Document:

<PAGE>   1

                                                                   Exhibit 10.12

                                  OFFICE LEASE

                                 by and between

                          NAGOG PARK INVESTORS, L.L.C.
                                  ("Landlord")

                                       and

                         ARROWPOINT COMMUNICATIONS, INC.
                                   ("Tenant")

                             Dated: August 31, 1999
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                                TABLE OF CONTENTS
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ARTICLE I
      REFERENCE DATA......................................................     1
      1.1   Commencement Date.............................................     1
      1.2   Building......................................................     1
      1.3   Leased Premises...............................................     1
      1.4   Land..........................................................     2
      1.5   Property......................................................     2
      1.6   Landlord's Mailing Address....................................     2
      1.7   Tenant's Mailing Address......................................     2
      1.8   Broker........................................................     2
      1.9   Tenant's Prorata Share........................................     2
      1.10  Security Deposit..............................................     2
      1.11  Guarantor.....................................................     2
      1.12  Leased Premises Rentable Area.................................     2
      1.13  Permitted Use.................................................     2
      1.14  Lease Year....................................................     2
      1.15  Base Year Taxes...............................................     3
      1.16  Base Year Operating Costs.....................................     3

ARTICLE II

      LEASE TERM; EXTENSIONS..............................................     4
      2.1   Term..........................................................     4
      2.2   Extension Rights..............................................     4

ARTICLE III

      RENT ...............................................................     4
      3.1   Base Rent.....................................................     4
      3.2   Additional Rent...............................................     5
      3.3   Manner of Payment of Additional Rent..........................     6
      3.4   Audit Right of Tenant.........................................     7

ARTICLE IV

      SECURITY DEPOSIT....................................................     7
      4.1   Handling of Security Deposit..................................     7
      4.2   Restoration of Security Deposit...............................     8

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ARTICLE V

      UTILITIES AND SERVICES .............................................     8
      5.1   Electricity...................................................     8
      5.2   Other Utilities...............................................     8
      5.3   Tenant's Obligations Regarding Additional Utilities...........     8
      5.4   Landlord's Right to Install Other Utilities...................     9
      5.5   Janitorial Services...........................................     9
      5.6   Satellite Dish................................................     9
      5.7   Year 2000 Compliance..........................................    10

ARTICLE VI

      USE OF LEASED PREMISES..............................................    10
      6.1   Use of Leased Premises........................................    10
      6.2   Compliance with Laws..........................................    10
      6.3   Compliance with Americans with Disabilities Act...............    10
      6.4   No Nuisance or Other Harmful or Disruptive Activity...........    11
      6.5   Compliance with Fire Insurance Requirements...................    11
      6.6   Hazardous Materials...........................................    12

ARTICLE VII

      MAINTENANCE; REPAIRS................................................    13
      7.1   Tenant's Obligations..........................................    13
      7.2   Landlord's Obligations........................................    13
      7.3   Removal of Snow, Ice and Debris...............................    14
      7.4   Tenant's Failure to Make Repairs..............................    14
      7.5   Landlord's Failure to Make Repairs............................    14

ARTICLE VIII

      ALTERATIONS.........................................................    14
      8.1   Alterations or Additions by Tenant............................    14
      8.2   Alterations or Additions by Landlord..........................    15

ARTICLE IX

      ASSIGNMENT; SUBLEASING..............................................    15
      9.1   Landlord's Consent............................................    15
      9.2   Standards for Consent.........................................    16
      9.3   Affiliated Transfers..........................................    16

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ARTICLE X

      SUBORDINATION; ESTOPPEL CERTIFICATES................................    16
      10.1  Subordination ................................................    16
      10.2  Estoppel Certificates.........................................    17

ARTICLE XI

      INDEMNIFICATION AND WAIVER..........................................    18
      11.1  Damage to Property ...........................................    18
      11.2  Indemnity Against Liability ..................................    18
      11.3  Waiver of Claims .............................................    19

ARTICLE XII

      INSURANCE...........................................................    19
      12.1  Insurance to be Maintained by Tenant..........................    19
      12.2  Other Insurance Requirements .................................    20
      12.3  Waiver of Subrogation.........................................    20
      12.4  Insurance to be Maintained by Landlord........................    20

ARTICLE XIII

      FIRE; CASUALTY; EMINENT DOMAIN......................................    21
      13.1  Damage by Casualty............................................    21
      13.2  Tenant's Option to Terminate in the Event of a Taking.........    22
      13.3  Landlord's Option to Terminate in the Event of a Taking.......    22
      13.4  Miscellaneous Provisions Regarding Casualty or Taking.........    23

ARTICLE XIV

      DEFAULT; REMEDIES; BANKRUPTCY.......................................    23
      14.1  Events of Default ............................................    23
      14.2  Landlord's Remedies ..........................................    25
      14.3  Landlord's Cure Rights .......................................    26
      14.4  Tenant's Obligation to Reimburse Landlord ....................    26
      14.5  No Waiver ....................................................    26
      14.6  Acceptance of Late Payments ..................................    27
      14.7  Interest on Late Payments ....................................    27
      14.8  Remedies Cumulative ..........................................    27
      14.9  Landlord's Rights in Tenant's Bankruptcy .....................    27
      14.10 Landlord's Default............................................    28
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ARTICLE XV

      SURRENDER; HOLDING OVER.............................................    29
      15.1  Surrender of Leased Premises..................................    29
      15.2  Holding Over .................................................    29

ARTICLE XVI

      LANDLORD'S LIABILITY................................................    30
      16.1  Limited Recourse .............................................    30
      16.2  Interruption of Services and Utilities .......................    30
      16.3  No Consequential Damages .....................................    30
      16.4  Liability after Conveyance of Property .......................    30

ARTICLE XVII

      MISCELLANEOUS PROVISIONS............................................    31
      17.1  Governing Law ................................................    31
      17.2  Partial Invalidity ...........................................    31
      17.3  Captions .....................................................    31
      17.4  Successors and Assigns........................................    31
      17.5  Recording of Lease............................................    31
      17.6  Entire Agreement..............................................    31
      17.7  Amendments....................................................    31
      17.8  Quiet Enjoyment...............................................    31
      17.9  No Partnership................................................    31
      17.10 Time of Essence...............................................    32
      17.11 Brokerage.....................................................    32
      17.12 Rules and Regulations.........................................    32
      17.13 Signs.........................................................    32
      17.14 Landlord's Access and Tenant's Access; Security...............    33
      17.15 Notices.......................................................    33
      17.16 No Merger.....................................................    34
      17.17 No Offer......................................................    34
      17.18 Waiver of Jury Trial..........................................    34
      17.19 Financial Reports.............................................    34
      17.20 Landlord's Fees...............................................    34
      17.21 Telecommunications............................................    34
      17.22 Confidentiality...............................................    35
      17.23 Notice to Landlord's Mortgagee................................    35
      17.24 Condition of Leased Premises..................................    35
      17.25 Landlord Work.................................................    36
      17.26 Intentionally Omitted.........................................    37
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      17.27 Tenant Improvements...........................................    37
      17.28 Right of First Offer..........................................    37
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List of Exhibits:
-----------------

Exhibit FP        - Floor Plan of Leased Premises
Exhibit LD        - Legal Description of Property
Exhibit OC        - Operating Costs
Exhibit FMRV      - Calculation of Fair Market Rental Value
Exhibit RR        - Rules and Regulations
Exhibit LW        - Landlord Work
Exhibit TI        - Tenant Improvements
Exhibit J         - Janitorial Services
Exhibit S         - Subordination, Non-Disturbance and Attornment Agreement
Exhibit HM        - Hazardous Materials Disclosure Form

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                                                                       8/27/99
                                                            Exchange.3028907.6

                                 OFFICE LEASE

      THIS OFFICE LEASE (this "Lease") is made as of the 31st day of August,
1999, by and between Nagog Park Investors, L.L.C., having a business address c/o
Tishman-Heskin Partners, 119 North Fourth Street, Minneapolis, MN 55401
("Landlord") and ArrowPoint Communications, Inc., a Delaware corporation, having
a business address as provided below in Section 1.7 ("Tenant").

      Subject to the covenants, conditions and other provisions of this Lease,
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the
Leased Premises (as defined below), together with the non-exclusive right to use
in common with others the Common Facilities (as defined below) and the right to
use in common with other tenants, the unassigned parking spaces on the Land, it
being agreed the assigned parking spaces on the Land will not exceed 45 spaces.

                                  ARTICLE I

                                REFERENCE DATA

      Each of the capitalized terms used in this Lease shall have the meaning
set forth opposite such term below:

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1.1   COMMENCEMENT DATE:            The later of (a) November 1, 1999 or (b) the
                                    date on which Landlord delivers the Leased
                                    Premises to Tenant with the Landlord Work
                                    substantially complete in accordance with
                                    Section 17.25 of this Lease.

1.2   BUILDING:                     The building located at 50 Nagog Park,
                                    Acton, Massachusetts, containing
                                    approximately one hundred eighteen thousand
                                    (118,309) rentable square feet of floor
                                    space.

1.3   LEASED PREMISES:              A portion of the Building containing
                                    approximately forty-four thousand three
                                    hundred five (44,776) square feet of
                                    floor space, located within the Building
                                    on the third (3rd) floor as shown on
                                    EXHIBIT FP attached hereto.

1.4   LAND:                         The land on which the Building is
                                    located, as described in the legal
                                    description attached hereto as EXHIBIT LD.
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1.5   PROPERTY:                       The Land, the Building, the Common
                                      Facilities and the other common areas and
                                      the other improvements on the Land.

1.6   LANDLORD'S MAILING ADDRESS:     119 North Fourth Street, Suit 407
                                      Minneapolis, MN 55401
                                      Attn: Mr. Raymond P. Cunningham

1.7   TENANT'S MAILING ADDRESS:       Prior to the Commencement Date:
                                      235 Littleton Rd., Suite #3
                                      Westford, MA 01886

                                      After the Commencement Date:
                                      the address of the Leased Premises
                                      Attn: Chief Financial Officer

1.8   BROKER:                         Grubb & Ellis Company and Insignia/ESG,
                                      Inc.

1.9   TENANT'S PRORATA SHARE:         Thirty-seven and eight tenths percent
                                      37.8%)

1.10  SECURITY DEPOSIT:.              One Hundred Thirty-Four Thousand Seven
                                      Hundred Sixty-One and 00/100 Dollars
                                      ($134,761.00)

1.11  GUARANTOR:                      N/A

1.12  LEASED PREMISES RENTABLE AREA:  Forty-four thousand seven hundred
                                      seventy-six (44,776) rentable square feet

1.13  PERMITTED USE:                  General office, laboratory, research,
                                      development and light assembly but only
                                      to the extent permitted by applicable
                                      zoning, and no other purpose.

1.14  LEASE YEAR:                     A period of twelve (12) consecutive
                                      calendar months commencing on the
                                      Commencement Date (or the first day of
                                      the first calendar month after the
                                      Commencement Date occurs if the
                                      Commencement Date is any day other than
                                      the first day of a month), and then each
                                      consecutive twelve (12) month period
                                      occurring thereafter during the Term of
                                      this Lease.

1.15  BASE YEAR TAXES:                Total Taxes (as defined below) paid with
                                      respect to the Property for the period
                                      from July 1, 1999 through June 30, 2000
                                      (i.e., fiscal tax year 2000); provided,
                                      however, if at the time the Building
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                                    reaches 95% occupancy, it can be
                                    reasonably determined that the assessment
                                    of the Property has been increased to
                                    reflect an increase in the occupancy of
                                    the Building over the occupancy level
                                    that existed on the relevant assessment
                                    date for fiscal year 2000, then the Base
                                    Year Taxes shall be calculated to equal
                                    the product of (a) the new, higher
                                    assessed value which reflects such 95%
                                    occupancy (as distinct from any increased
                                    valuation which is part of a general
                                    increased valuation of all the property
                                    within the Town of Acton) times (b) the
                                    tax rate in effect for the Property for
                                    fiscal year 2000.

1.16  BASE YEAR OPERATING COSTS:    Total Operating Costs (as defined below)
                                    paid with respect to the Property for the
                                    period from January 1, 2000 through and
                                    including December 31, 2000; however, if
                                    during such period average occupancy of
                                    the Building was less than ninety-five
                                    (95%), then Base Year Operating Costs
                                    shall be adjusted as reasonably
                                    appropriate to reflect the Operating
                                    Costs which would have been incurred had
                                    average occupancy of the Building for
                                    such period been ninety-five percent
                                    (95%).

1.17  COMMON FACILITIES:            The driveways and walkways necessary for
                                    access to the Building and the parking areas
                                    on the Land; the loading docks and loading
                                    areas serving the Building; the cafeteria;
                                    the entrances, lobbies, stairways, freight
                                    and passenger elevators, and corridors
                                    necessary for access to said loading docks,
                                    cafeteria and the Leased Premises; exercise
                                    facilities; and the heating, ventilating,
                                    air conditioning, plumbing, electrical,
                                    security, emergency and other mechanical
                                    systems and equipment serving the Leased
                                    Premises in common with other portions of
                                    the Building.

</TABLE>

                                   ARTICLE II

                             LEASE TERM; EXTENSIONS

      2.1 TERM. The term of this Lease shall be for a period of five (5) years
commencing on the Commencement Date and ending on the last day of the month
immediately prior to the

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month in which the fifth (5th) anniversary of the Commencement Date occurs (the
"Term"). Landlord shall deliver the Leased Premises to Tenant, free of all
tenants and occupants in accordance with Section 17.25 of this Lease, on the
Commencement Date.

      2.2 EXTENSION RIGHTS. Provided there is no uncured Event of Default both
at the time of Tenant's exercise of its right to extend and at the commencement
of the Option Term, Tenant shall have the right to extend the Term for one (1)
five-year extension period (the "Option Term") upon the following terms and
conditions:

            2.2.1 Tenant must notify Landlord in writing of its election to
extend the Term for the Option Term on or before two hundred seventy (270) days
prior to the expiration of the Term.

            2.2.2 The annual Base Rent for the Option Term shall be equal to
ninety-five percent (95%) of the Fair Market Rental Value as determined pursuant
to EXHIBIT FMRV attached hereto as of the last day of the original Term.

            2.2.3 Additional Rent (defined below) due for Real Estate Taxes
(defined below), Operating Costs (defined below), the costs of utilities and
other sums due under this Lease shall be payable during the Option Term in the
same manner as herein provided for the original Term; provided, however, the
Base Year Taxes shall be Total Taxes paid with respect to the Property for
fiscal tax year 2005, and the Base Year Operating Costs shall be Total Operating
Costs paid with respect to the Property for calendar year 2005.

            2.2.4 All other provisions of this Lease shall also remain in effect
during the Option Term except the right to extend as set forth in this Section
2.2, it being agreed that there are no further rights of extension after the
first (1st) Option Term. Unless expressly stated herein to the contrary, all
references in this Lease to the "Term" shall include the Option Term when and if
Landlord receives Tenant's notice of election to extend the Term as herein
provided.

                                   ARTICLE III

                                      RENT

      3.1 BASE RENT. Tenant shall pay to Landlord annual rent equal to (i) Eight
Hundred Seventeen Thousand One Hundred Sixty-Two and 00/100 Dollars
($817,162.00) per year, payable in equal monthly installments of Sixty-Eight
Thousand Ninety-Six and 83/100 Dollars ($68,096.83) each from the Commencement
Date through the date which is one (1) day prior to the first (1st) anniversary
of the Commencement Date, and Eight Hundred Twenty-Eight Thousand Three Hundred
Fifty-Six and 00/100 Dollars ($828,356.00) per year, payable in equal monthly
installments of Sixty-Nine Thousand Twenty-Nine and 67/100 Dollars ($69,029.67)
each from the first (1st) anniversary of the Commencement Date through the date
which is one (1) day prior to the third (3rd) anniversary of the Commencement
Date, and Eight Hundred Fifty

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Thousand Seven Hundred Forty-Four and 00/100 Dollars ($850,744.00) per year,
payable in equal monthly installments of Seventy Thousand Eight Hundred
Ninety-Five and 33/100 Dollars ($70,895.33) each from the third (3rd)
anniversary of the Commencement Date through the last day of the original Term
of this Lease ("Base Rent"), and (ii) an amount equal to the cost of the
electricity consumed by Tenant at the Building determined by a check meter (the
"Electricity Rent"). Landlord shall pay for the cost of such check meter.
Payments of Base Rent shall be made by Tenant at the Landlord's Mailing Address
commencing on the Commencement Date and continuing thereafter on the first day
of each month during the Term in advance, without offset, deduction, demand, or
abatement (except as otherwise expressly specified in this Lease) whatsoever, in
lawful money of the United States. The Base Rent payment for any fractional
month at the commencement, termination or expiration of the Term will be
prorated accordingly. The amount of Base Rent payable during the Option Term
shall be determined in accordance with Section 2.2.2 above. Electricity Rent
shall be payable in monthly installments in arrears within thirty (30) days
after Tenant receives an invoice from Landlord stating the amount of electricity
consumed by Tenant during the previous month according to said check meter and
the actual cost to Landlord of such electricity.

      3.2 ADDITIONAL RENT. In addition to the Base Rent and Electricity Rent,
Tenant shall pay to Landlord the following amounts as additional rent
("Additional Rent") hereunder:

            3.2.1 TAXES. Commencing July 1, 2000, Tenant will pay to Landlord
Tenant's Prorata Share of the "Increased Taxes" (defined below) for each fiscal
tax year or portion thereof included within the Term. "Taxes" shall mean the
total of all real estate taxes, charges, and assessments, extraordinary as well
as ordinary, and any payments in lieu of such real estate taxes, levied,
imposed, or assessed for a particular fiscal year during the Term of this Lease
by governmental authorities upon or attributable to the Property, or to any and
all personalty owned by Landlord installed in or about the same by Landlord. If
due to a future change in the method of taxation any franchise, income or profit
tax shall be levied against Landlord in substitution for or in lieu of any tax
which would otherwise constitute a real estate tax or payment in lieu of real
estate tax, or if a specific tax on rentals from the Property shall be levied
against Landlord, such franchise, rental, or income tax shall be deemed to
constitute "Taxes" for the purposes hereof. Notwithstanding any other provision
of this Lease, "Taxes" shall not include any penalties or interest thereon
incurred due to Landlord's fault or omission nor any tax on Landlord's net
income or any succession, inheritance, transfer, estate, franchise, income tax
or tax on gross rent. "Increased Taxes" shall mean the amount, if any, by which
total Taxes paid for any fiscal tax year included within the Term exceed Base
Year Taxes. If Landlord obtains an abatement of any such Taxes, a proportionate
share of such abatement, less the reasonable fees and costs incurred in
obtaining the same, shall be refunded to Tenant. If Tenant reasonably determines
that the assessed value of real property is not commensurate with similar
commercial properties in Acton, Tenant shall have the right to bring or cause to
be brought an application or proceeding for reduction of the assessed valuation
of the real property, at Tenant's sole cost and expense. Taxes shall be deemed
to be paid over the maximum time permitted under law. If the Term includes only
a portion of any fiscal tax year, Tenant's Prorata Share of Increased Taxes for
such fiscal tax year shall be prorated according to the fraction calculated by
dividing (a) the total number

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of days in such fiscal tax year included within the Term by (b) 365. Tenant
shall be fully responsible for any tax assessment or other charge levied by any
governmental authority against any personalty placed upon the Property by
Tenant.

            3.2.2 OPERATING COSTS. Commencing January 1, 2001, Tenant shall pay
to Landlord Tenant's Prorata Share of the Increased Operating Costs (defined
below) for each calendar year. For the purposes of this Lease, the term
"Operating Costs" shall mean the items listed in EXHIBIT OC attached hereto and
made a part hereof. "Increased Operating Costs" shall mean the amount, if any,
by which total Operating Costs for any calendar year included within the Term
exceed Base Year Operating Costs. If during any calendar year less than
ninety-five percent (95%) of the rentable area of the Building is occupied, then
Operating Costs for such calendar year shall be adjusted reasonably to reflect
the Operating Costs which would have been incurred if at least ninety-five
percent (95%) of the rental area of the Building had been occupied during such
calendar year. If the Term includes only a portion of a calendar year, Tenant's
Prorata Share of Increased Operating Costs for such calendar year shall be
prorated according to the fraction calculated by dividing (a) the total number
of days in such calendar year included within the Term by (b) 365.

      3.3 MANNER OF PAYMENT OF ADDITIONAL RENT. Landlord shall reasonably
estimate Base Year Operating Costs, Increased Taxes, Increased Operating Costs,
and Tenant's Prorata Share of such Increased Taxes and such Increased Operating
Costs for the Lease Year in question and commencing January 1, 2001, Tenant
shall pay with each monthly installment of Base Rent during that Lease Year, in
advance as Additional Rent, an amount equal to one-twelfth (1/12th) of the total
of Tenant's Prorata Share of such estimated Increased Taxes and Increased
Operating Costs. On or before April 1 of each calendar year, Landlord shall
deliver to Tenant a reasonably detailed written statement of the actual Taxes
and Operating Costs for the preceding calendar year, together with reasonable
supporting documentation to permit Tenant to confirm the accuracy of all charges
and calculations. If total payments made by Tenant based upon such estimates
exceed Tenant's Prorata Share of actual Increased Taxes and Increased Operating
Costs as finally determined for the Lease Year in question, then any overpayment
shall be credited in full to such payments next coming due under this Lease or
in the event such overpayment occurs at the end of the Term, then such excess
shall be refunded to Tenant within thirty (30) days after the end of the Term
(subject to any offsets for sums due from Tenant). If total payments based upon
such estimates are less than the actual amounts required to pay in full Tenant's
Prorata Share of actual Increased Taxes and Increased Operating Costs for the
year in question, then Tenant shall pay to Landlord the full amount of the
deficiency within thirty (30) days after receiving written notice from Landlord
of the amount of such deficiency. The Additional Rent payment for any fractional
month at the commencement, termination or expiration of the Term shall be
prorated accordingly. Payments of Additional Rent shall be made by Tenant
without offset, deduction, demand, or abatement whatsoever (except as otherwise
expressly provided in this Lease), in lawful money of the United States.

      3.4 AUDIT RIGHT OF TENANT. Tenant shall have the right to audit the
applicable records of Landlord to confirm that the Operating Costs and other
charges billed to Tenant are proper and

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conform to the provisions of the Lease. Such right shall be exercisable by
Tenant within one year after the Tenant's receipt of the Landlord's statement of
Taxes and Operating Costs with respect to such expenses and charges. Landlord
shall cooperate with Tenant in providing Tenant reasonable access to Landlord's
books and records during normal business hours to enable Tenant to audit
Landlord's books and records as they relate to any costs or expenses passed
through to Tenant pursuant to any provisions of this Lease. If the audit
discloses any overpayment on the part of Tenant, then Tenant shall be entitled
to a credit on the next succeeding installment of Increased Operating Costs for
an amount equal to the overcharge plus interest on the amount of such overcharge
from the date on which same was paid by Tenant until the date refunded by
Landlord at the prime rate as published in the Wall Street Journal, and such
credit shall be extended to succeeding installments of Increased Operating Costs
in the event such overcharge exceeds the amount of the next succeeding such
installment and, in the event the term of this Lease has expired or been earlier
terminated, then Tenant shall be entitled to a refund of such excess from
Landlord (net of any amounts whatsoever which Tenant may still owe to Landlord
notwithstanding such expiration or early termination) within thirty (30) days
after such date or expiration or earlier termination. In addition, in the event
such audit by Tenant discloses such an overcharge in excess of five percent (5%)
of the amount payable in accordance with this Lease, then Landlord shall pay to
the Tenant the reasonable costs and expenses of such audit.

                                   ARTICLE IV

                                SECURITY DEPOSIT

      4.1 HANDLING OF SECURITY DEPOSIT. Upon the execution of this Lease, Tenant
shall pay to Landlord the Security Deposit in the amount specified in Section
1.10 above, which shall be held as security for Tenant's performance of Tenant's
obligations under this Lease (and may be applied by Landlord to defray the cost
or expense to Landlord (including, without limitation, payment of any unpaid
Rent) arising out of any Event of Default by Tenant hereunder) and refunded to
Tenant at the end of the Lease Term subject to Tenant's satisfactory compliance
with the conditions and obligations of this Lease. Landlord may co-mingle the
Security Deposit with Landlord's other funds; however, Landlord shall at least
annually either pay over to Tenant or credit against Rent owed by Tenant any
interest accrued with respect to the Security Deposit. Further, Landlord shall
have the right to turn over the Security Deposit to any grantee of Landlord's
interest in the Property; and if so turned over, Tenant agrees to look solely to
such grantee for proper application of the Security Deposit.

      4.2 RESTORATION OF SECURITY DEPOSIT. In the event Landlord applies any
portion of the Security Deposit in accordance with provided in Section 4.1
above, Tenant shall immediately make payment to Landlord of the amount necessary
to restore the Security Deposit to the full dollar amount set forth in Section
1.10.

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                                    ARTICLE V

                             UTILITIES AND SERVICES

      5.1 ELECTRICITY. Tenant shall pay directly to Landlord monthly (as set
forth in Section 3.1) Tenant's share of charges for electricity for the lights
and plugs consumed in the Leased Premises as established by the so-called check
meter or sub-meter (the "Sub-meter") between the main meter (the "Main Meter")
for the Building and the Leased Premises which monitors electricity usage at the
Leased Premises. Tenant's share shall equal the total monthly electric bill
based upon the usage reflected by the Main Meter, times a fraction of which the
denominator is the total kilowatt hours shown on the Main Meter for the month in
question and the numerator of which is the total kilowatt hours shown on the
Sub-meter for the month in question. Landlord hereby warrants to Tenant that
electricity having a capacity of six (6) watts per square foot of rentable area
in excess of electricity provided for HVAC, lighting and the base building will
be provided to the Leased Premises at all times during the term. Landlord shall
provide heating, ventilation and air conditioning ("HVAC") to the Leased
Premises between the hours of 8:00 a.m. to 6:00 p.m. Monday through Friday and
from 8:00 a.m. to 1:00 p.m. on Saturday, but excluding holidays (the "Normal
Hours HVAC"). Landlord hereby warrants to Tenant that the Building air
conditioning system shall have a cooling capacity of one (1) ton per hour for
each three hundred (300) usable square feet in the Building. Upon Tenant's
request, which request must be made to Landlord's property manager by 3:00 p.m.
on the preceding business day, Landlord shall provide HVAC beyond Normal Hours
HVAC at a cost of fifty dollars ($50) per hour. Notwithstanding any provisions
of this Section 5.1 to the contrary, Tenant hereby agrees that in the event that
the Tenant's unusual concentration and use of business machines, classrooms,
training rooms, or its uncharacteristically high occupancy of the Leased
Premises or Tenant's unusual electrical loads cause the need for an upgrade to
the HVAC system, Tenant shall pay to Landlord all costs of such HVAC system
upgrade.

      5.2 OTHER UTILITIES. For any utility service provided to the Leased
Premises other than electricity, water or sewer, Tenant must make arrangements
directly with the provider of such utility service for bills to be rendered
directly to Tenant, and Tenant shall have full responsibility to pay all such
bills.

      5.3 TENANT'S OBLIGATIONS REGARDING ADDITIONAL UTILITIES. Landlord shall
have no obligation to provide utilities or equipment other than the utilities
and equipment within the Leased Premises as of the Commencement Date of this
Lease. In the event Tenant's use of the Leased Premises requires additional
utilities or equipment or utilities of greater capacity, the installation and
maintenance thereof shall be Tenant's sole obligation and shall be performed at
Tenant's sole cost and expense, provided that such installation shall be subject
to the prior written consent of Landlord which shall not be unreasonably
withheld, delayed or conditioned.

      5.4 LANDLORD'S RIGHT TO INSTALL OTHER UTILITIES. Landlord shall be
entitled to install in or through the Leased Premises (above drop ceilings) and
the Property and repair, maintain, and replace pipes, conduits, wires, and other
utility lines serving other tenants or portions of the

                                       8
<PAGE>   15
Property provided said installation, repair, maintenance or replacements do not
unreasonably interfere with Tenant's use of the Leased Premises, other than a
reasonable time necessary to complete repairs or replacements of an urgent
nature. Landlord shall provide at least forty-eight (48) hours advance written
notice to Tenant of any such work to be performed in or adjacent to the Leased
Premises that may reasonably be calculated to have an effect on the Tenant's use
of the Leased Premises.

      5.5 JANITORIAL SERVICES. Landlord shall provide daily and periodic
janitorial services to the Leased Premises after 5:00 p.m. according to the
schedule attached as EXHIBIT J substantially in accordance with similar suburban
buildings along the Route 495 corridor. The cost of such services shall be
included in Operating Costs. Tenant shall have the right, which shall be
exercised by sixty (60) days prior written notice to Landlord, to select and
hire Tenant's own cleaning company to perform the janitorial services set forth
on EXHIBIT J at Tenant's sole cost and expense; provided that, upon the date
which is sixty (60) days after Landlord's receipt of Tenant's notice that Tenant
will select and hire its own cleaning company, Landlord shall have no obligation
to provide any janitorial services to Tenant with respect to the Leased Premises
or otherwise. If Tenant notifies Landlord of its election to select and hire its
own cleaning company, then commencing on the date which is sixty (60) days after
Tenant's notice, Landlord shall not include in the calculation of Tenant's
Prorata Share of Operating Costs the cost of the janitorial services set forth
on EXHIBIT J.

      5.6 SATELLITE DISH. Provided that Tenant has (i) obtained Landlord's prior
written consent, which consent may be withheld in Landlord's sole discretion,
and (ii) submitted to Landlord, and Landlord has approved, the plans and
specifications for a satellite dish or other form of wireless equipment for
receiving telecommunications (the "Satellite Dish"), Tenant shall have the
right, appurtenant to the Leased Premises, to install, construct, maintain, use
and operate a satellite dish or other form of wireless equipment for receiving
telecommunications on the roof of the Building in the area reasonably specified
by Landlord; provided further that, (a) Tenant's installation, construction,
maintenance, use and operation of the Satellite Dish shall not invalidate any
warranty of any contractors or materials suppliers relating to the roof, (b)
Tenant hereby acknowledges and agrees that the indemnification of Landlord by
Tenant set forth in Section 11.2 shall expressly apply to any damage to the
roof, and injury to persons or other damage property occurring during or as a
result of the installation, construction, maintenance, or use of the Satellite
Dish, and (c) Tenant, its agents, contractors, or employees shall not interfere
with the rights of any other tenants to install, construct, maintain, use or
operate a satellite dish or other form of wireless equipment for receiving
telecommunications at the Building. Tenant shall so install, construct, maintain
(in good condition), use and operate such Satellite Dish at its sole expense and
in accordance with all applicable laws. Tenant shall remove such Satellite Dish
at the end of the Term and shall repair any damage to the Building caused by its
installation or removal. Notwithstanding anything in this Section 5.6 to the
contrary, Tenant shall have no right to install, construct, maintain, use or
operate the Satellite Dish in violation of any applicable Governmental
Regulations, zoning or town bylaws.

                                       9
<PAGE>   16
      5.7 YEAR 2000 COMPLIANCE. If any repairs, alterations or replacements need
to be made to any of the equipment, software and/or appliances of the Building,
including without limitation, elevators, heating, ventilating and air
conditioning systems, card key access systems, door locks, energy management
systems, sprinkler systems, fire detection and life safety systems and other
building systems, in order to prevent or eliminate any interruptions or
malfunctions in the services or operations provided thereby as a result of the
passage from the year 1999 to the year 2000, Landlord shall cause any such
repairs, alterations or replacements to be promptly and timely made and the cost
thereof will be paid by Landlord.

                                   ARTICLE VI

                             USE OF LEASED PREMISES

      6.1 USE OF LEASED PREMISES. Tenant acknowledges that no trade or
occupation shall be conducted in the Leased Premises or use made thereof other
than the Permitted Use set forth in Section 1.13 above.

