Document:

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                               CORPORATE AGREEMENT

            THIS CORPORATE AGREEMENT (the "Agreement") is entered into as of May
____, 2001 by and between REUTERS LIMITED, a company organized under the laws of
England and Wales ("Reuters"), and INSTINET GROUP INCORPORATED, a Delaware
corporation ("Instinet").

                                    RECITALS

            WHEREAS, the parties are contemplating the possibility that Instinet
will issue shares of common stock in an initial public offering (the "Initial
Public Offering") registered under the Securities Act.

            WHEREAS, the parties desire to enter into this Agreement to set
forth their agreement regarding certain corporate governance matters, certain
registration rights with respect to the Registrable Securities and certain other
matters with respect to the on-going relationship between Instinet and Reuters.

                                   AGREEMENTS

            NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Reuters and Instinet, for
themselves and their successors and assigns, hereby agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

            1.1. Definitions. As used in this Agreement, the following terms
will have the following meanings, applicable both to the singular and the plural
forms of the terms described:

            "Affiliate" means, with respect to a given Person, any other Person
that, directly or indirectly, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to vote forty percent (40%) or more of the
securities having voting power for the election of directors (or other Persons
acting in similar capacities) of such Person or otherwise to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

            "Agreement" has the meaning ascribed thereto in the preamble hereto,
as such agreement may be amended and supplemented from time to time in
accordance with its terms.

            "Board of Directors" means the board of directors of Instinet.

            "Business Day" means any day other than a Saturday, Sunday or any
day on which banking institutions are authorized or obligated by law or
executive order to be closed in London or New York.
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            "Cash Equivalents" means (i) United States dollars, Japanese Yen,
Euros and British Pounds Sterling (and foreign currency exchangeable into such
currencies within 30 days), (ii) securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than
thirty-six months from the date of acquisition, (iii) certificates of deposit
and eurodollar time deposits with maturities of twelve months or less from the
date of acquisition, bankers' acceptances with maturities not exceeding twelve
months and overnight bank deposits, in each case with any domestic commercial
bank having a long term credit rating of A3 or higher from Moody's Investors
Service, Inc. or A- or higher from Standard & Poor's Corporation, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above and (v) commercial paper or similar short term securities having one
of the two highest ratings obtainable from Moody's Investors Service, Inc. or
Standard & Poor's Corporation and in each case maturing within twelve months
after the date of acquisition.

            "Common Stock" means the common stock, par value $0.01 per share, of
Instinet, and any other class of Instinet's capital stock representing the right
to vote generally for the election of directors.

            "Covered Transaction" has the meaning ascribed thereto in Section
2.1.

            "Delaware 203" means Section 203 of the Delaware General Corporation
Law, as in effect from time to time.

            "Exchange Act" has the meaning ascribed thereto in Section 3.10.

            "Holder" means the Reuters Entities and any Transferee.

            "Holder Securities" has the meaning ascribed thereto in Section
3.2(c)

            "Holders' Representative" means Reuters or any other Holder
designated by Reuters as a Holders' Representative.

            "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.

            "Indebtedness" means, with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or bankers' acceptances
or representing capital lease obligations or the balance deferred and unpaid of
the purchase price of any property, except any such balance that constitutes an
accrued expense or trade payable, if and to the extent any of the foregoing
(other than letters of credit and hedging obligations) would appear as a
liability upon a balance sheet of such Person prepared in accordance with US
GAAP, as well as all Indebtedness of others secured by a lien on any asset of
such Person (whether or not such Indebtedness is assumed by such Person) and, to
the extent not otherwise included, the guarantee by such Person of any
indebtedness of any other Person. The amount of any Indebtedness outstanding as
of any date shall be (i) the accreted value
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thereof, in the case of any Indebtedness issued with original issue discount,
and (ii) the principal amount thereof, together with any interest thereon that
is more than 30 days past due, in the case of any other Indebtedness.

            "Initial Public Offering" has the meaning ascribed thereto in the
recitals hereto.

            "Initial Public Offering Date" means the date of completion of the
initial sale of Common Stock in the Initial Public Offering.

            "Instinet" has the meaning ascribed thereto in the preamble hereto.

            "Instinet Entities" means Instinet Parent, Instinet and their
respective Subsidiaries from time to time, and "Instinet Entity" shall mean any
of the Instinet Entities; provided, however, in each case, that any such
Instinet Entity shall cease to be an "Instinet Entity" under this Agreement at
such time as such Person no longer is a Subsidiary of Instinet Parent or
Instinet, as the case may be.

            "Instinet Parent" means any Person who succeeds Instinet as the
parent corporation of the Instinet Entities as a result of a corporate
reorganization, merger or otherwise.

            "Instinet Securities" has the meaning ascribed thereto in Section
3.2(c).

            "Instinet Transferee" shall mean any transferee or purchaser
(together with its Affiliates) from an Instinet Entity of greater than 5% of the
Total Voting Power of Instinet other than pursuant to an underwritten offering;
provided such Person holds more than 5% of the Total Voting Power of Instinet at
the time of the registration or offering in question.

            "Lower Threshold" has the meaning ascribed thereto in Section
2.3(a).

            "Market Capitalization" means the product of (A) the number of
shares of Common Stock outstanding on the date 30 days prior to the date the
Board of Directors authorizes the relevant Covered Transaction (or, if no such
approval is given or the relevant Instinet Entity(ies) enter into a definitive
agreement with respect to such Covered Transaction more than 60 days after such
approval, then on the date such agreement is entered into) (the "Measurement
Date"), multiplied by (B) (i) the average of the last sale price of such shares
of Common Stock on each of the thirty (30) trading days immediately preceding
the Measurement Date on The Nasdaq National Market or, if such shares are not
listed thereon, on the principal national securities exchange or automated
interdealer quotation system on which such shares are traded or (ii) if such
sale prices are unavailable or such shares are not so traded, the value of such
shares on the Measurement Date determined in accordance with agreed-upon
procedures reasonably satisfactory to each of Instinet and Reuters.

            "Material Agreement" means any written agreement, term sheet or
document, binding or not, that relates to a Covered Transaction and sets forth
or otherwise describes any of the contemplated or proposed material terms
thereof.

            "Net Indebtedness" means the consolidated Indebtedness of the
Instinet Entities, excluding (i) the Note dated _______________, 2001 in the
amount of US$49.0 million between
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Instinet Corporation and Fleet Street Finance Inc. and (ii) any Indebtedness
incurred in the ordinary course of their brokerage or other similar businesses
in connection with the clearing of traded securities or obligations to
securities exchanges or clearing systems, and less consolidated cash and Cash
Equivalents.

            "Nominee Threshold" has the meaning ascribed thereto in Section
2.3(a).

            "Other Holders" has the meaning ascribed thereto in Section 3.2(d).

            "Other Securities" has the meaning ascribed thereto in Section
3.2(a).

            "Ownership Reduction" shall be deemed to have occurred when no
Holder, together with its Affiliates, beneficially owns 20% or more of the Total
Voting Power of Instinet.

            "Permitted Acquisition" means an acquisition or series of related
acquisitions by any Instinet Entity(ies), whether by merger, stock purchase,
asset purchase or otherwise, of any business, Person or assets where the
aggregate consideration to be paid by the Instinet Entity(ies) in such
acquisition or related series of acquisitions does not exceed the lesser of (i)
20% of the Market Capitalization of Instinet or (ii) 20% of the total
consolidated revenues (calculated in accordance with US GAAP, and excluding any
extraordinary non-recurring items) of the Instinet Entities for the last four
completed fiscal quarters.

            "Person" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization,
government (and any department or agency thereof) or other entity.

            "Ratio" has the meaning ascribed thereto in Section 2.3(b).

            "Registrable Securities" means shares of Common Stock and any stock
or other securities into which or for which such Common Stock may hereafter be
changed, converted or exchanged and any other shares or securities issued to
Holders of such Common Stock (or such shares or other securities into which or
for which such shares are so changed, converted or exchanged) upon any
reclassification, share combination, share subdivision, share dividend, share
exchange, merger, consolidation or similar transaction or event. As to any
particular Registrable Securities, such Registrable Securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale by the Holder thereof shall have been declared effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) they shall have been distributed to the
public in accordance with Rule 144, (iii) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by Instinet and subsequent disposition of
them shall not require registration or qualification of them under the
Securities Act or any state securities or blue sky law then in effect or (iv)
they shall have ceased to be outstanding.

            "Registration Expenses" means any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
Article III, including, without limitation, (i) the fees, disbursements and
expenses of Instinet's counsel and accountants; (ii) all expenses, including
filing fees, in connection with the preparation, printing and filing of the
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registration statement, any preliminary prospectus or final prospectus, any
other offering document and amendments and supplements thereto and the mailing
and delivering of copies thereof to any underwriters and dealers; (iii) the cost
of printing or producing any underwriting agreements and blue sky or legal
investment memoranda and any other documents in connection with the offering,
sale or delivery of the securities to be disposed of; (iv) all expenses in
connection with the qualification of the securities to be disposed of for
offering and sale under state securities laws, including the fees and
disbursements of counsel for the underwriters or the Holders of securities in
connection with such qualification and in connection with any blue sky and legal
investment surveys; (v) the filing fees incident to securing any required review
by the National Association of Securities Dealers, Inc. of the terms of the sale
of the securities to be disposed of; (vi) transfer agents' and registrars' fees
and expenses and the fees and expenses of any other agent or trustee appointed
in connection with such offering; (vii) all security engraving and security
printing expenses; (viii) all fees and expenses payable in connection with the
listing of the securities on any securities exchange or automated interdealer
quotation system or the rating of such securities; (ix) all expenses with
respect to road shows that the Company is obligated to pay pursuant to Section
3.5(j); and (x) any other fees and disbursements of underwriters customarily
paid by the sellers of securities, but excluding underwriting discounts and
commissions and transfer taxes, if any (which underwriting discounts and
commissions and transfer taxes shall be borne by each selling stockholder
participating in a particular offering and, if selling securities in such
offering, Instinet, pro rata in accordance with the total amount of securities
sold in such offering by each such Person in accordance with Section 3.4).

            "Reuters" has the meaning ascribed thereto in the preamble hereto.

            "Reuters Audit Committee" means the audit committee of the Reuters
Parent Board of Directors.

            "Reuters Director" shall mean (i) any director designated by Reuters
in accordance with the provisions of Section 2.3 and (ii) any director of
Instinet who at such time as Reuters Entities cease to beneficially more than
50% of the Total Voting Power of Instinet is a director or officer of Reuters.

            "Reuters Entities" means the Reuters Parent and Subsidiaries of the
Reuters Parent (other than Subsidiaries that constitute Instinet Entities) from
time to time, and "Reuters Entity" shall mean any of the Reuters Entities;
provided, however, in each case, that any Reuters Entity shall cease to be a
"Reuters Entity" under this Agreement at such time as such Person no longer is a
Subsidiary of the Reuters Parent.

            "Reuters Parent" means the ultimate parent entity from time to time,
of Reuters, which is currently Reuters Group PLC.

            "Reuters Trust Principles" has the meaning used in the Memorandum of
Association of Reuters Founders Share Company Limited, a company organized under
the laws of England and Wales.

            "Rule 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the Securities Act.
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            "Rule 415 Offering" means an offering on a delayed or continuous
basis pursuant to Rule 415 (or any successor rule to similar effect) promulgated
under the Securities Act.

            "SEC" means the United States Securities and Exchange Commission.

            "Section 3.2 Notice" shall have the meaning ascribed thereto in
Section 3.2(a).

            "Securities Act" means the Securities Act of 1933, as amended, or
any successor statute.

            "Selling Holder" has the meaning ascribed thereto in Section 3.5(e).

            "Shelf Registration Statement" has the meaning ascribed thereto in
Section 3.3(a).

            "Subsidiary" means, as to any Person, any corporation, association,
partnership, joint venture or other business entity of which more than 50% of
the voting power of capital stock or other voting ownership interests entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is owned or controlled, directly or
indirectly, by such Person or by one or more of the Subsidiaries of such Person
or by a combination thereof. "Subsidiary," when used with respect to Reuters or
Instinet, shall also include any other entity affiliated with Reuters or
Instinet, as the case may be, that Reuters and Instinet may hereafter agree in
writing shall be treated as a "Subsidiary" of such Person for the purposes of
this Agreement.

            "3 Times Square Arrangements" shall mean (i) that certain Agreement
of Lease, dated February 18, 1998, between 3 Times Square Associates, LLC ("3
Times Square Associates"), as landlord, and Reuters C ("Reuters C"), as tenant,
as amended by First Amendment of Lease, dated as of June 30, 1998, Second
Amendment of Lease, dated as of July 1, 1998, Third Amendment of Lease, dated as
of March 31, 2000, and Fourth Amendment of Lease, dated as of November 28, 2000,
as the same may hereafter from time to time be amended, modified, extended,
renewed or supplemented; (ii) that certain Sublease, dated as of May __, 2001,
between Reuters C, as sublessor and Instinet Global Holdings, Inc. ("Instinet
Global Holdings"), as sublessee; (iii) the documentation executed in connection
with the transaction entered into by Reuters America Inc. ("Reuters America")
with the New York City Industrial Development Agency ("IDA") relating to 3 Times
Square, including, without limitation, that certain Project Agreement, dated as
of April 1, 1998, between the IDA, Reuters America and Reuters America Holdings,
Inc., as guarantor; (iv) that certain Benefits Allocation Agreement, dated as of
May __, 2001, between Reuters America and Instinet Global Holdings; and (v) all
other agreements and contracts pertaining to the development, operation,
management and construction of 3 Times Square to which any Reuters Entity is a
party, including without limitation, that certain Site 3 Leasehold Purchase and
Sale Agreement by and between Three Times Square Center Partners, L.P. , as
seller and 3 Times Square Associates, as buyer.

            "Total Voting Power of Instinet" shall mean the total number of
votes which may be cast in the election of members of the Board of Directors by
all holders of Common Stock.

            "Transferee" shall mean any of (i) the transferee of all or any
portion of the Common Stock or other Registrable Securities held by any Reuters
Entity or (ii) the subsequent
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transferee of all or any portion of the Common Stock or other Registrable
Securities held by any Transferee; provided that no Transferee shall be entitled
to any benefits of a Transferee hereunder unless such Transferee executes an
instrument substantially in the form provided as Exhibit A, attached hereto.

            "UK GAAP" means generally accepted accounting principles in the
United Kingdom as have been approved by a significant segment of the U.K.
accounting profession from time to time and as applied by Reuters in its public
financial statements.

            "US GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entities as have been approved by a significant segment
of the accounting profession, which are in effect from time to time, and with
respect to Instinet, consistent with Instinet's public financial statements
filed with the SEC.

            1.2.  Internal References.  Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement and references to the
parties shall mean the parties to this Agreement.

                                   ARTICLE II
                           CERTAIN GOVERNANCE MATTERS

            2.1. Definition of Covered Transaction. For purposes of this
Agreement, a "Covered Transaction" shall mean any of the following actions:

            (a) The issuance of equity securities or securities convertible
into, exchangeable for, or options or rights to acquire any equity securities
(except for securities issued pursuant to any of Instinet's employee stock
option or employee benefits plans or in a Permitted Acquisition) in excess of
(i), in any one-year period (commencing on the date after the Reuters Entities
beneficially own 50% or less of the Total Voting Power of Instinet), 10% of the
capital stock of Instinet or Total Voting Power of Instinet outstanding on the
last day of the calendar month immediately prior to such one-year period, or
(ii), in any three-year period (commencing on the date after the Reuters
Entities beneficially own 50% or less of the Total Voting Power of Instinet),
20% of the capital stock of Instinet or Total Voting Power of Instinet
outstanding on the last day of the calendar month immediately prior to such
three-year period; provided, that in calculating any such amounts of capital
stock of Instinet, or Total Voting Power of Instinet above, such calculation
shall also include shares issued pursuant to any of Instinet's employee stock
option, restricted stock award or employee benefit plans during the relevant
period on a weighted average basis;

            (b) Any acquisition by any Instinet Entity whether by merger, stock
acquisition, asset purchase or otherwise of any business, Person or assets by
any Instinet Entity other than a Permitted Acquisition; or

            (c) A sale or other disposition or series of related sales or
dispositions by any Instinet Entity(ies), whether by merger, stock disposition,
asset sale or otherwise, of any
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business, Person or assets where the aggregate consideration to be received by
the Instinet Entity(ies) in such sale or disposition or related series of sales
or dispositions exceeds the lesser of (i) 20% of the Market Capitalization of
Instinet or (ii) 20% of the total consolidated revenues (calculated in
accordance with US GAAP and excluding any extraordinary non-recurring items) of
the Instinet Entities for the last four completed fiscal quarters.

            2.2. Corporate Action Regarding Covered Transactions. (a) So long as
Reuters Entities beneficially own no less than 35% and no more than 50% of the
Total Voting Power of Instinet, Instinet agrees, and agrees to cause each
Instinet Entity, not to execute any Material Agreement or complete a Covered
Transaction, unless such Covered Transaction has been first submitted to Reuters
for its approval and Reuters has approved such Covered Transaction in writing in
accordance with the provisions of Section 2.2 (b) below.

