lease (provided, however, that in the
case of any Additional Rent other than Tenant's regular monthly payments on the
first of each month toward Common Charges and its electric usage, Tenant shall
not be in default unless more than ten (10) days has elapsed since Landlord gave
Tenant written notice of the amount of such Additional Rent and date upon which
such Additional Rent is due);

     (g)   The creation or imposition of a lien or encumbrance on or against the
Tenant's interest under this Lease or in or to the Premises whether or not the
Tenant consents thereto;

     (h)   A failure by Tenant after notice from Landlord and a reasonable
opportunity to perform (which period of opportunity shall be not less than
thirty (30) days unless Tenant's non-performance is creating an emergent or
dangerous condition, in which case it can be shorter) any other term, covenant,
agreement or condition of this Lease on the part of Tenant to be performed.

     22.2  Rights and Remedies Upon Default: If an event of default occurs,
Landlord shall be entitled to take such action as it deems advisable, from time
to time, under any one or more of the provisions of Section 22.2.

     (a)   Landlord may proceed as it deems advisable, at law or in equity, to
enforce the provisions of this Lease or to collect damages for the breach
thereof, or both;

     (b)   Landlord may notify Tenant that this Lease shall terminate on a date
specified in the notice, and this Lease shall terminate on the date so
specified; notwithstanding such termination, Tenant's liability for its failure
to comply with any provision of this Lease shall continue;

     (c)   Landlord may re-enter the Premises and any improvements located
thereon, may repossess itself (by summary proceedings, ejectment or other legal
proceedings), may dispossess Tenant, and may remove Tenant from the Premises,
without further notice to Tenant; and Tenant waives any right to the service of
any notice of Landlord's intention to re-enter provided for by any present or
future law, and any right to re-enter the Premises or restore the operation of
this Lease;

     (d)   Landlord may relet the Premises, as a whole or in part, for such term
or terms (which may be greater or less than the period which would have
constituted the balance of the Term if the Lease had not been terminated) and on
such conditions (which may include concessions or free rent) as Landlord
determines. Landlord shall use commercially reasonable efforts to mitigate its
damages in the event of a breach by Tenant of its obligations under this Lease;
provided, however, that Tenant agrees that Landlord shall not be liable to
Tenant for any inability of Landlord to collect rentals from any substitute
tenant that Landlord procures for the Premises. Any reasonable expenses of
reletting the Premises such as brokers' fees, advertising, decorating, repairs,
replacements and alterations shall be payable by Tenant as Additional Rent;

                                      16
<PAGE>

     (e)   [Reserved]

     (f)   [Reserved]

     (g)   Tenant shall pay Landlord as Additional Rent, all reasonable
attorney's fees and court costs incurred by the Landlord in enforcing its rights
hereunder.

     22.3  Advances, Etc. by Landlord: If any event of default occurs, Landlord
may pay any amount payable by Tenant under any provision of this Lease or comply
with any provision of this Lease on the part of Tenant to be complied with, and
make such expenditures in connection therewith (including reasonable attorney's
fees incurred by Landlord in enforcing the provisions of this Lease) as Landlord
deems advisable; and Tenant shall pay Landlord within ten (10) days of
Landlord's demand, in addition to Basic Rent, each amount so paid or expended by
Landlord, with interest as aforesaid; but no such payment or compliance by
Landlord shall constitute a waiver of Tenant's failure to make such payment or
to comply with such provision, or affect any right or remedy of Landlord with
respect thereto. Each such payment by Landlord shall be deemed Additional Rent
due from Tenant under this Lease.

     22.4  Additional Remedies, Waivers, Etc.: With respect to the rights and
remedies of, and waivers by, Landlord:

     (a)   The rights and remedies of Landlord under Section 22.2 and 22.3 shall
be in addition to every other right and remedy now or hereafter provided by law,
and all such rights and remedies shall be cumulative and not exclusive one of
the other; and Landlord may exercise such rights and remedies at such times, to
such extent, and as often, as Landlord deems advisable, and without regard to
whether the exercise of one right or remedy precedes, concurs with or succeeds
the exercise of another;

     (b)   A single or partial exercise of a right or remedy shall not preclude
a further exercise thereof, or the exercise of another right or remedy from time
to time;

     (c)   No delay or omission by Landlord in exercising a right or remedy
shall exhaust or impair the same, or constitute a waiver of, or acquiescence in,
a default;

     (d)   No waiver of a default shall extend to or affect any other default or
impair any right or remedy with respect thereto;

     (e)   No action or inaction by Landlord, whether it be the acceptance of
Basic Rent or otherwise, shall constitute a waiver of a default; and

     (f)   No waiver of a default shall be effective, unless it be in writing.

     22.5  Landlord's Default. Notwithstanding anything to the contrary in this
Lease, the provisions of this Section 22.5 shall govern the procedures to be
followed, and the consequences of, any default by Landlord under this Lease.

     (a)   In the event that Landlord shall fail to perform any of its
obligations under this Lease, Tenant shall give written notice of such failure
to Landlord. Landlord shall not be deemed to be in default of such obligations
unless Landlord fails to cure such non-performance within thirty (30) days after
receipt of Tenant's notice (except that, with respect to monetary defaults,
Landlord shall only have ten (10) days to comply). For non-monetary obligations,
if more than thirty (30) days are required to cure such non-performance,
Landlord shall not be in default if such cure is commenced within such thirty
(30) day period and thereafter is diligently pursued to completion.

     (b)   In the event that Landlord is in default of any of its obligations
under this Lease, Tenant shall have the right to perform such obligations and to
charge the reasonable costs thereof to Landlord. In the event that Landlord
fails to reimburse Tenant for such costs within ten (10) days of Tenant's demand
therefor, interest shall accrue on such sums until paid at the rate that
interest would accrue hereunder on late payments of rent from Tenant to
Landlord.

                                      17
<PAGE>

     (c)   In addition to the rights and remedies set forth in this Section
22.5, in the event of a default by Landlord of its obligations under this Lease,
Tenant shall be entitled to pursue any and all other rights and remedies that
Tenant may have against Landlord, whether arising by agreement, at law or in
equity.

     (d)   In the event that Landlord is in default of its obligations to Tenant
under this Lease, Tenant shall not be entitled to offset against the rental
payments due to Landlord until Tenant has obtained a judgment against Landlord
establishing the amount of Tenant's damages.