      6.2 COMPLIANCE WITH LAWS. Tenant, at its sole expense, shall comply with
all laws, rules, orders and regulations of federal, state, county, and municipal
authorities (collectively, "Governmental Regulations"), and with any direction
of any public officers pursuant to law, which impose any duty upon Landlord or
Tenant with respect to the Leased Premises; provided, however, Tenant shall not
be required to make structural modifications to the Leased Premises or to make
modifications to the Building's electrical, mechanical and plumbing systems
serving the Leased Premises, including, but not limited to, any bathrooms
located in the Leased Premises. Conversely, Landlord, at its sole expense, shall
comply with all Governmental Regulations and any such directions which impose
any duty with respect to the portions of the Building or Property outside of the
Leased Premises (or within the Leased Premises if structural modifications are
required), except to the extent that such duty is triggered by any unique (i.e.,
not typically part of a general office, laboratory, research, development or
light assembly use) and the specific use for which Tenant is utilizing the
Leased Premises, in which event the provisions of the prior sentence shall
govern. Tenant shall also comply with all covenants, conditions and restrictions
of record as of the execution of this Lease applicable to Tenant's use or
occupancy of the Property.

      6.3 COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT. Without in any way
limiting the generality of the obligations set forth in Section 6.2 above,
Tenant also shall comply at Tenant's sole cost and expense with all applicable
provisions of the Americans with Disabilities Act ("ADA") and all of the
regulations promulgated thereunder as they apply to Tenant's use and occupancy
of the Leased Premises and the operation of Tenant's business therein and shall
be fully responsible for any modifications or alterations to the Leased Premises
or the common areas of the Property necessary to meet requirements of the ADA
which have become applicable to the Leased Premises or the Property as a result
of any unique and specific use for which Tenant is utilizing the Leased
Premises; provided, however, Tenant shall not be required to make structural

                                       10
<PAGE>   17
alterations to the Leased Premises nor shall Tenant be required to make any
alteration or modification in connection with the entrance door to the Leased
Premises connecting to the hallway of the Building. Landlord shall be
responsible for compliance of the Building or Property outside of the Leased
Premises with all provisions of the ADA, except to the extent that such duty is
triggered by any unique and specific use for which Tenant is utilizing the
Leased Premises, in which event the provisions of the prior sentence shall
govern, and also except that Landlord will take no action to bring into
compliance with ADA any of the bathrooms of the Building (including, without
limitation, bathrooms within the Leased Premises) which may not presently comply
with ADA unless specifically notified of any such ADA noncompliance by a public
official having jurisdiction over such matters under applicable Governmental
Regulations. In the event that a public official having jurisdiction over such
matters under applicable Governmental Regulations specifically notifies Landlord
that any of the bathrooms of the Building are not in compliance with the ADA,
Landlord shall be responsible to: (i) bring any such bathrooms into compliance
with the ADA at Landlord's sole cost and expense and, (ii) pay any fines in
connection therewith; provided that, Tenant and not Landlord shall be
responsible for the items enumerated in (i) and (ii) above, at Tenant's sole
cost and expense, if the bathrooms were in compliance at the time of execution
of the Lease and the noncompliance is a result of any unique and specific use
for which Tenant is utilizing the Leased Premises. Notwithstanding the
immediately preceding sentence, Tenant shall not be required to make structural
alterations to the Leased Premises to bring the bathrooms of the Building into
compliance with the ADA. Landlord hereby represents that as of the execution of
this Lease, the Building (excluding the bathrooms of the Building as set forth
on the immediately preceding sentence) is in compliance with the ADA.

      6.4 NO NUISANCE OR OTHER HARMFUL OR DISRUPTIVE ACTIVITY. Tenant shall not
perform any acts or carry on any business or practices which may (a) injure or
overburden any part of the Leased Premises, the Property or common areas,
including, without limitation, any of the electrical or mechanical systems of
the Property, (b) violate any certificate of occupancy affecting the same, (c)
constitute a public or private nuisance or a menace to other tenants on the
Property, (d) produce undue noise, (e) create obnoxious fumes or other odors or
(f) otherwise cause unreasonable interference with other tenants or occupants of
the Property. Further, Tenant agrees not to use the Leased Premises for any
purpose whatsoever which may injure the reputation of the Leased Premises or the
Property.

      6.5 COMPLIANCE WITH FIRE INSURANCE REQUIREMENTS. Tenant shall not permit
any use of the Leased Premises which will make voidable any insurance on the
Property or on the contents of the Building or which shall be contrary to any
law or regulation from time to time established by the New England Fire
Insurance Rating Association or any similar body succeeding to its powers.
Tenant shall on demand reimburse Landlord for all extra insurance premiums
caused in any way by Tenant's use of the Leased Premises, including, without
limitation, the volume of electricity and electrical equipment used by Tenant.

                                       11
<PAGE>   18
      6.6 HAZARDOUS MATERIALS. Tenant shall not cause or permit the emission,
release, threat of release or other escape of any Hazardous Materials (defined
below) so as to adversely affect in any manner, even temporarily, any element or
part of the Leased Premises or the Property. Tenant shall not use, generate,
store or dispose of Hazardous Materials in or about the Leased Premises (except
for the materials listed and disclosed on the Hazardous Materials Disclosure
Form attached hereto as EXHIBIT HM provided such materials shall be stored, used
and disposed of by Tenant strictly in accordance with all applicable
Governmental Regulations and Environmental Laws, and ordinary office and
cleaning supplies which are stored, used and disposed of in compliance with all
applicable Environmental Laws (defined below)), or dump, flush or in any way
introduce Hazardous Materials (other than common cleaning products which are
being disposed of in compliance with all applicable Environmental Laws) into
sewage or other waste disposal systems serving the Leased Premises (nor shall
Tenant permit its employees, agents or contractors to take any of the foregoing
actions). Upon each anniversary of the Commencement Date, Tenant shall provide
to Landlord a written update to the information initially provided in EXHIBIT HM
reaffirming or revising the information provided on EXHIBIT HM or in the most
recently provided update, as applicable, which updated information shall be
certified as being true and correct by an authorized officer of Tenant.

      Tenant will indemnify, defend and hold Landlord harmless from and against
all claims, loss, costs and expenses (including, without limitation, reasonable
attorneys' fees and disbursements, diminution in the value of the Leased
Premises or the Property, costs incurred in connection with any investigation of
site conditions or any clean-up or remedial work required by any federal, state
or local governmental agency) to the extent incurred as a result of any
contamination of the Leased Premises or any other portion of the Property with,
or any release of Hazardous Materials by Tenant or Tenant's contractors,
licensees, invitees, agents, servants or employees (collectively, the "Tenant
Group") during the Term of this Lease. Without limiting the foregoing, if the
presence of any Hazardous Materials in, on or under the Leased Premises or the
Property caused or permitted by any of the Tenant Group results in any
contamination of the Leased Premises or the Property or any other property
during the Term of this Lease, Tenant shall promptly take all actions at its
sole expense as are necessary to return the Leased Premises, the Property and
such other property to the condition existing prior to the introduction of any
such Hazardous Material by such member(s) of the Tenant Group, provided that
Landlord's approval of such action shall first be obtained, which approval shall
not be unreasonably withheld so long as such actions would not potentially have
any material adverse long-term or short-term effect on Landlord, the Leased
Premises or the Property.

      The obligations of Tenant and Landlord in this Section shall survive the
expiration or earlier termination of this Lease and any transfer of title to the
Leased Premises, whether by sale, foreclosure, deed in lieu of foreclosure or
otherwise.

      For purposes of this Lease, "Hazardous Materials" means, collectively, any
animal wastes, medical waste, blood, biohazardous materials, hazardous waste,
hazardous substances, pollutants or contaminants, petroleum or petroleum
products, radioactive materials, asbestos in any form or

                                       12
<PAGE>   19
condition, or any pollutant or contaminant or hazardous, dangerous or toxic
chemicals, materials or substances within the meaning of any applicable federal,
state or local law, regulation, ordinance or requirement relating to or imposing
liability or standards of conduct concerning any such substances or materials on
account of their biological, chemical, radioactive, hazardous or toxic nature,
all as now in effect or hereafter from time to time enacted or amended. For
purposes of this Lease, "Environmental Laws" means all laws, rules, orders and
regulations of federal, state, county, and municipal authorities, concerning any
Hazardous Materials whatsoever.

                                   ARTICLE VII

                              MAINTENANCE; REPAIRS

      7.1 TENANT'S OBLIGATIONS. Tenant shall, at Tenant's sole cost and expense,
(a) maintain and keep in good repair, good working order and free of litter and
refuse the interior of the Leased Premises and, except for Landlord's
obligations under Section 7.2 of this Lease, make any and all repairs and
replacements thereto as and when required, ordinary or extraordinary,
foreseeable or unforeseeable, including, but not limited to, the maintenance,
repair and replacement of any and all furnishings, fixtures and leasehold
improvements within the Leased Premises, exterior entrances, windows and plate
glass within or part of the wall delimiting the Leased Premises and any
electrical wiring, lighting fixtures, heating or plumbing fixtures, pipes, air
conditioning or heating components contained within and exclusively serving the
Leased Premises; and (b) keep unclogged and in good repair all drains, traps and
sewer pipes serving the Leased Premises and maintain and leave the same in good
working order, reasonable wear and tear, damage by fire and other casualty only
excepted. Landlord hereby represents that the heating and plumbing fixtures of
the Building currently do not serve the Leased Premises exclusively and that the
maintenance and repair of such items and the balancing of the HVAC system in the
Leased Premises shall be governed by Section 7.2 below. Tenant hereby agrees
that the maintenance and repair of the bathrooms serving the Leased Premises
shall be the responsibility of the Landlord but the costs for such maintenance
and repairs shall be included in the Operating Costs passed through to the
tenants in the Building on a prorata basis. At Landlord's option, ordinary
maintenance of any of the systems described above shall be undertaken by
Landlord in which event, promptly upon demand by Landlord, Tenant shall
reimburse Landlord (such reimbursement to constitute Additional Rent hereunder)
for all costs and expenses incurred by Landlord in connection with such
maintenance undertaken.

      7.2 LANDLORD'S OBLIGATIONS. Landlord agrees to make all necessary repairs,
replacements, additions and removals, interior and exterior, structural and
nonstructural to maintain the exterior and structural portions of the Building
and the Property (including foundations, floors, structural supports, roofs,
roof structures, canopies (excluding Tenant's signage thereon), walls,
driveways, sidewalks and parking facilities), the building systems including
heating, ventilation, air conditioning, electrical, mechanical and plumbing
systems (except for portions of those systems exclusively serving the Leased
Premises and located within the Leased Premises), the Common Facilities and
windows and plate glass (to the extent

                                       13
<PAGE>   20
maintenance is required due to product failure or storm related damage) of the
Building, reasonable wear and tear, damage by fire and other casualty only
excepted. Further, if any such maintenance is required because of the negligence
or intentional misconduct of Tenant or those for whose conduct Tenant is legally
responsible and such maintenance is not covered by insurance, then Tenant shall
be responsible for such maintenance, and if such maintenance is covered by
insurance, then Tenant shall be fully liable and responsible to Landlord for the
deductible amount of any such insurance. Landlord agrees to maintain the Common
Facilities of the Building and the landscaped and paved areas of the Property in
the same condition as they may be as of the Commencement Date.

      7.3 REMOVAL OF SNOW, ICE AND DEBRIS. Removal of snow, ice and debris from
the Common Facilities including sidewalks, driveways and parking areas of the
Property shall be the responsibility of Landlord. Snow, ice and debris shall be
removed as soon as reasonably practicable.

      7.4 TENANT'S FAILURE TO MAKE REPAIRS. If repairs are required to be made
by Tenant pursuant to the terms hereof, Landlord may demand that Tenant make the
same forthwith, and if Tenant refuses or neglects to commence such repairs and
complete the same with reasonable dispatch, after such demand, Landlord may (but
shall not be required to do so) make or cause such repairs to be made and such
repairs by Landlord shall be governed by the provisions of Sections 14.3 and
14.4 below.

      7.5 LANDLORD'S FAILURE TO MAKE REPAIRS. If Landlord fails to make any
repairs required of Landlord under this Lease, Tenant shall be entitled to the
remedies described in Section 14.10 below.

                                  ARTICLE VIII

                                  ALTERATIONS

      8.1 ALTERATIONS OR ADDITIONS BY TENANT. Tenant shall not make any
alterations (structural or otherwise), improvements, or additions to the Leased
Premises, without the prior written consent of the Landlord, such consent or
approval not to be unreasonably withheld, conditioned or delayed (except that
Landlord may withhold consent to any work which may affect structural elements
of the Building in Landlord's sole discretion), other than the Landlord Work as
set forth in Section 17.25 and EXHIBIT LW below and nonstructural alterations or
additions to the Leased Premises costing less than $10,000 in any one instance,
in which case Landlord's consent shall not be required. Landlord shall respond
to Tenant's written request for approval within ten (10) business days after
Landlord's receipt thereof; and Tenant's request shall expressly refer to
Landlord's time period for approval. All such allowed alterations, improvements
or additions other than the Landlord Work shall be at Tenant's sole cost and
expense. Tenant shall not permit any mechanics' liens, or similar liens, to
remain upon the Leased Premises for labor and material furnished to Tenant or
claimed to have been furnished

                                       14
<PAGE>   21
to Tenant in connection with work of any character performed or claimed to have
been performed at the direction of Tenant and shall cause any such lien to be
released of record forthwith without cost to Landlord. Any alterations or
improvements made by Tenant shall become the property of the Landlord at the
expiration or earlier termination of the Term unless Landlord notified Tenant in
writing at the time Tenant makes such alteration or improvement that such
alteration or improvement is to be removed by Tenant at Tenant's sole cost and
expense at the expiration or earlier termination of the Term. All alterations or
additions made by Tenant shall be performed in a good and workmanlike manner and
in compliance with all the applicable laws, ordinances, orders, rules,
regulations and requirements applicable thereto, shall be carried out in
conformance with plans and specifications approved by Landlord, such consent or
approval not to be unreasonably withheld, conditioned or delayed (except that
Landlord may withhold consent to any work which may affect structural elements
of the Building in Landlord's sole discretion), and shall be performed only by
contractors or mechanics approved by Landlord, such consent or approval not to
be unreasonably withheld, conditioned or delayed. All such contractors and
mechanics shall carry liability insurance (which shall name Landlord and Tenant
as an additional insured) and workmen's compensation insurance reasonably
satisfactory to Landlord, and Landlord shall be presented with certificates of
same prior to the commencement of any work. If Landlord elects to retain the
services of an architect, engineer or other construction professional to review
or supervise any part of Tenant's work, Tenant agrees to reimburse Landlord for
any reasonable charges or fees paid to any of the same for the review of all
proposed alterations, improvements and additions and for supervision of the same
other than the Landlord Work. Neither approval of the plans and specifications
nor supervision of the Tenant's work by Landlord shall constitute a
representation or warranty by Landlord as to the accuracy, adequacy, sufficiency
or propriety of such plans and specifications or the quality of workmanship or
the compliance of such alteration with applicable law.

      8.2 ALTERATIONS OR ADDITIONS BY LANDLORD. Landlord hereby reserves the
right at any time to enter upon the Property or the Leased Premises and make
alterations or additions thereto, or to any or all of the common facilities,
improvements or personalty comprising a part thereof which are owned by
Landlord, provided such alterations or additions do not unreasonably interfere
with Tenant's use of the Leased Premises.

                                   ARTICLE IX

                             ASSIGNMENT; SUBLEASING

      9.1 LANDLORD'S CONSENT. Tenant shall not, without the prior written
consent of Landlord: (i) assign, convey, mortgage or otherwise transfer this
Lease or any interest hereunder, or sublease the Leased Premises, or any part
thereof, whether voluntarily or by operation of law; or (ii) permit the use of
the Leased Premises by any person other than Tenant and its employees; or (iii)
sell or transfer greater than fifty (50%), in the aggregate, of the ownership
interest of Tenant, unless after such sale or transfer Tenant's net worth is
equal to or greater than Tenant's net worth immediately prior to such sale, as
reasonably determined by Landlord, and Tenant

                                       15
<PAGE>   22
continues to conduct the same business operations that Tenant conducted prior to
such sale or transfer in which event Landlord's consent shall not be required.
Any such assignment, sublease, transfer or use described in the preceding
sentence (a "Transfer") occurring without the prior written consent of Landlord
shall be void and of no effect. Landlord's consent to any Transfer shall not
constitute a waiver of Landlord's right to withhold its consent to any future
Transfer. Landlord's consent to any Transfer or acceptance of Base Rent or
Additional Rent from any party other than Tenant shall not release Tenant from
any covenant or obligation under this Lease. Landlord may require as a condition
to its consent to any assignment of this Lease that the assignee execute an
instrument in which such assignee assumes the obligations of Tenant hereunder.
If Landlord consents to any Transfer, Tenant shall pay to Landlord fifty percent
(50%) of all rent and other consideration received by Tenant in excess of the
Base Rent, Electricity Rent and Additional Rent paid by Tenant for the portion
of the Leased Premises so transferred minus all costs associated with a
transfer, including, without limitation, Tenant's improvements, architectural,
engineering, brokerage commissions and reasonable attorneys' fees. In addition,
Tenant shall pay to Landlord reasonable attorneys' fees and expenses incurred by
Landlord in connection with any proposed Transfer, whether or not Landlord
consents to such Transfer.

      9.2 STANDARDS FOR CONSENT. If Tenant desires the consent of Landlord to a
Transfer, Tenant shall submit to Landlord, at least thirty (30) business days
prior to the proposed effective date of the Transfer, a written notice which
includes such information as Landlord may reasonably require about the proposed
Transfer and the transferee. Landlord shall not unreasonably withhold, condition
or delay its consent to any proposed Transfers. Landlord shall not be deemed to
have unreasonably withheld its consent if, in the judgment of Landlord: (i) the
transferee is of a character or engaged in a business which is not in keeping
with the standards or criteria used by Landlord in leasing the Building; (ii)
the financial condition of the transferee is such that it may not be able to
perform its obligations in connection with this Lease; (iii) the purpose for
which the transferee intends to use the Leased Premises or portion thereof is in
violation of the terms of this Lease or the lease of any other tenant in the
Building; or (iv) any other reasonable basis which Landlord deems appropriate.
If Landlord wrongfully withholds its consent to any Transfer, Tenant's sole and
exclusive remedy therefor shall be to seek specific performance of Landlord's
obligation to consent to such Transfer.

      9.3 AFFILIATED TRANSFERS. Notwithstanding any provision of Section 9.1 or
9.2 to the contrary, Tenant shall have the right to assign or sublet all or any
portion of the Leased Premises without Landlord's prior consent or any
obligation to pay such excess, to a business organization controlling,
controlled by or under common control with Tenant in connection with the merger
or consolidation of or into Tenant or the sale of all or substantially all of
Tenant's assets provided such successor entity expressly assumes Tenant's
obligations under this Lease and Tenant remains jointly and severally liable
with such successor for the failure to perform Tenant's obligations under the
Lease.

                                       16
<PAGE>   23
                                    ARTICLE X

                      SUBORDINATION; ESTOPPEL CERTIFICATES

      10.1 SUBORDINATION. If the Leased Premises are, as of the date hereof,
subject to any mortgage or trust deed, Landlord shall provide Tenant with an
agreement executed by such lienholder which shall assure Tenant's right to
possession of the Leased Premises and other rights granted under this Lease
substantially in accordance with this Lease's terms and conditions within thirty
(30) days after the execution of this Lease. Such agreement shall be reasonably
acceptable to Tenant, Landlord, and such lienholder and shall be recordable with
the applicable registry or office. Tenant agrees to subordinate this Lease to
any future mortgage, or trust deeds, provided such lienholder shall assure
Tenant's right to possession of the Leased Premises and other rights granted
under this Lease substantially in accordance with this Lease's terms and
conditions. Such assurance shall be in the form attached as EXHIBIT S with
respect to such lienholder, and shall be recordable with the applicable registry
or office.

      Upon such attornment, this Lease shall continue in full force and effect
as a direct lease between the Successor Landlord (as defined below) and Tenant
upon all of the terms, conditions and covenants as are set forth in this Lease,
except that the Successor Landlord (unless formerly Landlord under this Lease or
its nominee or designee) shall not be: (i) liable in any way to Tenant for any
act or omission, neglect or default on the part of Landlord under this Lease;
(ii) responsible for any monies owing by or on deposit with Landlord to the
credit of Tenant unless actually received by the Successor Landlord; (iii)
subject to any counterclaim or setoff which theretofore accrued to Tenant
against Landlord; (iv) bound by any modification of this Lease subsequent to
such Superior Lease or Superior Mortgage (each as defined below) or by any
previous prepayment of Base Rent or Additional Rent for more than one (1) month,
which was not approved in writing by the Superior Mortgagee (as defined below);
(v) liable to Tenant beyond the Successor Landlord's interest in the Property
and the rents, income, receipts, revenues, issues and profits issuing from such
Property; (vi) responsible for the performance of any work to be done by
Landlord under this Lease to render the Leased Premises ready for occupancy by
Tenant; or (vii) required to remove any person occupying the Leased Premises or
any part thereof, except if such person claims by, through or under the
Successor Landlord. Any mortgage to which this Lease is, at the time referred
to, subject and subordinate, is herein called the "Superior Mortgage" and the
holder of a Superior Mortgage is herein called the "Superior Mortgagee." Any
Superior Mortgagee or the nominee or designee of any Superior Mortgagee or
lessor under any Superior Lease, and their respective successors or assigns,
including the purchaser at a foreclosure sale, who succeeds to the rights of
Landlord under this Lease shall be a "Successor Landlord."

      10.2 ESTOPPEL CERTIFICATES. Tenant shall, within ten (10) business days
after request from Landlord, deliver to any mortgagee, proposed mortgagee,
proposed purchaser of all or any part of the Property, or any other person or
entity designated by Landlord, in recordable form, a certificate certifying any
and all information reasonably requested, including, but not limited to, the
following: (a) the date of this Lease, the date when the Term of this Lease
commenced,

                                       17
<PAGE>   24
the date of the expiration of the Term, and the date when Base Rent and
Additional Rent commenced to accrue hereunder; (b) that this Lease is
unmodified, not amended, and in full force and effect; or, if there have been
any amendments or modifications, that the Lease is in full force and effect as
so amended or modified and stating the amendments or modifications and the dates
thereof; (c) whether or not there are then existing any setoffs or defenses
against the enforcement of any of the terms and/or conditions of this Lease and
any amendments or modifications hereof on the part of Tenant to be performed,
and, if so, specifying the same; and (d) the dates, if any, to which the Base
Rent, the Additional Rent and other sums on Tenant's part to be paid hereunder
have been paid and/or paid in advance; and (e) whether Tenant has accepted the
Leased Premises and any and all improvements in the condition then existing as
being complete and in accordance with Tenant's agreements as to the same and in
accordance with the Lease, and that Tenant waives any and all claims or causes
of action as to the condition of the Leased Premises including the improvements
thereto (to the extent that the work for such improvements has been completed)
as against Landlord and any new owner of the Property or assignee, or specifying
in detail any respect in which the Leased Premises or any improvements have not
been completed in accordance with the Lease, if that is the case (setting forth
any such deficiencies in reasonable detail). Further, Tenant's failure or
refusal to execute and deliver such certificate within such ten (10) business
day period shall constitute an Event of Default under this Lease, provided that
the notice to Tenant requesting such certificate expressly states that such
failure or refusal shall constitute an Event of Default.

                                   ARTICLE XI

                           INDEMNIFICATION AND WAIVER

      11.1 DAMAGE TO PROPERTY. Tenant shall save Landlord harmless from all loss
and damage to property occurring within the Leased Premises occasioned by the
use or escape of water or by the bursting of pipes, as well as from any claim or
damage resulting from neglect in not removing snow and ice from the roof of the
Building, or by any nuisance made or suffered on the Leased Premises. Tenant
also agrees to save Landlord harmless from any claim or damage resulting from
neglect in not removing snow and ice from the sidewalks on the Property, unless
such loss is caused by the intentional misconduct or gross negligence of
Landlord. Landlord shall not be liable for any loss or damage arising from any
latent defect in the Leased Premises or in the Building except as may be
otherwise expressly and specifically provided herein. All personal property or
improvements of Tenant at or about the Leased Premises shall be installed, used,
or enjoyed at the sole risk of Tenant, and Tenant shall defend, indemnify and
hold Landlord harmless from and against any and all claims and/or causes of
action pertaining to or arising out of damage to the same, including but not
limited to subrogation claims by Tenant's insurance carrier, but excepting such
claims and/or causes of action resulting from the actual negligence and/or
willful misconduct of Landlord.

      11.2 INDEMNITY AGAINST LIABILITY. Tenant shall also indemnify and hold
Landlord harmless, to the fullest extent permitted by law, from and against any
and all claims, actions, loss,

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<PAGE>   25
damage, liability and expense (including, without limitation, reasonable
attorney's fees and related legal costs incurred by Landlord) in connection with
loss of life, personal injury and/or damage to property arising out of or
resulting from (i) any occurrence in, upon or at the Leased Premises or (ii) the
occupancy or use of the Leased Premises, the Building or the Property or any
part thereof, or anywhere on or about the Property if caused wholly or in part
by any act, negligence or failure to perform the obligations imposed by this
Lease or any breach thereof, or omission of Tenant, its officers, agents,
employees, subtenants, licensees, concessionaires, invitees, visitors or others
occupying space in the Leased Premises, except to the extent arising out of the
negligence or willful misconduct of Landlord or its agents, employees or
contractors. If Landlord shall be threatened with or made a party to any
litigation commenced by or against Tenant (except in the event that such
litigation is commenced by Landlord against Tenant or by Tenant against Landlord
and Tenant prevails in such litigation), or with respect to any matter described
above, except to the extent arising out of the negligence or willful misconduct
of Landlord or its agents, employees or contractors, then Tenant shall protect
and hold Landlord harmless and indemnified and shall defend Landlord with
counsel reasonably acceptable to Landlord, or, at Landlord's option, shall
advance all costs, expenses and reasonable attorney's fees incurred or paid by
Landlord in connection with such litigation.

      11.3 WAIVER OF CLAIMS. Except for any loss or claim covered by liability
insurance covering Landlord, for which a prorata share of premiums are charged
to Tenant pursuant to Section 3.2.2 (but only to the extent of the insurance
proceeds actually received by Landlord under such liability insurance for claims
relating to Tenant's loss), Tenant releases Landlord and its agents and
employees from, and waives all claims against Landlord for, damage or injury to
person or property and loss of business sustained by Tenant and resulting from
the Building or the Leased Premises or any part thereof or any equipment therein
becoming in disrepair (other than from Landlord's negligence in managing and
operating the Property), or resulting from any accident, or from any
intentionally wrongful conduct by anyone other than Landlord, in or about the
Building or the Leased Premises or occurring anywhere on or about the Property.
This paragraph shall apply particularly, but not exclusively, to flooding,
damage caused by Building equipment and apparatus, water, snow, ice, frost,
steam, excessive heat or cold, broken glass, sewage, gas, odors, excessive noise
or vibration or the bursting or leaking of pipes, plumbing fixtures or sprinkler
devices. Without limiting the generality of the foregoing, Tenant waives all
claims and rights of recovery against Landlord and its agents and employees for
any loss or damage to any property of Tenant, whether or not such loss or damage
is due to the fault or negligence of Landlord or its agents or employees, and
regardless of the amount of insurance proceeds collected or collectible under
insurance policies in effect.

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<PAGE>   26
                                 ARTICLE XII

                                  INSURANCE

      12.1 INSURANCE TO BE MAINTAINED BY TENANT. At its own cost and expense,
Tenant shall obtain and maintain throughout the Term of this Lease the following
insurance coverage: (a) comprehensive general public liability insurance
covering claims for injury to persons or property occurring in or about the
Leased Premises or the Property, or arising out of ownership, maintenance, use,
or occupancy thereof by the Tenant, in the amount of Two Million Dollars
($2,000,000.00), with property damage insurance with limits of Five Hundred
Thousand Dollars ($500,000.00); (b) all risk hazard insurance including and not
limited to fire, extended coverage, vandalism and malicious mischief insurance,
covering any and all of the Tenant's equipment, trade fixtures, tools,
inventory, and personal property in, at, or about the Leased Premises, in the
full amount of the replacement cost of any and all of the same; (c) Worker's
Compensation and all other insurance coverages for employees, agents, servants,
and others at or about the Leased Premises in compliance with and as required by
any and all applicable governmental regulations and statutes; and (d) if any of
the walls delimiting the Leased Premises contain plate glass, plate glass
insurance for the benefit of Landlord in the amount of replacement cost thereof.
Landlord may from time to time reasonably require Tenant to maintain other
insurance coverage or may increase the amount of the foregoing insurance to be
maintained by Tenant so as to provide insurance coverage in forms and amounts
consistent with the extent of coverage maintained by similar tenants in similar
buildings located in the same geographic market as the Leased Premises. Tenant
shall obtain an endorsement to such insurance waiving rights of subrogation
against Landlord, if such an endorsement is available from Tenant's insurance
company.

      12.2 OTHER INSURANCE REQUIREMENTS. All such insurance procured by Tenant
as provided herein shall be in responsible companies qualified to do business in
Massachusetts and in good standing therein and having a Best's rating of A+++,
naming Landlord and Landlord's mortgagee; as well as Tenant against injury to
persons or damage to property as herein provided. Tenant shall deposit with
Landlord certificates for such insurance at or prior to the Commencement Date,
and thereafter within thirty (30) days prior to the expiration of any such
policies. All such insurance certificates shall provide that such policies shall
not be canceled or modified without at least ten (10) days prior written notice
to each insured named therein.

      12.3 WAIVER OF SUBROGATION. Insofar as, and to the extent that, the
following provision may be effective without invalidating or making it
impossible to secure insurance coverage obtainable from responsible insurance
companies doing business in the locality in which the Property is located (even
though an extra premium may result therefrom), Landlord and Tenant mutually
agree that, with respect to any hazard, the loss from which is covered by
insurance then being carried by them, respectively, the party carrying such
insurance and suffering such loss releases the other of and from any and all
claims with respect to such loss to the extent of the insurance proceeds paid
with respect thereto; and they further mutually agree that their respective
insurance companies shall have no right of subrogation against the other on
account thereof.

                                       20
<PAGE>   27
      12.4 INSURANCE TO BE MAINTAINED BY LANDLORD. Landlord shall maintain
property and casualty insurance with respect to the Building and other
improvements constituting the Property in such amounts as are required by the
first mortgage lender for the Property, or in the absence of a first mortgage
lender, in amounts which are comparable to those maintained by other reasonably
prudent property owners of facilities of the type and character of the Property,
but not less than full replacement cost thereof as reasonably determined by
Landlord.

                                  ARTICLE XIII

                         FIRE; CASUALTY; EMINENT DOMAIN

      13.1 DAMAGE BY CASUALTY. Should a substantial portion of the Leased
Premises, or of the Building or Property, be substantially damaged by fire or
other casualty, or in the event that a fire or other casualty renders the Leased
Premises or the access thereto substantially unsuitable for its intended use,
Landlord may elect to terminate this Lease. If less than a substantial portion
of the Leased Premises, or of the Building, or of the Property is damaged by
fire or other casualty, then (subject to the availability of insurance proceeds
from any mortgagee of the Property) Landlord shall be obligated to repair,
reconstruct or replace the damaged portions of the Leased Premises, Building or
Property as nearly as possible to their former condition. When such fire or
casualty renders the Leased Premises substantially unsuitable for its intended
use, a just and proportionate abatement of rent shall be made until such time as
Tenant is able to resume full utilization of Premises or this Lease is
terminated. If any casualty results in the total suspension of business in the
Leased Premises as a result of damage or any adverse effect on the Leased
Premises, Tenant shall have the option of suspending the running of the Term
from the date of the casualty to the earlier of the date business is resumed or
sixty (60) days following the completion of restoration; such option to be
exercised by written notice within thirty (30) days after the date of the
casualty. Further, within thirty (30) days after any substantial fire or other
casualty, Landlord shall give written notice to Tenant with respect to whether
or not Landlord will restore the Leased Premises, except for the Tenant
Improvements to the Leased Premises. Tenant may elect to terminate this Lease if
either (a) Landlord notifies Tenant that Landlord has elected not to restore the
Leased Premises, including the Tenant Improvements to the Leased Premises, or
(b) Landlord elects to restore but fails to restore the Leased Premises, except
for the Tenant Improvements to the Leased Premises, to a condition substantially
suitable for its intended use within one hundred eighty (180) days after such
fire or casualty. However, Tenant's failure to give such notice of termination
within twenty (20) business days after the date on which the right to terminate
ripens under either (a) or (b) above shall constitute a waiver of such right by
Tenant. Tenant shall be responsible for the restoration of the Tenant
Improvements to the Leased Premises. Landlord will seek to have the first
mortgagee of the Property, if any, provide for application of hazard insurance
loss proceeds to the repair or reconstruction of the Leased Premises upon any
hazard loss. Subject to the mortgagee (if any) of the Property making the hazard
loss insurance proceeds available for such restoration and to Landlord's receipt
of such proceeds for that purpose, if Landlord elects to repair, reconstruct, or
cause to be repaired or reconstructed, such damage or destruction, Landlord
shall not be required to expend, in connection with such repair or
reconstruction, any amount exceeding the amount of casualty

                                       21
<PAGE>   28
insurance proceeds actually received by Landlord. Notwithstanding the foregoing,
in the event such mortgagee shall not make the insurance loss proceeds available
for repair or restoration, Landlord shall not be required to repair or
reconstruct the Leased Premises and shall notify Tenant within thirty (30) days
next following such hazard loss, of its election in this respect and thereupon,
Tenant shall have the termination rights described above in this Section. For
purposes of this Section 13.1, damage shall be deemed substantial if (i) fifty
percent (50%) or more of the Leased Premises, Building or Property is damaged or
destroyed, or (ii) the time needed for Landlord to repair or restore the damage
and put the Leased Premises, Building and/or Property in proper condition for
use or occupancy is reasonably estimated by Landlord to require more than one
hundred eighty (180) days.