            (b) Any request for Reuters' approval of a Covered Transaction shall
be submitted in writing to Reuters by notice which shall (i) describe the
Covered Transaction in reasonable detail, and include reasonably sufficient
information (including such information as is given or will be given to the
Board of Directors), for Reuters to make a determination pursuant to this
Section 2.2 and (ii) indicate that such notice is a formal request for Reuters
approval pursuant to this Section 2.2(b) and state the last date by which
Reuters may respond to such request in accordance with the provisions of this
Section 2.2(b). Instinet shall promptly provide Reuters with all information
requested by Reuters which is in the possession of, or reasonably obtainable by,
Instinet and relates to the Covered Transaction. Reuters shall in good faith use
its commercially reasonable efforts to respond to such request as expeditiously
as possible, but shall in no event respond later than ten Business Days after
receipt of such notice (or such later date as Instinet and Reuters shall agree).
Such request for Reuters' approval will be deemed approved by Reuters unless
Reuters refuses such approval (in its sole discretion) in writing within such
ten Business Day period.

            2.3. Seats on Board of Directors. (a) So long as Reuters Entities
beneficially own shares of Instinet's stock having at least 10% (the "Nominee
Threshold") but less than 50% of the Total Voting Power of Instinet, in
connection with any election of directors of Instinet Reuters shall have the
right to designate and Instinet shall cause the nomination of such number of
directors of Instinet such that after such election (assuming all such Reuters
designees are elected to the Board of Directors), the number of Reuters
Directors will be equal to the product of (1) the Total Voting Power of Instinet
beneficially owned by the Reuters Entities multiplied by (2) the total number of
members on the Board of Directors, rounded to the nearest whole number; provided
that in no event shall the number of Reuters Directors nominated pursuant to
this provision constitute (i) 50% or more of the members of the Board of
Directors or (ii) less than one member of the Board of Directors.
Notwithstanding the foregoing, if Instinet grants any other Person at any time
or from time to time the right to nominate a director or directors based on a
lesser percentage of the Total Voting Power of Instinet (the "Lower Threshold")
than the Nominee Threshold, Reuters shall have the right to designate an equal
number of members of the Board of Directors as such other Person so long as it
beneficially owns an amount of capital stock greater than or equal to the Lower
Threshold. If a vacancy occurs or exists on the Board of Directors at any time,
including but not limited to a vacancy because of the death, disability,
retirement, resignation or removal of any director for cause or otherwise, and
the vacant position was held by a Reuters Director, then Reuters shall have the
sole right to designate an individual
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to fill such vacancy, and, subject to the fiduciary duties of directors, the
Board of Directors shall elect such nominee to fill such vacancy. To the extent
permitted by law, Instinet shall use its commercially reasonable efforts to
solicit from the stockholders of Instinet eligible to vote for the election of
directors proxies in favor of the nominees designated by the Board of Directors
in accordance with this Section 2.3(a).

            (b) If at any time the total number of directors of Instinet is
increased or decreased, the number of directors that Reuters shall have the
right to designate pursuant to Section 2.3(a) above, shall as promptly as
practicable be increased or decreased so that the adjusted ratio of Reuters
Directors to total directors is not less than the ratio of Reuters Directors
(determined immediately prior to such increase in accordance with the provisions
of Section 2.3(a)) to the total number of directors of Instinet immediately
prior to such increase or decrease, as the case may be (the "Ratio"). In such
event, Reuters and Instinet shall take such steps consistent with the provisions
of Section 2.3(a) to effectuate this increase or decrease of Reuters Directors
in relation to the Ratio as rapidly as reasonably possible.

            (c) At the request of Reuters, Instinet shall (x) use its best
efforts to cause a special meeting of stockholders to be held proposing the
removal of any Reuters Director provided, that if in the reasonable good faith
determination by the Board of Directors it is materially detrimental to do so,
then Instinet may delay calling such special meeting; provided that Instinet
will cause such meeting to be held within 135 days of such request by Reuters
and (y) use its best efforts to solicit from stockholders of Instinet eligible
to vote for the election of directors proxies to remove such specified Reuters
Directors.

            (d) For so long as the Reuters Entities beneficially own shares of
Instinet's stock having at least 25% of the Total Voting Power of Instinet,
subject to the fiduciary duties of the directors, Reuters Directors shall be
nominated to serve on each committee of the Board of Directors (other than any
committee required by law or stock exchange requirement to consist solely of
independent directors but only to the extent a sufficient number of Reuters
Directors do not qualify as independent directors; provided that such lesser
number of Reuters Directors that do qualify as independent directors shall be
appointed to such committee) so that after such appointment(s), the ratio of
Reuters Directors who are members of such committee to the total number of
members of such committee is not less than the Ratio. Notwithstanding the
foregoing, if Instinet grants any other Person at any time or from time to time
the right to nominate a director or directors to serve on any committee(s) of
the Board of Directors at a percentage less than 25% of the Total Voting Power
of Instinet (the "Lower Percentage"), Reuters shall have the right to appoint an
equal number of Reuter Directors to serve on such committee(s) as such other
Person so long as the Reuters Entities beneficially own an amount of Instinet
stock having at least the same amount of the Total Voting Power of Instinet as
the Lower Percentage. For so long as (i) Reuters beneficially owns shares of
Instinet's stock having at least 10% but less than the Lower Percentage of the
Total Voting Power of Instinet and (ii) there is at least one Reuters Director,
any such Reuters Director shall be permitted to observe the proceedings of (but
shall not be a member of) any committee of the Board of Directors.
Notwithstanding the foregoing, if Instinet grants any other Person at any time
or from time to time the right to appoint a director or directors to observe the
proceedings of any committee(s) of the Board of Directors at a percentage less
than 10% of the Total Voting Power of Instinet, Reuters shall have the right to
appoint an equal number of Reuters Directors to observe such
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proceedings as such other Person so long as the Reuters Entities beneficially
own an amount of Instinet stock having at least the same amount of the Total
Voting Power of Instinet as such lesser percentage.

            2.4. Dilution. For so long as the Reuters Entities beneficially own
more than 51% of the Total Voting Power of Instinet, Instinet shall not take any
action without Reuters prior consent which directly or indirectly causes or
could cause the Reuters Entities to own less than 51% of the Total Voting Power
of Instinet or less than 51% of Instinet's capital stock unless Reuters
concludes in writing, in its reasonable judgment following discussions with
Instinet and the lessor, that such action would not result in a material adverse
consequence to the Reuters Entities under the 3 Times Square Arrangements.

            2.5. Acknowledgment of Reuters Trust Principles. Instinet
acknowledges that so long as Reuters Entities beneficially own more than 50% of
the Total Voting Power of Instinet, Instinet will, and will cause each of the
other Instinet Entities to, adhere to the Reuters Trust Principles.

            2.6. Transfer of Instinet (Schweiz) AG. Notwithstanding any other
provision contained herein, Instinet shall not transfer or dispose of any
interests in Instinet (Schweiz) AG, or take any other action which under Swiss
law or otherwise would require notification or action, until Reuters has
received written notification of such intention and subsequently confirms that
all necessary or required action has been taken by Instinet. Instinet hereby
agrees to indemnify and hold Reuters harmless from and against any and all
losses, liabilities, costs (including reasonable attorneys' fees and
disbursements) claims and damages arising out of, based upon or relating to a
breach of its obligations in the immediately preceding sentence.

                                  ARTICLE III
                               REGISTRATION RIGHTS

            3.1. Demand Registration - Registrable Securities. (a) Upon written
notice provided at any time after the Initial Public Offering Date from any
Holders' Representative requesting that Instinet effect the registration under
the Securities Act of any or all of the Registrable Securities held by the
Holders, which notice shall specify the number of such Registrable Securities to
be registered and the intended method or methods of disposition of such
Registrable Securities, Instinet shall use its commercially reasonable efforts
to effect the registration under the Securities Act and applicable state
securities laws of such Registrable Securities for disposition in accordance
with the intended method or methods of disposition stated in such request;
provided that:

            (i) with respect to any registration statement filed, or to be
      filed, pursuant to this Section 3.1, (A) if Instinet determines in the
      good faith judgment of the Board of Directors, such registration would
      cause Instinet to disclose material non-public information which
      disclosure would be materially detrimental to Instinet or would materially
      interfere with any material financing, acquisition, corporate
      reorganization or merger or other transaction involving Instinet and any
      of its Subsidiaries and the Board of Directors concludes, as a result of
      such potential disclosure or interference, that it is in the best
      interests of Instinet to defer the filing of such registration statement
      at such time,
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      and (B) Instinet shall furnish to such Holders' Representative a
      certificate signed by the chief executive officer of Instinet stating that
      in the good faith judgment of the Board of Directors it would be
      materially detrimental to Instinet for such registration statement to be
      filed in the near future and that it is, therefore, in the best interests
      of Instinet to defer the filing of such registration statement, then
      Instinet shall have the right to defer such filing, provided that such
      deferral, together with any other deferral or suspension of its
      obligations under Section 3.1 or Section 3.3, shall not be effected more
      than twice in any twelve-month period or for a period of more than one
      hundred and twenty (120) days, in the aggregate, for all such deferrals or
      suspensions over such twelve-month period;

            (ii) after an Ownership Reduction, the Holders of Registrable
      Securities may collectively exercise their rights under this Section 3.1
      through a Holders' Representative on not more than three occasions (it
      being acknowledged that prior to any Ownership Reduction, there shall be
      no limit to the number of occasions on which such Holders may exercise
      such rights; provided, that each Transferee of 10% or less of the Total
      Voting Power of Instinet shall be entitled to only one demand right
      hereunder through a Holders' Representative);

            (iii) except as otherwise provided herein, the Holders of
      Registrable Securities shall not have the right to exercise registration
      rights pursuant to this Section 3.1 within the 90-day period following the
      registration and sale of Registrable Securities effected pursuant to a
      prior exercise of the registration rights provided in this Section 3.1;

            (iv) Instinet will not be required to take any action pursuant to
      this Section 3.1 if the Registrable Securities are registered at the time
      of such demand under an effective Shelf Registration Statement; and

            (v) the estimated market value of the Registrable Securities to be
      registered pursuant to this Section 3.1, together with any Registrable
      Securities to be registered pursuant to Section 3.2, at the time such
      demand is made is at least $60 million.

            (b) Notwithstanding any other provision of this Agreement, a
registration requested by a Holders' Representative of Registrable Securities
pursuant to this Section 3.1 shall not be deemed to have been effected (and,
therefore, not requested for purposes of paragraph (a) above), (i) unless it has
become effective, (ii) if after it has become effective such registration is
interfered with by any stop order, injunction or other order or requirement of
the SEC or other governmental agency or court for any reason other than a
misrepresentation or an omission by such Holder and, as a result thereof, the
Registrable Securities requested to be registered cannot be completely
distributed in accordance with the plan of distribution set forth in the related
registration statement or (iii) if the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied or waived other than by reason of some act
or omission by such Holder of Registrable Securities.

            (c) In the event that any registration pursuant to this Section 3.1
shall involve, in whole or in part, an underwritten offering, the Holders of a
majority of the Registrable Securities to be registered shall have the right to
designate an underwriter or underwriters in accordance
<PAGE>   12
                                                                              12

with the provisions of the following two sentences. No later than ten Business
Days following its receipt of notice by the Holders' Representative pursuant to
Section 3.1(a), Instinet shall deliver to the Holders' Representative in writing
a list (the "List") of at least five internationally recognized investment
banking firms ranked in the top ten in the past year for equity underwritings by
Thomson Financial Securities Data (or such similar ranking service if such
ranking service ceases to exist other than by reason of merger, reorganization
or consolidation or other acquisition). A majority of the Registrable Securities
to be registered shall select from the List an underwriter or underwriters (the
"Holders' Underwriters") and notify Instinet in writing of its selection of the
Holders' Underwriters no later than ten Business Days following receipt by it of
the List.

            (d) Instinet shall have the right to cause the registration of
additional equity securities for sale for the account of any Instinet Entity,
any existing or former directors, officers or employees of the Instinet Entities
or any other stockholder of Instinet who is contractually entitled to include
its shares in such registration in any registration of Registrable Securities
requested by the Holders' Representative pursuant to paragraph (a) above;
provided, however, that if such Holders are advised in writing (with a copy to
Instinet) by the lead Holders' Underwriters that, in such firm's good faith
view, all or a part of such Registrable Securities cannot be sold and the
inclusion of all or a part of such additional equity securities in such
registration would be likely to have an adverse effect on the price, timing or
distribution of the offering and sale of the Registrable Securities then
contemplated by any Holder, the registration of such additional equity
securities or part thereof shall not be permitted but only to the extent such
additional equity securities would be likely to have such adverse effect. The
Holders of the Registrable Securities to be offered may require that any such
additional equity securities be included in the offering proposed by such
Holders on the same conditions as the Registrable Securities that are included
therein. In the event that the number of Registrable Securities requested to be
included in a registration statement by the Holders thereof exceeds the number
which, in the good faith view of such investment banking firm, can be sold
without adversely affecting the price, timing, distribution or sale of
securities in the offering, the number shall be allocated pro rata among the
requesting Holders on the basis of the relative number of Registrable Securities
then held by each such Holder (provided that any number in excess of a Holder's
request may be reallocated among the remaining requesting Holders in a like
manner).

            3.2. Piggyback Registration (a) In the event that Instinet at any
time after the Initial Public Offering Date proposes or is required to register
any of its Common Stock (including pursuant to Sections 3.1 or 3.3 hereof), any
other of its equity securities or securities convertible into or exchangeable
for its equity securities (collectively, the "Other Securities") under the
Securities Act, whether or not for sale for its own account, in a manner that
would permit registration of Registrable Securities for sale for cash to the
public under the Securities Act, it shall at each such time give prompt written
notice (the "Section 3.2 Notice") to each Holder of Registrable Securities of
its intention to do so and of the rights of such Holder under this Section 3.2.
Subject to the terms and conditions hereof, such Section 3.2 Notice shall offer
each such Holder the opportunity to include in such registration statement such
number of Registrable Securities as such Holder may request. Upon the written
request of any such Holder made within 15 business days after the receipt of the
Section 3.2 Notice (which request shall specify the number of Registrable
Securities intended to be disposed of), Instinet shall use its best efforts to
effect, in connection with the registration of the Other Securities, the
registration
<PAGE>   13
                                                                              13

under the Securities Act of all Registrable Securities which Instinet has been
so requested to register, to the extent required to permit the disposition (in
accordance with such intended method of disposition thereof) of the Registrable
Securities so requested to be registered; provided, that:

            (b) if, at any time after giving such Section 3.2 Notice of its
intention to register any Other Securities and prior to the effective date of
the registration statement filed in connection with such registration, Instinet
shall determine for any reason not to register the Other Securities, Instinet
may, at its election (subject to any other obligations it may have in connection
therewith), give written notice of such determination to such Holders and
thereupon Instinet shall be relieved of its obligation to register such
Registrable Securities in connection with the registration of such Other
Securities, without prejudice, however, to the rights of a Holder of Registrable
Securities immediately to request that such registration be effected as a
registration under Section 3.1 or Section 3.3 to the extent permitted
thereunder;

            (c) if the registration referred to in the first sentence of this
Section 3.2 is to be an underwritten registration on behalf of Instinet, and the
lead underwriter or managing underwriter advises Instinet in writing that, in
such firm's good faith view, all or a part of such Other Securities and
Registrable Securities cannot be sold and the inclusion of all or a part of such
Other Securities and Registrable Securities in such registration would be likely
to have an adverse effect upon the price, timing or distribution of the offering
and sale of the Other Securities and Registrable Securities then contemplated,
Instinet shall include in such registration: (i) first, all Other Securities
Instinet proposes to sell for its own account ("Instinet Securities"), (ii)
second, all (A) Other Securities proposed to be sold on behalf of any
stockholder of Instinet who beneficially owns a greater number of shares of
Common Stock than the Reuters Entities beneficially own and (B) Registrable
Securities held by Holders that are requested to be included in such
registration (Registrable Securities that are so held being sometimes referred
to herein as "Holder Securities") in excess of the number of Other Securities to
be sold in such offering pursuant to clause (i) above which, in the good faith
view of such investment banking firm, can be sold without adversely affecting
such offering (and (x) if such number is less than the full number of such Other
Securities and Holder Securities, such number shall be allocated pro rata among
holders of such Other Securities (other than Instinet Securities) and Holders of
Registrable Securities on the basis of the number of securities requested to be
included therein by each such holder) and (y) in the event that such investment
banking firm advises that less than all of such Holder Securities may be
included in such offering, such Holders may withdraw their request for
registration of their Registrable Securities under this Section 3.2 and 90 days
subsequent to the effective date of the registration statement for the
registration of such Other Securities and/or remaining Holder Securities request
that such registration be effected as a registration under Section 3.1 or
Section 3.3 to the extent permitted thereunder); and (iii) third, up to the full
number of the Other Securities (other than those registered pursuant to clauses
(i) and (ii) above), if any, in excess of the number of Other Securities and
Registrable Securities to be sold in such offering pursuant to clauses (i) and
(ii) above which, in the good faith view of such investment banking firm, can be
so sold without so adversely affecting such offering;

            (d) if the registration referred to in the first sentence of this
Section 3.2 is to be an underwritten secondary registration on behalf of holders
(other than Instinet) of Other Securities
<PAGE>   14
                                                                              14

(the "Other Holders"), and the lead underwriter or managing underwriter advises
Instinet in writing that in their good faith view, all or a part of such
additional securities cannot be sold and the inclusion of such additional
securities in such registration would be likely to have an adverse effect on the
price, timing or distribution of the offering and sale of the Other Securities
and Registrable Securities then contemplated, Instinet shall include in such
registration (i) first, (A) Other Securities sought to be included therein by
the Other Holders pursuant to the exercise of their demand registration rights,
and (B) the number of Holder Securities sought to be included in such
registration (and if such number is less than the full number of such Other
Securities and Holder Securities, such number shall be allocated 66.67% among
the holders of such Other Securities and 33.33% among the Holders of such Holder
Securities (provided that (x) if such number of securities allocated to the
Holders is less than the full number of Registrable Securities requested to be
included, such number shall be allocated pro rata among Holders of Registrable
Securities on the basis of the number of Registrable Securities then held by
each such Holder (unless other agreed by the Holders) and (y) any number of
securities in excess of the request of the holders of Other Securities pursuant
to clause (A) above shall be reallocated among the requesting Holders in a like
manner); provided that in the event that less than all of such Holder Securities
may be included in such offering, any Holder may withdraw its request for
registration of its Registrable Securities under this Section 3.2 and 90 days
subsequent to the effective date of the registration statement for the
registration of such Other Securities and/or remaining Holder Securities request
that such registration be effected as a registration under Section 3.1 or
Section 3.3 to the extent permitted thereunder, and (ii) second, up to the full
number of the Other Securities (other than Other Securities registered pursuant
to clause (i)), if any, in excess of the number of Other Securities and
Registrable Securities to be sold in such offering pursuant to clause (i) above
which, in the good faith view of such investment banking firm, can be sold
without so adversely affecting such offering;

            (e) Instinet shall not be required to effect any registration of
Registrable Securities under this Section 3.2 incidental to the registration of
any of its securities on Forms S-4 or S-8 (or any similar or successor form
thereto in connection with mergers, acquisitions, exchange offers, subscription
offers, dividend reinvestment plans or stock option or other executive or
employee benefit or compensation plans) (or any other form that would not be
available for registration of Registrable Securities); and

            (f) no registration of Registrable Securities effected under this
Section 3.2 shall relieve Instinet of its obligation to effect a registration of
Registrable Securities pursuant to Section 3.1 or Section 3.3 (except as
otherwise provided in Section 3.1 or Section 3.3).