     23.   SUBORDINATION AND ESTOPPEL.

     23.1  Subordination: Tenant agrees that this Lease, and all of the Tenant's
right, title and interest in and to the Premises, is subject and subordinate to
the lien of any mortgages or deeds of trust now or hereafter demising or
encumbering all or part of the Real Property, and to all advances made or
hereafter to be made upon the security thereof. This subordination provision
shall be self operative and no further instrument of subordination shall be
required; provided, however, Tenant agrees to execute and deliver, within ten
(10) days of receipt of same, such further instrument or instruments confirming
this subordination as shall be desired by Landlord or by any lessor or lessee or
mortgagee of the Real Property provided the same does not vary or alter the
terms of this Lease. Notwithstanding the foregoing, Tenant's agreement to
subordinate its leasehold interest in the Premises to the interest of any
mortgagee or deed of trust holder (collectively, "mortgagee") is contingent upon
such mortgagee, for itself and its successors and assigns, entering into a
nondisturbance agreement with Tenant which will provide that so long as no event
of default by Tenant under this Lease has occurred and is continuing: (i) Tenant
shall not be joined as a party defendant in any foreclosure or other action
which may be instituted by such mortgagee by reason of any default under the
terms of its lending arrangements; (ii) Tenant shall not be dispossessed of the
Premises by such mortgagee; (iii) Tenant's leasehold estate under the Lease
shall not be terminated or disturbed by such mortgagee; and (iv) Tenant's rights
under the Lease shall not be diminished, or Tenant's obligations increased, by
reason of any default under the mortgagee's lending arrangements or any
foreclosure of any mortgage or transfer of the Real Property to such mortgagee
in lieu of foreclosure. Landlord agrees to obtain for the benefit of Tenant a
non-disturbance agreement (consistent with the requirements set forth above)
from all existing mortgagees of the Real Property.

     23.2  Estoppel Certificates: Within ten (10) days after either party shall
have requested the same, the other party shall deliver a certificate to it
certifying:

     (a)   The Tenant has accepted the Premises, has made no advancement for or
on behalf of the Landlord for which it has a right to deduct from or offset
against future rentals as of the date of certification and has not paid Basic
Rent or Common Charges for more than the current month in which the certificate
is made;

     (b)   The Lease is in full force and effect, free from any default by
either party (to the best of the knowledge of the party executing the
certificate), and has not been changed, modified or amended except as stated in
the certification of the Tenant;

     (c)   If a corporation, Tenant's Board of Directors has duly authorized
execution of the lease and other documents; and

     (d)   Any other provisions as may be reasonably requested by Landlord or
Tenant, provided any such additional provision does not vary the terms of this
Lease.

     24.   CASUALTY AND CONDEMNATION.

     24.1  Damage by Fire or other Casualty: If the Premises shall be damaged by
fire or other casualty not arising from the intentional wrongdoing of Tenant, or
its servants, agents, employees, invites or licensees the following shall
apply:

     (a)   Except as otherwise provided in subsection (c) hereof, the damage
shall be repaired by and at the expense of Landlord (which expense will not be
included as part of Landlord's Operating Expenses), and if any of the Premises
is unusable, the Basic Rent and Additional Rent

                                      18
<PAGE>

shall be equitably apportioned according to the part of the Premises which
continues to be usable by Tenant until such repairs shall be made.
Notwithstanding anything below, Tenant shall not pay Basic Rent or Common
Charges if Tenant cannot use the space. Tenant shall repair or replace its own
furniture, furnishings and equipment.

     (b)   If the Premises are totally damaged or are rendered wholly
untenantable, and Landlord's architect certifies that the damage cannot be
repaired within one hundred eighty (180) days of the casualty ( a "Total
Destruction"), then Landlord shall give Tenant notice of such Total Destruction
within thirty (30) days of the date of the casualty, and the Term shall expire
ten (10) days after such notice is given, and Tenant shall vacate the Premises
and surrender the same to Landlord. Notwithstanding anything to the contrary in
this Lease, the 180 day period aforesaid may not be extended by Excusable
Delays.

     (c)   If any casualty causes less than a Total Destruction, then Landlord
shall complete the repair and restoration of the Premises within one hundred
eighty (180) days from the date of the casualty, subject, however, to Excusable
Delays. If the Premises are not repaired or restored within said period plus
extensions for Excusable Delays, Tenant shall have the right to cancel and
terminate this Lease upon the delivery of a notice to Landlord delivered after
the expiration of the aforesaid 180 day period, as extended. Notwithstanding the
foregoing provisions of this Section 24.1(c), however, if less than two (2)
years remain in the Term at the time of any casualty loss that would cost more
than $100,000.00 to repair, Landlord shall not be required to repair and restore
the Premises unless Tenant commits within thirty (30) days of the casualty to
exercise its next renewal option; or if no renewal options remain at the time,
the parties must negotiate at least a five-year lease extension during that time
period, before Landlord will be obligated to proceed with repairs and
restoration.

     (d)   Landlord agrees that it shall diligently pursue all repair and
restoration work required on its part to be completed at Landlord's expense.

     (e)   Nothing in this Section 24.1 shall require or obligate Landlord to
repair or replace any of Tenant's personal property, trade fixtures or
Alterations.

     24.2  Condemnation: If the entire Premises, or access thereto, or a
substantial portion of the parking therefor, shall be acquired by eminent domain
proceedings, or conveyance in lieu thereof, (a "Taking"), the Term shall cease
and terminate from the date possession of the taken area is transferred to the
condemnor. If only a portion of the Premises or the Building shall be so
acquired or condemned and such taking materially interferes with Tenant's
ability to conduct its business, this Lease shall cease and terminate upon
Tenant's delivery of notice thereof to Landlord. If, however, Tenant may
continue to reasonably conduct its business in the remaining portion of the
Premises, then, at Tenant's option, this Lease shall not cease and an equitable
adjustment of the Basic Rent and Additional Rent payable by Tenant for the
remaining portion of the Premises shall be made. In the event of a Taking,
whether or not this Lease terminates, Tenant shall have no claim against
Landlord for the value of any unexpired Term or any other losses resulting from
the Taking (other than for the adjustment of the Basic Rent and Additional Rent
as herein before mentioned), nor shall Tenant be entitled to any portion of any
amount that may be awarded as damages to the Landlord by the condemning
authority. However, whether or not this Lease terminates, Tenant shall have the
right to make a separate claim against the condemning authority for the value of
Tenant's Alterations made after the Commencement Date, moving expenses, and any
other economic loss suffered by Tenant as a result of the taking.

     25.   CHANGES SURROUNDING BUILDING.

     This Lease shall not be affected or impaired by any change in any sidewalk,
alley or street, parking or common areas adjacent to or around the Building or
by changes to any other buildings on the Real Property.

