Document:

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                                                                   EXHIBIT 10.23

                                                                       EXECUTION

                         DIGITAL ISLAND, INCORPORATED

                       DATA CENTER SPACE LEASE - SITE K

                                      and

                         CONFERENCE ROOMS 212B AND 213

                                December, 1998

                TELEHOUSE International Corporation of America

                7 Teleport Drive, Staten Island, New York 10311

                                       1
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                               TABLE OF CONTENTS

                            DATA CENTER SPACE LEASE

                                    ARTICLE 1
                          FUNDAMENTAL LEASE PROVISIONS

<TABLE>
<S>        <C>
1.1        Fundamental Lease Provisions
1.2        Effect of Reference to a Fundamental Lease Provision
1.3        Definitions
1.4        Other Interpretive Provisions

                                   ARTICLE 11
                             PREMISES AND LEASE TERM
2.1        Premises; Rentable Area Calculation
2.1.1      Demise of Premises
2.1.2      Determination of Rentable Area of the Premises
2.1.3      Appurtenant Facilities
2.2        Lease Term Commencement Date
2.3        Preparation of Premises
2.4        Failure to Deliver Possession

                                   ARTICLE III
            LIMITATIONS ON LANDLORD'S WORK-OWNERSHIP OF IMPROVEMENTS
3.1        Tenant Improvements
3.2        Ownership of Improvements

                                   ARTICLE IV
                                      RENTS
4.1        Rents
4.2        Payment of Rents
4.3        Payment of Base Rent
4.4        Intentionally Omitted
4.5        Intentionally Omitted
4.6        Late Charge
4.7        Payments Included in Rents
4.8        Government Rent Restrictions
4.9        Partial Payment

                                    ARTICLE V
                      TAX AND OPERATING EXPENSE ADJUSTMENTS
5.1        Tax and Operating Expense Definitions
5.1.1      "Lease Year"
5.1.2.     [Intentionally omitted.]
5.1.3      "Taxes"
5.1.4      [Intentionally omitted.]
5.1.5      "Building Operating Expenses"
5.1.6      Building Operating Expenses - Exclusions
5.1.7      Building Operating Expenses Adjustment
5.2        Payment of Taxes and Building Operating Expenses
5.2.1      Payment of Tenant's Share of Taxes
5.2.2      Payment of Tenant's Share of Building Operating Expenses
5.2.3      Tenant's Objection to Tax Statement or Operating Expense Statement
5.2.4      Arbitration
</TABLE>

                                  ARTICLE VI
                            SERVICES AND UTILITIES

                                       2
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<TABLE>
<S>        <C>
6.1        Electricity
6.1.1      Direct Supply
6.1.2      Additional Electrical Equipment
6.1.3      Landlord's Consent to Electrical Alterations
6.1.4      Requirements Applicable to Tenant
6.1.5      Provision of Emergency Power
6.2        Water
6.2.1      Provision of Water
6.2.2      Failure of Water Supply
6.3        Elevators and Cleaning
6.4        Heating and Air Conditioning
6.4.1      Heating
6.4.2      Air Conditioning.
6.4.3      Miscellaneous HVAC Provisions
6.4.4      Effect on HVAC of Changes in Premises
6.6        Service Interruption
6.6        Additional Tenant Use
6.7        Exculpation of Landlord for Utilities
6.8        Access
6.9        Communication Facilities

                                   ARTICLE VII
                                    INSURANCE
7.1        Property Insurance
7.2        Liability Insurance
7.3        Use of Premises
7.4        Waiver of Subrogation
7.4.1      Waiver Included in Policy
7.4.2      Landlord's Waiver
7.4.3      Tenants' Waiver
7.4.4      Limitation on Waiver
7.5        Policy Requirements
7.6        Premium Increase

                                 ARTICLE VIII
                                  ALTERATIONS
8.1        Conditions
8.1.1      Alterations by Tenant
8.1.2      Alterations by Landlord
8.2        Performance
8.3        Liens and Violations
8.3.1      Discharge of Liens and Violations
8.3.2      Tenants Right to Contest Liens
8.4        Labor Conditions
8.5        Port Authority's Fee
8.6        Improvement Fee

                                   ARTICLE IX
                         LANDLORD'S AND TENANTS PROPERTY
9.1        Tenants Property
9.2        Fixtures
9.3        [Intentionally omitted]
9.4        Abandonment
9.5        Taxes on Tenant's Property and Non-Standard Tenant Improvements
9.5.1      Taxes on Tenant's Property
9.5.2      [Intentionally omitted]
</TABLE>

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                                    ARTICLE X
                             REPAIRS AND MAINTENANCE

<TABLE>
<S>        <C>
10.1       Landlord's Obligations
10.2       Tenant's Obligations
10.3       Exculpation of Landlord for Repairs
10.4       Notice

                                   ARTICLE XI
                           USE AND COMPLIANCE WITH LAW
11.1       Use
11.2       Licenses and Permits
11.3       Prohibited Uses
11.4       Compliance by Tenant
11.5       Service Contracts
11.6       Floor Load
11.7       Right of Repossession
11.8       Rules and Regulations
11.9       Labor Harmony
11.10      Landlord's and Port Authority's Consent

                                   ARTICLE XII
                               RIGHTS OF LANDLORD
12.1       Conduits in Premises
12.2       Entry by Landlord
12.3       [intentionally omitted]
12.4       Exhibiting the Premises
12.5       [Intentionally omitted]
12.6       Building Name and Address
12.7       Alterations of Building
12.8       Security
12.9       Other Rights

                                  ARTICLE XIII
                              DAMAGE OR DESTRUCTION
13.1       Restoration
13.2       Rent Abatement
13.3       [Intentionally omitted]
13.4       Election to Terminate
13.4.1     Landlord's Election to Terminate
13.4.2     Tenant's Election to Terminate
13.5       Business Interruption
13.6       Tenant's Property
13.7       Waiver

                                   ARTICLE XIV
                                 EMINENT DOMAIN
14.1       Complete Taking
14.2       Partial Taking
14.3       Award
14.4       Temporary Taking

                                   ARTICLE XV
                              SURRENDER OF PREMISES
15.1       Surrender
15.2       Acceptance of Surrender
</TABLE>

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<TABLE>
<S>        <C>
15.3       No Merger
15.4       No Holding Over

                                   ARTICLE XVI
                         EXCULPATION AND INDEMNIFICATION
16.1       Exculpation
16.2       Indemnity
16.3       Transfers of Landlord's Interest
16.4       Recourse Limited to Building
16.5       Responsibility for Infrastructure

                                  ARTICLE XVII
                          SUBORDINATION AND ATTORNMENT
17.1       Subordination
17.2       Election to Subordinate
17.3       Notice and Cure of Landlord's Default
17.4       Attornment
17.5       Requirements of Superior Lessor or Mortgagee
17.6       Compliance With Ground Lease
17.6.1     Approval of Lease and Sublease By Port Authority
17.6.2     Compliance With Ground Lease

                                  ARTICLE XVIII
                                 QUIET ENJOYMENT
18.1       Quiet Enjoyment

                                   ARTICLE XIX
                            ASSIGNMENTS AND SUBLEASES
19.1       [Intentionally omitted]
19.2       Prohibition
19.3       Corporate and Partnership Transactions
19.4       Notice to Landlord
19.5       [Intentionally omitted]
19.6       [Intentionally omitted]
19.7       [Intentionally omitted]
19.8       Consent by Landlord
19.9       Miscellaneous
19.9.1     General Terms
19.9.2     Tenant Remains Liable
19.9.3     Landlord's Consent Required
19.9.4     lndemnification of Landlord
19.9.5     General Sublease Provisions
19.9.6     Modification
19.10      [Intentionally omitted]
19.11      Additional Charges
19.12      Acceptance of Rent
19.13      Standards of Landlord's Consent

                                   ARTICLE XX
                              ESTOPPEL CERTIFICATES
20.1       Estoppel Certificates
</TABLE>

                                   ARTICLE XXI
                             [INTENTIONALLY OMITTED]

                                  ARTICLE XXII

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                                     BROKER

<TABLE>
<S>        <C>
22.1       Broker
24.10.4    Presumptions
24.10.5    Independent Covenants
24.10.6    Number and Gender
24.10.7    Exhibits
24.11      Joint and Several Liability
24.12      Submission of Lease
24.13      Notices From One Party to the Other
24.14      Partnership Tenant
24.15      Port Authority's Immunity
24.16      No Discrimination

EXHIBIT "A"            Floor Plans
EXHIBIT "B"            Special Site Fitout
EXHIBIT "C"            TELEHOUSE Tenant Cleaning Specifications
EXHIBIT "D"            Rules and Regulations
EXHIBIT "E"            APPURTENANT FACILITIES
EXHIBIT "F"            EXCESSIVE ELECTRICITY
EXHIBIT "Z"            CONSENT AGREEMENT
</TABLE>

                                       6
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                                                                       EXECUTION

                                  THE TELEPORT

                             DATA CENTER SPACE LEASE

                                    ARTICLE I

                          FUNDAMENTAL LEASE PROVISIONS

SECTION 1.1  FUNDAMENTAL LEASE PROVISIONS

DATE:                                   December 01, 1998

LANDLORD:                               TELEHOUSE INTERNATIONAL CORPORATION OF
                                        AMERICA, a Delaware corporation.

ADDRESS OF LANDLORD:                    7 Teleport Drive
                                        Staten Island, New York 10311 -1011
                                        Attention: Sales & Marketing
                                        Telephone: (718) 355-2500
                                        Fax: (718) 355-2517

TENANT:                                 Digital Island, Inc.
                                        a Hawaiian corporation.

ADDRESS OF TENANT:                      353 Sacramento Street
                                        Suite 1520
                                        San Francisco, CA 94111
                                        Attn:
                                        Telephone:
                                        Fax:

PREMISES:                               Space consisting of portions
                                        of the second floor in the
                                        Building, which space is more
                                        particularly known as Site K
                                        and Conference Rooms 212B and
                                        213 and is indicated by
                                        shading on the floor plan
                                        annexed hereto as Exhibit "A".

BUILDING:                               The data center and office
                                        building and underlying land
                                        known as TELEHOUSE CENTER and
                                        located at 7 Teleport Drive in
                                        the Teleport, in the Borough
                                        of Staten Island, County of
                                        Richmond, City and State of
                                        New York, and all rights and
                                        interests appurtenant thereto.

INITIAL BASE RENT:                      $271,116.00 per annum, for Site K, plus
                                        $33,775.00 per

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                                        annum for Conference Rooms.

INITIAL BUILDING OPERATING EXPENSE:     $14.50 per square foot of Rentable Area
                                        per annum applicable to Site K only.

TENANTS SHARE:                          2.53 percent (2.53%)

LEASE TERM:                             The term of this Lease shall include the
                                        lnitial Lease Term and any extension or
                                        renewals thereof.

INITIAL LEASE TERM:                     A period of 3 years (unless terminated
                                        earlier pursuant to any of the
                                        provisions of this Lease or pursuant to
                                        law), commencing as set forth in Section
                                        2.2.

RECAPTURE PERCENTAGE:                   The Recapture Percentage shall be one
                                        hundred percent (100%) unless a
                                        different percentage is specified as
                                        follows: fifty percent (50% ).

FIXED COMMENCEMENT DATE*:               December 01, 1998

*Do Not Fill In This Date If An Outside Commencement Date Is Specified Below.

OUTSIDE COMMENCEMENT DATE**:            The Outside Commencement Date is ___
                                        days after the date of this Lease.
**Do Not Fill in This Date If A Scheduled Commencement Date Is Specified Above.

RENT COMMENCEMENT DATE:                 Payment of Base Rent commences on the
                                        Fixed Commencement Date.

RENTABLE AREA:                          Site K: 3,813 square feet (2,040 usable
                                        square feet). Conference Room: 1,803
                                        square feet (965 usable square feet).
TENANT'S BUSINESS:                      Communication related services.

TENANTS BROKER:                         None

ADDRESS OF TENANTS BROKER:              Not applicable.

SECTION 1.2 EFFECT OF REFERENCE TO A FUNDAMENTAL LEASE PROVISION. Each reference
in this Lease to any of the Fundamental Lease Provisions contained in Section
1.1 shall be construed to incorporate all of the terms provided under each such
Fundamental Lease Provision.

SECTION 1.3  DEFINITIONS.  Whenever used in this Lease, the following terms
shall have the indicated meanings:

Additional Rent:  As defined in Section 4.1.

Alterations:  As defined in Section 8.1.

                                       8
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Appurtenant Facilities:  As defined in Exhibit E.

Base Rent:  As defined in Section 4. 1.

Building:  As defined in Section 1.1.

Building Operating Expenses:  As defined in Section 5.1.5.

Business Hours:  As defined in Section 6.3.

Conditional Limitation:  As defined in Section 23.1.

Commencement Date:  As defined in Section 2.2.

Critical Power:  As defined in Section 6.1.5.

Date of the Taking:  As defined in Section 14.1.

Deficiency:  As defined in Section 23.3.3.

Eminent Domain:  As defined in Section 14.1.

Essential Power:  As defined in Section 6.1.5.

Expiration Date:  As defined in Section 2.2.

Force Majeure:  As defined in Section 24.5.

Fundamental Lease Provisions: Those terms and provisions set forth in Section
1.1.

Ground Lease: That certain Agreement dated as of August 9, 1988 by and between
the Port Authority as landlord and Landlord as tenant.

Improvements:  As defined in Section 3.2.

Improvement Fee:  As defined in Section 8.5.

Infrastructure: Roadways, walkways, landscaping, driveways and other areas
located within the Teleport and used in common by tenants and subtenants of the
Teleport.

Initial Base Rent:  As defined in Section 1.1.

Interest Rate:  As defined in Section 4.6.

Initial Tenant's Share of Building Operating Expenses: As defined in Section
1.1.

Labor Conditions:  As defined in Section 8.4.

Landlord: The party named as "Landlord" in Section 1.1 until a sale, transfer or
lease by it and thereafter the Person or Persons who shall, at any given time,
be liable for the obligations of Landlord under the provisions of this Lease, as
more fully described in Section 16.3.

Landlord's Sublease:  As defined in Section 19.7.1.

                                       9
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Law: The terms "law," "laws," "provisions of law," and words of similar import
shall mean present and future laws, statutes, ordinances, building and fire
codes, rules, regulations, requirements, judgments, rulings, decrees, executive,
judicial and other orders and directives of any or all of the federal, state,
county and city governments and all agencies, authorities, bureaus, commissions,
courts, departments, subdivisions, or offices thereof, and of any other
governmental, public or quasipublic authorities (including the board of fire
underwriters or other insurance body) having jurisdiction over the Building, and
the direction of any public officer pursuant to law, whether now or hereafter in
force. References to specific statutes include successor statutes of similar
purpose and import.

Lease Term:  As defined in Section 1.1.

Lease Year:  As defined in Section 5.1.1.

Mortgage: The term "mortgage" shall include a mortgage or a deed of trust, and
the term "holder of a mortgage" or "mortgagee" or words of similar import shall
include a mortgagee of a m mortgage or a beneficiary of a deed of trust.

Offer:  As defined in Section 19.4.

Operating Expense Payment:  As defined in Section 5.2.2.

Operating Expense Statement:  As defined in Section 5.2.2.

Partial Lease Year:  As defined in Section 5.1.1.

Partnership Tenant:  As defined in Section 24.14.

Permitted Use: Data processing and data, video and voice communications in
connection with Tenant's Business, office space and incidental and usual
activities compatible therewith, and for no other purpose whatsoever.

Person: A natural person, firm, association, corporation, partnership, joint
venture, trust or other entity, as the case may be.

Port authority: The Port Authority of New York and New Jersey, a body corporate
and politic created by compact between the States of New York and New Jersey
with the consent of the Congress of the United States of America.

Premises:  As defined in Section 1.1.

Recapture Percentage:  As defined in Section 1.1.

Rents:  As defined in Section 4. 1.

Rent Commencement Date:  As defined in Section 1.1.

Rentable Area:  As defined in Section 1.1.

Repossession Date:  As defined in Section 11.7.

Rules and Regulations:  As defined in Section 11.8.

Sublet Portion:  As defined in Section 19.7.

Substantially Complete or Substantial Comp ID Completion: As defined in Section
2.3.2.

Substantial Completion Date: The date on which the Premises are Substantially
Complete as defined in Section 2.3.

                                       10
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Substitute Premises:  As defined in Section 21.1.

Successor Landlord:  As defined in Section 17.4.

Superior Interest Holder. As defined in Section 17.1.

Superior Lease:  As defined in Section 17. 1.

Superior Lessor:  As defined in Section 17.1.

Superior Mortgage:  As defined in Section 17.1.

Superior Mortgagee:  As defined in Section 17.1.

Taxes:  As defined in Section 5.1.3.

Tax Payment:  As defined in Section 5.2. 1. 1.

Tax Statement:  As defined in Section 5.2.1.1.

TELEHOUSE Complex: The Building together with any other data centers and office
buildings owned or operated by Landlord and the underlying land located adjacent
to the Building in the Teleport.

Teleport: The telecommunications facility and related office park developed by
the Port Authority within a portion of the Staten Island Industrial Park in the
Borough of Staten Island, County of Richmond, City and State of New York, of
which the TELEHOUSE Complex is a part.

Tenant Improvements: As defined in the Exhibit B, Special Site Fitout.

Tenant's Broker: As defined in Section 1.1.

Tenants Business:  As defined in Section 1.1.

Tenant Expenses:  As defined in Section 19.11.

Tenant's Property:  As defined in Section 9.2.

Tenant's Share:  As defined in Section 1.1.

Tenant's Work:  As defined in the Exhibit B, Special Site Fitout.

UPS System:  As defined in Section 6.1.6.

Useable Area: The floor area of space in the Building in which Tenant
Improvements have been or will be constructed.

SECTION 1.4 OTHER INTERPRETIVE PROVISIONS. References to "Articles" and
"Sections" shall be to Articles and Sections respectively, of this Lease unless
otherwise specifically provided. Any of the terms defined in Sections 1.1 and
1.3 may, unless the content otherwise requires, be used in the singular or the
plural depending on the. reference. References to agreements and other
contractual instruments shall be deemed to include all subsequent amendments and
other modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of this Lease. The term
"including" shall mean "including, but not limited to," except where the context
requires otherwise. Where either Landlord or Tenant is obligated to perform some
duty, such obligation shall be at the sole cost and expense of the party so
obligated, unless otherwise provided herein.

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Whenever it is provided in this Lease that a party's consent or approval shall
not unreasonably be withheld, such consent or approval shall also not
unreasonably be conditioned or delayed.

                                   ARTICLE II

                             PREMISES AND LEASE TERM

SECTION 2.1  PREMISES; RENTABLE AREA CALCULATION.

        2.1.1 Demise of Premises. Landlord hereby leases to Tenant and Tenant
hereby hires from Landlord the Premises, pursuant to the provisions of this
Lease, together with the nonexclusive right, together with all other lessees and
occupants of the Building, to use common areas of the Building (including the
Appurtenant Facilities pursuant to Section 2.1.3 hereof) and the Infrastructure,
subject to the provisions of this Lease and Landlord's Rules and Regulations
(annexed hereto as Exhibit "D" and the rules and regulations of the Port
Authority (Ground Lease, Exhibit R).

        2.1.2 Determination of Rentable Area of the Premises. If the Rentable
Area of the Premises is reduced in size pursuant to Section 11.7 or as a result
of a partial taking in Eminent Domain, all amounts, sums and/or percentages
based upon the Rentable Area of the Premises (including amounts, sums and/or
percentages based upon the useable area of the Premises), including without
limitation, amounts, sums and/or percentages set forth in Sections 1.1 and 4.5
and in any Rider hereto, shall be adjusted by multiplying said amounts, sums
and/or percentages by a fraction, the numerator of which shall be the number of
square feet of Rentable Area (or useable area depending on the manner in which
the percentage is calculated) contained in the Promises, as so determined, and
the denominator of which shall be the number of square feet of Rentable Area set
forth in Section 1.1 (or in the number of square feet of useable area contained
in the Premises on the date of this Lease). After the Rentable Area of the
Premises has been determined as provided herein, the parties shall execute an
addendum to this Lease setting forth the Rentable Area of the Premises, and the
amounts, sums and/or percentages based thereon and adjusted as set forth above.
The failure of either party to execute such addendum shall not affect the
validity or enforceability of this Lease. The number of square feet of Rentable
Area contained in the Premises, as set forth in this Lease, shall for all
purposes of this Lease conclusively be deemed to be the Rentable Area of the
Premises as of the date of this Lease, and Landlord and Tenant shall be
responsible for performance of all obligations based upon or calculated from the
Rentable Area of the Premises, as so determined, notwithstanding any subsequent
remeasurement of the Premises as they exist on the date of this Lease.

        2.1.3 Appurtenant Facilities. In addition to the Premises, Tenant shall
have the right in common with all other lessees and occupants of the Building to
use the Appurtenant Facilities located in the Building as described in Exhibit E
annexed hereto, subject to payment by Tenant as Additional Rent of Landlord's
standard charge for such use.

SECTION 2.2 LEASE TERM: Commencement Date. The "Lease Term" (a) shall commence
on the Fixed Commencement Date.

SECTION 2.3 PREPARATION OF PROMISES. Landlord has provided the Site K position
of the premises with Landlord's standard site buildout including:

        - raised floor, drop ceiling, site painting
        - lighting

        - Critical Power, Essential Power and non
        - essential power feederinstallation
        - Demising walls
        - Halon and pre-action sprinkler fire protection installation and
          testing
        - Computer room air conditioning (two 25 ton units).
        - Connection to centralized building monitoring and security system
        - Site preparation coordination
        - Governmental approvals and scheduling
        - 125 Kva Computer Power Center (CPC)

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The conference Room position of the premises is provided on an "as is" basis. In
addition, Landlord will perform certain other site fitout work according to the
requirements of the Special Site Fitout Work annexed hereto as Exhibit "B". Such
additional work will be completed on or about January 31, 1999 ("Substantial
Completion Date"), however will not impact the Commencement Date.

SECTION 2.4 FAILURE TO DELIVER POSSESSION. Except to the extent specifically
provided for in this Article, Tenant waives any right to rescind this Lease
under Section 223-a of the New York Real Property Law and further waives the
right to recover any damages that may result from Landlord's failure to deliver
possession of a portion of the Premises on the Fixed Commencement Date. If
Landlord shall be unable to give possession of a portion of the Premises, known
as Site K, on the Fixed Commencement Date, and provided Tenant is not solely
responsible for such inability to give possession, Tenant's obligation to pay
Base Rent and Tenant's Share of Taxes and Building Operating Expenses and all
other additional rent shall, on a prorated basis, not commence until possession
of the Premises is given or are available for occupancy by Tenant, and no such
failure to give possession on such date shall in any way affect the validity of
this Lease or the obligations of Tenant hereunder or give rise to any claim for
damages by Tenant or claim for rescission of this Lease, nor shall the same be
construed to extend the Lease Term.

                                   ARTICLE III

           LIMITATIONS ON LANDLORD'S WORK; OWNERSHIP OF IMPROVEMENTS

        SECTION 3.1 TENANT IMPROVEMENTS. Landlord has agreed to the preparation
of the Premises in accordance with the provisions of Article III of this Lease
and Exhibit "B'", Special Site Fitout, and Landlord shall not be further
obligated to prepare, after or improve the Premises.

        SECTION 3.2 OWNERSHIP OF IMPROVEMENTS. All installations, alterations,
additions, substitutions, replacements, betterments or improvements, including
Tenant Improvements ("Improvements") upon the Premises, made by either party,
including pipes, ducts, conduits, wiring, paneling, non-mobile partitions and
railings, shall become the property of Landlord and shall remain upon and be
surrendered with the Premises as a part thereof; provided, however, that
Landlord may elect to have Tenant remove any Improvements, such election to be
exercised at the time of consent for such improvements is .given by Landlord.
Notwithstanding the foregoing, improvements (i) which are standard and customary
installations for data processing and communications occupancy may be left in
place by Tenant at the expiration or sooner termination of the term of this
Lease, (ii) movable office furniture and equipment and mobile partitions, which
have been heretofore installed or which are hereafter installed by Tenant at its
expense, shall at ail times remain Tenant's Property and may be removed at any
time, subject to the provisions of Section 9.2 and (iii) which have been
completed as of the above date in accordance with provisions of Section 3.1 and
Exhibit "B" need not be removed by Tenant because Landlord did not elect to
require such removal at the time Landlord consented to the improvements.

                                   ARTICLE IV

                                      RENTS

SECTION 4.1 RENTS. Commencing on the Rent Commencement Date and
thereafter-during the Lease Term, Tenant shall pay to Landlord the following
rents for the Premises (collectively, the "Rents"): (a) a base rent per annum
(the "Base Rent") In an amount equal to the Initial Base Rent, and (b)
additional charges ("Additional Rent") consisting of all other sums of money
payable by Tenant under the provisions of this Lease.

SECTION 4.2 PAYMENT OF RENTS. Tenant shall pay the Rents when due, without
notice or demand, and without any abatement, deduction or setoff, except for
abatements expressly provided for elsewhere in this Lease. Tenant shall pay the
Rents to Landlord, or as Landlord may otherwise designate, in lawful money of
the United States, at the Address of Landlord or at such other place as Landlord
may designate.

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SECTION 4.3 PAYMENT OF BASE RENT. Tenant shall pay the annual Base Rent in equal
monthly installments in advance on the first day of each calendar month included
in the Lease Term. The first installment of Base Rent shall be paid on the Rent
Commencement Date.

SECTION 4.4  [Intentionally Omitted]

SECTION 4.5  [Intentionally Omitted]

SECTION 4.6 LATE CHARGE. If Landlord does not receive payment of Base Rent or
Additional Rent within ten (10) days after notice of failure to receive such
Base Rent or Additional Rent payment, Tenant shall pay Landlord a late charge of
One Hundred Dollars ($100.00) per such occurrence.

SECTION 4.7 PAYMENTS INCLUDED IN RENTS. All payments to be made hereunder by
Tenant to Landlord, including Base Rent, shall be included in the term "Rents"
whenever used in this Lease. All such payments, other than Base Rent, shall be
deemed to be Additional Rent hereunder, whether or not designated as such and,
unless another time shall be herein expressly provided for the payment thereof,
shall be due and payable within thirty (30) days after demand and Landlord shall
have the same remedies for failure to pay the Additional Rent as for non-payment
of Base Rent.

SECTION 4.8 GOVERNMENT RENT RESTRICTIONS. If the amount of the Rents payable
under this Lease exceeds that allowed by the terms of any valid government
restriction which limits the amount of rent or other charges that a commercial
lessor may charge or collect, the amount of Rents payable under this Lease shall
be the maximum permitted by such government restriction for the period of time
during which such restriction remains in effect. However, all increases in Rents
provided for in this Lease shall, to the extent permitted by law, be calculated
upon the amount of the Rents that would have been payable in the absence of the
government restriction, and, effective as of the expiration of the government
restriction, the Rents payable hereunder shall be increased to the amount that
would have prevailed had the government restriction never been in effect.
Moreover, to the fullest extent permitted by law, on the first due date for an
installment of Base Rent following expiration of the government restriction,
Tenant shall pay to Landlord, as Additional Rent, an amount equal to the
difference between the amount of Rents which Tenant would have paid if the
government restriction had not been in force and the amount of Rents actually
paid by Tenant during the period in which the government restriction remained in
effect.

SECTION 4.9 PARTIAL PAYMENT. If Tenant pays a lesser amount than the correct
amount of Rents due, such payment shall be deemed to be a payment on account. No
endorsement or statement on any check or any letter accompanying any check or
payment may tie deemed to be an accord and satisfaction, but Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance, treat such partial payment as a default or pursue any other available
remedy.

                                    ARTICLE V

                      TAX AND OPERATING EXPENSE ADJUSTMENTS

SECTION 5.1  TAX AND OPERATING EXPENSE DEFINITIONS.

        5.1.1 "Lease Year" means a period of twelve (12) consecutive full
calendar months, the first full Lease Year to commence on the July 1 immediately
following the Commencement Date (or on the Commencement Date if the Commencement
Date is July 1), with each succeeding Lease Year commencing on the anniversary
date of such first Lease Year. Any portion of the Lease Term which is less than
a full Lease Year, that is, from the Commencement Date (if other than July 1)
through the following June 30 and from the last July 1 falling within the Lease
Term to the end of the Lease Term (if the Lease Term does not end on June 30),
shall be deemed a "Partial Lease Year". Any reference in this Lease to a Lease
Year shall, unless the context clearly indicates otherwise, be deemed to be a
reference to a Partial Lease Year if the period in question involves a Partial
Lease Year.

        5.1.2  [intentionally omitted.]

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     5.1.3 "Taxes" includes the aggregate amount of all real estate taxes,
general or specific assessments and other governmental impositions, duties,
charges and levies of every kind, character and nature whatsoever, extraordinary
as well as ordinary, foreseen and unforeseen (including payments in lieu of
taxes imposed on Landlord because the Teleport is owned by a public authority),
and each and every installment thereof, which shall during the Lease Term, be
levied, assessed, imposed, become due and payable, or liens upon, or arise in
connection with the use, occupancy or possession of, the TELEHOUSE Complex, the
Building or the Premises (including any expenses incurred by Landlord (including
attorneys' reasonable fees and disbursements, payments to appraisers and fees to
experts and other witnesses) in contesting any of the foregoing or contesting
the assessed valuation of the TELEHOUSE Complex), and shall include (i)
assessments made with respect to any "air" and "development" rights affecting
the TELEHOUSE Complex, and (ii) any fee, tax or charge imposed by any
governmental authority for any vaults, vault space or other properties within or
outside the boundaries of the land underlying the TELEHOUSE Complex, but
excluding, however, all penalties and interest thereon and also excluding any
water charges, sewer rental, utility taxes and any other costs included in the
term "Building Operating Expenses". Nothing in the preceding sentence shall be
construed to include as Taxes any inheritance, estate, succession, transfer,
gift, gain, franchise, corporation, income or profit tax or capital levy that is
imposed upon Landlord. However, if at any time during the Lease Term the methods
of taxation prevailing on the date hereof shall be altered so that in lieu of or
as a substitute for the whole or any part of the Taxes now levied, assessed or
imposed on real estate or upon Landlord with respect to the TELEHOUSE Complex,
the Building, or the Promises, there shall be levied, assessed or imposed any
other tax, fee, charge, Imposition or assessment, however denominated including,
(a) a tax on the rents received from Such real estate, or (b) a license fee
measured by the rents receivable by Landlord from the TELEHOUSE Complex or the
Building or the Premises, or (c) a tax or license fee imposed upon Landlord
which is otherwise measured by or based in whole or in part upon the TELEHOUSE
Complex, the Building or the Premises, or (d) a payment in lieu of taxes, then
the same, computed as if the amount of such tax or fee so payable were that due
if the TELEHOUSE Complex, the Building or the Premises were the only property of
Landlord subject thereto, shall be included in Taxes. Provided, that the Taxes
imposed on the TELEHOUSE Complex shall be equitably allocated among all of the
buildings (including the Building) within the TELEHOUSE Complex.

     5.1.4  [intentionally omitted.]

     5.1.5  "Building Operating Expenses" means the aggregate of all costs,
expenses and disbursements of every kind and nature paid or incurred by or on
behalf of Landlord or its agent or any contractor employed by Landlord with
respect to the operation, repair, cleaning, maintenance, management and security
of the Building and the TELEHOUSE Complex, provided that Building Operating
Expenses incurred in connection with the operation, repair, cleaning,
maintenance, management and security of the TELEHOUSE Complex shall be allocated
among all of the buildings (including the Building) located within the
TELEHOUSE- Complex on an equitable basis as determined by Landlord in its
reasonable discretion according to generally acceptable accounting principles.
Without in any way limiting the generality of the foregoing, Building Operating
Expenses shall include the following:

          (i)   salaries, wages, bonuses, fringe benefits and the cost of any
     pension or retirement plan or of any life or disability or other benefits
     with respect to the employees of Landlord engaged in the operation, repair,
     cleaning, maintenance, management and security of the Building at or below
     the grade of director of operations; provided that if any such employees of
     Landlord provide services for more than one building of Landlord, then a
     prorated portion of their wages, benefits and taxes shall be included in
     Building Operating Expenses, based on the portion of their working time
     devoted to the Building;

          (ii)  social security, unemployment and other payroll taxes;

          (iii) electricity for use in common areas; gas, steam or other fuel;
     operation of elevators and security systems; heating, cooling, air
     conditioning and ventilating in common areas; hot and cold water, sewer and
     other utilities; utility taxes, water rates and charges and sewer rental;

          (iv)  cleaning (including windows), painting, trash removal, security
     and other services and replacement of tubes, bulbs, lamps and ballasts
     required for building standard lighting;

                                       15
<PAGE>

               (v)     the cost of all appropriate insurance including Workers
        Compensation, property, casualty, rental or business interruption,
        liability and fidelity insurance and insurance consultants;

               (vi)    repairs and maintenance of the TELEHOUSE Complex and the
        Building and its systems;

               (vii)   landscaping;

               (viii)  building and cleaning goods and supplies;

               (ix)    the cost of, or rental charges (including interest
        charges paid by Landlord) for, machinery, equipment, tools, maintenance
        facilities or systems used in the operation, repair, cleaning,
        maintenance, management and security of the Building, and any sales and
        other taxes thereon;

               (x)     uniforms and dry cleaning;

               (xi)    management fees, or if no management fee is being
        charged, an amount not in excess of the amount which would be paid for
        managing a similar data center,

               (xii)   service agreements on equipment and service contracts and
        charges of independent contractors;

               (xiii)  telephone, telegraph, fax (or other telecommunication)
        costs incurred by Landlord in the management and operation of the
        Building and stationery;

               (xiv)   legal, accounting and professional fees and disbursements
        (other than with respect to Landlord's leasing of space in the
        Building);

               (xv)    costs of capital improvements and replacements which are
        made after completion of the Building or TELEHOUSE Complex and which are
        reasonably necessary for the proper functioning of the Building or
        TELEHOUSE Complex and the respective facilities and systems of each or
        which are intended to reduce Operating Costs or which are required by
        law, amortized over the shortest useful life permitted by the Internal
        Revenue Code of 1986 for such improvements and replacements, Including
        interest charges paid by Landlord or, in the absence of actual Interest,
        imputed interest at the Interest Rate;

               (xvi)   licenses, permits and inspections;

               (xvii)  depreciation on personal property, tools and moveable
        equipment used in the operation repair, cleaning, maintenance,
        management or security of the Building or the TELEHOUSE Complex or
        provided by Landlord for the use or benefit of lessees or occupants,
        including window coverings and carpeting in public corridors;

               (xviii) costs of contesting the validity or applicability of any
        law if a successful contest would reduce Building Operating Expenses;

               (xix)   those taxes, duties, charges, levies and assessments
        which are expensed as a part of the Building's or the TELEHOUSE
        Complex's operation, repair, cleaning, maintenance, management and
        security, but which are not included within Taxes (as defined below),
        such as sales, use and utility taxes;

               (xx)    all expenses and costs incurred by Landlord (other than
        for capital improvements, which are covered by clause (xv) of this
        Section) as a result of or in order to comply with applicable laws,
        including laws pertaining to energy or natural resource conservation or
        environmental protection (such as the costs of securing alternative
        sources of utilities, energy or other products or services and the costs
        of making the Building, the Premises or the TELEHOUSE Complex compatible
        with the use of such alternative sources);

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<PAGE>

               (xxi)   all charges, taxes, surcharges, assessments or penalties
        imposed by any government agency or public utility as a means of
        conserving or controlling the consumption of water, gas, electricity,
        energy sources or other natural resources;

               (xxii)  all charges imposed by the Port Authority with respect to
        the operation, repair, cleaning, maintenance, management and security of
        the Teleport or the Infrastructure;

               (xxiii) rent (excluding annual basic ground rent, basic operating
        expense rental and additional operating expense rental) payable to the
        Port Authority under the Ground Lease; and

               (xxiv)  any and all other costs and expenses of any kind or
        nature paid in connection with the operation, repair, cleaning,
        maintenance, management and security of the Building, the Premises or
        the TELEHOUSE Complex.