            3.3. Form S-3/Shelf Registration. (a) Instinet shall use all
reasonable efforts to qualify for registration on Form S-3 or any comparable or
successor form or forms. After Instinet has qualified for the use of Form S-3,
in addition to the rights contained in the foregoing provisions of this Article
III, the Holders of Registrable Securities, shall have the right at any time,
and from time to time, to request that Instinet prepare and file with the SEC a
"shelf" registration statement (the "Shelf Registration Statement") on the
appropriate form for an offering to be made on a continuous or delayed basis
pursuant to Rule 415 under the Securities Act (or any successor rule or similar
provision then in effect) covering all or part of the Registrable Securities.
Instinet shall use all reasonable efforts to have the Shelf Registration
Statement declared effective by the SEC as soon as practicable after such
request is made and to
<PAGE>   15
                                                                              15

keep such Shelf Registration Statement continuously effective and free of
material misstatements or omissions (including the preparation and filing of any
amendments and supplements necessary for that purpose) until the earlier of (i)
the date on which all Holders have consummated the sale of all of such Holders'
Registrable Securities registered under the Shelf Registration Statement or (ii)
two years from the date the Shelf Registration Statement first became effective.
Notwithstanding any other provision contained herein, there shall be no
limitation on the number of registrations on Form S-3 that may be requested and
obtained by Holders pursuant to this Section 3.3.

            (b) With respect to any Shelf Registration Statement filed, or to be
filed, pursuant to this Section 3.3, (i) if Instinet determines in the good
faith judgment of the Board of Directors, such registration would cause Instinet
to disclose material non-public information which disclosure would be materially
detrimental to Instinet or would materially interfere with any material
financing, acquisition, corporate reorganization or merger or other transaction
involving Instinet and any of its Subsidiaries and the Board of Directors
concludes, as a result of such potential disclosure or interference, that it is
in the best interests of Instinet to defer the filing of such Shelf Registration
Statement at such time, and (ii) Instinet shall furnish to such Holders'
Representative a certificate signed by the chief executive officer of Instinet
stating that in the good faith judgment of the Board of Directors, it would be
materially detrimental to Instinet for such Shelf Registration Statement to be
filed in the near future and that it is, therefore, in the best interests of
Instinet to defer the filing of such Shelf Registration Statement, then Instinet
shall have the right to defer such filing, provided that such deferral, together
with any other deferral or suspension of its obligations under Section 3.1 or
Section 3.3, shall not be effected more than twice in any twelve-month period or
for a period of more than one hundred and twenty (120) days, in the aggregate,
for all such deferrals or suspensions over such twelve-month period.

            (c) Instinet agrees, if necessary, to supplement or amend the Shelf
Registration Statement, as required by the rules, regulations or instructions
applicable to the registration form used by Instinet for such Shelf Registration
Statement or by the Securities Act or as otherwise required by this Agreement,
and shall use its all reasonable efforts to have such supplements and amendments
declared effective, if required, as soon as practicable after filing.

            (d) A registration will not be deemed to have been effected pursuant
to a Shelf Registration Statement unless the Shelf Registration Statement with
respect thereto has been declared effective by the SEC and Instinet has complied
in all material respects with its obligations under this Agreement with respect
thereto; provided, however, that if after the Shelf Registration Statement has
been declared effective, the offering of Registrable Securities pursuant to such
Shelf Registration Statement is interfered with by any stop order, injunction,
or other order or requirement of the SEC or any other governmental agency or
court, such Shelf Registration Statement will be deemed not to have been
effective during the period of such interference until the offering of
Registrable Securities pursuant to such Shelf Registration Statement may legally
resume.

            (e) (i) If Instinet determines in the good faith judgment of the
Board of Directors, the availability of the Shelf Registration Statement for use
would cause Instinet to disclose material non-public information which
disclosure would be materially detrimental to Instinet or would materially
interfere with any material financing, acquisition, corporate reorganization or
<PAGE>   16
                                                                              16

merger or other transaction involving Instinet and any of its Subsidiaries and
the Board of Directors concludes, as a result of such potential disclosure or
interference, that it is in the best interests of Instinet to suspend the use of
such Shelf Registration Statement at such time, and (ii) Instinet shall furnish
to each Holder a certificate signed by the chief executive officer of Instinet
stating that in the good faith judgment of the Board of Directors, it would be
materially detrimental to Instinet for such Shelf Registration Statement to be
available for use in the near future and that it is, therefore, in the best
interests of Instinet to suspend the use of such Shelf Registration Statement,
then Instinet shall have the right to suspend the use of such Shelf Registration
Statement, provided that such suspension, together with any other suspension or
deferral of its obligations under Section 3.1 or Section 3.3, shall not be
effected more than twice in any twelve-month period or for a period of more than
one hundred and twenty (120) days, in the aggregate, for all such suspensions or
deferrals over such twelve-month period.

            3.4. Expenses. Except as provided herein, Instinet shall pay all
Registration Expenses with respect to a particular offering (or proposed
offering). Except as provided herein, each Holder and Instinet shall be
responsible for its own fees and expenses of counsel and financial advisors and
internal administrative and similar costs, as well as their pro rata share of
underwriters' commissions and discounts, which shall not constitute Registration
Expenses.

            3.5. Registration and Qualification. If and whenever Instinet is
required to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 3.1, 3.2 or 3.3, Instinet shall as
promptly as practicable:

            (a) prepare, file and use its reasonable best efforts to cause to
become effective a registration statement under the Securities Act relating to
the Registrable Securities to be offered;

            (b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the disposition of all
Registrable Securities until the earlier of (A) such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition set forth in such registration statement and (B) the
expiration of six months (or two years in the case of a registration pursuant to
Section 3.3) after such registration statement becomes effective; provided, that
such six-month or two-year period shall be extended for such number of days that
equals the number of days elapsing from (x) the date the written notice
contemplated by paragraph (f) below is given by Instinet to (y) the date on
which Instinet delivers to the Holders of Registrable Securities the supplement
or amendment contemplated by paragraph (f) below;

            (c) furnish to the Holders of Registrable Securities and to any
underwriter of such Registrable Securities such number of conformed copies of
such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in such registration
statement or prospectus, and such other documents, as the Holders of Registrable
Securities or such underwriter may reasonably request, and upon request a copy
of any and all transmittal letters or other
<PAGE>   17
                                                                              17

correspondence to or received from, the SEC or any other governmental agency or
self-regulatory body or other body having jurisdiction (including any domestic
or foreign securities exchange) relating to such offering;

            (d) use its commercially reasonable efforts to register or qualify
all Registrable Securities covered by such registration statement under the
securities or blue sky laws of such U.S. jurisdictions as the Holders of such
Registrable Securities or any underwriter to such Registrable Securities shall
request, and use its reasonable best efforts to obtain all appropriate
registrations, permits and consents in connection therewith, and do any and all
other acts and things which may be necessary or advisable to enable the Holders
of Registrable Securities or any such underwriter to consummate the disposition
in such jurisdictions of its Registrable Securities covered by such registration
statement; provided, that Instinet shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any such
jurisdiction wherein it is not so qualified or to consent to general service of
process in any such jurisdiction;

            (e) (i) use its best efforts to furnish to each Holder of
Registrable Securities included in such registration (each, a "Selling Holder")
and to any underwriter of such Registrable Securities an opinion of counsel for
Instinet addressed to each Selling Holder and dated the date of the closing
under the underwriting agreement (if any) (or if such offering is not
underwritten, dated the effective date of the registration statement), (ii) use
its best efforts to furnish to each Selling Holder a "cold comfort" and
"bring-down" letter addressed to each Selling Holder and any underwriter of such
Registrable Securities and signed by the independent public accountants who have
audited the financial statements of Instinet included in such registration
statement, in each such case covering substantially the same matters with
respect to such registration statement (and the prospectus included therein) as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of securities
and such other matters as the Selling Holders may reasonably request and, in the
case of such accountants' letter, with respect to events subsequent to the date
of such financial statements and (iii) cause such authorized officers of
Instinet to execute customary certificates as may be requested by the Selling
Holders or any underwriter of such Registrable Securities;

            (f) as promptly as practicable, notify the Selling Holders in
writing (i) at any time when a prospectus relating to a registration pursuant to
Sections 3.1, 3.2 or 3.3 is required to be delivered under the Securities Act of
the happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and (ii) of any request by the SEC or any
other regulatory body or other body having jurisdiction for any amendment of or
supplement to any registration statement or other document relating to such
offering, and in either such case, at the request of the Selling Holders prepare
and furnish to the Selling Holders a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
<PAGE>   18
                                                                              18

make the statements therein, in light of the circumstances under which they are
made, not misleading;

            (g) cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange and automated interdealer
quotation system on which similar securities issued by Instinet are then listed;

            (h) provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such registration;

            (i) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make available to each seller
of Registrable Securities, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve (12) months, but not more than
eighteen (18) months, beginning with the first month after the effective date of
the Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;

            (j) to the extent reasonably requested by the lead or managing
underwriters, send appropriate officers of Instinet to attend any "road shows"
scheduled in connection with any such registration, with all out-of-pocket costs
and expense incurred by Instinet or such officers in connection with such
attendance to be paid by Instinet; provided that in connection with offerings
made pursuant to Sections 3.1 and 3.3, Instinet shall only be obligated to pay
such road show expenses in connection with a total of four such offerings; and

            (k) furnish for delivery in connection with the closing of any
offering of Registrable Securities pursuant to a registration effected pursuant
to Sections 3.1, 3.2 or 3.3 unlegended certificates representing ownership of
the Registrable Securities being sold in such denominations as shall be
requested by the Selling Holders or the underwriters (it being understood that
any Reuters Entity and any Transferee would agree to use their commercially
reasonable efforts to arrange for delivery to the Depository Trust Company).

            3.6. Conversion of Other Securities, Etc. In the event that any
Holder offers any options, rights, warrants or other securities issued by it or
any other Person that are offered with, convertible into or exercisable or
exchangeable for any Registrable Securities, the Registrable Securities
underlying such options, rights, warrants or other securities shall continue to
be eligible for registration pursuant to Sections 3.1, 3.2 and 3.3.

            3.7. Underwriting; Due Diligence. (a) If requested by the
underwriters for any underwritten offering of Registrable Securities pursuant to
a registration requested under this Article III, Instinet shall enter into an
underwriting agreement with such underwriters for such offering, which agreement
will contain such representations and warranties by Instinet and such other
terms and provisions as are customarily contained in underwriting agreements of
Instinet to the extent relevant and as are customarily contained in underwriting
agreements generally with respect to secondary distributions to the extent
relevant, including, without limitation, indemnification and contribution
provisions substantially to the effect and to the extent provided in Section
3.8, and agreements as to the provision of opinions of counsel and accountants'
letters
<PAGE>   19
                                                                              19

to the effect and to the extent provided in Section 3.5(e). The Selling
Holders on whose behalf the Registrable Securities are to be distributed by such
underwriters shall be parties to any such underwriting agreement and the
representations and warranties by, and the other agreements on the part of,
Instinet to and for the benefit of such underwriters, shall also be made to and
for the benefit of such Selling Holders. Such underwriting agreement shall also
contain such representations and warranties by such Selling Holders and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, when relevant, including,
without limitation, indemnification and contribution provisions substantially to
the effect and to the extent provided in Section 3.8.

            (b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act pursuant to this Article III, Instinet shall give the Selling Holders of
such Registrable Securities and the underwriters, if any, and their respective
counsel and accountants, such reasonable and customary access to its books and
records and such opportunities to discuss the business of Instinet with its
officers and the independent public accountants who have certified the financial
statements of Instinet as shall be necessary, in the opinion of such Holders and
such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.

            3.8. Indemnification and Contribution. (a) In the case of each
offering of Registrable Securities made pursuant to this Article III, Instinet
agrees to indemnify and hold harmless, to the extent permitted by law, each
Selling Holder, each underwriter of Registrable Securities so offered and each
Person, if any, who controls any of the foregoing Persons within the meaning of
the Securities Act, the Affiliates of each of the foregoing, and the officers,
directors, employees and agents of each of the foregoing, against any and all
losses, liabilities, costs (including reasonable attorney's fees and
disbursements), claims and damages, joint or several, to which they or any of
them may become subject, under the Securities Act or otherwise, including any
amount paid in settlement of any litigation commenced or threatened, insofar as
such losses, liabilities, costs, claims and damages (or actions or proceedings
in respect thereof, whether or not such indemnified Person is a party thereto)
arise out of or are based upon any untrue statement by Instinet or alleged
untrue statement by Instinet of a material fact contained in the registration
statement (or in any preliminary or final prospectus included therein) or in any
offering memorandum or other offering document relating to the offering and sale
of such Registrable Securities prepared by Instinet or at its direction, or any
amendment thereof or supplement thereto, or in any document incorporated by
reference therein, or any omission by Instinet or alleged omission by Instinet
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however that Instinet
shall not be liable to any Person in any such case to the extent that any such
loss, liability, cost, claim or damage arises out of or relates to any untrue
statement or alleged untrue statement, or any omission, if such statement or
omission shall have been made in reliance upon and in conformity with
information relating to such Person, another holder of securities included in
such registration statement or underwriter furnished to Instinet by or on behalf
of such Person, other holder or underwriter specifically for use in the
registration statement (or in any preliminary or final prospectus included
therein), offering memorandum or other offering document, or any amendment
thereof or supplement thereto. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of any Selling
Holder, any other holder or any underwriter and shall survive the transfer of
such securities. The foregoing
<PAGE>   20
                                                                              20

indemnity agreement is in addition to any liability that Instinet may otherwise
have to each Selling Holder, other holder or underwriter of the Registrable
Securities or any controlling person of the foregoing and the officers,
directors, Affiliates, employees and agents of each of the foregoing. Each
Selling Holder, each underwriter of Registrable Securities so offered and each
Person, if any, who controls any of the foregoing Persons within the meaning of
the Securities Act, the Affiliates of each of the foregoing, and the officers,
directors, employees and agents of each of the foregoing shall not enter into
any settlement of any litigation commenced or threatened without the prior
written consent of Instinet (such consent not to be unreasonably withheld)
unless Instinet has failed to assume the defense of such action or employ
counsel reasonably satisfactory to the indemnified party.

            (b) In the case of each offering made pursuant to this Agreement,
each Selling Holder, by exercising its registration rights hereunder, agrees to
indemnify and hold harmless, and to cause each underwriter of Registrable
Securities included in such offering (in the same manner and to the same extent
as set forth in Section 3.8(a)) to agree to indemnify and hold harmless,
Instinet, each other underwriter who participates in such offering, each other
Selling Holder or other holder with securities included in such offering and in
the case of an underwriter, such Selling Holder or other holder, and each
Person, if any, who controls any of the foregoing within the meaning of the
Securities Act and the officers, directors, Affiliates, employees and agents of
each of the foregoing, against any and all losses, liabilities, costs (including
reasonable attorney's fees and disbursements), claims and damages to which they
or any of them may become subject, under the Securities Act or otherwise,
including any amount paid in settlement of any litigation commenced or
threatened, insofar as such losses, liabilities, costs, claims and damages (or
actions or proceedings in respect thereof, whether or not such indemnified
Person is a party thereto) arise out of or are based upon any untrue statement
or alleged untrue statement by such Selling Holder or underwriter, as the case
may be, of a material fact contained in the registration statement (or in any
preliminary or final prospectus included therein) or in any offering memorandum
or other offering document relating to the offering and sale of such Registrable
Securities prepared by Instinet or at its direction, or any amendment thereof or
supplement thereto, or any omission by such Selling Holder or underwriter, as
the case may be, or alleged omission by such Selling Holder or underwriter, as
the case may be, of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that such untrue statement of a material fact is contained in, or such
material fact is omitted from information relating to such Selling Holder or
underwriter, as the case may be, furnished to Instinet by or on behalf of such
Selling Holder or underwriter, as the case may be, specifically for use in such
registration statement (or in any preliminary or final prospectus included
therein), offering memorandum or other offering document, or any amendment
thereof or supplement thereto. The foregoing indemnity is in addition to any
liability which such Selling Holder or underwriter, as the case may be, may
otherwise have to Instinet, or controlling persons and the officers, directors,
Affiliates, employees and agents of each of the foregoing.