      13.2 TENANT'S OPTION TO TERMINATE IN THE EVENT OF A TAKING. If the
Property shall be taken in its entirety under any condemnation or eminent domain
proceedings (each such occurrence being hereinafter referred to as a "Taking")
by any governmental authority (the "Taking Authority") during the Term hereof,
or in the event twenty-five percent (25%) or more of the Leased Premises, or the
access thereto, is taken in any such proceedings and the remaining portion shall
not be suitable or adequate (in the reasonable opinion of Tenant exercised in
good faith) for the conduct of Tenant's business and Tenant notifies Landlord in
writing of such determination within thirty (30) days next following the notice
of such taking by the Taking Authority or the date upon which Tenant receives
written notice that title has vested in the Taking Authority, whichever is first
to occur, then in any such event this Lease and the Term hereof shall terminate
thirty (30) days after such written notice from Tenant to Landlord, and Tenant
shall be liable for the payment of Base Rent, Additional Rent and all other
charges due from Tenant hereunder, and performance of the other terms and
conditions of this Lease on Tenant's part to be performed only up to date of
such termination, and any Base Rent and Additional Rent paid in advance for
periods following such date shall be apportioned and promptly refunded to
Tenant.

      13.3 LANDLORD'S OPTION TO TERMINATE IN THE EVENT OF A TAKING. If less than
the entire Property, or less than twenty-five (25%) percent of the Leased
Premises, shall be acquired or taken by condemnation or eminent domain as
aforesaid, and the mortgagee of the Property shall not make the proceeds of any
awards or damages payable as to the Taking available for restoration and repair
of the balance of the Building, or Landlord shall determine in its reasonable
discretion that the restoration and repair of the balance of the Building shall
be impracticable; or in the event the Taking occurs within the last eighteen
(18) months of the initial Term (or of an Option Term, if any), Landlord shall
be entitled to terminate this Lease by ninety (90) days written notice to Tenant
without liability by reason of such Taking. If Landlord does not so terminate
this Lease, this Lease shall continue and Landlord shall rebuild and restore the
Leased Premises as nearly as possible to the condition existing next preceding
such Taking, with due allowance for the portion so taken; further, Tenant shall
promptly restore or repair any improvements made by it in the Leased Premises to
the extent proceeds from such awards are made available to Tenant for such
purpose and this Lease shall be and remain in full force and effect and be
unaffected by, the Taking, except that from the date possession of the taken
portion of the Leased Premises is acquired by the Taking Authority, the Base
Rent payable under this Lease shall be diminished by a percentage equal to the
percentage of the Leased Premises so

                                       22
<PAGE>   29
taken and the Tenant's Pro Rata Share shall be recalculated. The restoration or
repair work to be done by Tenant shall be done subject to any and all terms and
conditions elsewhere set forth in this Lease governing alterations or work on
Tenant's part to be performed. Upon written request from Tenant (which written
request shall specifically reference this Section 13.3 and the consequence of
Landlord's failure to respond), Landlord shall notify Tenant of its
determination called for in this Section within one hundred twenty (120) days
after the date of the Taking. In the event that Landlord shall fail to respond
to such request and notify Tenant of its determination within such one hundred
twenty (120) day period, Tenant shall have the right to terminate this Lease
without cost or liability therefor as of the date of the Taking.

      13.4  MISCELLANEOUS PROVISIONS REGARDING CASUALTY OR TAKING.

            13.4.1 In the event this Lease is terminated or terminates by reason
of a Taking or a Casualty, the provisions of the Lease applicable upon
expiration of the Lease shall govern the parties.

            13.4.2 Landlord will seek to have any mortgagee of the Building or
Property provide for application of the proceeds of any Taking awards to
restoration, repair, and reconstruction of the portion of such Property
remaining after the Taking. Notwithstanding the amount of land, building, or
improvements taken by condemnation or eminent domain or the termination or
continuance of this Lease with respect thereto, Tenant shall not participate or
share in any recovery, award, or damages payable or paid as to such Taking, nor
have or assert any right, claim, or cause of action against Landlord, the fee
owner, or mortgagee of the Property or, except as expressly provided in Section
13.4.3 below, the Taking Authority whether for the loss of, or diminution in
value of, the unexpired Term of this Lease, or as to the Taking of any such
land, building, and/or improvements or otherwise; and Tenant for itself and its
successors and assigns hereby waives, surrenders, and releases to Landlord any
and all claims or rights to claim or receive all or any portion of any and all
recovery, awards, and/or damages as to such Taking.

            13.4.3 If permitted by statute, Tenant may assert a separate and
independent claim for and recover from the Taking Authority, but not from
Landlord, any compensation as may be separately awarded or recoverable by Tenant
in its own name and right for the value of the Tenant Improvements made by
Tenant (but only to the extent Tenant has paid the cost of installing or
constructing such Tenant Improvements), any damage to Tenant's portable fixtures
and equipment, or on account of any expenses which it shall incur in relocation
expenses, but in no event shall any such claims or recoveries be asserted if the
same would diminish in any way the award to Landlord for the Land, Building and
any Tenant Improvements paid for by Landlord.

                                       23
<PAGE>   30
                                   ARTICLE XIV

                          DEFAULT; REMEDIES; BANKRUPTCY

      14.1 EVENTS OF DEFAULT. Each of the following shall be an event of default
("Event of Default") under this Lease:

            14.1.1 Tenant shall default in the payment of any installment of
Base Rent, Additional Rent or other sum herein specified to be paid by Tenant
and such default shall continue for five (5) business days after written notice
thereof; provided, however, that Landlord shall not be required to give more
than two (2) notices during any consecutive twelve (12) month period with regard
to defaults in the payment of installments of Base Rent, Additional Rent or any
other sums payable by Tenant under this Lease, and in the event that Landlord
has already given two (2) such notices during any consecutive twelve (12) month
period, any subsequent failure of Tenant during such twelve (12) month period to
make any such payment shall immediately constitute an Event of Default even
though no notice has been given;

            14.1.2 Tenant shall default in the observance or performance of any
other of Tenant's covenants, agreements, or obligations hereunder and such
default shall not be cured within thirty (30) days after written notice thereof,
or if such default is of a nature that it cannot be reasonably cured within such
thirty (30) day period, Tenant shall not have commenced to cure such default
within such thirty (30) day period and diligently proceed to completion of said
cure, but only if such extended period beyond thirty (30) days without a
completed cure will not have a material adverse effect on the value of the
Property or the Leased Premises or expose Landlord to any liability;

            14.1.3 Tenant's leasehold interest in the Leased Premises shall be
taken on execution, levied upon or attached by other process of law directed
against Tenant;

            14.1.4 Tenant shall dissolve, shall become insolvent, shall make a
transfer in fraud of creditors, shall make an assignment for the benefit of
creditors, shall file a voluntary petition in bankruptcy, shall be adjudicated
bankrupt or insolvent, shall file any petition or answer seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief for itself under Title 11 of the United States Bankruptcy Code
relating to Bankruptcy, as amended (the "Bankruptcy Code") or under any present
or future Federal, State or other statute, law or regulation for the relief of
debtors, or shall seek or consent to or acquiesce in the appointment of any
trustee, receiver or liquidator of Tenant or of all or any substantial part of
their respective assets, or shall admit in writing its inability to pay its
debts generally as they become due (Tenant hereby acknowledging that this Lease
is a lease of nonresidential real property and therefore agreeing that Tenant,
as debtor in possession, or the trustee for Tenant in any proceeding under the
Bankruptcy Code, shall not seek or request any extension of time to assume or
reject this Lease or to perform any obligations of this Lease which arise from
or after the order of relief);

                                       24
<PAGE>   31
            14.1.5 A petition shall be filed against Tenant in bankruptcy under
the Bankruptcy Code or under any other law seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any present or future Federal, State or other statute, law or
regulation and shall remain undismissed or unstayed for an aggregate of sixty
(60) days (whether or not consecutive), or if any debtor in possession (whether
or not Tenant) trustee, receiver or liquidator of Tenant or of all or any
substantial part of their respective assets shall be appointed without the
consent or acquiescence of Tenant, as the case may be, and such appointment
shall remain unvacated or unstayed for an aggregate of sixty (60) days (whether
or not consecutive).

      14.2 LANDLORD'S REMEDIES. Upon the occurrence of an Event of Default,
Landlord shall have the following rights and remedies:

            14.2.1 Landlord shall have the right at its election, at any time
thereafter, to give Tenant written notice of Landlord's election to terminate
this Lease on a date specified in such notice. Upon the giving of such notice,
this Lease and the estate hereby granted shall expire and terminate on such date
as fully and completely and with the same effect as if such date were the date
hereinbefore fixed for the expiration of the Term, and all rights of Tenant
hereunder shall expire and terminate, but Tenant shall remain liable as
hereinafter provided. Further, Tenant hereby expressly waives any rights of
redemption it may have under M.G.L. c. 186, Section 11 or pursuant to any other
statutory provision or common law principle.

            14.2.2 Landlord shall have the immediate right, whether or not this
Lease shall have been terminated pursuant to Section 14.2.1, to re-enter and
repossess the Leased Premises or any part thereof and repossess the same as of
its former estate by force, summary proceedings, ejectment or otherwise and the
right to remove all persons and property therefrom. Landlord shall be under no
liability for or by reason of any such entry, repossession or removal. No such
re-entry or taking of possession of the Leased Premises by Landlord shall be
deemed to waive or prejudice any remedies provided to Landlord hereunder, nor be
construed as an election on Landlord's part to terminate this Lease unless a
written notice of such election be given to Tenant pursuant to Section 14.2.1 or
unless the termination of this Lease be decreed by a court of competent
jurisdiction.

            14.2.3 At any time or from time to time after the repossession of
the Leased Premises or any part thereof pursuant to Section 14.2.2, whether or
not this Lease shall have been terminated pursuant to Section 14.2.1, Landlord
shall use commercially reasonable efforts to relet the Leased Premises or any
part thereof for the account of Tenant, in the name of Tenant or Landlord or
otherwise, without notice to Tenant, for such term or terms (which may be
greater or less than the period which would otherwise have constituted the
balance of the Term) and on such conditions (which may include free rent and any
other concessions) and for such uses as Landlord, in its reasonable discretion,
may determine; and Landlord may collect and receive any rents payable by reason
of such reletting. Landlord shall not be responsible or liable for any failure
to relet or to collect any rent due upon such reletting.

                                       25
<PAGE>   32
            14.2.4 In the event of any termination of this Lease or repossession
of the Leased Premises or any part thereof by reason of the occurrence of an
Event of Default, Tenant will pay to Landlord the Base Rent, Additional Rent and
other sums required to be paid by Tenant for the period to and including the
date of such termination or repossession; and, thereafter, until the end of what
would have been the Term in the absence of such termination or repossession, and
whether or not the Leased Premises or any part thereof shall have been relet,
Tenant shall be liable to Landlord for, and shall pay to Landlord, as liquidated
and agreed current damages, the Base Rent, Additional Rent and other sums which
would be payable under this Lease by Tenant in the absence of such termination
or repossession, less the net proceeds, if any, of any reletting effected for
the account of Tenant pursuant to Section 14.2.3, after deducting from such
proceeds all of Landlord's expenses reasonably incurred in connection with such
reletting (including, without limitation, all repossession costs, brokerage
commissions, legal expenses, attorney's fees, employee expenses, alteration
costs and expenses of preparation for such reletting). Tenant will pay such
current damages on the days on which Base Rent would have been payable under
this Lease in the absence of such termination or repossession, and Landlord
shall be entitled to recover the same from Tenant on each such day.

            14.2.5 At any time after any such termination of this Lease or
repossession of the Leased Premises or any part thereof by reason of the
occurrence of an Event of Default, whether or not Landlord shall have collected
any current damages pursuant to Section 14.2.4, Landlord shall be entitled to
recover from Tenant, and Tenant will pay to Landlord on demand, as and for
liquidated and agreed final damages for any Event(s) of Default by Tenant and in
lieu of all current damages beyond the date of such demand (it being agreed that
it would be impracticable or extremely difficult to fix the actual damages), an
amount equal to the present value of the excess, if any, of (a) the Base Rent,
Additional Rent and other sums which would be payable under this Lease from the
date of such demand (or, if it be earlier, the date to which Tenant shall have
satisfied in full its obligations under Section 14.2.4 to pay current damages)
for what would be the then unexpired Term in the absence of such termination or
repossession plus Landlord's estimate of the aggregate expenses of reletting the
Leased Premises, over (b) the then net fair rental value of the Leased Premises
for the same period (after deducting from such fair rental value reasonable
amounts on account of the time needed to relet the Leased Premises and
concessions which would normally be given to a new tenant). Fair rental value
shall be established by reference to the terms and conditions upon which
Landlord relets the Leased Premises if such reletting is accomplished within a
reasonable period of time after such termination or repossession and otherwise
established on the basis of Landlord's estimates and assumptions of fact
regarding market and other relevant circumstances, which shall govern unless
shown to be clearly erroneous.

      14.3 LANDLORD'S CURE RIGHTS. If an Event of Default shall occur, Landlord,
without being under any obligation to do so and without thereby waiving such
Event of Default, may remedy such default for the account and at the expense of
Tenant.

      14.4 TENANT'S OBLIGATION TO REIMBURSE LANDLORD. If Landlord makes any
expenditures (pursuant to Section 14.3 above or otherwise) or incurs any
obligations for the

                                       26
<PAGE>   33
payment of money in connection with any failure of Tenant to perform fully all
of its obligations under this Lease, such sums paid or obligations incurred
(including but not limited to, reasonable attorney's fees and court costs in
instituting, prosecuting or defending any action or proceeding), with interest
at the rate of one and one half percent (1-1/2%) per month and costs, shall upon
demand be paid to Landlord by Tenant as Additional Rent.

      14.5 NO WAIVER. Landlord's failure to take action against Tenant with
respect to any default in Tenant's performance of its obligations hereunder
shall not, under any circumstances, constitute a waiver of any of Landlord's
rights under this Lease and, further, no waiver of any of the provisions of this
Lease shall be effective unless given in writing nor shall any waiver be
construed as a waiver of any of the other provisions hereof or as a waiver of
the same provisions for any subsequent time.

      14.6 ACCEPTANCE OF LATE PAYMENTS. No payment by Tenant, or acceptance by
Landlord, of a lesser amount than then due from Tenant to Landlord shall be
treated otherwise than as a payment on account regardless of any letter
accompanying such check or legend entered upon such check. Further, no
acceptance of any payment by Landlord from Tenant shall in any way constitute a
waiver of any default then existing or which would exist with the proper giving
of notice.

      14.7 INTEREST ON LATE PAYMENTS. If Tenant shall fail to pay, when the same
is due and payable, any Base Rent, or Additional Rent or any other charges or
payments required hereunder (excluding the payments described in Section 14.4
above), such unpaid amounts shall bear interest from the due date thereof to the
date of payment at the annual rate of interest of twelve percent (12%) per
annum, but in no event higher than the maximum rate permitted by law; and, in
addition, Tenant shall pay Landlord a late charge for any Base Rent, any
Additional Rent or any other charges or payments due hereunder which is paid
after its due date equal to five percent (5%) of such payment.

      14.8 REMEDIES CUMULATIVE. Any and all remedies set forth in this Lease (a)
shall be in addition to any and all other remedies Landlord may have at law or
in equity, (b) shall be cumulative, and (c) may be pursued successively or
concurrently as Landlord may elect. The exercise of any remedy by Landlord shall
not be deemed an election of remedies or preclude Landlord from exercising any
other remedies in the future.

      14.9 LANDLORD'S RIGHTS IN TENANT'S BANKRUPTCY. If this Lease is assigned
to any person or entity pursuant to the provisions of the Bankruptcy Code, 11
U.S.C. 101 et seq. as now existing or hereafter amended (the "Bankruptcy Code"),
any and all monies or other considerations payable or otherwise to be delivered
in connection with such assignment shall be paid and delivered to Landlord,
shall be and remain the exclusive property of Landlord and shall not constitute
property of Tenant or of the estate of Tenant within the meaning of the
Bankruptcy Code. Any and all monies or other considerations constituting
Landlord's property under the preceding sentence not paid or delivered to
Landlord shall be held in trust for the benefit of Landlord and be promptly paid
to or turned over to the Landlord. Notwithstanding anything in

                                       27
<PAGE>   34
this Lease to the contrary, all amounts payable by Tenant to or on behalf of
Landlord under this Lease, whether or not expressly denominated as rent,
including, without limitation, the Base Rent and Additional Rent specified
herein, shall constitute rent for the purpose of Section 502(b)(7) of the
Bankruptcy Code.

      If Tenant assumes this Lease and proposes to assign the same pursuant to
the provisions of the Bankruptcy Code to any person or entity who shall have
made a bona fide offer to accept an assignment of this Lease on terms acceptable
to Tenant, then notice of such proposed assignment, setting forth (a) the name
and address of such person; (b) all of the terms and conditions of such offer,
and (c) the adequate assurance to be provided Landlord to assure such person's
future performance under the Lease, including without limitation, the assurance
referred to in Sections 365(b)(1)(c) and 365(b)(3) of the Bankruptcy Code, shall
be given to Landlord by the Tenant no later than twenty (20) days after receipt
by the Tenant of such bona fide offer, but in any event no later than ten (10)
days prior to the date that the Tenant shall make application to a court of
competent jurisdiction for authority and application to enter into such
assignment and assumption, and Landlord shall thereupon have the prior right and
option, to be exercised by notice to the Tenant given at any time prior to the
effective date of such proposed assignment, to accept an assignment of this
Lease upon the same terms and conditions and for the same consideration, if any,
as the bona fide offer made by such person, less any brokerage commissions which
may be payable out of the consideration to be paid by such person for the
assignment of this Lease. Any person or entity to which this Lease is assigned
pursuant to the provisions of the Bankruptcy Code shall be deemed without
further act or deed to have assumed on and after the date of such assignment all
of the obligations arising under this Lease. Any such assignee shall upon demand
execute and deliver to Landlord an instrument confirming such assumption.

      14.10 LANDLORD'S DEFAULT. (a) If Tenant shall give written notice to
Landlord requesting that Landlord undertake any repair or replacement of the
Leased Premises or Property or to undertake any other obligation which Landlord
is expressly required to perform under the terms of this Lease, and Landlord
shall not, within twenty (20) days thereafter either (i) commence and diligently
prosecute such repair, replacement or other obligation, or (ii) refute on some
reasonable basis Tenant's contention that Landlord is required to undertake the
same, then in such event, Tenant may give a second notice to Landlord requesting
that Landlord undertake the same. If, within fifteen (15) days after such second
notice, Landlord shall not either (i) commence and diligently prosecute such
repair, replacement or other obligation or (ii) refute on some reasonable basis
Tenant's contention that Landlord is required to undertake the same, then
Tenant, on three (3) business days prior notice to Landlord of Tenant's intent
to do so, may undertake such repair, replacement or other obligation on
Landlord' behalf (unless Landlord shall have already commenced and be diligently
prosecuting the same) and Landlord shall reimburse Tenant for the reasonable
costs incurred by Tenant in connection herewith within fifteen (15) business
days after demand by Tenant therefor (such demand to be accompanied by
documentation of such expenditures in reasonable detail). Notwithstanding the
foregoing, in the event of an emergency, Tenant shall notify Landlord that such
emergency situation exists and describe the details and risk of the same and, if
Landlord has not responded to such emergency situation within twenty-four (24)
hours after receipt of such notice, then Tenant shall have the right to take
reasonable

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<PAGE>   35
measures to address such emergency situation and will be entitled to
reimbursement from Landlord in accordance with the preceding sentence.

            (b) If Landlord shall not make payment to Tenant as required
pursuant to this Subsection 14.10, then Tenant may file a legal proceeding
against Landlord to recover the same, but under no circumstance will Tenant have
the right to offset against Base or Additional Rent any amount owed by Landlord
to Tenant pursuant to this Section 14.10. If Tenant prevails against Landlord in
connection with such legal proceeding, then Landlord shall also be obligated to
reimburse Tenant fully for any and all reasonable attorney's fees or other costs
incurred by Tenant in connection with such legal proceeding and Landlord agrees
that its obligation to reimburse Tenant shall be made a part of any order
entered by a court as part in such legal proceeding.

                                   ARTICLE XV

                             SURRENDER; HOLDING OVER

      15.1 SURRENDER OF LEASED PREMISES. Tenant shall, at the expiration or
other termination of the Term, (a) remove all of Tenant's goods and effects and
trade fixtures from the Leased Premises (including, without hereby limiting the
generality of the foregoing, all signs and lettering affixed or painted by
Tenant either inside or outside the Leased Premises) and repair fully any damage
caused by such removal, and (b) deliver to Landlord the Leased Premises, in
broom clean condition, and otherwise in the same condition as existed as of the
Commencement Date (normal wear and tear and damage by fire or other casualty
excepted), all keys, locks thereto, other fixtures connected therewith and all
alterations and additions made to or upon the Leased Premises (other than any
Tenant's trade fixtures removed pursuant to the preceding subsection (a)).
Notwithstanding the foregoing, Tenant shall not be required to remove or restore
any alteration, addition or improvement to the Leased Premises at the expiration
or other termination of the Term unless Landlord notified Tenant in writing at
the time Tenant makes such alteration or improvement that such alteration or
improvement is to be removed by Tenant at Tenant's sole cost and expense at the
expiration or earlier termination of the Term. Upon Tenant's failure to comply
with either of the preceding sentences, Landlord is hereby authorized, without
liability to Tenant for loss or damage thereto, and at the sole risk of Tenant,
to remove and store any of such property at Tenant's expense, or to retain same
under Landlord's control or to sell, at public or private sale, without notice,
any or all of such property not so removed and to apply the net proceeds of such
sale to the payment of any sum due hereunder, or to destroy such property.

      15.2 HOLDING OVER. If Tenant remains in possession of the Leased Premises
or any part thereof after the expiration or earlier termination of the Term of
this Lease, Tenant shall be deemed to be in use and occupancy of the Leased
Premises as a month-to-month tenant at a rate of monthly Base Rent one and
one-half (1 1/2) times the rate of the total monthly installment of Base Rent
then in effect upon the date of expiration or termination of this Lease and
subject to

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<PAGE>   36
the same terms and conditions (including, without limitation, provisions
concerning the payment of all other charges hereunder) as those set forth in
this Lease other than as to the length of Term. However, nothing in this Lease
provision shall be deemed to extend the Term beyond that set forth in Article 2
hereof, nor grant any right to Tenant or any other person to use, occupy, or
remain in possession of all or any part of the Leased Premises beyond the
expiration or earlier termination of the Term of this Lease.

                                   ARTICLE XVI

                              LANDLORD'S LIABILITY

      16.1 LIMITED RECOURSE. Tenant specifically agrees to look solely to
Landlord's then equity interest in the Property at the time owned, for recovery
of any judgment from Landlord; it being specifically agreed that Landlord
(original or successor) shall never be personally liable for any such judgment,
or for the payment of any monetary obligation to Tenant.

      16.2 INTERRUPTION OF SERVICES AND UTILITIES. Landlord shall in no event be
liable for any interruption in, failure of, or discontinuance of services or
utilities to the Building or the Leased Premises for any reason, including,
without limitation, when such services or utilities are interrupted (a) by
strike (not limited to Landlord or its business operations), lockout, breakdown,
accident, order or regulation of or by an governmental authority, or failure of
supply, (b) by reason of the making of repairs or alterations which Landlord is
required or is permitted by this Lease or by law to make or in good faith deems
necessary; (c) by inability to obtain supplies, parts or employees necessary to
furnish such services, or because of war or other emergency, (d) by any other
cause beyond Landlord's reasonable control, or (e) by any cause due to any act
or neglect of Tenant or Tenant's servants, agents, employees, licensees or any
persons claiming by, through or under Tenant In addition, no such interruption
in, failure of, or discontinuance of any such services or utilities shall be
considered as an eviction or disturbance of Tenant's occupancy of the Leased
Premises, relieve Tenant from its obligations under this Lease, or entitle
Tenant to any offset rights or any other rights or remedies against Landlord.

      16.3 NO CONSEQUENTIAL DAMAGES. In no event shall either Landlord or Tenant
ever be liable to the other for any loss of business or any other indirect or
consequential damages suffered by Tenant from whatever cause.

      16.4 LIABILITY AFTER CONVEYANCE OF PROPERTY. The term "Landlord", as used
herein, shall mean and refer to the owner of the fee estate in the Property
whosoever such owner may be from time to time or to the person or entity named
as Landlord above or its successors or assigns, as the case may be; and upon any
conveyance or transfer of the interest of such person or entity as Landlord,
such person or entity shall be thereupon released and discharged from any and
all liability under this Lease or otherwise to Tenant and any and all others
whomsoever except for breaches of this Lease occurring prior to such transfer.
Upon such conveyance, Landlord shall transfer any monies on deposit with
Landlord hereunder to such successor or assign.

                                       30
<PAGE>   37
                                  ARTICLE XVII

                            MISCELLANEOUS PROVISIONS

      17.1 GOVERNING LAW. This Lease shall be governed by the law of the
Commonwealth of Massachusetts and shall be deemed to have been made, executed,
delivered and accepted by the respective parties in that state.

      17.2 PARTIAL INVALIDITY. If any term or provision of this Lease, or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Lease shall be valid and be enforced to the fullest
extent permitted by law. It is the intention of the parties hereto that if any
provision of this Lease is capable of two constructions, one of which would
render the provision valid, then the provision shall have the meaning which
renders it valid.

      17.3 CAPTIONS. The captions of this Lease are for convenience and
reference only and shall not be deemed or construed to bind, modify, increase,
or decrease the terms and conditions of this Lease, or any interpretation or
construction thereof.

      17.4 SUCCESSORS AND ASSIGNS. The terms and conditions in this Lease shall
apply to and be binding upon the parties herein and their respective successors
and assigns, except as expressly otherwise provided.

      17.5 RECORDING OF LEASE. Tenant shall not record this Lease. However,
Landlord and Tenant shall execute, acknowledge, deliver, exchange, and record a
Notice of Lease or other short-form instrument permitted under applicable state
law and prepared by Landlord.

      17.6 ENTIRE AGREEMENT. This Lease and any and all exhibits and riders
attached hereto and made a part of this Lease constitute the entire agreement of
the parties concerning this Lease, and any and all other or prior agreements,
representations, or warranties are hereby terminated, canceled, and agreed to be
void and of no force or effect.

      17.7 AMENDMENTS. No change, amendment, deletion, or addition to this Lease
shall be effective unless in writing and signed by the parties.

      17.8 QUIET ENJOYMENT. So long as Tenant is not in default of any of its
obligations under this Lease, Tenant shall peaceably and quietly have, hold and
enjoy the Leased Premises free of any claims by, through or under Landlord.

      17.9 NO PARTNERSHIP. Nothing in this Lease shall create or be construed to
create a partnership between Tenant and Landlord, or make them joint venturers,
or bind or make

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<PAGE>   38
Landlord in any way liable or responsible for any acts, omissions, negligence,
debts or obligations of Tenant.

      17.10 TIME OF ESSENCE. Time is of the essence of this Lease and all of the
terms and conditions specified herein.

      17.11 BROKERAGE. Tenant acknowledges that Tenant has dealt with no broker
in connection with this Lease other than the Broker or Brokers named in Section
1.8 above. In the event of any other brokerage claim against Landlord predicated
upon dealings with Tenant, Tenant agrees to defend the same and indemnify
Landlord against any such claim. Landlord warrants and represents that it has
dealt with no broker in connection with the consummation of this Lease except
the Broker or Brokers listed in Section 1.8 above, and in the event of any other
brokerage claim against Tenant predicated upon dealings with Landlord, Landlord
agrees to defend the same and indemnify Tenant against any such claim. The
Brokers shall be paid by Landlord pursuant to a separate agreement.

      17.12 RULES AND REGULATIONS. Tenant agrees to comply, and cause its
employees, agents, contractors, invitees and other representatives to comply,
with any and all rules and regulations established by Landlord for the Property
as reasonably determined by Landlord to be necessary for the orderly and
efficient operation of the Property and applied in a uniform, non-discriminatory
manner, including, without limitation, those rules and regulations set forth in
EXHIBIT RR attached hereto and any reasonable modifications, amendments or
additions thereto as Landlord may make from time to time by written notice to
Tenant. However, Landlord shall not be responsible to Tenant for failure to
enforce any of such rules and regulations or for the non-observance or violation
of any of such rules and regulations by any other tenant or owner or by any
other person, or for the non-observance or violation of or failure to enforce or
to perform the provisions of any other lease.

      17.13 SIGNS. Tenant shall obtain the prior written consent of Landlord,
which consent shall not be unreasonably withheld, before placing any sign at,
on, or about the door to the Leased Premises. Tenant shall also obtain the prior
written consent of Landlord, which consent may be withheld in Landlord's sole
and absolute discretion, before erecting any other type of sign outside of the
Building or any exterior door, wall, window, or portion of the Leased Premises,
or within the lobby of the Building and Landlord shall have no obligation
whatsoever to approve any such sign. Any materials or displays approved by
Landlord, shall at all times be maintained by Tenant at its cost and expense in
good condition, good working order and appearance and in compliance with all
applicable laws, codes, ordinances and by-laws; and Tenant hereby
unconditionally and irrevocably authorizes Landlord to enter upon the Leased
Premises at Tenant's expense and without liability or penalty, and to remove any
materials or displays not in accordance with each and all of the foregoing
provisions. Landlord shall provide, at Landlord's sole cost and expense, an
identifying sign for Tenant in a Building directory located in the lobby of the
first (1st) floor of the Building. Landlord shall install, at Landlord's sole
cost and expense, by December 31, 1999, a Building monument sign on the
Property, and for so long thereafter as Tenant occupies at least one-third (1/3)
of the Building, Landlord shall provide, at

                                       32
<PAGE>   39
Tenant's sole cost and expense, an identifying sign for Tenant on the Building's
monument sign, which sign shall comply with all applicable laws, codes,
ordinances and bylaws.

      17.14 LANDLORD'S ACCESS AND TENANT'S ACCESS; SECURITY. (a) Landlord or
agents of Landlord may, upon twenty-four (24) hours prior notice to Tenant (or
at any time without notice in the case of emergency), enter the Leased Premises
to (i) inspect the same, (ii) remove placards and signs affixed thereto and not
approved as herein provided, (iii) make alterations as provided in Section 8.2
above or repairs, (iv) show the Leased Premises to prospective lenders or buyers
and during the last six (6) months of the Term or Option Term, as the case may
be, to prospective tenants, and (v) at any time within six (6) months before the
expiration of the Term or the Option Term, as the case may be, affix to any
suitable part of the Leased Premises a notice that the Leased Premises are
available for lease and keep the same so affixed without hindrance or
molestation.