        5.1.6  Building Operating Expenses- Exclusions. The term Building
        Operating Expenses excludes:

               (i)     expenses relating to leasing space in the TELEHOUSE
        Complex (including tenant improvements, leasing commissions and
        advertising expenses);

               (ii)    legal charges incurred for collection of accounts, or
        negotiation of leases, or relating to disputes between Landlord and
        other lessees and occupants of the TELEHOUSE Complex;

               (iii)   the cost of electricity and other utilities and services
        furnished directly to the Premises or to space leased to other lessees
        and occupants to the extent that such lessees and occupants pay for such
        utilities and services directly or reimburse Landlord for such costs
        other than as provided in this Article V;

               (iv)    the cost of repairs or replacements incurred by reason of
        fire or other casualty or Eminent Domain to the extent to which Landlord
        has actually received compensation therefor through proceeds of
        insurance or condemnation awards;

               (v)     Taxes;

               (vi)    depreciation (other than on personal property, tools and
        moveable equipment as described in Clause (xvii) of Section 5.1.5
        above), and interest and principal on mortgages encumbering the Building
        or Landlord's interest under the Ground Lease;

               (vii)   telephone, telegraph, fax or other telecommunication
        costs incurred by lessees and occupants of the TELEHOUSE Complex or the
        Building;

               (viii)  costs and expenses otherwise includable in Building
        Operating Expenses, to the extent that Landlord is reimbursed from other
        sources for such costs and expenses;

               (ix)    salaries, wages, bonuses, fringe benefits and the cost of
        any pension or retirement plan or of any life or disability or other
        benefits with respect to the employees of Landlord above the grade of
        director of operations;

               (x)     annual basic ground rent payable to the Port Authority
        under the Ground Lease and payments under any mortgage encumbering the
        Building and/or the estate created by the Ground Lease; and

               (xi)    costs of performing work or furnishing services for
        tenants other than this Tenant at the Landlord's expense, to the extent
        that such work or service is in excess of any work or service, Landlord
        is obligated to furnish to this Tenant at Landlord's expense.

               It is the intention of the parties that Tenant shall not be
required to make duplicate payments of any Building Operating Expense item, if
such payment was made in relation to the item pursuant to any other

                                       17
<PAGE>

provision of this Lease; nor shall Tenant be required to pay any Rent as an
Building Operating Expense to the extent Landlord is reimbursed for such item,
whether by another tenant, through insurance proceeds or otherwise.

        5.1.7   Building Operating Expenses Adjustment. If during all or part of
any Lease Year the Rentable Area of the Building is not fully occupied by
tenants, the Building Operating Expenses for such Lease Year shall be adjusted
to reflect the Building Operating Expenses which would have been payable had the
Building been fully occupied throughout such Lease Year.

SECTION 5.2.  PAYMENT OF TAXES AND BUILDING OPERATING EXPENSES. Landlord shall
pay all Taxes and Building Operating Expenses and Tenant shall reimburse
Landlord for Tenant's Share thereof, in accordance with this Section 5.2.

        5.2.1.  Payment Of Tenant's Share Of Taxes.

        5.2.1.1 Tax Payment and Tax Statement, Tenant shall pay to Landlord as
Additional Rent, an amount equal to Tenant's Share of Taxes for any Lease Year
or Partial Lease Year in the manner set forth in this Section 5.2. 1. At any
time during or after a Lease Year, Landlord may render to Tenant a statement
(the "Tax Statement") showing (a) the Taxes for the Lease Year and (b) Tenant's
Share of any such Taxes (the "Tax Payment"). Tenant shall pay to Landlord, in
(2) equal installments, in advance, on June 1 and December 1 of each year, the
Tax Payment shown on the Tax Statement. If the taxing authority changes the
number or amount of installments of Taxes or the dates on which Taxes are
required to be paid, then the amounts or the due dates of the installments of
the Tax Payment shall be correspondingly revised so that the Tax Payment (or the
installments thereof) will be due not more than thirty (30) days prior to the
date the corresponding payment is due to such authority. If any additional Taxes
are imposed during any Lease Year or if any Tax Statement contains an error,
Landlord may at any time deliver revised Tax Statements to Tenant, and the
provisions of this Section 5.2.1.1 regarding the timing of the Tax Payment shall
apply to such revised Tax Statements. Landlord's failure to render a Tax
Statement during any Lease Year or failure to make a demand under this Section
5.2.1 shall not prejudice Landlord's right to render a Tax Statement with
respect to such Lease Year during any subsequent Lease Year or with respect to
any subsequent Lease Year, and shall not affect Tenant's obligation to pay the
Tax Payment for such Lease Year or act as a waiver of any kind. Whenever so
requested, but not more than once a year, Landlord shall furnish Tenant with a
reproduced copy of the tax bill for the Taxes for the current or next succeeding
Lease Year, if theretofore issued by the taxing authority.

        5.2.1.2 Adjustments of Tax Payment. The Tax Payment shall be prorated
for any Partial Lease Year in which the Lease Term shall commence or end. If a
Tax Statement is furnished to Tenant after the commencement of the Lease Year in
respect of which such Tax Statement is rendered, Tenant shall, within thirty
(30) days after receipt, pay to Landlord the amount shown thereon. If, after
Tenant shall have made a Tax Payment and regardless of whether this Lease shall
have terminated, Landlord shall receive a refund of any portion of the Taxes on
which such payment shall have been based, Landlord shall have the option either
to pay to Tenant Tenant's Share of the net refund after deduction of all
expenses (including, but not limited to, attorneys' and appraisers' fees and
disbursements and witnesses' fees) incurred by Landlord in connection with
obtaining the refund or to credit such sum against subsequent Tax Payments;
provided however, , that Tenant's Share of such refund shall be limited to the
amount, if any, which Tenant had theretofore paid to Landlord in respect of
Taxes for such Lease Year.

        5.2.1.3 Miscellaneous Tax Matters. Tenant shall receive Tenant's Share
of any discount that Landlord may receive by virtue of any early payment of
Taxes or on account of any exemption or abatement of Taxes, and Taxes shall be
calculated by taking such discounts into account. Subject to the second sentence
of Section 5.1.7, Taxes shall be computed initially on the assessed valuation in
effect at the time the Tax Statement is issued to Tenant, regardless of any then
pending proceeding for reduction of such assessed valuation. Only Landlord shall
be eligible to institute tax reduction or other proceedings to reduce the
assessed valuation of the TELEHOUSE Complex or the Building or contest any item
comprising Taxes. Notwithstanding the foregoing, tenant shall have the right to
participate in, at Tenant's, sole cost and expense, or maintain, at Tenant's
sole cost and expense, appropriate proceedings to seek reduction of any Tax
imposed on Tenant's property under the provisions of the New York State Tax Law
imposing a tax on telecommunications equipment. Tenant's liability for any Tax
Payment due under this Section 5.2.1 shall survive the expiration or earlier
termination of this Lease, and shall be payable within thirty (30)

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<PAGE>

days after demand therefor following such expiration or termination. In no event
shall any adjustment of any Tax Payment hereunder result in a decrease in Base
Rent.

        5.2.2     Payment of Tenant's Share of Building Operating expenses,

        5.2.2.1 Operating Expense Statement, Tenant shall pay to Landlord as
Additional Rent an amount equal to Tenant's Share of Building Operating Expenses
for any Lease Year or Partial Lease Year in the manner set forth in this Section
5.2.2. Promptly after the commencement of each Lease Year, Landlord shall submit
to Tenant a statement (the "Operating Expense Statement") setting forth
Landlord's estimate of Building Operating Expenses for such Lease Year and
indicating Tenant's Share of the estimated Building Operating Expenses. For the
first Lease Year, Tenant's Share of estimated Building Operating Expenses is set
forth in Section 1.1 as the Initial Tenant's Share of Building Operating
Expenses (the "Operating Expense Payment"). Landlord's failure to render an
Operating Expense Statement during any Lease Year or failure to make a demand
under this Section 5.2.2 shall not prejudice Landlord's right to render an
Operating Expense Statement with respect to such Lease Year during any
subsequent Lease Year or with respect to any subsequent Lease Year, and shall
not affect Tenant's obligation to pay Tenant's Share of such Building Operating
Expenses for such Lease Year or act as a waiver of any kind. Within thirty (30)
days of receipt of an Operating Expense Statement, Tenant shall pay to Landlord
a sum equal to one-twelfth (1/12th) of such estimated Building Operating
Expenses multiplied by the number of months (including any partial months) to
and including the then current month which have elapsed since the commencement
of such Lease Year, less the aggregate of any payments made on account of
Building Operating Expenses made since the commencement of such Lease Year
pursuant to this Section 5.2.2; and, thereafter, commencing with the first day
of the month following the furnishing to Tenant of an Operating Expense
Statement and continuing monthly on the first day of every month thereafter
until rendition of the next succeeding Operating Expense Statement, Tenant shall
pay an amount equal to one-twelfth (1/12th) of Tenant's Share of such estimated
Building Operating Expenses.

        5.2.2.2 Miscellaneous Building Operating Expense Matters. Tenant's
liability for Tenant's Share of Building Operating Expenses due under this
Section 5.2.2 shall survive the expiration or earlier termination of this Lease,
and shall be payable within thirty (30) days after demand therefore following
such expiration or termination. In no event shall the Base Rent ever be reduced
by the operation of any provision of this Section 5.2.2.

        Landlord and Tenant. In rendering their decision and award, the
arbitrators shall have no power to vary, modify or amend any provision of this
Lease.

                                   ARTICLE VI

                             SERVICES AND UTILITIES

SECTION 6.1  ELECTRICITY.

        6.1.1  Direct Supply. Electrical power shall be furnished directly to
Site K position of the Premises by the Port Authority for so long as the Port
Authority provides electrical power to the Building, and Tenant shall obtain
electrical power directly from the Port Authority. The costs of such service
(which shall be at least one hundred fifteen percent (115%) of the cost to the
Port Authority of the same quantity of electrical power) shall be paid by Tenant
directly to the Port Authority on such terms and conditions as the Port
Authority may establish. Notwithstanding the foregoing, if Tenant's consumption
of electrical power exceeds the standard of forty (40) VoltAmps per square foot
of Useable Area, Tenant shall pay as Additional Rent an amount calculated
according to the Excessive Electricity Schedule annexed hereto as Exhibit "F".
Notwithstanding the foregoing, such Additional Rent for Excessive Electricity
shall be waived until such time that it becomes necessary and appropriate for
the Landlord to expand the Building's basic power and/or cooling capacity.

        6.1.2  Additional Electrical Equipment. If Tenant from time to time
shall require additional electrical power for use in the Site K position of the
Premises in excess of the quantity being previously supplied to the Site K
position of the Premises, Tenant may obtain such additional electrical power
from the Port Authority so long as

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<PAGE>

Tenant's use of electrical power will not exceed the capacity of existing
feeders to the Building or the risers, conduits, transformers, cables, switches,
meters, switchboards or wiring installations and Tenant's use of electrical
power will not, in Landlord's reasonable judgment, overload such installations
or interfere with the use thereof by other lessees and occupants of the
Building. If, in Landlord's reasonable judgment, such excess requirements cannot
be furnished unless additional risers, conduits, feeders, transformers, cables,
switches, meters, switchboards or installations are installed in the Premises or
the Building, Landlord, upon written request of Tenant, will, to the extent that
such excess requirements can in Landlord's reasonable opinion be practically and
safely met without undue interference with the use and occupancy of other
lessees and occupants, proceed with reasonable diligence to install such
additional risers, conduits, feeders, transformers, cables, switches, meters,
switchboards or installations provided the same and the use thereof (i) shall be
permitted by the Port Authority, (ii) shall not cause permanent damage to the
Building or the Premises or create a dangerous condition or entail unreasonable
Alterations or unreasonably interfere with, or disturb other lessees or
occupants of the Building or increase the premiums for any insurance on the
Building, and (iii) shall comply with applicable laws; but no risers, conduits,
feeders, transformers, cables, switches, meters, switchboards or installations
may be installed without Tenant's first submitting plans and obtaining the prior
written consent of Landlord (which shall not be unreasonably withheld) and the
Port Authority. Tenant shall pay all costs and expenses incurred by Landlord in
connection with such installation within thirty (30) days after receipt of an
Invoice and documentation substantiating all charges. All meters and all panel
boards, feeders, risers, wiring, transformers, switches, switchboards and other
conductors or equipment required for the Premises to receive electrical power
directly from the Port Authority and/or public utility shall be installed by
Landlord at Tenant's expense, the amount of which shall be equal to the direct,
out-of-pocket costs and expenses actually incurred by Landlord, plus the
Landlord's Improvement Fee as described in Section 8.6.

        6.1.3  Landlord's Consent to Electrical Alterations. In order that
Landlord may at all times have ail necessary Information that it requires to
maintain and protect its equipment, Tenant agrees that Tenant will not make any
alteration of or addition to, the electrical equipment or wiring in the Premises
without the prior written consent in each instance of Landlord (which shall not
be unreasonably withheld) and, if required, of the Port Authority.

        6.1.4  Requirements Applicable to Tenant. Tenant shall at all times
comply with the rules, regulations, tariffs, terms and requirements of the Port
Authority applicable to service, equipment and wiring.

        6.1.5  Provision of Emergency Power. Except as provided in this Section
6.1.5, Landlord shall not be liable in any way to Tenant for any failure,
inadequacy or defect in the supply or character of electrical power furnished to
the Site K position of the Premises caused by any applicable law or any act or
omission of the Port Authority or for any other reason not attributable to the
gross negligence or willful misconduct of Landlord. However, in the event of an
interruption in the electrical power furnished by the Port Authority, Landlord
shall furnish emergency electrical power to the Site K position of the Premises
as follows:

               (i)     Landlord shall provide to the Site K position of the
Premises an emergency power system consisting of (a) four diesel generators
located in the Building equipped with a 48-hour capacity fuel tank, and (b) an
uninterruptable power source ("UPS System") with batteries which operate to
provide electrical power from the time of the interruption in the Port
Authority's service until the generators are operating, but not exceeding
fifteen (15) minutes.

               (ii)    Landlord shall operate the emergency power system to
provide two categories of electrical power to the Site K position of the
Premises. The first category, referred to as "Essential Powers", is electrical
power in quantity at least equal to one-half (1/2) of the quantity of electrical
power normally consumed by Tenant during the time of year in which the
interruption occurs in Tenant's operation of its lighting and air-conditioning
equipment for office space. The second category, referred to as "Critical
Power", is electrical power in quantity at least equal to the quantity of
electrical power normally consumed by Tenant during the time of year in which
the interruption occurs in Tenant's operation of its computers in the Premises.

PROVIDED, that Landlord shall use its best efforts to furnish both Essential
Power and Critical Power to the Site K position of the Premises at all times
during any interruption of the Port Authority's service, but Landlord shall not
be liable to Tenant for any loss, liability, damage or expense which Tenant may
sustain or incur if (i) all or part of the emergency power system fails to
operate or (ii) the electrical power supplied to the Site K position of the
Premises by Landlord's emergency power system is interrupted due to an event of
Force Majeure or otherwise or (iii) the

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<PAGE>

quantity or character of electrical power supplied by Landlord's emergency power
system changes or is no longer available or suitable for Tenant's requirements,
except for actual damage suffered by Tenant and resulting from Landlord's
willful misconduct or gross negligence, and then only after actual notice
thereof to Landlord and Landlord's failure to cure within a reasonable time.
Notwithstanding anything to the contrary contained in this Section 6.1.5, in no
event shall Landlord be liable to Tenant or any third person for consequential
damages. Provided, further, that Landlord will maintain in good working order
and condition all equipment and conductors required to furnish the Site K
position of the Premises with normal and emergency electrical power, will not
interrupt or diminish electrical power supplied to the Site K position of the
Premises unless required due to an emergency, and will use its best efforts to
notify Tenant not less than five (5) business days in advance of an anticipated
or planned interruption or diminution of power furnished to the Site K position
of the Premises. In the event that the supply of electrical power to the
Premises is Interrupted by any cause except Tenant's acts or omissions, and such
interruption results in the shut down of Tenant's computer and/or communications
equipment in the Premises and prevents Tenant from engaging in its business for
a period in excess of one hour in any calendar day, then the Base Rent and
Tenant's Share of Building Operating Expenses shall be abated for such calendar
day.

SECTION 6.2  WATER.

        6.2.1  Provision of Water. Landlord shall provide hot and cold water for
ordinary lavatory and drinking purposes only in the common areas. Additionally,
Landlord shall provide chilled water to the Site K position of the Premises only
for the cooling of the computer and/or communications equipment therein and for
conditioning air for office space cooling.

        6.2.2  Failure of Water Supply. Except as provided in this Section
6.2.2, Landlord shall not be liable to Tenant for any loss, liability, damage or
expense which Tenant may sustain or incur by reason of any failure, inadequacy
or defect in the supply or character of water furnished to the Site K position
of the Premises or the common areas except for actual damage suffered by Tenant
by reason of any such failure, inadequacy or defect caused by the gross
negligence or willful misconduct of Landlord, and then only after actual notice
thereof to Landlord and Landlord's failure to cure within a reasonable time, and
in no event shall Landlord be liable to Tenant or any third Person for
consequential damages. In the event that the supply of chilled water for cooling
the computer and/or communications equipment in the Site K position of the
Premises is interrupted by any cause except Tenant's acts or omissions, and such
interruption results in the shut down of Tenant's computer and/or communications
equipment in the Site K position of the Premises and prevents Tenant from
engaging in its business for a period in excess of one hour in any calendar day,
then the Base Rent and Tenant's Share of Building Operating Expenses shall be
abated for such calendar day.

SECTION 6.3 ELEVATORS AND CLEANING. Landlord shall (i) provide necessary
passenger elevator service on a 24-hour basis each day and shall provide freight
elevator service and loading dock service on business days from 8:00 o'clock
a.m. to 6:00 o'clock p.m. and on Saturdays from 8:00 o'clock a.m. to 1:00
o'clock p.m. (collectively, "Business Hours") and (ii) provide office and window
cleaning services, and remove Tenant's ordinary office refuse and rubbish, all
pursuant to the Cleaning Specifications provided in Exhibit `C' annexed hereto.
Landlord shall not be required to provide janitorial services for portions of
the Premises used for computer operations or for storage. The terms "Business
Days" and "Saturdays" as used in this Section 6.3 and in Section 6.4 shall not
include Sundays or Federal or New York State legal holidays. Landlord shall have
the right to make reasonable changes in the operation of the elevators or the
loading dock in the Building and shall have the right to discontinue,
temporarily or permanently, the use of any one or more cars in any of the banks
of elevators provided reasonable elevator service is furnished to the Premises
as above provided.

SECTION 6.4 HEATING AND AIR CONDITIONING.

        6.4.1  Heating Landlord shall, through the heating equipment of the
Building, furnish the common areas of the Building and the Conference Room
position of the Premises with heat sufficient in Landlord's reasonable judgment
for comfortable occupancy of the common areas between October 1st and May 14th.
Tenant shall be responsible for providing heating to the Site K position of the
Premises.

        6.4.2  Air Conditioning. Landlord shall, through the air conditioning
equipment of the Building, furnish the common areas of the Building with air
conditioning sufficient in Landlord's reasonable judgment for

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<PAGE>

comfortable occupancy of the common areas between May 15th and September 30th.
Tenant shall be responsible for providing air conditioning to the Site K
position of the Premises.

        6.4.3  Miscellaneous HVAC Provisions. Any heating, ventilating or air
conditioning equipment required by Tenant for the proper operation of Tenant's
computer or for the comfortable occupancy by Tenant of the Premises and any
utilities required for the operation of such equipment shall be furnished,
installed, maintained and obtained by Tenant, at Tenant's sole cost, in
accordance with the applicable provisions of this Lease and Exhibit "B".
Landlord shall not be required to provide any heat, ventilating or air
conditioning to the Premises other than conditioned fresh air as required by
applicable law. Landlord and Tenant shall at all times cooperate fully with each
other, and Tenant shall abide by all the Rules and Regulations which Landlord
may reasonably prescribe or which the Port Authority may prescribe for the
proper functioning of the Building's heating, ventilating and air conditioning
system. Landlord upon reasonable notice (except in emergency) shall have free
and unrestricted access to any and all heating, ventilating and air conditioning
facilities in the Premises.

        6.4.4  Effect on HVAC of Changes in Premises. Tenant understands that
(i) any occupancy of the Premises, in whole or in part, for any purpose other
than the Permitted Use or (ii) any rearrangement of partitioning which
interferes with normal operation of the Building's heating, ventilating and air
conditioning system, may require changes or alterations in said system or in the
ducts through which the system operates, and Tenant accordingly agrees that any
changes or alterations so occasioned shall be made only with the prior written
consent of Landlord which Landlord will not unreasonably withhold (and the
consent of the Port Authority), and shall be done by Tenant at Tenant's expense,
and otherwise subject to the provisions of Article VIII, to the extent
applicable.

SECTION 6.5 SERVICE INTERRUPTION. Landlord reserves the right to interrupt,
curtail, stop or suspend service or operation of the heating, air conditioning,
elevator, plumbing, mechanical and electrical systems when Landlord is required
to do so because Landlord has been mandated by law to adhere to a recognized
energy, water or other resource conservation program promulgated by any
governmental or quasi-governmental agency, bureau, board, commission,
department, office or other division thereof. Landlord may take such action as
it deems appropriate to comply with any such program, including making
Alterations to the Building or Premises. Landlord agrees, however, that it will
use its best efforts to minimize interference with Tenant's use of the Premises
in effecting such and that Landlord diligently will prosecute same to
completion. Landlord agrees that it will not apply the restrictions of such
program to Tenant on a discriminatory basis. Subject to the provisions of
Section 6.1.5, Landlord reserves the right without liability to Tenant to
interrupt, curtail, stop or suspend service or operation of the heating, air
conditioning, elevator, plumbing, mechanical and electrical systems, when
necessary by reason of accident, or emergency, or for repairs or Alterations
desirable or necessary in the reasonable judgment of Landlord to be made, until
said repairs or Alterations shall have been completed. Landlord agrees, however,
that it will use its best efforts to minimize interference with Tenant's use of
the Premises in effecting such and that Landlord diligently will prosecute same
to completion.

SECTION 6.6 ADDITIONAL TENANT USE. At the Commencement Date, and from time to
time thereafter, Landlord may impose a reasonable charge, as Additional Rent,
and establish reasonable Rules and Regulations for: (a) the use by Tenant of the
heating, air conditioning, or ventilation systems serving the common areas, or
of the loading dock or freight elevator at any time other than during Business
Hours; or (b) the use by Tenant of chilled water in amounts exceeding the
amounts Landlord has undertaken to provide in Section 6.2.1 of this Article VI.
All requests for additional services must be submitted in writing to the
Building's superintendent (or such other person designated by Landlord), by a
person authorized by Tenant to make such requests, before 3:00 o'clock p.m. on
weekdays for weekday service and before 3:00 o'clock p.m. the day preceding
holidays and weekends for holiday or weekend service. In the event of emergency,
after-hours service may be obtained by calling the Building's superintendent (or
such other person designated by Landlord) in sufficient time to enable him to
provide the service requested, and Tenant shall follow up with a written
confirmation. Landlord may also impose a reasonable charge, as Additional Rent,
for the use of any additional or unusual cleaning services required because of
any non-building standard improvements in the Premises or for the removal of any
refuse and rubbish from the Premises, other than discarded material placed in
wastepaper baskets and left for emptying as an incident to Landlord's normal
cleaning of the Premises. Landlord may charge Tenant an additional charge for
cleaning if Tenant has glass partitions or an unusual amount of glass surfaces
in the interior of the Premises. Any charges imposed under the provisions of
this Section shall not exceed charges imposed for the provision of such services
in similar, first-class data centers.

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<PAGE>

SECTION 6.7 EXCULPATION OF LANDLORD FOR UTILITIES. Except as provided in Section
6.1.5 and Section 6.2.2, Landlord shall not be liable for any failure to furnish
any services or utilities when such failure is caused by events of Force
Majeure, accidents, breakage, necessary repairs, including any governmental
energy, water or other resource conservation program and including any
interruption in service by the Port Authority, and Tenant shall not be entitled
to any damages nor shall such failure abate or suspend Tenant's obligation to
pay the Rents or constitute or be construed as a constructive or other eviction
of Tenant.

SECTION 6.8 ACCESS. Tenant agrees to allow Landlord, its cleaning contractor and
their employees, to have access to the Premises after 5:30 o'clock p.m. and
before 8:00 o'clock a.m. and to have the right to use, without charge therefor,
all light and electrical power in the Premises reasonably required to clean the
Premises.

SECTION 6.9 COMMUNICATION FACILITIES. During the Lease Term, until Landlord
gives Tenant written notice to the contrary, Teleport Communications Group, a
partnership, shall, under the terms of the Ground Lease, be the exclusive
provider of communications services and facilities at the Teleport, including,
without limitation, all antennas, conduit, and cabling and including any such
items located in, on, or around any buildings and structures at the Teleport,
and Tenant shall not, and shall not permit any other Person to, install,
contract for, or use, or cause to be installed, contracted for, or used, any
such items, services, or facilities at the Teleport not provided by Teleport
Communications Group without the prior written approval of Teleport
Communications Group, which may be withheld or subject to such conditions as
Teleport Communications Group in its sole discretion may determine, provided,
however, that Teleport Communications Group may consent to internal building
wiring and internal terminal equipment furnished by Tenant, but only if Teleport
Communications Group is reasonably satisfied after testing and inspection that
such wiring and equipment is technologically compatible with its
telecommunications equipment and configurations at the Teleport. Notwithstanding
the above, Tenant will have access to fiber based services of both the Teleport
Communications Group and Bell Atlantic.

                                  ARTICLE VII

                                   INSURANCE

SECTION 7.1 PROPERTY INSURANCE. During the Lease Term, Landlord shall maintain
All Risk property insurance, covering the Building and insuring the Building in
the amount of its full replacement value, with loss of rents coverage. The
amount of any deductible shall be determined by Landlord but shall not exceed
that which is commercially reasonable for a first-class data center.

SECTION 7.2 LIABILITY INSURANCE. During the Lease Term, Landlord shall maintain
public liability insurance covering the Building and insuring against all
hazards and risks customarily insured against by Persons operating data
communications buildings. During the Lease Term, Tenant shall maintain
comprehensive general liability insurance, written on an occurrence basis with
blanket contractual liability coverage, broad form property damage and such
other coverage as Landlord may reasonably require, with respect to the Premises,
their use and occupancy by Tenant and the conduct or operation of business
therein, with combined single-limit coverage of not less than Five Million
Dollars ($5,000,000). Landlord may, from time to time, but not more frequently
than once every three (3) years, increase the policy amount to be maintained by
Tenant under this Section 7.2 as Landlord reasonably deems necessary in order to
maintain adequate liability coverage, provided, that the policy amount does not
exceed the policy amount required for other Tenants within the building and
TELEHOUSE.

SECTION 7.3 USE OF PREMISES. Tenant shall not do, or permit anything to be done,
in or about the Premises which might, solely by reason of the particular nature
of Tenant's use of the Premises: (a) increase any insurance rate with respect to
the Building over the rate which would otherwise then be in effect, or (b)
result in insurance companies of good standing refusing to insure the Building
in amounts satisfactory to Landlord, or (c) result in the cancellation of any
policy covering or relating to the Building.

SECTION 7.4 WAIVER OF SUBROGATION.

        7.4.1  Waiver Included in Policy. Landlord and Tenant shall each secure
an appropriate clause in, or an endorsement upon, each property insurance policy
required by this Article VII, pursuant to which the insurance

                                       23
<PAGE>

company waives subrogation or permits the insured, prior to any loss, to agree
with a third party to waive any claim it might have against said third party
without invalidating the coverage under the insurance policy. On Tenant's
policies, the waiver of subrogation or permission for waiver of any claim shall
extend to Landlord and its agents and employees and against other lessees in the
Building, , provided that such other lessees agree to a waiver of their
respective rights of subrogation against Tenant. On Landlord's policies, the
waiver of subrogation or permission for waiver of any claim shall extend to
Tenant and its agents and employees. If such waiver be unobtainable, the parties
shall include in their property insurance policies (i) an express agreement that
such policy shall not be invalidated if the insured waives or has waived before
the casualty the right of recovery against any party responsible for a covered
casualty or (ii) any other form of permission for the release of such
responsible party. If such waiver, agreement or permission shall not be, or
shall cease to be, obtainable without additional charge or at all, the insured
party shall so notify the other party promptly after notice thereof. If the
other party shall agree in writing to pay the insurer's additional charge
therefor, such waiver, agreement or permission shall (if obtainable) be included
in the policy. In the event either party's insurer shall refuse to permit such
waiver, agreement or permission even with an additional charge, then the other
party shall have the right to designate another insurer with a Best's Insurance
Guide rating of A-XI or better who would be prepared to permit such waiver, and
the first party shall use such other insurer.

        7.4.2  Landlord's Waiver. As long as Landlord's casualty insurance
policies include the waiver of subrogation or agreement or permission to release
liability referred to in Section 7.4.1, Landlord hereby waives, for itself and
those claiming through or under it, any right of recovery against Tenant, any
other permitted occupant of the Premises, and of their partners, employees,
agents or contractors, for any loss occasioned by fire or other insured
casualty, whether or not arising from the negligence of Tenant or its employees,
agents or contractors. If at any time any of Landlord's property insurance
policies shall not include such or similar provisions, the waiver set forth in
the foregoing sentence shall, upon notice given by Landlord to Tenant, be of no
further force or effect (or, if the insurer shall not grant such waiver for all
of the required parties, such waiver shall be of no force or effect only with
respect to the required parties not included in such waiver). To the extent that
Landlord is at any time a self-insurer with respect to loss, damage or
destruction by fire or other casualty, Landlord agrees to waive any claim or
right of recovery which Landlord might have against Tenant for any loss
occasioned by fire or other casualty, whether or not arising from Tenant's
negligence.

        7.4.3  Tenants' Waiver. As long as Tenant's property insurance policies
include the waiver of subrogation or agreement or permission to release
liability referred to in Section 7.4.1 and provided that Landlord provides the
waiver referred to in Section 7.4.2, Tenant hereby waives (and agrees to cause
all other occupants of the Premises to execute and deliver to Landlord
instruments waiving), for itself and those claiming through or under it any
right of recovery against Landlord, the other additional insureds and any of
their partners, employees, agents or contractors, and against other lessees of
the TELEHOUSE Complex to the extent that the policies of such other lessees
permit a similar waiver for the benefit of Tenant and such other lessee actually
gives such a waiver, for any loss occasioned by fire or other insured peril,
whether or not arising from the negligence of Landlord or its employees, agents
or contractors. If at any time any of Tenant's property insurance policies shall
not include such or similar provisions, the waiver set forth in the foregoing
sentence shall, upon notice given by Tenant to Landlord, be of no further force
or effect (or, if the insurer shall not grant such waiver for all of the
required parties, such waiver shall be of no force or effect only with respect
to the required parties not included in such waiver). To the extent that Tenant
is at any time a self-insurer with respect to loss, damage or destruction by
fire or other peril, Tenant agrees to waive any claim or right of recovery which
Tenant might have against Landlord for any loss occasioned by fire or other
peril, whether or not arising from Landlord's negligence provided that Landlord
provides the waiver referred to in Section 7.4.2.

        7.4.4  Limitation on Waiver. Except to the extent expressly provided in
this Section 7.4, nothing contained in this Lease shall relieve either party of
any liability to the other or to its insurance carriers which such party may
have under law or the terms of this Lease in connection with any damage to the
Building by fire or other peril.

SECTION 7.5 POLICY REQUIREMENTS. Landlord and its agents and employees, the City
of New York, the New York City Public Development Corporation, the Port
Authority and any other Superior Lessor or any Superior Mortgagee whose name and
address shall have been furnished to Tenant shall be designated as additional
insureds on any insurance policy required by this Article VII. Tenant shall
deliver to Landlord certificates of insurance for the

                                       24
<PAGE>

insurance coverage required by this Article VII, in form reasonably satisfactory
to Landlord, issued by the insurance company or its authorized agent, within
thirty (30) days of the Commencement Date. Tenant shall procure and pay for
renewals of such insurance from time to time before the expiration thereof, and
Tenant shall deliver to Landlord such renewal certificate(s). At Landlord's
request, Tenant shall deliver certificates of insurance to additional insured
parties. All policies shall be issued by companies of recognized responsibility,
reasonably acceptable to Landlord, and licensed to do business in the State of
New York. All policies shall provide that they cannot be cancelled or modified
unless Landlord, the Port Authority and any other Superior Lessor or any
Superior Mortgagee named as an additional insured are given at least thirty (30)
days' prior written notice of such cancellation or modification. All insurance
policies involving liability shall contain a provision that in any action or
proceeding under or in connection with such policy, the insurance carrier shall
not without obtaining express advance consent from the General Counsel of the
Port Authority raise any defense involving in any way the immunity of the Port
Authority, its Commissioners, officers, agents or employees, the governmental
nature of the Port Authority, the provisions of any statutes respecting suits
against the Port Authority, or the jurisdiction of the tribunal over the person
of the Port Authority. Tenant shall not carry separate or additional insurance,
concurrent in form or contributing in the event of any loss or damage with any
insurance required to be obtained by Tenant under this Lease. Tenant may carry
any insurance coverage required of it hereunder pursuant to blanket policies of
insurance so long as the coverage afforded Landlord and the other additional
insureds thereunder shall not be less than the coverage which would be provided
by direct policies.

SECTION 7.6 PREMIUM INCREASE. If, by reason of any default by Tenant under this
Lease after notice and beyond any applicable grace period, or by reason of any
Tenant's Work Installed in the Premises except for any work performed by
Landlord pursuant to the terms hereof, including without limitation, the work
referred to in Section 2.3 of this Lease, the premiums on Landlord's insurance
on the Building (including without limitation rent insurance) are higher than
they otherwise would be, Tenant shall correct such default, and Tenant shall
reimburse Landlord, within thirty (30) days after demand, as Additional Rent,
for that part of the premiums attributable to the default by Tenant or the
Tenant's Work. If, due to the particular manner of Tenant's use of the Premises,
any such insurance shall be cancelled by the insurance carrier, then Tenant
shall cease such. use or occupancy and shall indemnify, defend and hold Landlord
harmless against any loss which would have been covered by such Insurance. A
schedule or statement of rates for the Building, issued by the insurance
companies insuring the Building, or by a fire insurance rating organization or
other similar body making rates for insurance for the Building, shall be
conclusive evidence of the facts therein stated and of the several items and
charges in the insurance rate then applicable to the Building.

                                 ARTICLE VIII

                                  ALTERATIONS

SECTION 8.1 CONDITIONS.