            (c) Each party entitled to indemnification under this Section 3.8
shall give notice to the party required to provide indemnification promptly
after such indemnified party has actual knowledge that a claim is to be made
against the indemnified party as to which indemnity may be sought, and shall
permit the indemnifying party to assume the defense of such claim or litigation
resulting therefrom and any related settlement and settlement negotiations,
subject to
<PAGE>   21
                                                                              21

the limitations on settlement set forth below; provided, that counsel for the
indemnifying party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the indemnified party
(whose approval shall not unreasonably be withheld), and the indemnified party
may participate in such defense at such party's expense; and provided, further,
that the failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under this Section
3.8, to the extent such failure is not materially prejudicial. Notwithstanding
the foregoing, an indemnified party shall have the right to retain separate
counsel, with the reasonable fees and expenses of such counsel being paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel or if the indemnifying party has failed to assume
the defense of such action (provided that in no event shall the indemnifying
party be responsible for the fees and costs of more than one such additional
counsel for all indemnified parties). No indemnifying party, in the defense of
any such claim or litigation, shall, except with the consent of each indemnified
party, consent to entry of any judgment or enter into any settlement that does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release, reasonably satisfactory to the
indemnified party, from all liability in respect to such claim or litigation.
Each indemnified party shall furnish such information regarding itself or the
claim in question as an indemnifying party may reasonably request in writing and
as shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.

            (d) If the indemnification provided for in this Section 3.8 shall
for any reason be unavailable (other than in accordance with its terms) to an
indemnified party in respect of any loss, liability, cost, claim or damage
referred to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, cost, claim or damage in
such proportion as shall be appropriate to reflect (i) the relative benefits
received by the indemnifying party on the one hand and the indemnified party on
the other hand or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, the relative benefits and the relative fault of the
indemnifying party on the one hand and the indemnified party on the other with
respect to the statements or omissions which resulted in such loss, liability,
cost, claim or damage as well as any other relevant equitable considerations.
The relative benefits received by the indemnifying party and the indemnified
party shall be deemed to be in the same respective proportion as the net
proceeds (before deducting expenses) of the offering received by such party (or,
in the case of an underwriter, such underwriter's discounts and commissions)
bear to the aggregate offering price of the Registrable Securities or Other
Securities. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
indemnifying party on the one hand or the indemnified party on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission, but not by
reference to any indemnified party's stock ownership in Instinet. The amount
paid or payable by an indemnified party as a result of the loss, cost, claim,
damage or liability, or action in respect thereof, referred to above in this
paragraph (d) shall be deemed to include, for purposes of this paragraph (d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the
<PAGE>   22
                                                                              22

Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

            (e) Indemnification and contribution similar to that specified in
the preceding paragraphs of this Section 3.8 (with appropriate modifications)
shall be given by Instinet, the Selling Holders and underwriters with respect to
any required registration or other qualification of securities under any state
law or regulation or governmental authority.

            (f) The obligations of the parties under this Section 3.8 shall be
in addition to any liability which any party may otherwise have to any other
party.

            3.9. Information by Holder. Each Holder shall furnish to Instinet
such information regarding such Holder and the distribution proposed by such
Holder as Instinet may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Article III.

            3.10. Rule 144 and Form S-3. Commencing 90 days after the Initial
Public Offering Date, Instinet shall use all reasonable efforts to ensure that
the conditions to the availability of Rule 144 set forth in paragraph (c)
thereof shall be satisfied. Instinet agrees to use all reasonable efforts to
file with the SEC in a timely manner all reports and other documents required of
Instinet under the Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), at any time after it has become subject to such
reporting requirements. Upon the request of any Holder of Registrable Securities
and for so long as such information is a necessary element of such Holders'
ability to avail itself of Rule 144, Instinet will deliver to such Holder (i) a
written statement as to whether it has complied with such requirements and (ii)
a copy of the most recent annual or quarterly report of Instinet, and such other
reports and documents so filed as a Holder may reasonably request in availing
itself of any rule or regulation of the SEC allowing a Holder to sell any such
securities without registration. Instinet further agrees to use its reasonable
efforts to cause all conditions to the availability of Form S-3 (or any
successor form) under the Securities Act of the filing of registration
statements under this Agreement to be met as soon as practicable after the
Initial Public Offering Date.

            3.11. Holders' Priority. The Holders may exercise their rights under
Article III in such priority as they shall agree upon among themselves.

            3.12. Holdback Agreement. (a) If any registration pursuant to this
Article III shall be in connection with an underwritten public offering of
Registrable Securities, each Holder of more than 5% of the Total Voting Power of
Instinet at the time of such registration or offering agrees not to effect any
public sale or distribution, including any sale under Rule 144, of any equity
security of Instinet or any security convertible into or exchangeable or
exercisable for any equity security of Instinet, (otherwise than through the
registered public offering then being made), within 7 days prior to or 90 days
(or such lesser period as the lead or managing underwriters may permit) after
the effective date of the registration statement (or the commencement of the
offering to the public of such Registrable Securities in the case of Rule 415
offerings); provided that each such Holder shall only be bound so long as (i)
each Instinet Transferee and (ii) each director and executive officer of
Instinet is similarly bound. Instinet hereby also agrees to be subject to the
restrictions set forth in the preceding sentence; provided,
<PAGE>   23
                                                                              23

that, Instinet shall not be so restricted from effecting any public sale or
distribution of any security in connection with any merger, acquisition,
exchange offer, subscription offer, dividend reinvestment plan or stock option
or other executive or employee benefit or compensation plan.

            (b) Instinet agrees to require each Instinet Transferee to agree not
to effect any public sale or distribution, including any sale under Rule 144, of
any equity security of Instinet or any security convertible into or exchangeable
or exercisable for any equity security of Instinet (otherwise than through the
registered public offering then being made), within 7 days prior to or 90 days
(or such lesser period as the lead or managing underwriters may permit) after
the effective date of the registration statement (or the commencement of the
offering to the public of such Registrable Securities in the case of Rule 415
offerings) for any registration pursuant to this Article III made in connection
with an underwritten public offering of Registrable Securities.

            3.13. Termination of Registration Rights. The right of any Holder to
request registration pursuant to Sections 3.1 or 3.3 shall be suspended on such
date when all shares of Registrable Securities held or entitled to be held by
such Holder may be sold pursuant to Rule 144(k) under the Securities Act;
provided that in order for such rights to terminate with respect to such Holder,
such Holder shall have received an opinion of counsel (which such counsel shall
be satisfactory to such Holder) confirming that all shares of Registrable
Securities held or entitled to be held by such Holder may be sold pursuant to
Rule 144(k). Instinet shall pay all expenses with respect to the opinion
referred to in this Section 3.13.

                                   ARTICLE IV
                         CERTAIN COVENANT AND AGREEMENTS

            4.1. No Violations. Instinet covenants and agrees that it will not,
and will cause the Instinet Entities not to, take any action or enter into any
commitment or agreement which may reasonably be anticipated to result, with or
without notice and with or without lapse of time or otherwise, in a
contravention of any stock exchange rule or similar requirement applicable to
any Reuters Entity (of which Instinet has knowledge of or has otherwise been
made aware by Reuters). Reuters covenants and agrees that it will not, and will
cause the Reuters Entities not to, take any action or enter into any commitment
or agreement which may reasonably be anticipated to result, with or without
notice and with or without lapse of time or otherwise, in a contravention of any
stock exchange rule or similar requirement applicable to any Instinet Entity (of
which Reuters has knowledge or has otherwise been made aware of by Instinet).

            4.2. Regulatory Requirements. Subject to the terms and conditions
hereof, Instinet agrees, and agrees to cause each Instinet Entity, and Reuters
agrees, and agrees to cause each Reuters Entity, to use their commercially
reasonable efforts to promptly take, or cause to be promptly taken, or to
refrain or cause to refrain from, as applicable, all action and to do, or cause
to be done, all things necessary, on their respective parts, to assist each
other in obtaining all governmental licenses, permits, consents, approvals,
authorizations, qualifications and orders and to permit each other to be in
compliance with all legal and regulatory requirements (of which such party has
knowledge or has otherwise been made aware of by the other party hereto) as are
reasonably necessary in connection with the operation of their respective
businesses. Instinet shall promptly furnish, and shall cause each Instinet
Entity to furnish, Reuters with such information and assistance as Reuters may
reasonably request in connection with the preparation
<PAGE>   24
                                                                              24

of any necessary filings or submissions by any Reuters Entity to any
governmental or regulatory agency or stock exchange or as otherwise necessary to
comply with law or regulation, including, without limitation, any filings
necessary under the provisions of the HSR Act, the Securities Act, the Exchange
Act or any rules or regulations of the European Union or pursuant to the
requirements of the London Stock Exchange. Reuters shall furnish, and shall
cause each Reuters Entity to furnish, Instinet with such information and
assistance as Instinet may reasonably request in connection with the preparation
of any necessary filings or submissions by any Instinet Entity to any
governmental or regulatory agency or stock exchange or as otherwise necessary to
comply with law or regulation, including, without limitation, any filings
necessary under the provisions of the HSR Act, the Securities Act, the Exchange
Act or any rules or regulations of the European Union.

            4.3. Fees and Expenses. Instinet hereby agrees to pay promptly upon
request the fees and reasonable out-of-pocket expenses of the financial advisors
of Reuters in connection with Instinet's Initial Public Offering.

            4.4. Delaware 203. So long as the Reuters Entities or any Transferee
and its Affiliates beneficially own 15% or more of the Total Voting Power of
Instinet, Instinet hereby agrees not to amend its Certificate of Incorporation
to "opt-in" to Delaware 203 without the prior written consent of Reuters or such
Transferee. At any time within three years of the date the Reuters Entities
cease to beneficially own at least 15% of the Total Voting Power of Instinet,
Reuters shall vote all of the Common Stock held by Reuters Entities in favor of
any amendment (which is approved by the Board of Directors) to Instinet's
Certificate of Incorporation that proposes to "opt-in" to Delaware 203.

            4.5. Limitation on Incurrence of Indebtedness. So long as the
Reuters Entities beneficially own more than 50% of the Total Voting Power of
Instinet, Instinet hereby agrees not to incur (after giving pro forma effect to
such incurrence) in excess of an aggregate of $400 million of Net Indebtedness
outstanding at any one time without Reuters' prior written consent.

                                   ARTICLE V
                               INFORMATION RIGHTS

            5.1. Financial Information. (a) So long as the Reuters Entities
beneficially own 50% or more of the Total Voting Power of Instinet, Instinet
shall deliver to the Reuters Parent:

                  (i) for each fiscal month, (x) a balance sheet of Instinet and
            its consolidated Subsidiaries (including amounts owed by or owing to
            the Reuters Entities) as of the end of such fiscal month prepared on
            generally the same basis as is prepared by Instinet and submitted to
            the Reuters Parent on the date hereof, together with the related
            statements of stockholders' equity and the related income statements
            for Instinet and its consolidated Subsidiaries for such fiscal month
            and for the year to date, and broken out by each division or segment
            of Instinet for which Instinet provides separate financial
            information, if any, on a basis consistent with the basis Instinet
            reports such division or segment on the date hereof; provided that
            Instinet may reasonably change such internal reporting practices if
            written notice of such change is provided to Reuters, (all of the

<PAGE>   25
                                                                              25

            foregoing financial statements, collectively, the "Financial
            Statements") and (y) the information set forth in Schedule 5.1(a)
            hereto; and

                  (ii) for each fiscal year and half-year, (A) draft Financial
            Statements and supporting information consistent with the Reuters
            Parent's accounting practices and policies (together with such
            information as is required by the Reuters Parent's accounting
            practices and policies as in effect from time to time) of Instinet
            and its consolidated Subsidiaries as of the last day of such fiscal
            year (or such other period as may be required by the Reuters Parent
            for public reporting purposes), together with a reconciliation
            thereof to US GAAP, (B) for year-end audited US GAAP only Financial
            Statements of Instinet and its consolidated Subsidiaries (reported
            on by Instinet's primary outside auditor who shall be an
            internationally recognized accounting firm) as of the last day of
            such fiscal year (or such other period as may be required by the
            Reuters Parent for public reporting purposes), together with a
            reconciliation thereof to UK GAAP, (together with such information
            as is required by the Reuters Parent's accounting practices and
            policies from time to time) and (C) commentary on key features of
            performance and comparisons of prior corresponding periods.

            (b) So long as the Reuters Entities beneficially own 20% or more of
the Total Voting Power of Instinet (or if the Reuters Parent is otherwise
required to treat Instinet as an "associate" under UK GAAP), Instinet shall
deliver to the Reuters Parent:

            (i) for each fiscal quarter, (A) Financial Statements for such
      fiscal quarter and for the year to date, together with a reconciliation
      thereof to UK GAAP, (B) commentary on key features of performance and
      comparisons of prior corresponding periods and (C) the information set
      forth in Schedule 5.1(b)(i) hereto; and

            (ii) for each fiscal year and half-year, (A) draft Financial
      Statements and supporting information of Instinet and its consolidated
      Subsidiaries as of the last day of such fiscal year and half-year,
      together with a reconciliation thereof to UK GAAP, (B) audited year-end
      only Financial Statements of Instinet and its consolidated Subsidiaries,
      together with a reconciliation thereof to UK GAAP, reported on by
      Instinet's primary outside auditor who shall be an internationally
      recognized accounting firm and (C) commentary on key features of
      performance and comparisons of prior corresponding periods.

            (c) Instinet shall use all reasonable efforts consistent with past
practices, and in consultation with the Reuters Parent, to prepare and submit
(i) all Financial Statements and related financial information pursuant to
Section 5.1(a), in accordance with the Reuters Parent accounting policies and
practices (as may reasonably change from time to time) and (ii) all Financial
Statements and related financial information pursuant to Section 5.1(b) in
accordance with US GAAP, in each case except as otherwise set forth herein. The
Reuters Parent shall provide Instinet with such assistance as is reasonably
necessary, consistent with past practice, to assist Instinet in ensuring that
such financial information is prepared in accordance with the Reuters Parent's
accounting practices and policies. Instinet shall provide the Reuters Parent
with reasonable access to such employees of the Instinet Entities as is
reasonably necessary to
<PAGE>   26
                                                                              26

understand and evaluate the information required to be submitted to the Reuters
Parent by Instinet pursuant to Sections 5.1 (a) and (b).

            (d) (i) So long as the Reuters Entities beneficially own 50% or more
of the Total Voting Power of Instinet and except as otherwise expressly
provided, the information required by Section 5.1(a) shall be delivered to the
Reuters Parent within the timeframes required by the Reuters Parent's internal
and external accounting and reporting practices as in effect on the date hereof
or as may be reasonably modified by the Reuters Parent subject to Instinet's
consent, which consent shall not be unreasonably withheld. Instinet shall use
commercially reasonable efforts to provide all information to the Reuters Parent
pursuant to this Section 5.1 in a format reasonably consistent with the format
of the Reuters Parent public financial statements as in effect from time to
time. Instinet shall cooperate with the Reuters Parent in connection with the
preparation of the financial information required by the Reuters Parent, and
shall make financial officers and managers available, upon reasonable notice and
at reasonable times, to discuss and review with the Reuters Parent and its
independent accountants the financial information provided to the Reuters Parent
pursuant to this Section 5.1(d)(i).

            (ii) So long as the Reuters Entities beneficially own at least 20%
or more but less than 50% of the Total Voting Power of Instinet and except as
otherwise expressly provided, Instinet shall use reasonable commercial efforts
to deliver, the information required by Section 5.1(b) to the Reuters Parent
within the timeframes required by the Reuters Parent's internal and external
accounting and reporting practices as in effect on the date hereof or as may be
reasonably modified by the Reuters Parent and agreed with Instinet. Instinet
shall cooperate with Reuters in connection with the preparation of the financial
information required by Reuters, and shall make financial officers and managers
available, upon reasonable notice and at reasonable times, to discuss and review
with Reuters and its independent accountants the financial information provided
to Reuters pursuant to this Section 5.1(d)(ii).