            (b) Thirty (30) days prior to the Commencement Date, provided Tenant
shall not be in default of any term, covenant or condition of this Lease (i)
Landlord shall notify Tenant that Tenant may have access to the Leased Premises
(subject to the immediately following sentence) for a period of fifteen (15)
days solely for purposes of installing customary office furniture and
telecommunications equipment, and (ii) during the Term of this Lease, Tenant
shall have access to the Leased Premises, the Common Areas and the parking
facilities twenty-four (24) hours per day, seven (7) days a week, fifty-two (52)
weeks per year, through means of the Building card-key security/access system.
Landlord, at its sole cost and expense, shall install a card-key security/access
system at the main entrance to the Leased Premises which shall be compatible
with the card-key security/access system at the main door of the Building.
Tenant hereby acknowledges and agrees that Tenant shall not interfere with or
disrupt the Landlord Work or any other work performed in, at, or around the
Building or the Leased Premises, and Tenant shall coordinate Tenant's access and
its installation of such furniture and telecommunications equipment with
Landlord for the period of time that Tenant has access to the Leased Premises
prior to the Commencement Date. Upon Tenant's request, Landlord shall provide
Building card-key passes to Tenant, but if Tenant requests more than one hundred
(100) such passes in total, Tenant shall pay all costs in connection with
Landlord's issuance of each such additional pass. The cost to issue each
additional and/or replace a card-key pass shall be reasonably determined by
Landlord, and initially shall be $5. In the event that Landlord is unable to
provide Tenant with access the Leased Premises at least for the period of
fourteen (14) days prior to the Commencement Date and such inability is the
result of causes within Landlord's reasonable control, Tenant shall receive a
day for day abatement of Basic Rent and Additional Rent under this Lease for
each day after such date that Landlord is unable to provide such access to
Tenant.

      17.15 NOTICES. Any and all notices, demands, consents or approvals
required hereunder shall be given in writing in accordance with this Section
17.15. Any notice from Landlord to Tenant shall be deemed duly served, or mailed
to Tenant's Mailing Address (as defined in Section 1.7 above), or such other
address as Tenant may advise by written notice to Landlord, by overnight
courier, or by registered or certified mail, return receipt requested, postage
prepaid. Any notice from Tenant to Landlord shall be deemed duly served, if
mailed to Landlord by a

                                       33
<PAGE>   40
nationally recognized overnight courier, or by registered or certified mail,
return receipt requested, postage prepaid, addressed to Landlord at Landlord's
Mailing Address (as defined in Section 1.6 above) or at such other address as
Landlord may from time to time advise in writing. All payments of Base Rent and
Additional Rent shall be paid and sent to Landlord at Landlord's Mailing
Address.

      17.16 NO MERGER. There shall be no merger of the leasehold estate hereby
created with the fee estate in the Property or any part thereof if the same
person acquires or holds, directly or indirectly, this Lease or any interest in
this Lease and the fee estate in the Property or any interest in such fee
estate.

      17.17 NO OFFER. The submission of this Lease to Tenant shall not be
construed as an offer, and Tenant shall not have any rights under this Lease
unless Landlord executes a copy of this Lease and delivers it to Tenant.

      17.18 WAIVER OF JURY TRIAL. To the maximum extent permitted by law,
Landlord and Tenant each waive right to trial by jury in any litigation arising
out of or with respect to this Lease.

      17.19 FINANCIAL REPORTS. Not more than once in any twelve (12) month
period, and within fifteen (15) days after Landlord's request, Tenant shall
furnish Tenant's most recent financial statements (including any notes to them)
as may have been prepared by an independent certified public accountant or,
failing those, Tenant's internally prepared financial statements to Landlord.
Landlord will not disclose any aspect of Tenant's financial statements that
Tenant designates to Landlord as confidential except (i) to Landlord's lenders
or prospective purchasers of the Property, (ii) in litigation between Landlord
and Tenant, and (iii) if required by court order.

      17.20 LANDLORD'S FEES. Whenever Tenant requests Landlord to take any
action or give any consent required or permitted under this Lease, Tenant will
reimburse Landlord for Landlord's reasonable out-of-pocket costs incurred in
reviewing the proposed action or consent, including without limitation
reasonable attorneys', engineers' or architects' fees, within ten (10) days
after Landlord's delivery to Tenant of a statement of such costs. Tenant will be
obligated to make such reimbursement without regard to whether Landlord consents
to any such proposed action.

      17.21 TELECOMMUNICATIONS. Tenant and its telecommunications companies,
including but not limited to local exchange telecommunications companies and
alternative access vendor services companies shall have no right of access to
and within the Building, for the installation and operation of
telecommunications systems including but not limited to voice, video, data, and
any other telecommunications services provided over wire, fiber optic,
microwave, wireless, and any other transmission systems, for part or all of
Tenant's telecommunications within the Building and from the Building to any
other location without Landlord's prior written consent which shall not be
unreasonably withheld, conditioned or delayed; provided, however, Tenant

                                       34
<PAGE>   41
shall have the right to use, in common with others, (i) the main
telecommunications room of the Building located on the first (1st) floor of the
Building for the placement of service provider equipment (such placement, size
and type of equipment subject to Landlord's approval which may be withheld in
its sole discretion) and (ii) the riser cables from such main telecommunications
room located on the first (1st) floor of the Building to the third (3rd) floor
(provided Tenant's use of such riser cables shall not interfere with any other
tenant's use or occupancy of the Building or any portion thereof). Regardless of
Landlord's consent to the installation and operation of such telecommunications
systems, Tenant hereby acknowledges that Landlord has no obligation to Tenant to
ensure performance by telecommunication companies or other service companies,
and Landlord has no responsibility for any delays, deficiencies or defects in
connection with the services provided. Tenant hereby acknowledges and agrees
that the indemnification of Landlord by Tenant set forth in Section 11.2 above,
shall expressly apply to any damage to the Leased Premises or the Building, and
injury to persons or other damage to property occurring during or as a result of
any actions taken or done pursuant to Landlord's consent given in accordance
with this Section 17.21.

      17.22 CONFIDENTIALITY. Tenant acknowledges that the terms and conditions
of this Lease are to remain confidential for the Landlord's benefit, and may not
be disclosed by Tenant to anyone, by any manner or means, directly or
indirectly, without Landlord's prior written consent, except to bona-fide
current or prospective investors, lenders, underwriters, legal counsel, or as
required by law. The consent by the Landlord to any disclosures shall not be
deemed to be a waiver on the part of the Landlord of the prohibition against any
future disclosure.

      17.23 NOTICE TO LANDLORD'S MORTGAGEE. Tenant shall not seek to enforce any
remedy it may have for any default on the part of the Landlord without first
giving written notice by certified mail, return receipt requested, specifying
the default in reasonable detail, to any Landlord's Mortgagee whose address has
been given to Tenant, and affording such Landlord's Mortgagee a reasonable
opportunity to perform Landlord's obligations hereunder.

      17.24 CONDITION OF LEASED PREMISES. Tenant hereby accepts the Leased
Premises in their "AS-IS" condition, and Landlord shall have no obligation to
perform any work therein (including, without limitation, demolition of any
improvements existing therein or construction of any tenant finish-work or other
improvements therein), and shall not be obligated to reimburse Tenant or provide
an allowance for any costs related to the demolition or construction of
improvements therein except for completion of the Landlord Work (defined below)
in accordance with EXHIBIT LW. No agreement of Landlord to alter, remodel,
decorate, clean or improve the Leased Premises or the Building (or to provide
Tenant with any credit or allowance for the same), and no representations
regarding the condition of the Leased Premises or the Building have been made by
or on the behalf of Landlord or relied upon by Tenant other than with respect to
the Landlord Work as set forth in Section 17.25 and as described in EXHIBIT LW.
Landlord and Tenant expressly disclaim any implied warranty that the Leased
Premises are suitable for Tenant's intended commercial purpose, and Tenant's
obligation to pay rent hereunder is not dependent upon the condition of the
Leased Premises or the performance by Landlord of its obligations hereunder,
except for the completion of the Landlord Work as provided in

                                       35
<PAGE>   42
Section 17.25 below and, except as otherwise expressly provided herein, Tenant
shall continue to pay the rent, without abatement, setoff or deduction,
notwithstanding any breach by Landlord of its duties or obligations hereunder,
whether express or implied. Tenant's taking possession of the Leased Premises
shall be conclusive evidence that the Leased Premises were in good order and
satisfactory condition when Tenant took possession. Notwithstanding the
foregoing, Landlord shall deliver the Leased Premises to Tenant in broom-clean
condition, with all trash removed therefrom, missing and stained ceiling tiles
replaced, all furniture of prior tenants removed, and lights in good working
order.

      17.25 LANDLORD WORK. Landlord shall perform the construction work (the
"Landlord Work") described in EXHIBIT LW attached hereto in a good and
workmanlike manner and in accordance with all Government Regulations and shall
substantially complete the Landlord Work (that is, complete the Landlord Work,
except for normal "punch list" items which shall be completed within thirty (30)
days after substantial completion of the Landlord Work) on or before November 1,
1999. Landlord shall attach a schedule of dates by which Tenant shall approve
the construction drawings for the Landlord Work, and such schedule shall be
attached to and be a part of EXHIBIT LW. Subject to the provisions of the
following paragraph, if substantial completion of the Landlord Work is delayed
beyond November 1, 1999, payment of Base Rent pursuant to Section 3.1 of this
Lease shall commence on the date the Landlord Work is substantially complete. On
or before the date of execution of this Lease, Tenant shall have the option upon
five (5) days prior written notice to select the construction company which will
perform the Landlord Work, subject to Landlord's approval.

      Landlord shall use diligent efforts to complete the Landlord Work on or
before November 15, 1999. In the event the Landlord Work is not substantially
completed on or before November 15, 1999 (the "Completion Date"), Tenant shall
receive a day for day abatement of Basic Rent for each day beyond the Completion
Date that the Landlord Work is not substantially complete, and in the event the
Landlord Work is not substantially completed on or before December 15, 1999 (the
"Outside Date for Completion"), Tenant shall have the right to terminate its
obligations under this Lease; provided, however, that (1) the Completion Date
and the Outside Date for Completion shall be extended for a period equal to the
duration of any delays in construction caused by strikes, shortages or
materials, acts of God or other matters not reasonably within the control of
Landlord, and (2) in the event any delays in completing the Landlord Work are as
a result of change orders or other delays caused by Tenant, including, without
limitation, Tenant's failure to approve the construction drawings for the
Landlord Work by the dates set forth in the schedule of dates attached to
EXHIBIT LW, the Outside Date for Completion shall be extended day for day for
each such delay caused by Tenant or longer if appropriate to compensate for
additional delays which were encountered on account of items enumerated in (1)
above that would not otherwise have been encountered but for the Tenant caused
delays. Further, if issuance of a temporary or permanent certificate of
occupancy for the Landlord Work or the Leased Property is delayed beyond
November 1, 1999, because of delays caused by Tenant, then the rent commencement
date shall be November 1, 1999 and on that date Tenant shall commence to pay
Base Rent and Additional Rent under this Lease.

                                       36
<PAGE>   43
      Except for latent defects and deficiencies in the Landlord Work of which
Tenant has given written notice to Landlord not later than thirty (30) days
following the Commencement Date, Landlord shall be deemed to have satisfactorily
completed the Landlord Work, and Tenant shall be deemed to have waived all
rights and remedies with respect to deficiencies (other than latent defects) in
the Landlord Work. If Tenant does give timely notice of deficiencies, Landlord
shall remedy as soon as reasonably practicable any deficiencies specified in
such notice and shall begin such remediation within thirty (30) days after
Tenant's notice.

      Landlord shall bear the full cost of the Design Costs (defined below) and
the Tenant Improvement Allowance (defined below). The "Design Costs" shall be
the cost of Tenant's architect or other design fees incurred to design, and
prepare the plans and specifications necessary for, the Landlord Work. The
"Tenant Improvement Allowance" shall be the allowance for any so-called "hard
costs" incurred in constructing the Landlord Work, which allowance shall not
exceed Four Hundred Forty-Seven Thousand Seven Hundred Sixty and 00/100 Dollars
($447,760.00). Tenant shall be responsible for any construction-related costs of
the Landlord Work on the Leased Premises exceeding Four Hundred Forty-Seven
Thousand Seven Hundred Sixty and 00/100 Dollars ($447,760.00), and Tenant shall
pay such amount to Landlord within thirty (30) days after the Landlord Work is
completed and Tenant has received an invoice describing the costs with
reasonable detail. The Tenant Improvement Allowance shall be used for physical
improvements only.

      17.26 INTENTIONALLY OMITTED.

      17.27 TENANT IMPROVEMENTS. Except for Landlord Work, all improvements to
the Building required for Tenant's initial occupancy of the Building are
referred to as "Tenant Improvements." Tenant Improvements shall be constructed
in accordance with the plans and specifications prepared by Tenant ("Tenant
Space Plan") (as further defined in EXHIBIT TI) and submitted to Landlord and
approved by Landlord as provided below and in EXHIBIT TI. Landlord's approval,
shall be limited to determining whether Tenant's plans and specifications (a)
will have an adverse impact on Landlord's re-use of the Leased Premises at the
end of the Term and (b) conform with the requirements of applicable Governmental
Regulations, good construction practices, and insurance industry standards,
their consistency with the architectural and structural integrity of the
Building, and with the ability of the heating, ventilation and air conditioning
system serving the Leased Premises to provide adequate ventilation and
heating/cooling capacity for general office purposes.

      17.28 RIGHT OF FIRST OFFER. Landlord will first offer to Tenant in writing
any space on the first (1st), second (2nd), or third (3rd) floors of the
Building, as applicable, which will still leave any remaining area in a good
marketable layout in Landlord's sole judgement, subject to Tenor Network, Inc.'s
right of first offer on the second (2nd) floor of the Building, and subject to
Xedia Corporation's right of first offer on the first (1st), second (2nd), and
third (3rd) floors of the Building. Said space will be leased to Tenant at the
same rental rate per rentable square foot if leased to Tenant during the first
(1st) year of Tenant's occupancy of the Building, and otherwise at the
then-prevailing fair market rents for comparable space at such time as Tenant

                                       37
<PAGE>   44
shall lease said additional space as determined in accordance with EXHIBIT FMRV,
but in either case expressly excluding any allowances, Landlord's contributions,
free rent, broker's commissions, other similar concessions, rights of first
offer or extension options contained in this Lease. Tenant will have ten (10)
days to accept Landlord's offer in writing, which offer will specify the
proposed rent rate and amount of allowances, if any, and will include a
reference to the aforesaid ten (10) day period in which Tenant is required to
respond to such offer. Failure to respond timely to Landlord's offer shall be
deemed to constitute a denial by Tenant of Landlord's offer. If Tenant accepts
Landlord's offer, Landlord and Tenant shall execute a new lease which effects
the addition of the new space to the Leased Premises upon terms which are in
accordance with Landlord's offer, and with respect to terms not set forth in
Landlord's offer, substantially on the same terms and conditions set forth in
this Lease, but containing appropriate modifications to reflect the different
number of rentable square feet, prorata share, rent, increased number of parking
spaces, and term. If Tenant declines Landlord's offer, Landlord shall be free to
offer the space to a third party on terms which are not materially more
favorable to the tenant than those terms offered to Tenant. If Landlord has not
leased the space within twelve (12) months after offering the space to Tenant,
the space shall be re-offered to Tenor Networks, Inc. in accordance with its
right of first offer before being re-offered to Tenant if the space is on the
second (2nd) floor, and/or to Xedia Corporation in accordance with its right of
first offer before being re-offered to Tenant, and in the event Tenor Networks,
Inc. and Xedia Corporation decline Landlord's offer, the space shall be
re-offered to Tenant in accordance with this Section 17.28 before being offered
to any third party.

      IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
executed and delivered as a sealed instrument by their respective duly
authorized officers as of the day and year first written above.

LANDLORD:                           TENANT:

NAGOG PARK INVESTORS, L.L.C.        ARROWPOINT COMMUNICATIONS, INC.

By:   /s/ Nagog Park LLC                        By:   /s/ Cynthia M. Deysher
      --------------------------                      -------------------------
      Its Managing Member                             Name: Cynthia M.Deysher
                                                Title: VP Operations, CFO
      By:   /s/ Steven B. Cox
            ------------------------
            Name: Steven B. Cox
            Title:      V.P.

                                       38
<PAGE>   45
                                   EXHIBIT FP

                          FLOOR PLAN OF LEASED PREMISES

                                  See Attached.

                                       39
<PAGE>   46
                 [ARROWPOINT COMMUNICATIONS FLOOR PLAN GRAPHIC]
<PAGE>   47
                                  EXHIBIT LD

                        LEGAL DESCRIPTION OF PROPERTY

Lot 106 on a Plan entitled " 'Nagog Square' Definitive Subdivision Plan of Land
in Acton, Mass." by R. D. Nelson dated May 10, 1973, last revised November 12,
1973 and recorded with Middlesex South District Registry of Deeds as Plan No.
448 of 1974 in Book 12629, Page 25 (hereinafter called the "Plan"), bounded and
described as follows:

SOUTHERLY               by Nagog Park, as shown on the Plan, by five courses,
                        76.81', 520.00', 99.38', 346.17' and 104.76',
                        respectively;

SOUTHEASTERLY           by land of Nagog Development Company shown on the
                        Plan as "60' R. O. W. Easement Area 20.450 S.F.," by
                        two courses, 43.17' and 289.09', respectively;

NORTHERLY               by land now or formerly of J. J. Heider & V. P. Wiegand,
                        231.95';

EASTERLY                again by said land now or formerly of J. J. Heider &
                        V. E. Wiegand by five courses, 86.36', 141.00',
                        62.49', 110.13', and 135.94', respectively;

NORTHEASTERLY           by land now or formerly of S. & J. Tabbi, 623.67';

NORTHWESTERLY           by land shown on the Plan as Lot 8A, by three courses,
                        109.64', 103.78' and 154.91', respectively;

SOUTHWESTERLY           again by said land shown on the Plan as Lot 8A, 102.27'

Together with grant of easements contained in a deed May 27, 1982 recorded in
Book 14625, Page 368.

                                       40
<PAGE>   48
                                   EXHIBIT OC

                                 OPERATING COSTS

      "Operating Costs" shall mean:

      (a) all costs and expenses paid or incurred by Landlord, which costs shall
be substantially competitive with comparable properties located along the Route
495 corridor, in operating, managing, equipping, insuring, controlling traffic,
policing (if and to the extent provided by Landlord), lighting, cleaning,
maintaining, repairing (including minor replacements associated with such
repair) and restoring the Property, including all utility lines, pipes and
conduits, drainage or sewage systems, elevators and escalators, and electricity,
steam, water, fuel, heating, lighting and air conditioning systems serving the
Property and also including the costs and expenses for all utilities, including,
without limitation, HVAC, water and sewer service, used or consumed in the
Building, and also including all costs and expenses for mail collection and
distribution, sweeping, snowplowing, sanding, refuse removal, planting and
replacing decorations, flowers and landscaping, painting, uniforms, wages,
fidelity bonds, unemployment taxes, social security taxes, workmen's
compensation insurance premiums, fees for required licenses and permits,
supplies, repair, maintenance, operation, replacement and debt service of any
equipment associated with the maintenance or operation of common areas and
Common Facilities (but excluding the cost of equipment properly chargeable to
the capital account and depreciation of the original cost of construction of the
common areas, buildings and building systems), and any other expense or charge,
whether or not hereinbefore mentioned, which, in accordance with generally
accepted accounting and management principles, would be considered an expense of
managing, operating, maintaining or repairing the Property; and

      (b) all premiums for comprehensive general public liability, property
damage, difference-in-condition, casualty, rent loss, elevator, and other
insurance maintained by Landlord with respect to all of the Property, including
the Common Facilities and other common areas and all buildings and improvements.

      Notwithstanding any contrary provision of this Lease, Operating Costs
shall not include expenses relating to the following:

      (i) salaries, wages, benefits and other expenses of administrative
employees and other persons not involved in the daily operations of the
Building;

      (ii) principal, interest or other charges relating to indebtedness secured
by a mortgage covering any portion of the Property, and payments of rent and
other charges under any superior lease covering any portion of the Property;

      (iii) leasehold improvements made in connection with the preparation of
any portion of the Building for occupancy by a new or existing tenant;

                                       41
<PAGE>   49
      (iv) any expansion of the rentable area of the Building;

      (v) costs, expenses or charges properly chargeable or attributable to a
particular tenant or tenants;

      (vi) any utility or other service used or consumed in the premises leased
to any tenant or occupant, if Tenant's use or consumption of such utility or
other services is separately metered or sub-metered at the Premises;

      (vii) efforts to lease portions of the Building or to procure new tenants
for the Building, including advertising expenses, leasing commissions and
attorney's fees;

      (viii) negotiations or disputes with any tenant of the Building;

      (ix) Landlord's general overhead not directly related to the management or
operations of the Building;

      (x)   depreciation of the Building;

      (xi) repairs and replacements arising out of a fire or other casualty or
an exercise of the eminent domain of the Building; provided, however, that the
deductible portion of any loss covered by insurance shall be amortized over the
useful life of the improvements which have been repaired or replaced in response
to such fire or other casualty and such amortized portion shall be includable in
annual operating costs;

      (xii) Landlord's breach or violation of a law, lease or other obligation,
including fines, penalties and attorneys' fees;

      (xiii) compensation paid to employees or other persons in connection with
commercial concessions operated by Landlord;

      (xiv) fees for licenses, permits or inspections that are not part of
routine maintenance of the Building (but Operating Costs shall include fees for
licenses, permits of inspections required to comply with changes in any laws
occurring after the Commencement Date) or result from the act or negligence of
Landlord or any other tenant of the Building;

      (xv)  environmental testing, remediation and compliance;

      (xvi) compliance by Landlord with laws existing as of the date of this
Lease, including without limitation the Americans with Disabilities Act and the
regulations and standards thereunder;

      (xvii) sculptures, paintings and other works of art;

                                       42
<PAGE>   50
      (xviii) repairs necessary to cure defects in the construction of any
portion or component of the Building;

      (xix) any items with respect to which Landlord receives reimbursement from
insurance proceeds or from a third party; and

      (xx) any repair or replacement which would be deemed a capital expenditure
under generally accepted accounting; provided, however, that the cost of any
such repair or replacement shall be amortized over the useful life of the
improvements which have been repaired or replaced and such amortized portion
shall be includable in annual operating costs.

      (xxi) any capital expenditure to replace the Building's roof or structure.

      Notwithstanding the foregoing, Landlord shall not charge Tenant, as an
Operating Cost, for any management fee of Landlord's property manager in excess
of four percent (4%) of Landlord's gross revenues derived from the Property.

                                       43
<PAGE>   51
                                  EXHIBIT FMRV

                     CALCULATION OF FAIR MARKET RENTAL VALUE

      For purposes of Section 2.2, "Fair Market Rental Value" shall be as
reasonably determined by Landlord to be the annual rental charge (including
without limitation Base Rent, Additional Rent and other charges) as of the
commencement date of each Option Period, for new leases then being negotiated or
executed for comparable office space in Acton, Massachusetts for terms
commencing on or about the date of commencement of the Option Period. In
determining Fair Market Rental Value, Landlord shall take into consideration the
size of the premises, location of the premises, lease term, condition and
location of the applicable office building, services provided by the landlord,
rental concessions and other comparable factors). Bona fide written offers to
lease comparable space received by Landlord from third parties (at arm's length)
may be used by Landlord as an indication of the Fair Market Rental Value.

      Landlord shall notify Tenant of its determination of Fair Market Rental
Value within thirty (30) days after Landlord's receipt of Tenant's notice
exercising its option to extend. If the Landlord does not receive written notice
from Tenant of Tenant's disagreement with Landlord's determination of the Fair
Market Rental Value within ten (10) days after Tenant's receipt of said
determination and requesting an appraisal as set forth below, Tenant shall be
deemed to have rejected said determination by Landlord. If Tenant rejects
Landlord's determination of the Fair Market Rental Value, Tenant shall have the
right, by written notice to Landlord within ten (10) days after Tenant has
received notice of Landlord's determination, to (i) request that such Fair
Market Value be determined by appraisal in accordance with the provisions of
this EXHIBIT FMRV or (ii) withdraw Tenant's notice exercising its option to
extend. In the event Tenant requests that such Fair Market Value be determined
by appraisal in accordance with the provisions of EXHIBIT FMRV, the Fair Market
Rental Value shall be determined by impartial MAI appraisers, one to be chosen
by Landlord, one to be chosen by Tenant (the "Initial Appraisers"), and, if
necessary, a third to be selected as provided below. Landlord and Tenant shall
each notify the other of its selected appraiser within ten days following the
giving of Tenant's request for appraisal as provided above. Each appraiser shall
be independent, familiar with office buildings and leases and rents in Acton,
Massachusetts and experienced in making real estate appraisals. The cost of each
Initial Appraiser shall be paid by the party selecting such Appraiser. The
appraisers shall render their written appraisal of the Fair Market Rental Value
for the Option Period within thirty (30) days following the appointment of both
such appraisers. If the appraisals determined by each of the Initial Appraisers
are less than five percent (5%) apart (i.e., the higher appraisal is less than
105% of the lower appraisal), then the Fair Market Rental Value shall be
determined by taking the average of the two appraisals. In the event the Initial
Appraisers are five percent (5%) or more apart, the Initial Appraisers shall
promptly select a third appraiser who meets the same criteria as required of the
Initial Appraisers ("Third Appraiser"). The Third Appraiser shall submit to
Landlord and Tenant, within twenty-one (21) days after its appointment, its
written appraisal of the Fair Market Rental Value with respect to the Leased
Premises as of the applicable commencement date, which appraisal shall be
binding upon

                                       44
<PAGE>   52
Landlord and Tenant. The cost of the Third Appraiser shall be borne equally by
Landlord and Tenant.

                                       45
<PAGE>   53
                                   EXHIBIT RR

                              RULES AND REGULATIONS

      The following rules and regulations shall apply to the Leased Premises,
the Building, and the Property:

      1. Sidewalks, doorways, vestibules, halls, stairways, and other similar
areas shall not be obstructed by tenants or used by any tenant for purposes
other than ingress and egress to and from their respective leased premises and
for going from one to another part of the Building.

      2. Plumbing, fixtures and appliances shall be used only for the purposes
for which designed, and no sweepings, rubbish, rags or other unsuitable material
shall be thrown or deposited therein. Damage resulting to any such fixtures or
appliances from misuse by a tenant or its agents, employees or invitees, shall
be paid by such tenant.

      3. No signs, advertisements or notices shall be painted or affixed on or
to any windows or doors or other part of the Building (nor to the outside of the
Leased Premises) without the prior written consent of Landlord. No curtains or
other window treatments shall be placed between the glass and the Building
standard window treatments.

      4. Landlord shall provide all door locks in each tenant's leased premises,
at the cost of such tenant, and no tenant shall place any additional door locks
in its leased premises without Landlord's prior written consent. Landlord shall
furnish to each tenant a reasonable number of keys to such tenant's leased
premises, at such tenant's cost, and no tenant shall make a duplicate thereof.

      5. Movement in or out of the Building of furniture or office equipment, or
dispatch or receipt by tenants of any bulky material, merchandise or materials
which require use of elevators or stairways, or movement through the Building
entrances or lobby shall be conducted under Landlord's supervision at such times
and in such a manner as Landlord may reasonably require, except for Tenant's
receipt and transportation of boxes approximately 4'x2'x2' containing electronic
equipment; provided that, Tenant's receipt, movement and transportation of such
boxes of electrical equipment shall not interfere with the use of the Property,
Building and Common Areas, including without limitation the use of the elevators
and loading docks by Landlord and the other tenants, and further, Tenant agrees
to take all reasonable measures to minimize any interference with such other
tenants that is occasioned by Tenant's receipt, movement and transportation of
such boxes of equipment. Each tenant assumes all risks of and shall be liable
for all damage to articles moved and injury to persons or public engaged or not
engaged in such movement, including equipment, property and personnel of
Landlord if damaged or injured as a result of acts in connection with carrying
out this service for such tenant.

      6. Landlord may prescribe weight limitations and determine the locations
for safes and other heavy equipment or items, which shall in all cases be placed
in the Building so as to

                                       46
<PAGE>   54
distribute weight in a manner acceptable to Landlord which may include the use
of such supporting devices as Landlord may require. All damages to the Building
caused by the installation or removal of any property of a tenant, or done by a
tenant's property while in the Building, shall be repaired at the expense of
such tenant.

      7. Corridor doors, when not in use, shall be kept closed. Nothing shall be
swept or thrown into the corridors, halls, elevator shafts or stairways. No
birds or animals shall be brought into or kept in, on or about any tenant's
leased premises excluding dogs to assist sight impaired individuals. No portion
of any tenant's leased premises shall at any time be used or occupied as
sleeping or lodging quarters.

      8. Tenant shall cooperate with Landlord's employees in keeping its leased
premises neat and clean. Tenant shall not employ any person for the purpose of
such cleaning other than the Building's cleaning and maintenance personnel,
except in accordance with Section 5.5 of this Lease.

      9. To ensure orderly operation of the Building, no ice, mineral or other
water, towels, newspapers, etc. shall be delivered to any leased area except by
persons approved by Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed.

      10. Tenant shall not make or permit any vibration or improper,
objectionable or unpleasant noises or odors to permeate outside of the Leased
Premises or otherwise interfere in any way with other tenants or persons having
business with them.

      11. No machinery of any kind (other than normal office equipment) shall be
operated by any tenant on its leased area without Landlord's prior written
consent which shall not be unreasonably withheld, conditioned or delayed, nor
shall any tenant use or keep in the Building any flammable or explosive fluid or
substance other than the materials listed on EXHIBIT HM and ordinary office
supplies and cleaning products provided the same are stored, used and disposed
of strictly in compliance with all Governmental Regulations and Environmental
Laws.

      12. Landlord will not be responsible for lost or stolen personal property,
money or jewelry from tenant's leased premises or public or common areas
regardless of whether such loss occurs when the area is locked against entry or
not.

      13. No vending or dispensing machines of any kind may be maintained in any
leased premises without the prior written permission of Landlord; provided,
however, Tenant shall be permitted to maintain vending or food dispensing in the
Leased Premises machines for food and drink for use strictly by Tenant's
employees only.

      14. Tenant shall not conduct any activity on or about the Property, the
Building or the Leased Premises which will draw pickets, demonstrators, or the
like.

                                       47
<PAGE>   55
      15. All vehicles are to be currently licensed, in good operating
condition, parked for business purposes having to do with Tenant's business
operated in the Premises, parked within designated parking spaces, one vehicle
to each space. No vehicle shall be parked as a "billboard" vehicle in the
parking lot. Any vehicle parked improperly may be towed away. Tenant, Tenant's
agents, employees, vendors and customers who do not operate or park their
vehicles as required shall subject the vehicle to being towed at the expenses of
the owner or driver. Landlord may place a "boot" on the vehicle to immobilize it
and may levy a charge of $50.00 to remove the "boot". Tenant shall indemnify,
hold and save harmless Landlord of any liability arising from the towing or
booting of any vehicles belonging to Tenant, Tenant's agents, vendors, employees
and customers.

                                       48
<PAGE>   56
                                  EXHIBIT LW

                                 LANDLORD WORK

                                See Attached.

                                       49
<PAGE>   57
                          [GRAPHIC TENANT ENTRY DOOR]
<PAGE>   58
100 NAGOG PARK, ACTON, MASSACHUSETTS
LANDLORD IMPROVEMENTS SPECIFICATIONS

WALLS:    New demising partition: one layer 5/8" FC GWB each side on 3 5/8"
          metal studs to underside of metal deck above.

          Demising wall from existing wall construction: extend existing wall to
          underside of metal deck above, one layer 5/8" FC GWB each side on 3
          5/8" metal studs. For existing wall that extends to deck, firetape
          only.

CEILING:  Patch ceiling where new demising: match existing.

DOORS:    Tenant entry: construct new tenant entry per building standard.

PAINT:    Existing demising walls (only if altered): one coat latex eggshell,
          Benjamin Moore or equal, color to be determined.