SECTION 8.1.1  ALTERATIONS BY TENANT. With Landlord's prior approval, which will
not be unreasonably withheld, and the prior approval of the Port Authority, if
such approval is required pursuant to the Ground Lease, Tenant may from time to
time, at its expense, make such alterations, improvements, additions and
replacements (including installation of fixtures, cables, wires) and decorations
(collectively, "Alterations") in and to the Premises as Tenant may desire
provided that: (a) the Alterations do not affect the outside appearance of the
Building and are not visible from the outside of the Building; (b) the
Alterations are non-structural and do not impair the strength or structural
integrity of the Building; (c) the Alterations are to the interior of the
Premises and do not affect any part of the Building outside of the Premises; (d)
the Alterations do not adversely affect the proper functioning of the
mechanical, electrical, sanitary and other service systems of the Building, or
unreasonably increase the usage of such systems by Tenant; (e) before proceeding
with any Alteration (other than decorations), Tenant shall submit to Landlord,
for Landlord's reasonable approval, plans and specifications for the work to be
done, and Tenant shall not proceed with such work until it obtains Landlord's
approval, which shall not be unreasonably withheld; (f) Tenant shall pay to
Landlord upon demand the reasonable direct, outof-pocket costs and expenses
actually incurred by Landlord in reviewing Tenant's plans and specifications and
inspecting the Alterations to determine whether they are being performed in
accordance with the approved plans and specifications and in compliance with
law, including the fees of any architect or engineer employed by Landlord for
such purpose; and (g) Tenant shall comply with the rules and regulations of
Landlord and the Port Authority (including applicable provisions of the Ground
Lease) then

                                       25
<PAGE>

in force with respect to the making of Alterations. Tenant hereby agrees that
the review and approval by Landlord of Tenant's plans and specifications for
Alterations are solely for Landlord's benefit. Landlord shall have no duty
toward Tenant, nor shall Landlord be deemed to have made any representation or
warranty to Tenant with respect to the safety, adequacy, correctness, efficiency
or compliance with law of the plans and specifications, the Alterations or their
design, or any other matter regarding the Alterations. Landlord shall, at no
cost or expense to Landlord, cooperate reasonably with Tenant and its
contractors and subcontractors in obtaining all permits, approvals, certificates
and bonds required under this Article VIII.

SECTION 8.1.2 ALTERATIONS BY LANDLORD. Landlord reserves the right, at any time,
to make such Alterations, in or to the Building, the TELEHOUSE Complex and the
respective systems and equipment of each, as well as in or to street entrances,
doors, halls, passages, elevators, escalators and stairways, and other public
parts of the Building, as Landlord shall deem necessary or desirable. However,
Landlord shall not exercise its rights under this Section 8.1.2 in a manner that
would materially interfere with Tenant's use or access to the Premises, reduce
Tenant's usable square footage, materially alter the configuration of the
Premises, or in any manner effect the Tenant's ability to continue their
permitted use of the Premises.

SECTION 8.2 PERFORMANCE. Landlord or Tenant shall obtain all necessary
governmental permits and certificates for the construction of the Alterations
which either of them undertakes and for the use and occupancy of the Alterations
upon completion. Tenant shall retain a reputable contractor, selected from
Landlord's list of acceptable contractors and independently approved by Landlord
(which approval shall not be unreasonably withheld) and by the Port Authority
for specific Alterations, to perform the Alterations in compliance with the
permits and certificates and applicable law. Alterations shall be diligently
performed in a good and workmanlike manner, using new materials and equipment at
least equal in quality and class to the better of: (a) the original
installations of the Building, or (b) the prevailing building standards
established by Landlord. Any Alterations by Tenant in the mechanical,
electrical, sanitary, heating, ventilating, air-conditioning or other systems of
the Building shall be performed only by contractors designated by Landlord.
Alterations shall be performed in a manner that causes the least interference
with the use of the Building by lessees and occupants and in a manner that does
not interfere unreasonably with, delay or, in the case of Tenant's Alterations,
impose additional expense on Landlord in the maintenance, repair or operation of
the Building; and if any additional expense is incurred by Landlord as a result
of any Alterations by Tenant, Tenant shall reimburse Landlord for such
additional expense, within thirty (30) days after demand, as Additional Rent.
Throughout the performance of Alterations by Tenant, Tenant shall carry, or
cause its contractors to carry, workers' compensation insurance as required by
law and general liability insurance, with completed operations endorsements, for
any occurrence in or about the Building, in such coverage limits as Landlord may
reasonably require, with insurers meeting the requirements of Section 7.5.
Landlord and the Persons specified in Section 7.5 shall be designated as
additional insureds on such insurance policies. Tenant shall furnish Landlord
with evidence reasonably satisfactory to Landlord that such insurance is in
effect before the commencement of Alterations and, on request of Landlord during
construction, Tenant shall provide evidence reasonably satisfactory to Landlord
that the insurance remains in effect. Upon completion of any Alterations,
Landlord or Tenant shall obtain certificates of final approval of such
Alterations required by any governmental authority and, in the case of
Alterations performed by Tenant, shall furnish Landlord with copies thereof,
together with the "as-built" plans and specifications therefor as approved in
accordance with law and the Rules and Regulations for the Building and the
Teleport. If any of Tenant's Alterations involve the removal of fixtures,
equipment or other property in the Premises which are not Tenant's Property, the
removed fixtures, equipment or other property shall be promptly replaced at
Tenant's expense with new fixtures, equipment or other property of like utility
and at least equal value, unless Landlord otherwise directs Tenant in writing.

SECTION 8.3 LIENS AND VIOLATIONS.

        8.3.1 Discharge of Liens and Violations. Tenant shall promptly procure
the cancellation or discharge of all notices of violation arising from or
otherwise connected with Alterations, or any other work, done for Tenant, or any
person claiming through or under Tenant, which shall be Authority or the
Building Department of the City of New York or any other public authority.
Tenant shall not utilize materials in Alterations that are subject to security
interests or liens. Tenant shall defend, indemnify and hold Landlord harmless
from and against all liens and encumbrances or claims of liens or encumbrances
filed in connection with Alterations, or any other work, labor, services or
materials done for or supplied to Tenant, including security interests in any
materials, fixtures or articles installed in the Premises; and against all
costs, expenses and liabilities incurred in connection with any such lien or

                                       26
<PAGE>

encumbrance, or claim of lien or encumbrance, its removal or any related action
or proceeding. Subject to Tenant's right to contest as set forth below, Tenant
shall satisfy or discharge of record each lien or encumbrance within fifteen
(15) days after it is filed. If Tenant fails to do so, Landlord shall have the
right to satisfy or discharge such lien or encumbrance by payment to the
claimant on whose behalf it was filed or by payment into court or to the County
Clerk pursuant to the New York Lien Law. Tenant shall reimburse Landlord within
thirty (30) days after demand for the costs and expenses so incurred by
Landlord, as Additional Rent, and without regard for any defense or offset that
Tenant may have had against the claimant.

        8.3.2 Tenant's Right to Contest Liens. Notwithstanding anything to the
contrary contained in this Section 8.3, Tenant shall have the right to contest
in good faith and with diligence the correctness or the validity of any lien,
encumbrance or claim therefor if Tenant discharges the lien of record, whether
by deposit of funds into the appropriate court or with the County, Clerk or by
procuring and recording a lien release bond issued by a corporation authorized
to issue surety bonds in the State of New York in an amount equal to one and
one-half (1.5) times the amount of the claim of lien, encumbrance or claim
therefor. The bond shall meet the requirements of New York law and shall provide
for payment of any sum that the claimant may recover on the claim, together with
costs of suit if it recovers in the action. Nothing in this Lease contained
shall be construed as a consent on the part of Landlord to subject Landlord's
estate in the Premises to any lien or liability under the Lien Law of the State
of New York.

SECTION 8.4 LABOR CONDITIONS. In the performance of Alterations, Tenant shall
not permit any Labor Condition to arise or continue at the Building or the
Teleport which interferes with the progress of other construction work at the
Building or the Teleport. The determinations of the Port Authority or Landlord
as to whether any Labor Condition interferes with the progress of other
construction work at the Teleport or the Building shall be conclusive on Tenant
so long as such determinations are not arbitrary or capricious and, upon notice
from the Port Authority or Landlord, Tenant shall, or shall cause its contractor
to, rectify any Labor Condition specified in the notice as soon as is reasonably
possible, unless failure to rectify such Labor Condition immediately will result
in an emergency situation, in which event Tenant shall, or shall cause its
contractor to, rectify such Labor Condition immediately. In the event of failure
by

Tenant or its contractor to comply with the requirements of this Section
(whether or not such failure is due to Tenant's fault), the Port Authority or
Landlord by notice shall have the right to suspend the Port Authority's or
Landlord's permission to Tenant to proceed with any portion of the Alterations
being performed, and Tenant shall thereupon immediately cease the same. Unless
failure to immediately suspend construction will result in an emergency
condition, the Port Authority has agreed to give, and Landlord will give,
reasonable advance notice before directing a cessation of construction. When the
Labor Condition shall be so settled that such interference no longer exists, the
Port Authority has agreed to, or Landlord, by notice to Tenant, shall, reinstate
the permission to Tenant to perform the Alterations on all the same terms and
conditions as before the suspension. "Labor Condition" shall mean and include
strikes, boycotts, picketing, work-stoppages, slowdowns, complaints, disputes,
controversies, or any other type of labor trouble, regardless of the employer of
the Person involved or their employment status, if any.

SECTION 8.5 PORT AUTHORITY'S FEE. If the Port Authority shall charge any fee in
connection with any Alteration to the Premises, Tenant shall pay the fee.

SECTION 8.6 IMPROVEMENT FEE. Tenant shall pay to Landlord as Additional Rent in
connection with any Alterations except for those performed by Landlord in
connection with Tenant's initial occupancy of the Premises, Landlord's fee (the
"Improvement Fee"). which shall not exceed (i) fifteen percent (15%) of the
total cost of such Alteration it Landlord performs the Alteration on Tenant's
behalf, and (ii) if Tenant performs the Alteration, all of Landlord's reasonable
costs and expenses in connection with such Alteration. There shall be excluded
from such computation the cost of furniture, furnishings, draperies, office,
computer and communication equipment, painting, cabinetry, items of special
decoration and telephone installation. Prior to making-any Alteration, Tenant
shall submit to Landlord a statement of Tenant's contractor, estimating the
total cost of such Alteration. The Improvement Fee shall be calculated on the
basis of such estimate and paid in equal monthly installments during the course
of the performance of the Alteration, together with the monthly installments of
Base Rent. Upon completion of the Alteration, Tenant shall submit to Landlord a
statement of Tenant's contractor, certifying the total cost of such Alteration.
The Improvement Fee shall be adjusted, if necessary, based on the certification.
Within thirty (30) days
                                       27
<PAGE>

after completion of the Alteration, Tenant shall pay to Landlord any remaining
balance of the Improvement Fee. If the Improvement Fee, as adjusted, is less
than the amount theretofore paid to Landlord, Landlord, within thirty (30) days
after receipt of the certification, shall refund to Tenant the amount of such
overpayment.

                                  ARTICLE IX

                       LANDLORD'S AND TENANT'S PROPERTY

SECTION 9.1 TENANT'S PROPERTY. All computer, communications and office
equipment, whether or not attached to or built into the Premises, which are
installed in the Premises by or for the account of Tenant, without expense to
Landlord, and which can be removed without substantial damage to the Premises or
the Building, and all furniture, furnishings and other articles of movable
personal property owned by Tenant and located in the Premises shall remain the
property of Tenant ("Tenant's Property") and may be removed by Tenant at any
time during the Lease Term. Prior to the expiration of the Lease Term, or
immediately upon any earlier termination of this Lease, Tenant shall remove from
the Premises all of Tenant's Property (except such items thereof as Landlord has
expressly permitted to remain, which shall become the property of Landlord).
Tenant shall repair any damage to the Premises or to the Building resulting from
the installation or removal of Tenant's Property. Equipment or other property
for which Landlord shall have granted an allowance or credit to Tenant, or any
item installed for Tenant's account, but in replacement of an item that was not
Tenant's Property, shall not be deemed Tenant's Property and shall become the
property of Landlord.

SECTION 9.2 FIXTURES. All fixtures, equipment (other than equipment referred to
in Section 9.1), improvements and appurtenances attached to or built into the
Premises at the Commencement Date or during the Lease Term, including
Alterations, shall become and remain a part of the Premises and the property of
Landlord, regardless of whether they were installed by Tenant or at Tenant's
expense, and shall not be removed by Tenant.

SECTION 9.3  [intentionally omitted]

SECTION 9.4 ABANDONMENT. If Tenant does not remove items of Tenant's Property
from the Premises after the expiration or earlier termination of the Lease Term,
Landlord may consider such items to have been abandoned. In that event Landlord
may retain such items as its property or dispose of them, at Tenant's expense,
in such manner as Landlord shall determine.

SECTION 9.5  TAXES ON TENANT'S PROPERTY R AND NON-STANDARD TENANT IMPROVEMENTS.

        9.5.1  Taxes on Tenant's Prop. At least fifteen (15) days prior to
delinquency, Tenant shall pay all taxes levied or assessed upon Tenant's
Property. If the assessed value of the Building is increased by the inclusion of
a value placed upon Tenant's Property, Tenant shall pay to Landlord, within
thirty (30) days after demand, as Additional Rent, the taxes (including payments
in lieu of taxes) levied against Landlord on account of the included value of
Tenant's Property. Landlord shall uniformly apply this Section 9.5.1 or a
similar provision to all tenants of the Building and if Landlord does not
uniformly apply such a provision, Landlord shall not include in Building
Operating Expenses any taxes that should have been charged directly to other
tenants of the Building under the terms of such a provision.

        9.5.2  [Intentionally omitted.)

                                   ARTICLE X

                            REPAIRS AND MAINTENANCE

SECTION 10.1 LANDLORD'S OBLIGATIONS. Landlord, at its expense, shall keep and
maintain the Building's exterior walls, glass, roof and foundation and the
public portions of the Building and the Building systems and facilities serving
the Premises, including, without limitation, the mechanical, electrical,
sanitary, ventilating, air conditioning and other systems, in proper working
order, condition and repair. Landlord's obligation to perform such repairs in
the Premises, or with respect to Building systems and facilities serving the
Premises, shall arise

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<PAGE>

promptly after Tenant has notified Landlord or Landlord has actual knowledge of
the need for such repairs in the Premises.

SECTION 10.2 TENANT'S OBLIGATIONS. Except for Landlord's obligations as set
forth specifically in Sections 10.1 and 13.1, Tenant shall take good care of the
Premises and Tenant's Property. Tenant shall promptly replace all scratched,
damaged or broken doors and interior glass in the Premises with doors and glass
that match as nearly as practicable the damaged item unless such damage or
breakage is caused by the acts or omissions of Landlord. Tenant shall be
responsible for all repairs, maintenance and replacement of wall and floor
coverings and electrical fixtures and equipment in the Premises (excluding the
portions of the HVAC system located outside of the Premises and excluding the
sprinkler system and life safety system). Additionally, Tenant shall be
responsible for all maintenance and repairs, interior and exterior, structural
and non-structural, ordinary and extraordinary, of the Premises, the Building
and the Building's facilities and systems, made necessary, in whole or in part,
by: (a) the performance or existence of Tenant's Work or Alterations (excluding
any Work or Alterations performed by Landlord under the Lease); (b) the
installation or use of Tenant's Property in the Premises; (c) the moving of
Tenant's Property into or out of the Building; (d) an act or omission of Tenant
or its officers, partners, employees, agents, representatives, contractors,
sublessees or invitees; or (e) the particular nature of Tenant's use or
occupancy of the Premises. Tenant shall promptly make all repairs in or to the
Premises for which Tenant is responsible, and such repair work shall be subject
to the provisions of Article VIII regarding Alterations, to the extent
applicable. Tenant shall also be responsible for any repairs and maintenance of
the Infrastructure required as a result of the acts or omissions of Tenant, its
officers, partners, employees, agents, representatives, contractors, sublessees
or invitees. Landlord shall perform or cause to be performed, at Tenant's
expense, any other repairs of the Building and its facilities and systems or the
Infrastructure for which Tenant is responsible. Tenant shall reimburse Landlord
on demand, as Additional Rent, for the costs of such repairs, plus fifteen
percent (15%) of such costs as an allowance for Landlord's overhead and indirect
costs.

SECTION 10.3 EXCULPATION OF LANDLORD FOR REPAIRS. Except as otherwise expressly
provided in this Lease, Landlord will not be liable to Tenant and Tenant's
obligations under this Lease shall not be reduced or abated, by reason of any
inconvenience, annoyance, interruption or injury to business arising from
Landlord making any maintenance, repairs or Alterations in or to any portion of
the Building or the Premises or in or to the fixtures, equipment or
appurtenances of the Building or the Premises, which Landlord is required or
permitted to make by this Lease, or which are required by law, or which Landlord
deems appropriate, excepting any direct (but not consequential) damages to the
extent caused by the gross negligence or willful misconduct of Landlord or its
employees. Landlord shall have the right to erect scaffolding and barricades in
the Building for purposes of such repairs, provided that such structures do not
unreasonably impair access to or use of the Premises. Tenant waives any rights
it may have under any provisions of law regarding the duties of a lessor to
repair leased premises or the rights of lessees to make repairs if the lessor
fails to do so. In the event that Landlord fails for a period of thirty (30)
days after receipt of written notice from Tenant to perform maintenance or
repairs in the Premises that Landlord is required to perform by the terms of
this Lease, and such maintenance or repairs will not affect the utility and
other systems in the Building nor interfere in any way with the occupancy and
quiet enjoyment of other tenants and occupants of the Building, then Tenant may
make such repairs to the Promises and Landlord shall pay the reasonable cost of
such repairs within thirty (30) days after receipt of Tenant's itemized invoices
for such work.

SECTION 10.4 NOTICE. Tenant will notify Landlord and Landlord will notify Tenant
of: (a) any occurrence in or about the Premises for which Landlord will be
liable; (b) any fire or other casualty in the Premises; (c) any damage to or
defect in the Premises, for the repair of which Landlord will be responsible;
and (d) any damage to or defect in any part of the Building's sanitary heating,
ventilating, air-conditioning or other systems located in or passing through the
Premises.

                                  ARTICLE XI

                          USE AND COMPLIANCE WITH LAW

SECTION 11.1 USE. Tenant shall use and occupy the Premises for the Permitted Use
and for no other purpose.

SECTION 11.2 LICENSES AND PERMITS. Tenant shall procure and at all times comply
with the terms and conditions of any governmental license or permit required for
the lawful conduct of the Permitted Use in the

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<PAGE>

Premises, and Landlord shall procure and at all times comply with the terms and
conditions of any governmental license or permit required for the lawful
occupancy of the Building, excluding licenses and permits relating to work done
by or on behalf of Tenant. Landlord and Tenant shall, at no cost or expense to
Landlord, cooperate with each other in obtaining any governmental license or
permit required under this Section 11.2. Anything contained herein to the
contrary notwithstanding, to the best knowledge of Landlord, the Permitted Use
of the Premises is permissible under all applicable laws, statutes, rules and
regulations affecting the Premises and Landlord maintains all necessary
governmental licenses and permits and certificates of occupancy for the
Permitted use of the Premises.

SECTION 11.3 PROHIBITED USES. Tenant shall not at any time use or occupy or
allow any Person to use or occupy the Premises or the Infrastructure or do or
permit anything to be done or kept in or about the Premises or the Building or
the Infrastructure that solely by reason of the particular nature of Tenant's
use of the Premises or Infrastructure: (a) violates any certificate of occupancy
in force for the Building or the Infrastructure; (b) causes or is likely to
cause damage to the Building or the Infrastructure or any equipment, facilities
or other systems therein; (c) constitutes a violation of law; (d) violates a
requirement or condition of the standard fire insurance policy issued for office
or data processing buildings in the City of New York or, in the non-arbitrary
and non-capricious judgment of Landlord or the Port Authority, constitutes an
extra-hazardous condition; (e) impairs the character, reputation, image or
appearance of the Building as a first class data center; (f) impairs the proper
and economic maintenance, operation and repair of the Building, the
Infrastructure or their respective equipment, facilities or systems; (g)
constitutes a nuisance, annoyance or inconvenience to other lessees or occupants
of the Building or the Infrastructure or any portion of the TELEHOUSE Complex
or interferes with or disrupts the use or occupancy of any area of the Building,
the Infrastructure or any portion of the TELEHOUSE Complex (other than the
Premises) by other lessees or occupants of the Building or the TELEHOUSE Complex
or the Teleport; (h) interferes with the computer or telecommunications
operations of any lessee or occupant of the TELEHOUSE Complex or with the
transmission or reception of microwave, television, radio or other
communications signals by antennae located anywhere within the Teleport
(including the Building); (i) constitutes an unlawful, immoral or objectionable
occurrence or condition; or (j) results in repeated demonstrations, bomb threats
or other events which require evacuation of the Building or any other portion of
the TELEHOUSE Complex or otherwise disrupts the use, occupancy or quiet
enjoyment of the Building or any other portion of the TELEHOUSE Complex by other
lessees and occupants. Tenant shall not use or allow another Person to use any
part of the Premises for a restaurant or bar, the preparation, consumption,
storage, manufacture or sale of food, beverages, liquor, tobacco, drugs or
hazardous substances; the maintenance or operation of vending machines or
devices for dispensing or sale of food, beverages, liquor, tobacco, tobacco
products or merchandise of any kind or any equipment or device for furnishing
services to the public, including pay telephones; the business of photocopying,
multilith or offset printing (but Tenant may use part of the Premises for
photocopying in connection with its own business); a typing or stenography
business; a school or classroom; cooking, lodging or sleeping; or for immoral
purposes. No noise, vibration or odor shall be permitted to escape from the
Premises.

SECTION 11.4 COMPLIANCE BY TENANT. Tenant and Landlord shall promptly forward to
each other any notice received of the violation of any law involving the
Premises. Tenant shall comply with all laws and all Superior Leases that impose
any obligation arising from or related to: (a) the particular manner of Tenant's
use of the Premises; (b) the conduct of Tenant's business or operation of its
equipment therein; (c) any cause or condition created by or at the instance of
Tenant; or (d) breach of any of Tenant's obligations hereunder, and Tenant shall
pay all the costs, expenses, fines, penalties and damages which may be imposed
upon Landlord by reason of or arising out of Tenant's failure to comply with (i)
the requirement for delivery of the notice provided in the first sentence of
this Section 11.4 or (ii) any law or any Superior Lease that imposes any
obligation arising from or related to: (w) the peculiar nature of Tenant's use
of the Premises; (x) the conduct of Tenant's business or operation of its
equipment therein; (y) any cause or condition created by or at the instance of
Tenant; or (z) breach of any of the Premises by Tenant pursuant to this Section
11.4 shall be subject to the provisions of Article VIII. Anything contained in
this Lease to the contrary notwithstanding, to the best knowledge of Landlord,
at the time possession of the Premises is delivered, the Premises shall comply
fully with (i) all laws regarding life safety, including, without limitation,
New York Local Laws -Nos. 5, 16, and 58 and any similar or successor laws
thereto, and (ii) all laws regrading the removal and disposal of asbestos,
including, without limitation, New York City Local Law 76 and any similar or
successor laws thereto.

SECTION 11.5 SERVICE CONTRACTS. Tenant shall neither contract for, nor employ
any labor in connection with, the maintenance or cleaning of, or providing of
any other services to, the Premises or the Building (but

                                       30
<PAGE>

excluding Tenant's Property) without the prior consent of Landlord, which
consent shall not be unreasonably withheld or delayed, and the prior consent of
the Port Authority.

SECTION 11.6 FLOOR LOAD. Tenant shall not place a load upon any floor of the
Premises which exceeds either the load per square foot which such floor was
designed to carry (100 lbs. per square foot) or that which is allowed by law.
Landlord reserves the right to prescribe the weight and position of all safes,
business machines and mechanical equipment. Business machines and mechanical
equipment used by Tenant that cause vibrations or noise that may be transmitted
to the Building structure or to any leased space to such a degree as to be
reasonably objectionable to Landlord or to any lessees or occupants of the
Building shall be placed and maintained by Tenant, at its expense, in settings
of cork, rubber or spring-type vibration eliminators sufficient to eliminate
such vibrations or noise.

SECTION 11.7 RIGHT OF REPOSSESSION. If in order to comply with any law now or
hereafter enacted, it becomes necessary for Landlord to recover possession of
all or any portion of the Premises, Landlord shall have the right to repossess
the Promises, or such portion thereof, at any time upon one hundred eighty (180)
days' (or any lesser time required by law) notice to Tenant, and when said space
shall have been repossessed, in lieu of any and all claims for damages, Tenant
shall be entitled to a reduction in the Base Rent equal to the percentage that
the Rentable Area of the repossessed space bears to the total Rentable Area of
the Premises, and a reduction in Tenant's Share of Taxes and Building Operating
Expenses by an amount equal to the percentage that the Rentable Area of the
repossessed space bears to the total Rentable Area of the Building. However, if
the space taken is of such an amount or size as to make the remaining space
unusable to Tenant, then Landlord, upon thirty (30) days' notice from Tenant,
shall use its best efforts to furnish Tenant with comparable space, if
available, elsewhere in the TELEHOUSE Complex and to place Tenant in such new
space, and this Lease and each and all of the terms, covenants and conditions
hereof shall thereupon remain in full force and effect and be deemed applicable
to such new space. For this purpose, comparable space shall include provision by
Landlord of capability similar to that resulting from Preparation of Premises,
Section 2.3, and Tenant Improvements, Section 3.1. If Landlord is unable to
provide Tenant with such substitute space, then this. Lease shall cease and
terminate on the date (the "Repossession Date") designated in writing by Tenant
to Landlord at least thirty (30) days prior to such Repossession Date, which
Repossession Date shall not be later than ninety (90) days from the end of the
thirty (30) day notice period. No exercise by Landlord of any right reserved in
this Section 11.7 shall entitle Tenant to damages for any injury or
inconvenience occasioned thereby.

SECTION 11.8 RULES AND REGULATIONS. Tenant shall observe and comply with the
Rules and Regulations for the Teleport promulgated by the Port Authority and the
Rules and Regulations for the Building set forth in Exhibit D hereto, and any
amendments and additions thereto as Landlord may reasonably adopt or the Port
Authority may adopt from time to time for the management, safety, security,
care, cleanliness and good order of the Teleport or of the Building (the "Rules
and Regulations"). Landlord shall not be responsible or liable to Tenant for
violations of the Rules and Regulations by other lessees and occupants of the
Building. Landlord agrees that it shall not apply any Rule or Regulation to
Tenant on a discriminatory basis.

SECTION 11.9 LABOR HARMONY. Tenant shall not use (and upon notice from Landlord
shall cease using) contractors, labor, materials or equipment that, in
Landlord's reasonable judgment, would disturb labor harmony with the workforce
or trades engaged in performing other work or services in or about the Building
or the TELEHOUSE Complex or which would violate any of the terms of the Ground
Lease.

SECTION 11.10 LANDLORD'S AND PORT AUTHORITY'S CONSENT. In the event Tenant's
compliance as required by this Lease necessitates actions by Tenant for which
this Lease requires Landlord's consent and the consent of the Port Authority,
Tenant shall obtain such consents before taking such actions.

                                  ARTICLE XII

                              RIGHTS OF LANDLORD

SECTION 12.1 CONDUITS IN PREMISES. Landlord reserves the right, and Tenant shall
permit Landlord, to install, erect, use and maintain pipes, ducts and conduits
in and through the Premises when reasonably required; provided that (i) Landlord
shall disguise, conceal or camouflage the pipes, ducts and conduits, (ii) the
same are

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<PAGE>

erected along perimeter walls wherever possible and are installed in a manner
that does not materially detract from the appearance of the Premises or
interfere with Tenant's use and operation of the Premises.

SECTION 12.2 ENTRY BY LANDLORD. Landlord and its agents shall have the right to
enter or pass through the Premises at reasonable times: (a) to examine the
Premises and to show them to actual and prospective lenders, Superior Lessors,
Superior Mortgagees, purchasers, and lessees of the Building; (b) to make
repairs and Alternations in the Premises, the Building or Building facilities
and equipment; and (c) to take such actions as Landlord deems necessary or
desirable in an emergency, including shutting down or turning off Tenant's
computer, air conditioning, cooling and other equipment. Any entry by Landlord
shall be made on reasonable advance oral notice, except in emergency situations.
In exercising its rights under this Section 12.2, Landlord shall take reasonable
measures to avoid unnecessary interference with Tenant's use and occupancy of
the Premises. Landlord shall have a pass key or card key to the Premises and
shall be allowed to bring materials and equipment into the Premises as necessary
in connection with repairs and Affirmations. If work is to be performed by
Landlord in the Premises, Tenant shall afford Landlord access and the work shall
be done with due diligence. Landlord shall not interfere with Tenant's business
operations and shall not cause any interruption thereto; but Tenant acknowledges
that Landlord's work may be done on business days during business hours and
Tenant agrees to cooperate amicably enabling Landlord to complete such work,
Landlord shall repair any damage it causes to the Premises and shall fully
restore the Premises to the condition existing prior to the commencement of
Landlord's work.

SECTION 12.3 [Intentionally omitted]

SECTION 12.4 EXHIBITING THE PREMISES. During the period of six (6) months prior
to the date of expiration of the Lease Term, Landlord and its agents may exhibit
the Premises to prospective tenants during normal business hours, on reasonable
advance oral notice to Tenant.

SECTION 12.5 [Intentionally omitted]

SECTION 12.6 BUILDING NAME AND ADDRESS. Landlord reserves the right at any time,
without notice to Tenant, to change the Building's or the TELEHOUSE Complex's
respective name or address, and Landlord shall have no liability to Tenant for
any cost or inconvenience occasioned thereby.

SECTION 12.7 ALTERATIONS OF BUILDING.

SECTION 12.8 SECURITY. Landlord shall supply reasonable security measures for
the Building, consistent with such services supplied for other buildings in the
Teleport. By obligating itself to provide security measures, Landlord does not
warrant or represent the adequacy or sufficiency of such security to protect
persons and property in or about the Premises or the Building, and Landlord's
obligations under this Section 12.8 are expressly subject to the exculpatory
provisions of Article XVI of this Lease. In addition, Landlord reserves the
right to institute such security measures as may be required by the Port
Authority, from time to time.

SECTION 12.9 Other Rights. The enumeration of rights of Landlord in this Article
is not all-inclusive, and shall not be construed to preclude or limit other
rights reserved to Landlord by this Lease or by law.

                                 ARTICLE XIII

                             DAMAGE OR DESTRUCTION

SECTION 13.1 RESTORATION. If the Building or the Premises is partially damaged
or totally destroyed by fire or other casualty, and if this Lease is not
terminated as provided in this Article XIII, Landlord shall repair the damage
and restore the Building or the Premises (except for Tenant's Property), as the
case may be, with reasonable dispatch after notice to Landlord of the damage or
destruction and the collection of substantially all of the insurance proceeds
receivable on account of the casualty; provided, that in no event shall Landlord
be required to expend on such restoration amounts in excess of the total
insurance proceeds collected on account of the casualty. Tenant shall not be
obligated to repair damage to or destruction of the Building or the Premises
caused by such casualty.

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<PAGE>

SECTION 13.2 RENT ABATEMENT. If fire or other casualty damages or destroys or
renders the Premises untenantable, or deprives Tenant of reasonable access to
the Premises, the Base Rent shall be abated or reduced in the proportion that
the Rentable Area of the untenantable portion of the Premises bears to the total
Rentable Area of the Premises, for the period from the date of the damage or
destruction to the date that any damage to the Premises has been substantially
repaired except for Punch-List Items and Tenant has reasonable access to the
Premises and Tenant's Share of Taxes and Building Operating Expenses shall be
adjusted to the percentage that the Rentable Area of the portion of the Premises
that has not been rendered untenantable bears to the then Rentable Area of the
Building after the casualty; provided however should Tenant reoccupy a portion
of the Premises for the conduct of Tenant's Business during the period the
repair work is taking place and prior to the date that the Premises are
substantially repaired, the Base Rent and Additional Rent allocable to such
reoccupied portion, based upon the proportion which the Rentable Area of the
reoccupied portion of the Premises bears to the total Rentable Area of the
Premises, shall be payable by Tenant, and Tenant's Share of Taxes and Building
Operating Expenses shall be adjusted based upon the proportion which the
Rentable Area of the reoccupied portion of the Premises bears to the then total
Rentable Area of the Building, from the date of such occupancy.

SECTION 13.3 [Intentionally omitted]

SECTION 13.4 Election to Terminate.

        13.4.1 Landlord's Election to Terminate. If: (i) the Building or the
Premises is totally destroyed by fire or other casualty; or (ii) the Building is
so damaged (whether or not the Premises are damaged or destroyed) that Landlord
elects not to restore the Building; or (iii) less than one (1) year remains in
the Lease Term at the time of the fire or other casualty and the time necessary
to rebuild or repair the Building or the Premises, in the opinion of a reputable
contractor, would exceed ninety (90) days; then, in any of such cases, either
party may terminate this Lease by giving the other party notice to such effect
within ninety (90) days after the date of the casualty. This Lease shall
terminate on the date specified in such party's notice.

        13.4.2 Tenant's Election to Terminate. If: (i) the Building is totally
destroyed by fire or other casualty; or (ii) the Building or the Premises is
damaged to such an extent that Tenant cannot reasonably expect to conduct its
business for a period exceeding ninety (90) days from the date of the casualty,
Tenant may terminate this Lease by giving Landlord notice within ninety (90)
days after the date of the casualty, and this Lease shall terminate as of the
date of the casualty.

SECTION 13.5 BUSINESS INTERRUPTION. Except as set forth in Section 6.1.5 and
Section 6.2.2 of the Lease, Tenant shall not be entitled to any compensation or
rent abatement solely on account of inconvenience, loss of business or annoyance
arising from any repair or restoration of any portion of the Premises or of the
Building pursuant to this Article XIII. Landlord shall exert reasonable efforts
to make such repair or restoration promptly and in such manner as not to
interfere unreasonably with Tenant's use and occupancy of the Promises, but
Landlord shall have no obligation to perform such work on an overtime or
premium-pay base.

SECTION 13.6 TENANT'S PROPERTY. Landlord shall not be obligated to repair any
damage to or replace Tenant's Property.

SECTION 13.7 WAIVER. Tenant hereby waives the application of any law, now or
hereafter in force, to any case of damage to or destruction of the Building or
the Premises by fire or other casualty, or to a taking of all or part of the
Building or the Premises subject to the provisions of Article XIV below. This
Article XIII constitutes an express agreement governing the case of damage or
destruction of the Premises or the Building by fire or other casualty, and
Section 227 of the Real Property Law of the State of New York, which provides
for such contingency in the absence of an express agreement, shall not apply in
any such case.

                                  ARTICLE XIV

                                EMINENT DOMAIN

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<PAGE>

SECTION 14.1 COMPLETE TAKING. If the whole of the Building or the Premises is
taken by condemnation, sale in lieu of condemnation, or in any other manner for
any public or quasi-public use or purpose ("Eminent Domain"), this Lease and the
term and estate hereby granted shall terminate as of the date of vesting of
title on such taking or the date that the condemning or purchasing authority
takes possession, whichever is earlier ("Date of the Taking"), and the Rents
shall be prorated and adjusted as of such date.