            (e) So long as Instinet is required to deliver information pursuant
to Section 5.1(a),

            (i) Instinet and the Reuters Parent shall coordinate the public
      release and disclosure of their public financial information including,
      but not limited to, (A) earnings releases and trading statements, (B)
      quarterly and annual reports and (C) restatement of earnings, so that all
      public disclosure of material new financial information of either which
      includes or is included in information of the other shall be made on the
      same day and, as far as practicably possible, at the same time, and
      provided that if either is unprepared to make its own release or disclose
      on the scheduled day through no fault of the other, the other may proceed
      with its release or disclosure as previously contemplated provided,
      further, that the provisions of this subsection (e)(i) shall not apply to
      either party, if in the reasonable judgment of the releasing party, it is
      required by law, market practice or regulation to release information on a
      basis inconsistent with the other party's schedule;

                  (ii) Instinet shall provide the Reuters Parent with drafts of
      Instinet's public quarterly, annual and other filings, disclosures and
      reports that contain financial information and/or discussion and the
      Reuters Parent shall provide Instinet with drafts of
<PAGE>   27
                                                                              27

      the sections of the Reuters Parent's public quarterly, annual and other
      filings, disclosures and reports that contain financial information and/or
      discussion that relates to Instinet, in each case sufficiently in advance
      of filing to permit the recipient to review such materials to ensure
      consistency with similar information to be included in its own materials;
      and

                  (iii) So long as the Reuters Entities beneficially own 50% or
      more of the Total Voting Power of Instinet, Instinet shall not change its
      fiscal year without the prior written consent of Reuters.

            5.2. Annual Business Plan and Budget. So long as the Reuters
Entities beneficially own 50% or more of the Total Voting Power of Instinet,
Instinet shall, consistent with past practice and in accordance with reporting
timetables agreed to by the parties hereto, (A) prepare and submit to the
Reuters Parent a profit forecast for the upcoming three fiscal years including
(i) business forecasts and (ii) details of assumptions used, (B) provide the
Reuters Parent a copy of the budget for the upcoming fiscal year and in
accordance with the Reuters Parent's reporting timetable as may be changed from
time to time subject to Instinet's consent, which consent shall not be
unreasonably withheld, including monthly projections of capital, profits and
losses, manpower and cash flow (collectively the "Annual Budget"), (C) provide
an updated quarterly outlook of information provided under clause (B) above for
current and upcoming financial year in accordance with existing timetables
(collectively the "Outlook") and (D) provide half-yearly tax forecasts
consistent with past practice. Notwithstanding the foregoing, so long as the
Reuters Entities beneficially own at least 20% or more of the Total Voting Power
of Instinet, Instinet shall provide the Reuters Parent with an Annual Budget of
profits or losses with quarterly updated Outlooks of profits or losses in
accordance with reporting timetables agreed to by the parties hereto.

            5.3. Audit Rights. To the extent that the Reuters Audit Committee
is required by law or stock exchange requirements to audit, or cause to audit,
any of the affairs of any Instinet Entity, Instinet shall allow on reasonable
notice, the Reuters Audit Committee or its representatives to audit the affairs
of Instinet, including (i) having access to (and take copies of) the records of
the Instinet Entities (and the working papers of its accountants); (ii) having
access to the premises of any Instinet Entity and to have the ability to
consult and discuss matters with the auditors, advisors and management of any
Instinet Entity (during normal office hours). Instinet shall, and (iii)
procuring that each Instinet Entity shall, co-operate fully with the Reuters
Audit Committee and its representatives in relation to this process. In
addition, Instinet shall use all reasonable efforts to allow the independent
accountants of Reuters to audit the working papers of and to assist in any
review undertaken by Instinet's independent accountants. The Reuters Audit
Committee shall coordinate its efforts in good faith with, and work with and
through, the Audit Committee of the Board of Directors and the Instinet
internal audit department to accomplish such objectives.

                                   ARTICLE VI
                         REPRESENTATIONS AND WARRANTIES

            6.1. Reuters represents and warrants as follows:

            (a) Status and Authority. Reuters is a company duly organized and
validly existing under the laws of England and Wales. The execution and delivery
by Reuters of this
<PAGE>   28
                                                                              28

Agreement and the performance of its obligations hereunder have been duly
authorized by all necessary corporate action on the part of Reuters, and this
Agreement has been duly executed and delivered by the duly authorized officers
of Reuters and constitutes the valid, legal and binding obligation of Reuters.

            (b) No Conflicts.

            (i) The execution, delivery and performance of this Agreement by
      Reuters will not result in (A) any conflict with the charter documents of
      any Reuters Entity, (B) any material breach or violation of or default
      under any statute, law, rule, regulation, judgment, decree, order or any
      material mortgage, deed of trust, indenture, agreement or any other
      instrument to which any Reuters Entity is a party or by which any of their
      respective material properties or assets are bound, or (C) the creation or
      imposition of any lien, charge, pledge or encumbrance thereon, except for
      such breaches, violations or defaults and such liens, charges, pledges or
      encumbrances as would not, individually or in the aggregate, have a
      material adverse effect on Reuters' business or adversely affect the
      ability of Reuters' to perform its obligations hereunder.

            (ii) No consent, approval or authorization of or filing with any
      governmental authority is required with respect to Reuters in connection
      with the execution and delivery of this Agreement, and the performance by
      Reuters of its obligations hereunder.

            (c) No Litigation. There no judicial or administrative actions,
proceedings or investigations pending or, to the best knowledge or Reuters,
threatened, which question the validity of this Agreement or any action taken or
to be taken by Reuters in connection herewith.

            6.2. Instinet represents and warrants as follows:

            (a) Status and Authority. Instinet is a company duly organized,
validly existing in good standing under the laws of Delaware. The execution and
delivery by Instinet of this Agreement and the performance of its obligations
hereunder have been duly authorized by all necessary corporate action on the
part of Instinet, and this Agreement has been duly executed and delivered by the
duly authorized officers of Instinet and constitutes the valid, legal and
binding obligation of Instinet.

            (b) No Conflicts.

            (i) The execution, delivery and performance of this Agreement by
      Instinet will not result in (A) any conflict with the charter documents of
      any Instinet Entity (B) any material breach or violation of or default
      under any statute, law, rule, regulation, judgment, decree, order or any
      material mortgage, deed of trust, indenture, agreement or any other
      instrument to which any Instinet Entity is a party or by which any of
      their respective material properties or assets are bound, or (C) the
      creation or imposition of any lien, charge, pledge or encumbrance thereon,
      except for such breaches, violations or defaults and such liens, charges,
      pledges or encumbrances as would not, individually or in the aggregate,
      have a material adverse effect on Instinet's business or adversely affect
      the ability of Instinet to perform its obligations hereunder.
<PAGE>   29
                                                                              29

            (ii) Except as set forth on Schedule 6.2(b)(ii), no consent,
      approval or authorization of or filing with any governmental authority is
      required with respect to Instinet in connection with the execution and
      delivery of this Agreement, and the performance by Instinet of its
      obligations hereunder.

            (c) No Litigation. There are no judicial or administrative actions,
proceedings or investigations pending or to the best knowledge of Instinet,
threatened, which question the validity of this Agreement or any action taken or
to be taken by Instinet in connection herewith.

                                  ARTICLE VII
                                  MISCELLANEOUS

            7.1. Subsidiaries. Reuters agrees and acknowledges that Reuters
shall be responsible for the performance by each Reuters Entity of the
obligations hereunder applicable to such Reuters Entity. Instinet agrees and
acknowledges that Instinet shall be responsible for the performance by each
Instinet Entity of the obligations hereunder applicable to such Instinet Entity.

            7.2. Amendments. This Agreement may be amended, supplemented or
otherwise modified only by a writing duly executed by or on behalf each of the
parties hereto. No waiver by any party of any of the provisions hereof shall be
effective unless explicitly set forth in writing and executed by the party so
waiving. Except as provided in the preceding sentence, no action taken pursuant
to this Agreement, including without limitation, any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the party taking
such action of compliance with any representations, warranties, covenants or
agreements contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.

            7.3. Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement or such provision
of the application of such provision to such party or circumstances, other than
those to which it is so determined to be invalid, illegal or unenforceable,
shall remain in full force and effect to the fullest extent permitted by law and
shall not be affected thereby, unless such a construction would be unreasonable.

            7.4. Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon actual
receipt, and shall be delivered (a) in person, (b) by registered or certified
mail, postage prepaid, return receipt requested or (c) by facsimile or other
generally accepted means of electronic transmission (provided that a copy of any
notice delivered pursuant to this clause (c) shall also be sent pursuant to
clause (a) or (b)) above, addressed as follows:

            (a)   if to Instinet, to:

                  Instinet Corporation
                  Three Times Square
                  10th Floor
<PAGE>   30
                                                                              30

                  Attention:  General Counsel
                  Telecopy No.:  646-223-9017

                  with a copy to:

                  Cleary, Gottlieb, Steen & Hamilton
                  One Liberty Plaza
                  New York, N.Y.  10006
                  Attention:  Alan L. Beller, Esq.
                  Telecopy No.:  212-225-3999

            (b)   If to Reuters, to:

                  Reuters Limited
                  85 Fleet Street
                  London England
                  EC4B 4AJ
                  Attention:  General Counsel
                  Telecopy No.:  011-44-207-542-5896

                  with a copy to:

                  Reuters America Inc.
                  The Reuters Building
                  3 Times Square
                  New York, New York  10036
                  Attention:  General Counsel
                  Telecopy No:  646-223-4250

                  and to:

                  Simpson Thacher & Bartlett
                  425 Lexington Avenue
                  New York, New York  10017
                  Attention: Vince Pagano, Esq.
                  Telecopy No.:  212-455-2502

or to such other addresses or telecopy numbers as may be specified by like
notice to the other parties; provided, however, that all notices and other
communications required or permitted hereunder regarding any Covered Transaction
shall be delivered only to Instinet Group Incorporated and Reuters Limited (with
a copy to Reuters America Inc.).

            7.5. Further Assurances. Reuters and Instinet shall execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments and take such other action as may be reasonably necessary or
advisable to carry out their obligations under this Agreement and under any
exhibit, document or other instrument delivered pursuant hereto.
<PAGE>   31
                                                                              31

            7.6. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.

            7.7. Entire Agreement. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.

            7.8. Successors. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns. Except as set forth in Section 7.12, nothing contained in
this Agreement, express or implied, is intended to confer upon any other Person
or entity any benefits, rights or remedies.

            7.9. Jurisdiction; Specific Performance. The parties to this
Agreement agree that jurisdiction and venue in any action brought by any party
hereto pursuant to this Amendment shall properly lie and shall be brought in any
federal or state court located in the Borough of Manhattan, City and State of
New York. By execution and delivery of this Agreement, each party hereto
irrevocably submits to the jurisdiction of such courts for itself or herself and
in respect of its or her property with respect to such action. The parties
hereto irrevocably agree that venue would be proper in such court, and hereby
irrevocably waive any objection that such court is an improper or inconvenient
forum for the resolution of such action. The parties hereto acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached.

            7.10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute but one and the same agreement.

            7.11. Assignment. Neither this Agreement nor any right or obligation
hereunder is assignable in whole or in part by any party without the prior
written consent of the other party hereto. Notwithstanding the foregoing, (a)
Reuters may transfer its rights and obligations under Section 2.3 (in whole or
in part), Article III (in whole or in part), Sections 4.1 and 4.2 (in whole),
Sections 4.4 and 4.5 (in whole and in part) and Sections 5.1 and 5.2 (in whole)
to any Transferee (and any Transferee may transfer such rights and obligations
to any subsequent Transferee) without the prior written consent of Instinet;
provided that a Transferee of less than a majority of the Total Voting Power of
Instinet may receive only those rights and obligations thereunder as to which
Reuters would be entitled to as a holder of such percentage interest or as are
specified herein.

            (b) Any assignment pursuant to paragraph (a) of this Section 7.11
shall be effective upon receipt by Instinet of (i) written notice from the
transferring Holder stating the name and address of any Transferee and
indentifying the number of Registrable Securities with respect to which the
rights under this Agreement are being transferred and the nature of the rights
so transferred and (ii) a written agreement in substantially the form attached
as Exhibit A hereto from such Transferee to be bound by the applicable terms of
this Agreement.

            7.12. Effective Only Following Completion of Initial Public
Offering. Neither this Agreement nor any right or obligation hereunder shall be
binding on the parties hereto and
<PAGE>   32
                                                                              32

enforceable against them in accordance with the terms thereof unless and until
the Initial Public Offering is complete.
<PAGE>   33
            IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.

                                    REUTERS LIMITED

                                    By: ______________________________
                                        Name:
                                        Title:

                                    INSTINET GROUP INCORPORATED

                                    By: ______________________________
                                        Name:
                                        Title:<PAGE>   1

                            FIRST AMENDMENT TO LEASE

        THIS AMENDMENT TO LEASE, dated as of the 4th day of April, 2001, by and
between TEN THIRTY-FIVE ASSOCIATES, LIMITED PARTNERSHIP, a New Jersey limited
partnership, having offices at 225 Highway 35, Red Bank, New Jersey 07701 (the
"Landlord"), and MILLENIUM CELL, LLC, a New Jersey limited liability company,
having offices at 1 Industrial Way West, Eatontown, New Jersey 07724 (the
"Tenant");

                              W I T N E S S E T H:

        WHEREAS, Landlord and Tenant have heretofore executed and delivered a
certain Lease, dated as of June 9, 1999, for the Tenant's rental of
approximately 9,730 rentable square feet of space, referred to in the lease as
Unit K, and commonly referred to as modules K and L in Building E (the
"Building"), in HovPark, One Industrial Way West, Eatontown, New Jersey (the
"First Leased Premises"), for a term of five (5) years (the "Base Lease"). All
capitalized terms that are used, but not defined, in this Amendment, shall have
the meanings assigned to such terms in the Base Lease;

        WHEREAS, Landlord and Tenant desire to amend the Base Lease in order to
(i) expand the premises leased to Tenant, (ii) modify the rent, (iii) extend the
term, (iv) amend the Tenant's renewal option, (v) provide Tenant with an
expansion option and (vi) otherwise amend the Base Lease, all as specifically
provided herein. As used herein, the "Lease" shall mean the Base Lease as
modified by this Amendment.

        NOW, THEREFORE, in consideration of the mutual covenants, terms and
conditions contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties specifically agree as
follows:

        1.      DEMISED PREMISES: (A) Landlord leases to Tenant, and Tenant
leases from Landlord, (i) the First Leased Premises, (ii) approximately 4,900
rentable square feet of space in the Building, commonly referred to as Module M
(the "Module M Premises") as set forth on the Building Plan attached hereto as
Exhibit B-1 and the Floor Plan attached hereto as Exhibit C-1, and (iii)
approximately 17,874 rentable square feet of space in the Building, commonly
referred to as Modules E, F, G, H and J, it being understood that there is no
Module I (the "Module E Premises") as set forth on the Building Plan attached
hereto as Exhibit B-1 and the Floor Plan attached hereto as Exhibit C-2. All
references in the Lease to the Demised Premises shall mean (i) the First Leased
Premises, until the Module M Commencement Date, as hereinafter defined; (ii) the
First Leased Premises and the Module M Premises, collectively, commencing on the
Module M Commencement Date until the Module E Commencement Date, as hereinafter
defined; and (iii) the First Leased Premises, the Module M Premises and the
Module E Premises, collectively, commencing on the Module E Commencement Date.

<PAGE>   2

                (B)     During the term of the Lease, Tenant shall also have a
non-exclusive right, in common with the Landlord and other tenants, to use the
parking lots, common areas and sidewalks for pedestrian and vehicular access to
the Demised Premises, subject to the rules and regulations as attached to the
Base Lease and to such amendments thereto as the Landlord may now or hereafter
adopt, and to the right of the Landlord to alter the parking lots, common areas
and sidewalks from time to time.

        2.      COMMENCEMENT DATES: (A) The Module M Premises are currently
occupied by Biological Controls under a lease which expires April 30, 2001,
although it is currently projected that Biological Controls may vacate the
Module M Premises on or about April 15, 2001. The Module M Commencement Date
shall be the earlier of the date on which (i) Landlord makes the Module M
Premises available to Tenant for the construction by Tenant of the Module M
Alterations, as defined in Paragraph 8 hereof, or (ii) Tenant first occupies all
or any part of the Module M Premises.

                (B)     The Module E Premises are currently occupied by York
Telecom under a lease which expires December 31, 2001, although it is currently
projected that York Telecom may vacate the Module E Premises on or about
September 1, 2001. The Module E Commencement Date shall be the earlier of the
date on which (i) the Landlord has obtained on behalf of Tenant, and at Tenant's
expense, a certificate of occupancy, temporary or permanent, permitting
occupancy of the Module E Premises by Tenant, or (ii) Tenant first occupies all
or any part of the Module E Premises.

                (C)     If, for any reason, including but not limited to the
failure of the existing tenant to vacate either the Module M Premises or the
Module E Premises, Landlord is unable to deliver possession to Tenant as
currently projected, the Landlord shall have no liability to Tenant, the Lease
shall remain in effect and such failure to deliver possession shall be of no
consequence, except that the commencement date for such premises shall not occur
until Landlord delivers possession of such premises to Tenant.

                (D)     Upon request of either, Landlord and Tenant shall
complete and execute a commencement date memorandum substantially in the form
annexed hereto as Exhibit E to memorialize the occurrence of any one or more of
the commencement dates described in this Amendment.

        3.      TERM: The term of the Lease is amended to be (i) the period
between the date of this Amendment and the Module E Commencement Date plus (ii)
seven (7) years from the Module E Commencement Date. The expiration date of the
Lease will be the day prior to the seventh anniversary of the Module E
Commencement Date.