          New demising walls: one coat primer, one coat latex eggshell, Benjamin
          Moore or equal, color to be determined.
<PAGE>   59
                            [GRAPIC OF THIRD FLOOR]
<PAGE>   60
                       [GRAPIC OF THIRD FLOOR FLOORPLAN]
<PAGE>   61
                                  EXHIBIT TI

                             TENANT IMPROVEMENTS

(a) Tenant shall cause its architect to prepare a reasonable detailed layout
plan of proposed Tenant Improvements of the Leased Premises, as the same may be
amended ("Tenant Space Plan") and submitted to and approved by Landlord, which
approval or disapproval shall not be unreasonably delayed or conditioned.
Landlord shall provide its approval or disapproval to Tenant within five (5)
business days after Landlord's receipt of the Tenant Space Plan and provided
that any disapproval shall contain reasonable objections, Tenant will enter into
a contract (the "TI Construction Contract") with one of three general
contractors to be chosen by Landlord in its reasonable discretion and approved
by Tenant in its reasonable discretion ("Tenant's General Contractor"). Tenant
shall have the right to solicit competitive bids for the construction of the
Tenant Improvements from said three (3) general contractors.

(b) Tenant shall adhere to the following requirements in performing all the
Tenant Improvements work. Tenant shall procure all necessary governmental
approvals and all Tenant Improvements work shall be performed at Tenant's risk
in compliance with all applicable laws and in a good and workmanlike manner
employing new materials of good quality and producing a result at least equal in
quality to the other parts of the Leased Premises. When any Tenant Improvements
work is in progress, Tenant shall cause to be maintained insurance as described
below and such other insurance as may be required by Landlord covering any
additional hazards due to such Tenant Improvements work. It shall be a condition
of Landlord's approval of any Tenant Improvements work (i) that certificates of
such insurance, issued by responsible insurance companies qualified to do
business in Massachusetts and reasonably approved by Landlord, shall have been
deposited with Landlord, (ii) that Tenant has provided Tenant's certification of
the insurable value of the work in question for casualty insurance purposes, and
(iii) that all of the other conditions of the Lease have been satisfied. At all
times while performing Tenant Improvements work, Tenant and each contractor of
Tenant shall not discriminate against any individual because of race, color,
sex, religion or national origin.

(c) In performing Tenant Improvements work, each contractor of Tenant shall
comply with Landlord's reasonable requirements relating to the time and methods
for such work, use of delivery elevators and other Building facilities; and no
contractor shall ever interfere with or disrupt any other tenant or other person
using the Building. Each contractor shall in all events work on the Leased
Premises without causing labor disharmony or coordination difficulties, and
without causing any delays to, or impairing any guaranties, warranties or
obligations of, any contractors of Landlord. Tenant and its contractors shall
not have any obligation to employ union labor. If any such contractor uses or
asks Landlord to provide any services in addition to those services specified in
this Lease, such contractors, jointly and severally with Tenant, shall agree to
reimburse Landlord for the cost thereof based on Landlord's schedule of charges
established from time to time (and if no such charges have been established,
then based on Landlord's reasonable charge established at the time). Each such
contractor shall, by its entry into the Building, be deemed to have agreed
jointly and severally with Tenant to indemnify and hold

                                       50
<PAGE>   62
Landlord, Landlord's Managing Agent and Landlord's mortgagee and their
respective partners, officers, directors, employees and agents harmless from any
claim, loss or expense arising in whole or in part out of any act or neglect
committed by such person while in the Building, to the same extent as Tenant has
so agreed in the Lease.

      Tenant shall purchase and, unless waived in writing by the Landlord in
particular instances, shall cause each contractor of Tenant to purchase, in a
company or companies against which the Landlord has no reasonable objections,
such insurance as will protect Landlord from claims set forth below:

            4.1 claims under workers' or workmen's compensation, disability
benefit and other similar employee benefit acts;

            4.2 claims for damages because of bodily injury, occupational
sickness or disease, or death of his employees;

            4.3 claims for damages because of bodily injury, sickness or
disease, or death of any person other than his employees;

            4.4 claims for damages insured by personal injury liability coverage
which are sustained (1) by any person as a result of an offense directly or
indirectly related to the employment of such person by the Contractor, or (2) by
any other person;

            4.5 claims for damages, other than to the Tenant Improvements work
itself, because of injury to or destruction of tangible property, including loss
of use resulting therefrom;

            4.6 claims for damages because of bodily injury or death of any
person or property damage arising out of the ownership, maintenance or use of
any motor vehicle; and

            4.7 claims for contractual liability (both oral and written) under
his undertaking with Tenant.

(d) The insurance required shall include all major divisions of coverage, and
shall be on a comprehensive general basis including Premises and Operations
(deleting X-C-U exclusions), Owners' and Contractor's Protective, Products and
Completed Operations, and Owned, Nonowned, and Hired Motor Vehicles. Such
insurance shall be written for not less than any limits of liability required by
law or those set forth below (which amounts may, from time to time, be
reasonably increased by Landlord), whichever is greater.

            .1    Workman's Compensation - Statutory/Employers Liability and
                  all additional endorsements $500,000.

                                       51
<PAGE>   63
            .2    Public Liability - Single Limit (Combined) Per Occurrence.

                  Bodily & Personal Injury $1,000,000
                  Property Damage $1,000,000 Occurrence/Aggregate.

            .3    Automobile Liability - Single Limit (Combined) Per
                  Occurrence.

                  Bodily Injury $1,000,000
                  Property Damage $1,000,000 Per Occurrence.

            .4    Independent Contractors - $1,000,000 Per Occurrence.

            .5    Products and Completed Operations $1,000,000 Per Occurrence,
                  covering liability for claims made within applicable statutes
                  of limitations following issuance of final Certificate of
                  Payment.

            .6    Broad Form Blanket Contractual Liability (both oral and
                  written) $1,000,000 per occurrence.

            .7    Excess Liability Umbrella - $5,000,000 Per Occurrence.

      Certificates of insurance reasonably acceptable to Landlord shall be filed
with Landlord prior to commencement of the Tenant Improvements work. These
Certificates shall contain a provision that coverages afforded under the
policies will not be amended, canceled or non-renewed until at least 30 days'
prior written notice has been given to Landlord and all other additional
insureds. The form of certificate shall be acceptable to Landlord. If by the
terms of insurance carried by tenant or any contractor a mandatory deductible is
required, in the event of a paid claim Tenant or such contractor shall be
responsible for the deductible amount. All deductible/self-insured retention
amounts shall be show on the Certificate of Insurance. In all cases, Landlord,
Landlord's Managing Agent, each mortgagee of the Building and any other person
designated by Landlord shall be named as additional insureds.

                                       52
<PAGE>   64
                                    EXHIBIT J

                               JANITORIAL SERVICES

                             CLEANING SPECIFICATIONS

A.    GENERAL NOTES

      1.    All cleaning personnel shall sign in and out at the main lobby
            security desk.

      2.    Building keys shall be accounted for and returned daily. Any missing
            keys are to be reported to building security immediately.

      3.    All cleaning personnel will wear uniforms and proper identification
            including the company and the employee names.

      4.    Cleaning company will maintain a logbook on a daily basis noting any
            problems, areas inaccessible due to tenants working after hours and
            utility work completed.

      5.    Cleaning supervisors will maintain a log of building supplies used
            and advise management when to restock. Cleaning supervisor will be
            responsible for transporting, storing and organizing supplies.

      6.    Supervisors will be responsible for turning off all lights and
            locking all doors when their job is done.

B.    MAIN LOBBY AND COMMON AREAS

      1.    Dust mop, wash and rinse all hard floor surfaces. Wash with a
            detergent solution and rinse with a clear water solution. Spray
            buff, using a high speed floor machine as necessary. Strip and
            reseal as directed.

      2.    Clean all entrance mats as required.

      3.    Vacuum all carpeted surfaces and spot clean all stains with a spot
            carpet cleaner.

      4.    Clean, with glass cleaner, all fingerprints and marks on all glass
            entry doors including revolving doors, etc.

      5.    Polish all exposed metal surfaces in main lobby.

      6.    Wipe clean and polish all metal and wood surfaces in elevator and on
            elevator doors.

                                       53
<PAGE>   65
      7.    Vacuum carpeted elevators and spot clean as necessary. Wash freight
            elevator floor as necessary.

      8.    Dust elevator light fixtures.

      9.    Empty all exterior trash receptacles, cleaning as needed and replace
            liners.

      10.   Clean and sanitize all drinking fountains using a germicidal
            detergent solution.

C.    RESTROOMS

      1.    Dust mop and sweep tiled lavatory floors. Wash and rinse using
            germicidal solution. Machine scrub once per month. Strip and reseal
            tile floors as directed.

      2.    Clean, using a germicidal solution, all metal toilet and urinal
            partitions.

      3.    Clean, using a germicidal solution, all tile walls as required.

      4.    Clean all vanity tops.

      5.    Clean and sanitize all sinks, toilet bowls and seats, and urinals,
            using a germicidal detergent.

      6.    Clean and polish all bright work (chrome fixtures, faucets, etc.).

      7.    Clean and sanitize all dispensers and receptacles (soap dispensers,
            paper towels, toilet paper, sanitary napkins).

      8.    Refill all dispensers in lavatories.

      9.    Remove all waste paper and refuse to a designated area.

D.    TENANT CLEANING

      1.    Empty all wastebaskets and dispose of trash in designated area.
            Replace plastic liners.

      2.    Dust mop, wash and rinse all hard surfaces. Spray buff, using a high
            speed floor machine, as necessary. Strip and reseal floors as
            directed.

      3.    Vacuum all carpeted surfaces and spot clean all stairs with a spot
            cleaner.

      4.    Clean all fingerprints and marks on walls, door frames, kick planes,
            door louvers, door handles and light switches.

                                       54
<PAGE>   66
      5.    Dust and clean any spots on all baseboards throughout tenant areas.

      6.    Dust and wipe clean as necessary, all furniture, chair rails,
            moldings, closets and coat racks.

      7.    Damp wipe and polish all glass furniture tops.

E.    UTILITY CLEANING

      1.    Keep electric and telephone closets in clean and orderly fashion.

      2.    Police loading dock and trash areas.

      3.    Perform miscellaneous projects such as cleaning mechanical areas,
            exterior stairs, etc. as may be requested by building management.

                                       55
<PAGE>   67
                                    EXHIBIT S

             SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

      THIS AGREEMENT is made as of the ____ day of __________, 19__, by _______
________, a ____________ corporation, having a principal address at ___________
_____________________________, (hereinafter referred to as the "Tenant"), and
Nagog Park Investors, L.L.C., a Delaware limited liability company having a
business address c/o Tishman-Heskin Partners, 119 North Fourth Street,
Minneapolis, Minnesota 55401 ("Borrower" and, having its principal address at
__________________________________ (hereinafter referred to as the "Lender").

                                   WITNESSETH:

      WHEREAS, the Lender has loaned to Borrower the original principal amount
of ___________ DOLLARS ($________ ), evidenced by a Promissory Note of even
date and delivery herewith, made by the Borrower to the order of the Lender
(hereinafter referred to as the "Note");

      WHEREAS, payment of the indebtedness evidenced by the Note is secured, in
part, by a Mortgage and Security Agreement (hereinafter referred to as the
"Mortgage") of even date and record herewith, executed by the Borrower in favor
of the Lender, encumbering certain real property and all of the improvements now
or hereafter located thereon commonly known as 100 Nagog Park, Acton,
Massachusetts (hereinafter collectively referred to as the "Mortgaged
Property"), as more particularly described in EXHIBIT A attached hereto and
incorporated herein by reference;

      WHEREAS, the Note, the Mortgage, this Agreement and all other documents
and instruments evidencing or securing the repayment of, or otherwise pertaining
to and executed and delivered in connection with, the loan evidenced by the Note
are hereinafter collectively referred to as the "Loan Documents" and all
indebtedness and all other covenants, terms, conditions and warranties under the
Loan Documents are hereinafter collectively referred to as the "Loan
Obligations");

      WHEREAS, the Tenant has entered an office lease (hereinafter referred to
as the "Lease") dated as of ________, 1999, with the Borrower relating to
certain premises (hereinafter referred to as the "Demised Premises") consisting
of _______ rentable square feet on the second floor of the principal Building on
the Mortgaged Property and other appurtenances thereto, all as more fully
described in the Lease;

      WHEREAS, the Demised Premises consist of all or a portion of the
Mortgaged Property; and

      WHEREAS, the Tenant has required Landlord to obtain this Agreement from
the Lender as a condition of Tenant entering into the Lease;

                                       56
<PAGE>   68
      WHEREAS, the Lender has required that the Tenant execute and deliver this
Agreement as a condition of the Lender's agreeing to make the loan evidenced by
the Note.

      NOW, THEREFORE, in consideration of the foregoing premises and of the sum
of Ten ($10.00) Dollars and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties do hereby covenant
and agree as follows:

     1. SUBORDINATION. Subject to the terms of this Agreement, the Tenant hereby
agrees that the Lease and all amendments, consolidations, substitutions,
extensions, renewals, replacements or modifications thereof, and all of its
right, title and interest in and to the Demised Premises and the Mortgaged
Property, including, without limitation, all options to purchase and rights of
first refusal, are and shall be subject and subordinate in all respects to all
of the Loan Documents, including, without limitation, the lien of the Mortgage,
and to all amendments, revisions, substitutions, renewals, modifications,
consolidations, replacements and extensions thereof, to the full extent of the
Loan Obligations with the same force and effect as if the Note, the Mortgage and
all of the other Loan Documents were each made, delivered and/or recorded prior
to the making, delivery and/or recording of the Lease (or any memorandum or
notice thereof). Without limiting the foregoing, the Tenant expressly
acknowledges and agrees that with respect to any and all insurance proceeds
recovered or recoverable in connection with a fire or other casualty, and with
respect to any and all proceeds recovered or recoverable in connection with a
taking by condemnation or by eminent domain by a public or quasi-public
authority of all or a part of the Demised Premises, the rights of the Lender
under the Mortgage shall be superior, in all respects, to the rights of the
Tenant under the Lease to have such proceeds applied to the repair and
restoration of the Mortgaged Property, but Tenant shall retain any rights it
enjoys under the Lease to terminate the Lease if Landlord or its successors or
assigns fails to repair and restore the Leased Premises in the manner and time
required by the Lease.

     2. NONDISTURBANCE. As long as Tenant is not in default (beyond any
applicable notice and grace period expressly given the Tenant in the Lease to
cure such default) in the payment of rent or in the performance or fulfillment
of any of the terms, warranties, representations, covenants or conditions of the
Lease (including, without limitation, all options to purchase and rights of
first refusal), the Tenant's possession of the Demised Premises and the Tenant's
rights and privileges under the Lease, and all extensions or renewals thereof
which may be effected in accordance with any option granted in the Lease, shall
not be diminished or interfered with by the Lender, and the Tenant's occupancy
of the Demised Premises shall not be disturbed by the Lender during the term of
the Lease or any such extension or renewal thereof.

     3. JOINDER OF THE TENANT. As long as the Tenant is not in default (beyond
any applicable notice and grace period expressly given the Tenant in the Lease
to cure such default) in the payment of rent or in the performance of any of the
terms, covenants or conditions of the Lease on the Tenant's part to be
performed, the Lender will not join the Tenant as a party defendant for the
purpose of terminating or otherwise affecting the Tenant's interest and estate
under the Lease, in any action of foreclosure or other proceeding brought by the
Lender for the purpose of enforcing any of its rights and/or remedies under any
of the Loan Documents in the

                                       57
<PAGE>   69
event of any default thereunder; provided, however, the Lender may join the
Tenant as a party in any such action or proceeding if such joinder is necessary
under applicable law for the purpose of effecting the rights and/or remedies
available to the Lender under the Loan Documents, but only for such purpose and
not for the purpose of terminating the Lease, or affecting the Tenant's right to
possession.

     4. ATTORNMENT. If the interest of the Borrower in the Mortgaged Property
shall be transferred to the Lender or any other Person (as hereinafter defined)
by reason of the Lender's exercise of any of its rights and/or remedies under
any of the Loan Documents, including, without limitation, the exercise of the
power of sale under the Mortgage or any other foreclosure of the Mortgage or
other proceeding brought to enforce the rights of the holder of the Mortgage, by
and in lieu of foreclosure, or by any other method (each such other Persons
being hereinafter referred to as a "Purchaser"), and the Lender or such
Purchaser succeeds to the interest of the Borrower under the Lease, the Tenant
shall be bound to the Lender or such Purchaser, and the Lender or such Purchaser
shall be bound to the Tenant, under all of the terms, covenants, conditions and
warranties under the Lease for the balance of the term thereof remaining and all
extensions or renewals thereof which may be effected in accordance with any
option granted in the Lease, with the same force and effect as if the Lender or
such Purchaser were the landlord under the Lease, but subject to the exceptions
set forth in this Agreement, and, the Tenant does hereby attorn to the Lender or
such Purchaser as its landlord, said attornment to be effective and
self-operative without the execution of any further instruments on the part of
any of the parties hereto immediately upon the Lender or such Purchaser
succeeding to the interest of the Borrower under the Lease.

      Without limiting the foregoing, within ten (10) days after written request
by the Lender or such Purchaser, the Tenant agrees to execute and deliver to the
Lender or such Purchaser, any instrument of further assurance reasonably
requested by the Lender or such Purchaser to confirm and acknowledge such
attornment.

      Notwithstanding anything to the contrary contained herein, the Tenant
shall be under no obligation to pay rent or any other charges due under the
Lease to the Lender or such Purchaser until the Tenant receives written notice
from the Lender or such Purchaser that it has succeeded to the interest of the
Borrower under the Lease (or that the Lender has exercised its rights under any
Assignment of Leases and Rents from the Borrower to the Lender) and directing
where such rent should be delivered. Landlord hereby consents to Tenant paying
such rent and other charges in accordance with such directions, and any such
payments shall be credited against Tenant's obligations under the Lease.

     5. LIMITATION OF THE OBLIGATIONS OF THE LENDER. Notwithstanding anything to
the contrary contained herein, in the event that the Lender or any Purchaser
shall succeed to the interest of the Borrower under the Lease, the Lender and
such Purchaser shall not be:

            (a) liable for any act or omission or any representation or warranty
      of any prior landlord, including, without limitation, the Borrower;

                                       58
<PAGE>   70
            (b) liable for the return of any security deposit not actually
      received by it;

            (c) subject to any offsets or defenses which the Tenant might have
      against any prior landlord, including, without limitation, the Borrower;

            (d) bound by any minimum rent or additional rent or other charges
      which the Tenant might have paid for more than the current month to any
      prior landlord, including, without limitation, the Borrower, unless
      actually received by the Lender or such Purchaser;

            (e) bound by any assignment (except assignments that do not require
      Landlord's consent under the Lease), surrender, termination, cancellation,
      amendment or modification of the Lease made without the Lender's express
      written consent;

            (f) liable under the Lease except during that period of time in
      which the Lender or such Purchaser are in privity of estate with the
      Tenant; or

            (g) responsible for any indirect or consequential damages,
including, without limitation, loss of business, arising from any breach of the
lessor's obligations under the Lease; provided, that the Lender or such
Purchaser shall in no event be exonerated from any liability to the Tenant for
any injury, loss, damage or liability to the extent prohibited by applicable
law.

      In addition, and without limiting the foregoing, in the event that the
Lender or any Purchaser shall succeed to the interest of the Borrower under the
Lease, the Tenant specifically agrees to look solely to the Lender's or the
Purchaser's then equity interest in the Mortgaged Property and the proceeds of
any insurance relating to the Mortgaged Property for the satisfaction or
recovery of any obligation from the Lender or the Purchaser to the Tenant
arising under or in connection with the Lease; it being specifically agreed that
the Lender or the Purchaser shall never be personally liable to the Tenant for
the satisfaction of any such obligation and that the general assets of the
Lender or the Purchaser shall not be subject to levy, execution or other
enforcement procedure for the satisfaction of any such obligation.

     6. DEFAULTS UNDER THE LEASE. Notwithstanding anything contained in the
Lease to the contrary, the Tenant agrees that so long as the Mortgage is in
force and effect, the Tenant shall deliver to the Lender, at the address and in
the manner set forth above, copies of all notices which the Tenant may from time
to time serve upon the Borrower or any successor thereto, under and pursuant to
the terms, covenants and conditions of the Lease. The Tenant further agrees
that, from this date forward, it will not seek to terminate the Lease by reason
of any act or omission of the Borrower until:

            (a) the Tenant shall have given written notice (sent by certified
      mail, return receipt requested or by a nationally recognized commercial
      overnight delivery service) of such act or omission to the Lender, at the
      address set forth above; and

                                       59
<PAGE>   71
            (b) thirty (30) days shall have elapsed following the receipt of
      such notice, during which period the Lender shall have the right, but
      shall not be obligated, to remedy such act or omission; the Tenant
      agreeing to accept any such remedy by the Lender as if the same had been
      performed by the Landlord.

As used herein, a reasonable period of time shall be thirty (30) days or, if
such act or omission cannot be remedied during such thirty (30) day period, then
such period of time as is necessary to remedy such act or omission, including,
without limitation, such time as may be reasonably required to gain possession
of the Demised Premises; provided, that the Lender (i) has elected to remedy
such act or omission, (II) has so notified the Tenant during the thirty (30) day
period following the receipt of the Tenant's notice and (iii) is diligently
prosecuting the same.

     7. NOTICES. Any notice, request, demand, statement or consent made
hereunder shall be in writing and shall be deemed duly given if personally
delivered, sent by certified mail, return receipt requested, or sent by a
nationally recognized commercial overnight delivery service with provisions for
a receipt, postage or delivery charges prepaid, and shall be deemed given three
business days after being postmarked or placed in the possession of such mail or
delivery service and addressed as follows:

IF TO THE TENANT:      ___________________________
                       ___________________________
                       ___________________________
                       Attn:______________________

WITH A COPY TO:        ___________________________
                       ___________________________
                       ___________________________
                       Attn:______________________

IF TO THE LENDER:      ___________________________
                       ___________________________
                       ___________________________
                       Attn:  ____________________

or at such other place as either party hereto may from time to time hereafter
designate to the other in writing. Any notice given to the Tenant by the Lender
at any time shall not imply that such notice or any further or similar notice
was or is required.

     8. GOVERNING LAW. This Agreement shall be construed, and the rights and
obligations of the Tenant and the Lender shall be determined, in accordance with
the laws of the Commonwealth of Massachusetts.

                                       60
<PAGE>   72
     9. AMENDMENTS, WAIVERS AND MODIFICATIONS. This Agreement sets forth the
entire agreement of the parties with respect to the subject matter hereof and
none of the terms, covenants, conditions, warranties or representations
contained herein may be renewed, replaced, amended, extended, substituted,
revised, waived, consolidated, modified or terminated except by an agreement in
writing signed by the Person against whom enforcement is sought. The provisions
of this Agreement shall extend and be applicable to all renewals, replacements,
amendments, extensions, substitutions, revisions, consolidations and
modifications of the Loan Documents or the Lease; and all references herein to
the Loan Documents or the Lease shall be deemed to include any such renewals,
replacements, amendments, substitutions, revisions, extensions, consolidations
or modifications thereof.

      Notwithstanding the foregoing, any reference, whether express or implied,
to any renewal, replacement, amendment, extension, substitution, revision,
consolidation or modification of the Lease is not intended to constitute a
consent to any such renewal, replacement, amendment, extension, substitution,
revision, consolidation or modification of the Lease, but as a reference only to
those instances where the Lender may give consent to any such renewal,
replacement, amendment, extension, substitution, revision, consolidation or
modification of the Lease, as the same may be required pursuant to the terms,
covenants and conditions hereof.

    10. INVALIDITY. If any provision of this Agreement or the application
thereof to any Person or circumstance, for any reason and to any extent, shall
be held to be invalid or unenforceable, neither the remainder of this Agreement
nor the application of such provision to any other Person or circumstance shall
be affected thereby, but rather the same shall be enforced to the greatest
extent permitted by law.

      Notwithstanding the foregoing, it is the intention of the Tenant and the
Lender that if any provision of any of this Agreement is capable of two (2)
constructions, one of which would render the provision void and the other of
which would render the provision valid, then such provision shall be construed
in accordance with the construction which renders such provision valid.

    11. SUCCESSORS AND ASSIGNS; JOINT AND SEVERAL LIABILITY. This Agreement
shall run with the land and be binding on and inure to the benefit of (a) the
Tenant and the Tenant's heirs, executors, administrators, legal representatives,
and permitted successors and assigns and (b) the Lender, any Person who may now
or hereafter hold any interest in the Loan, the Purchaser and their respective
successors and assigns. Notwithstanding the foregoing, except for assignments
and subleases that do not require Landlord's prior consent under the lease, the
Tenant shall not assign or otherwise transfer this Agreement or any of its
rights or obligations hereunder without the express written consent of the
Lender in each instance, which consent shall not be unreasonably withheld,
delayed or conditioned. Where more than one Person shall execute this Agreement
as the Tenant, then each such Person shall be fully liable for all of the
obligations of the Tenant hereunder and all such obligations shall be joint and
several.

                                       61
<PAGE>   73
    12. RULES OF CONSTRUCTION. References in this Agreement to "herein",
"hereof" and "hereunder" shall be deemed to refer to this Agreement and shall
not be limited to the particular text or Section in which such words appear. The
use of any gender shall include all genders and the singular number shall
include the plural and vice versa as the context may require. References in this
Agreement to attorneys' fees and expenses shall be deemed to include all
reasonable out-of-pocket costs for administrative, paralegal and other support
staff.

      References in this Agreement to the Mortgaged Property shall be deemed to
include references to all of the Mortgaged Property and references to any
portion thereof. References in this Agreement to the Demised Premises shall be
deemed to include references to all of the Demised Premises or any portion
thereof. The words "foreclosure" and "foreclosure sale" as used herein shall be
deemed to include the acquisition of the Mortgaged Property or of the Demised
Premises by voluntary deed or assignment in lieu of foreclosure.

      As used herein the term "Person" shall include all individuals and all
entities of every kind and nature, including, without limitation, corporations,
general and limited partnerships, stock companies or associations, joint
ventures, unincorporated associations, companies, trusts, banks, trust
companies, land trusts, business trusts, and agencies, authorities, bodies,
boards, commissions, courts, instrumentalities, legislatures, or offices of any
nature whatsoever for any government unit or political subdivision, whether
federal, state, county, district, municipal, city or otherwise, and whether now
or hereafter in existence.

      As used herein, the term "including", when following any general
statement, will not be construed to limit such statement to the specific items
or matters as provided immediately following the term "including" (whether or
not non-limiting language such as "without limitation" or "but not limited to"
or words of similar import are also used), but rather will be deemed to refer to
all items or matters that could reasonably fall within the broader scope of the
general statement.

    13. CAPTIONS AND HEADINGS. The captions and headings set forth in this
Agreement are included for convenience and reference only and the words
contained therein shall in no way be held or deemed to define, limit, describe,
explain, modify, amplify or add to the interpretation, construction or meaning
of, or the scope or intent of, this Agreement or any part hereof.

    14. LIMITATION OF LIABILITY. All Persons dealing with the Lender, in any
way, shall look only to the assets of the Lender for the payment of any sum or
the performance of any obligation. Furthermore, in no event shall the Lender
ever be liable to the Tenant for any indirect or consequential damages suffered
by the Tenant resulting from any cause whatsoever. Notwithstanding the
foregoing, the Tenant hereby acknowledges and agrees that the Tenant shall look
only to the assets of the Lender for the payment of any sum or performance of
any obligation due by or from the Lender pursuant to the terms, covenants and
conditions hereof.

    15. TIME OF THE ESSENCE. Time is of the essence of each and every term,
condition, covenant and warranty set forth herein.

                                       62
<PAGE>   74
      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as a sealed instrument on the date first above-mentioned.

WITNESS:                         TENANT:

                                 ______________________________________

____________________________     By:___________________________________
Name:                                Name:___________________
                                     Title:__________________

WITNESS:                         LENDER:

                                 __________________________, a _______________

____________________________     By:___________________________________
Name:                               Name:
                                    Title: Vice President

____________________________     By:___________________________________
Name:                               Name:
                                    Title: Assistant Treasurer

WITNESS:                         LANDLORD:

                                 NAGOG PARK INVESTORS, L.L.C.

____________________________     By:___________________________________
Name:                               Name:
                                    Title:

                                       63
<PAGE>   75
                         COMMONWEALTH OF MASSACHUSETTS

               , ss.                                         ___________, 1999

      Then personally appeared the above-named _________________ , ____________
__________________ of _________________ , and acknowledged the foregoing
instrument to be his free act and deed and the free act and deed of ___________
_________________ , before me,

                              __________________________________
                              Notary Public
                              My commission expires: ___________

                               STATE OF NEW YORK

               , ss.                                         ___________, 1999

      Then personally appeared the above-named ______________________ who swore
that he/she is the ____________of Nagog Park Investors, L.L.C., and acknowledged
the foregoing instrument to be his free act and deed and the free act and deed
of Nagog Park Investors, L.L.C., before me,

                              __________________________________
                              Notary Public
                              My commission expires: ___________

                         COMMONWEALTH OF MASSACHUSETTS

               , ss.                                         ___________, 1999

      Then personally appeared the above-named ____________________ who swore
that he/she is the ____________ of __________________________________ and
acknowledged the foregoing instrument to be his free act and deed and the
free act and deed of ________________________, before me

                              __________________________________
                              Notary Public
                              My commission expires: ___________

                                       64
<PAGE>   76
                                    Exhibit A
                                Legal Description

Lot 106 on a Plan entitled " 'Nagog Square' Definitive Subdivision Plan of Land
in Acton, Mass." by R. D. Nelson dated May 10, 1973, last revised November 12,
1973 and recorded with Middlesex South District Registry of Deeds as Plan No.
448 of 1974 in Book 12629, Page 25 (hereinafter called the "Plan"), bounded and
described as follows:

SOUTHERLY         by Nagog Park, as shown on the Plan, by five courses, 76.81',
                  520.00', 99.38', 346.17' and 104.76', respectively;

SOUTHEASTERLY     by land of Nagog Development Company shown on the Plan as "60'
                  R. O. W. Easement Area 20.450 S.F.," by two courses, 43.17'
                  and 289.09', respectively;

NORTHERLY         by land now or formerly of J. J. Heider & V. P. Wiegand,
                  231.95';

EASTERLY          again by said land now or formerly of J. J. Heider & V. E.
                  Wiegand by five courses, 86.36', 141.00', 62.49', 110.13', and
                  135.94', respectively;

NORTHEASTERLY     by land now or formerly of S. & J. Tabbi, 623.67';

NORTHWESTERLY     by land shown on the Plan as Lot 8A, by three courses,
                  109.64', 103.78' and 154.91', respectively;

SOUTHWESTERLY     again by said land shown on the Plan as Lot 8A, 102.27'

Together with grant of easements contained in a deed May 27, 1982 recorded in
Book 14625, Page 368.

                                       65
<PAGE>   77
                                   EXHIBIT HM

              INITIAL HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

      Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 6.6 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:

Landlord:   Nagog Park Investors, LLC

            Attn:______________________________________________________________
            Phone:_____________________________________________________________

Name of (Prospective) Tenant: ArrowPoint Communications, Inc.

Mailing Address: 235 Littleton Road, Westford, MA 01886

Contact Person, Title and Telephone Number(s):   Maurice Bouchard,
                                                 IS and Facilities Manager
                                                 978 692-5875 x 543

Address of (Prospective) Premises:     50 Nagog Park, 3rd Floor, Acton, MA

Length of (Prospective) initial Term:   5 years

1.    GENERAL INFORMATION:

                                       66
<PAGE>   78
      Describe the initial proposed operations to take place in, on, or about
      the Premises, including, without limitation, principal products processed,
      manufactured or assembled services and activities to be provided or
      otherwise conducted. Existing tenants should describe any proposed changes
      to on-going operations.

      General office, laboratory, research development and light assembly of
      data network switches.

2.    USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS

      2.1   Will any Hazardous Materials be used, generated, stored or disposed
            of in, on or about the Premises? Existing tenants should describe
            any Hazardous Materials which continue to be used, generated, stored
            or disposed of in, on or about the Premises.

                    Wastes                        Yes [ ]       No [X]
                    Chemical Products             Yes [X]       No [ ]
                    Other                         Yes [ ]       No [X]

      If Yes is marked, please explain: Some very small amounts of chemicals are
      used in the repair and rework of electronic parts. See attached list for
      quantity and types.