SECTION 14.2 PARTIAL TAKING. If only part of the Building is taken by Eminent
Domain, this Lease shall be unaffected by such taking, except that: (a) if more
than twenty- five percent (25%) of the Rentable Area of the Building shall be
taken, whether or not any portion of the Premises shall be affected thereby, or
if so much of the Building shall be taken that Landlord in the exercise of its
good faith business judgment determines that it Would be economically or
operationally impractical to operate (including impracticability of providing
conditioned air or of operating the emergency power system) the portion of the
Building remaining after the taking, Landlord may, at its option, terminate this
Lease by giving Tenant sixty (60) days prior notice to that effect within thirty
(30) days after the Date of the Taking, and (b) if twenty percent (20%) or more
of the Premises shall be so taken and the remaining area of the Premises shall
not be reasonably adequate for Tenant to continue operation of its business,
Tenant may terminate this Lease by giving Landlord sixty (60) days prior notice
to that effect within thirty (30) days after the Date of the Taking. This Lease
shall terminate on the sixtieth (60th) day after the date that such termination
notice from Landlord or Tenant is given, and the Rents shall be prorated and
adjusted as of such termination date. Upon a partial taking, where this Lease
continues in force as to any part of the Premises, the Base Rent shall be
reduced by the percentage that the Rentable Area of the portion of the Premises
taken bears to the Rentable Area of the Premises prior to the taking, and
Tenant's Share of Taxes and Building Operating Expenses shall be adjusted to the
percentage that the Rentable Area of the portion of the Premises left to Tenant
bears to the Rentable Area of the Building after the taking.

SECTION 14.3 AWARD. Landlord shall be entitled to receive the entire award or
payment in connection with any taking of the Premises, without deduction for any
estate vested in Tenant by this Lease. Tenant hereby expressly assigns to
Landlord all of its right, title and interest in and to every such award or
payment. Tenant shall be entitled to claim and receive any award or payment from
the condemning authority expressly granted for the taking of Tenant's Property,
interruption of its business or moving expenses, but only if Tenant's claim does
not adversely affect or result in any reduction of Landlord's or the Port
Authority's award or interfere with Landlords or the Port Authority's
prosecution of its claim for the taking. If Tenant intervenes in a condemnation
proceeding in which Landlord or the Port Authority is a party, Landlord and
Landlord's counsel or the Port Authority and the Port Authority's counsel shall
manage and control the proceeding for the claimants.

SECTION 14.4 Temporary Taking. If all or any portion of the Premises is taken by
Eminent Domain for a limited period of time, not exceeding fourteen (14) days
this Lease shall remain in full force and effect and Tenant shall continue to
perform all of Tenant's obligations under this Lease, including, without
limitation, the payment of Rents. Tenant shall be entitled to receive that
portion of the award which is made for any such temporary taking of the Premises
attributable to any period within the Lease Term and for any damage to Tenant's
Property. Landlord shall be entitled to receive that portion of the award which
is made for any such temporary taking of the Premises attributable to the period
after the expiration of the Lease Term or which is allocable to the Building,
other than the Promises, or to the cost of restoration of the Premises or which
is made for any other purpose. If any such temporary taking terminates prior to
the expiration of the Lease Term, Tenant shall restore the Premises as nearly as
possible to their condition prior to the taking, at Tenant's sole cost and
expense; provided that Tenant shall receive the portion of the award
attributable to such restoration. If all of the Premises is taken by Eminent
Domain for a period of time longer than ninety (90) consecutive days, then
Tenant shall have the right to treat such taking as a Total Taking and the
provisions of Sections 14.1 and 14.3 shall apply. If less than all of the
Premises is taken by Eminent Domain for a period of time longer than ninety (90)
consecutive days, then Tenant shall have the right to treat such taking as a
Partial Taking and the provisions of Sections 14.2 and 14.3 shall apply.

                                  ARTICLE XV

                             SURRENDER OF PREMISES

SECTION 15.1 SURRENDER. On the last day of the Lease Term, or upon any earlier
termination of this Lease, or upon any re-entry by Landlord upon the Premises,
Tenant shall quit and surrender the Premises to Landlord "broom-

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clean" and in good order, condition and repair, ordinary wear and tear and also
excepting any damage or destruction caused by fire or other casualty which
Tenant is not obligated by this Lease to repair. As provided in Section 9.2,
Tenant shall remove all of Tenant's Property from the Premises.

SECTION 15.2 ACCEPTANCE OF SURRENDER. Prior to expiration of the Lease Term, or
earlier termination of this Lease in accordance with the terms hereof, no act or
thing done by Landlord or its agents (including accepting the keys to the
Premises) shall be deemed an acceptance of surrender of the Premises, and no
agreement to accept such surrender shall be valid unless in writing and signed
by Landlord.

SECTION 15.3 NO MERGE. The surrender of this Lease by Tenant or the termination
of this Lease prior to expiration of the Lease Term shall not constitute a
merger, and at the option of Landlord shall operate as an assignment to Landlord
of any subleases of the Premises.

SECTION 15.4 NO HOLDING OVER. There shall be no holding over by Tenant after
expiration of the Lease Term, and the failure by Tenant to deliver possession of
the Premises to Landlord shall be an unlawful detainer.

                                  ARTICLE XVI

                        EXCULPATION AND INDEMNIFICATION

SECTION 16.1 EXCULPATION. Except to the extent provided for in this Lease,
neither Landlord, nor any partner, shareholder, director, officer, agent or
employee of Landlord nor the Port Authority nor the agents or employees of the
Port Authority shall be liable to Tenant or its partners, directors, officers,
contractors, agents, employees, invitees, sublessees or licensees, for any loss,
injury or damage to Tenant or to any other Person, or to its or their property,
irrespective of the cause of such injury, damage or loss, including but not
limited to, claims for damage resulting from: (i) any equipment or appurtenances
becoming out of repair, (ii) injury done or occasioned by weather conditions;
(iii) any defect in or failure of plumbing, heating or air conditioning
equipment, raised flooring, leak detection equipment, gas, water, and steam
pipes, stairs, porches, railings or walks; (iv) broken glass; (v) the backing up
of any sewer pipe or downspout; (vi) the bursting, leaking or running of any
water pipe, air conditioner, humidifier, chiller, tank, tub, washstand, water
closet, waste pipe, sprinkler, drain or any other pipe or tank in, upon or about
the Building or the Premises; (vii) the escape of steam or hot water; (viii)
water, snow or ice being upon or coming through the roof or any skylight,
trapdoor, stair, doorway, window, walk or any other place upon or near the
Building or the Premises or otherwise; (ix) the falling of any fixture, plaster,
tile or stucco; and (x) any act, omission or negligence of other lessees,
licensees or other occupants of the Building or of adjoining or contiguous
buildings or of owners of adjacent or contiguous property; unless solely caused
by or solely resulting from the gross negligence or willful misconduct of
Landlord or its employees in the operation or maintenance of the Premises or the
Building, without any contributing negligence on the part of Tenant or any of
its sublessees or licensees or its or their employees, agents or contractors, or
any other lessees or occupants of the Building. Further, neither Landlord, nor
any partner, shareholder, director, officer, agent or employee of Landlord nor
the Port Authority or the Commissioners, officers, agents and employees of the
Port Authority in its capacity as Superior Lessor shall be liable: (a) for any
such damage caused by other lessees or Persons in or about the Building, or
caused by operations in construction of any private, public or quasi-public
work; or (b) for consequential damages, whether arising out of any loss of the
use of the Premises or any equipment or facilities therein by Tenant or any
Person claiming through or under Tenant, or arising from any other cause
including the gross negligence or willful misconduct of Landlord or its agents,
contractors or employees.

SECTION 16.2 INDEMNITY.

        (A) To the extent not covered by insurance, Tenant shall defend,
indemnify and hold harmless Landlord, the Port Authority and the Commissioners
of the Port Authority, all Superior Lessors and Superior Mortgagees, and its and
their respective partners, directors, officers, agents and employees (in the
case of the Landlord only, to the extent not covered by insurance maintained by
Landlord) from and against any and all claims, demands, liability, losses,
damages, costs and expenses arising from or in connection with: (a) the use or
occupancy of the Premises or the conduct or management of the Premises or of any
business therein, or any work or act whatsoever done, or any condition created
(other than by Landlord or with respect to which Landlord is obligated to remedy
pursuant to the terms and provisions of this Lease) in or about the Premises
during the Lease Term or during the period of time, if

                                       35
<PAGE>

any, prior to the Commencement Date that Tenant may have been given access to
the Premises or during any holdover by Tenant after the expiration or earlier
termination of this Lease; (b) any act or omission of Tenant or any of its
subtenants or licensees or its or their partners, directors, officers, members,
agents, employees, representatives, contractors, customers, guests, invitees and
other Persons doing business with Tenant or who are at the Premises with
Tenant's consent (whether or not such acts or omissions occur at the Premises or
elsewhere in the Teleport); (c) any accident, injury or damage whatever (unless
caused solely by Landlord's negligence) occurring in or about the Premises; and
(d) any breach or default by Tenant in the full and prompt payment and
performance of Tenant's obligations under this Lease or under any other lease of
space in the TELEHOUSE Complex or any ancillary service agreement or other
agreement between Landlord and Tenant. If any claim, action or proceeding is
brought against any of the persons indemnified under this Section 16.2 (A) for a
matter covered by this indemnity, Tenant, upon notice from the indemnified
Person, shall defend such claim, action or proceeding by counsel reasonably
satisfactory to Landlord and the indemnified Person. In the conduct of such
defense, Tenant shall not, without obtaining express advance permission from the
General Counsel of the Port Authority, raise any defense involving in any way
the jurisdiction of the tribunal over the person of the Port Authority, the
immunity of the Port Authority, its Commissioners, officers, agents or
employees, the governmental nature of the Port Authority. or the provisions of
any statutes respecting suits against the Port Authority. Any party seeking
indemnification pursuant to this Section 16.2 (A) shall (i) give prompt written
notice to Tenant of the commencement by a third party of any action, suit or
proceeding or of any written threat from a third party of any claim, action,
suit or proceeding for which such party shall seek to be indemnified, (ii)
advise Tenant in writing upon request of the status of the same, (iii)
cooperate, at no expense to such party, with Tenant with respect to the defense
of the same, and (iv) not settle or compromise any such claim, action, suit or
proceeding without Tenant's prior written consent, which consent shall not
unreasonably be withheld. The Tenant's obligations under this Section 16.2 (A)
shall not be diminished by any delay or failure to comply with the foregoing
clauses (i) through (iv), except to the extent that such failure or delay
results in any increased costs or material prejudice to Tenant solely as a
result of such failure or delay.

        (B) Landlord shall defend, indemnify and hold harmless Tenant and its
partners, directors, officers, agents and employees (to the extent not covered
by insurance maintained by Tenant) from and against any and all claims,
liability, losses, damages, costs and expenses arising from or in connection
with: (a) the use or occupancy of the Building (other than the Premises) or the
conduct or management of the Building (other than the Premises), or any work or
act whatsoever done, or any condition created (other than by Tenant or with
respect to which Tenant is obligated to remedy pursuant to the terms and
provisions of this Lease) in or about the Building (other than the Premises)
during the Lease Term or during the period of time, if any, prior to the
Commencement Date that Tenant may have been given access to the Premises or
during any holdover (with Landlord's express written consent) by Tenant after
the expiration or earlier termination of this Lease; (b) any act or omission of
Landlord or any of its partners, directors, officers, members, agents,
employees, representatives, and contractors, and other Persons doing business
with Landlord (excluding other tenants and occupants of the Building) (whether
or not such acts or omissions occur at the Building or elsewhere in the
Teleport); (c) any accident, injury or damage whatever (unless causes solely ;by
Tenant's negligence) occurring in or about i the Building (other than the
Premises); and (d) any breach or default by Landlord in the full and prompt
payment and performance of Landlord's obligations under this Lease or any
ancillary service agreement or other agreement between Landlord and Tenant. If
any claim, action or proceeding is brought against any of the persons
indemnified under this Section 16.2 (B) for a matter covered by this indemnity,
Landlord, upon notice from the indemnified Person, shall defend such claim,
action or proceeding by counsel reasonably satisfactory to Tenant and the
indemnified Person. Any party seeking indemnification pursuant to this Section
16.2 (B) shall (i) give prompt written notice to Landlord of the commencement by
a third party of any action, suit or proceeding or of any written threat from a
third party of any claim, action, suit or proceeding for which such party shall
seek to be indemnified, (ii) advise Landlord in writing upon request of the
status of the same, (iii) cooperate, at no expense to such party, with Landlord
with respect to the defense of the same, and (iv) not settle or compromise any
such claim, action, suit or proceeding without Landlord's prior written consent,
which consent shall not unreasonably be withheld. Landlord's obligations under
this Section 16.2 (B) shall not be diminished by any delay or failure to comply
with the foregoing clauses (i) through (iv), except to the extent that such
failure or delay results in any increased costs or material prejudice to
Landlord solely as a result of such failure or delay.

SECTION 16.3 TRANSFERS OF LANDLORD'S INTEREST. The term "Landlord" shall mean
only the owner at the time in question of the present Landlord's interest in the
Building. In the event of a sale or transfer of the Building (by operation of
law or otherwise) or a lease of all or substantially all of the Building, or a
sale or transfer (by operation of law or otherwise) of the leasehold estate
under any such lease, the grantor, transferor or lessor, as

                                       36
<PAGE>

the case may be, shall be and hereby is (to the extent of the interest or
portion of the Building or leasehold estate sold, transferred or leased)
automatically and entirely released and discharged, from and after the date of
such sale, transfer or leasing, of all liability in respect of the performance
of any of the terms of this Lease on the part of Landlord thereafter to be
performed; it being intended that Landlord's obligations hereunder shall be
binding on Landlord, its successors and assigns only during and in respect of
their respective successive periods of ownership. In the event of such a sale,
transfer or leasing, the covenants of Landlord shall thereafter be binding upon
the transferee of Landlord's interest. If Landlord's interest in the Building
shall be sold, assigned or otherwise transferred to any Person, including any
transfer upon the exercise of any remedy provided in a Superior Lease or a
Superior Mortgage or at law or equity, that Person, and each Person thereafter
succeeding to its interest in the Building, shall not be: (a) liable for any act
or omission of Landlord under this Lease occurring prior to such sale,
assignment or other transfer, (b) subject to any offset, defense or counterclaim
accruing prior to such sale, assignment, or other transfer, (c) bound by any
payment prior to such sale, assignment or other transfer of Base Rent or
Additional Rent for more than one month in advance; and (d) liable for the
return of the Security Deposit except to the extent that the Security Deposit
has been paid over to such Person.

SECTION 16.4 RECOURSE LIMITED TO BUILDING. No recourse shall be had on any of
Landlord's obligations hereunder or for any claim based thereon or otherwise in
respect thereof against any agent, incorporator, subscriber to the capital
stock, shareholder, officer, director, or employee, past, present or future, of
any corporation or any joint venturer of a joint venture which shall be Landlord
hereunder or included in the term "Landlord" or of any successor of any such
corporation, or against any principal, disclosed or undisclosed, or any
affiliate of any party which at the time the obligation accrued shall have been
Landlord or included in the term "Landlord", whether directly or through
Landlord or through any receiver, assignee, trustee in bankruptcy or through any
other Person, whether by virtue of any law or by enforcement of any assessment
or penalty or otherwise, except to the extent of the interest of any of the
foregoing in the Building or the proceeds of the Building, all such liability,
except as aforesaid, being expressly waived and released by Tenant. Tenant shall
look solely to Landlord's estate and interest in the Building or the proceeds of
the Building for the satisfaction of any right of Tenant for the collection of a
judgment or other judicial process or arbitration award requiring the payment of
money by Landlord, and no other property or assets of Landlord, Landlord's
agents, incorporators, subscribers, shareholders, officers, directors,
employees, partners, principals (disclosed or undisclosed) or affiliates shall
be subject to levy, lien, execution, attachment, or other enforcement procedure
for the satisfaction of Tenant's rights and remedies under or with respect to
this Lease, the relationship of Landlord and Tenant, or Tenant's use and
occupancy of the Premises or any other liability of Landlord to Tenant.

SECTION 16.5 RESPONSIBILITY FOR INFRASTRUCTURE. The Infrastructure has been
designed and constructed and will be repaired and maintained by the Port
Authority. Landlord shall have no responsibility regarding the Infrastructure,
and the Rents will not be reduced or abated, nor will Tenant's other obligations
hereunder be affected, by any defect or change in, or closure of, or failure to
complete, the Infrastructure; provided however. the Base Rent and Tenant's Share
of Taxes and Building Operating Expenses will be abated on a daily basis for
each day of twelve (12) hours or more that Tenant is denied access to the
Building by some defect in or repair or closure of the Infrastructure; and
provided further, that the provisions set forth in Section 6.1.5 and Section
6.2.2 shall apply.

                                 ARTICLE XVII

                         SUBORDINATION AND ATTORNMENT

SECTION 17.1 SUBORDINATION. This Lease, and all rights of Tenant under R, are
subordinate to the Ground Lease and the rights of the Port Authority thereunder
and all present and future leases of all or any part of the Building or any
other part of the TELEHOUSE Complex (except for leases of office or commercial
space within the Building or other portions of the TELEHOUSE Complex); existing
present and future mortgages encumbering the Building, the TELEHOUSE Complex or
any of such leases, including mortgages also covering other real property; all
past and future advances made under such mortgages, all renewals, modifications,
replacements and extensions of such leases and such mortgages and spreaders and
consolidations of such mortgages; unless the lessor under any such lease or the
mortgagee under any such mortgage elects that this Lease shall be Superior to
his lease or mortgage pursuant to Section 17.2. This Section 17.1 shall be
self-operative and no further instrument of subordination shall be required.
However, in confirmation of subordination. Tenant shall promptly execute,

                                       37
<PAGE>

acknowledge and deliver any instrument that Landlord, the lessor under any such
lease or the mortgagee under any such mortgage or any of their respective
successors in interest may reasonably request to evidence such subordination if
Tenant fails to execute, acknowledge or deliver any such instrument within ten
(10) days after request therefor, such failure shall constitute a material
default under this Lease. Tenant hereby irrevocably appoints Landlord as
Tenant's attorney-in- fact, with full power of substitution, coupled with an
interest, to execute, acknowledge and deliver any such instrument for and on
behalf of Tenant in the event of such a default by Tenant,' but exercise by
Landlord of its power-of attorney shall not cure the default. Any lease to which
this Lease, at the time referred to, is subordinate (including the Ground Lease)
is herein called a "Superior Lease" and the lessor of a Superior Lease or its
successor in Interest, at the time referred to (including the Port Authority),
is herein called a "Superior Lessor"; and any mortgage to which this Lease, at
the time referred to, is subordinate is herein called a "Superior Mortgage" and
the holder of a Superior Mortgage is herein called a "Superior Mortgagee". Each
Superior Lessor or Superior Mortgagee is also herein called a "Superior Interest
Holder".

SECTION 17.2 ELECTION TO SUBORDINATE. By written notice to Tenant, any Superior
Lessor or Superior Mortgagee may elect to subordinate its Superior Lease or
Superior Mortgage to this Lease.

SECTION 17.3 NOTICE AND CURE OF LANDLORD'S DEFAULT. If any act or omission of
Landlord would give Tenant the right, immediately or after lapse of a period of
time, to cancel or terminate this Lease, or to claim a partial or total
eviction, Tenant shall not exercise such right until: (a) it has given written
notice of the act or omission to Landlord, to the Port Authority at its address
specified in Section 24.13 and to each Superior Mortgagee and Superior Lessor
whose name and address shall previously have been furnished to Tenant, which
notice shall specifically refer to this Section 17.3 and shall describe
Landlord's default with reasonable detail, specifying the section of this Lease
as to which Landlord is in default, and (b) a reasonable period for remedying
the act or omission shall have elapsed following the giving of such notice and
following the time during which the Port Authority and each such Superior
Mortgagee or Superior Lessor would be entitled under its Superior Mortgage or
Superior Lease to remedy the act or omission (which reasonable period shall in
no event be shorter than the period during which Landlord would be entitled
under this Lease, after similar notice, to effect such remedy nor be shorter
than thirty (30) days). If, within said reasonable period, the Port Authority or
such a Superior Mortgagee or Superior Lessor gives Tenant notice of its
intention to remedy the act or omission, and thereafter diligently commences the
required remedial action and pursues it to completion, Tenant shall have no
right to terminate this Lease on account of the act or omission.

SECTION 17.4 ATTORNMENT. Any Superior Lessor or Superior Mortgagee who succeeds
to the rights of Landlord under this Lease, whether through exercise of remedies
in a Superior Lease or Superior Mortgage or by operation of law, is in this
Section 17.4 called a "Successor Landlord". Subject to the terms of any
non-disturbance agreement between Tenant and the Superior Landlord, if such
Successor Landlord does not elect to treat this Lease as extinguished, upon the
Successor Landlord's request, Tenant shall attorn to and recognize the Successor
Landlord as Tenant's landlord under this Lease and shall promptly execute and
deliver any instrument that such Successor Landlord may reasonably request to
evidence the attainment. Tenant hereby irrevocably appoints Landlord or the
Successor Landlord as Tenant's attorney-in-fact, coupled with an interest, to
execute, acknowledge and deliver the instrument of attornment on behalf of
Tenant in the event Tenant fails to do so within twenty (20) days after receipt.
Upon attornment, this Lease shall continue in full force and effect and as a
direct lease between the Successor Landlord and Tenant, upon all of the terms,
conditions and covenants as are set forth in this Lease, subject to the
provisions of Section 16.3.

SECTION 17.5 REQUIREMENTS OF SUPERIOR LESSOR OR MORTGAGEE. If any Superior
Lessor or Superior Mortgagee requires any modifications of this Lease, Tenant
shall, at Landlord's request, promptly execute and deliver to Landlord
instruments effecting the modifications that the Superior Lessor or Superior
Mortgagee requires, provided that such modifications do not adversely affect in
a material respect any of Tenant's rights or Landlord's obligation, or reduce
limit or modify, in a manner materially adverse to Tenant, Landlord's
obligations under this Lease.

SECTION 17.6  COMPLIANCE WITH GROUND LEASE.

        17.6.1 Approval of Lease and Sublease By Port Authority. Notwithstanding
the execution of this Lease by Landlord and Tenant, if the Port Authority shall
refuse to execute and deliver a consent agreement in the form

                                       38
<PAGE>

attached to the Ground Lease as "Exhibit Z", a copy of which is attached hereto
as Exhibit Z, then on the date of such refusal this Lease shall terminate and
all obligations of Landlord and Tenant arising thereafter shall be discharged
and released automatically. In addition, if the Port Authority shall fail to
execute and deliver a consent agreement in the form attached to the Ground Lease
as "Exhibit Z", a copy of which is attached hereto as Exhibit Z within fourteen
(14) days from the Fixed Commencement Date, then Tenant shall have the right to
terminate this lease and all obligations of Landlord and Tenant arising
thereafter shall thereafter be discharged and released. Alternatively, if either
Landlord or Tenant elects not to perform any of their respective obligations
hereunder until the Port Authority consents, then this Lease shall not become
effective until Landlord, Tenant and the Port Authority shall each have executed
a consent agreement in the form attached to the Ground Lease as "Exhibit Z", a
copy of which is attached hereto as Exhibit Z. Additionally, no sublease of the
Premises or assignment of this Lease shall be effective until Tenant, its
proposed subtenant or assignee and the Port Authority shall each have executed a
consent agreement in the form attached hereto as subtenant or assignee pursuant
to consent by the Port Authority shall not entitle any such subtenant or
assignee to any rights or privileges which the Port Authority has or may
hereafter accord to lessees of space at the Teleport.

        17.6.2 Compliance With Ground Lease. Tenant shall: (i) observe, be bound
by, and comply with all of the terms, provisions, covenants and conditions of
the Ground Lease affecting its operations under or in connection with this Lease
and its occupancy of the Premises; (ii) use the Premises for the Permitted Use
and for no other purpose whatsoever; and (iii) pay directly to the Port
Authority on demand any rental, fee, charge or other amount due to Landlord if
Landlord shall be under notice of default under the Ground Lease. If the default
shall have been remedied, the Port Authority shall remit to Landlord any such
rentals, fees, charges or other amounts it has collected and which have not been
used by the Port Authority to cure the default pursuant to the terms of the
Ground Lease. No change or modification to this Lease shall be binding on the
Port Authority unless and until the Port Authority shall have given its written
approval to such change or modification. This Lease shall terminate and expire,
without notice to Tenant, no later than the day preceding the date of expiration
of the Ground Lease, or on the earlier expiration date of the Lease Term, or on
the effective date of any revocation of the Port Authority's consent to this
Lease. The Ground Lease requires that this Lease contain the following
provision, and Tenant agrees to perform and comply with the covenants of the
"Tenant" contained therein:

        "Tenant covenants and agrees that, if by reason of a default upon the
part of Landlord who is the Lessee under the Underlying Lease covering the
demised premises, to wit, the Agreement of Lease between The Port Authority of
New York and New Jersey as Lessor arid TELEHOUSE international Corporation of
America, as Lessee, in the performance of any of the terms or provisions of such
Underlying Lease or if for any other reason of any nature whatsoever such
Underlying Lease and the leasehold estate of the Lessee thereunder are
terminated by summary dispossess proceedings or otherwise, Tenant, at the
request in writing of the then landlord under such Underlying Lease, shall
attorn to and recognize such landlord as Tenant's landlord under this lease.
Tenant covenants and agrees to execute and deliver, at any time and from time to
time, upon the request of the landlord under such Underlying Lease, any
instrument which may be necessary or appropriate to evidence such attornment.
Tenant further waives the provisions of any statute or rule of law now or
hereafter in effect which may terminate this lease or give or purport to give
Tenant any right of election to terminate this lease or to surrender possession
of the premises demised hereby in the event such Underlying Lease terminates or
in the event any such proceeding is brought by the landlord under such
Underlying. Lease if such landlord shall have requested in writing that Tenant
attorn, as aforesaid, and in that circumstance Tenant agrees that this lease
shall not be affected in any way whatsoever by any such proceeding or
termination. Nothing contained herein shall obligate the landlord to request the
Tenant to attorn or to accept such attornment from the Tenant."

                                 ARTICLE XVIII

                                QUIET ENJOYMENT

        SECTION 18.1 Quiet Enjoyment. So long as Tenant timely pays all the
Rents and performs all of Tenant's other obligations hereunder within the time
periods permitted under this Lease, Tenant shall peaceably and quietly, hold and
enjoy the Premises during the Lease Term without hindrance or ejection by
Landlord or-any person lawfully claiming through or under Landlord, subject,
nevertheless, to the provisions and to Superior Leases and Superior Mortgages.
This covenant is a covenant running with the land, and is not a personal
covenant of Landlord, except to the extent of Landlord's interest in this Lease
and for only so long as such interest shall continue.

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<PAGE>

                                  ARTICLE XIX

                           ASSIGNMENTS AND SUBLEASES

        SECTION 19.1 [intentionally omitted]

        SECTION 19.2 PROHIBITION. Tenant shall not mortgage, pledge, encumber or
otherwise hypothecate this Lease or the Premises or any part thereof in any
manner whatsoever, and any attempt to do so shall be void and a material breach
of this Lease. Provided that Tenant obtains the prior written consent of the
Port Authority pursuant to Section 17.6 and of Landlord in accordance with the
provisions of this Article XIX, then Tenant may (a) assign or otherwise transfer
this Lease or offer or advertise to do so; or (b) sublet the Premises or any
part thereof, or offer or advertise to do so. Any attempt by Tenant to assign or
transfer this Lease or offer or advertise to do so, or sublet the Premises or
offer or advertise to do so, without strictly complying with the requirements of
Section 17.6 and this Article XIX shall be void and a material breach of this
Lease. Use or occupancy of the Premises by a licensee, concessionaire, or any
other Person other than Tenant is a sublease subject to the provisions of this
Article XIX.

        SECTION 19.3 CORPORATE AND PARTNERSHIP TRANSACTIONS. If Tenant is a
corporation, a dissolution of the corporation or a transfer (by one or more
transactions) of a majority of the voting stock of Tenant shall be deemed an
assignment of this Lease subject to the provisions of Section 17.6 and this
Article XIX; but the provisions of this Article XIX shall not apply to
transactions with a corporation into or with which Tenant is merged or
consolidated or to which substantially all of Tenant's assets are transferred or
which controls or is controlled by Tenant or is under common control with
Tenant, provided that a principal purpose of such merger or transfer is not the
assignment of this Lease and that in any of such events the successor to Tenant
has a net worth computed in accordance with generally accepted accounting
principles at least equal to the net worth of Tenant immediately prior to such
merger, consolidation or transfer. Proof satisfactory to Landlord of such net
worth shall be delivered to Landlord at least thirty (30) days prior to the
effective date of any such transaction. If Tenant is a partnership, a
dissolution of the partnership or a transfer of the controlling interest in
Tenant (including the admission of new partners or withdrawal of existing
partners having a controlling interest) shall be deemed an assignment of this
Lease subject to the provisions of Section 17.6 and this Article XIX, regardless
of whether the transfer is made by one or more transactions, or whether one or
more Persons hold the controlling interest prior to the transfer or afterwards.

        SECTION 19.4 NOTICE TO LANDLORD. Tenant shall give notice to Landlord of
any proposed assignment or sublease accompanied by: (a) a conformed or
Photostatted copy of the proposed assignment or sublease; (b) a statement
setting forth in reasonable detail the identity of the proposed assignee or
sublessee, the nature of its business and (for a proposed sublease) the space to
be sublet; and (c) current financial information with respect to proposed
assignee or sublessee, including, without limitation, its most recent financial
report.

        SECTION 19.5 [Intentionally omitted]

        SECTION 19.6 [Intentionally omitted]

        SECTION 19.7 [Intentionally omitted]

        SECTION 19.8 CONSENT BY LANDLORD. Landlord, in its reasonable judgment,
shall either consent, or withhold its consent, to the proposed assignment or
sublease. Landlord may condition its consent on reasonable conditions,
including, without limitation, the following requirements:

        19.8.1.  The business of the proposed assignee or sub-tenant and its use
of the Premises, or the relevant portion thereof, must be consistent with the
Permitted Use and, in Landlord's judgment, in keeping with the standards of the
Building.

        19.8.2   The proposed assignee or subtenant must be a reputable person
of good character, with sufficient assets and income, in Landlord's judgment, to
bear the financial responsibilities of Tenant under this Lease, and Landlord
must be furnished with reasonable proof thereof.

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<PAGE>

        19.8.3   Neither the proposed assignee or sublessee, nor any person who
directly or indirectly, controls, is controlled by, or is under common control
with, the proposed assignee or sublessee or any person who controls the proposed
assignee or sublessee, may then be an occupant of any part of the Building
unless Landlord is unable to provide the proposed assignee or subtenant with
comparable space within the building.

        19.8.4   The proposed assignee or sublessee is not presently negotiating
with Landlord to lease space in the Building (or with the Port Authority to
lease space in the Teleport).

        19.8.5   The form of the proposed sublease must be reasonably
satisfactory to Landlord and shall comply with the applicable provisions of this
Article XIX.

        19.8.6   There may not be more than one Person occupying the Premises,
in the case of an assignment of this Lease or a sublease of all of the Premises,
or occupying the Sublet Portion, in the case of a sublease of part of the
Premises.

        19.8.7   In the case of a sublease, Tenant shall not advertise or permit
any broker or agent or other Person to advertise the availability of the
Premises or any portion thereof at an aggregate rent per square foot of Rentable
Area which is less than the current market rent per square foot of Rentable Area
of the Premises that could be obtained if the Premises were vacant.

        19.8.8   The Sublet Portion must be regular in shape and suitable for
normal leasing purposes.

        19.8.9   The written consent of the Port Authority to the proposed
sublease or assignment must first be obtained. In this regard, Tenant
acknowledges that under the terms of the Ground Lease the Port Authority's
consent to any subletting or assignment is required and that the Port Authority
has no obligation whatsoever to give such consent.

SECTION 19.9  MISCELLANEOUS.

        19.9.1   General Terms. Any sublease to which Landlord gives its consent
shall be expressly subject and subordinate to all of the covenants, agreements,
terms, provisions and conditions contained in this Lease and to the Ground
Lease. Tenant shall reimburse Landlord on demand for any reasonable costs that
may be incurred by Landlord in connection with any proposed assignment or
sublease, including, without limitation, the costs of making investigations as
to the acceptability of the proposed assignee or subtenant, and legal costs
incurred in connection with any request for consent. Any assignment of this
Lease to which Landlord gives its consent shall not be valid or binding on
Landlord unless and until the assignee executes an agreement in form and
substance reasonably satisfactory to Landlord, and expressly enforceable by
Landlord, whereby the assignee assumes and agrees to be bound by all of the
provisions of this Lease and to perform all of the obligations of Tenant
hereunder. Tenant's obligation to reimburse Landlord for costs under this
Section shall be limited to an amount equal to the direct, out-of-pocket costs
and expenses actually incurred by Landlord. Upon request, Landlord shall provide
Tenant with copies of all invoices for which reimbursement is sought and any
related documents.

        19.9.2   Tenant Remains Liable. Notwithstanding any sublease to Landlord
or any assignment or sublease to any other Person, Tenant will remain fully
liable for the payment of Rents and for the performance of all the other
obligations of Tenant contained in this Lease. Any act or omission of an
assignee or subtenant, or anyone claiming under or through any subtenant, that
violates any of the obligations of this Lease shall be deemed a violation of
this Lease by Tenant.

        19.9.3   Landlord's Consent Required. The consent by Landlord and the
Port Authority to any assignment or sublease shall not relieve Tenant or any
Person claiming through or under Tenant of the obligation to obtain the consent
of Landlord and the Port Authority, pursuant to the provisions of Section 17.6
and this Article XIX, to any future assignment or sublease.

        19.9.4   Indemnification of Landlord. If Landlord or the Port Authority
declines to give its consent to any proposed assignment or sublease, Tenant
shall indemnity, defend and hold Landlord and the Port Authority harmless

                                       41
<PAGE>

against and from any and all loss, liability, damages, costs and expenses
(including reasonable attorneys' fees) resulting from any claims that may be
made against Landlord or the Port Authority by the proposed assignee or
sublessee, or brokers or other persons claiming a commission or similar
compensation in connection with the proposed assignment or sublease.

        19.9.5   General Sublease Provisions.  With respect to each and every
sublease authorized by Landlord under the provisions of this Article XlX, it is
further agreed that:

                 (i)   The term of the sublease must end no later than one day
prior to the last day of the Lease Term.

                 (ii)  No sublease shall be valid, and no subtenant shall take
possession of the Premises or any part thereof, until a fully executed
counterpart of such sublease has been delivered to Landlord.

                 (iii) Each sublease shall provide that it Is subject and
subordinate to this Lease and the Ground Lease and to all Superior Leases and
Superior Mortgages; that Landlord may enforce the provisions of the sublease,
including collection of rents; that in the event of termination of this Lease or
re-entry or repossession of the Premises by Landlord, Landlord may, at its
option, take over all of the right, title and interest of Tenant, as sublessor,
under such sublease, and such subtenant shall, at Landlord's option, attorn to
Landlord but that nevertheless Landlord shall not: (1) be liable for any
previous act or omission of Tenant under such sublease; (2) be subject to any
defense or offset previously accrued in favor of the subtenant against Tenant;
or (3) be bound by any previous modification of such sublease made without
Landlord's written consent or by any previous prepayment of more than one (1)
month's rent.

        19.9.6   Modification.  Landlord shall not be bound by any modification
or amendment to a sublease of the Premises which Landlord has not approved in
writing.