                                      -2-
<PAGE>   3

        4.      BASE RENT: (A) Commencing on the Module M Commencement Date, in
addition to the Base Rent as provided in Paragraph 5 of the Base Lease, Tenant
shall pay Base Rent for the Module M Premises in the amount of SEVENTY FIVE
THOUSAND NINE HUNDRED FIFTY AND 00/100 ($75,950.00) DOLLARS, $15.50 per square
foot, payable in equal monthly installments of SIX THOUSAND THREE HUNDRED TWENTY
NINE AND 17/100 ($6,329.17) DOLLARS. Base Rent for the Module M Premises for the
partial month in which the Module M Commencement Date occurs, if the Module M
Commencement Date is not on the first day of a calendar month shall be prorated
on a daily basis and paid on the Module M Commencement Date.

                (B)     Commencing on the Module E Commencement Date, and for a
period of five years thereafter, in place of the Base Rent as provided in
Paragraph 5 of the Base Lease and the Base Rent provided in Paragraph 4(A) of
this Amendment, Tenant shall pay Base Rent for the entire Demised Premises in
the amount of FOUR HUNDRED EIGHTY FOUR THOUSAND THREE HUNDRED NINE AND 60/100
($484,309.60) DOLLARS payable in equal monthly installments of FORTY THOUSAND
THREE HUNDRED FIFTY NINE AND 13/100 ($40,359.13) DOLLARS.

                (C)     For the sixth year after the Module E Commencement Date
(i.e., commencing on the fifth anniversary of the Module E Commencement Date),
Tenant shall pay Base Rent for the entire Demised Premises in the amount of FIVE
HUNDRED THOUSAND FIVE HUNDRED SIXTY ONE AND 60/100 ($500,561.60) DOLLARS payable
in equal monthly installments of FORTY ONE THOUSAND SEVEN HUNDRED THIRTEEN AND
47/100 ($41,713.47) DOLLARS.

                (D)     For the seventh year after the Module E Commencement
Date (i.e., commencing on the sixth anniversary of the Module E Commencement
Date), Tenant shall pay Base Rent for the entire Demised Premises in the amount
of FIVE HUNDRED SIXTEEN THOUSAND EIGHT HUNDRED THIRTEEN AND 60/100 ($516,813.60)
DOLLARS payable in equal monthly installments of FORTY THREE THOUSAND SIXTY
SEVEN AND 80/100 ($43,067.80) DOLLARS.

                (E)     If any applicable commencement date, or applicable
anniversary date, does not occur on the first day of a calendar month, the Base
Rent payable for that month shall be appropriately prorated on a per diem basis
and any additional amount payable for that month beyond the Base Rent previously
paid by Tenant shall be due and payable within five (5) days after demand. Base
Rent for any partial month at the end of the term shall be similarly prorated on
a per diem basis.

        5.      SECURITY DEPOSIT: (A) Tenant agrees to pay to Landlord an
additional security deposit of $22,932, for a total security deposit of
$45,676.02 upon the Module M Commencement Date. Upon the Module E Commencement
Date, the security deposit will be increased to the amount of $588,972 and
Tenant agrees to pay the amount required to bring the security deposit to such
amount on the

                                      -3-
<PAGE>   4

Module E Commencement Date. Landlord is not required to hold the security
deposit in a separate account and may commingle the security deposit with other
funds. Nevertheless, Landlord agrees that after the Module E Commencement Date,
provided that (i) Tenant has not elected to provide a letter of credit as part
of the security deposit pursuant to Paragraph 5(B), and (ii) Tenant is not in
default under the Lease, the security deposit will be deemed to accrue interest
at a rate of three (3%) percent per annum on the unapplied balance, from time to
time, of the security deposit held by Landlord, which interest shall be paid by
Landlord on each February 1 for the prior calendar year by credit against the
amount otherwise due from Tenant on such date.

                (B)     (i)Tenant shall have the right on or after the Module E
                        Commencement Date, at Tenant's option, to deliver to
                        Landlord an unconditional, irrevocable and transferable
                        letter of credit (the "Letter of Credit") in the amount
                        of the security deposit and to reduce the cash security
                        deposit required under the Lease by the amount of the
                        Letter of Credit; provided, however, that in no event
                        shall less than $45,676.02 be provided as a cash
                        security deposit; and further provided that if the
                        Letter of Credit is being provided after the Module E
                        Commencement Date, Tenant shall provide not less than
                        four (4) months written notice of its intent to
                        substitute a Letter of Credit for a portion of the cash
                        security deposit, which notice will set forth the amount
                        of the Letter of Credit to be provided. The Letter of
                        Credit must be issued by and drawn on a bank reasonably
                        satisfactory to Landlord as to size, location,
                        reputation and financial strength, be payable in New
                        Jersey, be in the form attached hereto as Exhibit F and
                        be otherwise in form and substance reasonably acceptable
                        to Landlord. The Letter of Credit shall be irrevocable
                        for an initial period of not less than one (1) year, and
                        shall by its terms automatically renew for successive
                        one (1) year periods, unless the issuing bank provides
                        the Landlord with not less than sixty (60) days prior
                        written notice, by postage prepaid certified mail,
                        return receipt requested that the Letter of Credit will
                        not automatically renew (a "Non-Renewal Notice"). If
                        Landlord receives a Non-Renewal Notice, then Landlord
                        may immediately present the Letter of Credit for payment
                        and retain the proceeds thereof as a cash security
                        deposit in lieu of the Letter of Credit.

                (ii)    The Letter of Credit shall be held as Landlord as part
                        of the security deposit as security for the faithful
                        performance and observance by Tenant of the terms,
                        conditions and provisions of this Lease, including
                        without limitation, the surrender of possession of the
                        Demised Premises to Landlord as herein provided. The
                        Letter of Credit shall be drawable by delivery to the
                        issuing bank of a statement purportedly signed by an
                        authorized representative of the Landlord stating that
                        the Landlord is entitled to draw upon the Letter of
                        Credit under the terms and conditions of the Lease. The
                        Letter of Credit will

                                      -4-
<PAGE>   5

                        be honored by the issuing bank without inquiry as to the
                        accuracy of the statement, and regardless of whether
                        Tenant disputes the statement, and the Letter of Credit
                        shall so provide.

                (iii)   If Tenant defaults in respect of any of the terms,
                        provisions and conditions of this Lease (beyond
                        applicable grace periods), including, but not limited
                        to, the payment of the Base Rent or any other item of
                        rental, Landlord may present the Letter of Credit for
                        payment in full and apply or retain the whole or any
                        part of the proceeds thereof to the extent required for
                        the payment of the Base Rent or any other item of rental
                        as to which Tenant is in default or for any sum which
                        Landlord may, pursuant to the terms hereof, expend or be
                        required to expend by reason of Tenant's default in
                        respect of any of the terms, covenants and conditions of
                        this Lease, including, but not limited to, any damages
                        or deficiency accrue or accrues before or after summary
                        proceedings or other re-entry by Landlord. If Landlord
                        draws down on the Letter of Credit and only applies a
                        portion of the draw to any Tenant obligation under the
                        Lease, Landlord agrees to hold the balance of the draw,
                        if any, as a cash security deposit under the Lease. If
                        Landlord applies or retains any part of the proceeds of
                        the Letter of Credit, Tenant, upon demand, shall deposit
                        with Landlord the amount so applied or retained so that
                        Landlord shall have the full required security deposit
                        on hand at all times during the term. Tenant shall not
                        be entitled to any reduction in the Letter of Credit
                        unless and until the security deposit as required by the
                        Lease is fully funded.

                (iv)    If Tenant shall fully and faithfully comply with all of
                        the terms, provisions, covenants and conditions of this
                        Lease, the balance of the Letter of Credit shall be
                        returned to Tenant after the expiration of the Lease and
                        after delivery of possession of the Leased Premises to
                        Landlord in the condition provided for herein.

                (v)     In the event of a sale or lease of the Building, the
                        Landlord shall have the right to transfer the Letter of
                        Credit to the vendee or lessee and Landlord shall
                        thereupon be automatically deemed released by Tenant
                        from all liability for the return of such Letter of
                        Credit, provided that the vendee or lessee shall have
                        assumed Landlord's obligations under the Lease, and
                        Tenant shall upon written notice from Landlord, cause
                        the bank which issued the Letter of Credit to transfer
                        the Letter of Credit to the vendee or lessee and thereby
                        name the vendee or lessee as the beneficiary thereunder.
                        Pending such transfer, Landlord shall continue to have
                        the right to draw upon the Letter of Credit as agent for
                        the vendee or lessee, and without liability to Tenant.
                        Tenant shall pay all expenses, points and/or fees
                        incurred related to the Letter of Credit and/or any
                        transfer(s) thereof. Upon compliance with the foregoing,
                        Tenant agrees to look solely to the new landlord for the
                        return of the Letter

                                      -5-
<PAGE>   6

                        of Credit. The provisions hereof shall apply to every
                        transfer or assignment of the Letter of Credit made to a
                        new landlord.

                (vi)    Tenant shall not assign or encumber or attempt to assign
                        or encumber the monies deposited herein as security and
                        neither Landlord nor its successors or assigns shall be
                        bound by any assignment, encumbrance, attempted
                        assignment or attempted encumbrance.

                (vii)   No interest shall be payable on any portion of the
                        security deposit provided by Letter of Credit. If the
                        Landlord draws under the Letter of Credit for the whole
                        or any part of the Letter of Credit, and if the Landlord
                        holds the whole or any part of the proceeds thereof as a
                        cash security deposit, Tenant shall not be entitled to
                        interest for any period during which Landlord is so
                        holding such proceeds nor shall Landlord be required to
                        keep such security deposit separate from its general
                        funds. If the Landlord draws or attempts to draw under
                        the Letter of Credit, Landlord shall be entitled to
                        receive from Tenant reimbursement for any and all
                        expenses incurred by Landlord in connection with such
                        draw or attempt to draw, including but not limited to,
                        reasonable attorneys' fees.

                (viii)  Notwithstanding any of the above, at any time during the
                        lease term, Tenant may deposit with the Landlord the
                        cash equivalent of the Letter of Credit in lieu of such
                        Letter of Credit to satisfy the security deposit
                        requirement of this Lease. Any such cash deposit shall
                        be held by Landlord as described in this Lease for the
                        Tenant's faithful performance and observance by Tenant
                        of the terms, conditions and provisions of this Lease.

                (ix)    If Landlord presents the Letter of Credit for payment,
                        Landlord agrees to on the same date provide written
                        notice that the Letter of Credit notifying Tenant of the
                        presentation for payment which notice will set forth the
                        basis for Landlord's draw upon the Letter of Credit.
                        Notwithstanding any such notice, Tenant shall have no
                        right to prevent or hinder payment on any draw by
                        Landlord on the Letter of Credit, it being agreed that
                        any such draw request shall be honored by the issuing
                        bank without inquiry as to the Landlord's entitlement to
                        draw on the Letter of Credit under this Lease and
                        regardless of whether Tenant disputes Landlord's right;
                        provided, however, that Landlord agrees that any funds
                        received by Landlord as a result of such draw request
                        will be applied by Landlord in accordance with, and
                        subject to, the provisions of the Lease governing the
                        cash portion of the security deposit.

                (C)     In the event Tenant exercises its Expansion Right under
Paragraph 19, the security deposit shall be increased by the amount of
$180,438.82. The increased security deposit

                                      -6-
<PAGE>   7

may be provided in cash or by Letter of Credit, and will be subject to all the
terms and conditions of this Paragraph 5.

                (D)     Provided that no default has occurred under this Lease,
then on each of the first, second and third anniversaries of the Module E
Commencement Date, Tenant shall have the right to request that Landlord consider
a reduction in the security deposit. In that event, Tenant shall have the
opportunity to attempt to demonstrate to Landlord's good faith satisfaction that
Tenant's financial condition has improved sufficiently so as to merit a
reduction in the security deposit, considering such factors as Tenant's payment
history, Dun and Bradstreet rating, relationships with lenders and creditors,
profitability, and balance sheet and operating statement history. If Landlord
and Tenant in good faith agree that a reduction is warranted on any anniversary
date, then Landlord agrees that provided no default has occurred under this
Lease, (i) if the agreement is reached on the first anniversary of the Module E
Commencement Date the security deposit will be reduced by the amount of one
month's Base Rent; (ii) if the agreement is reached on the second anniversary of
the Module E Commencement Date the security deposit will be reduced by the
amount of one month's Base Rent; (iii) if agreement is reached on the third
anniversary of the Module E Commencement Date, the security deposit will be
reduced by an additional one month's Base Rent; provided that:

                        (1) Tenant's right to request a reduction in the
security deposit shall be cumulative, such that if any of the reductions
provided for above is not agreed upon on the first or second anniversary, the
maximum reduction on the succeeding anniversary will be increased by the amount
of the reduction that could have been received (but was not) on the prior
anniversary(ies). For example, if no reduction were agreed upon on the first
anniversary, then the maximum reduction on the second anniversary (if agreed to
by Landlord) would be two (2) months Base Rent. Similarly, if on the third
anniversary, the total reduction in the security deposit on the first and second
anniversaries combined was equal to one (1) month's Base Rent (i.e., no
reduction in the security deposit was agreed to for one of such anniversaries
and a one (1) month reduction was agreed to on the other), then on the third
anniversary the maximum reduction (if agreed to by Landlord) would equal two (2)
months' Base Rent; and

                        (2) in no event shall the security deposit be reduced by
a total aggregate amount greater than $121,078.59 (or, if Tenant has exercised
its Expansion Right under Paragraph 19, $158,172.15) under any circumstances,
nor shall there be any right to request or receive a reduction in the security
deposit after the third anniversary of the Module E Commencement Date, and the
remaining security deposit shall thereafter continue to be held throughout the
remaining term and any extension term.

In addition to the foregoing, and provided that no default has occurred under
this Lease, then during the fourth, fifth and sixth years after the Module E
Commencement Date, Tenant shall have the right on an annual basis to request
that Landlord consider a further reduction in the security deposit, by
demonstrating to Landlord's good faith satisfaction that Tenant's financial
condition has continued to improve sufficiently so as to merit such a further
reduction in the security deposit, considering similar factors to those
described above. If Landlord and Tenant in good faith agree that a reduction

                                      -7-
<PAGE>   8

is warranted, then Landlord agrees that, provided no default has occurred under
this Lease, the security deposit will be reduced by the amount Landlord in good
faith determines to be warranted; provided, however, that notwithstanding
anything to the contrary in this Lease, in no event shall the total aggregate of
all reductions in the security deposit, inclusive of any reductions agreed to on
the first, second or third anniversaries of the Module E Commencement Date and
any further reduction agreed to during the fourth, fifth and sixth years after
the Module E Commencement Date, reduce the security deposit to less than
$346,817.22 (or, if Tenant has exercised its Expansion Right under Paragraph 19,
to less than $453,068.92) and Landlord shall continue to hold a security deposit
in not less than such amount during the remainder of the lease term and any
extension term.

        6.      PROPORTIONATE SHARE OF COMMON AREA MAINTENANCE CHARGES AND
TAXES: Tenant shall throughout the term of the Lease continue to pay common area
maintenance charges and taxes, which shall be payable in monthly installments on
the first day of each calendar month, in amounts as estimated by Landlord, in
accordance with, and subject to adjustment as provided in, the Base Lease.
Tenant's proportionate share for common area maintenance charges and taxes shall
be calculated based upon the rentable square footage of the Demised Premises
divided by the total rentable square footage of all "flex" space (i.e.,
Buildings D and E) in the Project, as defined in the Base Lease, which is
currently 79,323 square feet. Accordingly the Tenant's proportionate share as of
the date hereof is 12.27% and the Base Lease is amended to so provide.
Commencing on the Module M Commencement Date, Tenant's proportionate share shall
equal 18.44%. Commencing on the Module E Commencement Date, Tenant's
proportionate share shall equal 40.98%.

        7.      TEMPORARY SPACE: To accommodate Tenant's immediate space needs,
Landlord has leased to Tenant, and Tenant has leased lease from Landlord,
approximately 3,000 rentable square feet of office space commonly known as Suite
P (the "Temporary Space"), on the second floor of Building B in the Project
pursuant to a letter agreement dated March 7, 2001 (the "Letter Amendment").
Tenant's occupancy of the Temporary Space shall be solely for office purposes
and shall be subject to all of the terms and conditions of the Lease, except as
expressly otherwise provided in the Letter Amendment.

        8.      AS-IS CONDITION: (A) Tenant agrees to accept the Module M
Premises, the Module E Premises, the Temporary Space and, if Tenant exercises
its expansion option, the Expansion Space in AS-IS condition and state of
repair, and by taking occupancy of any portion of the Demised Premises Tenant
will be conclusively deemed to have agreed that such portion was in satisfactory
condition on that date. Landlord shall have no obligation to construct or
contribute to any alterations or improvements to any of such premises, except as
otherwise expressly provided in this Paragraph 8. Without limiting the
foregoing, the provisions of Articles 10 and 11 and Exhibit E of the Base Lease
are not applicable to the

                                      -8-
<PAGE>   9

Module M Premises, the Module E Premises, the Temporary Space or the Expansion
Space. Tenant shall be solely responsible for performing all tenant improvement
work, if any, to such premises at its own expense and in accordance with the
provisions of the Base Lease applicable to alterations by Tenant, including but
not limited to the provisions of Exhibit E-1 of the Base Lease.