     26.   TENANT'S PROPERTY.

     26.1  The Tenant hereby assumes the risk of loss or damage, including all
consequential losses and damage, to any real or personal property, constructed,
used, kept, placed, or stored by Tenant in

                                      19
<PAGE>

or at the Premises, or real or personal property used, kept, placed, or stored
by Tenant in or at other property of the Landlord of which the Premises form a
part, including the Real Property, caused by fire, water, theft, war, vermin,
flood or any other casualty or peril normally included in multi-peril all risk
insurance with minimum allowable specific peril or casualty exclusions, agrees
not to look to the Landlord or its allied or affiliated corporations,
partnerships, or individuals for indemnification for the same, and hereby
releases the Landlord from any liability for any such loss or damage. The Tenant
agrees to look solely to third parties, its insurer, if any, or itself for
compensation for such loss or damage.

     26.2  Notwithstanding the foregoing, Landlord shall be liable to Tenant for
damages caused by the gross negligence or willful omission of Landlord or its
agents, servants, employees, invitees, etc., if the resulting loss and damages
are not covered by Tenant's commercially acceptable business insurance policy.

     27.   NOTICE.

     All notices required under the terms of this Lease shall be sent by
personal delivery, overnight courier (e.g., Federal Express), or by mailing such
notices by certified or registered mail, return receipt requested, to the
Landlord at the address shown at the head of this Lease, and to Tenant at the
Premises, or to such other address of the Landlord or Tenant as may be
designated by them in writing, which notice of change shall be given in the same
manner. Facsimile machine transmission of notices is not deemed adequate notice
                                                     ---
or service. Notices sent by personal delivery shall be effective upon actual
receipt at the address of the addressee. Notices sent by overnight courier shall
be effective as of the date deposited with the courier service for next day
delivery. Notices sent by certified mail or registered mail shall be effective
as of the date deposited with and postmarked by the U.S. Postal Service,
properly addressed, with postage thereon prepaid.

     28.   DISCLAIMER BY LANDLORD.

     Subject to the provisions of Sections 7.3, 7.8, and 13.6, except due to
Landlord's recklessness or intentional misconduct, the Landlord shall not be
responsible for the loss of or damage to property, or injury to persons,
occurring in or about the Premises and Real Property, by reason of any existing
or future condition, defect, matter or thing in the Premises or Real Property,
or for the acts, omissions or negligence of other persons or tenants in and
about the Premises and the Real Property.

     29.   INSURANCE.

     29.1  Tenant's Insurance: Tenant shall provide on or before the
Commencement Date for the benefit of Landlord and Tenant a normally commercially
available comprehensive policy of liability insurance insuring against accident
on or about the Premises or any appurtenances thereto. Such policy is to be
written by good and solvent insurance companies reasonably satisfactory to
Landlord, and the limits of liability thereunder shall not be less than the
amounts set forth in Section 2.14 hereof for personal injury, including death,
in respect of any one person, in respect of any one occurrence, and in respect
of property damage. Such insurance may be carried under a blanket policy
covering other locations of Tenant, if any. Landlord shall be named as an
additional insured under such policy. Prior to the time such insurance is first
required by this Section 29 to be carried by Tenant, and thereafter, at least
fifteen (15) days prior to the expiration of any such policy, Tenant agrees to
deliver to Landlord either a duplicate original of the aforesaid policy or a
certificate evidencing such insurance, which policy or certificate shall provide
that such insurance may not be canceled except upon thirty (30) days prior
notice to Landlord. Upon failure at any time on the part of Tenant to procure
and deliver to Landlord the policy or certificate of insurance, as hereinabove
provided, stamped "Premium Paid" by the issuing company at least fifteen (15)
days before the expiration of the prior insurance policy or certificate, if any,
or to pay the premiums therefor, Landlord shall be at liberty, from time to
time, as often as such failure shall occur, to procure such insurance and to pay
the premium therefor, and any sums paid for insurance by Landlord shall be and
become, and are hereby declared, to be Additional Rent hereunder for the
collection of which Landlord shall have all the remedies provided for in this
Lease or by law for the collection of rent. Payment by Landlord of such premium
or the carrying by Landlord of any such policy shall not be deemed to waive or
release the default of Tenant with respect thereto. Tenant's failure to provide
and keep in force the aforementioned insurance shall be regarded as an

                                      20
<PAGE>

Event of Default hereunder entitling Landlord to exercise any or all of the
remedies as provided in this Lease.

     29.2  Landlord's Insurance: Throughout the Term of this Lease, the Landlord
shall maintain in effect full replacement cost hazard insurance coverage on the
Building and the Real Property. Landlord shall provide to Tenant proof of such
hazard insurance coverage.

     29.3  Waiver of Subrogation: Landlord and Tenant shall each obtain for each
insurance policy procured by it regarding the Premises, the Building or the Real
Property, or any property located thereon, an appropriate clause therein or
endorsement thereto, pursuant to which each such insurance company waives its
subrogation rights against Landlord and Tenant, and their respective owners,
managers, directors, officers and employees. If the waiver of subrogation shall
not be obtainable except at additional charge, the party procuring such
insurance shall pay such charge. Notwithstanding anything to the contrary in
this Lease, Landlord and Tenant hereby waive all rights of recovery and causes
of action that either of them now or hereafter may have against the other for
any damage to the Premises, the Building, the Real Property and any other
property of Landlord or Tenant, to the extent caused by the perils insured
against or required to be insured against pursuant to this Lease, whether or not
such damage was caused, in whole or in part, by the negligence or willful
misconduct of the Landlord or Tenant or by persons for whom they are legally
responsible.

     30.   TENANT'S LIABILITY.

     In addition to the other obligations and liabilities of the Tenant set
forth herein, Tenant shall reimburse Landlord for all expenses, damages or
fines, incurred or suffered by Landlord by reason of any breach, violation or
nonperformance by Tenant, its agents, servants, employees, or licensees of any
covenant or provision of this Lease, or by reason of damage to persons or
property caused by moving property of or for Tenant in or out of the Building,
or by the installation or removal of furniture or other property of or for
Tenant or by reason of or arising out of the carelessness, negligence or
improper conduct of Tenant or its agents, servants, employees, and licensees in
the use or occupancy of the Premises or the Common Areas. Any such expense, if
any, which Tenant is required to pay to Landlord shall be deemed Additional
Rent, due ten (10) days after Landlord's written demand therefor.