SECTION 19.10    [Intentionally omitted]

SECTION 19.11    ADDITIONAL CHARGES. If Landlord shall give its consent to any
assignment of this Lease or to any sub-lease, Tenant shall in consideration
therefor, pay to Landlord, as Additional Rent:

        (a)      in the case of an assignment, an amount equal to the Recapture
Percentage specified in Section 1.1 multiplied by all sums and other
consideration paid to Tenant by the assignee for or by reason of such assignment
(including sums paid for the purchase or rental of part or all of Tenant's
Property to the extent that such sums are. intended as consideration for the
assignment of the Lease) less (ii) Tenant Expenses in connection with such
assignment; and

        (b)      in the case of a sublease, Q) the Recapture Percentage
specified in Section 1.1 multiplied by the amount by which the sublease rental
exceeds the portion of the Rents allocable to the subleased space less (ii)
Tenant Expenses in connection with such sublease. In computing this amount, the
sublease rental shall include all rents, charges and other consideration payable
to Tenant under the terms of the sublease and any collateral agreements, and
also sums paid by the sublessee for the purchase or rental of all or part of
Tenant's Property to the extent that such sums are intended as sublease rental.
The Rents allocable to the subleased space for any period shall equal the total
Rents accruing during such period, multiplied by a fraction, the numerator of
which is the Rentable Area of the subleased space and the denominator of which
is the Rentable Area of the Premises.

        Said Additional Rent shall be paid by Tenant to Landlord as and when
said sums, rentals, and other consideration (or any portion thereof) are
received by Tenant; provided that Tenant shall receive a credit toward such
Additional Rent in an amount equal to the net unamortized or undepreciated cost
of any of Tenant's Property that is sold to the assignee or sublessee in
connection with such assignment or sublease, determined on the basis of Tenant's
federal income tax returns, such credit to be prorated over the period during
which such sums, rentals, or other consideration are to be paid by the assignee
or sublessee, in proportion to the amount of such sums, rentals or other
consideration received by Tenant.

                                       42
<PAGE>

        For purposes of this Section 19.11, "Tenant Expenses" in connection with
an assignment or sublease shall mean all brokerage commissions, legal fees,
takeover expenses and cash contributions or alteration expenses incurred, or to
be incurred, by Tenant in connection with such assignment or sublease.

SECTION 19.12 ACCEPTANCE OF RENT. If this Lease is assigned, whether or not in
violation of the provisions of this Lease, Landlord may collect Rents from the
assignee if the Premises or any part thereof are sublet, whether or not in
violation of this Lease, Landlord may, after default by Tenant and expiration of
Tenant's time to cure such default, collect rent from the sublessee. In either
event, Landlord may apply the net amount collected to payment of Rents, but no
such assignment, subletting, or collection shall be deemed a waiver of any of
the provisions of this Article, an acceptance of the assignee or sublessee as a
lessee, or a release of Tenant from the performance by Tenant of Tenant's
obligations under this Lease.

SECTION 19.13 STANDARDS OF LANDLORD'S CONSENT. Landlord and Tenant agree that if
Tenant desires to assign this Lease or sublet all or any part of the Premises,
and Landlord withholds its consent or conditions its consent and Tenant believes
that Landlord did so unreasonably, Tenant may prosecute an action for
declaratory relief to determine if Landlord unreasonably withheld or conditioned
its consent, but Tenant waives and discharges any claims it may have against
Landlord for damages arising from Landlord's withholding or conditioning its
consent. In any such action, each party shall bear its own attorneys' fees.
Tenant shall indemnify, defend and hold Landlord harmless from any and all
liability, losses, claims, damages, costs, expenses, causes of action and
proceedings involving any third party or parties (including without limitation
Tenant's proposed subtenant or assignee) who claim they were damaged by
Landlord's wrongful withholding or conditioning of Landlord's consent.

                                  ARTICLE XX

                             ESTOPPEL CERTIFICATES

SECTION 20.1 Estoppel Certificates. Landlord and Tenant each agree from time to
time, within ten (10) days after a request by the other, to execute and deliver
to the other an estoppel certificate, in form satisfactory to the other, that:
(a) certifies that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified, and stating the modifications); (b) states the expiration date of the
Lease Term and that there are no agreements with either party to extend or renew
the Lease Term or to permit any holding over (or if there are any such
agreements, describes them and specifies the periods of extension or renewal);
(c) certifies the dates through which Rents have been paid; (d) states whether
or not, to the knowledge and belief of Landlord or Tenant, Tenant or Landlord Is
in default in performance of any of its obligations under this Lease, and
specifies each default of which Landlord or Tenant has knowledge; (e) states
whether or not, to the knowledge and belief of Landlord or Tenant, any event has
occurred that, with the giving of notice or passage of time, or both, would
constitute a default by Tenant or .Landlord and, if such an event has occurred,
specifies each such event; (f) states whether Tenant is entitled to any credits,
offsets, defenses or deductions against payment of Rents, and, if so, describes
them; and (g) states that Tenant has no rights or options to purchase the
Building or the TELEHOUSE Complex or the Premises. An estoppel certificate
issued by Landlord or Tenant pursuant to this Section 20.1 shall be a
representation and warranty by such party which may be relied upon by the other
party and by others with whom the other party may be dealing, regardless of
independent investigation. Landlord or Tenant also shall include in any estoppel
certificate such other information concerning this Lease as the other party may
reasonably request. If Landlord or Tenant fails to execute and deliver an
estoppel statement within ten (10) days after a request by the other party: (i)
the other party's representations concerning the factual matters covered by an
estoppel certificate, as described above, shall be conclusively presumed to be
correct, and (ii) such failure shall be a material default. Upon request, Tenant
shall execute and deliver estoppel certificates to the Port Authority and any
other Superior Lessor and any Superior Mortgagee.

                                  ARTICLE XXI

                            [INTENTIONALLY OMITTED]

                                 ARTICLE XXII

                                       43
<PAGE>

                                    BROKER

SECTION 22.1    BROKER. Tenant covenants, warrants and represents that no was
instrumental in bringing about or consummating this Lease and that Tenant had no
conversations or negotiations with any broker concerning the leasing of the
Premises. Tenant agrees to indemnify, defend and hold Landlord harmless against
and from any claims for any brokerage commissions or finder's fees, and all
costs, expenses and liabilities incurred in connection with such claims,
including attorneys' fees. Landlord agrees to indemnify, defend and hold Tenant
harmless against and from any claims for any brokerage commissions or finder's
fees by persons claiming under Landlord, and all costs, expenses and liabilities
incurred in connection with such claims, including attorneys fees.

                                 ARTICLE XXIII

                            CONDITIONAL LIMITATIONS

SECTION 23.1.   CONDITIONAL LIMITATIONS. This Lease and the Lease Term and
estate here granted are subject to the limitation that if any of the following
(each a "Conditional Limitation") shall occur, Landlord may, at any time
thereafter, give a written notice to Tenant stating that this Lease and the
Lease Term and estate hereby granted shall automatically expire and terminate on
the specified in such notice, which date shall be twenty (20) days after the
giving of such notice, and upon the expiration of such twenty (20) day period
this Lease and the Lease Term and estate here granted shall automatically expire
and terminate as if the last day of such twenty (20) day period we the
Expiration Date herein definitely fixed, and Tenant immediately shall quit and
surrender the Premises to Landlord, but Tenant shall remain liable for damages
as provided in this Article XXIII.

        23.1.1  [Intentionally omitted]

        23.1.2  Failure to Pay Rent. Any failure by Tenant to pay Base Rent or
Additional Rent when due and such failure shall continue for ten (10) days after
notice thereof by Landlord to Tenant;

        23.1.3  [Intentionally omitted]

        23.1.4  Failure to Perform Under This Lease. The failure by Tenant to
observe and perform any other provisions of this Lease to be observed or
performed by Tenant, where such failure continues for thirty (30) days after
written notice thereof by Landlord to Tenant; provided, however, that if the
nature of such default is such that it cannot reasonably be cured within such
thirty (30) day period, Tenant shall not be deemed to be in default if Tenant
within that period commences to cure the default and thereafter diligently
proceeds to completion within a reasonable time; and provided further, that if
such failure by Tenant would constitute a default under the Ground Lease, Tenant
shall have five (5) days after receipt of notice of default from the Port
Authority to cure such default (except where cure of not such default requires
more than five (5) days, Tenant shall not be deemed to be in default if Tenant
commences to cure the default within five (5) days and thereafter diligently
proceeds to completion within a reasonable time);

        23.1.5  [Intentionally omitted]

        23.1.6  Admission of Inability to Pay Debts. Tenant shall be unable to,
or shall admit in writing its inability to, pay its debts as they become due;

        23.1.7  Voluntary Proceeding. Tenant shall commence any case, proceeding
or other action (x) seeking relief on its behalf as debtor, or to adjudicate it
a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts under any law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, or (y)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for any part of its property;

        23.1.8  General Assignment. Tenant shall make a general assignment for
the benefit of creditors;

                                       44
<PAGE>

        23.1.9  Involuntary Proceeding. Any case, proceeding or other action
shall be commenced against Tenant (x) seeking to enter an order against Tenant
as debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts under any law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, or (y) seeking appointment of a receiver,
trustee, custodian or other similar' official for it or for all or any part of
its property, which either results in the entry of such an order, adjudication
of bankruptcy or insolvency or such an appointment or the entry of any other
order having a similar effect or remains undismissed for a period of sixty (60)
days;

        23.1.10 Appointment of Trustee. A trustee, receiver, custodian or other
similar official is appointed for any substantial part of the assets of Tenant
which appointment is not vacated or effectively stayed within seven (7) business
days;

        23.1.11 Tenant's Acquiescence. Tenant shall consent to or acquiesce in,
any of the acts set forth in Section 23.1.9 or 23.1.10;

        23.1.12 [Intentionally Omitted]

        23.1.13 Waste.  The committing of waste on the Premises;

        23.1.14 Hypothecation or Assignment. The hypothecation or assignment of
this Lease or subletting of the Premises, or attempts at such actions, in
violation of Article XIX;

        23.1.15 Service of Notice. The service by Landlord of a three-day notice
under Section 711 of the New York Real Property Actions and Proceedings Law more
than once during each of any two (2) consecutive Lease Years of this Lease;

        23.1.16 Rent Delays. Payment of Base Rent or Additional Rent more than
ten (10) days after notice on two (2) or more occasions during each of any two
(2) consecutive Lease Years of this Lease, regardless of whether Landlord served
a three-day notice on Tenant under Section 711 of the New York Real Property
Actions and Proceedings Law on any such occasion; or

        23.1.17 Legal Process. If Landlord, on two (2) or more occasions,
institutes legal proceedings to recover possession of the Premises from Tenant
on account of defaults.

SECTION 23.2   TERMINATION. Upon the occurrence of any Conditional Limitation,
Landlord shall have the separate and independent right to re-enter the Premises
and to remove Tenant by summary dispossess proceeding or other lawful process.
Notwithstanding anything to the contrary contained herein, if the expiration and
termination of the Lease Term shall be stayed by operation of law or by order of
any court having jurisdiction over any proceeding described in Section 23.1 or
if the trustee appointed in any such proceeding or Tenant or Tenant as
debtor-in-possession shall fail to assume Tenant's obligations under this Lease
within the period prescribed by law for such assumption or within one hundred
twenty (120) days after entry of the order for relief or within any other period
allowed by the court, or if said trustee or Tenant or Tenant as
debtor-in-possession shall fail to provide adequate protection of Landlord's
right, title and interest in and to the Premises; then, following the lifting of
any such stay, this Lease shall automatically expire and terminate five (5) days
after the lifting of such stay.

SECTION 23.3   REMEDIES AND DAMAGES.

        23.3.1  Surrender and Re-Entry. If this Lease shall automatically expire
or terminate pursuant to Section 23.1, or if this Lease shall otherwise expire
or be terminated or if Landlord shall re-enter or Tenant be removed from
possession of the Premises:

                (i) Tenant shall immediately quit and peacefully surrender the
Premises to Landlord, and Landlord and its agents may immediately, or at any
time after such default or after the date upon which this Lease and the Lease
Term shall expire, re-enter and repossess the Premises, without notice, either
by summary proceedings or

                                       45
<PAGE>

otherwise. In the event of any such re-entry, Landlord shall have the right,
with or without terminating this Lease, to remove all persons and property from
the Premises; the removed property may be stored in a public warehouse or
elsewhere at the cost of and for the account of Tenant.

                (ii) Landlord, at Landlord's option, may relet the Premises from
time to time, either in the name of Landlord or otherwise, to such tenant or
tenants, for such term or terms ending before, on or after the Expiration Date,
at such rental or rentals and upon such other conditions, which may include
concessions and free rent periods, as Landlord, in its sole discretion, may
determine; provided however, that Landlord shall have no obligation to relet the
Premises and shall in no event be liable for refusal or failure to relet the
Premises or, in the event of any such reletting, for refusal or failure to
collect any rent due upon any such reletting, and no such refusal or failure
shall operate to relieve Tenant of any liability under this Lease or otherwise
affect any such liability. Landlord may make such repairs, replacements,
alterations, additions, improvements, decorations and other physical changes in
and to the Premises as Landlord, in its sole discretion, considers advisable or
necessary. In connection with any such reletting or proposed reletting, without
relieving Tenant of any liability under this Lease or otherwise affecting any
such liability.

        23.3.2  Tenant's Waiver of Notice and Redemption. Tenant hereby waives
the service of any notice of intention to. re-enter (which waiver shall not
constitute a waiver of any other notice required to be given to Tenant pursuant
to the terms of this Lease). Tenant does further hereby waive all rights of
Tenant to redeem the Premises, or to re-enter or repossess the Premises, or to
restore the operation of this Lease, after (i) Tenant shall have been
dispossessed by a judgment or by warrant of any court or (ii) any re-entry by
Landlord, or (iii) any expiration or termination of this Lease and the Lease
Term, whether such dispossess, re-entry, expiration or termination shall be by
operation of law or pursuant to the provisions of this Lease. The terms
"re-enter", "re-entry" and re-entered" as used in this Lease shall not be deemed
to be restricted to their technical legal meanings.

        23.3.3  Damages. If this Lease and the Lease Term shall expire as
provided in Section 23.1 or 23.2 hereof or by or under any summary proceeding or
any other proceeding, or if Landlord shall re-enter the Premises, then, in any
of said events:

                (i)   Tenant shall pay to Landlord all Base Rent and Additional
Rent to the date upon which this Lease and the Lease Term shall have expired or
to the date of re-entry upon the Premises by Landlord, as the case may be;

                (ii)  Tenant also shall pay to Landlord, as damages, any
deficiency (a "Deficiency") between the Rents for the period that otherwise
would have constituted the unexpired portion of the Lease Term and, the net
amount, if any, of rents collected under any reletting effected pursuant to the
provisions of Section 23.3.1 (ii) for any part of such period (first deducting
from the rents collected under any such reletting all of Landlord's expenses in
connection with the termination of this Lease, Landlord's re-entry, upon the
Premises and such reletting including all repossession costs, brokerage
commissions, attorneys' fees and disbursements, alteration costs an other
expenses of preparing the Premises for such reletting): any such Deficiency
shall be paid in monthly installments by Tenant on the days specified in this
Lease for payment of installments of Base Rent, and Landlord shall be entitled
to recover from Tenant each monthly Deficiency as the same shall arise, and no
suit to collect the amount of the Deficiency for any month shall prejudice
Landlord's right to collect the Deficiency for any subsequent month by a similar
proceeding; and

                (iii) whether or not Landlord shall have collected any monthly
Deficiency as aforesaid, Landlord shall be entitled to recover from Tenant, and
Tenant shall pay to Landlord, within thirty (30) days after demand, in lieu of
any further Deficiency as and for liquidated damages, a sure equal to the amount
by which the Rents for the period that otherwise would have constituted the
unexpired portion of the Lease Term exceeds the then fair market rental value of
the Premises for the same period, both discounted to present value at the rate
of four per cent (4%) per annum less the aggregate amount of Deficiencies
theretofore collected by Landlord for the same period; if, before presentation
of proof of such liquidated damages to any court or tribunal, the Premises, or
any part thereof, shall have been relet by Landlord for the period which
otherwise would have constituted the unexpired portion of the Lease Term, or any
part thereof, the amount of rent reserved upon such reletting shall be deemed,
prima facie, to be the fair market rental value for the part of the Premises so
relet during the term of the reletting.

                                       46
<PAGE>

        23.3.4.  Rents from Reletting. If the Premises shall be relet together
with other space in the Building, the rents collected or reserved under any such
reletting and the expenses of any such reletting shall be equitably apportioned
for the purposes of this Section 23.3. Tenant shall in no event be entitled to
any rents collected or payable under any reletting, whether or not such rents
shall exceed the Base Rent reserved in this Lease. Nothing contained in this
Article XXIII shall be deemed to limit or preclude the recovery by Landlord-from
Tenant of the maximum amount allowed to be obtained as damages by applicable
law, or of any sums or damages to which Landlord may be entitled in addition to
the damages set forth in this Section 23.3.

        23.3.5   Monies Received. Landlord from or on behalf of Tenant during
the pendency of any proceedings between Landlord and Tenant shall be deemed paid
as compensation for the use and occupation of the Premises, and the acceptance
of any such compensation by Landlord shall not be deemed an acceptance of Rents
or a waiver on the part of Landlord of any rights hereunder.

        23.3.6   Equitable Remedies. In the event of a breach or threatened
breach by Tenant of any of the provisions hereof, Landlord shall have the right
of injunction and the right to invoke any remedy allowed at law or in equity as
if re-entry, summary proceedings and other remedies were not herein provided.

SECTION 23.4     WAIVER OF TRIAL BY JURY: TENANT NOT TO COUNTERCLAIM. Landlord
and Tenant each waive trial by jury in any action, proceeding or counterclaim
brought by either of them against the other on any matters not relating to
personal injury or property damage but otherwise arising out of or in any way
connected with this Lease, the relationship of Landlord and Tenant or Tenant's
use or occupancy of the Premises. Tenant shall not interpose any counterclaim in
a summary proceeding or in any action based on nonpayment of Rents or on
Tenant's holding over after expiration of the Lease Term or on any matter
relating to the foregoing unless the failure of Tenant to interpose such
counterclaim would result in the forfeiture or waiver of any claim raised
therein.

SECTION 23.5     NO HOLDOVER BY TENANT. Tenant waives any rights under Section
2201 of the New York Civil Practice Law and Rules in connection with any
holdover proceedings which Landlord may Property institute against Tenant. If
the Premises shall not be surrendered within thirty (30) days the termination of
this Lease, Tenant hereby indemnifies Landlord against loss, cost, injury,
damage, claim, expense, or liability (including but not limited to attorneys'
fees and disbursements) resulting from delay by Tenant in so surrendering the
Premises, including any claims made by any succeeding tenant or prospective
tenant founded upon such delay.

SECTION 23.6     LANDLORD'S RIGHT TO CURE DEFAULTS.

     Landlord may, but shall not be obligated to, cure any default by Tenant
under this Lease, at any time after expiration of any applicable cure period,
without notice; and whenever Landlord so elects, all costs and expenses incurred
by Landlord in curing any such default, including, without limitation,
reasonable attorneys' fees and disbursements, together with interest on the
amount of costs and expenses so incurred at the Interest Rate, shall be paid by
Tenant to Landlord within thirty (30) days after demand, as Additional Rent.

SECTION 23.7     EFFECTS OF WAIVERS OF DEFAULT: NO OTHER WAIVER. No consent or
waiver, express or implied, by Tenant or Landlord to or of any breach of any
obligation of the other party shall be construed as a consent or waiver to or of
any other breach of the same or any other obligation. The failure of Landlord or
Tenant at any time to insist upon the strict performance of any obligation of
the other party under this Lease or to exercise any right or remedy herein
contained, shall not be construed as a waiver or relinquishment of the
performance of such obligation or of the right to exercise any right or remedy
in the future. The following specific provision shall not limit the generality
of the provisions of this Section 23.7. The receipt or acceptance by Landlord of
Rents or the payment by Tenant of Rents with knowledge of a breach by the other
party of any term of this Lease shall not be deemed a waiver of such breach. No
payment by Tenant or receipt by Landlord of an amount less than the correct
Rents shall be deemed to be other than a payment on account, nor shall any
endorsement or statement on any check or any accompanying letter be deemed to
effect or evidence an accord and satisfaction, and Landlord may accept such
check or payment without prejudice to Landlord's right to recover the balance or
pursue any other rights of Landlord.

                                       47
<PAGE>

SECTION 23.8   ELECTION TO TERMINATE. No re-entry or taking possession of the
Premises by Landlord shall be construed as an election to terminate this Lease
unless a written notice of such intention be given to Tenant or unless the
termination thereof be decreed by a court of competent jurisdiction.

SECTION 23.9   REMEDIES NOT EXCLUSIVE. The rights and remedies of Landlord
provided in this Lease for a default by Tenant are cumulative and not exclusive,
and the exercise by Landlord of any right or remedy it may have shall not
preclude the concurrent or subsequent exercise of any other right or remedy it
may have pursuant to this Lease, at law or in equity.

SECTION 23.10  PAYMENT OF LANDLORD'S EXPENSES. Any expenses incurred by Landlord
in connection with any performance by it for the account of Tenant, and all
costs and expenses, including reasonable attorneys' fees (whether or not legal
proceedings are Instituted), involved in collecting Rents or enforcing the
obligations of Tenant under this Lease, including the cost and expense of
instituting and prosecuting legal proceedings or recovering possession of the
Premises after default by Tenant or upon expiration or sooner termination of
this Lease, shall be due and payable by Tenant, within thirty (30) days after
demand, as Additional Rent.

                                 ARTICLE XXIV

                                 MISCELLANEOUS

SECTION 24.1   NO RECORDING OF LEASE. Neither Landlord nor Tenant shall record
this Lease or any memorandum thereof.

SECTION 24.2   ENTIRE AGREEMENT. This Lease contains all of the agreements and
understandings related to the leasing of the Premises and the respective
obligations of Landlord and Tenant in connection therewith. All prior agreements
and understandings between the parties have merged into this Lease, which alone
folly and completely expresses the agreement of the parties.

SECTION 24.3   AMENDMENTS. No agreement shall be effective to amend, change,
modify, waive, release, discharge, terminate or effect an amendment of this
Lease, in whole or in part, unless such agreement is in writing, refers
expressly to this Lease and is signed by Landlord and Tenant. Modifications to
this Lease will not be binding upon the Port Authority or any other Superior
Lessor or Superior Mortgagee who has a right to approve modifications hereto
under its Superior Lease or Superior Mortgage unless approved by the Port
Authority or by the other Superior Lessor or Superior Mortgagee.

SECTION 24.4   SUCCESSORS. Except as otherwise expressly provided herein, the
obligations of this Lease shall bind and benefit the successors and assigns of
the parties hereto; provided, however, that no assignment, sublease or other
transfer in violation of the provisions of Article XIX shall operate to vest any
rights in any putative assignee, sublessee or transferee of Tenant.

SECTION 24.5   FORCE MAJEURE. Tenant and Landlord shall have no liability
whatsoever to the other on account of the inability of Tenant or Landlord to
fulfill, or delay in fulfilling, any of their respective obligations (excluding
obligations to pay money) under this Lease by reason of any strike, lockout or
other Labor Condition; inability to obtain labor, materials, coal, oil, or other
suitable fuel or reasonable substitutes therefor or the failure of the supply of
any thereof; acts of God, fire or other casualty; governmental preemption of
priorities or other controls in connection with a public emergency; governmental
restrictions or requirements of law; enemy or hostile governmental action; civil
commotion; or any other cause, whether similar or dissimilar to the above,
beyond Tenant's or Landlord's reasonable control. (The foregoing events are
collectively referred to as "Force Majeure".) if this Lease specifies a time
period for performance of an obligation of Tenant or Landlord, that time period
shall be extended by the period of any delay in Tenant's or Landlord's
performance caused by any of the events of Force Majeure.

SECTION 24.6   POST-TERMINATION OBLIGATIONS. Upon the expiration of the Lease
Term or earlier termination of this Lease, neither party shall have any further
obligation or liability to the other except as otherwise expressly provided in
this Lease and except for such obligations as by their nature or under the
circumstances can

                                       48
<PAGE>

only be, or by the provisions of this Lease, may be, performed after such
expiration or earlier termination. However, any liability for a payment of Rents
or indemnity shall survive the expiration of the Lease Term or earlier
termination of this Lease.

SECTION 24.7     CONSTRUCTION ON ADJACENT PROMISES. If any excavation or other
construction shall be made on any premises adjoining or above or below the
Building, Tenant shall permit Landlord, the Port Authority or the adjoining
owner, and their respective agents, employees, licensees and contractors to
enter upon the Premises and to shore the walls thereof and to erect scaffolding
and/or protective barricades around the Building (but not so as to preclude
entry thereto) and to do any act or thing necessary for the safety or
preservation of the Building. Tenant's obligations under this Lease shall not be
affected by any such construction or excavation work, shoring-up, scaffolding or
barricading. Landlord shall not be liable in any case for any inconvenience,
disturbance, loss of business or any other annoyance arising from such
construction, excavation, shoring-up, scaffolding or barricades, but if Landlord
is performing such work, Landlord shall use its best efforts so that the work
will cause as little inconvenience, annoyance and disturbance to Tenant as
possible, consistent with accepted construction practice in the vicinity, so
that such work shall be expeditiously completed.

SECTION 24.8     NO REPRESENTATIONS BY LANDLORD. Landlord and Landlord's agents
have made no representations, warranties or promises whatsoever with respect to
the Promises, the Building and the Teleport, except as expressly set forth
herein, and no rights, easements or licenses are acquired by Tenant by
implication or otherwise except as expressly set forth herein. Tenant represents
and warrants that it has thoroughly inspected the Premises and is fully familiar
with the Premises.

SECTION 24.9     LANDLORD'S CONSENT. All references in this Lease to the consent
or approval of Landlord shall be deemed to mean the written consent or approval
of Landlord, and no consent or approval of Landlord shall be effective for any
purpose unless such consent or approval is in writing.

SECTION 24.10    INTERPRETATION.

        24.10.1  Governing Law. Irrespective of the place of execution or
performance, this Lease shall be governed by and construed in accordance with
the laws of the State of New York.

        24.10.2  Invalidity. If any provision of this Lease or the application
thereof to any Person or circumstance shall, for any reason and to any extent,
be invalid or unenforceable, the remainder of this Lease and the application of
that provision to other Persons or circumstances shall not be affected but
rather shall be enforced to the fullest extent permitted by law.

        24.10.3  Captions. The Table of Contents, captions, headings and titles
of this Lease are solely for convenience of reference and shall not affect its
interpretation.

        24.10.4  Presumptions. This Lease shall be construed without regard to
any presumption or other rule requiring construction against the party drafting
a document. It shall be construed neither for nor against Landlord or Tenant,
but shall be given a reasonable interpretation in accordance with the plain
meaning of its terms and the intent of the parties.

        24.10.5  Independent Covenants. Each covenant, agreement, obligation or
other provision of this Lease on Tenant's part to be performed shall be deemed
and construed as a separate and independent covenant of Tenant, not dependent on
any other provision of this Lease.

        24.10.6  Number and Gender. All terms and words used in this Lease,
regardless of the number or gender in which they are used, shall be deemed to
include any other number and any other gender as the context may require.

        24.10.7  Exhibits. All exhibits, schedules and riders appended to this
Lease are incorporated herein and by this reference made a part hereof.

                                       49
<PAGE>

SECTION 24.11  JOINT AND SEVERAL LIABILITY. If, at any time during the Lease
Term, Tenant comprises more than one person, all such persons shall be jointly
and severally liable for payment of Rents and for performance of every
obligation of Tenant under this Lease.

SECTION 24.12  SUBMISSION OF LEASE. The submission of this Lease by Tenant to
Landlord or by Landlord to Tenant for review or signature does not constitute an
offer by or to Tenant to lease the Premises or the granting of an option to do
so. This instrument shall have no binding force or effect until its execution
and delivery by both Landlord and Tenant.

SECTION 24.13  NOTICES FROM ONE PARTY TO THE OTHER. Any notice or demand from
Landlord to Tenant or from Tenant to Landlord shall be in writing and shall be
deemed duly served if personally delivered, sent by a nationally recognized
courier service, or mailed by registered or certified mail, return receipt
requested, addressed, if to Tenant, at the Premises or such other address as
Tenant shall have last designated by notice in writing to Landlord and, if to
Landlord, to the Address of Landlord or at such other address as Landlord shall
have last designated by notice in writing to Tenant. Notices to the Port
Authority shall be delivered to the Executive Director at One World Trade
Center, New York, New York 10048 or to such other address as the Port Authority
may hereafter designate. Notices shall be deemed received and served when
personally delivered or upon receipt if mailed or sent by a courier service.

SECTION 24.14 PARTNERSHIP TENANT. If Tenant is a partnership (or is comprised of
two (2) or more Persons, individually or as partners of a partnership) or if
Tenant's interest in this Lease shall be assigned to a partnership (or to two
(2) or more Persons, individually or as partners of a partnership) in a manner
permitted under Article XIX (any such partnership and such Persons are referred
to as "Partnership Tenant"), the following provisions shall apply to such
Partnership Tenant: (a) the liability of each of the parties comprising
Partnership Tenant shall be joint and several; (b) each of the parties
comprising Partnership Tenant hereby consents in advance to, and agrees to be
bound by (i) any written instrument which may hereafter be executed by
Partnership Tenant or any successor partnership, changing, modifying, extending
or discharging this Lease, in whole or in part, or surrendering all or any part
of the Premises to Landlord, and (ii) any notices, demands, requests or other
communications which may hereafter be given by Partnership Tenant; (c) any
bills, statements, notices, demands, requests or other communications given or
rendered to Partnership Tenant or to any of such parties shall be binding upon
Partnership Tenant and all such parties; (d) if Partnership Tenant shall admit
new partners, all of such new partners shall, by their admission to Partnership
Tenant, be deemed to have assumed joint and several liability for the
performance of all of the provisions of this Lease on Tenant's part to be
observed and performed from and after the date of their admission to Partnership
Tenant; and (e) Partnership Tenant shall give prompt notice to Landlord of the
admission of any such new partners, and upon demand of Landlord, shall cause
each such new partner to execute and deliver to Landlord an agreement in form
satisfactory to Landlord, wherein each such new partner shall assume joint and
several liability for the performance of all the provisions of this Lease on
Tenant's part to be observed and performed from and after the date of their
admission to Partnership Tenant, but neither Landlord's failure to request any
such agreement nor the failure of any such new partner to execute or deliver any
such agreement to Landlord shall vitiate the provisions of clause (d) of this
Section 24.14.

SECTION 24.15  PORT AUTHORITY'S IMMUNITY. No immunity or exemption (actual,
alleged or imputed) of the Port Authority from any law or other requirement
shall excuse compliance, or be grounds for noncompliance, therewith by Tenant.

SECTION 24.16  NO DISCRIMINATION. Tenant shall treat all employees and
applicants for employment at the Premises without unlawful discrimination as to
race, creed, color, national origin, sex, age, handicap, marital status, sexual
orientation or affectional preference in all employment divisions, including but
not limited to recruitment, hiring, compensation, training and apprenticeship,
promotion, upgrading, demotion, downgrading, transfer, lay-off, and termination,
and all other terms and conditions of employment except as provided by law, and
shall state in all solicitations for employment at the Premises that all
qualified applicants will receive consideration for employment without regard to
race, color, religion, national origin, sex, sexual orientation or affectional
preference.

     IN WITNESS WHEREOF, Landlord and Tenant have hereunto executed this Lease
as of the day and year first above written.

                                       50
<PAGE>

LANDLORD:          TELEHOUSE INTERNATIONAL CORPORATION OF AMERICA,
                   a Delaware corporation

                   By:      /s/ Y. SHINTANI
                   Name:    Y. SHINTANI
                   Title:   President

TENANT:            DIGITAL ISLAND, INC.
                   a Hawaiian corporation

                   By:      /s/ RUANN F. ERNST
                   Name:    RUANN F. ERNST
                   Title:   CEO and PRESIDENT

                                       51
<PAGE>

                              TELEHOUSE International Corp. of America TELEHOUSE

                                    [LOGO]

                FIRST AMENDMENT TO TELEHOUSE SERVICE AGREEMENT

                                    between

                TELEHOUSE INTERNATIONAL CORPORATION OF AMERICA

                                      and

                                DIGITAL ISLAND

        This First Amendment to the TELEHOUSE SERVICE AGREEMENT (the
"Agreement") made this 16th day of November, 1999, by and between TELEHOUSE
International Corporation of America, a Delaware corporation, having an address
at 7 Teleport Drive, Staten Island, New York, 10311 ("TELEHOUSE") and Digital
Island, Inc., a Delaware corporation, having an address at 45 Freemont Street,
Suite 1200 San Francisco, CA 94105 ("Client").

                                  WITNESSETH:

        WHEREAS, TELEHOUSE and Digital Island have entered into an Agreement as
of July 21, 1999 (the "Agreement") providing Digital Island with CAC and CPC
Maintenance Services associated with Site K.

        WHEREAS, TELEHOUSE and Client mutually desire additional CAC/CPC
Maintenance Services associated with Site N, and in order to accomplish that,
TELEHOUSE and Client mutually desire to amend the Agreement, upon the terms and
conditions set fourth in this Amendment;

        NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained and for other good and valuable consideration, TELEHOUSE
and Client hereby agree as follows:

        1. Amendment of Agreement

               A.     Amendment of Exhibit A.  Section B. "Fees and Charge", is
hereby amended in its entirety to read as follows:

"B.     Fees and Charges.

In consideration of the CAC/CPC Maintenance Services to be performed by
TELEHOUSE, Client shall pay a CAC/CPC Maintenance Service-Fee of Twelve Thousand
five hundred Dollars ($12,500.00) per year from December 01, 1998 until August
31, 1999, and effective September 01, 1999, Twenty five Thousand Dollars
($25,000) per year for the additional CAC/CPC Maintenance Services performed by
TELEHOUSE, which amount is derived from the following schedule:

      ---------------------------- ------------------ --------------------
        Number of Units Site K     Equipment Type      Annual Cost/Unit
      ---------------------------- ------------------ --------------------
                   2               CPD                     $1,500.00
      ---------------------------- ------------------ --------------------
                   2               CAC (on-line)           $3,500.00
      ---------------------------- ------------------ --------------------
                   1               CAC (standby)           $2,500.00
      ---------------------------- ------------------ --------------------

      ---------------------------- ------------------ --------------------
        Number of Units Site N     Equipment Type      Annual Cost/Unit
      ---------------------------- ------------------ --------------------
                   2               CPC                     $1,500.00
      ---------------------------- ------------------ --------------------
                   2               CAC (on-line)           $3,500.00
      ---------------------------- ------------------ --------------------

                                       52
<PAGE>

      ---------------------------- ------------------ --------------------
                   1               CAC (standby)           $2,500.00
      ---------------------------- ------------------ --------------------

        The CAC/CPC Maintenance Service Fee shall be payable monthly at a rate
of One Thousand forty-one Dollars ($1,041.00) from December 01, 1998 until
August 31,1999. Effective September 01, 1999, CAC/CPC Maintenance Service Fee
shall be payable monthly at a rate of Two Thousand eighty-three Dollars
($2,083.00), for the additional CAC/CPC Maintenance Service associated with Site
N, within (30) days after receipt by Client of an invoice thereof from
TELEHOUSE".

        2.     Confirmation of License.  Except as modified by this Amendment,
the Agreement is and shall remain in full force and effect. TELEHOUSE and Client
hereby ratify and confirm all of the terms and provisions of the Agreement, as
amended hereby.