                (B)     Landlord agrees to obtain on Tenant's behalf, and at
Tenant's expense, a Certificate of Occupancy for the Module E Premises, the
Temporary Space and, if applicable, the Expansion Space; and to make such
alterations as are required by the municipality in order to obtain the
certificate of occupancy in AS-IS condition, at Tenant's cost and expense.
Tenant acknowledges that to the extent that Tenant desires to make any
alterations to any of the premises, Tenant, at its own sole cost and expense,
will be required to obtain a building permit and a certificate of occupancy with
regard to such alterations and shall comply with all requirements of Exhibit E-1
of the Base Lease with respect thereto.

                (C)     Landlord and Tenant acknowledge that Tenant intends to
convert the existing existing warehouse space in Building Module M
(approximately 3,900 square feet) to general office and laboratory space (the
"Module M Alterations"). Landlord shall provide an allowance (the "Allowance")
of $20 per square foot (not to exceed $78,000) to be applied to the cost of
those Module M Alterations that are required to convert the existing warehouse
space in the Module M Premises to general office/laboratory space such as
lowered ceilings, general lighting, HVAC to office requirements, carpeting or
VAT flooring (the "Qualified Alterations"). The Qualified Alterations shall not
include any equipment or alterations required to create specialized laboratory
space. Tenant shall be responsible at its own expense for all permits, design,
architectural and construction plans for the Module M Alterations, as well as
for construction, construction management and supervision of the Module M
Alterations, which shall be subject to all of the provisions of the Base Lease
with regard to alterations by Tenant, including Exhibit E-1. The Allowance shall
be used to reimburse Tenant for the costs of constructing the Qualified
Alterations, but limited in all events to the amount of $78,000. Tenant shall
provide Landlord with contractor invoices for completed work and proof of
payment of costs of Qualified Alterations. Upon approval by Landlord, which
shall not be unreasonably withheld, Landlord shall pay the Allowance to Tenant
by authorizing Tenant to credit the amount due against the next installment of
Base Rent. Landlord or its designated representative(s) shall have the right to
inspect from time to time the Module M Alterations as they progress. Unless
otherwise agreed in writing by Landlord, all Module M Alterations, other than
the Qualified Alterations, shall be removed by Tenant and the Premises restored
to their prior condition by Tenant, all at Tenant's own

                                      -9-
<PAGE>   10

sole cost and expense, prior to the expiration or other termination of this
Lease; provided, however, that all roof penetrations will be removed by Landlord
and the roof restored to Landlord's satisfaction, at Tenant's cost and expense.

                (D)     Paragraph 21 of Exhibit E-1 is amended to amend the
first sentence of Paragraph 21 to read as follows:

                Lessee shall engage Landlord's roofing contractor for any roof
                penetrations, including but not limited to penetrations for
                Lessee's rooftop equipment, setting/installation of Lessee's
                equipment or structural support at Lessee's equipment locations.

                (E)     Paragraph 22 of Exhibit E-1 is amended by adding the
following:

                At Lessor's option, Lessee shall contract directly with Lessor's
                roofing contractor for the performance of such work in a manner
                so as to keep Lessor's roof guarantee in effect.

        9.      LESSOR'S REPAIRS: Lessor agrees, subject to the provisions of
Paragraph 8 of the Base Lease, to maintain the exterior walls and roof of the
Building, and the common areas, including but not limited to the parking areas,
in good condition and repair during the term of this Lease.

        10.     LESSEE'S REPAIRS: Paragraph 8.B of the Base Lease is amended by
deleting the final two sentences of the Paragraph in their entirety and
substituting the following:

                Lessee will not commit or allow any waste or damage to be
                committed on any portion of the Demised Premises, and, shall, at
                the termination of this Lease, by lapse of time or otherwise,
                deliver up the Demised Premises to Lessor in as good condition
                as at the date of possession by the Lessee, ordinary wear and
                tear, and casualty loss covered by Landlord's insurance,
                excepted.

        11.     ASSIGNMENT AND SUBLETTING: (A) Paragraph 13.C.1 of the Base
Lease is amended by adding the following sentence: "Notwithstanding the
foregoing, Tenant shall be permitted to sublet a portion of the Demised Premises
in accordance with and subject to the provisions of Paragraph 13.C.2.a." 1.

                (B)     Paragraph 13.C.2.a of the Base Lease is deleted in its
entirety and replaced with the following:

                                      -10-
<PAGE>   11

                Lessee shall not assign or sublet this Lease without the prior
                written consent of Landlord. Provided that Tenant is not in
                default of this Lease, Landlord agrees not to unreasonably
                withhold its consent to an assignment or to a sublease. Consent
                withheld for any of the following reasons shall be conclusively
                deemed to be consent reasonably withheld: (i) the proposed
                assignee or sublessee is not financially qualified or is an
                otherwise unsatisfactory credit risk, or is not sufficiently
                experienced; (ii) the proposed assignment or subleased would
                adversely the overall character or quality of the Building;
                (iii) the proposed assignment or sublease, or use by the
                assignee or sublessee would come within the provisions of ISRA
                or the Spill Compensation and Control Act; (iv) the sublease
                would result in more than twenty five (25%) percent of the
                Demised Premises, in the aggregate, being subject to subleases;
                (v) the use by the subtenant or assignee is not in accordance
                with the permitted use under this Lease or would result in
                increased burdens on the parking or other common areas; or (vi)
                the proposed assignee or sublessee is an existing lessee in the
                Complex.

                (C)     Paragraphs 13.C 2.b, 13.C.2.c(1) and (2), 13.C.2.e. and
the final paragraph of Paragraph 13.C of the Base Lease shall be deemed amended
to apply equally to any sublease, subletting and sublessee as they do to any
assignment or assignee.

                (D)     Paragraph 13.C.2.c(3) of the Base Lease is deleted in
its entirety and replaced by new paragraphs 13.C.2.c(3) and 13.C.2.c(4), as
follows:

                (3)     Tenant shall not publicly advertise or publicly market
                the Demised Premises, or any part thereof, for a rental less
                than the rental then being requested by Lessor for available
                space in the Project.

                (4)     In the event the Landlord consents to any subletting or
                assignment, Tenant shall pay to Landlord, monthly, as Additional
                Rent, sixty (60%) percent of the rent and other consideration
                (however characterized) received by Tenant from any such
                sublessee or assignee in excess of the Base Rent and Additional
                Rent payable under this Lease, pro rated on a square foot basis
                as to sublets of less than all of the Demised Premises, after
                appropriate provision has been made for the payment of broker's
                commissions incurred in connection with such subletting or
                assignment and the recovery by Tenant of reasonable fit-up costs
                actually expended by Tenant in connection with any such
                subletting or assignment, if any.

                                      -11-
<PAGE>   12

                (E)     Paragraph 13.C.2.g of the Base Lease is amended to
provide that Landlord shall not have a right of recapture with respect to any
proposed sublease or subleases which in the aggregate are less than twenty-five
(25%) percent of the Demised Premises, and that as to Landlord's right to
recapture with respect to any sublease (other than subleases which in the
aggregate with all other subleases affect less than twenty-five (25%) of the
Demised Premises), the recapture shall be limited to the space affected by the
proposed sublease.

                (F)     The final paragraph of Paragraph 13.C is deleted in its
entirety, and replaced by the following:

                Except as otherwise permitted by, and in accordance with, the
                foregoing provisions of this Paragraph 13, Lessee will not
                assign this Lease, or allow the same to be assigned by operation
                of law or otherwise; nor shall Lessee sublet the Demised
                Premises, or any part thereof. Further, Lessee shall not use or
                permit the Demised Premises to be used for any other purpose
                than the Permitted Use herein set forth without the prior
                written permission of Lessor which may be refused for any
                reason. Without limiting the other provisions of Paragraph 13,
                the selling or other transfer in one or more transactions of
                more than forty (40%) percent of (i) the membership interests in
                a limited liability company Lessee, (ii) the corporate stock of
                any corporate Lessee or (iii) the partnership interests in a
                general or limited partnership Lessee, as applicable, shall be
                deemed to be an assignment for purposes of this Lease Agreement.
                No assignment or subletting, whether or not permitted by Lessor,
                will relieve the Lessee of any obligation under this Lease.

        12.     TENANT'S INDEMNITY: Notwithstanding the provisions of Paragraph
13.G of the Base Lease, Tenant shall not be required to indemnify any party
against claims to the extent arising solely from the indemnified party's own
willful misconduct or gross negligence.

        13.     ENTRY TO SHOW PREMISES: Paragraph 13.I of the Base Lease is
amended to change "one hundred twenty (120) days" to "twelve (12) months".

        14.     LOSS OR DAMAGE: Paragraph 14.B of the Base Lease is amended by
adding the words "or wilful misconduct" immediately after the words "gross
negligence" in the final line.

        15.     LIEN TO RENT: Paragraph 14.C of the Base Lease is deleted in its
entirety.

        16.     RESTORATION AFTER FIRE OR CASUALTY: Paragraph 14.F of the Base
Lease is deleted in its entirety and replaced by the following:

                                      -12-
<PAGE>   13

                Lessee shall, in case of fire or other damage, give immediate
                notice thereof to Lessor. In the event of damage to the Demised
                Premises or Building by fire or other causes resulting from the
                act, fault or negligence of Lessee or Lessee's agents, officers,
                employees, invitees, or visitors, the same shall be repaired by
                Lessor but at the expense of Lessee or, at Lessor's election by
                the Lessee but under the direction and supervision of Lessor. If
                the Demised Premises shall be partially destroyed by fire or
                other casualty, all rent and other payments to be made to the
                Lessor by Lessee under this Lease shall continue without
                abatement. In case of the total destruction of the Demised
                Premises without act, fault or negligence of Lessee, its agents,
                officers, employees, invitees, or visitors, or if from such
                cause the same shall be so damaged that Lessor shall decide in
                its sole discretion not to rebuild, then Lessor shall so notify
                Lessee of same and all Base Rent and other payments due up to
                the time of such destruction or termination shall be paid by
                Lessee, and Lessee agrees to quit and surrender the Demised
                Premises and thereafter this Lease shall cease and come to an
                end. As used herein, the Demised Premises shall be deemed to be
                partially destroyed if Lessor determines, in its reasonable
                discretion, that the repair and restoration of the Demised
                Premises by Lessor can be substantially completed within six (6)
                months. If this Lease is not terminated as a result of a fire or
                other casualty pursuant to Paragraph 14.F of the Lease, then
                Landlord shall repair the damage and restore and rebuild the
                Building and/or the Demised Premises to the extent of the
                insurance proceeds received by Landlord, with reasonable
                dispatch after notice to it of the damage or destruction;
                provided, however, that Landlord shall not be required to repair
                or replace any of the Tenant's property or any alterations
                constructed by Tenant.

        17.     CURING NON-MONETARY DEFAULTS: Paragraph 14.J.3 of the Base Lease
is amended by adding the following to the end of the first sentence regarding
the cure of non-monetary defaults: "....provided, however, that if such
non-monetary default cannot by its nature be cured within such ten (10) day
period, and Tenant commences the cure of such default within the ten (10) day
period and thereafter diligently and continuously pursues such cure to
completion, then Tenant shall have a reasonable time to cure such default, but
in no event more than ninety (90) days."

        18.     BANKRUPTCY: Paragraph 14.M of the Base Lease is supplemented to
provide that, as to involuntary proceedings commenced against Tenant, it shall
not be a default if such proceedings are dismissed within forty-five (45) days
from filing.

                                      -13-
<PAGE>   14

        19.     OPTION TO EXPAND: (A) Provided that Tenant is not in default
under the Lease, then at any time on or before December 20, 2001, Tenant shall
have an option to lease an additional space of approximately 9,958 rentable
square feet of space in the Building, commonly known as Modules A, B, C and D,
as shown on Exhibit B-1 (the "Expansion Space"), subject to the terms and
conditions set forth in this Paragraph 19 (the "Expansion Right").

                (B)     Tenant's Expansion Right is available to Tenant until
December 20, 2001; provided that Tenant shall notify Landlord sooner if Tenant
has knowledge of its plans with regard to the Expansion Space prior to such
date. If Tenant does not exercise the Expansion Right by written notice to
Landlord given on or before December 20, 2001, Tenant shall be deemed to have
waived the Expansion Right and this Paragraph 19 shall be of no further force or
effect.

                (C)     Tenant recognizes that the Expansion Space is presently
occupied by Najarian Associates, Inc. ("Najarian"). If Tenant exercises its
Expansion Right, Landlord will have no less than six (6) months to relocate
Najarian, but agrees to use reasonable efforts, if possible, to seek to relocate
Najarian sooner. The commencement date for the Expansion Space will be the
earlier of the date on which (i) Landlord has obtained a certificate of
occupancy, temporary or permanent, permitting occupancy of the Expansion Space
by Tenant, or (ii) Tenant first occupies all or any portion of the Expansion
Space (the "Expansion Space Commencement Date").

                (D)     On and after the Expansion Space Commencement Date, all
the obligations, terms, and conditions under the Lease shall also apply to the
Expansion Space, as follows:

                (1)     All references in the Lease to the Demised Premises
                        shall be deemed to include the Expansion Space;

                (2)     The term for the Expansion Space shall be co-terminus
                        with the term for the remainder of the Demised Premises,
                        any exercise of Tenant's Extension Right shall be deemed
                        to include the entire Demised Premises, including the
                        Expansion Space and the calculation of fair market rent
                        for any extension term shall be based upon the entire
                        Demised Premises, including the Expansion Space;

                (3)     Commencing on the Expansion Space Commencement Date, the
                        Base Rent shall be increased by the following amounts
                        (prorated on a per diem basis for any period of less
                        than a full calendar month):

                        (1)     Until the expiration of five years from the
                                Module E Commencement Date, the Base Rent
                                provided under Paragraph 4 of this Amendment
                                will be increased by the amount of ONE HUNDRED
                                FORTY EIGHT THOUSAND THREE HUNDRED SEVENTY FOUR
                                AND 20/100 ($148,374.20) DOLLARS payable

                                      -14-
<PAGE>   15

                                in equal monthly installments of TWELVE THOUSAND
                                THREE HUNDRED SIXTY FOUR AND 52/100 ($12,364.52)
                                DOLLARS;

                        (2)     For the sixth year after the Module E
                                Commencement Date (i.e., commencing on the fifth
                                anniversary of the Module E Commencement Date),
                                the Base Rent provided under Paragraph 4 of this
                                Amendment will be increased by the amount of ONE
                                HUNDRED FIFTY THREE THOUSAND THREE HUNDRED FIFTY
                                THREE AND 20/100 ($153,353.20) DOLLARS payable
                                in equal monthly installments of TWELVE THOUSAND
                                SEVEN HUNDRED SEVENTY NINE AND 43/100
                                ($12,779.43) DOLLARS; and

                        (3)     For the seventh year after the Module E
                                Commencement Date (i.e., commencing on the sixth
                                anniversary of the Module E Commencement Date),
                                the Base Rent provided under Paragraph 4 of this
                                Amendment by the amount of ONE HUNDRED FIFTY
                                EIGHT THOUSAND THREE HUNDRED THIRTY TWO AND
                                20/100 ($158,332.20) DOLLARS payable in equal
                                monthly installments of THIRTEEN THOUSAND ONE
                                HUNDRED NINETY FOUR AND 35/100 ($13,194.35)
                                DOLLARS;

                (4)     The security deposit will be increased by the amount of
                        $180,438.82, as provided in Paragraph 5(C) of this
                        Amendment;

                (5)     Tenant's proportionate share of common area maintenance
                        charges and taxes will be 53.53%;

                (6)     All other terms and conditions of the Lease will remain
                        in full force and effect.

                (G)     The Expansion Right is personal to the Tenant and shall
                        become null and void upon the occurrence of an
                        assignment of the Lease or a sublet of all or part of
                        the Leased Premises.

        20.     OPTION TO EXTEND: Paragraph 2.B of the Base Lease is deleted in
its entirety and replaced by the following:

                Provided Tenant is not in default under any of the terms,
                provisions, covenants and conditions of the Lease, and provided
                that Tenant is in sole occupancy of the entire Demised Premises,
                then upon the expiration of the term of this Lease Tenant shall
                have the right to extend the term of the Lease for one (1)
                extension period of

                                      -15-
<PAGE>   16

                five (5) years (the "First Extension Term"), followed by one (1)
                extension period of three (3) years (the "Second Extension
                Term"). Tenant shall have no right to the Second Extension Term
                unless Tenant exercised the option for the First Extension Term.
                Tenant's option to extend the term of the Lease shall be
                exercisable by Tenant giving written notice of the exercise of
                the extension right to Landlord at least twelve (12) months
                prior to the expiration of the original term, or the First
                Extension Term, as applicable. In the event Tenant fails to so
                give written notice of its intent to exercise its extension
                right as provided above, Tenant's option to extend the term of
                the Lease shall be deemed to have been waived by Tenant and
                shall be of no further force or effect. In the event Tenant
                exercises its extension right in accordance with the provisions
                hereof, the term of the Lease shall be extended accordingly, and
                all the references contained in the Lease to the term, whether
                by number of years or number of months, shall be construed to
                refer to the original term of the Lease, as extended, whether or
                not specific reference is made thereto in the Lease. Tenant
                acknowledges that it is important for Landlord to know whether
                or not the option is exercised by Tenant so that it may seek a
                replacement tenant to avoid loss of rent. Accordingly, the time
                within which the option must be exercised and the reply by
                Tenant to Landlord's proposed fair market rent is hereby made of
                the essence. Each extended term of the Lease shall be upon the
                same terms, conditions, and covenants as set forth in the Lease
                except:

                (1)     All provisions relating to the initial construction of
                        the Demised Premises shall be deleted and/or any
                        allowance by Landlord shall be deleted. (1)

                (2)     During the First Extension Term, Tenant's only Extension
                        Right shall be the option for the Second Extension Term.
                        There shall be no further right or option to extend the
                        term of the Lease during or after the Second Extension
                        Term.