     31.   RULES AND REGULATIONS.

     The Tenant shall comply and cause its employees, agents, and invitees to
comply with all rules and regulations adopted by the Landlord in connection with
the use of the Premises and the common areas of the Real Property. A copy of the
Landlord's current rules and regulations are annexed hereto, and the Tenant
shall also comply with all reasonable supplements and amendments thereto which
are hereafter adopted by the Landlord. All rules and regulations and supplements
thereto which the Landlord may adopt shall be in writing, and a copy thereof
shall be delivered to the Tenant. If the Tenant shall fail to cure any violation
of these rules and regulations within the time provided for the cure of non-
monetary obligations under this Lease, such failure shall constitute a default
under this Lease.

     32.   MISCELLANEOUS.

     32.1  [Reserved]

     32.2  Mechanics' Liens: Any mechanics', materialmen's, or laborer's lien
filed against the Real Property for work claimed to have been done for, or
materials claimed to have been furnished to Tenant, shall be bonded or otherwise
removed by Tenant, at Tenant's expense, within thirty (30) days.

     32.3  Notice of Fire and Accidents: Tenant shall give Landlord prompt
notice in case of fire or accident on the Premises or, if involving Tenant, its
servants, agents, employees, invitees, or licensees, in the Building or on the
Real Property.

     32.4  [Reserved.]

                                      21
<PAGE>

     32.5  Force Majeure: If by reason of an Excusable Delay, including, without
limitation, a strike, labor troubles or other causes beyond Landlord's or
Tenant's control, or governmental preemption in connection with a national
emergency or any rule, order or regulation of any Governmental Authority, or
conditions of supply and demand which are affected by war or other emergency,
Landlord or Tenant shall be unable to fulfill its obligations under this Lease
or shall be unable to supply any service which Landlord or Tenant is obligated
to supply, the period for performance of such obligation shall be extended by a
period equal to the period of Excusable Delay.

     32.6  Broker: Landlord and Tenant each represents that it has not dealt
with any real estate broker in connection with this Lease, other than the Broker
listed in Section 2.2 hereof, if any. Tenant and Landlord hereby indemnify and
hold the other party harmless of and from any and all claims, liabilities, costs
or damages the other party may incur as a result of a breach of this
representation by the indemnifying party.

     32.7  Construction: The following rules shall be employed in interpreting
this Lease:

     (a)   Whenever in this Lease any words of obligation or duty are used, such
words or expressions shall have the same force and effect as though made in the
form of covenants;

     (b)   Words of any gender used in this Lease shall be held to include any
other gender, and words in the singular number shall be held to include the
plural, when the sense requires;

     (c)   All pronouns and any variations thereof shall be deemed to refer to
the neuter, masculine, feminine, singular or plural as the identity of the
Tenant requires;

     (d)   No remedy or election given by an provision in this Lease shall be
deemed exclusive unless so indicated, but each shall, wherever possible, be
cumulative with all other remedies in law or equity except as otherwise
specifically provided;

     (e)   [Reserved]

     (f)   The parties mutually agree that the headings and captions contained
in this Lease are inserted for convenience of reference only, and are not to be
deemed part of or to be used in construing this Lease.

     (g)   Each provision hereof on the Landlord's or Tenant's part to be
performed shall be deemed a covenant running with the land;

     (h)   This Lease has been executed and delivered in the State of New Jersey
and shall be construed in accordance with the laws of the State of New Jersey;

     (i)   Landlord has made no representations or promises with respect to the
Premises or the Real Property, except as expressly contained herein. Tenant has
inspected the Premises and agrees to take the same in an "As Is" condition
except as otherwise expressly set forth. Landlord shall have no obligation,
expressed or implied, except as herein set forth, to do any work in and to the
Premises to render them ready for occupancy and use by Tenant; and

     (j)   The terms, conditions, covenants and provisions of this Lease shall
be deemed to be severable. If any clause or provision herein contained shall be
adjudged to be invalid or unenforceable by a court of competent jurisdiction or
by operation of any applicable law, it shall not affect the validity of any
other clause or provision herein, but such other clauses or provisions shall
remain in full force and effect.

     32.8  Building Maintenance: Landlord agrees to maintain the exterior of the
Building and the common areas of the Real Property in a neat, clean and orderly
condition.

     32.9  Waiver of Jury Trial: Landlord and Tenant hereby mutually waive any
and all rights which either may have to request a jury trial in any proceeding
at law or in equity in any court of competent jurisdiction.

                                      22
<PAGE>

     33.   MANAGING AGENT.

     33.1  Designation of Managing Agent: The parties hereby acknowledge that at
this time and until further notice, G.B. Ltd. Oper. Co., Inc., shall be the
managing agent for the Landlord. All payments of rent and additional rent and
any other payments required under the terms of this Lease shall be made payable
to G.B. Ltd. Oper. Co., Inc., and shall be delivered to G.B. Ltd. Oper. Co.,
Inc., 63 West Main Street, P.O. Box 5008, Freehold, New Jersey 07728.
Furthermore, the Tenant shall direct all written communication (including
notices under Section 27 hereof) with respect to this tenancy solely to G.B.
Ltd. Oper. Co., Inc., at the aforementioned address, or otherwise by telephoning
(732) 780-8888.

     33.2  Change of Managing Agent: At any time and from time to time during
the term of this Lease, Landlord may designate a different firm or entity as
managing agent, and/or Landlord may change its directions to Tenant as to where
Basic Rent and Additional Rent payments shall be made. Landlord shall send
Tenant advance written notice, advising of any such changes in managing agent or
rent payment instructions.

     34.   LANDLORD'S RIGHT TO MODIFY.

     Anything contained in the within Lease to the contrary notwithstanding, it
is specifically understood and agreed by and between the parties hereto that
Landlord retains the sole and uncontrolled right and discretion (at Landlord's
sole cost and expense, not to be passed through to Tenant as Common Charges) to
vary, modify or alter the size of the Property and/or the buildings, to add
thereto or to subtract therefrom, or to make any modifications thereto,
additions thereto, deletions therefrom or expansion thereof as Landlord may in
its sole discretion elect to do; provided always, however, that no such
variation, modification, or alteration shall operate so as to affect the
Premises in such a way as would vary, modify or alter the size thereof or as
would materially and adversely affect Tenant's access thereto, use and enjoyment
thereof or of the common areas associated therewith. Landlord retains and shall
retain in its sole discretion the right to enlarge or diminish the common areas;
provided, however, that in connection with any enlargement or diminution of the
common areas, (i) Tenant shall not be required to incur any increased costs
(including, without limitation, through increased Common Charges) as a result of
such enlargement or diminution; and (ii) Tenant's access to the Premises and use
of the parking facilities shall not be adversely affected.