      2.2   If Yes is marked in Section 2.1, attach a list of any Hazardous
            Materials to be used, generated, stored or disposed of in, on or
            about the Premises, including the applicable hazard class and an
            estimate of the quantities of such Hazardous Materials at any given
            time; estimated annual throughput; the proposed location(s) and
            method of storage (excluding nominal amounts of ordinary household
            cleaners and janitorial supplies which are not regulated by any
            Environmental Laws); and the proposed location(s) and method of
            disposal for each Hazardous Material, including, the estimated
            frequency, and the proposed contractors or subcontractors. Existing
            tenants should attach a list setting forth the information requested
            above and such list should include actual data from on-going
            operations and the identification of any variations in such
            information from the prior year's certificate.

3.    STORAGE TANKS AND SUMPS

      3.1   Is any above or below ground storage of gasoline, diesel, petroleum,
            or other Hazardous Materials in tanks or sumps proposed in, on or
            about the Premises? Existing tenants should describe any such actual
            or proposed activities.

            Yes [ ]             No [X]

            If yes, please explain:____________________________________________

                                       67
<PAGE>   79
4.    WASTE MANAGEMENT

      4.1   Has your company been issued an EPA Hazardous Waste Generator I.D.
            Number? Existing tenants should describe any additional
            identification numbers issued since the previous certificate.

            Yes [ ]             No [X]

      4.2   Has your company filed a biennial or quarterly reports as a
            hazardous waste generator'? Existing tenants should describe any new
            reports filed.

            Yes [ ]             No [X]

            If yes, attach a copy of the most recent report filed.

5.    WASTEWATER TREATMENT AND DISCHARGE

      5.1   Will your company discharge wastewater or other wastes to:

                 storm drain?          sewer?
            ----                  ----
                 surface water?     X  no wastewater or other wastes discharged.
            ----                  ----

            Existing tenants should indicate any actual discharges. If so,
            describe the nature of any proposed or actual discharge(s).

            ____________________________________________________________________
            ____________________________________________________________________

      5.2   Will any such wastewater or waste be treated before discharge?

            Yes [ ]             No [X]

            If yes, describe the type of treatment proposed to be conducted.
            Existing tenants should describe the actual treatment conducted.

            ____________________________________________________________________
            ____________________________________________________________________

6.    AIR DISCHARGES

                                       68
<PAGE>   80
      6.1   Do you plan for any air filtration systems or stacks to be used in
            your company's operations in, on or about the Premises that will
            discharge into the air; and will such air emissions be monitored?
            Existing tenants should indicate whether or not there are any such
            air filtration systems or stacks in use in, on or about the Premises
            which discharge into the air and whether such air emissions are
            being monitored.

            Yes [ ]             No [X]

            If yes, please describe:___________________________________________
            ___________________________________________________________________
            ___________________________________________________________________

      6.2   Do you propose to operate any of the following types of equipment,
            or any other equipment requiring an air emissions permit? Existing
            tenants should specify any such equipment being operated in, on or
            about the Premises.

                 Spray booth(s)            Incinerator(s)
            ----                      ----
                 Dip tank(s)               Other (Please describe)
            ----                      ----
                 Drying oven(s)         X  No Equipment Requiring Air Permits
            ----                      ----

            If yes, please describe:___________________________________________
            ___________________________________________________________________
            ___________________________________________________________________

7.    HAZARDOUS MATERIALS DISCLOSURES

      7.1   Has your company prepared or will it be required to prepare a
            Hazardous Materials management plan ("Management Plan") pursuant to
            Fire Department or other governmental or regulatory agencies'
            requirements? Existing tenants should indicate whether or not a
            Management Plan is required and has been prepared.

            Yes [ ]             No [X]

            If yes, attach a copy of the Management Plan. Existing tenants
            should attach a copy of any required updates to the Management Plan.

8.    ENFORCEMENT ACTIONS AND COMPLAINTS

      8.1   With respect to Hazardous Materials or Environmental Laws, has your
            company ever been subject to any agency enforcement actions,
            administrative orders, or consent decrees or has your company
            received requests for information, notice or demand letters, or any
            other inquiries regarding its operations? Existing tenants should
            indicate whether or not any such actions, orders or decrees have
            been, or are in the process of being, undertaken or if any such
            requests have been received.

                                       69
<PAGE>   81
            Yes [ ]             No [X]

            If yes, describe the actions, orders or decrees and any continuing
            compliance obligations imposed as a result of these actions, orders
            or decrees and also describe any requests, notices or demands, and
            attach a copy of all such documents. Existing tenants should
            describe and attach a copy of any new actions, orders, decrees,
            requests, notices or demands not already delivered to Landlord
            pursuant to the provisions of Section 6.6 of the signed Lease
            Agreement.

            ___________________________________________________________________
            ___________________________________________________________________
            ___________________________________________________________________

      8.2   Have there ever been, or are there now pending, any lawsuits against
            your company regarding any environmental or health and safety
            concerns?

            Yes [ ]             No [X]

            If yes, describe any such lawsuits and attach copies of the
            complaint(s), cross-complaint(s), pleadings and all other documents
            related thereto as requested by Landlord. Existing tenants should
            describe and attach a copy of any new complaint(s),
            cross-complaint(s), pleadings and other related documents not
            already delivered to Landlord pursuant to the provisions of Section
            6.6 of the signed Lease Agreement.

            ___________________________________________________________________
            ___________________________________________________________________
            ___________________________________________________________________

      8.3   Have there been any problems or complaints from adjacent tenants,
            owners or other neighbors at your company's current facility with
            regard to environmental or health and safety concerns? Existing
            tenants should indicate whether or not there have been any Such
            problems or complaints from adjacent tenants, owners or other
            neighbors at, about or near the Premises.

            Yes [ ]             No [X]

            If yes, please describe. Existing tenants should describe any such
            problems or complaints not already disclosed to Landlord under the
            provisions of the signed Lease Agreement.

            ___________________________________________________________________
            ___________________________________________________________________

                                       70
<PAGE>   82
9.    PERMITS AND LICENSES

      9.1   Attach copies of all Hazardous Materials permits and licenses
            including a Transporter Permit number issued to your company with
            respect to its proposed operations in, on or about the Premises,
            including, without limitation, any wastewater discharge permits, air
            emissions permits, and use permits or approvals. Existing tenants
            should attach copies of any new permits and licenses as well as any
            renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 6.6 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof of the Lease Agreement.

I (print name) Maurice Bouchard, acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent and
warrant that the information contained in this certificate is true and correct.

(PROSPECTIVE) TENANT:

By:   /s/ Maurice E. Bouchard
      -------------------------------------

                                       71
<PAGE>   83
Title:      IS and Facilities Manager
Date:       30 Aug 1999

                                       72
<PAGE>   84
ArrowPoint Chemicals used in Assembly:

1) cyanoacrylate (tak pak circuit board adhesive).
Quantity: 1, 20 gram bottle.  Usage, approx. 10 grams per month.

2) 1, 1, 1,2-tetrafluoroethane (freeze spray).

Quantity: 10, 238 gram cans. Usage, 1 can per week.

3) 2-methylpentane, 3-methylpentane, 2-3 dimethylbutane, n-hexane, ethyl acetate
(flux remover).

Quantity: 10, 284 gram cans. Usage, 1 can per week.

4) Isopropyl Alcohol, mineral spirits. (RMA Flux).

Quantity: 1 gallon. Usage, 1 ounce per week.

5) 60/40 Tin/Lead Solder.
Quantity: 3 rolls, 1 lb. each.  Usage, .1 ounce per week.<PAGE>   1
                                                                   Exhibit 10.13

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

                                CREDIT AGREEMENT
                                ----------------

                           Dated as of August 5, 1998

                                     between

                         ArrowPoint Communications, Inc.

                                       and

                               Fleet National Bank

--------------------------------------------------------------------------------
<PAGE>   2

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

<TABLE>
<CAPTION>
<S>                                                                                                 <C>
1.   DEFINITIONS:  .................................................................................1
2.   REVOLVING CREDIT FACILITY.  ...................................................................8

         2.1.  Commitment to Lend.  ................................................................8
         2.2.  Requests Revolving Credit Loans.  ...................................................8
         2.3.  Repayments and Prepayments.  ........................................................10

3.   TRANCHE A EQUIPMENT LOAN FACILITY..............................................................11
         3.1.   Making of Tranche A Equipment Loans.................................................11
         3.2.   Repayment of Tranche A Equipment Loans..............................................11

4.   TRANCHE B EQUIPMENT LOAN FACILITY..............................................................12
         4.1.   Making of Tranche B Equipment Loans.................................................12
         4.2.   Repayment of Tranche B Equipment Loans..............................................13

5.   LETTER OF CREDIT FACILITY......................................................................14
         5.1.  Letter of Credit Commitment.  .......................................................14
         5.2.  Reimbursement Obligation of the Borrower.  ..........................................15
         5.3.  Letter of Credit Payments.  .........................................................16
         5.4.  Obligations Absolute.  ..............................................................16
         5.5.  Reliance by Issuer.  ................................................................16
         5.6.  Letter of Credit Fees.  .............................................................17
6.   INTEREST, OVERDUE PAYMENTS.  ..................................................................17
         6.1.  Interest on Loans.  .................................................................17
         6.2.  Interest after Default.  ............................................................18
         6.3.  Overdue Payments.  ..................................................................18

7.   FEES AND PAYMENTS.  ...........................................................................18
8.   REPRESENTATIONS AND WARRANTIES.  ..............................................................19
9.   CONDITIONS PRECEDENT.  ........................................................................21
10.  COVENANTS.  ...................................................................................21

         10.1.  Affirmative Covenants.  ............................................................21
         10.2.  Negative Covenants.  ...............................................................23
         10.3.  Financial Covenants.  ..............................................................24

11.  EVENTS OF DEFAULT; ACCELERATION.  .............................................................24
12.  SETOFF.  ......................................................................................27
13.  MISCELLANEOUS.  ...............................................................................27
</TABLE>

<PAGE>   3

                                CREDIT AGREEMENT
                                ----------------

     This CREDIT AGREEMENT (this "Agreement") is made as of August 5, 1998, by
and between ArrowPoint Communications, Inc. (the "Borrower"), a Delaware
corporation having its principal place of business at 235 Littleton Road,
Westford, Massachusetts 01886, and Fleet National Bank (the "Bank"), a national
banking association with its head office at One Federal Street, Boston,
Massachusetts 02110.

                                 1. DEFINITIONS:
                                    ------------

     Certain capitalized terms are defined below:

     ACCOUNTS: All rights of the Borrower to any payment of money for goods
sold, leased or otherwise marketed in the ordinary course of business and all
rights of the Borrower to payment for services rendered in the ordinary course
of business, whether evidenced by or under or in respect of a contract or
instrument, and to all proceeds in respect thereof.

     AGREEMENT: See preamble, which term shall include this Agreement and the
Schedules hereto, all as amended and in effect from time to time.

     BANK: See preamble.

     BASE ACCOUNTS: Those Accounts (net of any finance charges, late charges,
credits, commissions, contras or other offsets or counterclaims) (i) which the
Borrower reasonably determines to be collectible, (ii) the account debtors in
respect of which are reasonably deemed creditworthy by the Bank, are solvent,
are not affiliated with the Borrower, and purchased the goods or services at
arms' length, (iii) which are not outstanding for more than ninety (90) days
past the earlier to occur of (A) the date of invoice and (B) the date of
shipment (as to goods) or of provision (as to services), (iv) that are not due
from an account debtor located in Indiana, Minnesota or New Jersey unless the
Borrower (A) has received a certificate of authority to do business and is in
good standing in such state or (B) has filed a notice of business activities
report with the appropriate office or agency of such state for the current year,
(v) in which the Bank has a valid and perfected first-priority security
interest, and over which there is no other Lien other than Liens permitted under
this Agreement, (vi) which are in payment of fully performed and undisputed
obligations, unless the amount of the portion of any Account in dispute is less
than $15,000, and (vii) which are payable in U.S. currency from an office within
the United States, unless (a) the payment of any such

<PAGE>   4

                                      -2-

Account is backed by a letter of credit in form and substance satisfactory to
the Bank and is issued by a financial institution acceptable to the Bank having
an office in the United States or (b) such account is pre-approved in writing by
the Bank.

     BASE RATE: The higher of (i) the annual rate of interest announced from
time to time by the Bank at its head office as the Bank's "prime rate" and (ii)
one-half of one percent (1/2%) above the Federal Funds Effective Rate.

     BORROWER: See preamble.

     BUSINESS DAY: Any day on which banks in Boston, Massachusetts, are open for
business generally.

     CHARTER DOCUMENTS: In respect of any entity, the certificate or articles of
incorporation or organization and the by-laws of such entity, or other
constitutive documents of such entity.

     COLLATERAL: All of the property, rights and assets of the Borrower that are
or are intended to be subject to the security interest created by the Security
Documents.

     COMMITMENTS: Collectively, the Revolving Credit Commitment, the Tranche A
Equipment Loan Commitment and the Tranche B Equipment Loan Commitment.

     CONSENT: In respect of any person or entity, any permit, license or
exemption from, approval, consent of, registration or filing with any local,
state or federal governmental or regulatory agency or authority, required under
applicable law.

     CURRENT ASSETS: The sum of (i) cash on hand of the Borrower, (ii) cash
equivalents of the Borrower, (iii) Accounts and (iv) Inventory, that in
accordance with GAAP are properly classified as current assets.

     CURRENT LIABILITIES: The sum of (i) all liabilities of the Borrower payable
on demand or maturing within one (1) year from the date as of which current
liabilities are to be determined, including, without limitation, any Revolving
Credit Loans, and such other liabilities that in accordance with GAAP are
properly classified as current liabilities minus (ii) Deferred Revenue.

     DEFAULT: An event or act which with the giving of notice and/or the lapse
of time, would become an Event of Default.

<PAGE>   5

                                      -3-

     DEFERRED REVENUE: Payments received by the Borrower with respect to
services not yet provided by the Borrower.

     DRAWDOWN DATE: In respect of any Loan, the date on which such Loan is made
to the Borrower.

     ENVIRONMENTAL LAWS: All laws pertaining to environmental matters, including
without limitation, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Superfund Amendments and Reauthorization Act of 1986, the Federal Clean Water
Act, the Federal Clean Air Act, the Toxic Substances Control Act, in each case
as amended, and all rules, regulations, judgments, decrees, orders and licenses
arising under all such laws.

     EQUIPMENT BORROWING BASE: An amount determined by the Bank to be equal to
the lesser of (a) $2,000,000 and (b) the sum of (i) one hundred percent (100%)
of the cost (excluding freight, taxes, set-up and other installation costs) of
all Equipment Collateral (excluding any and all Equipment Collateral consisting
of development software) as evidenced by invoices and evidence of payment (dated
no more than thirty (30) days from the date of purchase) from the sellers
thereof, plus (ii) one hundred percent (100%) of the cost (excluding freight,
taxes, set-up and other installation costs) of all Equipment Collateral
consisting of development software as evidenced by invoices and evidence of
payment (dated no more than thirty (30) days from the date of purchase) from the
sellers thereof in an aggregate amount not to exceed the lesser of (A) $500,000
and (B) thirty-five percent (35%) of the aggregate principal amount outstanding
of the Tranche A Equipment Loans and the Tranche B Equipment Loans; provided,
however, that the Borrower shall not be required to provide Bank with evidence
of such invoices and evidence of payment within such thirty (30) day period set
forth above with respect to the Equipment Collateral financed by Silicon Valley
Bank or such other entity and refinanced with the proceeds of Tranche A
Equipment Loans on the Closing Date or other equipment financed on Closing Date.

     EQUIPMENT BORROWING BASE REPORT: A report, in form and with supporting
details satisfactory to the Bank, setting forth the Borrower's computation of
the Equipment Borrowing Base.

     EQUIPMENT COLLATERAL: The new machinery, equipment and fixtures purchased
or financed by the Borrower with the proceeds of the Equipment Loans on or after
the Closing Date (or refinanced by the Bank with the proceeds of Tranche A
Equipment Loans and paid to Silicon Valley Bank or such other entity on the
Closing Date) and which

<PAGE>   6

                                      -4-

machinery, equipment and fixtures (a) are owned, possessed and held by the
Borrower within the United States and not subject to any claim of ownership by
any third party, (b) are held on land leased by the Borrower located in
Westford, Massachusetts and (c) as to which a valid and perfected first-priority
security interest in favor of the Bank has been created and which there is no
other Lien other than Liens permitted under this Agreement.

     EQUIPMENT LOAN CONVERSION DATE: With respect to Tranche A Equipment Loans,
January 1, 1999 and with respect to Tranche B Equipment Loans, July 1, 1999.

     EQUIPMENT LOAN MATURITY DATE: With respect to the Tranche A Equipment
Loans, December 1, 2002 and with respect to the Tranche B Equipment Loans, June
1, 2002.

     EQUIPMENT LOANS: Collectively, the Tranche A Equipment Loans and the
Tranche B Equipment Loans.

     ERISA: The Employee Retirement Income Security Act of 1974, as amended, and
all rules, regulations, judgments, decrees, and orders arising thereunder.

     EVENT OF DEFAULT: Any of the events listed in ss.11 hereof.

     FCC: The Federal Communications Commission or any governmental authority
succeeding to any of its functions.

     FCC LICENSES. Any mobile telephone, cellular telephone, microwave, paging
or other license, authorization, certificate of compliance, franchise, approval
or permit granted or issued by the FCC.

     FEDERAL FUNDS EFFECTIVE RATE: For any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Bank from three
funds brokers of recognized standing selected by the Bank.

     FINANCIALS: In respect of any period, the balance sheet of any person or
entity as at the end of such period, and the related statement of income and
statement of cash flow for such period, each setting forth in

<PAGE>   7

                                      -5-

comparative form the figures for the previous comparable fiscal period, if
history is available, all in reasonable detail and prepared in accordance with
GAAP.

     GAAP: Generally accepted accounting principles consistent with those
adopted by the Financial Accounting Standards Board and its predecessor, (i)
generally, as in effect from time to time, and (ii) for purposes of determining
compliance by the Borrower with its financial covenants set forth herein, as in
effect for the fiscal year therein reported in the most recent Financials
submitted to the Bank prior to execution of this Agreement.

     INDEBTEDNESS: In respect of any entity, all obligations, contingent and
otherwise, that in accordance with GAAP should be classified as liabilities,
including without limitation (i) all debt obligations for money borrowed, (ii)
all liabilities secured by Liens, (iii) all guarantees and (iv) all liabilities
in respect of bankers' acceptances or letters of credit.

     INTELLECTUAL PROPERTY. All intellectual property and/or rights owned,
possessed or controlled by Borrower or which Borrower has the right to use,
including, without limitation, patents (including, without limitation,
substitutions, extensions, reissues, re-examinations, renewals, divisions,
continuations, or continuations-in-part); copyrights; works of authorship;
object code; source code; data bases; inventions; mask work rights; trademarks;
service marks; trade names; logos; other commercial symbols; trade secrets;
know-how; confidential or proprietary information; and registrations or
applications for any of the foregoing.

     INVENTORY: All goods, merchandise and other personal property, now owned or
hereafter acquired by the Borrower, which are held for sale or leased, or
furnished under a contract for service, or are raw materials, work in process,
or materials used in the Borrower's business.

     INVESTMENTS: All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of equity interests or
indebtedness of, or for loans, advances, capital contributions or transfers of
property to, or in respect of any guaranties, or obligations of, any entity. In
determining the aggregate amount of Investments outstanding at any particular
time: (i) the amount of any Investment represented by a guaranty shall be taken
at not less than the principal amount of the obligations guaranteed and still
outstanding; (ii) there shall be included as an Investment all interest accrued
with respect to indebtedness constituting an Investment unless and until such
interest is paid; (iii) there shall be deducted in respect of each such
Investment any amount received as a return of capital (but only by repurchase,
redemption,

<PAGE>   8

                                      -6-

retirement, repayment, liquidating dividend or liquidating distribution); (iv)
there shall not be deducted in respect of any Investment any amounts received as
earnings on such Investment, whether as dividends, interest or otherwise, except
that accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.

     LETTER OF CREDIT: See ss.5.1(a).

     LETTER OF CREDIT APPLICATION: See ss.5.1(a).

     LETTER OF CREDIT FEE: See ss.5.6.

     LIENS: Any encumbrance, mortgage, pledge, hypothecation, charge,
restriction or other security interest of any kind securing any obligation of
any entity or person.

     LOANS: Collectively, the Tranche A Equipment Loans, the Tranche B Equipment
Loans and the Revolving Credit Loans.

     LOAN DOCUMENTS: This Agreement, the Notes, the Letters of Credit, the
Letter of Credit Applications and the Security Documents and any document,
agreement and/or instrument executed and/or delivered in connection therewith,
in each case as from time to time amended or supplemented.

     MATERIALLY ADVERSE EFFECT: Any materially adverse effect on the financial
condition or business operations of the Borrower or material impairment of the
ability of the Borrower to perform its material obligations hereunder or under
any of the other Loan Documents.

     MAXIMUM DRAWING AMOUNT: The maximum aggregate amount from time to time that
beneficiaries may draw under outstanding Letters of Credit, as such aggregate
amount may be reduced from time to time pursuant to the terms of the Letters of
Credit.

     NET INCOME. The net income (or deficit) of the Borrower, after deduction of
all expenses, taxes and other proper charges, determined in accordance with
GAAP.

     NOTES. Collectively, the Tranche A Equipment Note, the Tranche B Equipment
Note and the Revolving Credit Note.

     OBLIGATIONS: All indebtedness, obligations and liabilities of the Borrower
to the Bank, existing on the date of this Agreement or arising

<PAGE>   9

                                      -7-

thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Agreement or any other Loan Document or in respect of any of the Loans or
Letters of Credit or the Notes or other instruments at any time evidencing any
thereof.

     REIMBURSEMENT OBLIGATION: The Borrower's obligation to reimburse the Bank
on account of any drawing under any Letter of Credit as provided in ss.5.2.

     REQUIREMENT OF LAW: In respect of any person or entity, any law, treaty,
rule, regulation or determination of an arbitrator, court, or other governmental
authority, in each case applicable to or binding upon such person or entity or
affecting any of its property.

     REVOLVING CREDIT BORROWING BASE: An amount equal to the sum of 80% of the
Base Accounts.

     REVOLVING CREDIT BORROWING BASE REPORT: A report, in form and with
supporting details satisfactory to the Bank, setting forth the Borrower's
computation of the Revolving Credit Borrowing Base.

     REVOLVING CREDIT COMMITMENT: The obligation of the Bank to make Revolving
Credit Loans to, and to issue, extend and renew Letters of Credit for the
account of, the Borrower up to an aggregate outstanding principal amount not to
exceed $5,000,0000, as such amount may be reduced from time to time or
terminated hereunder.

     REVOLVING CREDIT LOAN: Any loan made or to be made to the Borrower pursuant
to ss.2 hereof.

     REVOLVING CREDIT MATURITY DATE: June 30, 1999 or such earlier date on which
all Revolving Credit Loans may become due and payable pursuant to the terms
hereof.

     REVOLVING CREDIT NOTE. See ss.2.1.

     SECURITY DOCUMENTS: The Security Agreement between the Borrower and the
Bank, together with any UCC-1 financing statements executed and/or delivered in
connection therewith, each as the same may be amended, reaffirmed or modified
from time to time and in form and substance satisfactory to the Bank.

<PAGE>   10

                                      -8-

     TANGIBLE NET WORTH: The excess of (i) all assets of the Borrower determined
in accordance with GAAP, over (ii) all liabilities of the Borrower determined in
accordance with GAAP, subtracting from such result (iii) the sum of (A) the book
value all intangibles determined in accordance with GAAP, including good will
and intellectual property, and (B) any write-up in the book value of assets
since the most recent audited Financials in existence on the date hereof.

     TOTAL FUNDED DEBT. As to the Borrower and whether recourse is secured by or
is otherwise available against all or only a portion of the assets of the
Borrower and whether or not contingent, but without duplication:

          (i)  every obligation of the Borrower for money borrowed;

          (ii) every obligation of the Borrower evidenced by bonds, debentures,
     notes or other similar instruments, including obligations incurred in
     connection with the acquisition of property, assets or businesses;

          (iii) every reimbursement obligation of the Borrower with respect to
     letters of credit, bankers' acceptances or similar facilities issued for
     the account of the Borrower; and

          (iv) every obligation of the Borrower issued or assumed as the
     deferred purchase price of property or services (including securities
     repurchase agreements but excluding trade accounts payable or accrued
     liabilities arising in the ordinary course of business which are not
     overdue or which are being contested in good faith).

     TOTAL OUTSTANDINGS: At any time of reference thereto, the sum of (i)
Revolving Credit Loans outstanding at such time, (ii) the Maximum Drawing Amount
at such time and (iii) any Unpaid Reimbursement Obligations at such time.

     TRANCHE A EQUIPMENT LOAN COMMITMENT: The obligation of the Bank to make
Tranche A Equipment Loans to the Borrower up to an aggregate outstanding
principal amount not to exceed $2,000,000, as such amount may be reduced from
time to time or terminated hereunder.

     TRANCHE B EQUIPMENT LOAN COMMITMENT: The obligation of the Bank to make
Tranche B Equipment Loans to the Borrower up to an aggregate outstanding
principal amount not to exceed the sum of (a) $2,000,000 minus (b) the
outstanding principal amount of all Tranche A

<PAGE>   11

                                      -9-

Equipment Loans, as such amount may be reduced from time to time or terminated
hereunder.

     TRANCHE A EQUIPMENT LOAN NOTE: See ss.3.1.

     TRANCHE B EQUIPMENT LOAN NOTE: See ss.4.1.

     UNIFORM CUSTOMS: With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Bank in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.

     UNPAID REIMBURSEMENT OBLIGATION: Any Reimbursement Obligation for which the
Borrower does not reimburse the Bank on the date specified in, and in accordance
with, ss.5.2(a).

                          2. REVOLVING CREDIT FACILITY.
                             --------------------------

     2.1. COMMITMENT TO LEND. Upon the terms and subject to the conditions of
this Agreement, the Bank agrees to lend to the Borrower such sums that the
Borrower may request, from the date hereof until but not including the Revolving
Credit Maturity Date, PROVIDED that the sum of the outstanding principal amount
of all Revolving Credit Loans (after giving effect to all amounts requested)
shall not exceed the lesser of (a) the Revolving Credit Commitment MINUS the sum
of the Maximum Drawing Amount and all Unpaid Reimbursement Obligations and (b)
the Revolving Credit Borrowing Base. Except as otherwise provided in certain
cash management arrangements between the Borrower and the Bank set forth in
ss.2.2(b), Revolving Credit Loans shall be in the minimum aggregate amount of
$100,000 or an integral multiple thereof.

     2.2. REQUESTS REVOLVING CREDIT LOANS.

          (a) Except as otherwise provided in certain cash management
     arrangements between the Borrower and the Bank set forth in ss.2.2(b), the
     Borrower shall give to the Bank written notice in form and substance
     satisfactory to the Bank (or telephonic notice confirmed in writing in form
     and substance satisfactory to the Bank) of each Revolving Credit Loan
     requested hereunder (a "Revolving Loan Request") no later than 10:00 a.m.,
     Boston time, on the proposed Drawdown Date of any Revolving Credit Loan.
     Each such notice shall specify (i) the principal amount of the Revolving
     Credit Loan requested and (ii) the proposed Drawdown Date of such

<PAGE>   12

                                      -10-

     Revolving Credit Loan. Each such notice shall be irrevocable and binding on
     the Borrower and shall obligate the Borrower to accept the Revolving Credit
     Loan requested from the Bank on the proposed Drawdown Date. Each Revolving
     Loan Request shall be in a minimum aggregate amount of $100,000.00 or an
     integral multiple thereof.

          (b) Notwithstanding the notice requirement set forth in ss.2.2(a),
     Revolving Credit Loans may be made from time to time in the following
     manner: the Bank may make Revolving Credit Loans to the Borrower by entry
     of credits to the Borrower's controlled disbursement account (the
     "Disbursement Account") with the Bank to cover checks or other charges
     which the Borrower has drawn or made against such Disbursement Account. The
     Borrower hereby requests and authorizes the Bank to make from time to time
     such Revolving Credit Loans by means of appropriate entries of such credits
     sufficient to cover checks and other charges then presented. The Borrower
     and the Bank may also agree to effect such other controlled disbursement
     arrangements as may be mutually satisfactory. The Borrower acknowledges and
     agrees that the making of such Revolving Credit Loans in accordance with
     this ss.2.2(b) shall, in each case, be subject in all respects to
     provisions of this Agreement as if they were Revolving Credit Loans covered
     by a Revolving Loan Request including, without limitation, the limitations
     set forth in ss.2.1 and the requirement that the applicable provisions of
     ss.9 be satisfied. All actions taken by the Bank pursuant to the provisions
     of this ss.2.2(b) shall be conclusive and binding on the Borrower.

          (c) Notwithstanding the notice requirement set forth above in
     ss.2.2(a) and subject to the other terms and conditions of this Agreement,
     the Bank agrees to make Revolving Credit Loans to the Borrower sufficient
     to pay to the Bank any Unpaid Reimbursement Obligations on the date on
     which such Reimbursement Obligations become Unpaid Reimbursement
     Obligations. The Borrower hereby requests and authorizes the Bank to make
     from time to time such Revolving Credit Loans by means of paying Unpaid
     Reimbursement Obligations. The Borrower acknowledges and agrees that the
     making of such Revolving Credit Loans shall, in each case, be subject in
     all respects to the provisions of this Agreement, including, without
     limitation, the limitations set forth in ss.2.1 and the requirements of the
     applicable conditions in ss.9. All actions taken by the Bank pursuant to
     the provisions of this ss.2.2(c) shall be conclusive and binding on the
     Borrower.

<PAGE>   13

                                      -11-

          (d) The obligation of the Borrower to repay to the Bank the principal
     of the Revolving Credit Loans and interest accrued thereon shall be
     evidenced by a revolving credit promissory note (the "Revolving Credit
     Note") in the maximum aggregate principal amount of $5,000,000 executed and
     delivered by the Borrower and payable to the order of the Bank, in form and
     substance satisfactory to the Bank.

     2.3. REPAYMENTS AND PREPAYMENTS. The Borrower hereby agrees to pay the Bank
on the Revolving Credit Maturity Date the entire unpaid principal of and
interest on all Revolving Credit Loans. The Borrower may elect to prepay the
outstanding principal of all or any part of any Revolving Credit Loan, without
premium or penalty. Except as otherwise provided in certain cash management
arrangements between the Borrower and the Bank, the Borrower shall give the Bank
no later than 10:00 a.m. Boston time, on the date of such prepayment pursuant to
this ss.2.3 of any Revolving Credit Loan, specifying the amount to be prepaid.
The Borrower shall be entitled to reborrow before the Revolving Credit Maturity
Date such amounts repaid or prepaid, upon the terms and subject to the
conditions of this Agreement. Each repayment or prepayment of principal of any
Revolving Credit Loan shall be accompanied by payment of the unpaid interest
accrued to such date on the principal being repaid or prepaid. If at any time
the sum of the outstanding principal amount of the Revolving Credit Loans, the
Maximum Drawing Amount and all Unpaid Reimbursement Obligations exceeds the
lesser of (a) the Revolving Credit Commitment and (b) the Revolving Credit
Borrowing Base, the Borrower shall immediately pay the amount of such excess to
the Bank for application to the Revolving Credit Loans or, if no Revolving
Credit Loans are outstanding, to be held by the Bank as cash collateral to
secure the payment of all Reimbursement Obligations up to the Maximum Drawing
Amount. The Borrower may elect to reduce or terminate the Commitment by a
minimum principal amount of $25,000 or an integral multiple thereof, upon
written notice to the Bank given by 10:00 a.m. Boston time at least one (1)
Business Day prior to the date of such reduction or termination. The Borrower
shall not be entitled to reinstate the Revolving Credit Commitment following
such reduction or termination.