        IN WITNESS WHEREOF, TELEHOUSE and Licensee have hereunto executed this
Amendment by their respective duly authorized representatives as of the day and
year first above written.

          Digital Island, Inc.          TELEHOUSE International Corporation of
                                        America

          By:  /s/                      By:  /s/ Hideki Akabawa

          Name:                         Name:  Hideki Akabawa

          Title:  Real Estate Manger    Title:  Director

                                       53
<PAGE>

                               TELEHOUSE International Corp. of America Original

             SECOND AMENDMENT TO TELEHOUSE DATA CENTER SPACE LEASE

                                    between

                TELEHOUSE INTERNATIONAL CORPORATION OF AMERICA

                                      and

                             DIGITAL ISLAND, INC.

        THIS SECOND AMENDMENT TO TELEHOUSE CENTER SPACE LICENSE (this
"Amendment"), is made and entered into as of the It' day of June, 2000, by and
between TELEHOUSE International Corporation of America, a Delaware corporation,
with an address at 7 Teleport Drive, Staten Island, New York, 10311
("TELEHOUSE") and Digital Island, Inc. a Delaware corporation, having an address
at 45 Freemont Street, Suite 1200, San Francisco, CA 94105 ("Lessee").

                             W I T N E S S E T H:

        WHEREAS, TELEHOUSE and Lessee have entered into a Lease dated as of the
1st day of December, 1998 (the "Lease") covering certain space referred to as
Site K and Conference Rooms 212B and 213 of the TELEHOUSE premises at 7 Teleport
Drive, Staten Island New,

        WHEREAS, TELEHOUSE and Lessee have entered into a First Amendment to
such Lease dated as of the 17th day of August, 1999 (the "First Amendment")
covering certain additional space referred to as Site N of the TELEHOUSE
premises at 7 Teleport Drive, Staten Island Now York,

        WHEREAS, TELEHOUSE and Lessee mutually desire that TELEHOUSE again
provide additional space referred to as Sites P and H and in order to accomplish
that, TELEHOUSE and Lessee mutually desire to amend the Lease, upon the terms
and conditions set forth in this Amendment;

        NOW THEREFORE, In consideration of the mutual promises and covenants
hereinafter contained and for other good and valuable consideration, TELEHOUSE
and Lessee hereby agree as follows:

        a.  Amendment of Section 1.1.  Section 1.1 "Fundamental Lease
Provisions," is hereby amended in its entirety to read as follows;

"DATE:                                    December 01, 1998

LANDLORD:                                 TELEHOUSE INTERNATIONAL CORPORATION OF
                                          AMERICA, Delaware corporation.

ADDRESS OF LANDLORD:                      7 Teleport Drive
                                          Staten Island, Now York 10311 -1011
                                          Attention: Sales & Marketing
                                          Telephone: (718) 355-2500
                                          Fax: (718) 355-2517

TENANT:                                   Digital Island, Inc.
                                          a Delaware corporation.

ADDRESS OF TENANT:                        45 Fremont Street
                                          Suite 1200
                                          San Francisco, CA 94105

                                       54
<PAGE>

                                          Attn:
                                          Telephone:
                                          Fax:

PREMISES:                                 Space consisting of portions of the
                                          second and third floors in the
                                          Building, which space is more
                                          particularly known as Site K, Site N,
                                          Site P, Site H and Conference Rooms
                                          2128 and 213 and is indicated by
                                          shading on the floor plan annexed
                                          hereto as Exhibit "A".

BUILDING:                                 The data center and office building
                                          and underlying land known as TELEHOUSE
                                          CENTER and located at 7 Teleport Drive
                                          in the Teleport, in the Borough of
                                          Staten Island, County of Richmond,
                                          City and State of New York, and all
                                          rights and interests appurtenant
                                          thereto.

INITIAL BASE RENT:                        $271,116.00 per annum, for Site K,
                                          plus $33,775.00 per annum for
                                          Conference Rooms, plus $401,328.00 per
                                          annum for Site N, plus $745,366.00 per
                                          annum for Site P and plus $946,836.00
                                          per annum for Site H.

INITIAL BUILDING OPERATING EXPENSE:       $14.50 per square foot of Rentable
                                          Area per annum applicable to Site K,
                                          Site N, Site P and Site H only.

TENANT'S SHARE:                           28.66 percent (28.66%)

LEASE TERM:                               The term of this Lease shall include
                                          the Initial Lease Term and any
                                          extension or renewals thereof.

INITIAL LEASE TERM:                       A period of 3 years (unless terminated
                                          earlier pursuant to any of the
                                          provisions of this Lease or pursuant
                                          to law), commencing as set forth in
                                          Section 2.2.

RECAPTURE PERCENTAGE:                     The Recapture Percentage shall be one
                                          hundred percent (100%) unless a
                                          different percentage is specified as
                                          follows: fifty percent (50%).

FIXED COMMENCEMENT DATE:                  December 01, 1998

RENT COMMENCEMENT DATE:                   Payment of Base Rent commences on the
                                          Fixed Commencement Date for Site K and
                                          Conference Rooms, on September 01,
                                          1999 for Site N, on June 1, 2000 for
                                          Site P and on July 1, 2000 for Site H.

RENTABLE AREA:                            Site K: 3,813 square feet (2,040
                                          usable square feet).
                                          Conference Room: 1,803 square feet
                                          (965 usable square feet).
                                          Site N: 8,074 square feet (4,320
                                          usable square feet)
                                          She P: 12,340 square feet (6,602
                                          usable square feet)
                                          Site H: 19,050 square feet (10, 192
                                          usable square feet)

                                       55
<PAGE>

TENANTS BUSINESS:                         Communication related services.

TENANT'S BROKER:                          None

ADDRESS OF TENANTS BROKER:                Not applicable."

        b. Amendment of Section 2.3 "Preparation of Premises".  Section 2.3
"Preparation of Premise", is hereby amended by inserting the following language
at the end of the Section:

"Landlord has provided the Site P portion of the Premises on an "as is" basis
including:

        - Raised floor, drop ceiling and lighting
        - Critical Power, Essential Power and Non-essential power feeder
          installation
        - Demising walls
        - Computer room air conditioning (three 23 ton units).
        - Connection to centralized building monitoring and security system
        - Halon and dry sprinkler fire protection in computer room
        - Three (3) 75 Kva Computer Power Centers (CPC) each with 84 breaker
          positions
        - Main entrance and computer room card readers

Notwithstanding above. Landlord will clean all underfloor and floor surfaces
including removal of cabling and power distribution wiring as necessary and
Landlord will paint and re-lamp entire space.

Landlord has provided the Site H portion of the Premises on an "as is" basis
including:

        - Raised floor, drop ceiling and lighting
        - Critical Power and Essential Power feeder installation
        - Demising walls
        - Computer room air conditioning (two 20 ton units) with overhead
          distribution.
        - Connection to centralized building monitoring and security system
        - Pre-action sprinkler system
        - One (1) 125 Kva Computer Power Center (CPC) with 126 breaker positions
        - Main entrance card reader

Notwithstanding above, Landlord will clean all underfloor and floor surfaces
including removal of cabling and power distribution wiring as necessary and
Landlord will paint and re-lamp entire space.

In addition and as requested by Tenant, Landlord will perform certain other
special site fitout work for the Site H portion of the Premises according to the
requirements of the Special Site Fitout Work annexed hereto as Exhibit "B". Such
additional work will be completed on or about October 1, 2000 however such
completion will not impact the Commencement Date or Rent Commencement Date.

Tenant will pay for such special fitout work as per schedule provided in Exhibit
"B" and Article IV herein,"

        c. Amendment of Section 6.1. "Service and Utilities", is hereby amended
by replacing in subsection 6.1.2 "Additional Electrical Equipment" and in
subsection 6.1.5 "Provision of Emergency Power", every occurrence of the phrase
"Site K or Site N" with the phrase "Site K, Site N, Site P or Site H".

        d. Amendment of Section 6.2.  Section 6.2, "Water". is hereby amended
by replacing every occurrence of the phrase "Site K or Site N" with the phrase
"Site K, Site N, Site P or Site H".

                                       56
<PAGE>

     e.  Amendment of Section 6.4.  Section 6.4 "Heating and Air Conditioning"
is hereby amended by replacing in subsection 6.4.1 "Heating" and in subsection
6.4.2 "Air Conditioning" every occurrence of the phrase "Site K or Site N" with
the phrase "Site K, Site N, Site P or Site H".

     f.  Amendment of Exhibit A.  Exhibit A "Floor Plans", is hereby amended to
include Site P and Site H portions of the Premises as per Exhibit "A" attached.

     g.  Amendment of Exhibit B.  Exhibit B "Special Site Fitout", is hereby
amended by adding the following language at the end of the Exhibit:

"Site H Modifications

       . Architect and engineering design fees and Port Authority filing fees.
       . Provide and install eight (8) Liebert 25-ton air conditioning units
       . Provide and install four (4)125 Kva United Power PDUs
       . Provide and install halon fire protection system
       . Close second doorway from Tenant corridor
       . Other site work as specified in construction drawings listed below

Site H Construction Drawings:

<TABLE>
<S>        <C>                                                                                    <C>        <C>
G-1        Second Floor Site H : General Notes, Legend and Key Plan                               3/24/00    Rev 0
D-1        Second Floor Site H: Demolition Plan                                                   3/24/00    Rev 0
D-2        Second Floor Site H Demolition Reflected Ceiling                                       3/24/00    Rev 0
A-1        Second Floor Site H: Floor Plan                                                        3/24/00    Rev 0
A-2        Second Floor Site H: Reflected Ceiling Plan                                            3/24/00    Rev 0
M-1        Second Floor Site H: Floor Plan Ductwork Demolition HVAC                               3/24/00    Rev 0
M-2        Second Floor Site H: Floor Plan Piping Demolition HVAC                                 3/24/00    Rev 0
M-3        Second Floor Site. H: Floor Plan Ductwork HVAC                                         3/24/00    Rev 0
M-4        Second Floor Site H : Floor Plan Piping HVAC                                           3/24/00    Rev 0
M-5        Second Floor Site H: Equipment Schedules & Notes HVAC                                  3/24/00    Rev 0
M-6        Second Floor Site H: Details-HVAC                                                      3/24/00    Rev 0
FP-1       Second Floor Site H: Fire Protection Notes, Details & Specifications                   3/24/00    Rev 0
FP-2       Second Floor Site H: Fire Protection Floor Plan                                        3/24/00    Rev 0
E-1        Second Floor Site H: Specifications, General Notes and Legend                          3/24/00    Rev 0
E-2        Second Floor Site H: Floor Plan Lighting & Diagram                                     3/24/00    Rev 0
E-3        Second Floor Site H: Floor Plan- Power, Details & Diagram                              3/24/00    Rev 0
E-3A       Second Floor Site H: Demolition Plan                                                   3/24/00    Rev 0
E-4        Second Floor Site H: Riser Diagrams                                                    3/24/00    Rev 0
E-5        Second Floor Site H: Panelboard Schedules (Sheet-1)                                    3/24/00    Rev 0
E-6        Second Floor Site H: Panelboard Schedules (Sheet-2)                                    3/24/00    Rev 0
E-7        Second Floor Site H: Demolition Plan                                                   3/24/00    Rev 0
</TABLE>

Site H Tenant's Costs.  Tenant shall be responsible for payment of the following
costs (hereinafter, "Tenant's Costs") for Site H fitout work specified in this
Exhibit:

                Cost of above work                $1,448,871.00
                Tax                                    2,373.00
                Total                             $1,451,244.00

Tenant's Costs will be paid according to the following schedule:

     -  20% upon approval of construction plans by Port Authority and
commencement of construction work (estimated July 1, 2000)
     -  40% upon completion of all construction work except installation of
Liebert air conditioning units (estimated September 1, 2000)

                                       57
<PAGE>

     -  40% upon final completion of all construction work (estimated October 1,
2000)"

     IN WITNESS WHEREOF, TELEHOUSE and Licensee have hereunto executed this
Amendment by their respective duly authorized representatives as of the day and
year first above written.

     Digital Island, Inc.                     TELEHOUSE Intentional Corporation
                                              of America

     By:  /s/ Howard Lasky                    By:  /s/  Y. SHINTANI

     Name:  Howard Lasky                      Name:  Y. SHINTANI

     Title: VP & General Counsel              Title:  President

Attachment:            Exhibit "A Floor Plans
                       Exhibit "Z" Consent Agreement

                                       58
<PAGE>

                                  EXHIBIT "Z"

                               CONSENT AGREEMENT

                        Port Authority Lease No. TP-004
                 (said Lease being dated as of August 9, 1988)

     THIS AGREEMENT, made as of June 1st, 2000 by and among THE PORT AUTHORITY
OF NEW YORK AND NEW JERSEY (hereinafter called the "Port Authority"), a body of
corporate and politic, created by Compact between the States of New Jersey and
New York, with the consent of the Congress of the United States of America and
having an office at One World Trade Center, in the Borough of Manhattan, City,
County and State of New York, and TELEHOUSE International Corporation of America
(hereinafter called "the Lessee'), and Digital I land, Inc. (hereinafter called
the "Space Lessee) whose representative is  Allan Leinwand

     WITNESSETH, that:

     WHEREAS, the Port Authority and the Lessee have heretofore entered into an
agreement dated August 9, 1988 (which agreement, as the same has been or may
hereafter be supplemented and amended, is hereinafter called the "Main Lease"
covering the construction and operation of an office building or buildings at
the Teleport (located in a portion of the Staten Island Industrial Park leased
by the City of New York to the Port Authority and hereinafter called the
"Facility"); and

     WHEREAS, pursuant to and in accordance with the terms of the Main Lease,
the Lessee proposes as of the effective date hereof to enter ink a use and
occupancy agreement with the Second Amendment to the Space Lease dated June 1st,
2000, a copy of which is attached hereto, made a part hereof and hereafter
called "Second Amendment", subject to the consent of the Port Authority and the
execution of a Consent Agreement by and among the Lessee, the Space Lessee and
the Port Authority;

     NOW, THEREFORE, for and in consideration of the covenants and mutual
agreements herein contained, the Port Authority, the Lessee and the Space Lessee
hereby agree effective as of June 1st, 2000, as follows:

     1.  On the terms and conditions hereinafter set forth, the Port Authority
consents to the Space Lease.

     2.  The Second Amendment shall terminate, without notice to the Space
Lessee, on the day proceeding the date of expiration or earlier termination of
the Main Lease, or on such earlier date as the Lessee and the Space Lessee may
agree upon. The Space Lessee shall quit the space covered by the Second
Amendment and remove its property for which it is responsible therefrom on or
before the termination of the Second Amendment.

     3.  Neither this Consent Agreement, or anything contained herein nor the
consent granted hereunder shall constitute or be deemed to constitute a consent
to nor shall they create an implication that there has been consent to any
enlargement or change in the rights, powers and privileges granted to the Lessee
under the Main Lease, nor consent to the granting of any rights or privileges to
the Space Lessee as may be provided by the Second Amendment if not granted to
the Lessee under the Main Lease. The Second Amendment is an agreement between
the Lessee and the Space Lessee with respect to the various matters set forth
therein. Neither this Consent nor anything herein nor the consent granted
hereunder shall constitute an agreement between the Port Authority and the
Lessee that the provisions of the Second Amendment shall apply and pertain as
between the Lessee and the Port Authority, it being understood that the terms,
conditions and agreements of the Main Lease shall, in all respects, be
controlling and determinative. The specific mention of or reference to the Port
Authority in any part of the Second Amendment, including without limitation
thereto, any mention of any consent or approval of the Port Authority now or
hereafter to be obtained, shall not be or be deemed to create an inference that
the Port Authority has granted its consent or approval thereto under this
Consent Agreement or shall thereafter grant its consent or approval thereto or
that the Port Authority's discretion pursuant to the Main Lease as to any such
consents or approvals shall in any way be affected or impaired. The lack of any
specific reference in any provisions of the Second Amendment to Port Authority
approval, or consent shall not be deemed to imply that no such approval or
consent is required and the Main Lease shall, in all respects, be controlling.

                                       59
<PAGE>

     No provision of the Second Amendment, including, but not limited to, those
imposing obligations on the Space Lessee with respect to laws, rules,
regulations, taxes, assessments and liens shall be construed as a submission or
admission by the Port Authority that the same could or does lawfully apply to
the Port Authority, nor shall the existence of any provision of the Second
Amendment covering actions which shall or may be undertaken by the Space Lessee
or the Lessee including, but not limited to, construction on the space covered
by the Second Amendment, be deemed to imply or infer that Port Authority consent
or approval thereto pursuant to the Main Lease will be given or that Port
Authority discretion with respect thereto will in any way be affected or
impaired.

     4.  The Space Lessee, in its operations under or in connection with the
Second Amendment and in its use of the space covered by the Second Amendment,
shall be subject to the applicable terms, provisions, covenants and conditions
of the Main Lease. Without in any way affecting the obligations of the Lessee
under the Main Lease and under this Consent Agreement, all acts and omissions of
the Space Lessee shall be deemed acts and omissions of the Lessee under the Main
Lease, but notwithstanding the foregoing, the Lessee shall not be or be deemed
to be default of the Main Lease to the extent that any of the foregoing shall
constitute a breach thereof if, except for causes beyond the control of the
Lessee, it shall have commenced to remedy said default within twenty (20) days
after receipt of notice thereof from the Port Authority and continues diligently
to pursue such remedy.

     5.  The Second Amendment shall not be changed, modified, discharged or
extended except by written instrument duly executed by the parties thereto and
only with the express written consent of the Port Authority. Without limiting
the generality of the foregoing, the Space Lessee shall use the space covered by
the Second Amendment for the following purpose and for no other purpose or
purposes whatsoever: for communications related services in connection with its
business.

     6.  If the Lessee shall at any time be in default of its obligations under
the Main Lease to make payments to the Port Authority, or if there shall occur
at any time an event involving insolvency, bankruptcy, arrangement or
reorganization of the Lessee which under the terms of the Main Lease would
constitute an event the occurrence of which grants the Port Authority the right
to terminate the Main Lease and provided the same has not been cured within the
time granted therefor, if any, under the Main Lease, the Space Lessee on demand
of the Port Authority shall pay directly to the Port Authority any fee or other
amount due to the Lessee. No such payment shall relieve the Lessee from any
obligations under the Main Lease or under this Consent Agreement but all such
payments shall be credited against the obligations of the Lessee and of the
Space Lessee for each payment or part thereof.

     7.  The granting of the consent hereunder by the Port Authority shall not
be or be deemed to operate as a waiver of consent to any subsequent agreement
with respect to the use or occupancy of space at the Facility (by the Lessee or
by the Space Lessee) or to any assignment of the Main Lease or the Second
Amendment or of any rights under either of them, whether in whole or in part.

     8.  In the event of any substantial default by the Space Lessee under any
of the provisions of this Consent Agreement and said default has not been cured
within thirty (30) days after the Port Authority has served a notice of such
default upon the Lessee and the Space Lessee, the Port Authority shall have the
right to revoke the consent granted hereunder upon thirty (30) days' written
notice to the Lessee and the Space Lessee, but no such revocation shall be
deemed to affect the Main Lease and the continuance thereof, it being
understood, moreover, that the foregoing shall not be deemed to affect or limit
any rights of the Port Authority under the Main Lease. In the event of the
revocation of the consent hereunder as hereinabove provided, the Lessee shall
immediately terminate the Second Amendment.

     9.  Reference herein to the Space Lessee shall mean and include the Space
Lessee, its officers, agents, employees and also others on the space covered by
the Second Amendment or on the Facility with the consent of the Space Lessee.

     10.  Neither the Commissioners of the Port Authority nor any of them, nor
any officer, agent or employee thereof shall be held personally liable to the
Lessee or to the Space Lessee under any term or provision of this Consent
Agreement or because of its execution or because of any breach or alleged breach
hereof.

                                       60
<PAGE>

     IN WITNESS WHEREOF, the Port Authority, the Lessee and the Space Lessee
have executed these presents.

                                                 THE PORT AUTHORITY OF NEW YORK
                                                 AND NEW JERSEY

ATTEST:  /s/ Daniel D Bergstein                  By:  /s/ Cherrie Nanninga
      Daniel D Bergstein                         Name: Cherrie Nanninga
      Secretary The Port Authority               Title:  DIRECTOR OF REAL STATE
      of NY & NY

                                                 TELEHOUSE INTERNATIONAL CORP.
                                                 OF AMERICA

ATTEST:                                          By:  /s/ Y. SHINTANI
                                                 Name:  Y. SHINTANI
                                                 Title:  President

                                                 DIGITAL ISLAND INC.

ATTEST:                                          By: /s/ Howard Lasky
                                                 Name:  Howard Lasky
                                                 Title:  VP & General Counsel

                                       61
<PAGE>

STATE OF NEW YORK        )
COUNTY OF RICHMOND       ) ss.:

     On the 2nd day of October, 2000 before me personally came Yasuhiro Shintani
to me known, who, being by me duly sworn, did depose and say that he resides at
110 East 56th Street, NY, NY; that he is the President of TELEHOUSE
International Corporation of America, one of the corporations described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the Board of Directors of the said corporation.

                                   _____________________________________________
                                                (Notarial Seal and Stamp)

STATE OF CALIFORNIA      )
COUNTY OF SAN FRANCISCO  ) ss.

     On the 5th day of September, 2000 before me personally came Howard Lasky to
me known, who, being by me duly sworn, did depose and say that he resides at 10
Bay Vista, Ct., Mill Valley, CA 94941; that he is the VP & General Counsel of
DIGITAL ISLAND, INC., one of the corporations described in and which executed
the foregoing instrument; and that he signed his name thereto by order of the
Board of Directors of the said corporation.

                                   /s/ Alaina Austin
                                   ---------------------------------------------
                                                (Notarial Seal and Stamp)

STATE OF NEW YORK        )
COUNTY OF NEW YORK       ) ss.:

     On the 14th day of November, 2000 before me personally came Cherrie
Nanninga, to me known, who, being by me duly sworn, did depose and say that she
resides at 250 W. 24 Street, New York, New York 10011; that she is the Director
of Real Estate of the Port Authority of New York and New Jersey, one of the
corporations described in and which executed the foregoing instrument; that she
knows the seal of said corporation; that it was so affixed by order of the Board
of Commissioners of said corporation; and that she signed her name thereto by
like order.

                                   /s/ Sylvia Shepherd
                                   ---------------------------------------------
                                                (Notarial Seal and Stamp)

                                       62<PAGE>

                                                                   EXHIBIT 10.24

                                     LEASE

                                by and between

                             COUSINS/MYERS II, LLC

                                 ("Landlord")

                                      and

                             DIGITAL ISLAND, INC.

                                  ("Tenant")

                                     dated

                                 April 3, 2000

                               One Second Street

                           San Francisco, California
<PAGE>

                                     LEASE

                            Basic Lease Information

          The foregoing Basic Lease Information is incorporated in and made a
part of the Lease to which it is attached. If there is any conflict between the
Basic Lease Information and the Lease, the Basic Lease Information shall
control.

Date of Lease:                April 3, 2000

Landlord:                     COUSINS/MYERS II, LLC,
                              a Delaware limited liability company

Landlord's Address:

                       (i)    Cousins/Myers II, LLC

                              c/o Cousins Properties Incorporated
                              2500 Windy Ridge Parkway
                              Suite 1600
                              Atlanta, Georgia 30339-5683
                              Attn:  Corporate Secretary

                       (ii)   with a copy to:

                              Myers Development Company
                              525 Market Street, Suite 3440
                              San Francisco, CA 94105
                              Attn:  Mr. Jack Myers

Tenant:                       DIGITAL ISLAND, INC.,
                              a Delaware corporation

Tenant's Address:

                       (i)    Before the Rent Commencement Date:

                              45 Fremont, 12th Floor
                              San Francisco, CA 94105
                              Attn:  Jean Ann Krupp, Manager

                       (ii)   After the Rent Commencement Date:
                              One Second Street
                              San Francisco, California 94015
                              Attn:  Jean Ann Krupp, Manager

Building Address:

                              One Second Street
                              San Francisco, California 94105

Rentable Square
Feet in Premises:             158,025 rentable square feet ("RSF") [See Section
                              1(b)]

Rentable Square
<PAGE>

Feet in Building:             373,512 RSF [See Section 1(b)]

Lease Term:                   Twelve (12) years, subject to extension pursuant
                              to Exhibit K.

Expiration Date:              [See Section 2]

Premises:                     Floors 5-12 and 14 in the Building, subject to
                              adjustment to Floors 6-12 and 14 and 15, as
                              provided in Exhibit E.

Use of Premises:              General office uses, including a network
                              operation center

Base Rental:                  See Section 5 and Exhibit G

Rent Commencement Date:       The earlier of (x) the date Tenant commences
ordinary business operations in the Premises; or (y) seventy-eight (78) days
after the Final Delivery Date (defined in Section 5.2 of the Work Letter), which
Rent Commencement Date is anticipated to be February 1, 2002 (the "Anticipated
Commencement Date"), and which may be adjusted subject to the terms of the Work
Letter.

First
Delivery Date:                November 15, 2001 [See Section 5 of the Work
                              Letter]

Rent Deposit:                 [Section 4.3] $278,973.23 on the execution and
                              delivery of this Lease. $278,973.23 on October 1,
                              2000.

Tenant Improvement
Allowance:                    $30.00 per RSF

Security Deposit:             -0-

Broker                        [See Section 40]

Guarantor(s):                 N/A

                                       2
<PAGE>

                               TABLE OF CONTENTS
                                                                            Page

[TO BE INSERTED]
<PAGE>

                                                                            Page

                                       4
<PAGE>

                                   Exhibits

A        Description of Land and Building
B        Description of Premises
C        Supplemental Notice Regarding Rent Commencement Date
D        Work Letter
E        Adjustment and Expansion of Premises
F        Letter of Credit Terms
G        Base Rent Description
H        Rules and Regulations
I        Building Standard Services
J        Form of Tenant Estoppel Certificate
K        Option to Extend
<PAGE>

                                     LEASE

          This Lease (together with the Basic Lease Information and Exhibits A
through K which are incorporated into the Lease by this reference, collectively,
the "Lease") is made as of the date specified in the Basic Lease Information, by
and between COUSINS/MYERS II, LLC, a Delaware limited liability company
("Landlord"), and the tenant specified in the Basic Lease Information
("Tenant"), who hereby agree as follows:

     1.   Lease of Premises.

          (a)   Lease of Premises. Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, for the term and subject to the covenants to be
performed by Tenant, those certain premises (the "Premises") which shall be
located in the building (hereinafter referred to as "Building") to be
constructed on that certain tract of land (the "Land") more particularly
described on Exhibit "A". The Premises are outlined or crosshatched on the floor
plan(s) attached hereto as Exhibit "B" with no easement for light, view or air
included in the Premises or being granted hereunder. The "Project" is comprised
of the Building, the Land, the Building's parking facilities, any walkways,
covered walkways, tunnels or other means of access to the Building and the
Building's parking facilities, all common areas, including any lobbies or
plazas, and any other improvements or landscaping now or hereafter constructed
on the Land. Except as specifically set forth in this Lease and in the Work
Letter attached hereto as Exhibit "D", Landlord shall not be obligated to
provide or pay for any improvement, work or services related to the improvement
of the Premises. Tenant also acknowledges that Landlord has made no
representation or warranty regarding the condition of the Premises, the Building
or Project except as specifically set forth in the Work Letter.

          (b)   Recalculation of RSF. The RSF in the Building and the Premises
are approximately as set forth in the Basic Lease Information above. For
purposes hereof, the RSF of the Premises and the Building shall be calculated by
Landlord pursuant to the Standard Method for Measuring Floor Area in Office
Buildings, ANSI Z65.1-1996. The RSF of the Premises and the Building shall be
initially verified by Landlord's planner/designer after the Building is
completed. Tenant's architect may consult with Landlord regarding the
verification; however, the reasonable good faith determination of Landlord's
planner/designer shall be conclusive and binding upon the parties. In the event
that Landlord's planner/designer determines that the RSF of the Premises or the
Building are different from that set forth in this Lease, all amounts,
percentages and figures appearing or referred to in this Lease based upon the
incorrect RSF shall be modified in accordance with such determination. If such
determination is made, it will be confirmed in writing by Landlord to Tenant.

     2.   Term. The term of this Lease ("Lease Term") shall commence on the Rent
Commencement Date and, unless sooner terminated as provided in this Lease, shall
end on the "Expiration Date", which shall be twelve (12) years after the Rent
Commencement Date, subject to extension as provided in Exhibit K [Option to
Extend]. However, if the Expiration Date would not otherwise fall on the last
day of a calendar month, then the Expiration Date shall be the last day of the
calendar month in which the Expiration Date would otherwise fall. Promptly after
the Rent Commencement Date, Landlord shall send to Tenant a Supplemental Notice
in the form of Exhibit "C" specifying the Rent Commencement Date, the date of
expiration of the Lease Term and the other matters described therein. If for any
reason Landlord does not deliver possession of the Premises to Tenant on or
before the Anticipated Commencement Date, this Lease shall not be void or
voidable and Landlord shall not be liable to Tenant for any loss or damage
resulting therefrom, except as provided in Section 1 of the Work Letter.

          Notwithstanding that the Lease Term does not commence until the Rent
Commencement Date, the provisions of this Lease shall be effective and binding
upon Landlord and Tenant once this Lease has been executed and delivered by both
Landlord and Tenant.

     3.   Possession.

          (a)  The obligations of Landlord and Tenant with respect to the
initial leasehold improvements to the Premises are set forth in the Work Letter
attached hereto as Exhibit "D" ("Work Letter"). By taking possession of the
Premises, Tenant shall be deemed conclusively to establish that Landlord's
construction obligations with respect to the Premises have been completed in
accordance with the plans and specifications
<PAGE>

therefor and that the Premises, to the extent of Landlord's construction
obligations with respect thereto, are in good and satisfactory condition,
subject only to completion of any incomplete or collective items specified in a
"punch list" approved by Landlord and Tenant as provided in the Work Letter and
to Landlord's obligations under Section 3(b) below.

          (b)  Tenant shall, at Tenant's sole cost and expense, promptly comply
with all laws, ordinances, rules, regulations, orders and other requirements of
any government or public authority which may be in force with respect to each
floor of the Premises after the Delivery Date for such floor, with all
requirements of any board of fire underwriters or similar body now or hereafter
constituted, and with all directions and certificates of occupancy issued
pursuant to any law by any governmental agency or body, insofar as any of the
foregoing relate to or are required by the condition, use or occupancy of the
Premises or the operation, use or maintenance of any personal property, trade
fixtures, machinery, equipment or improvements in the Premises; provided,
however, that Landlord shall be responsible, at its sole cost and expense, for
causing the Base Project to comply with all such requirements which were in
effect as of the dates of the respective permits Landlord obtained to construct
the Base Project and, to the extent covered by warranties received by Landlord
with respect thereto, for repairing all Base Project items. The judgment of any
court of competent jurisdiction or the admission of Tenant in any judicial
action, regardless of whether Landlord is a party thereto, that Tenant has
violated any of the foregoing laws, ordinances, etc., shall be conclusive of
that fact as between Landlord and Tenant.

     4.   Rental Payments; Rent Deposit.

          4.1. Commencing on the Rent Commencement Date and continuing
throughout the Lease Term, Tenant hereby agrees to pay all Rent due and payable
under this Lease. As used in this Lease, the term "Rent" shall mean the Base
Rental, Tenant's Forecast Additional Rental, Tenant's Additional Rental, and any
other amounts that Tenant assumes or agrees to pay under the provisions of this
Lease that are owed to Landlord, including without limitation any and all other
sums that may become due by reason of any default of Tenant or failure on
Tenant's part to comply with the agreements, terms, covenants and conditions of
this Lease to be performed by Tenant. Base Rental and Tenant's Forecast
Additional Rental shall be due and payable in twelve (12) equal installments on
the first day of each calendar month, commencing on the Rent Commencement Date
and continuing thereafter throughout the Lease Term and any extensions or
renewals thereof. Tenant hereby agrees to pay such Rent to Landlord at
Landlord's address as provided herein (or such other address as Landlord
designates from time to time) monthly in advance. Tenant shall pay all Rent and
other sums of money which are due and payable by Tenant to Landlord at the times
and in the manner provided in this Lease, without demand, set-off, counterclaim
or abatement (except as specifically provided to the contrary herein).

          4.2. If the Rent Commencement Date is other than the first day of a
calendar month or if this Lease terminates on other than the last day of a
calendar month, then the installments of Base Rental, Tenant's Forecast
Additional Rental and Tenant's Additional Rental for such month or months shall
be prorated on a daily basis and the installment or installments so prorated
shall be paid in advance.

          4.3. As security for Tenant's obligations to take possession of the
Premises in accordance with the terms of this Lease and to comply with all of
Tenant's obligations hereunder, Tenant has deposited with Landlord on the date
of execution of the Lease one half (1/2) of the sum set forth under "Rent
Deposit" in the Basic Lease Information; and Tenant agrees to deposit with
Landlord the other one half (1/2) of the Rent Deposit on or before October 1,
2000. Such amount shall be applied by Landlord to the first monthly installment
of Base Rental as it becomes due hereunder. In the event Tenant fails to take
possession of the Premises when required or otherwise fails to comply with any
of Tenant's obligations or warranties hereunder, said sum shall be retained by
Landlord for application in reduction, but not in satisfaction, of damages
suffered by Landlord as a result of Tenant's breach. Landlord shall not be
required to keep the Rent Deposit separate from its general accounts.

          4.4. Within twenty (20) days of the execution and delivery of this
Lease by Landlord and Tenant, Tenant shall deliver to Landlord the initial
letter of credit described in Exhibit F, and no later than the First Delivery
Date (defined in Section 5 of the Work Letter) Tenant shall deliver to Landlord
the permanent letter of credit described in Exhibit F.

                                       2
<PAGE>

     5.   Base Rental. From and after the Rent Commencement Date Tenant
shall pay to Landlord a base annual rental (herein called "Base Rental") equal
to the Base Rental set forth in the Basic Lease Information and Exhibit G,
adjusted as provided in Section 1(b).

     6.   Additional Rental.

          (a)  For purposes of this Lease, "Tenant's Forecast Additional Rental"
means Landlord's reasonable estimate of Tenant's Additional Rental for the
initial period of the Lease Term from the Rent Commencement Date until the end
of the first calendar year of the Lease Term, and for all subsequent calendar
years or portions thereof occurring during the balance of the Lease Term. If at
any time it reasonably appears to Landlord that Tenant's Additional Rental for
the current calendar year will vary from Landlord's estimate, Landlord shall
have the right to revise its estimate for such year by notice to Tenant and
subsequent payments by Tenant for such year shall be based upon such revised
estimate. Failure to make such a revision shall not prejudice Landlord's right
to collect the full amount of Tenant's Additional Rental. Prior to the Rent
Commencement Date and thereafter prior to the beginning of each calendar year
during the Lease Term, including any extensions thereof, Landlord shall present
to Tenant a statement of Tenant's Forecast Additional Rental for such calendar
year; provided, however, that if such statement is not given prior to the
beginning of any calendar year, Tenant shall continue to pay during the next
ensuing calendar year on the same basis as in the prior calendar year until the
month after such statement is delivered to Ten ant. Commencing with the first
day of the calendar month following the month in which the Tenant's Forecast
Additional Rental was delivered to Tenant, Tenant shall pay Tenant's Forecast
Additional Rental (less amounts, if any, previously paid toward such excess for
such year) to Landlord in equal monthly installments over the remainder of such
calendar year in advance on the first day of each month.