     35.   CORPORATE TENANTS.

     In the event Tenant is a corporation, the persons executing this Lease on
behalf of Tenant hereby covenant and warrant that: Tenant is a duly constituted
corporation qualified to do business in the State of New Jersey; all of Tenant's
franchise and corporate taxes have been paid to date; all future forms, reports,
fees and other documents necessary for Tenant to comply with applicable laws
will be filed by Tenant when due; and such persons are duly authorized by the
board of directors of such corporation to execute and deliver this Lease on
behalf of the corporation.

     36.   SUCCESSORS & ATTACHMENTS.

     36.1  The terms and conditions of this Lease and attachments shall inure to
and be binding upon the parties hereto and their respective heirs or successors
and assigns.

     36.2  The exhibits and other attachments to this Lease are the following:

           (a)  Exhibit A - Floor plan of the building, showing the Premises
area and the Expansion Space.

           (b)  Exhibit B - Basic Rent Schedule for Initial Premises.

           (c)  Exhibit C - Basic Rent Schedule for Expansion Space.

           (d)  Exhibit D - Rules and Regulations.

           (e)  Exhibit E - Metes and Bounds Description of the Real Property.

                                      23
<PAGE>

          (f)  Exhibit F - Permitted Land Uses.

          (g)  Exhibit G - Tenant's Floor Plan of Premises.

          (h)  Exhibit H - Building Standard Materials.

     IN WITNESS WHEREOF, the parties hereto have executed this Lien on the day
and year first above written.

Witness/Attest:                         G.B. Ltd., L.L.C., Landlord

_______________________                 By: /s/ Carl P. Gross 2/9/98
                                            -------------------------------
                                            Carl P. Gross, Managing Member

                                        Tellium, Inc., Tenant

/s/               2/6/98                By: /s/               2/6/98
---------------------------                 -------------------------------

                                      24
<PAGE>

                         AMENDMENT TO LEASE AGREEMENT
                         ----------------------------

LANDLORD:      G.B. LTD., LLC

TENANT:        TELLIUM, INC.

PREMISES:      42,831 Rentable Square Feet in Building C
               Monmouth Park Corporate Center II
               2 Crescent Place
               Oceanport, NJ 07757

DATE:          February 9/th/, 1998

     Landlord and Tenant are entering into a Lease Agreement with respect to the
Premises described above simultaneously with executing this Amendment to Lease
Agreement. All terms used herein shall have the same definitions as set forth in
the Lease Agreement.

     Landlord represents to Tenant that the Real Property is in a flood zone,
having a base flood elevation for the 100 year flood zone of 11 feet. Within
fourteen (14) days of full execution of the Lease Agreement and this Amendment,
Landlord shall obtain from a licensed surveyor of the State of New Jersey, an
elevation certificate showing the elevation of the finished floor of Building C
as being above the 100 year flood zone base flood elevation of 11 feet. If
Landlord cannot deliver this elevation certificate to Tenant within that
fourteen day period, or if the elevation certificate shows that the finished
floor of the building is at or below the base flood elevation of 11 feet, then
Tenant may, at its option, terminate this Lease Agreement by serving written
notice of termination upon Landlord within five days of receipt of said
elevation certificate, or within five days of the end of the fourteen day
period, if no elevation certificate is delivered.

     IN WITNESS WHEREOF, the parties hereto are executing this Amendment to
Lease Agreement on the date first written above.

Witness/Attest:                              G.B. Ltd., L.L.C., Landlord

____________________________                 By: /s/ Carl P. Gross 2/9/98
                                                 -------------------------------
                                                 Carl P. Gross, Managing Member

                                             Tellium, Inc., Tenant

/s/               2/6/98                     By: /s/               2/6/98
----------------------------                     -------------------------------
<PAGE>

                         AMENDMENT TO LEASE AGREEMENT
                         ----------------------------

LANDLORD:                G.B. Ltd., L.L.C.

TENANT:                  Tellium, Inc.

INITIAL PREMISES:        42,831 Square Feet in Building C
                         2 Crescent Place, Oceanport, New Jersey
ADDITIONAL PREMISES:     2,184 Square Feet in Building C
TOTAL PREMISES:          45,015 Square Feet in Building C

DATED:                   May 20, 1998

     Landlord and Tenant entered into a Lease Agreement and Amendment to Lease
Agreement with respect to the Initial Premises on or about February 9, 1998.
Landlord and Tenant have now agreed upon terms under which Tenant shall also
rent the Additional Premises described above, as follows:

     1.   To the extent not modified herein, the terms of the Lease Agreement
and Amendment thereto (hereinafter collectively referred to as the "Lease" or
"Lease Agreement") dated February 9, 1998 shall continue in full force and
effect, and shall be applicable to the Total Premises.

     2.   Attached hereto and designated as Amended Exhibit A is a floor plan of
Building C, showing the Initial Premises and the Additional Premises.

     3.   The following sections of the "Lease Particulars" section of the Lease
Agreement are amended as follows:

     2.1  Basic Rent: Tenant's Basic Rent for the Total Premises shall be
calculated in accordance with Exhibit B to the Lease Agreement.

     2.7  Rentable Area of Premises: The rentable area of the Total Premises
shall be 45,015 Square Feet measured outside wall to outside wall plus Tenant's
share of the common areas.

     2.8  Tenant's Proportionate Share of Building: Initially 67.19%, subject to
adjustment as set forth in the Lease Agreement.

     2.9  Tenant's Proportionate Share of Real Property: Initially 15.63%,
subject to adjustment as set forth in the Lease Agreement.

     2.13 Initial Electric Service Contribution: $7,502.50 per month for the
Total Premises.

     2.15 Preparation of Additional Premises: The terms of the Lease Agreement
shall remain in full force and effect with respect to the preparation of the
Initial Premises. The following pertains solely to the Additional Premises.
Except as set forth in the next sentence, Tenant shall accept the Additional
Premises including the space configuration, electrical, plumbing, mechanical,
HVAC, lighting and all building systems, in existing condition. Prior to the
Commencement Date, Landlord shall, at its own cost and expense, relocate the
existing wire fence so that it separates the Additional Premises from the
Expansion Space.

     4.   Landlord and Tenant hereby acknowledge and agree that the provisions
of Sections 2.17 through and including 2.21 shall remain in full force and
effect as written in the Lease Agreement, except that the Additional Premises
shall no longer be treated as or be deemed to be a part of the Expansion Space.
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Lease on the day and year first above written. The persons who are executing
this Lease on behalf of the Landlord and Tenant represent that they are
authorized to do so on behalf of their respective entities.