                      3. TRANCHE A EQUIPMENT LOAN FACILITY.
                         ----------------------------------

     3.1. MAKING OF TRANCHE A EQUIPMENT LOANS. Upon the terms and subject to the
conditions of this Agreement, the Bank agrees to lend to the Borrower such sums
that the Borrower may request, from the date hereof until but not including the
Equipment Loan Conversion Date;

<PAGE>   14

                                      -12-

provided that the sum of the outstanding principal amount of all Tranche A
Equipment Loans (after giving effect to all amounts requested) shall not exceed
the lesser of (a) Tranche A Equipment Loan Commitment and (b) the Equipment Loan
Borrowing Base. In addition, in no event shall the Bank be obligated to make any
Tranche A Equipment Loan in excess of one hundred percent (100%) of the purchase
price (including taxes, freight, set-up and installation costs) of the piece or
pieces of new or used equipment to be purchased or financed on the Closing Date
by the Borrower with the proceeds of such Tranche A Equipment Loan. Tranche A
Equipment Loans shall be in the minimum aggregate amount of $25,000 or an
integral multiple thereof. The Borrower shall notify the Bank in writing or
telephonically, not later than 2:00 p.m. Boston, Massachusetts time at least one
Business Day prior to the date of the Tranche A Equipment Loan being requested,
of the Drawdown Date (which must be a Business Day), the principal amount of
such Tranche A Equipment Loan and the type and description of equipment being
purchased (including, without limitation, serial or vehicle identification
numbers) and the purchase price thereof. In the case of any telephonic
notification, the Borrower shall provide to the Bank written confirmation of all
of such information within three Business Days after such telephonic
notification. Subject to the foregoing, so long as the Tranche A Equipment Loan
Commitment is then in effect and the conditions set forth in Section 9 hereof
have been met, the Bank shall advance the amount requested to the Borrower's
bank account at the Bank in immediately available funds not later than the close
of business on such Drawdown Date. The obligation of the Borrower to repay to
the Bank the principal of the Tranche A Equipment Loans and interest accrued
thereon shall be evidenced by a promissory note in the aggregate principal
amount of $2,000,000 executed and delivered by the Borrower and payable to the
order of the Bank, in form and substance satisfactory to the Bank (the "TRANCHE
A EQUIPMENT NOTE").

     3.2. REPAYMENT OF TRANCHE A EQUIPMENT LOANS. (a) The Borrower hereby agrees
to pay the outstanding principal amount of the Tranche A Equipment Loans in
thirty-six (36) consecutive equal installments, with such installments due and
payable on the first day of each calendar month, commencing on February 1, 1999;
provided, that the outstanding principal amount of the Tranche A Equipment
Loans, together with all interest accrued thereon and all fees and expenses
incurred by the Bank in connection therewith, shall be due and payable on the
Equipment Loan Maturity Date.

          (b)  The Borrower shall have the right at any time, subject to the
indemnity provisions of Section 6.1, to prepay voluntarily the

<PAGE>   15

                                      -13-

Tranche A Equipment Loans on or before the Equipment Loan Maturity Date, as a
whole, or in part; provided that each partial prepayment shall be in the
principal amount of $25,000 or an integral multiple thereof, unless paid in
full. The Borrower shall give the Bank, no later than 2:00 p.m. Boston,
Massachusetts time on the date of such prepayment (or if a fixed rate of
interest is selected under Section 6.1(b)(ii) hereof, two Business Days prior to
the date of such prepayment), written notice of any proposed prepayment pursuant
to this Section 3.2(b) and the principal amount to be prepaid. Any partial
prepayment of the Tranche A Equipment Loans shall be applied to the installments
of the Tranche A Equipment Loans due hereunder (including the final installment
due and payable on the Equipment Loan Maturity Date) in inverse order of
maturity. No amount repaid may be reborrowed. Any voluntary prepayment of
principal of the Tranche A Equipment Loans shall also include all interest
accrued to the date of prepayment.

          (c)  If at any time the outstanding principal amount of the Tranche A
Equipment Loans exceeds the lesser of (i) the Tranche A Equipment Loan
Commitment and (ii) the Equipment Loan Borrowing Base, the Borrower hereby
agrees to pay immediately the amount of such excess to the Bank for application
to the Tranche A Equipment Loans. The Borrower may elect to reduce or terminate
the Tranche A Equipment Loan Commitment by a minimum principal amount of $25,000
or an integral multiple thereof, upon one (1) Business Day's prior written
notice to the Bank of the proposed date of such reduction or termination. The
Borrower shall not be entitled to reinstate the Tranche A Equipment Loan
Commitment following such reduction or termination.

                      4. TRANCHE B EQUIPMENT LOAN FACILITY.
                         ----------------------------------

     4.1. MAKING OF TRANCHE B EQUIPMENT LOANS. Upon the terms and subject to the
conditions of this Agreement, the Bank agrees to lend to the Borrower such sums
that the Borrower may request from January 1, 1999 until but not including the
Equipment Loan Conversion Date; PROVIDED that the sum of the outstanding
principal amount of all Tranche B Equipment Loans (after giving effect to all
amounts requested) shall not exceed the lesser of (a) the Tranche B Equipment
Loan Commitment and (b) the Equipment Loan Borrowing Base. In addition, in no
event shall the Bank be obligated to make any Tranche B Equipment Loan in excess
of one hundred percent (100%) of the purchase price (including taxes, freight,
set-up and installation costs) of the piece or pieces of new or used equipment
to be purchased by the Borrower with the proceeds of such Tranche B Equipment
Loan. Tranche B Equipment Loans shall be in the minimum aggregate amount of
$25,000 or an integral multiple thereof.

<PAGE>   16

                                      -14-

The Borrower shall notify the Bank in writing or telephonically, not later than
2:00 p.m. Boston, Massachusetts time at least one Business Day prior to the date
of the Tranche B Equipment Loan being requested, of the Drawdown Date (which
must be a Business Day), the principal amount of such Tranche B Equipment Loan
and the type and description of equipment being purchased (including, without
limitation, serial or vehicle identification numbers) and the purchase price
thereof. In the case of any telephonic notification, the Borrower shall provide
to the Bank written confirmation of all of such information within three
Business Days after such telephonic notification. Subject to the foregoing, so
long as the Tranche B Equipment Loan Commitment is then in effect and the
conditions set forth in Section 9 hereof have been met, the Bank shall advance
the amount requested to the Borrower's bank account at the Bank in immediately
available funds not later than the close of business on such Drawdown Date. The
obligation of the Borrower to repay to the Bank the principal of the Tranche B
Equipment Loans and interest accrued thereon shall be evidenced by a promissory
note in the aggregate principal amount of $2,000,000 executed and delivered by
the Borrower and payable to the order of the Bank, in form and substance
satisfactory to the Bank (the "TRANCHE B EQUIPMENT NOTE").

     4.2. REPAYMENT OF TRANCHE B EQUIPMENT LOANS. (a) The Borrower hereby agrees
to pay the outstanding principal amount of the Tranche B Equipment Loans in
thirty-six (36) consecutive equal installments, with such installments due and
payable on the first day of each calendar month, commencing on August 1, 1999;
PROVIDED, that the outstanding principal amount of the Tranche B Equipment
Loans, together with all interest accrued thereon and all fees and expenses
incurred by the Bank in connection therewith, shall be due and payable on the
Equipment Loan Maturity Date.

          (b)  The Borrower shall have the right at any time, subject to the
indemnity provisions of Section 6.1, to prepay voluntarily the Tranche B
Equipment Loans on or before the Equipment Loan Maturity Date, as a whole, or in
part; provided that each partial prepayment shall be in the principal amount of
$25,000 or an integral multiple thereof, unless paid in full. The Borrower shall
give the Bank, no later than 2:00 p.m. Boston, Massachusetts time on the date of
such prepayment (or if a fixed rate of interest is selected under Section
6.1(b)(ii) hereof, two Business Days prior to the date of such prepayment),
written notice of any proposed prepayment pursuant to this Section 4.2(b) and
the principal amount to be prepaid. Any partial prepayment of the Tranche B
Equipment Loans shall be applied to the installments of the Tranche B Equipment
Loans due hereunder (including the final installment due and

<PAGE>   17

                                      -15-

payable on the Equipment Loan Maturity Date) in inverse order of maturity. No
amount repaid may be reborrowed. Any voluntary prepayment of principal of the
Tranche B Equipment Loans shall also include all interest accrued to the date of
prepayment.

          (c)  If at any time the outstanding principal amount of the Tranche B
Equipment Loans exceeds the lesser of (i) the Tranche B Equipment Loan
Commitment and (ii) the Equipment Loan Borrowing Base, the Borrower hereby
agrees to pay immediately the amount of such excess to the Bank for application
to the Tranche B Equipment Loans. The Borrower may elect to reduce or terminate
the Tranche B Equipment Loan Commitment by a minimum principal amount of $25,000
or an integral multiple thereof, upon one (1) Business Day's prior written
notice to the Bank of the proposed date of such reduction or termination. The
Borrower shall not be entitled to reinstate the Tranche B Equipment Loan
Commitment following such reduction or termination.

                          5. LETTER OF CREDIT FACILITY.
                             --------------------------

     5.1. LETTER OF CREDIT COMMITMENT.

          (a) Subject to the terms and conditions hereof and the execution and
     delivery by the Borrower of a letter of credit application on the Bank's
     customary form (a "Letter of Credit Application"), the Bank, in reliance
     upon the representations and warranties of the Borrower contained herein,
     agrees to issue, extend and renew from time to time from the date hereof
     until but not including the date which is fourteen (14) days prior to the
     then scheduled Revolving Credit Maturity Date, for the account of the
     Borrower, standby and documentary letters of credit (each a "Letter of
     Credit"), in such form as may be requested by the Borrower and agreed to by
     the Bank; PROVIDED, HOWEVER, that, after giving effect to such request, the
     sum of the principal amount of Total Outstandings shall not exceed the
     lesser of (i) the Revolving Credit Commitment and (ii) the Revolving Credit
     Borrowing Base at any time. No Letter of Credit shall be issued, extended
     or renewed with an expiration date occurring after the then scheduled
     Revolving Credit Maturity Date;

          (b) Each Letter of Credit Application shall be completed to the
     satisfaction of the Bank. In the event that any provision of any Letter of
     Credit Application shall be inconsistent with any provision of this
     Agreement, then the provisions of this Agreement shall, to the extent of
     any such inconsistency or conflict, govern;

<PAGE>   18

                                      -16-

          (c) Each Letter of Credit issued, extended or renewed hereunder shall,
     among other things, provide for the payment of sight drafts for honor
     thereunder when presented in accordance with the terms thereof and when
     accompanied by the documents described therein. Each Letter of Credit so
     issued, extended or renewed shall be subject to the Uniform Customs.

     5.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the Bank
to issue, extend and renew each Letter of Credit, the Borrower hereby agrees to
reimburse the Bank for or to pay to the Bank with respect to each Letter of
Credit issued, extended or renewed by the Bank hereunder,

          (a) except as otherwise expressly provided in ss.5.2(b), on each date
     that any draft presented under such Letter of Credit is honored by the
     Bank, or the Bank otherwise makes a payment with respect thereto, (i) the
     amount paid by the Bank under or with respect to such Letter of Credit, and
     (ii) the amount of any taxes (not including the Bank's income taxes), fees,
     charges or other costs and expenses whatsoever incurred by the Bank in
     connection with any payment made by the Bank under, or with respect to,
     such Letter of Credit;

          (b) upon the termination of the Revolving Credit Commitment, or the
     acceleration of the Reimbursement Obligations with respect to all Letters
     of Credit in accordance with ss.11 an amount equal to the Maximum Drawing
     Amount, which amount shall be held by the Bank as cash collateral for all
     Reimbursement Obligations.

     Unless funded by a Revolving Credit Loan pursuant to ss.2.2(c), each such
payment shall be made to the Bank at the Bank's head office at One Federal
Street, Boston, Massachusetts 02110 in immediately available funds. Interest on
any and all amounts remaining unpaid by the Borrower under this ss.5.2 and not
required to be funded by a Revolving Credit Loan pursuant to ss.2.2(c) at any
time from the date such amounts become due and payable (whether as stated in
this ss.5.2, by acceleration or otherwise) until payment in full (whether before
or after judgment) shall be payable to the Bank on demand at the rate specified
in ss.6.2 following an Event of Default.

     5.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Bank shall
notify the Borrower of the date and amount of the draft presented or demand for
payment and of the date and time when it

<PAGE>   19

                                      -17-

expects to pay such draft or honor such demand for payment. The responsibility
of the Bank to the Borrower shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit.

     5.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this ss.5 shall
be absolute and unconditional under any and all circumstances and irrespective
of the occurrence of any Default or Event of Default or any condition precedent
whatsoever or any setoff, counterclaim or defense to payment which the Borrower
may have or have had against the Bank or any beneficiary of a Letter of Credit.
The Borrower further agrees with the Bank that the Bank shall not be responsible
for, and the Reimbursement Obligations shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among the Borrower, the
beneficiary of any Letter of Credit or any financing institution or other party
to which any Letter of Credit may be transferred or any claims or defenses
whatsoever of the Borrower against the beneficiary of any Letter of Credit or
any such transferee. The Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, except when caused by its own gross negligence or
willful misconduct, in connection with any Letter of Credit. The Borrower agrees
that any action taken or omitted by the Bank under or in connection with each
letter of Credit and the related drafts and documents, if done in good faith and
in the absence of gross negligence and willful misconduct, shall be binding upon
the Borrower and shall not result in any liability on the part of the Bank to
the Borrower.

     5.5. RELIANCE BY ISSUER. To the extent not inconsistent with ss.5.4, the
Bank shall be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the proper person or entity and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Bank.

     5.6. LETTER OF CREDIT FEES. The Borrower shall, on the date of issuance or
of any extension or renewal of any Letter of Credit and at such other time or
times as such charges are customarily made by the Bank, pay a fee (in each case
a "Letter of Credit Fee") to the Bank (a) in respect

<PAGE>   20

                                      -18-

of each Standby Letter of Credit an amount equal to one and one-half of one
percent (1.5%) per annum of the face amount of such Letter of Credit, plus the
Bank's customary issuance, amendment and other administrative processing fees
and (b) in respect of each documentary Letter of Credit an amount equal to one
and one-half of one percent (1.5%) per annum of the face amount of such
documentary Letter of Credit, plus the Bank's customary issuance, amendment,
time negotiation fee and other administrative processing fees.

                         6. INTEREST, OVERDUE PAYMENTS.
                            ---------------------------

     6.1. INTEREST ON LOANS. Except as otherwise provided in ss.6.2, the Loans
shall bear interest as follows:

          (a) Each Revolving Credit Loan or portion thereof shall bear interest
     at a rate per annum equal to the Base Rate in effect from time to time,
     such interest to be payable in arrears on the first day of each calendar
     month for the immediately preceding calendar month, commencing the first
     such day following the date hereof.

          (b) In the case of Equipment Loans:

               (i)  Except as set forth in ss.6.1(b)(ii) hereof, the Borrower
agrees to pay interest on the Equipment Loans at a rate per annum which is equal
to the Base Rate in effect from time to time, PLUS one-half of one percent
(0.5%), such interest to be payable in arrears on the first day of each calendar
month for the immediately preceding calendar month, commencing the first such
day following the date hereof.

               (ii) To the extent that the Borrower has requested, by written
notice provided to the Bank not more than sixty (60) days but not less than
seven (7) days after either Equipment Loan Conversion Date, a fixed rate option
as quoted by the Bank, such Equipment Loan shall bear interest at a fixed rate
per annum equal to the Bank's cost of funds rate plus three percent (3.0%)
applicable for such period on and after such Equipment Loan Conversion Date for
such Equipment Loan. Such fixed rate of interest shall be determined and quoted
by the Bank, in its discretion. The Borrower may elect, by written notice
provided to the Bank, that interest applicable to such Equipment Loan accrue on
and after such Equipment Loan Conversion Date at such fixed rate of interest;
provided, that the Borrower shall be entitled to request only one (1) fixed rate
option for each Equipment Loan. Interest on the Equipment Loans at such fixed
rate shall be payable in arrears on the first day of each calendar month for the
immediately preceding calendar month, commencing with the first such day
following the date hereof. If the

<PAGE>   21

                                      -19-

Borrower elects the fixed rate of interest under this Section 6.1, the Borrower
agrees to indemnify the Bank and hold the Bank harmless from and against any
loss, cost or expense (including loss of anticipated profits) that the Bank may
sustain or incur as a consequence of any prepayment, in full or in part, of the
Equipment Loans prior to the applicable Equipment Loan Maturity Date.

     6.2. INTEREST AFTER DEFAULT. While an Event of Default is continuing,
amounts payable under any of the Loan Documents shall bear interest (compounded
monthly and payable on demand in respect of overdue amounts) at a rate per annum
which is equal to the rate of interest in effect on such amounts immediately
preceding such Event of Default (or if not rate of interest in payable thereon,
the Base Rate) plus four percent (4.0%) until such amount is paid in full or (as
the case may be) such Event of Default has been cured or waived in writing by
the Bank (after as well as before judgment). In addition to the imposition of
the default rate, the Bank may charge the Borrower a late charge equal to five
percent (5.0%) of the amount of any payment due to the Bank hereunder or under
any of the other Loan Documents and not received by the Bank within ten (10)
days after the due date thereof.

     6.3. OVERDUE PAYMENTS. If a payment of principal and/or interest due
hereunder or under the Notes is not made within ten (10) days of when due, the
Borrower shall pay a late payment charge to the Bank equal to five percent
(5.0%) of the amount then due and owing. Nothing contained herein shall affect
Bank's right to demand the Obligations upon the occurrence of an Event of
Default.

                              7. FEES AND PAYMENTS.
                                 ------------------

     The Borrower shall pay to the Bank, on the first day of each calendar
quarter hereafter, and upon the Revolving Credit Maturity Date or the date upon
which the Revolving Credit Commitment is no longer in effect, a commitment fee
calculated at a rate per annum which is equal to three-tenths of one percent
(0.30%) of the average daily difference by which the Revolving Credit Commitment
amount exceeds the aggregate sum of the outstanding Revolving Credit Loans, the
Maximum Drawing Amount and all Unpaid Reimbursement Obligations during the
preceding calendar quarter or portion thereof. All payments to be made by the
Borrower hereunder or under any of the other Loan Documents shall be made in
U.S. dollars in immediately available funds at the Bank's head office at One
Federal Street, Boston, Massachusetts 02110, without set-off or counterclaim and
without any withholding or deduction whatsoever. The Bank shall be entitled to
charge any account of the Borrower with the

<PAGE>   22

                                      -20-

Bank for any sum due and payable by the Borrower to the Bank hereunder or under
any of the other Loan Documents. If any payment hereunder is required to be made
on a day which is not a Business Day, it shall be paid on the immediately
succeeding Business Day, with interest and any applicable fees adjusted
accordingly. All computations of interest or of the commitment fee or any Letter
of Credit Fees payable hereunder shall be made by the Bank on the basis of
actual days elapsed and on a 360-day year.

                       8. REPRESENTATIONS AND WARRANTIES.
                          -------------------------------

     The Borrower represents and warrants to the Bank on the date hereof, on the
date of any request for any Loan, on the date of each request for a Letter of
Credit, on each Drawdown Date and on the date on which each Letter of Credit is
issued, extended or renewed that subject to changes permitted hereunder:

          (a) the Borrower is duly organized, validly existing, and in good
     standing under the laws of its jurisdiction of incorporation and is duly
     qualified and in good standing in every other jurisdiction where the
     failure to so qualify would have a Materially Adverse Effect, and the
     execution, delivery and performance by the Borrower of the Loan Documents
     (i) are within its corporate authority, (ii) have been duly authorized,
     (iii) do not conflict with or contravene its Charter Documents;

          (b) upon execution and delivery thereof, each Loan Document shall
     constitute the legal, valid and binding obligation of the Borrower,
     enforceable in accordance with its terms, except as subject to or affected
     by applicable usury, bankruptcy, insolvency, reorganization, moratorium,
     fraudulent conveyance laws or similar laws affecting the rights of
     creditors generally;

          (c) the Borrower has good and marketable title to all its material
     properties, subject only to Liens permitted hereunder, and possesses all
     assets, including intellectual properties, franchises and Consents,
     adequate for the conduct of its business as now conducted. The Borrower
     does not have or require any FCC Licenses to own or operate its business.
     The Borrower maintains insurance with financially responsible insurers,
     copies of the policies for which have been previously delivered to the
     Bank, covering such risks and in such amounts and with such deductibles as
     are customary in the Borrower's business and are adequate;

<PAGE>   23

                                      -21-

          (d) the Borrower has provided to the Bank its audited Financials as at
     December 31, 1997 and for the fiscal period then ended, and such Financials
     are complete and correct and fairly present the position of the Borrower as
     at such date and for such period in accordance with GAAP consistently
     applied;

          (e) since March 31, 1998, there has been no materially adverse change
     of any kind in the Borrower which would have a Materially Adverse Effect;

          (f) other than disclosed in SCHEDULE 8(f) attached hereto, there are
     no legal or other proceedings or investigations pending or threatened
     against the Borrower before any court, tribunal or regulatory authority,
     which would, if adversely determined, alone or together, have a Materially
     Adverse Effect;

          (g) the execution, delivery, performance of its obligations, and
     exercise of its rights under the Loan Documents by the Borrower, including
     borrowing under this Agreement and the obtaining of Letters of Credit (i)
     do not require any Consents; and (ii) are not and will not be in conflict
     with or prohibited or prevented by (A) any Requirement of Law, or (B) any
     Charter Document, corporate minute or resolution, material instrument,
     agreement or provision thereof, in each case binding on it or affecting its
     property;

          (h) the Borrower is not in violation of (i) any Charter Document,
     corporate minute or resolution, (ii) any material instrument or agreement,
     in each case binding on it or affecting its property, or (iii) any
     Requirement of Law, in a manner which could have a Materially Adverse
     Effect, including, without limitation, all applicable federal and state tax
     laws, ERISA and Environmental Laws;

          (i) upon execution and delivery of the Security Documents and the
     filing of documents thereby required, the Bank shall have first-priority
     perfected Liens on the Collateral, subject only to Liens permitted
     hereunder and entitled to priority under applicable law, with no financing
     statements, chattel mortgages, real estate mortgages or similar filings on
     record anywhere which conflict with such first-priority Liens of the Bank;
     and

          (j) the Borrower is not a party to any partnership or joint venture.

<PAGE>   24

                                      -22-

                            9. CONDITIONS PRECEDENT.
                               ---------------------

     In addition to the making of the foregoing representations and warranties
and the delivery of the Loan Documents and such other documents and the taking
of such actions as the Bank may reasonably require at or prior to the time of
executing this Agreement, the obligation of the Bank to make any Loan or to
issue, renew or extend any Letter of Credit to the Borrower hereunder is subject
to the satisfaction of the following further conditions precedent:

          (a) each of the representations and warranties of the Borrower to the
     Bank herein, in any of the other Loan Documents or any documents,
     certificate or other paper or notice in connection herewith shall be true
     and correct in all material respects as of the time made or claimed to have
     been made, subject to changes permitted hereunder;

          (b) no Default or Event of Default shall be continuing;

          (c) all proceedings in connection with the transactions contemplated
     hereby shall be in form and substance satisfactory to the Bank, and the
     Bank shall have received all information and documents as it may have
     reasonably requested; and

          (d) no change shall have occurred in any law or regulation or in the
     interpretation thereof that in the reasonable opinion of the Bank would
     make it unlawful for the Bank to make such Loan.

                                 10. COVENANTS.
                                     ----------

     10.1. AFFIRMATIVE COVENANTS. The Borrower agrees that so long as there are
any Loans or Letters of Credit outstanding and until the termination of the
Commitments and the payment and satisfaction in full of all the Obligations, the
Borrower will comply with its obligations as set forth throughout this Agreement
and to:

          (a) furnish the Bank: (i) as soon as available but in any event within
     one hundred twenty (120) days after the close of each fiscal year, its
     audited Financials for such fiscal year, certified by the Borrower's
     accountants; (ii) as soon as available but in any event within thirty (30)
     days after the end of each calendar month its unaudited Financials for such
     month, certified by its chief financial officer; (iii) together with the
     monthly and annual audited Financials, a certificate of the Borrower
     setting forth computations demonstrating compliance with the Borrower's
     financial covenants

<PAGE>   25

                                      -23-

     set forth herein, and certifying that no Default or Event of Default has
     occurred, or if it has, the actions taken by the Borrower with respect
     thereto; (iv) within thirty (30) days after the end of each calendar month,
     or at such other time or times as the Bank may reasonably request, an
     Equipment Loan Borrowing Base report, in form and detail satisfactory to
     the Bank, demonstrating the Equipment Loan Borrowing Base as at the end of
     such month or other applicable date requested; and (v) within thirty (30)
     days after the end of each calendar month, or at such other time or times
     as the Bank may reasonably request, (1) a Revolving Credit Borrowing Base
     report, in form and detail satisfactory to the Bank, demonstrating the
     Revolving Credit Borrowing Base as at the end of such month or other
     applicable date requested and (2) a report detailing the aging of all
     Accounts of the Borrower, in form and detail satisfactory to the Bank;

          (b) keep true and accurate books of account in accordance with GAAP,
     maintain its current fiscal year and permit the Bank or its designated
     representatives to inspect the Borrower's premises during normal business
     hours and upon not less than two days prior written notice, to examine and
     be advised as to such or other business records upon the request of the
     Bank, and to permit the Bank's commercial finance examiners to conduct
     periodic commercial finance examinations no more than once per fiscal year;

          (c) (i) maintain its corporate existence and business and keep its
     assets in good repair, (ii) keep its business and assets adequately
     insured, (iii) maintain its chief executive office in the United States,
     (iv) continue to engage in the same or related lines of business, (v)
     continue to hold and comply with all permits and licenses required for the
     operation of its business, and (vi) comply with all Requirements of Law,
     including ERISA and Environmental Laws which could have a Material Adverse
     Effect;

          (d) notify the Bank promptly in writing of (i) the occurrence of any
     Default or Event of Default, (ii) any noncompliance with ERISA or any
     Environmental Law or proceeding in respect thereof which could have a
     Materially Adverse Effect, (iii) any change of address, (iv) any threatened
     or pending litigation or similar proceeding affecting the Borrower or any
     material change in any such litigation or proceeding previously reported,
     (v) claims against any assets or properties of the Borrower encumbered in
     favor of the Bank, excluding existing or permitted Liens, and (vi) any
     proceedings instituted by or against the Borrower in any Federal or

<PAGE>   26

                                      -24-

     state court or any other commission or other regulatory body, whether
     Federal, state or local, which, if adversely determined, would have a
     Materially Adverse Effect upon the business, operations, properties,
     assets, or condition, financial or otherwise, of the Borrower;

          (e) use the proceeds of the Loans solely to refinance all of the
     indebtedness of the Borrower to Silicon Valley Bank, to acquire equipment
     to be used now or in the future in the ordinary course of the Borrower's
     business and for working capital purposes, and use Letters of Credit solely
     for other working capital purposes, and not for the carrying of "margin
     security" or "margin stock" within the meaning of Regulations U and X of
     the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221
     and 224; and

          (f) cooperate with the Bank, take such action, execute such documents,
     and provide such information as the Bank may from time to time reasonably
     request in order further to effect the transactions contemplated by and the
     purposes of the Loan Documents.

     10.2. NEGATIVE COVENANTS. The Borrower agrees that so long as there are any
Loans or Letters of Credit outstanding and until the termination of the
Commitments and the payment and satisfaction in full of all the Obligations, the
Borrower will not:

          (a) create, incur or assume any Indebtedness other than (i)
     Indebtedness to the Bank, (ii) Indebtedness in respect of the acquisition
     of property which does not exceed $500,000 in the aggregate outstanding at
     any time, (iii) current liabilities of the Borrower not incurred through
     the borrowing of money or the obtaining of credit except credit on an open
     account customarily extended, (iv) Indebtedness in respect of taxes or
     other governmental charges contested in good faith and by appropriate
     proceedings and for which adequate reserves have been taken; and (v)
     Indebtedness not included above and listed on SCHEDULE 10.2(a) hereto;

          (b) create or incur any Liens on any of the property or assets of the
     Borrower or enter into or permit to exist any arrangement or agreement
     which directly or indirectly prohibits Borrower from creating or incurring
     any lien, encumbrance, mortgage, pledge, charge, restriction or other
     security interest of any kind other than pursuant to the Security Agreement
     except (i) Liens securing the Obligations; (ii) Liens securing taxes or
     other governmental charges

<PAGE>   27

                                      -25-

     not yet due; (iii) deposits or pledges made in connection with social
     security obligations; (iv) Liens of carriers, warehousemen, mechanics and
     materialmen, less than 120 days old as to obligations not yet due; (v)
     easements, rights-of-way, zoning restrictions and similar minor Liens which
     individually and in the aggregate do not have a Materially Adverse Effect;
     (vi) purchase money security interests in or purchase money mortgages on
     real or personal property securing purchase money Indebtedness permitted by
     ss.10.2(a)(ii), covering only the property so acquired; and (vii) other
     Liens existing on the date hereof and listed on SCHEDULE 10.2(b) hereto;

          (c) make any Investments other than Investments in (i) marketable
     obligations of the United States maturing within one (1) year, (ii)
     certificates of deposit, bankers' acceptances and time and demand deposits
     of United States banks having total assets in excess of $1,000,000,000,
     (iii) securities commonly known as "commercial paper" issued by a
     corporation organized and existing under the laws of the United States of
     America or any state thereof that at the time of purchase have been rated
     and the ratings for which are not less than "P 1" if rated by Moody's
     Investors Service, Inc., and not less than "A 1" if rated by Standard and
     Poor's Rating Group, (iv) Investments not included above and listed on
     Schedule 10.2(c) hereto, or (v) such other Investments as the Bank may from
     time to time approve in writing; provided, however, that in each such case
     referred to in this ss.10.2(c), arrangements have been made to the
     satisfaction of the Bank for the perfection and protection and the
     preservation of the Bank's Lien therein;

          (d) make any distributions on or in respect of its capital of any
     nature whatsoever, other than (i) dividends payable solely in shares of
     common stock and (ii) payments in connection with repurchase of stock under
     existing repurchase agreements not to exceed in the aggregate $300,000; or

          (e) become party to a merger or sale-leaseback transaction, or to
     effect any disposition of assets other than in the ordinary course, or to
     purchase, lease or otherwise acquire assets other than in the ordinary
     course.

     10.3. FINANCIAL COVENANTS. The Borrower agrees that so long as there are
any Loans or Letters of Credit outstanding and until the termination of the
Commitments and the payment and satisfaction in full of all the Obligations, the
Borrower will not:

<PAGE>   28

                                      -26-

          (a) permit the ratio of Current Assets to Current Liabilities to be
     less than 1.0 to 1 for any fiscal quarter of the Borrower ending on or
     after March 31, 1999;

          (b) permit the ratio of Total Funded Debt to Tangible Net Worth to be
     less than 1.0 to 1 at any time; or

          (c) permit Net Income to be less than $500,000 for any fiscal quarter
     of the Borrower ending on or after December 31, 1999.