          (b)  For purposes of this Lease, "Tenant's Additional Rental" means
for each calendar year (or portion thereof) during the Lease Term Tenant's Share
of the Operating Expenses (as defined below). "Expense Year" means each calendar
year (or portion thereof) during the Lease Term, although Landlord, upon notice
to Tenant, may change the Expense Year from time to time to any other twelve
(12) consecutive-month period. In the event of any such change, Tenant's
Additional Rental shall be equitably adjusted for any Expense Year involved in
any change. "Tenant's Share" shall be determined by dividing the RSF of the
Premises by the greater of (i) ninety-five percent (95%) of the RSF of the
Building and (ii) the total number of RSF occupied in the Building for the
Expense Year in question on an average annualized basis, expressed as a
percentage. In the event during any Expense Year the Building is less than
ninety-five percent (95%) occupied on an average annualized basis, Operating
Expenses which vary with occupancy of the Building ("Variable Operating
Expenses") shall be adjusted to reflect the Operating Expenses of the Building
as though it were ninety-five percent (95%) occupied for such year on an average
annualized basis, and the increase or decrease in the sums owed pursuant to this
Section 6 shall be based upon such Operating Expenses as so adjusted. Therefore,
if the Variable Operating Expenses actually incurred by Landlord are lower than
would be incurred if at least ninety-five percent (95%) of the Building were
occupied or if Landlord is not furnishing any particular item(s) of work or
services (the cost of which would otherwise be included within Operating
Expenses) to portions of the Building because (A) such portions are not
occupied, (B) such item of work or services is not required or desired by the
tenant of such portion and the same is not included in such tenant's Operating
Expenses under its lease, or (C) such tenant is itself obtaining such item of
work or services and the same is not included in such tenant's Operating
Expenses under its lease then appropriate adjustments shall be made to determine
Variable Operating Expenses for such calendar year as though the Building were
actually occupied to the extent of the greater of (1) ninety-five percent (95%)
of the number of RSF in the Building; or (2) the total number of RSF occupied in
the Building for such calendar year on an average annualized basis and as though
Landlord had furnished such item of work or services to the greater of (1) or
(2) above.

          (c)  Within one hundred fifty (150) days but no later than two hundred
seventy (270) days after the end of the calendar year in which the Rent
Commencement Date occurs and of each Expense Year thereafter during the Lease
Term, or as soon thereafter as practicable, Landlord shall provide Tenant a
statement showing the Operating Expenses for said Expense Year, as prepared by a
certified public accounting firm designated by Landlord, and a statement
prepared by Landlord comparing Tenant's Forecast Additional Rental with Tenant's
Additional Rental (the "Reconciliation Statement"). In the event Tenant's
Forecast Additional Rental paid exceeds Tenant's Additional Rental for said
Expense Year, Landlord shall credit such excess against Rent next due hereunder
or, if the Lease Term has expired or is about to expire, refund such excess to
Tenant within thirty (30)
                                       3
<PAGE>

     days after Landlord's preparation of such Reconciliation Statement if
     Tenant is not in default under this Lease (in the instance of a default
     such excess shall be held as additional security for Tenant's performance,
     may be applied by Landlord to cure any such default, and shall not be
     refunded until any such default is cured). In the event that Tenant's
     Additional Rental exceeds Tenant's Forecast Additional Rental paid for said
     Expense Year, Tenant shall pay Landlord, within thirty (30) days of receipt
     of the statement, an amount equal to such difference. The provisions of
     this paragraph (c) shall survive the expiration or earlier termination of
     this Lease.

               (d)  For so long as Tenant is not in default under this Lease
     beyond any applicable cure or grace period, Landlord's books and records
     pertaining to the calculation of Operating Expenses for any Expense Year
     within the Lease Term may be audited, at Tenant's expense, by an authorized
     representative of Tenant for a period of one hundred twenty (120) days
     following the delivery of a Reconciliation Statement (or any Statement
     revising the same); provided, that Tenant shall give Landlord not less than
     thirty (30) days' prior written notice of any such audit. For purposes
     hereof an authorized representative of Tenant shall mean a bona fide
     employee of Tenant, any national accounting firm, or any other party
     reasonably approved in writing by Landlord, in each case who is not
     representing, and agrees not to represent, any other tenant or subtenant in
     the Building regarding Additional Rental. In no event shall an authorized
     representative of Tenant include the owner of any office building in the
     metropolitan San Francisco, California area or any affiliate of such owner.
     Prior to the commencement of any audit, Tenant shall cause its authorized
     representative to agree in writing for the benefit of Landlord that such
     representative will keep the results of the audit confidential and that
     such representative will not disclose or divulge the results of such audit
     except to Tenant and Landlord and except in connection with any dispute
     between Landlord and Tenant relating to Operating Expenses. Such audit
     shall be conducted during reasonable business hours at Landlord's office
     where Landlord's books and records are maintained. Tenant shall cause a
     written audit report to be prepared by its authorized representative
     following any such audit and shall provide Landlord with a copy of such
     report promptly after receipt thereof by Tenant. If Landlord's calculation
     of Tenant's Additional Rental for the audited Expense Year is incorrect,
     then Tenant shall be entitled to a prompt refund of any overpayment or
     Tenant shall promptly pay to Landlord the amount of any underpayment, as
     the case may be. Tenant waives the right to dispute or contest, and shall
     have no right to dispute or contest, any matter relating to the calculation
     of Operating Expenses or other forms of Rent under the Lease (and waives
     the right to inspect Landlord's records with respect thereto) with respect
     to each Expense Year during the Lease Term for which a Reconciliation
     Statement is given to Tenant if no claim or dispute with respect thereto is
     asserted by Tenant in writing to Landlord within one hundred twenty (120)
     days of delivery to Tenant of the original or most recent Reconciliation
     Statement with respect thereto. All disputes under this Section 6 shall be
     resolved by arbitration pursuant to Section 42.

          7.   Operating Expenses.

               (a)  For the purposes of this Lease, "Operating Expenses" shall
     mean all expenses, costs and disbursements (but not specific costs billed
     to or paid directly by specific tenants of the Building) of every kind and
     nature, computed on the accrual basis, relating to or incurred or paid by
     Landlord in connection with the ownership, management, operation, repair
     and maintenance of the Project, including but not limited to, the
     following:

                    (1)  wages, salaries and other costs of all on-site and off-
     site employees at or below the level of senior property manager engaged
     either full or part-time in the operation, management, maintenance or
     access control of the Project, including taxes, insurance and benefits
     relating to such employees, allocated based upon the time such employees
     are engaged directly in providing such services;

                    (2)  the cost of all supplies, tools, equipment and
     materials used in the operation, management, maintenance and access control
     of the Project;

                    (3)  the cost of all utilities for the Project, including
     but not limited to the cost of electricity, gas, water, sewer services and
     power for heating, lighting, air conditioning and ventilating;

                    (4)  the cost of all maintenance and service agreements for
     the Project and the equipment therein, including but not limited to
     security service, window cleaning, elevator maintenance, HVAC

                                       4
<PAGE>

     maintenance, janitorial service, waste recycling service, landscaping
     maintenance, customary landscaping replacement, and maintenance (including
     striping and painting) of the parking area;

                    (5)  the cost of repairs and general maintenance of the
     Project, including the cost of repair following a casualty to the extent
     not reimbursed by insurance proceeds or other payments from a third party,
     subject to Section 20(c) below;

                    (6)  amortization (together with reasonable financing
     charges, whether or not actually incurred) of the cost of acquisition
     and/or installation of capital investment items (including security and
     energy management equipment), amortized over their respective useful lives,
     which are installed for the purpose of reducing operating expenses,
     promoting safety, complying with governmental requirements (although this
     provision shall not relieve Landlord of its obligation in the proviso in
     Section 3(b)), or maintaining the first-class nature of the Project
     including capital investment items which are replacements of items which
     are obsolete or cannot be repaired in an economically feasible manner, but
     not including upgrades such as replacing of the exterior surface of the
     Building or reconfiguring or expanding the Building, the Common Area or the
     lobby or substantially upgrading the finishes therein;

                    (7)  the cost of casualty, rental loss, liability and other
     insurance applicable to the Project, including earthquake, including
     commercially reasonable deductibles, and Landlord's personal property used
     in connection therewith;

                    (8)  the cost of trash and garbage removal, air quality
     audits, vermin extermination, and snow, ice and debris removal;

                    (9)  the cost of legal and accounting services incurred by
     Landlord in connection with the management, maintenance, operation and
     repair of the Project, excluding the owner's or Landlord's general
     accounting, such as partnership statements and tax returns, and excluding
     services described in Section 7(b)(13) below;

                    (10) the cost of operating the management office for the
     Project, including the cost of office supplies, bulletins or newsletters
     distributed to tenants, postage, telephone expenses, maintenance and repair
     of office equipment, non-capital investment equipment, amortization
     (together with reasonable financing charges) of the cost of capital
     investment equipment not in excess of $25,000 in any calendar year, and
     rent;

                    (11) the cost of complying with Section 43(r) of this Lease;

                    (12) the cost of complying with the rules and regulations
     applicable to the Project as mandated by governmental authorities with
     jurisdiction over the Project, including employment brokerage services
     pursuant to San Francisco Planning Code Section 164;

                    (13) a management fee contribution equal to two percent
     (2.0%) of Tenant's Base Rental and Additional Rental (but Additional Rental
     shall not include the management fee for purposes of this calculation); and

                    (14) all "Tax Expenses", which means all taxes, assessments
     and governmental charges attributable to the Project, whether or not
     directly paid by Landlord, whether federal, state, county or municipal and
     whether they be by taxing districts or authorities presently taxing the
     Project or by others subsequently created or otherwise, and any other taxes
     and assessments attributable to the Project or its operation (and the costs
     of contesting any of the same), including community improvement district
     taxes and business license taxes and fees, excluding, however, taxes and
     assessments imposed on the personal property of the tenants of the Project,
     federal and state taxes on income, death taxes, franchise taxes, penalties
     (but only if Landlord is negligent in paying such taxes in a timely
     manner), interest, transfer taxes, and any taxes [other than business
     license taxes and fees and taxes on Landlord's rental income from the
     Project but not its other income] imposed or measured on or by the income
     of Landlord from the operation of the Project.

                                       5
<PAGE>

               (b)  For purposes of this Lease, and notwithstanding anything in
     any other provision of this Lease to the contrary, "Operating Expenses"
     shall not include the following:

                    (1)  the cost of any special work or service performed for
     any tenant (including Tenant) at such tenant's cost;

                    (2)  the cost of installing, operating and maintaining any
     specialty service, such as an observatory, broadcasting facility, luncheon
     club, restaurant, cafeteria, retail store, sundry shop, newsstand, or
     concession, but only to the extent such costs exceed those which would
     normally be expected to be incurred had such space been general office
     space;

                    (3)  the cost of correcting defects in construction of the
     Base Project for which Landlord is responsible under the Work Letter,
     including the failure of such construction to comply with applicable laws
     as of the date the respective permits for construction work were obtained;

                    (4)  compensation paid to officers and executives of
     Landlord (but it is understood that the regional director of property
     management and other employees below the grade of regional director of
     property management may carry a title such as vice president and the
     salaries and related benefits of these officers/employees of Landlord would
     be allowable Operating Expenses under Section 7(a)( 1))

                    (5)  the cost of any items for which Landlord is reimbursed
     by insurance, condemnation or warranties;

                    (6)  the cost of any additions, improvements, changes,
     replacements and other items which are made in order to prepare for a new
     tenant's occupancy;

                    (7)  the cost of repairs incurred by reason of fire or other
     casualty to the extent reimbursed by insurance proceeds under policies
     maintained by Landlord;

                    (8)  insurance premiums to the extent Landlord is directly
     reimbursed therefor, other than through Operating Expenses;

                    (9)  interest on debt or amortization payments on any
     mortgage or deed of trust and rental under any ground lease or other
     underlying lease except to the extent, in each case, that the debt which is
     being amortized was incurred to pay for an expense which is properly
     included in Operating Expenses pursuant to Section 7(a)

                    (10) any real estate brokerage commissions or other costs
     incurred in procuring tenants or any fee in lieu of such commissions;

                    (11) any advertising and promotional expenses incurred in
     connection with the marketing of the Project for sale or lease;

                    (12) any expenses for repairs or maintenance. which are
     covered by warranties and service contracts, to the extent such maintenance
     and repairs are made at no cost to Landlord;

                    (13) legal expenses arising out of the construction of the
     improvements on the Land or the enforcement or negotiation of the
     provisions of any lease affecting the Land or building, including without
     limitation this Lease, 6r relating to the sale, financing or refinancing of
     the Project or any interest therein except to the extent directly related
     to financing in connection with the management, maintenance, operation or
     repair of the Project;

                                       6
<PAGE>

                    (14) costs of environmental remediation, including the
     remediation of any soils or ground water or the removal of any underground
     storage tanks from the Project;

                    (15) any costs related to the valet parking at the parking
     garage at the Project;

                    (16) costs and expenses relating to the operation,
     management, maintenance and repair incurred solely for the benefit of
     retail tenants;

                    (17) fines and penalties assessed by a court or governmental
     agency to the extent such fines and penalties are based on Landlord's
     violation of law or negligence in failing to perform an act or pay an
     amount due;

                    (18) cost of sculptures, paintings or any other objects of
     fine art, other than replacements of the same to the extent permitted by
     Section 7(a)(6). Operating Expenses shall include such costs to the extent
     they are reasonably related in use and cost (adjusted by inflation) to
     sculptures, paintings or fine art which are originally purchased at
     Landlord's expense;

                    (19) costs or expenses of services or supplies provided by
     Landlord or any person or entity affiliated with Landlord to the extent
     such costs or expenses are in excess of those that would be generally be
     charged by non-affiliated parties in arms' length transactions;

                    (20) legal, accounting or consulting costs incurred in
     connection with the acquisition or disposition of the Project; and

                    (21) capital expenditures except as specifically provided in
     Sections 7(a)(5), (6) and (10) above.

          8.   Tenant Taxes; Rent Taxes.

               Tenant shall pay promptly when due all taxes directly or
     indirectly imposed or assessed upon Tenant's gross sales, business
     operations, machinery, equipment, trade fixtures and other personal
     property or assets, whether such taxes are assessed against Tenant,
     Landlord or the Building. In the event that such taxes are imposed or
     assessed against Landlord or the Building, Landlord shall furnish Tenant
     with all applicable tax bills, public charges and other assessments or
     impositions and Tenant shall forthwith pay the same either directly to the
     taxing authority or, at Landlord's option, to Landlord. In addition, in the
     event there is imposed at any time a tax upon and/or measured by the rental
     payable by Tenant under this Lease, whether by way of a sales or use tax or
     otherwise, Tenant shall be responsible for the payment of such tax and
     shall pay the same on or prior to the due date thereof, provided, however,
     that the foregoing shall not include any inheritance, estate, succession,
     transfer, gift or income tax imposed on Landlord.

               Tenant will be responsible for ad valorem taxes on its personal
     property and on the value of the leasehold improvements in the Premises to
     the extent that the same exceed Building Standard allowances, if said taxes
     are based upon an assessment which includes the cost of such leasehold
     improvements in excess of Building Standard allowances (and if the taxing
     authorities do not separately assess Tenant's leasehold improvements,
     Landlord may make an appropriate allocation of the ad valorem taxes
     allocated to the Project to give effect to this sentence), and such taxes
     relating to other tenants of the Building will not be included in Operating
     Expenses. As used herein, the phrase "Building Standard allowances" shall
     be deemed to mean an amount equal to Thirty Dollars ($30.00) per RSF in the
     Premises.

          9.   Payments.  All payments of Rent and other payments to be made to
     Landlord shall be made on a timely basis and shall be payable to Landlord
     or as Landlord may otherwise designate. All such payments shall be mailed
     or delivered to Landlord's Address designated in the Basic Lease
     Information above or at such other place as Landlord may designate from
     time to time in writing. If mailed, all payments shall be mailed in
     sufficient time and with adequate postage thereon to be received in
     Landlord's account by no later than the due date for such payment.

                                       7
<PAGE>

     Tenant agrees to pay to Landlord Fifty Dollars ($50.00) (to be increased by
     inflation increases during the Lease Term) for each check presented to
     Landlord in payment of any obligation of Tenant which is not paid by the
     bank on which it is drawn, together with interest from and after the due
     date for such payment at the "Interest Rate," which for purposes of this
     Lease shall mean the rate announced by Bank of America, N.A. or its
     successor in interest, as its prime or reference rate plus two percent (2%)
     per annum (not to exceed the maximum rate permitted by law).

          10.  Late Charges. Any Rent or other amounts payable to Landlord under
     this Lease, if not paid by the fifth day of the month with respect to Base
     Rental and Tenant's Forecast Additional Rental, or within five (5) days
     after the due date specified on any invoice from Landlord for any other
     amounts payable hereunder, shall incur a late charge of four percent (4%)
     of the overdue amount (the "Late Charge") for Landlord's administrative
     expense in processing such delinquent payment and in addition thereto shall
     bear interest at the Interest Rate from and after the due date for such
     payment. Notwithstanding the foregoing with respect to the first late
     payment of Rent during any calendar year during the Lease Term, Tenant
     shall not be required to pay such Late Charge unless such failure continues
     for a period of three (3) business days after written notice of such
     failure is delivered by Landlord to Tenant.

          11.  Use Rules. The Premises shall be used solely for the purposes set
     forth in the Basic Lease Information and no other purposes and consistent
     with the character of the Building as a first-class office building. The
     occupancy rate of the Premises shall in no event be more than one (1)
     person per one hundred seventy-five (175) RSF within the Premises. Tenant
     covenants and agrees to abide by the Rules and Regulations attached as
     Exhibit H in all respects as now set forth or as changed from time to time
     by Landlord. Landlord shall have the right at all times during the Lease
     Term to establish and enforce such reasonable and non-discriminating rules
     and regulations as it deems necessary in its reasonable discretion to
     protect the tenantability, safety, operation, and welfare of the Premises
     and the Project. In the event of any inconsistency between the Lease and
     the Rules and Regulations, the Lease shall prevail.

          12.  Alterations.

               (a)  Tenant shall not make, suffer or permit to be made any
     alterations, additions or improvements to or of the Premises or any part
     thereof, or remove any portion of the Premises which is affixed thereto, or
     attach any fixtures or equipment thereto (collectively, the "Alterations"),
     without first obtaining Landlord's written consent, which consent shall not
     be unreasonably withheld or delayed and which consent shall be requested by
     Tenant not less than fifteen (15) business days prior to the commencement
     of any such work. If Landlord fails to approve or disapprove Tenant's
     request within such fifteen (15) business day period, Landlord shall be
     deemed to have approved such request, but only if such request contained a
     statement in at least 10 point type, in all capital letters, to such effect
     which references this Section. Notwithstanding the foregoing, the
     construction of the Tenant Improvements (as defined in the Work Letter)
     shall be governed by the terms of the Work Letter and not the terms of this
     Section 12.

               (b)  Landlord may impose, as a condition of its consent to all
     Alterations, such reasonable requirements as Landlord deems desirable,
     including, but not limited to: (i) the requirement that upon Landlord's
     request, made at the time such consent is given, Tenant shall, at Tenant's
     expense, remove such Alterations upon the expiration or any early
     termination of the Lease Term and repair any damage to the Premises and
     Building caused by such removal; and/or (ii) the requirement that Tenant
     utilize for such purposes only contractors, materials, mechanics and
     materialmen selected by Tenant and approved by Landlord, which approval
     shall not be unreasonably withheld or delayed; provided, however, that in
     any event, a contractor of Landlord's selection shall perform all
     mechanical, electrical, plumbing, structural, and heating, ventilation and
     air conditioning work. Notwithstanding the foregoing, to the extent any
     Alterations would materially affect the Building Systems, the exterior
     appearance of the Building or any structural component of the Building,
     such Alterations shall be subject to Landlord's consent in the exercise of
     its sole discretion; to the extent such Alterations would merely affect the
     Building Systems, but not materially, Tenant shall observe reasonable rules
     relating thereto established by Landlord. Tenant shall construct such
     Alterations and perform any repairs which Tenant is obligated to perform
     hereunder at Tenant's cost and in conformance with any and all applicable
     rules and regulations of any federal, state, county or municipal code or
     ordinance and pursuant to a valid building permit, issued by the city in
     which the Building is located, in conformance with Landlord's construction
     rules and regulations. Landlord's approval of the plans,

                                       8
<PAGE>

     specifications and working drawings for Alterations shall create no
     responsibility or liability on the part of Landlord for their completeness,
     design sufficiency, or compliance with all laws, rules and regulations of
     governmental agencies or authorities. All work with respect to any
     Alterations must be done in a good and workmanlike manner and diligently
     prosecuted to completion to the end that the Premises shall at all times be
     a complete unit except during the period of work. Tenant shall cause all
     work to be performed in such manner as not to obstruct access to the
     Building or Project or the common areas for any other tenant of the
     Project, and as not to obstruct the business of Landlord or other tenants
     in the Project, or unreasonably interfere with the labor force working on
     the Project. In the event that Tenant makes any Alterations, in excess of
     $10,000; Tenant agrees to carry "Builder's Special Form" insurance in an
     amount reasonably approved by Landlord covering the construction of such
     Alterations, and such other insurance as Landlord may require, it being
     understood and agreed that all of such Alterations shall be insured by
     Tenant pursuant to Section 15 immediately upon completion thereof. In
     addition, for Alterations costing in excess of $75,000, Landlord may, in
     its discretion, require Tenant to obtain a lien and completion bond or some
     alternate form of security reasonably satisfactory to Landlord in an amount
     sufficient to ensure the lien-free completion of such Alterations and
     naming Landlord as a co-obligee. Upon completion of any Alterations, Tenant
     agrees to cause a Notice of Completion to be recorded in the office of the
     Recorder of the county in which the Building is located in accordance with
     Section 3093 of the Civil Code of the State of California or any successor
     statute, and Tenant shall deliver to the Building management office a
     reproducible copy of the "as built" drawings of the Alterations and, if
     available, such drawings in "CAD" format.

                    (c)  All Alterations which may be installed or placed in or
     about the Premises, and all signs installed in, on or about the Premises,
     from time to time, shall be at the sole cost of Tenant and shall be and
     become the property of Landlord, other than trade fixtures and equipment
     which may be removed without material damage to Premises. If Tenant fails
     to complete such removal and/or to repair any damage caused by the removal
     of any Alterations to the extent required under this Lease, then as a
     matter which shall survive termination of this Lease, Landlord may do so
     and may charge the cost thereof to Tenant. Tenant hereby indemnifies and
     holds Landlord harmless from any liability, cost, obligation, expense or
     claim of lien in any manner relating to the installation, placement,
     removal or financing of any Alterations by Tenant or at Tenant's behest.

                    (d)  Notwithstanding anything contained in this Section 12
     to the contrary, Tenant shall have the right, without Landlord's consent
     but upon at least fifteen (I 5) days' prior written notice to Landlord, to
     make non-structural Alterations to the Premises which do not materially
     affect Building Systems or the exterior appearance of the Building provided
     that the cost of such Alterations does not exceed Fifty Thousand Dollars
     ($50,000) in any calendar year.

               13.  Repairs.

                    (a)  Landlord shall maintain in good order and repair, and
     as a first class office building, subject to normal wear and tear and
     subject to casualty and condemnation, the Building (excluding the portions
     of the Premises for which Tenant is responsible under Section 13(b) below
     and other portions of the Building leased to other tenants), the Building
     parking facilities, the public areas and the landscaped areas.
     Notwithstanding the foregoing obligation, the cost of any repairs or
     maintenance to the foregoing necessitated by the willful misconduct or
     negligence of Tenant or its agents, contractors, employees, invitees,
     licensees, tenants or assigns, shall be borne solely by Tenant, shall be
     deemed Rent hereunder and shall be reimbursed by Tenant to Landlord upon
     demand. Landlord shall not be liable for any failure to make any such
     repairs, or to perform any maintenance unless such failure shall persist
     for an unreasonable time after written notice of the need of such repairs
     or maintenance is given to Landlord by Tenant. There shall be no abatement
     of rent and no liability of Landlord by reason of any injury to or
     interference with Tenant's business arising from the making of any repairs,
     alterations or improvements in or to any portion of the Project, Building
     or the Premises or in or to fixtures, appurtenances and equipment therein;
     provided, however, that in making any such repairs, alterations or
     improvements, Landlord shall use commercially reasonable efforts to
     minimize interference with Tenant's use of and access to the Premises.
     Landlord shall not be required to make any repairs or improvements to the
     Premises except structural repairs which it is aware are necessary for
     safety and tenantability, and except that Landlord shall make repairs to
     all Building Systems (defined in Section 1 of the Work Letter) serving the
     Premises, to the extent such repairs are not necessary on account of
     Tenant's breach of this Lease or negligent act. This paragraph (a) shall
     not operate to relieve Landlord of its obligation under Section 3(b).

                                       9
<PAGE>

                    (b)  Tenant agrees that, at its sole cost and expense, it
     will keep and maintain the Premises and all alterations, additions and
     improvements thereto in good condition and repair (i) except for normal
     wear and tear, and (ii) subject to casualty and condemnation. Tenant shall
     at once report, in writing, to Landlord any defective or dangerous
     condition known to Tenant. Tenant shall have no responsibility for
     maintaining any portion of the Building structure or systems (including
     mechanical, electrical, HVAC, life safety and plumbing) which may be
     located in the Premises. At Landlord's option, if Tenant fails to maintain
     the Premises or to make such repairs within ten (10) days after written
     notice from Landlord that such repairs are needed, Landlord may, but need
     not, perform such maintenance or make such repairs, in which case Tenant
     shall pay Landlord the cost thereof including a percentage of the cost
     thereof (to be uniformly established for the Building) sufficient to
     reimburse Landlord for all overhead, general conditions, fees and other
     costs or expenses arising from Landlord's involvement upon being billed for
     same. Landlord may, but shall not be required to, enter the Premises at all
     reasonable times (but upon not less than 24 hours' prior notice, except in
     the event of an emergency or otherwise approved by Tenant, to make such
     repairs and maintenance to the Premises or to the Building or to any
     equipment located in the Building as Landlord shall desire or reasonably
     deem necessary or as Landlord may be required to do by governmental or
     quasi-governmental authority or court order or decree. To the fullest
     extent permitted by law, Tenant hereby waives and releases all rights to
     make repairs at the expense of Landlord or in lieu thereof to vacate the
     Premises as may be provided by any law, statute or ordinance now or
     hereafter in effect, including Sections 1941 and 1942 of the California
     Civil Code. Landlord has no obligation and has made no promise to alter,
     remodel, improve, repair, decorate or paint the Premises or any part
     thereof except as specifically and expressly herein set forth.

               14.  Landlord's Right of Entry. Landlord shall retain duplicate
keys to all doors of the Premises and Landlord and its agents, employees and
independent contractors shall have the right to enter the Premises at reasonable
hours to inspect and examine same, to make repairs, additions, alterations, and
improvements to exhibit the Premises to mortgagees, prospective mortgagees,
purchasers or (during the last eighteen (18) months of the Lease Term) tenants,
to post notices of nonresponsibility and to inspect the Premises to ascertain
that Tenant is complying with all of its covenants and obligations hereunder,
all without being liable to Tenant in any manner whatsoever for any damages
arising therefrom; provided, however, that Landlord shall, except in case of
emergency, afford Tenant such prior notification of an entry into the Premises
as shall be reasonably practicable under the circumstances, but not less than
twenty-four (24) hours, unless otherwise agreed to by Tenant; and provided,
further, that Landlord shall use commercially reasonable efforts to minimize
interference with Tenant's use of and access to the Premises. Landlord shall be
allowed to take into and through the Premises any and all materials that may be
required to make any such repairs, additions, alterations or improvements.
Notwithstanding anything to the contrary contained in this Section 14, Landlord
may enter the Premises at any time to (a) perform services required of Landlord;
(b) take possession due to any breach of this Lease in the manner provided
herein; and (c) perform any covenants of Tenant which Tenant fails to perform or
commence to perform within ten (10) days after written notice from Landlord of
such failure and thereafter diligently pursue to completion. Any such entries
shall be without the abatement of Rent and shall include the right to take such
reasonable steps as are required to accomplish the stated purposes. Tenant
hereby waives any claims for damages or for any injuries or inconvenience to or
interference with Tenant's business, lost profits, any loss of occupancy or
quiet enjoyment of the Premises, and any other loss occasioned thereby;
provided, however, that Landlord uses commercially reasonable efforts to
minimize interference with Tenant's use of and access to the Premises. In an
emergency, Landlord shall have the right to use any means that Landlord may deem
proper to open the doors in and to the Premises. Any entry into the Premises in
the manner hereinbefore described shall not be deemed to be a forcible or
unlawful entry into, or a detainer of; the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises.
Notwithstanding the foregoing, Landlord may only access Tenant's computer rooms
and network operations center in the presence of Tenant's representatives,
except in the event of an emergency.

          15.  Insurance.

               (a)  Tenant shall procure at its expense and maintain throughout
     the Lease Term a policy or policies of special form/all-risk insurance
     insuring the lull replacement cost of its furniture, trade fixtures,
     equipment, supplies, and other personal property owned, leased, held or
     possessed by it and contained in the Premises, together with the excess
     value of the improvements to the Premises over the Tenant Improvement
     Allowance, and worker's compensation insurance as required by applicable
     law. Tenant shall also procure at its expense and maintain throughout the
     Lease Term a policy or policies of commercial general liability insurance,

                                      10
<PAGE>

     insuring Tenant, Landlord and any other person designated by Landlord,
     against liability for injury to or death of a person or persons and for
     damage to property occasioned by or arising out of any construction work
     being done on the Premises, or arising out of the condition, use, or
     occupancy of the Premises, or in any way occasioned by or arising out of
     the activities of Tenant, its agents, contractors, employees, guests, or
     licensees in the Premises, or other portions of the Building or the
     Project, the limits of such policy or policies to be in combined single
     limits for both damage to property and personal injury and in amounts not
     less than Five Million Dollars ($5,000,000) for each occurrence and in the
     aggregate. Such insurance shall, in addition, contain standard contractual
     liability coverage. All insurance policies procured and maintained by
     Tenant pursuant to this paragraph(a) (i) shall name Landlord and any
     additional parties designated by Landlord as additional insured; (ii) shall
     be carried with companies licensed to do business in the State of
     California having a rating from Best's Insurance Reports of not less than
     A-X; and (iii) shall be non-cancelable and not subject to change except
     after thirty (30) days' written notice to Landlord and any mortgagee or
     underlying ground lessor of Landlord; (iv) shall be primary insurance as to
     all claims thereunder and provide that any insurance carried by Landlord is
     excess and is non-contributing with any insurance requirement of Tenant;
     and (v) shall contain a cross-liability endorsement or severability of
     interest clause. Such policies or duly executed certificates of insurance
     with respect thereto, accompanied by proof of payment of the premium
     therefor, shall be delivered to Landlord prior to the date that Tenant
     occupies the Premises for any reason, and renewals of such policies shall
     be delivered to Landlord at least thirty (30) days prior to the expiration
     of each respective policy term. In the event Tenant shall fail to procure
     such insurance, or to deliver such policies or certificate, in a timely
     manner Landlord may, at its option, procure such policies for the account
     of Tenant, and the cost thereof shall be paid to Landlord as Rent within
     five (5) days after delivery to Tenant of bills therefor. Tenant shall have
     the right to satisfy the foregoing insurance requirements pursuant to so-
     called "umbrella" or "blanket" insurance coverage so long as the minimum
     coverages described above are applicable to the Premises, the Building,
     Landlord and the Project, as applicable.

               (b)  Landlord shall procure and maintain at its expense (but with
     the expense to be included in Operating Expenses) throughout the Lease Term
     a policy or policies of special form/all-risk (including rent loss
     coverage) real and personal property insurance covering the Project
     (including the leasehold improvements in the Premises up to the amount of
     the Base Project and the Tenant Improvement Allowance, but excluding
     Tenant's personal property, trade fixtures and equipment and Alterations),
     in an amount equal to the full insurable replacement cost thereof as such
     may increase from time to time (but such insurance may provide for a
     commercially reasonable deductible), and in an amount sufficient to comply
     with any co-insurance requirements in such policy, and a policy of workers'
     compensation insurance, if any, as required by applicable law. In addition,
     Landlord shall procure and maintain at its expense (but with the expense to
     be included in Operating Expenses) and shall thereafter maintain throughout
     the Lease Term, a commercial general liability insurance policy covering
     the Project with combined single limits for both damage to property and
     personal injury in commercially reasonable amounts but not less than Three
     Million Dollars ($3,000,000) per occurrence, subject to annual aggregate
     limits of not less than Five Million Dollars ($5,000,000). Landlord may
     also carry such other types of insurance, including earthquake insurance,
     in form and amounts which Landlord shall reasonably determine to be
     appropriate from time to time, and the cost thereof shall be included in
     Operating Expenses; all such policies procured and maintained by Landlord
     pursuant to this Section 15(b) shall be carried with companies licensed to
     do business in the State of California and having a rating by Best's
     insurance Reports of not less than A-X (A-VIII for earthquake coverage).
     Any insurance required or permitted to be carried by Landlord hereunder may
     be carried under blanket policies covering other properties of Landlord
     and/or its partners and/or their respective related or affiliated
     corporations so long as such blanket policies provide insurance at all
     times for the Project as required by this Lease.

          16.  Waiver of Subrogation. Landlord and Tenant shall each have
     included in all policies of fire, extended coverage, business interruption
     and loss of rents insurance respectively obtained by them covering the
     Premises, the Building and contents therein, a waiver by the insurer of all
     right of subrogation against the other in connection with any loss or
     damage thereby insured against. Any additional premium for such waiver
     shall be paid by the primary insured. To the full extent permitted by law,
     Landlord and Tenant each waives all right of recovery against the other
     for, and agrees to release the other from liability for, loss or damage to
     the extent such loss or damage is covered by valid and collectible
     insurance in effect at the time of such loss or damage or would be covered
     by the insurance required to be maintained under this Lease by the party
     seeking recovery.