WITNESS/ATTEST:                              G.B. LTD., L.L.C., Landlord

_________________________                    By: /s/ Carl P. Gross
                                                 ------------------------------
                                                 Carl P. Gross, Managing Member

                                             Tellium, Inc., Tenant

/s/ Scott L. Kahn                            By: /s/ M. Farooque Mesiya
-----------------                                ------------------------------
Scott L. Kahn                                    M. Farooque Mesiya
<PAGE>

                      THIRD AMENDMENT TO LEASE AGREEMENT
                      ----------------------------------

LANDLORD:                           G.B. Ltd., L.L.C.

TENANT:                             Tellium, Inc.

CURRENT PREMISES:                   45,015.0 Square Feet in Building C
                                    2 Crescent Place, Oceanport, New Jersey

ADDITIONAL PREMISES:                5,240.0 Square Feet in Building B
                                    21,985.0 Square Feet in Building C

NEW TOTAL PREMISES:                 72,240.0 Square Feet in Buildings B and C

DATED:                              April 19th, 2000

          Landlord and Tenant entered into a Lease Agreement and Amendment to
Lease Agreement with respect to 42,831 square feet of the Current Premises on or
about February 9, 1998.  Landlord and Tenant entered into another Amendment to
Lease Agreement with respect to 2,184 square feet of the Current Premises on or
about May 20, 1998.  (The Lease Agreement and the two Amendments to Lease
Agreement are hereinafter collectively referred to us the "Lease").  Landlord
and Tenant have now agreed upon terms under which Tenant shall also rent the
Additional Premises described above, as well as other changes to the terms of
the Lease, all of which are memorialized in this Third Amendment to Lease
Agreement ("Third Amendment") as follows:

          1.  To the extent not modified herein, the terms of the Lease shall
continue in full force and effect, and shall be applicable to the New Total
Premises.

          2.  Attached to this Third Amendment to Lease Agreement is Amended
Exhibit A, which shows all of the space in Building C that comprises the Current
Premises and the "Expansion Space," which is the 21,985 square feet of the
Additional Premises to be rented by Tenant in Building C.  Attached hereto and
designated as Exhibit 1 is a floor plan of all the Buildings on the Real
Property, showing the 5,240 square feet of the Additional Premises to be rented
by Tenant in Building B.

          3.  The following sections of the original Lease Agreement are amended
as follows:
<PAGE>

          2.  LEASE PARTICULARS

               2.1  Basic Rent:  Upon the Commencement Date for the Additional
          Premises, Tenant's Basic Rent shall be calculated and paid as follows:

               (a)   For the portion of the New Total Premises in Building C,
          the Basic Rent shall be $634,671.25 per annum, payable $52,889.27 per
          month, for the first 36 months of the Term following the Commencement
          Date for the Additional Premises. For the last 24 months of the Term,
          the Basic Rent for the portion of the New Total Premises in Building C
          shall be $871,000.00 per annum, payable $72,583.33 per month.

               (b)   For the portion of the New Total Premises in Building B,
          the Basic Rent shall be $68,120.00 per annum, payable $5,676.67 per
          month, throughout the Term.

               2.4   Commencement Date: The Commencement Date for the portion of
          the Additional Premises in Building B shall be June 1, 2000. The
          Commencement Date for the portion of the Additional Premises in
          Building C shall be June 1, 2000.

               2.7   Rentable Area of Premises:  The rentable area of the New
          Total Premises is deemed to be 72,240.0 Square Feet.

               2.8   Tenant's Proportionate Share of Buildings:  6.7% with
          respect to Building B, and 100.0% with respect to Building C.

               2.9   Tenant's Proportionate Share of Real Property:  1.8% with
          respect to Building B, and 23.2% with respect to Building C, for a
          total of 25.0% for the New Total Premises.

               2.10  Security Deposit:  $110,741.00, of which $51,754.00 was
          previously deposited with Landlord upon execution of the Lease
          Agreement.

               2.11  Number of Months in Term:  Sixty (60) months from the
          Commencement Date for the Additional Premises, during which Term
          Tenant shall rent the New Total Premises.

               2.15  Preparation of Additional Premises:  Tenant shall accept
          the Additional Premises, including the space configuration,
          electrical, plumbing, mechanical, HVAC, lighting and all building
          systems, in existing condition, subject only to the following work to
          be performed by Landlord at its sole cost and expense:

                                      -2-
<PAGE>

               (a)   On or before April 20, 2000, Tenant shall provide to
          Landlord a written list of any and all cafeteria equipment and
          fixtures that it wants left in the Additional Premises in Building B,
          and a written list of any and all cafeteria equipment and fixtures
          that it wants removed from the Additional Premises in Building B. As
          to the former, the Landlord shall leave any such cafeteria equipment
          and fixtures in place, making no representation whatsoever as to their
          operating condition, and Tenant may use the equipment and fixtures as
          it wishes after the Commencement Date. As to all cafeteria equipment
          and fixtures that are on Tenant's list of items to be removed,
          Landlord shall remove such cafeteria equipment and fixtures from the
          Additional Premises in Building B, prior to the Commencement Date for
          that space, and repair any damage caused by such removal.

               (b)   On or before April 27, 2000, Tenant shall advise Landlord
          in writing as to which non-bearing sheetrock walls it wants removed
          from the interior of the Additional Premises in Building C. The
          Landlord shall not remove any weight-bearing walls or any block walls.
          If Tenant does not send notice to Landlord by 5:00 p.m. on April 27,
          2000, then Landlord shall not remove any walls from the Additional
          Premises in Building C.

               (c)   Cut in a maximum of twelve (12) additional windows in
          Building C, of a similar size and quality as were previously installed
          in Tenant's Current Premises, subject to a plan to be mutually agreed
          upon by Landlord and Tenant.  Promptly following the full execution of
          this Third Amendment, Landlord shall hire an architect to meet with
          Tenant and to prepare a sketch of where the windows will be located.
          The architect shall deliver the sketch to Landlord and Tenant, and
          they shall agree upon the location of the windows, by May 5, 2000.
          The architect shall then be directed to prepare construction drawings,
          which shall then be submitted to the municipality to obtain the
          necessary permits.  As soon as the permits are issued, construction of
          the windows shall commence.  Landlord shall use its best efforts to
          have the additional windows completed as soon as possible, in
          accordance with the foregoing steps that must be taken to accomplish
          same.

               (d)   Raise the floor to grade level in the existing "pool" area
          in Building C, as may be required by Tenant.