                      11. EVENTS OF DEFAULT; ACCELERATION.
                          --------------------------------

     If any of the following events ("Events of Default") shall occur:

          (a)  the Borrower shall fail to pay when due and payable any principal
     of the Loans when the same becomes due;

          (b)  the Borrower shall fail to pay interest on the Loans, any
     Reimbursement Obligations not funded by a Revolving Credit Loan pursuant to
     ss.2.2(c), or any other sum due under any of the Loan Documents on the date
     which the same shall have first become due and payable;

          (c)  the Borrower shall fail to perform any term, covenant or
     agreement contained in ss.ss.10.1(a), 10.1(d) and 10.1(e), 10.2 and 10.3;

          (d)  the Borrower shall fail to perform any other term, covenant or
     agreement contained in the Loan Documents within fifteen (15) days after
     the Bank has given written notice of such failure to the Borrower;

          (e)  any representation or warranty of the Borrower in the Loan
     Documents or in any certificate or notice given in connection therewith
     shall have been false or misleading in any material respect at the time
     made or deemed to have been made;

          (f)  the Borrower shall be in default (after any applicable period of
     grace or cure period) under any agreement or agreements evidencing
     Indebtedness owing to the Bank or any affiliates of the Bank or in excess
     of $100,000 in aggregate principal amount, or shall fail to pay such
     Indebtedness when due, or within any applicable period of grace;

          (g)  any of the Loan Documents shall cease to be in full force and
     effect,

<PAGE>   29

                                      -27-

          (h)  the Borrower (i) shall make an assignment for the benefit of
     creditors, (ii) shall be adjudicated bankrupt or insolvent, (iii) shall
     seek the appointment of, or be the subject of an order appointing, a
     trustee, liquidator or receiver as to all or part of its assets, (iv) shall
     commence, approve or consent to, any case or proceeding under any
     bankruptcy, reorganization or similar law and, in the case of an
     involuntary case or proceeding, such case or proceeding is not dismissed
     within forty-five (45) days following the commencement thereof, or (v)
     shall be the subject of an order for relief in an involuntary case under
     federal bankruptcy law;

          (i)  the Borrower shall be generally unable to pay its debts as they
     mature; or

          (j)  there shall remain undischarged for more than thirty (30) days
     any final judgment or execution action against the Borrower that, together
     with other outstanding claims and execution actions against the Borrower
     exceeds insurance coverage by $25,000 in the aggregate;

     THEN, or at any time thereafter:

          (1) In the case of any Event of Default under clause (h) or (i), the
     Commitments shall automatically terminate and the Bank shall be relieved of
     all further obligations to make Loans or to issue, renew or extend any
     Letters of Credit, and the entire unpaid principal amount of the Loans, all
     interest accrued and unpaid thereon, all Unpaid Reimbursement Obligations,
     and all other amounts payable thereunder and under the other Loan Documents
     shall automatically become forthwith due and payable, without presentment,
     demand, protest or notice of any kind, all of which are hereby expressly
     waived by the Borrower, and the Bank may require that cash be delivered to
     the Bank in the amount of the Maximum Drawing Amount to be held by the Bank
     as cash collateral for all Reimbursement Obligations; and

          (2) In the case of any Event of Default other than (h) and (i), the
     Bank may, by written notice to the Borrower, terminate the Commitments
     and/or declare the unpaid principal amount of the Loans, all interest
     accrued and unpaid thereon, all Unpaid Reimbursement Obligations, and all
     other amounts payable hereunder and under the other Loan Documents to be
     forthwith due and payable, without presentment, demand, protest or further
     notice of any kind, all of which are hereby expressly waived by the
     Borrower, and the Bank may require that cash be delivered to the

<PAGE>   30

                                      -28-

     Bank in the amount of the Maximum Drawing Amount to be held by the Bank as
     cash collateral for all Reimbursement Obligations.

     No remedy herein conferred upon the Bank is intended to be exclusive of any
other remedy and each and every remedy shall be cumulative and in addition to
every other remedy hereunder, now or hereafter existing at law or in equity or
otherwise.

                                   12. SETOFF.
                                       -------

     Regardless of the adequacy of any collateral for the Obligations, any
deposits or other sums credited by or due from the Bank to the Borrower may
,after an Event of Default, be applied to or set off against any principal,
interest and any other amounts due from the Borrower to the Bank at any time
without notice to the Borrower, or compliance with any other procedure imposed
by statute or otherwise, all of which are hereby expressly waived by the
Borrower.

                               13. MISCELLANEOUS.
                               ------------------

     The Borrower agrees to indemnify and hold harmless the Bank and its
officers, employees, affiliates, agents, and controlling persons from and
against all claims, damages, liabilities and losses of every kind arising out of
the Loan Documents, including without limitation, against those in respect of
the application of Environmental Laws to the Borrower absent the gross
negligence or willful misconduct of the Bank. The Borrower shall pay to the Bank
promptly on demand all costs and expenses (including reasonable legal and other
professional fees) incurred by the Bank in connection with the preparation,
negotiation, execution, amendment, administration or enforcement of any of the
Loan Documents. Any communication to be made hereunder shall (i) be made in
writing, but unless otherwise stated, may be made by telex, facsimile
transmission or letter, and (ii) be made or delivered to the address of the
party receiving notice which is identified with its signature below (unless such
party has by five (5) days written notice specified another address), and shall
be deemed made or delivered, when dispatched, left at that address, or five (5)
days after being mailed, postage prepaid, to such address. This Agreement shall
be binding upon and inure to the benefit of each party hereto and its successors
and assigns, but the Borrower may not assign its rights or obligations
hereunder. This Agreement may not be amended or waived except by a written
instrument signed by the Borrower and the Bank, and any such amendment or waiver
shall be effective only for the specific purpose given. No failure or delay by
the Bank to exercise any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege preclude
any other right,

<PAGE>   31

                                      -29-

power or privilege. The provisions of this Agreement are severable and if any
one provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, such invalidity or unenforceability shall affect only such
provision in such jurisdiction. This Agreement, together with all Schedules
hereto, expresses the entire understanding of the parties with respect to the
transactions contemplated hereby. This Agreement and any amendment hereby may be
executed in several counterparts, each of which shall be an original, and all of
which shall constitute one agreement. In proving this Agreement, it shall not be
necessary to produce more than one such counterpart executed by the party to be
charged. THIS AGREEMENT AND THE NOTES ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL BE CONSTRUED IN ACCORDANCE THEREWITH AND
GOVERNED THEREBY. THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF ANY
OF THE LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN. The Borrower, as an
inducement to the Bank to enter into this Agreement, hereby waives its right to
a jury trial with respect to any action arising in connection with any Loan
Document.

<PAGE>   32

                                      -30-

     IN WITNESS WHEREOF, the undersigned have duly executed this Revolving
Credit Agreement as a sealed instrument as of the date first above written.

                                              ARROWPOINT
                                              COMMUNICATIONS, INC.

                                              By: /s/ Cynthia Deysher
                                                  ------------------------------
                                                  Name:  Cynthia Deysher
                                                  Title: Chief Financial Officer

                                              Address:

                                                  235 Littleton Road
                                                  Westford, MA  01886

                                                Tel:  (978) 692-5875
                                                Fax:  (978) 692-5873

                                              FLEET NATIONAL BANK

                                              By: /s/ Olaperi Onipede
                                                  ------------------------------
                                                  Name:  Olaperi Onipede
                                                  Title: Vice President

                                              Address:

                                                  Mail-stop: MA of DO7A
                                                  One Federal Street
                                                  Boston, MA  02110

                                                Tel:  (617) 346-0052
                                                Fax:  (617) 346-0151

<PAGE>   33

                                  SCHEDULE 8(f)
                                  -------------

                               LEGAL PROCEEDINGS

HISTORY:

     ArrowPoint received a letter from Arrow Electronics, Inc. ("Arrow
Electronics") on 1/7/98 alleging trademark infringement. Arrow Electronics
requested voluntary withdrawal of ArrowPoint trademark and cessation of use of
name and mark. On February 13, 1998, ArrowPoint responded that it was not
willing to cease use of the name and mark.

CURRENT STATUS:

     ArrowPoint has received no further direct correspondence from Arrow
Electronics. Arrow Electronics has filed a Request for Extension of Time to file
an opposition against ArrowPoint's trademark "ArrowPoint." This was extended to
July 27, 1998 by the Trademark Trial and Appeal Board.

<PAGE>   34

                                SCHEDULE 10.2(a)
                                ----------------

                             PERMITTED INDEBTEDNESS

1.   Capital Leases

     3 Logic analyzers with data acquisition cards
     2 oscilloscopes
     1 Fireberd communication analyzer with interface cards
     1 Programmer and PinSite

     The foregoing are the subject of a capital lease with Continental
     Resources, Inc. with a term of 12 months, starting November, 1997, for
     total principal amount of $136,696 with interest charged at 9%, both
     payable monthly. Principal Balance at July 31, 1998 was $35,331. Upon
     completion of Lease, ArrowPoint has option to purchase the equipment for
     $1.00 asset.

<PAGE>   35

                                SCHEDULE 10.2(b)
                                ----------------

                                PERMITTED LIENS

1.   SECURED PARTY                                SECURED PROPERTY

     Continental Resources, Inc.                  See attached UCC-1,
     175 Middlesex Turnpike                       reference number 501620
     Bedford, MA  01730                           dated October 6, 1997

<PAGE>   36

                                SCHEDULE 10.2(c)
                                ----------------

                                  INVESTMENTS

     Repurchase Agreements and Eurodollar time deposits in connection with the
Borrower's checking account maintained with Lender.
<PAGE>   37

                               AMENDMENT AGREEMENT
                               -------------------

     AMENDMENT AGREEMENT (this "AMENDMENT AGREEMENT") dated as of October 20,
1999 by and between ArrowPoint Communications, Inc. (the "BORROWER") and Fleet
National Bank (the "BANK"), amending a certain Credit Agreement dated as of
August 5, 1998 between the Borrower and the Bank (as amended from time to time,
the "CREDIT AGREEMENT").

                                   WITNESSETH

     WHEREAS, pursuant to the terms of the Credit Agreement, the Bank has made
loans to the Borrower; and

     WHEREAS, the Borrower has requested, among other things, that the Bank
amend certain terms and conditions of the Credit Agreement; and

     WHEREAS, the Borrower has also requested that the Bank make a new Tranche C
Equipment Loan; and

     WHEREAS, the Bank is willing to amend certain terms and conditions of the
Credit Agreement and to make the Tranche C Equipment Loan on the terms and
conditions set forth herein.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     SS.1. DEFINITIONS. Capitalized terms used herein without definition that
are defined in the Credit Agreement shall have the same meanings herein as
therein.

     SS.2. RATIFICATION OF EXISTING AGREEMENTS. All of the Borrower's
obligations and liabilities to the Bank as evidenced by or otherwise arising
under the Credit Agreement, the Notes (as defined herein) and the other Loan
Documents, except as otherwise expressly modified in this Amendment Agreement
upon the terms set forth herein, are, by the Borrower's execution of this
Amendment Agreement, ratified and confirmed in all respects. In addition, by the
Borrower's execution of this Amendment Agreement, the Borrower represents and
warrants that no counterclaim, right of set-off or defense of any kind exists or
is outstanding with respect to such obligations and liabilities.

     SS.3. REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties made by the Borrower in the Credit Agreement, the Notes and the other
Loan Documents are true and correct on the date hereof as if made on and as of
the date hereof, except to the extent that any of such representations and
warranties relate by their terms to a prior date and for matters previously
disclosed to the Bank in writing.

<PAGE>   38

                                      -2-

     SS.4. CONDITIONS PRECEDENT. The effectiveness of the amendments
contemplated hereby shall be subject to the satisfaction on or before the date
hereof of each of the following conditions precedent:

          (a)  REPRESENTATIONS AND WARRANTIES. All of the representations and
     warranties made by the Borrower herein, whether directly or incorporated by
     reference, shall be true and correct on the date hereof, except as provided
     in ss.3 hereof.

          (b)  PERFORMANCE; NO EVENT OF DEFAULT. The Borrower shall have
     performed and complied in all material respects with all terms and
     conditions herein required to be performed or complied with by it prior to
     or at the time hereof, and there shall exist no Event of Default or
     condition which, with either or both the giving of notice of the lapse of
     time, would result in an Event of Default upon the execution and delivery
     of this Amendment Agreement.

          (c)  CORPORATE ACTION. All requisite corporate action necessary for
     the valid execution, delivery and performance by the Borrower of this
     Amendment Agreement and all other instruments and documents delivered by
     the Borrower in connection therewith shall have been duly and effectively
     taken.

          (d)  DELIVERY. The parties hereto shall have executed and delivered
     this Amendment Agreement and the Tranche C Equipment Note, each in form and
     substance satisfactory to the Bank.

          (e)  FEES AND EXPENSES. The Borrower shall have paid to the Bank in
     immediately available funds all fees and expenses incurred by the Bank in
     connection with this Amendment Agreement, the Credit Agreement or the other
     Loan Documents on or prior to the date hereof.

     SS.5. AMENDMENTS TO THE CREDIT AGREEMENT.

          5.1. AMENDMENTS TO SS.1.

          (a)  The definition of the term "COMMITMENTS" appearing in Section 1
     of the Credit Agreement is hereby amended in its entirety to read as
     follows:

          "COMMITMENTS: Collectively, the Revolving Credit Commitment, the
          Tranche A Equipment Loan Commitment, the Tranche B Equipment Loan
          Commitment and the Tranche C Equipment Loan Commitment."

          (b)  The definition of the term "CURRENT ASSETS" appearing in Section
     1 of the Credit Agreement is hereby amended in its entirety to read as
     follows:

<PAGE>   39

                                      -3-

          "CURRENT ASSETS: The sum of (i) cash on hand of the Borrower, (ii)
          cash equivalents of the Borrower and (iii) Accounts, that in
          accordance with GAAP are properly classified as current assets."

          (c)  The definition of the term "EQUIPMENT BORROWING BASE" appearing
     in Section 1 of the Credit Agreement is hereby amended in its entirety to
     read as follows:

               "EQUIPMENT BORROWING BASE: An amount determined by the Bank to be
          equal to the lesser of (a) $2,000,000 and (b) the sum of (i) one
          hundred percent (100%) of the cost (excluding freight, taxes, set-up
          and other installation costs) of all Equipment Collateral (excluding
          any and all Equipment Collateral consisting of development software)
          as evidenced by invoices and evidence of payment (dated no more than
          thirty (30) days from the date of purchase) from the sellers thereof,
          PLUS (ii) one hundred percent (100%) of the cost (excluding freight,
          taxes, set-up and other installation costs) of all Equipment
          Collateral consisting of development software as evidenced by invoices
          and evidence of payment (dated no more than thirty (30) days from the
          date of purchase) from the sellers thereof in an aggregate amount not
          to exceed the lesser of (A) $500,000 and (B) thirty-five percent (35%)
          of the aggregate principal amount outstanding of the Tranche A
          Equipment Loans, the Tranche B Equipment Loans and the Tranche C
          Equipment Loans; PROVIDED, however, that the Borrower shall not be
          required to provide Bank with evidence of such invoices and evidence
          of payment within such thirty (30) day period set forth above with
          respect to (x) the Equipment Collateral financed by Silicon Valley
          Bank or such other entity and refinanced with the proceeds of Tranche
          A Equipment Loans on the Closing Date or other equipment financed on
          Closing Date and (y) the Equipment Collateral purchased by the
          Borrower from July 1, 1999 through the Tranche C Equipment Loan
          Closing Date and refinanced with the proceeds of Tranche C Equipment
          Loans on the Tranche C Equipment Loan Closing Date."

          (d)  The definition of the term "EQUIPMENT LOAN CONVERSION DATE"
     appearing in Section 1 of the Credit Agreement is hereby amended in its
     entirety to read as follows:

               "EQUIPMENT LOAN CONVERSION DATE: With respect to Tranche A
          Equipment Loans, January 1, 1999, with respect to Tranche B Equipment
          Loans, July 1, 1999 and with respect to Tranche C Equipment Loans,
          September 30, 2000."

          (e)  The definition of the term "EQUIPMENT LOAN MATURITY DATE"
     appearing in Section 1 of the Credit Agreement is hereby amended in its
     entirety to read as follows:

<PAGE>   40

                                      -4-

               "EQUIPMENT LOAN MATURITY DATE: With respect to Tranche A
          Equipment Loans, December 1, 2002, with respect to Tranche B Equipment
          Loans, June 1, 2002 and with respect to Tranche C Equipment Loans,
          September 1, 2003."

          (f)  The definition of the term "EQUIPMENT LOANS" appearing in Section
     1 of the Credit Agreement is hereby amended in its entirety to read as
     follows:

               "EQUIPMENT LOANS: Collectively, the Tranche A Equipment Loans,
          the Tranche B Equipment Loans and the Tranche C Equipment Loans."

          (g)  The definition of the term "LOANS " appearing in Section 1 of the
     Credit Agreement is hereby amended in its entirety to read as follows:

               "LOANS: Collectively, the Equipment Loans and the Revolving
          Credit Loans."

          (h)  The definition of the term "NOTES" appearing in Section 1 of the
     Credit Agreement is hereby amended in its entirety to read as follows:

               "NOTES: Collectively, the Tranche A Equipment Note, the Tranche B
          Equipment Note, the Tranche C Equipment Note and the Revolving Credit
          Note."

          (i)  The definition of the term "REVOLVING CREDIT MATURITY DATE"
     appearing in Section 1 of the Credit Agreement is hereby amended in its
     entirety to read as follows:

               "REVOLVING CREDIT MATURITY DATE: June 30, 2000, or such earlier
          date on which all Revolving Credit Loans may become due and payable
          pursuant to the terms hereof."

          (j)  The following new definitions are hereby added to Section 1 of
     the Credit Agreement in their proper alphabetical order to read as follows:

               "NET CASH PROCEEDS: The cash proceeds received by the Borrower
          from the sale of equity, net of all costs of sale, including legal
          costs, underwriting or brokerage costs, Indebtedness (other than
          Loans) paid off with such cash proceeds and taxes paid or payable as a
          result thereof by the Borrower (but without deduction for any
          hold-backs or reserves required in connection with the applicable
          sale)."

               "TRANCHE C EQUIPMENT LOAN CLOSING DATE: October 20, 1999."

<PAGE>   41

                                      -5-

               "TRANCHE C EQUIPMENT LOAN COMMITMENT: The obligation of the Bank
          to make Tranche C Equipment Loans to the Borrower up to an aggregate
          outstanding principal amount not to exceed the sum of (a) $2,000,000
          MINUS (b) the aggregate principal amount of all Tranche A Equipment
          Loans outstanding on the Equipment Loan Conversion Date and all
          Tranche B Equipment Loans outstanding on the Equipment Loan Conversion
          Date, as such amount may be reduced from time to time or terminated
          hereunder."

               "TRANCHE C EQUIPMENT LOAN NOTE: See ss.4A.1.

               "TRANCHE C EQUIPMENT LOANS: Any equipment loan made or to be made
          to the Borrower pursuant to ss.4A hereof.

          5.2. AMENDMENTS TO SS.4. ss.4 of the Credit Agreement is hereby
amended by adding the following as Section 4A at the end of ss.4:

          "4A  EQUIPMENT LOAN FACILITY.

               4A.1 MAKING OF TRANCHE C EQUIPMENT LOANS. Upon the terms and
          subject to the conditions of this Agreement, the Bank agrees to lend
          to the Borrower such sums that the Borrower may request from September
          29, 1999 until but not including the Equipment Loan Conversion Date;
          PROVIDED that the sum of the outstanding principal amount of all
          Tranche C Equipment Loans (after giving effect to all amounts
          requested) shall not exceed the lesser of (a) Tranche C Equipment Loan
          Commitment and (b) the Equipment Borrowing Base. In addition, in no
          event shall the Bank be obligated to make any Tranche C Equipment Loan
          in excess of one hundred percent (100%) of the purchase price
          (excluding freight, shipping, taxes, set-up and other installation
          costs) of the Equipment Collateral purchased by the Borrower with the
          proceeds of such Tranche C Equipment Loan or refinanced with the
          proceeds of such Tranche C Equipment Loan for Equipment Collateral
          purchased by the Borrower during the period commencing on July 1, 1999
          and continuing up to the Conversion Date. Tranche C Equipment Loans
          shall be in the minimum aggregate amount of not less than $25,000 or
          an integral multiple thereof. The Borrower shall notify the Bank in
          writing or telephonically, not later than 2:00 p.m. Boston,
          Massachusetts time at least one Business Day prior to the date of the
          Tranche C Equipment Loan being requested, of the Drawdown Date (which
          must be a Business Day), the principal amount of such Tranche C
          Equipment Loan and the type and description of equipment purchased
          (including, without limitation, serial or vehicle identification
          numbers) and the purchase price thereof. In the case of any telephonic
          notification, the Borrower shall provide to the Bank written
          confirmation of all of such information within

<PAGE>   42

                                      -6-

          three Business Days after such telephonic notification. Subject to the
          foregoing, so long as the Tranche C Equipment Loan Commitment is then
          in effect and the conditions set forth in ss.9 hereof have been met,
          the Bank shall advance the amount requested to the Borrower's bank
          account at the Bank in immediately available funds not later than the
          close of business on such Drawdown Date. The obligation of the
          Borrower to repay to the Bank the principal of the Tranche C Equipment
          Loans and interest accrued thereon shall be evidenced by a promissory
          note in the aggregate principal amount of $2,000,000 executed and
          delivered by the Borrower and payable to the order of the Bank, in
          form and substance satisfactory to the Bank (the "TRANCHE C EQUIPMENT
          NOTE").

               4A.2 REPAYMENT OF TRANCHE C EQUIPMENT LOANS. (a) If at any time
          the outstanding principal amount of the Tranche C Equipment Loans
          exceeds the lesser of (i) the Tranche C Equipment Loan Commitment and
          (ii) the Equipment Borrowing Base, the Borrower hereby agrees to pay
          immediately the amount of such excess to the Bank for application to
          the Tranche C Equipment Loans. The Borrower may elect to reduce or
          terminate the Tranche C Equipment Loan Commitment by a minimum
          principal amount of $25,000 or an integral multiple thereof, upon one
          (1) Business Day's prior written notice to the Bank of the proposed
          date of such reduction or termination. The Borrower shall not be
          entitled to reinstate the reduced or terminated portion of the Tranche
          C Equipment Loan Commitment following such reduction or termination.

               (b)  As long as no Default or Event of Default shall have
          occurred and be continuing, the outstanding amount of all Tranche C
          Equipment Loans on the Equipment Loan Conversion Date shall be
          converted into a term loan. The Borrower hereby absolutely and
          unconditionally promises to pay to the Bank the principal amount of
          the Tranche C Equipment Loans outstanding on the Equipment Loan
          Conversion Date in thirty-six (36) consecutive equal installments,
          each in the amount of two and seventy-seven one hundredths of one
          percent (2.77%) of the aggregate principal amount of the Tranche C
          Equipment Loans outstanding on the Equipment Loan Conversion Date.
          Such installments shall be due and payable on the first day of each
          calendar month, commencing on October 1, 2000; PROVIDED, that the
          outstanding principal amount of the Tranche C Equipment Loans,
          together with all interest accrued thereon and all fees and expenses
          incurred by the Bank in connection therewith, shall be due and payable
          on the Equipment Loan Maturity Date.

<PAGE>   43

                                      -7-

               (c)  The Borrower shall have the right at any time, subject to
          the indemnity provisions of Section 6.1, to prepay voluntarily the
          Tranche C Equipment Loan on or before the Equipment Loan Maturity
          Date, as a whole, or in part; provided that each partial prepayment
          shall be in the minimum principal amount of $25,000, unless paid in
          full. The Borrower shall give the Bank, no later than 2:00 p.m.
          Boston, Massachusetts time on the date of such prepayment, written
          notice of any proposed prepayment pursuant to this ss.4A.2(c) and the
          principal amount to be prepaid. Any partial prepayment of the Tranche
          C Equipment Loans shall be applied prior to the Equipment Loan
          Conversion Date, to the aggregate principal amount of the Tranche C
          Equipment Loans outstanding on the date of such prepayment and, on and
          after the Equipment Loan Conversion Date, to the scheduled
          installments of the principal due on the Tranche C Equipment Loans
          (including the final installment due and payable on the Equipment Loan
          Maturity Date) in inverse order of maturity. No amount repaid may be
          reborrowed. Any voluntary prepayment of principal of the Tranche C
          Equipment Loans shall also include all interest accrued to the date of
          prepayment."

          5.3. AMENDMENTS TO SS.10.1(a). Subsections "(ii)," "(iii)" and "(iv)"
of Section 10.1(a) of the Credit Agreement are hereby amended in their entirety
to read as follows:

               "(ii) as soon as available but in any event within thirty (30)
          days after the end of each fiscal quarter of the Borrower, its
          unaudited Financials for such quarter, certified by its chief
          financial officer; (iii) together with the quarterly unaudited and
          annual audited Financials, a certificate of the Borrower setting forth
          computations demonstrating compliance with the Borrower's financial
          covenants set forth herein, and certifying that no Default or Event of
          Default has occurred, or if its has, the actions taken by the Borrower
          with respect thereto; (iv) within fifteen (15) days after the end of
          each calendar month, a Revolving Credit Borrowing Base Report and an
          Equipment Loan Borrowing Base Report, each in form and detail
          satisfactory to the Bank, demonstrating compliance with the Revolving
          Credit Borrowing Base and the Equipment Loan Borrowing Base,
          respectively, each as at the end of such month or other applicable
          date requested;"

          5.4. AMENDMENT TO SS.10.3(a). Section 10.3(a) of the Credit Agreement
is hereby amended in its entirety to read as follows:

               "(a) permit the ratio of Current Assets to Current Liabilities
          for any fiscal quarter of the Borrower ending during any period
          described in the table set forth below to be less than the ratio set
          forth opposite such period in such table:

<PAGE>   44

                                      -8-

<TABLE>
<CAPTION>
                       Period                                                                        Ratio
                       ------                                                                        -----

<S>                                                                                                 <C>
         September 29, 1999 through June 30, 2000                                                   1.50:1.00
         July 1, 2000 and thereafter                                                                1.25:1.00"
</TABLE>

          5.5. AMENDMENT TO SS.10.3(c). Section 10.3(c) of the Credit Agreement
is hereby amended in its entirety to read as follows:

               "(c) permit Net Income (i) to be negative in an amount exceeding
          $10,000,000 for the fiscal year of the Borrower ending December 31,
          1999 and (ii) for any fiscal quarter ending during any period
          described in the table set forth below to be less than (or in the case
          of a negative amount, in an amount exceeding) the amount set forth
          opposite such period in such table:

<TABLE>
<CAPTION>
                        Period                                                                       Amount
                        ------                                                                       ------

<S>                                                                                               <C>
         January 1, 2000 through March 31, 2000                                                   $(2,000,000)
         April 1, 2000 through June 30, 2000                                                      $(1,250,000)
         July 1, 2000 through September 30, 2000                                                  $  (500,000)
         October 1, 2000 and thereafter                                                           $   500,000"
</TABLE>

          5.6. AMENDMENT TO SS.10.3. Section 10.3 of the Credit Agreement is
hereby amended by adding a new subsection "(d)" to read as follows:

               "(d) permit the Tangible Net Worth at any time to be less than
          the sum of (i) $9,000,000, plus (ii) 50% of the Net Cash Proceeds from
          any issuance of capital stock, options, rights or warrants to buy
          capital stock, or other equity issuances received by the Borrower
          after September 30, 1999."

     SS.6. ADDITIONAL COVENANTS. Without any prejudice or impairment whatsoever
to any of the Bank's rights and remedies contained in the Credit Agreement and
the covenants contained therein, the Notes or in any of the other Loan
Documents, the Borrower additionally covenants and agrees with the Bank as
follows:

          (a) The Borrower shall comply and continue to comply with all of the
     terms, covenants and provisions contained in the Credit Agreement, the
     Notes and the other Loan Documents, except as such terms, covenants and
     provisions are expressly modified by this Amendment Agreement upon the
     terms set forth herein.

          (b) The Borrower will provide to the Bank such financial information
     as the Bank may reasonably request from time to time and at the Borrower's
     expense.

          (c) The Borrower shall at any time or from time to time execute and
     deliver such further instruments, and take such further action as

<PAGE>   45

                                      -9-

     the Bank may reasonably request, in each case further to effect the
     purposes of this Amendment Agreement, the Credit Agreement, the Notes and
     the other Loan Documents.

          The Borrower expressly acknowledges and agrees that any failure by the
     Borrower to comply with the terms and conditions of this ss.6 or any other
     provisions contained in this Amendment Agreement shall constitute an Event
     of Default in accordance with the relevant provisions of ss.11 of the
     Credit Agreement.

     SS.7. EXPENSES. The Borrower agrees to pay to the Bank upon demand (a) an
amount equal to any and all reasonable out-of-pocket costs or expenses
(including reasonable legal fees and disbursements and appraisal expenses)
incurred or sustained by the Bank in connection with the preparation of this
Amendment Agreement and related matters and (b) from time to time any and all
reasonable out-of-pocket costs or expenses (including commercial examiner fees
and legal fees and disbursements) hereafter incurred or sustained by the Bank in
connection with the administration of credit extended by the Bank to the
Borrower or the preservation of or enforcement of the Bank's rights under the
Credit Agreement, the Notes or the other Loan Documents or in respect of any of
the Borrower's other obligations to the Bank.

     SS.8. MISCELLANEOUS.

          (a) This Amendment Agreement shall be governed by and construed in
     accordance with the laws of the Commonwealth of Massachusetts.

          (b) Except as otherwise expressly provided by this Amendment
     Agreement, all of the respective terms, conditions and provisions of the
     Credit Agreement shall remain the same. It is declared and agreed by each
     of the parties hereto that the Credit Agreement, as amended hereby, shall
     continue in full force and effect, and that this Amendment Agreement and
     the Credit Agreement be read and construed as one instrument, and all
     references in the Loan Documents to the Credit Agreement shall hereafter
     refer to the Credit Agreement, as amended by this Amendment Agreement.

<PAGE>   46

                                      -10-

     IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement
to be executed in its name and behalf by its duly authorized officer as an
instrument under seal as of the date first written above.

                                          FLEET NATIONAL BANK

                                          By: /s/ illegible signature
                                              ----------------------------------
                                              Title: VP

                                          ARROWPOINT COMMUNICATIONS, INC.

                                          By: /s/ Cynthia M. Deysher
                                              ----------------------------------
                                              Title: VP Operations and CFO

<PAGE>   47

                            TRANCHE C EQUIPMENT NOTE
                            ------------------------
                        ARROWPOINT COMMUNICATIONS, INC.
                        -------------------------------

$2,000,000.00                                                   October 20, 1999

     FOR VALUE RECEIVED, the undersigned, ARROWPOINT COMMUNICATIONS, INC., a
Delaware corporation (hereinafter, together with its successors in title and
assigns, called the "Borrower"), promises to pay, on or before the Equipment
Loan Maturity Date (as hereinafter defined by reference) to the order of FLEET
NATIONAL BANK, a national banking association hereinafter, together with its
successors in title and assigns, called the "Bank"), at the office of the Bank
at One Federal Street, Boston, Massachusetts 02110, the principal sum of TWO
MILLION AND 00/100 {$2,000,000.00) DOLLARS, in immediately available funds or,
if less, the aggregate unpaid principal amount of the Tranche C Equipment Loans
made by the Bank to the Borrower pursuant to the Credit Agreement to which
reference is hereinafter made and to pay interest, in like money, on the unpaid
principal amount owing hereunder from time to time from the date hereof until
payment in full of such principal amount as provided in the Credit Agreement.

     This Note is made and delivered by the Borrower pursuant to ss.4A of the
Credit Agreement dated as of August 5, 1998 by and between the Borrower and the
Bank, as amended by an Amendment Agreement dated of even date herewith (as
amended and in effect from time to time, the "Credit Agreement"), and is
entitled to the benefits and is subject to the provisions of the Credit
Agreement. All capitalized terms used herein which are defined in the Credit
Agreement shall have the same meanings herein as therein.

     The Borrower promises to pay principal in such amounts and on the dates set
forth in or established pursuant to the Credit Agreement. The Borrower also
promises to pay interest on the aggregate unpaid principal amount of the Tranche
C Equipment Loans outstanding until paid in full at the rates per annum set
forth in or established pursuant to the Credit Agreement. Such interest shall be
payable on such dates as are determined from time to time pursuant to the Credit
Agreement and shall be calculated as therein provided.

     The Borrower has the right to prepay the principal of this Note without
premium or penalty on the terms and conditions specified in the Credit
Agreement.

     If any Event of Default shall occur, the entire unpaid principal amount of
this Note and all of the unpaid interest accrued thereon may

<PAGE>   48

                                      -2-

become or be declared due and payable in the manner and with the effect provided
in the Credit Agreement.

     The Borrower and all guarantors and endorsers hereby waive presentment,
demand, protest and notice of any kind in connection with the delivery,
acceptance, performance and enforcement of this Note, and also hereby assent to
extensions of time of payment or forbearance or other indulgences without
notice. This Note and the obligations of the Borrower hereunder shall be
governed by, and interpreted and determined in accordance with, the laws of the
Commonwealth of Massachusetts.

     IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in its
corporate name by its duly authorized officer as a sealed instrument on the day
and in the year first above written.

                                                 ARROWPOINT COMMUNICATIONS, INC.

                                                 By: /s/ Cynthia M. Deysher
                                                    ----------------------------
                                                     Its VP Operations and CFO

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