                (3)     The Base Rent to be paid by Tenant during each extension
                        term shall be the fair market rent; provided that in no
                        event shall the annual Base Rent during the First
                        Extension Term be less than the Base Rent payable by
                        Tenant in the final year of the original term, nor shall
                        the annual Base Rent during the Second Extension Term be
                        less than the Base Rent payable by Tenant during the
                        final year of the First Extension Term, notwithstanding
                        that fair market rent may be lower. Fair market

                                      -16-
<PAGE>   17

                        rent shall be determined for each extension term as
                        provided in Paragraph (iv) hereunder.

                (4)     Within thirty (30) days after Landlord receives Tenant's
                        notice exercising its extension option Landlord shall
                        submit to Tenant, in writing, its determination of fair
                        market rent for the applicable extension term. Within
                        thirty (30) days after Tenant receives the fair market
                        rental figure, Tenant shall have the right to dispute
                        the rent by written notice received by Landlord within
                        the thirty (30) day time period. Failure by Tenant to
                        dispute the rent in this manner shall be deemed,
                        automatically and conclusively, an acceptance by Tenant
                        of the rent submitted. Within thirty (30) days after
                        Landlord receives Tenant's notice disputing the rent,
                        Landlord and Tenant shall each designate an independent,
                        qualified commercial real estate broker with not less
                        than seven (7) years of experience, who regularly
                        conducts business in Monmouth County and who is familiar
                        with Monmouth County office/flex/warehouse rentals, for
                        the purpose of having them agree on the then current
                        fair market rent for the Demised Premises within
                        Monmouth County, New Jersey, for a term of the same
                        duration as the extension term at issue with similar
                        tenant expense assumptions and contributions. In the
                        event that the two designees cannot agree upon one
                        figure, then the designees shall select a third person
                        with comparable qualifications, and the agreement of two
                        of the three designees shall prevail, or if two cannot
                        agree, the average of their three rents shall prevail.
                        Landlord and Tenant shall each pay the fees and expenses
                        of their own designee, and they shall share, equally,
                        the fees and expenses of the third. The greater of (a)
                        the monthly Base Rent for the final year original term;
                        or (b) the fair market rent so determined, shall be the
                        Base Rent payable monthly for the First Extension Term.
                        The greater of (a) the monthly Base Rent for the final
                        year of the First Extension Term, or (b) the fair market
                        rent so determined, shall be the Base Rent payable for
                        the Second Extension Term. If Tenant gives notice of the
                        exercise of its option more than twelve (12) months
                        prior to the expiration of the original term, then
                        Landlord shall have until eleven (11) months prior to
                        the expiration of the original term or the First
                        Extension Term, as applicable, to submit its
                        determination of fair market rent. Landlord and Tenant
                        shall execute and

                                      -17-
<PAGE>   18

                        deliver to each other a written statement of the rent
                        for the extended term when determined as herein
                        provided.

        21.     PARKING: Paragraph 24 of the Base Lease is supplemented to
provide that Tenant shall have the right to use a total 3.5 parking spaces for
every 1000 rentable square feet included in the Demised Premises (rounded down
to nearest whole number of spaces) for Tenant's employees and visitors. Such
parking spaces shall not be marked, designated or reserved in any way; provided,
however, that Landlord agrees to designate a reserved parking area for six (6)
of such spaces consisting of four (4) marked parking spaces for Tenant's
visitors and two (2) marked parking spaces for company-owned cars of Tenant.
Landlord shall not be obligate to enforce such designation.

        22.     SIGNAGE: Paragraph 25 of the Base Lease is supplemented to
provide that Landlord and Tenant will cooperate to create opportunity for
additional signage within Hovpark providing greater exposure for Tenant. The
parties recognize that this may require consultation with and site plan and/or
variance approvals from the Borough of Eatontown. Any additional signage will be
subject to Landlord's approval, which will not be unreasonably withheld.
Landlord will cooperate with Tenant and sign required applications for permits
and approvals, but without cost to Landlord. Any additional signage will be
constructed by Tenant at Tenant's sole cost and expense. At Landlord's option,
such additional signage will be removed by Tenant, at Tenant's cost and expense,
upon the expiration or earlier termination of this Lease, and any damage caused
by such removal, including but not limited to, damage to the facade or exterior
of the Building, shall be restored by Landlord, at Tenant's cost and expense, to
Landlord's satisfaction.

        23.     CERTAIN HAZARDOUS SUBSTANCES: (A) Tenant has advised Landlord of
the possible creation of certain substances which under certain circumstances
may have the potential to be explosive within the new laboratory space Tenant
intends to construct in the Module M Premises. Such substances, with maximum
quantities, are more fully described on Exhibit D attached hereto and made a
part hereof. Tenant's creation, use, storage and disposal of such substances
shall be at Tenant's sole cost, risk and expense; and Landlord shall have no
liability with respect thereto. Tenant shall take all steps required to prevent
the occurrence of any dangerous or hazardous condition or situation. Except as
shown on Exhibit D, Tenant shall not use, store, generate or dispose of
potentially explosive or extra-hazardous substances on the Demised Premises.

                (B)     Tenant agrees to obtain, maintain in full force and
effect, and comply with all required permits and approvals with regard to such
substances, including, but not limited to, zoning and other federal, state,
county and municipal permits and approvals, and to provide copies of all such
permits and approvals to Landlord. Tenant acknowledges that Landlord has made no
representation as to whether the creation, use, storage or disposal of such
substances is permitted under applicable law, nor as to whether all required
permits and approvals can be obtained. If the creation, use, storage or disposal
of such substances is not lawfully permitted, or if any required permit or
approval is not obtained or obtainable, this Lease shall nevertheless remain
unmodified

                                      -18-
<PAGE>   19

and in full force and effect, except that Tenant shall not create, use, store or
dispose of any such substances on or about the Demised Premises.

                (C)     Tenant shall at all times comply with all required
safety, environmental and other precautions and requirements required by any
governmental agencies and/or good practices. Tenant agrees to provide any
information requested by Landlord's Mortgagee and insurance company of such
hazardous substances and to comply at Tenant's sole cost with the requirements
of Landlord's Mortgagee and insurance company. In the event of any increased
insurance cost as a result of Tenant's activities on Demised Premises, Tenant
shall pay such increased costs promptly upon request from Landlord. If Tenant is
permitted to create, store or use such substances on or about the Demised
Premises, then:

                (i)     Paragraph 13.G.2(A) of the Base Lease is amended to
                        increase the comprehensive general liability insurance
                        maintained by Tenant, and naming Landlord and Landlord's
                        Mortgagee as additional insureds, to a combined single
                        limit of $5,000,000; and

                (ii)    Paragraph 13.G.2 of the Base Lease is amended to add a
                        new Paragraph (D):

                        (D) Pollution Liability Insurance: Lessee shall maintain
                        and provide certificates of insurance for pollution
                        liability insurance coverage, in amounts and with
                        coverages of not less than $500,000 (or if reasonably
                        available, $1,000,000), naming Landlord and Landlord's
                        Mortgagee as additional insureds.

                (D)     In addition to, and without limiting, any obligations of
Tenant to indemnify Landlord under the Base Lease, Tenant agrees to defend (with
counsel acceptable to Landlord), indemnify and hold harmless Landlord,
Landlord's partners, principals, employees, representatives, attorneys and
agents, or any Mortgagee of Landlord (collectively, "Indemnified Parties"), from
and against any and all claims, liability, fines, penalties, damages, loss, cost
or expense, including but not limited to, reasonable attorneys' fees, for seen
or unforseen, criminal or civil, of any nature or description, arising out of or
related directly or indirectly to Tenant's creation storage, use or disposal of
such substances or their presence on or about the Demised Premises.

                (E)     Upon request of Landlord from time to time, Tenant
agrees to provide to Landlord a written certification from a duly qualified
officer as to the hazardous substances and quantities thereof on the Leased
Premises, including but not limited to the substances listed on Exhibit D.
Landlord shall further have the right, but not the obligation, upon reasonable
advance notice and at reasonable times, to inspect the Demised Premises with
respect to the use, storage, disposal and handling of the substances on Exhibit
D and other hazardous substances.

        24.     BROKER: Tenant acknowledges and represents that it has had no
discussion with any broker in connection with this lease amendment other than
John Schimpf and Gerard Crosbie.

                                      -19-
<PAGE>   20

        25.     NO DEFENSES: Tenant represents and warrants to Landlord that as
of the date hereof, Tenant has no claims, offsets, or defenses to the payment
and performance of its obligations under the Base Lease. 1.

        26.     AUTHORITY: Landlord and Tenant represent and warrant to each
other, that they have the power and authority to execute, deliver and perform
the obligations contemplated by this Agreement and that this Agreement has been
duly authorized by all requisite corporate action, and upon execution will be a
valid and binding obligation, enforceable in accordance with its terms.

        27.     ENTIRE AGREEMENT: The Base Lease, as amended by the Letter
Amendment and this Amendment, constitutes the entire agreement between Landlord
and Tenant. Neither party has made any agreement, promise or representation
except as set forth in the Base Lease, the Letter Amendment and this Amendment.

        28.     HEADINGS: All headings in this amendment are for convenience of
reference only and shall not affect the interpretation of the provisions of this
Amendment.

        29.     EFFECT OF AMENDMENT: Except as specifically modified herein, all
of the terms and provisions of the Base Lease shall continue in full force and
effect. In the event of any conflict in the Base Lease and this Amendment to
Lease, the terms of this Amendment shall govern and prevail.

        30.     LENDER APPROVAL: This Amendment is subject to review and
approval by Landlord's Mortgagee. If Landlord's Mortgagee does not approve this
Amendment, then this Amendment shall be of no further force or effect, and the
parties shall be left to their rights under the Base Lease the Letter Amendment.

        IN WITNESS WHEREOF, the parties have caused this amendment to Lease to
be signed by their proper corporate officers and the proper corporate seals to
be hereto affixed on the date first above written.

ATTEST OR WITNESS:                          TEN THIRTY-FIVE ASSOCIATES,
                                            LIMITED PARTNERSHIP

                                            BY: /s/ ARA K. HOVNANIAN
---------------------------                     -------------------------
                                            NAME: ARA K. HOVNANIAN
                                            ITS: GENERAL PARTNER

ATTEST OR WITNESS:                          MILLENNIUM CELL, LLC

                                            BY: /s/ NORMAN R. HARPSTER, JR.
---------------------------                     ---------------------------
                                            NAME: NORMAN R. HARPSTER, JR.
                                            ITS:  CHIEF FINANCIAL OFFICER

                                      -20-
<PAGE>   21

EXHIBITS

B-1     Building Plan

C-1     Floor Plan of Module M

C-2     Floor Plan of Module E

D       Schedule of Potential Explosive Substances

E       Commencement Date Memorandum

F       Form of Letter of Credit

STATE OF NEW JERSEY                 )
                                    ss.:
COUNTY OF MONMOUTH           )

        I CERTIFY that on April ____, 2001, Ara K. Hovnanian personally appeared
before me and acknowledged under oath, to my satisfaction, that this person (or
if more than one person, each person):

        (a) is a general partner of TEN THIRTY-FIVE ASSOCIATES, LIMITED
PARTNERSHIP, the partnership named in the attached instrument; and

        (b) personally signed the attached instrument; and

        (c) signed this instrument as his or her own act as such general partner
on behalf of, and as the voluntary act of, such partnership.

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

STATE OF NEW JERSEY          )
                             ss.:
COUNTY OF MONMOUTH    )

        I CERTIFY that on _____________________, 2001, ________________________
personally appeared before me and this person acknowledged under oath, to my
satisfaction, that this person:

<PAGE>   22

        (a) signed the attached instrument as ______________________ of
MILLENNIUM CELL, LLC, the limited liability company named in this instrument;
and

        (b) was authorized to execute the attached instrument on behalf of such
limited liability company; and

        (c) executed the attached instrument as the voluntary act of such
limited liability company on behalf of, and as the voluntary act of, MILLENNIUM
CELL, LLC.

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

<PAGE>   23

                                   EXHIBIT B-1

                                  BUILDING PLAN

Exhibit B-1 includes drawings of the building plan, with Module M, Module E and
the expanision space shaded.

                                      -23-
<PAGE>   24

                                   EXHIBIT C-1

                             FLOOR PLAN OF MODULE M

Exhibit includes drawings of floor plan of module M

                                      -24-
<PAGE>   25

                                   EXHIBIT C-2

                             FLOOR PLAN OF MODULE E

Exhibit includes drawing of floor plan of module E

                                      -25-
<PAGE>   26

                                    EXHIBIT D

                   SCHEDULE OF POTENTIAL EXPLOSIVE SUBSTANCES

<TABLE>
<CAPTION>
SUBSTANCE       QUANTITY PRODUCED               COMMENTS
---------       -----------------               --------
<S>             <C>                      <C>
Diborane*       0.05 lbs/day             Microreactor (Bench Scale Reactions)

                1.4 lbs/day              Process Demonstration Unit
</TABLE>

* Diborane will not be stored on premises, but will be generated and consumed in
the production of sodium borohydride. Quantities produced will be consumed
immediately to make the end product of the reaction. Diborane will be the
limiting reagent so that there will not be unconsumed diborane.

                                      -26-
<PAGE>   27

                                    EXHIBIT E

                          COMMENCEMENT DATE MEMORANDUM

        THIS AGREEMENT made the ______ day of __________________, by and between
____________________ ("Landlord") and __________________________("Tenant").

                              W I T N E S S E T H:

        WHEREAS, Landlord and Tenant entered into a lease, dated as of
_________________, as amended by First Amendment to Lease (the "Amendment")
dated____________ (collectively, the "Lease"), setting forth the terms of
occupancy by Tenant of premises located at ________________________; and

        WHEREAS, the Lease is for a term of seven (7) years from the Module E
Commencement Date, as defined in the Lease; and

        WHEREAS, it has been determined by the parties in accordance with the
Amendment that ____________ ______, _____ is the _________________ Commencement
Date; and

        WHEREAS, the parties desire to memorialize the Commencement and
Termination Dates of the term of the Lease, and any applicable option period(s),
if properly exercised.

        NOW, THEREFORE, in consideration of the mutual covenants contained
herein and in the Lease, and for other good and valuable consideration, it is
hereby agreed that:

        1.      The _______________ Commencement Date is ____________________,
                _____ and the Termination Date of the term of the Lease is
                _________________. [DELETE REFERENCE TO TERMINATION DATE IF
                MODULE E COMMENCEMENT DATE HAS NOT YET OCCURRED]

        2.      [IF APPLICABLE] The First Extension Period, if properly
                exercised by Tenant, shall commence on ___________ and terminate
                on ________________.

        IN WITNESS WHEREOF, the parties hereto have duly executed this
Memorandum as of

                                      -27-
<PAGE>   28

the day and year first above written.

WITNESS/ATTEST:                                LANDLORD:

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

WITNESS/ATTEST:                                TENANT:

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

                                      -28-
<PAGE>   29

                                    EXHIBIT F

                            FORM OF LETTER OF CREDIT

                                        BANK NAME
                                        BANK ADDRESS

IRREVOCABLE LETTER OF CREDIT
REFERENCE NUMBER:___________
TRANSACTION DATE:___________
EXPIRATION DATES:

BENEFICIARY:
_____name____________
____address__________
_____________________
_____________________

Gentlemen:

We hereby open our irrevocable letter of credit in your favor for the account of
____________________________, in the aggregate amount of $__________________.00
(United States Dollars ________________________ and ____/100) available by
payment of your draft(s) at sight drawn on ourselves when accompanied by the
following document(s):

A statement purportedly signed by a person purporting to be an authorized
representative of ______[name]______ stating that ______{name]______ is entitled
to draw upon the letter of credit.

It is a condition of this letter of credit that it shall be deemed automatically
extended without amendment for one year from the present or any future expiry
date unless at least sixty (60) days prior to such expiration date, we notify
you in writing by certified mail or nationally recognized overnight express
courier that we elect not to renew this letter of credit for any such additional
one-year period. In any event this credit will not be automatically extended
beyond ______[estimated outside lease termination with extensions]___________.
If you receive notice of non-renewal, you may draw immediately by presentation
of your sight draft and the original letter of credit only.

This irrevocable letter of credit sets forth in full the terms of our
undertaking. This undertaking shall not, in any way, be modified, amended, or
amplified by reference to any document or contract referred to herein.

                                      -29-
<PAGE>   30

We hereby agree with you that draft(s) drawn under and in compliance with the
terms and conditions of this credit shall be duly honored if presented together
with document(s) as specified and the original of this credit, at either of our
following locations:

        ______________[address in New Jersey]________________

Draft(s) drawn under this credit must state on their face "Draw Under
______[issuer name]______ Irrevocable Letter of Credit Number ________ dated
____________".

Partial drawings are permitted.

Except as otherwise expressly stated herein, this letter of credit is subject to
the uniform customs and practice for documentary credits, established by the
International Chamber of Commerce, as in effect on the date of issuance of this
credit.

Sincerely,

------------------------
Authorized Signature

                                      -30-

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