               (e)   Install new and/or repair the roof on Building C.

               (f)   Install a drop ceiling or paint the existing ceiling, as
          necessary, throughout the Additional Premises in Building C.

                                      -3-
<PAGE>

               (g)   Sheetrock all perimeter walls in the Additional Premises in
          Building C, as required by Tenant.

               (h)   Repaint all the remaining walls and perimeter walls in the
          Additional Premises, using building standard paint.

               (i)   Install new floor coverings throughout the Additional
          Premises, using building standard carpet and vinyl tile, to be
          selected by Tenant from Landlord's samples.

               (j)   Provide building standard HVAC, sprinklers and lighting
          throughout the Additional Premises, similar to that which was
          installed by Landlord in the Current Premises.

               (k)   Provide access from the cafeteria to the adjacent
          courtyard, i.e., remove bushes and create a pathway.
                     ----

               (l)   Landlord shall deliver the Additional Premises vacant,
          broom clean, free of all hazardous materials and in compliance with
          all laws.

               (m)   Landlord agrees to use its best efforts to complete all of
          the above fit up work except for the additional windows, not later
          than June 1, 2000, subject to the municipal permitting process, and
          provided that by April 27, 2000, the Tenant has provided to Landlord
          in writing all of the information that Landlord needs in order to do
          this fit up work, including detailed plans, specifications and
          selection of all finishes for the entire Additional Premises.  If the
          completion of Landlord's fit up work is delayed beyond June 1, 2000,
          and Tenant has met their deadlines for supplying to Landlord the
          necessary information as required herein, then the Tenant's obligation
          to pay Basic Rent, Common Charges and electric charges for the
          Additional Premises shall be adjusted accordingly until Landlord's fit
          up work is completed as to each portion of the Additional Premises.

               Sections 2.17, 2.18, 2.19, 2.20 and 2.21 are hereby omitted in
          their entirety and are of no further force or effect.

          9.   REAL ESTATE TAXES AND OPERATING EXPENSES

               9.3    Monthly Contribution Payments.  Section 9.3 of the Lease
          Agreement is replaced in its entirety, as follows:  With respect to
          the New Total Premises, it shall be the Tenant's responsibility to pay
          its proportionate share of the full amount of Common Charges for the
          Buildings and the Real Property from June 1, 2000, forward, to be
          calculated in accordance with Tenant's Proportionate Shares, as set
          forth in

                                      -4-
<PAGE>

          Sections 2.8 and 2.9. The Tenant's initial estimated monthly payment
          for the New Total Premises shall be $14,628.50.

          12.  PARKING

               Section 12 of the Lease Agreement is replaced in its entirety, as
          follows:

               12.1  Tenant shall have the exclusive use of 197 parking spaces
          at the south and west sides of Building C.  The Tenant shall also have
          the non-exclusive use in common with other tenants and occupants of
          the Real Property, of an additional 150 spaces at the Real Property in
          which the New Total Premises are located, and/or across the street at
          the Monmouth Park Corporate Center I.  If any portion of Tenant's non-
          exclusive parking spaces are at the Monmouth Park Corporate Center I,
          Landlord shall provide a jitney bus to be available between the hours
          of 8:30 a.m. and 9:30 a.m., and 4:30 p.m. and 5:30 p.m., on weekdays
          only, and excluding Building Holidays.

               12.2  The Landlord reserves the right from time to time to make
          reasonable nondiscriminatory rules and regulations as in its judgment
          may be desirable for the safety, care and cleanliness of the parking
          lot and for the preservation of good order therein, including but not
          limited to the allocation of Parking Spaces among the tenants from
          time to time so that the distribution thereof is fair to all of the
          tenants.  Upon the making of such rules and regulations and when
          notice thereof has been given to the Tenant, such rules and
          regulations shall have the same force and effect as if originally made
          a part of this Lease.  Provided, however, that no such rules or
          regulations may diminish Tenant's number of exclusive and non-
          exclusive parking spaces as set forth in Section 12.1 above.

               14.2  Maintenance by Landlord:

               (c)   Notwithstanding any provision to the contrary elsewhere in
          the Lease or in this Third Amendment, for the first three years
          following the Commencement Date for the Additional Premises, in the
          event that the HVAC for the Additional Premises, as it exists on the
          Commencement Date for the Additional Premises, requires the repair or
          replacement of any major components, Landlord shall be obligated to
          have such repairs or replacements made at its own cost and expense
          (with such cost not to be included in Common Charges).  Provided,
          however, that if the need for such repairs or replacements to major
          components or any of the HVAC units for the Additional Premises arises
          out of the negligence or willful misconduct of the Tenant, its agents,
          employees, guests, licensees, invitees,

                                      -5-
<PAGE>

          subtenants, assignees or successors, or due to the Tenant's failure to
          comply with the provisions of Section 14.1(c) of the Lease Agreement,
          then Tenant shall be fully responsible for the necessary replacements
          and restoration of any structural damage, damage to the common areas,
          and/or damage to the exterior of the Buildings arising out of the
          making of such replacements, all at the Tenant's own cost and expense.
          Landlord agrees to deliver such components in good working order.

          16.  TRANSFERS OF TENANT'S INTEREST.

               Tenant shall have the right to sublet all or any one or more
          portions of New Total Premises, subject to the Landlord's prior
          written approval of each subtenancy, which approval shall not be
          unreasonably withheld or delayed.

          4.   Tenant shall be given the exclusive use of the bathrooms in the
common corridor between Buildings A and C.  The following work shall be due to
these bathrooms, at Landlord's sole cost and expense.

          (a)  The existing entrance from the common corridor will be closed and
a new entrance opened directly in Tellium's Premises in Building C, which work
shall be done as soon as possible, subject to the Landlord obtaining any and all
required permits for same.

          (b)  The sewage ejector pump shall be repaired or replaced, and any
soiled carpet shall be replaced, both of which shall be done not later than June
1, 2000.

          (c)  In each of these bathrooms, Landlord shall (i) paint all walls
and toilet partitions, (ii) replace any broken fixtures, and (iii) install
mirrors above the vanities, all of which shall be done not later than June 1,
2000.

          5.   Landlord and Tenant acknowledge that 5,265.9 square feet of the
Additional Premises in Building C are presently leased to Concurrent Computer
Corporation ("Concurrent").  Landlord represents that it has the right to
relocate this rented premises of Concurrent, in accordance with the relocation
provision in that tenant's lease, a copy of which is reproduced on the attached
Exhibit J.  With respect to the relocation of Concurrent's rented premises in
Building C, Landlord represents that it shall proceeds as follows:

          (a)  Promptly following the full execution of this Third Amendment,
and Tenant's payment of the additional Security Deposit, Landlord shall send
Concurrent a written notice advising it of the impending relocation of the
5,265.9 square feet it rents in Building C, to comparable space at the Monmouth
Park Corporate Center I.

                                      -6-
<PAGE>

          (b)  Following the service of this notice on Concurrent, Landlord
shall proceed with diligence to effectuate the physical relocation of
Concurrent, so that the space presently occupied by it in Building C is
available for fit up and possession by Tenant herein at the earliest possible
moment:

          (c)  In the event that Concurrent fails to cooperate with Landlord in
moving out of Building C, Landlord shall use it best efforts to promptly and
diligently pursue its remedies at law and/or in equity to force Concurrent to
comply with Landlord's relocation directive.

          (d)  In the event that possession of the space presently occupied by
Concurrent in Building C cannot be delivered to Tenant simultaneously with
possession of the rest of the Additional Premises in Building C, then Tenant's
Basic Rent, Common Charge contributions and electric charges shall be adjusted
accordingly until Landlord delivers possession of that space to Tenant, in the
condition required by Section 2.15 above.

          6.   As additional security to Landlord for the full performance of
all of Tenant's leasehold obligations, Tenant shall provide to Landlord a letter
of credit in accordance with the following terms and conditions:

          (a)  On or before 5:00 p.m. on April 27, 2000, Tenant shall deliver to
Landlord an irrevocable and unconditional letter of credit naming the Landlord
as beneficiary, in the amount of $650,000.00, which will be automatically
renewed and extended without amendment for additional one (1) year periods
beginning on the expiration date of the initial letter of credit.  The letter of
credit shall provide that if the bank elects not to renew the letter of credit,
then the bank shall so notify the Landlord by overnight courier service at the
address provided in the Lease, not later than thirty (30) days prior to the
expiration date of the then expiring letter of credit.  Upon receipt of such
notice, the Landlord may, at any time before the expiration date, draw on the
letter of credit for the full amount thereof, by submission to the bank of the
original letter of credit together with the Landlord's signed statement that it
received the bank's notice of non-renewal, and that such non-renewal constitutes
a default by Tenant under the Lease that is not subject to a fourteen (14) day
cure period.  Upon Landlord's receipt of the $650,000.00, it shall be placed in
a separate escrow account, to be disbursed in accordance with the terms of this
Section 6 of this Third Amendment.

          (b) Upon the Tenant's default in the performance of its obligations
under the Lease and/or this Third Amendment, Landlord shall have the right to
draw on the letter of credit to cure Tenant's defaults.  In the event of a
default other than a default arising out of the non-renewal of the letter of
credit, that has not been cured by Tenant following notice to Tenant and
expiration of the applicable cure period in the Lease, Landlord shall submit a
written certification to Tenant, demanding the remittance of the $650,000.00 to
Landlord, and stating the basis for same.  Tenant shall have fourteen (14)

                                      -7-
<PAGE>

days from receipt of Landlord's certification within which to cure the default.
If Tenant cures the default within that time period, the Landlord shall not draw
on the letter of credit. Tenant's cure of a default in order to avoid the
Landlord's draw on the letter of credit shall not be deemed an admission by
Tenant that the default complained of by Landlord in fact existed, nor shall
such cure be deemed a waiver of Tenant's right to thereafter contest same. If
Tenant does not cure the default within the fourteen (14) day period, Landlord
shall be able to draw upon the letter of credit by issuing a statement to the
bank issuing the letter of credit which provided, "Tellium, Inc., is in default
of its obligations under the Lease as amended and has not cured this default in
the last fourteen (14) days."

          (c)  If Tenant does not cure the default, as a result of which
Landlord proceeds with the draw on the letter of credit, and the amount needed
to cure the default is less than $650,000.00, Landlord shall place the balance
in a separate escrow account. In the event of a subsequent default by Tenant,
Landlord shall submit a written certification directly to Tenant, before drawing
upon the escrow account to cure same.

          (d)  If the Tenant wishes to assert that no default occurred in its
performance of its leasehold obligations, and it is unable or unwilling to cure
the alleged default within fourteen (14) days after receipt of the Landlord's
certification, the Tenant's only recourse to prevent Landlord from calling the
letter of credit or subsequently drawing upon the balance in the escrow account
shall be to obtain a restraining order in a court of competent jurisdiction,
which order must be obtained and served upon Landlord within the fourteen (14)
day period after Tenant's receipt of Landlord's certification.

          (e)  If Landlord has not theretofore drawn on the letter of credit,
then Landlord shall release the letter of credit at such time that either (i)
Tenant makes an initial public offering of its shares, and its Initial public
offering provides it with a minimum of $75,000,000.00 net cash to the company,
or (ii) the Tenant can show a twelve-month audited net income from operations of
the company of $18 million or more.  Upon the occurrence of either of these
events, the Tenant may so notify the Landlord and provide Landlord with proof
thereof, and Landlord shall thereupon release the letter of credit.  If either
of these events occur after Landlord has drawn on the letter of credit, then
following receipt of Tenant's notice and proof thereof, any funds remaining from
the letter of credit that Landlord is holding in escrow, shall be released to
the Tenant.

          (f)  Tenant acknowledges and agrees that a failure to maintain in
effect a letter of credit that complies with all other requirements of this
Section 6, or the refusal by Tenant's bank to renew any letter of credit, shall
each constitute an event of default under the Lease as amended by this Third
Amendment.

          7.   Tenant agrees to remit to Landlord the sum of $14,250.00 upon
signing this Third Amendment, to be used as an escrow fund for payment of the
electric bills.  At the expiration of the Term, this sum shall be applied toward
Tenant's final

                                      -8-
<PAGE>

electric bill, and then Tenant shall remit the difference if the final bill is
higher, or Landlord shall refund the difference if the final bill is less than
$14,250.00.

                                      -9-
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment to Lease on the day and year first above written.  The persons who are
executing this Lease on behalf of the Landlord and Tenant represent that they
are authorized to do so on behalf of their respective entities.

WITNESS/ATTEST:                               G.B. LTD., L.L.C., Landlord

-------------------------------               By: /s/  Carl P. Gross
                                                  ------------------------------
                                                  Carl P. Gross, Managing Member

                                              Tellium, Inc., Tenant

     /s/ Thomas Biehl                         By: /s/  Michael J. Losch
------------------------------                    ------------------------------
Thomas Biehl                                      Michael J. Losch

                                     -10-

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