          17.  Default.

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<PAGE>

               (a)  The following events shall be deemed to be events of default
     by Tenant under this Lease: (i) Tenant shall fail to pay any installment of
     Rent or any other charge or assessment against Tenant pursuant to the terms
     hereof within five (5) days after the due date thereof with such failure
     continuing for five (5) days after notice of such failure from Landlord to
     Tenant; provided that after the sixth (6th) such failure within any twelve
     (12) month period, only the passage of time, but not notice from Landlord,
     shall be required to establish an event of default within such twelve (12)
     month period; (ii) Tenant shall fail to perform any obligation of Tenant or
     to comply with any provision of this Lease, other than the payment of the
     Rent or any other charge or assessment payable by Tenant, and shall not
     cure such failure within thirty (30) days after notice thereof to Tenant;
     provided however, that any such notice shall be in lieu of, and not in
     addition to, any notice required under California Code of Civil Procedure
     Section 1 161 or any similar or successor law; and provided further, that
     if the nature of such failure is that it cannot reasonably be cured within
     a thirty (30) day period, Tenant shall not be deemed to be in default if it
     diligently commences such cure within such period, notifies Landlord within
     such period that it cannot reasonably complete such cure within thirty (30)
     days and thereafter diligently proceeds to cure said failure as soon as
     possible but in no event later than one hundred twenty (120) days after the
     receipt of Landlord's notice; (iii) abandonment of the Premises by Tenant
     as defined in California Civil Code Section 1951.3; (iv) Tenant or any
     guarantor of this Lease shall make a general assignment for the benefit of
     creditors, or shall admit in writing its inability to pay its debts as they
     become due, or shall file a petition in bankruptcy, or shall be adjudicated
     as bankrupt or insolvent, or shall file a petition in any proceeding
     seeking any reorganization, arrangement, composition, readjustment,
     liquidation, dissolution or similar relief under any present or future
     statute, law or regulation, or shall file an answer admitting or fail
     timely to contest the material allegations of a petition filed against it
     in any such proceeding; (v) a proceeding is commenced against Tenant or any
     guarantor of this Lease seeking any reorganization, arrangement,
     composition, readjustment, liquidation, dissolution or similar relief under
     any present or future statute, law or regulation, and such proceeding shall
     not have been dismissed within sixty (60) days after the commencement
     thereof; (vi) a receiver or trustee shall be appointed for the Premises or
     for all or substantially all of the assets of Tenant or of any guarantor of
     this Lease; (vii) Tenant shall fail to take possession of the Premises
     within thirty (30) days after delivery of the same to Tenant in the manner
     required under this Lease; (viii) Tenant shall do or permit to be done
     anything which creates a lien upon the Premises or the Project and such
     lien is not removed or discharged within fifteen (15) days after the filing
     thereof; (ix) Tenant shall fail to return a properly executed instrument to
     Landlord in accordance with Section 25 hereof within the time period
     provided therein and such failure continues for a period of five (5) days
     after written notice thereof from Landlord; (x) Tenant shall fail to return
     a properly executed estoppel certificate to Landlord in accordance with
     Section 26 hereof within the time period provided therein and such failure
     continues for a period of five (5) days after written notice thereof from
     Landlord; or (xi) Tenant shall fail to deliver to Landlord the letters of
     credit described in Exhibit F within the time required by Section 4.4.

               (b)  In the event of any such event of default by Tenant, in
     addition to any other remedies available to Landlord at law or in equity,
     Landlord shall have the immediate option to terminate this Lease and all
     rights of Tenant hereunder and to remove Tenant from the Premises in
     accordance with law. In the event that Landlord shall elect to so terminate
     this Lease then Landlord may recover from Tenant:

                    (i)   the worth at the time of award of any unpaid rent
     which had been earned at the time of such termination; plus

                    (ii)  the worth at the time of award of the amount by which
     the unpaid rent which would have been earned after termination until the
     time of award exceeds the amount of such rental loss that Tenant proves
     could have been reasonably avoided; plus

                    (iii) the worth at the time of award of the amount by which
     the unpaid rent for the balance of the term after the time of award exceeds
     the amount of such rental loss that Tenant proves could be reasonably
     avoided; plus

                    (iv)  any other amount necessary to compensate Landlord for
     all the detriment proximately caused by Tenant's failure to perform its
     obligations under this Lease or which in the ordinary course of things
     would be likely to result therefrom.

                                      12
<PAGE>

     As used in clauses (i) and (ii) above, the "worth at the time of award" is
     computed by allowing interest at the maximum rate permitted by law per
     annum. As used in clause (iii) above, the "worth at the time of award" is
     computed by discounting such amount at the discount rate of the Federal
     Reserve Bank of San Francisco at the time of award plus one percent (1%).

               (c)  In the event of any such event of default by Tenant,
     Landlord shall also have the right, with or without terminating this Lease,
     but subject to applicable law, to re-enter the Premises and remove all
     persons and property from the Premises; such property may be removed and
     stored in a public warehouse or elsewhere at the cost of and for the
     account of Tenant for such period of time as may be required by applicable
     law after which time Landlord may dispose of such property in accordance
     with applicable law. No re-entry or taking possession of the Premises by
     Landlord pursuant to this Section 17(c) shall be construed as an election
     to terminate this Lease unless a written notice of such intention be given
     to Tenant or unless the termination thereof be decreed by a court of
     competent jurisdiction. In addition to its other rights under this Lease,
     Landlord has the remedy described in California Civil Code Section 1951.4
     (Landlord may continue the Lease in effect after Tenant's breach and
     abandonment and recover the rent as it becomes due, if Tenant has the right
     to sublet or assign, subject only to reasonable limitations).

               (d)  Upon the occurrence of an event of default, Landlord shall
     have the right to exercise and enforce all rights and remedies granted or
     permitted by law. The remedies provided for in this Lease are cumulative
     and in addition to all other remedies available to Landlord at law or in
     equity by statute or otherwise. Exercise by Landlord of any remedy shall
     not be deemed to be an acceptance of surrender of the Premises by Tenant,
     either by agreement or by operation of law. Surrender of the Premises can
     be effected only by the written agreement of Landlord and Tenant.

               (e)  No reentry or taking possession of the Premises by Landlord
     or any other action taken by or on behalf of Landlord shall be construed to
     be an acceptance of a surrender of this Lease or an election by Landlord to
     terminate this Lease unless written notice of such intention is given to
     Tenant. Tenant agrees to pay to Landlord all costs and expenses incurred by
     Landlord in the enforcement of this Lease, including, without limitation,
     the reasonable fees of Landlord's attorneys. Tenant waives any right of
     redemption arising as a result of Landlord's exercise of its remedies under
     this Section 17.

          18.  Waiver of Breach. No waiver of any breach of the covenants,
     warranties, agreements, provisions, or conditions contained in this Lease
     shall be construed as a waiver of said covenant, warranty, provision,
     agreement or condition or of any subsequent breach thereof and if any
     breach shall occur and afterwards be compromised, settled or adjusted, this
     Lease shall continue in full force and effect as if no breach had occurred.

          19.  Assignment and Subletting.

               (a) Tenant shall not, without the prior written consent of
     Landlord (which consent shall not be unreasonably withheld subject to
     Sections 19(c) and (h) below), assign this Lease or any interest herein or
     in the Premises, or mortgage, pledge, encumber, hypothecate or otherwise
     transfer or sublet the Premises or any part thereof or permit the use of
     the Premises by any party other than Tenant (all of the following are
     hereinafter sometimes referred to collectively as "Transfer", and any
     person to whom any Transfer is made or sought to be made is hereinafter
     sometimes referred to as a "Transferee"). In addition, Tenant shall not,
     without Landlord's prior written consent, create or distribute materials
     intended to market the Premises in this Lease to any potential Transferee
     except for ordinary information placed on a commercial marketing system
     such as CoStar. Consent to one or more such Transfers shall not destroy or
     waive this provision, and all subsequent Transfers shall likewise be made
     only upon obtaining the prior written consent of Landlord.

               (b)  If Tenant desires to effect any Transfer, Tenant shall
     notify Landlord in writing, which notice (the "Transfer Notice") shall
     include (i) the proposed effective date of the Transfer, which shall not be
     less than forty-five (45) days nor more than one hundred eighty (180) days
     after the date of delivery of the Transfer Notice, except that the I 80 day
     requirement shall not be applicable to any subleases which are to be
     effective within one hundred twenty (120) days after the Rent Commencement
     Date, (ii) a description of the portion of the Premises

                                      13
<PAGE>

     to be transferred (the "Subject Space"), (iii) all of the terms of the
     proposed Transfer and the consideration therefor, including a calculation
     of the Transfer Premium (defined below), the name and address of the
     proposed Transferee, and a copy of all existing and/or proposed
     documentation pertaining to the proposed Transfer, including all existing
     operative documents to be executed to evidence such Transfer or the
     agreements incidental or related to such Transfer, and (iv) current
     financial statements of the proposed Transferee certified by an officer,
     partner or owner thereof, and any other information reasonably required by
     Landlord which will en able Landlord to determine the financial
     responsibility, character, and reputation of the proposed Transferee,
     nature of such Transferee's business and proposed use of the Subject Space.
     Within thirty (30) days after Landlord's receipt of such Transfer Notice,
     Landlord shall recapture (to the extent permitted pursuant to Section
     19(h)), approve, or reasonably disapprove such Transfer. The failure of
     Landlord to respond to such Transfer Notice within such thirty (30) day
     period shall constitute Landlord's deemed approval of such Transfer if the
     Transfer Notice contains a statement in at least ten point type in all
     capital letters to such effect and references this Section. Any Transfer
     made without Landlord's prior written consent or deemed approval shall, at
     Landlord's option, be void and shall constitute an event of default.
     Whether or not Landlord grants consent, Tenant shall pay Landlord's review
     and processing fees, as well as any reasonable legal fees incurred by
     Landlord, within thirty (30) days after written request by Landlord, which
     legal fees shall not exceed in the aggregate $2,500 plus five percent (5%)
     for each year of the Lease Term which has then elapsed. If Landlord
     consents to any Transfer (and does not exercise any recapture rights
     Landlord may have under Section 19 (h) below), Tenant may within six (6)
     months after Landlord's consent or deemed consent, if applicable, enter
     into such agreement to Transfer the Premises or portion thereof, upon the
     same terms and conditions as are set forth in the Transfer Notice.

               (c)  Notwithstanding Section 19 (a) above, in no event shall
     Tenant assign this Lease or any interest herein, whether directly,
     indirectly or by operation of law, or sublet the Premises or any part
     thereof or permit the use of the Premises or any part thereof by any party
     (i) if the proposed assignee or subtenant is a party who would (or whose
     use would) detract from the character of the Building as a first-class
     building, such as, without limitation, a dental, medical or chiropractic
     office or a governmental office, (ii) if the proposed use of the Premises
     shall involve an occupancy rate of more than one (1) person per one hundred
     seventy-five (175) RSF within the Premises, (iii) if the proposed
     assignment or subletting is to a governmental subdivision or agency or any
     person or entity who enjoys diplomatic or sovereign immunity, (iv) if such
     proposed assignee or subtenant is an existing tenant of the Building
     (unless space reasonably comparable in size in the Building is not
     available to such assignee or subtenant), or (v) if such proposed
     assignment, subletting or use would contravene any restrictive covenant
     (including any exclusive use) granted to any other tenant of the Building.

               (d)  Sublessees or transferees of the Premises for the balance of
     the Lease Term shall become directly liable to Landlord for all obligations
     of Tenant hereunder pertaining to that portion of the Premises covered by
     their subleases or other instruments of transfer (e.g., an assignment)
     without relieving Tenant (or any guarantor of Tenant's obligations
     hereunder) of any liability therefor, and Tenant shall remain obligated for
     all liability to Landlord arising under this Lease during the entire
     remaining Lease Term including any extensions thereof, whether or not
     authorized herein.

               (e)  If Tenant is a partnership, an aggregate withdrawal or
     change, whether voluntary, involuntary or by operation of law, of partners
     owning a controlling interest in Tenant shall be deemed a voluntary
     assignment of this Lease and subject to the foregoing provisions. If Tenant
     is a corporation, any merger, consolidation, or reorganization or sale of
     substantially all of the assets or stock of Tenant, including pursuant to
     any legislative act which reorganizes Tenant, shall not be deemed a
     voluntary assignment of this Lease requiring Landlord's consent if
     immediately after such transaction the tangible net worth of the then
     Tenant is, in Landlord's reasonable judgment, equal to or greater than that
     of the original Tenant hereunder on the Rent Commencement Date. However,
     the lack of a consent requirement shall not relieve Tenant of the
     obligation to deliver a timely Transfer Notice to Landlord. "Tangible net
     worth" means the excess (if any) of assets, other than good will, over
     liabilities, otherwise determined in accordance with generally accepted
     accounting principles, consistently applied. Furthermore, the following
     transactions shall also not be deemed an assignment of this Lease requiring
     the Landlord's consent: (i) if Tenant makes a public offering of its shares
     of stock; or (ii) if Tenant issues any equity interests in itself as a
     result of investments or strategic partnerships with or by any public or
     private entities or individuals, so long as the issuance of such equity
     interests does not result in a decrease in the tangible net worth of
     Tenant.

                                      14
<PAGE>

               (f)  Seventy percent (70%) of any consideration, net of Tenant's
     reasonable, out-of-pocket costs incurred in the assignment or subletting
     (including amortization over the term of the sublease or assignment of
     Tenant's reasonable expenses in constructing improvements specifically for
     the subtenant or assignee), which is in excess of the Rent and other
     amounts due and payable by Tenant under this Lease, and which is paid to
     Tenant by any assignee of this Lease or successor to Tenant (including
     pursuant to Section 19 (b)) for its assignment, or by any sublessee under
     or in connection with its sublease, or otherwise paid to Tenant by another
     party for use and occupancy of the Premises or any portion thereof (the
     "Transfer Premium"), shall be promptly remitted by Tenant to Landlord as
     additional rental hereunder and Tenant shall have no right or claim thereto
     as against Landlord.

               (g)  No assignment of this Lease consented to by Landlord shall
     be effective unless and until Landlord shall receive an original assignment
     and assumption agreement, in form and substance reasonably satisfactory to
     Landlord, signed by Tenant. and Tenant's proposed assignee, whereby the
     assignee assumes due performance of this Lease to be done and performed for
     the balance of the then remaining Lease Term. No subletting of the
     Premises, or any part thereof, shall be effective unless and until there
     shall have been delivered to Landlord an agreement, in form and substance
     reasonably satisfactory to Landlord, signed by Tenant and the proposed
     sublessee, whereby the sublessee acknowledges the right of Landlord to
     continue or terminate any sublease, in Landlord's reasonable discretion,
     upon termination of this Lease, and such sublessee agrees to recognize and
     attorn to Landlord in the event that Landlord elects under such
     circumstances to continue such sublease.

               (h)  Notwithstanding anything to the contrary contained in this
     Section 19 except paragraph (i) below, upon receipt of any Transfer Notice
     which contemplates the subletting of more than two thousand (2000) RSF or
     an assignment of Tenant's interest in this Lease other than pursuant to the
     second sentence of Section 19 (e) above, Landlord shall have the option
     exercisable by written notice to Tenant given within thirty (30) days after
     receipt of the Transfer Notice, to recapture the space proposed to be
     sublet or assigned ("Transfer Space"). If Landlord exercises this option,
     the Lease shall terminate with respect to the Transfer Space on the
     commencement date specified in the Transfer Notice, and if there is no such
     date then thirty (30) days after Landlord sends its written notice of
     recapture. In the event of a recapture by Landlord, if this Lease shall be
     canceled with respect to less than the entire Premises, the Rent reserved
     herein shall be prorated on the basis of the number of square feet of RSF
     retained by Tenant in proportion to the number of square feet of RSF
     contained in the Premises, and this Lease as so amended shall continue
     thereafter in full force and effect, and upon request of either party, the
     parties shall execute Written confirmation of the same. If Landlord elects
     to recapture the Transfer Space, Landlord and Tenant shall share the costs
     reasonably determined by Landlord, if any, in separating the Transfer Space
     from the balance of the Premises and in complying with any relevant law or
     ordinance with which compliance is required in connection with such
     separation, in the ratio that each will control the former Premises
     following recapture. If Landlord declines, or fails to elect in a timely
     manner to recapture the Transfer Space within such thirty (30) day period,
     then, provided Landlord has consented or is deemed to have consented to the
     proposed Transfer, Tenant shall be entitled to proceed to transfer the
     Transfer Space to the proposed Transferee, subject to the provisions of the
     last sentence of this grammatical paragraph. Any subsequent proposed
     Transfer of the applicable space shall be subject to this Section. If a
     proposed Transfer is not consummated within six months after the date of
     the relevant Transfer Notice, Tenant shall be required to submit a new
     Transfer Notice to Landlord with respect to any contemplated Transfer of
     the Transfer Space described in the first Transfer Notice.

               Notwithstanding anything contained in this Section 19 to the
     contrary, Tenant shall have the right to assign this Lease, without
     obtaining Landlord's consent and without affording Landlord the opportunity
     to recapture the Premises or terminate this Lease, to any entity that
     controls, is controlled by or is under common control with Tenant. No such
     assignment shall release Tenant from its obligations under this Lease,
     including its obligations to provide Landlord with a Transfer Notice and to
     comply with Section 19(g) above, and Tenant may not utilize this paragraph
     principally as a means to avoid the recapture option of Landlord in Section
     19(h).

               (i)  Notwithstanding Section 19(h) above but subject to the
     balance of this Section 19, Tenant shall have the right, upon compliance
     with the provisions of this paragraph (i), to sublease (1) up to fifty-two
     thousand (52,000) of the RSF in the Premises for a period ending no later
     than five (5) years after the Rent Commencement Date and (2) up to thirty-
     six thousand five hundred (36,500) of the RSF in the Premises for a period
     ending no later than the beginning of the last twelve (12) months of the
     Lease Term (not including any extension of the Lease Term). In each case,
     such subletting shall not be subject to Landlord's recapture right in
     Section 19(h) 50

                                      15
<PAGE>

     long as: (x) Tenant and its sublessee(s) comply with the other provisions
     of this Section 19 in connection with such subletting; and (y) the space
     described in clause (2) immediately above is not in addition to the space
     which was leased pursuant to clause (1) above.

          20.  Destruction.

               (a)  If the Premises are damaged by fire or other casualty, the
     same shall be repaired as speedily as practicable, subject to reasonable
     delay for insurance adjustment or other matters beyond Landlord's
     reasonable control under the circumstances, at the expense of the Landlord
     (subject to paragraph (c) below), unless this Lease is terminated as
     provided in this Section. During the period required for repair, the Base
     Rental shall be abated to the extent the Premises are unfit for occupancy
     for the purposes permitted under this Lease, and not occupied by Tenant as
     a result thereof, unless such damage to the Premises is due to the
     negligence or willful misconduct of Tenant or Tenant's employees,
     contractors, licensees, or invitees, in which event Base Rental shall be
     abated only to the extent Landlord is reimbursed from the proceeds of
     rental income or interruption insurance purchased by Landlord as part of
     Operating Expenses.

               (b)  If the Premises are (i) damaged to such an extent that
     repairs cannot, in Landlord's judgment, be completed within one (1) year
     after the date of the casualty; (ii) damaged or destroyed as a result of a
     risk which is not insured under standard special form/all-risk insurance
     policies or any other insurance carried by Landlord, to the extent that the
     cost of repairing such damage or destruction exceeds $3,000,000; (iii)
     damaged and the holder of any mortgage on the Building or ground or
     underlying lessor with respect to the Project and/or the Building requires
     that the insurance proceeds or any portion thereof be used to retire the
     mortgage debt, and the amount for which insurance proceeds are not
     available is in excess of $3,000,000 or terminates the ground or underlying
     lease, as the case may be; or (iv) substantially damaged or destroyed
     during the last eighteen (18) months of the Lease Term; or if the Building
     is damaged in whole or in part (whether or not the Premises are damaged) to
     such an extent that the Building cannot, in Landlord's reasonable judgment,
     be operated economically as an integral unit and is not operated as an
     integral unit as originally built, then in any such event Landlord may at
     its option terminate this Lease by notice in writing to Tenant within sixty
     (60) days after the date of such damage or destruction. If the Premises are
     damaged to such an extent that repairs cannot, in Landlord's judgment, be
     completed within one (1) year after the date of the casualty or if the
     Premises are substantially damaged during the last eighteen (18) months of
     the Lease Term as it may have been extended if permitted herein, then in
     either such event Tenant may elect to terminate this Lease by notice in
     writing to Landlord within thirty (30) days after notice from Landlord of
     the estimated repair time. Unless Landlord or Tenant elects to terminate
     this Lease as hereinabove provided, this Lease will remain in full force
     and effect and Landlord shall repair such damage to the extent required in
     this Section 20 as expeditiously as possible under the circumstances. If
     Landlord or Tenant terminates the Lease pursuant to this Section 20, then
     Tenant shall pay the Base Rental and Additional Rental properly apportioned
     up to such date of damage, and both parties hereto shall thereafter be
     freed and discharged of all further obligations hereunder, except as
     provided for in provisions of this Lease which by their terms survive the
     expiration or earlier termination of the Lease Term.

               (c)  If Landlord should elect or be obligated pursuant to
     paragraph (a) above to repair because of any damage or destruction,
     Landlord's obligation shall be limited to the original Building and the
     leasehold improvements in the Premises (to the extent such leasehold
     improvements can be restored for the amount of the Tenant Improvement
     Allowance applicable thereto) and shall not extend to any furniture,
     equipment, supplies, trade fixtures or other personal property owned or
     leased by Tenant, its employees, contractors, invitees or licensees. If the
     cost of performing such repairs and restoration exceeds the actual proceeds
     of insurance paid or payable to Landlord on account of such casualty by
     more than $3,000,000, or if Landlord's mortgagee under a mortgage or the
     lessor under an underlying lease shall require that $3,000,000 or more of
     any insurance proceeds from a casualty loss be paid to it, Landlord may
     terminate this Lease unless Tenant, within fifteen (15) days after demand
     therefore, deposits with Landlord a sum of money sufficient to pay the
     difference between the cost of repair and the sum of (i) the proceeds of
     the insurance available to Landlord for such purpose, plus (ii) $3,000,000.
     In the event Landlord elects or is obligated to repair the Building after
     damage or destruction and intends to include in Operating Expenses more
     than $3,000,000 of any repair costs pursuant to its right to do so under
     Section 7(a)(5)) it shall so notify Tenant which shall have the right,
     exercisable by notice to Landlord given within sixty (60) days after
     receipt of the notice from Landlord, to terminate the Lease effective
     ninety (90) days after Tenant's notice to Landlord.

                                      16
<PAGE>

               (d)  In no event shall Landlord be liable for any loss or damage
     sustained by Tenant or its visitors, or injury to Tenant's business by
     reason of casualties mentioned hereinabove or any other accidental
     casualty.

               (e)  The provisions of this Lease, including this Section,
     constitute an express agreement between Landlord and Tenant with respect to
     any and all damage to, or destruction of, all or any part of the Premises,
     the Building or any other portion of the Project. Any statute or regulation
     of the state in which the Building is located, including, without
     limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with
     respect to any rights or obligations concerning damage or destruction in
     the absence of an express agreement between the parties, shall have no
     application to this Lease or any damage or destruction to all or any part
     of the Premises, the Building or any other portion of the Project.

          21.  Intentionally Omitted.

          22.  Services by Landlord.

               (a)  Landlord shall provide the Building Standard Services on the
     days and for the hours as described on Exhibit "I" attached hereto.

               (b)  Except as described in the Work Letter, Tenant shall not,
     without Landlord's prior written consent, which shall not be unreasonably
     withheld or delayed, use machines or equipment (other than ordinary office
     machines or equipment) or lighting other than Building standard lights in
     the Premises, which may materially affect the temperature otherwise
     maintained by the air conditioning system or increase the water normally
     furnished for the Premises by Landlord pursuant to the terms of Section 22
     (a) above. If such consent is given, or such equipment is permitted in the
     Work Letter, Landlord shall have the right to require Tenant to install
     supplementary air conditioning units or other facilities in the Premises,
     including supplementary or additional metering devices, and the cost
     thereof, including the cost of installation, operation and maintenance,
     increased wear and tear on existing equipment and other similar charges,
     shall be paid by Tenant to Landlord upon billing by Landlord. If Tenant
     uses water or heat or air conditioning or any other service or utility in
     excess of that supplied by Landlord pursuant to Section 22 (a) above, or if
     Tenant's consumption of electricity exceeds three and one-half (3 1/2)
     watts per RSF of the Premises, and the total rated electrical design load
     for lighting exceeds two (2) watts per RSF of the Premises, calculated on
     an annualized basis for Building Operating Hours (defined in Exhibit I),
     Tenant shall pay to Landlord, within fifteen (15) days of billing, the
     reasonable cost of such excess consumption, the reasonable cost of the
     installation, operation, and maintenance of equipment which is installed in
     order to supply or monitor such excess consumption and a reasonable
     administrative fee to Landlord. If Tenant desires to use heat, ventilation
     or air conditioning during hours other than those for which Landlord is
     obligated to supply such utilities as required in this Lease, Tenant shall
     give Landlord such prior notice, as Landlord shall from time to time
     reasonable establish as appropriate, of Tenant's desired use and Landlord
     shall supply such utilities to Tenant at such hourly cost to Tenant as
     Landlord shall from time to time reasonably establish. Landlord may adjust
     the hours or days during which air conditioning, heating and ventilation
     are provided to the Premises and the Building to accommodate the usage by
     tenants occupying two-thirds or more of the RSF of the Building or to
     conform to practices of other buildings in the area comparable to the
     Building, but in no event shall such hours or days be less than those
     specified in this Lease.

               (c)  Tenant agrees that Landlord shall not be liable for damages,
     by abatement of Rent or otherwise, for failure to furnish or delay in
     furnishing any service or utility, or for any diminution in the quality or
     quantity thereof, when such failure or delay or diminution is occasioned,
     in whole or in part, by repairs, replacements, by any strike, lockout or
     other labor trouble, by inability to secure electricity, gas, water, or
     other fuel at the Building or Project after reasonable effort to do so, by
     any accident 6r casualty whatsoever, by act or default of Tenant or other
     parties, or by any other cause beyond Landlord's reasonable control; and
     such failures or delays or diminution shall never be deemed to constitute
     an eviction or disturbance of Tenant's use and possession of the Premises
     or relieve Tenant from paying Rent or performing any of its obligations
     under this Lease. Furthermore, Landlord shall not be liable under any
     circumstances for a loss of, or injury to, property or for injury to, or
     interference with, Tenant's business, including, without limitation, loss
     of profits, however occurring, through or in

                                      17
<PAGE>

     connection with or incidental to a failure to furnish any of the services
     or utilities as set forth in this Section 22. Notwithstanding anything
     contained in this Section 22 to the contrary, in the event of the failure
     of Landlord to furnish utilities described in Building Standard Services
     for a period of seven (7) or more consecutive days, which failure has a
     material, adverse effect on the ability of Tenant to use or access the
     Premises and is caused by Landlord's negligence or an event within
     Landlord's reasonable control, then Rent payable hereunder shall abate, in
     proportion to the adverse effect on Tenant, until such utilities are again
     furnished to the Premises.

               (d)  Landlord shall also have the exclusive right, but not the
     obligation, to provide the following additional services which may be
     required by Tenant: locksmithing, non-Building standard lamp replacement,
     and additional janitorial service; provided, that Tenant shall pay to
     Landlord within fifteen (15) days of billing, the sum of all costs to
     Landlord of such additional services plus an administration fee. Charges
     for any service for which Tenant is required to pay from time to time
     hereunder shall be deemed Additional Rental hereunder and shall be billed
     on a monthly basis. Notwithstanding the foregoing, upon receiving
     Landlord's prior written consent (which shall not be withheld
     unreasonably), Tenant may contract directly for the provision of utilities
     to the Premises, and in such case (i) Tenant shall pay promptly and before
     delinquency for all such utility service supplied to the Premises, together
     with all taxes, assessments, surcharges, and similar expenses relating to
     such utilities and (ii) Landlord shall have no responsibility whatsoever to
     furnish such utilities to the Premises.

          23.  Waiver of Jury Trial: Attorneys' Fees.  If either party commences
     litigation against the other for the specific performance of this Lease,
     for damages for the breach hereof or otherwise for enforcement of any
     remedy hereunder, the parties hereto agree to and hereby do waive any right
     to a trial by jury and, in the event of any such commencement of litigation
     then, in addition to any money judgment award ordered by the court, the
     prevailing party shall be entitled to recover from the other party such
     costs and reasonable attorneys' fees as may have been incurred, including
     any and all costs incurred in enforcing, perfecting and executing such
     judgment.

          24.  Time. Time is of the essence of this Lease and each of its
     provisions and whenever a certain day is stated for payment or performance
     of any obligation of Tenant or Landlord, the same enters into and becomes a
     part of the consideration hereof.

          25.  Subordination and Attornment.

               (a)  Except to the extent that Landlord's mortgagee (or lessor
     under a ground lease) elects to make the Lease senior to the mortgage (or
     ground lease) pursuant to Section 25(b), Tenant agrees that this Lease and
     all rights of Tenant hereunder are and shall be subject and subordinate to
     any ground or underlying lease which may hereafter be in effect regarding
     the Project or any component thereof, to any mortgage now or hereafter
     encumbering the Premises or the Project or any component thereof, to all
     advances made or hereafter to be made upon the security of such mortgage,
     to all amendments, modifications, renewals, consolidations, extensions, and
     restatements of such mortgage, and to any replacements and substitutions
     for such mortgage. The terms of this provision shall be self-operative and
     no further instrument of subordination shall be required. Tenant, however,
     upon request of any party in interest, shall execute within fifteen (15)
     days of request by Landlord such instrument or certificates as may be
     reasonably required to carry out the intent hereof, whether said
     requirement is that of Landlord or any other party in interest, including,
     without limitation, any mortgagee. Tenant hereby irrevocably authorizes
     Landlord to execute and deliver in the name of Tenant any such instrument
     or instruments if Tenant fails to do so within such 15-day period, provided
     that such authorization shall in no way relieve Tenant from the obligation
     of executing such instruments or certificates. Landlord represents that no
     mortgage or deed of trust currently encumbers the Project and that there is
     no ground lease affecting the Project.

               (b)  If any mortgagee or lessor under a ground or underlying
     lease elects to have this Lease superior to its mortgage or lease and
     signifies its election in the instrument creating its lien or lease or by
     separate recorded instrument, then this Lease shall be superior to such
     mortgage or lease, as the case may be. The term "mortgage", as used in this
     Lease, includes any deed of trust, deed to secure debt, or security deed
     and any other instrument creating a lien in connection with any other
     method of financing or refinancing. The term "mortgagee", as used in this
     Lease, refers to the holder(s) of the indebtedness secured by a mortgage.

                                      18
<PAGE>

               (c)  In the event any proceedings are brought for the foreclosure
     of, or in the event of exercise of the power of sale under, any mortgage
     covering the Premises or the Project, or in the event the interests of
     Landlord under this Lease shall be transferred by reason of deed in lieu of
     foreclosure or other legal proceedings, or in the event of termination of
     any lease under which Landlord may hold title, Tenant shall attorn to the
     transferee or purchaser at foreclosure or under power of sale, or the
     lessor of the Landlord upon such lease termination, as the case may be
     (sometimes hereinafter called "such person"), without any deductions or
     off-set whatsoever, and shall recognize and be bound and obligated
     hereunder to such person as the Landlord under this Lease; provided,
     however, that no such person shall be (i) bound by any payment of Rent for
     more than one (1) month in advance, except prepayments in the nature of
     security for the performance by Tenant of its obligations under this Lease
     (and then only if such prepayments have been deposited with and are under
     the control of such person); (ii) bound by any amendment or modification of
     this Lease made without the express written consent of the mortgagee or
     lessor of the Landlord, as the case may be; (iii) obligated to cure any
     defaults under this Lease of any prior landlord (including Landlord);
     provided, however, that such person shall be responsible for ongoing
     maintenance and repair obligations of the Landlord; (iv) liable for any act
     or omission of any prior landlord (including Landlord); (v) subject to any
     offsets or defenses which Tenant might have against any prior landlord
     (including Landlord); or (vi) bound by any warranty or representation of
     any prior landlord (including Landlord) relating to work performed by any
     prior landlord (including Landlord) under this Lease. Tenant agrees to
     execute any attornment agreement not in conflict herewith requested by
     Landlord, the mortgagee or such person. Tenant's obligation to attorn to
     such person shall survive the exercise of any such power of sale,
     foreclosure or other proceeding. Tenant agrees that the institution of any
     suit, action or other proceeding by any mortgagee to realize on Landlord's
     interest in the Premises or the Building pursuant to the powers granted to
     a mortgagee under its mortgage, shall not, by operation of law or
     otherwise, result in the cancellation or termination of the obligations of
     the Tenant hereunder.

               (d)  Notwithstanding the foregoing, in the event of a foreclosure
     of any mortgage or the termination of any ground lease or in the event of
     any other action or proceeding for the enforcement of either of them, or of
     any sale thereunder, this Lease shall not be terminated or extinguished,
     nor shall the rights and possession of Tenant hereunder be disturbed, if no
     event of default then exists under this Lease; and in such case, Tenant
     shall attorn to the person who acquires Landlord's interest hereunder
     through any such mortgage or lease. In the event Landlord elects to place a
     mortgage on its interest in the Building or the Project, it shall use
     commercially reasonable efforts to obtain for the benefit of its lender and
     of Tenant a subordination, non-disturbance and attornment agreement in a
     commercially form, reasonably acceptable to its lender. In the event
     Landlord obtains the same, Tenant agrees to execute, acknowledge and
     deliver upon demand such agreement and further instruments requested by the
     lender evidencing such subordination of this Lease to the lien of the
     mortgage or lease.

          26.  Estoppel Certificates. Within ten (10) days after request
     therefor from Landlord, Tenant agrees to execute and deliver to Landlord an
     estoppel certificate addressed to Landlord, any mortgagee or assignee of
     Landlord's interest in, or purchaser O{ the Premises or the Building or any
     part thereof, which shall be substantially in the form of Exhibit "J"
     attached hereto. Such certificate shall also include such other information
     as may reasonably be required by such mortgagee, assignee, purchaser or
     Landlord. Any such certificate may be relied upon by Landlord, any
     mortgagee, proposed mortgagee, assignee, purchaser and any other party to
     whom such certificate is addressed. Failure of Tenant to timely execute and
     deliver such estoppel certificate or other instruments shall constitute an
     acceptance of the Premises and an acknowledgment by Tenant that statements
     included in the estoppel certificate are true and correct, without
     exception. Within ten (10) days after request therefor from Tenant,
     Landlord agrees to execute and deliver to Tenant an estoppel certificate
     addressed to Tenant, any sublessee or assignee of Tenant, or any entity in
     which Tenant is entering into a merger, consolidation or other transaction
     involving the sale of substantially all of the stock or assets of Tenant,
     which estoppel certificate shall address the matters set forth in
     Paragraphs 1, 2, 3, 7, 8 and 9 of the estoppel certificate set forth in
     Exhibit "J".

          27.  Cumulative Rights. All rights, powers and privileges conferred
     hereunder upon the parties hereto shall be cumulative to, but not
     restrictive of; or in lieu of those conferred by law.

          28.  Holding Over.  If Tenant remains in possession after expiration
     or termination of the Lease Term with or without Landlord's written
     consent, Tenant shall become a tenant-at-sufferance, and there shall be no
     renewal or extension of this Lease by operation of law. During the period
     of any such holding over, all provisions of this Lease shall be and remain
     in effect except that the monthly rental shall be the greater of two
     hundred percent

                                      19
<PAGE>

     (200%) of the amount of Rent (including any adjustments as provided herein)
     payable for the last full calendar month of the Lease Term, including
     renewals or extensions and the then Fair Market Rental Value of the
     Premises. The inclusion of the preceding sentence in this Lease shall not
     be construed as Landlord's consent for Tenant to hold over. Landlord hereby
     expressly reserves the right to require Tenant to surrender possession of
     the Premises to Landlord as provided in this Lease upon the expiration or
     other termination of this Lease. The provisions of this Section 28 shall
     not be deemed to limit or constitute a waiver of any other rights or
     remedies of Landlord provided herein or at law. If Tenant fails to
     surrender the Premises upon the termination or expiration of this Lease, in
     addition to any other liabilities to Landlord accruing therefrom, Tenant
     shall protect, defend, indemnify and hold Landlord harmless from all loss,
     costs (including reasonable attorneys' fees) and liability resulting from
     such failure, including, without limiting the generality of the foregoing,
     any claims made by any succeeding tenant founded upon such failure to
     surrender, provided that in no event shall Tenant be responsible to
     Landlord for consequential damages; provided, that if Landlord notifies
     Tenant at least sixty (60) days prior to the expiration or earlier
     termination of the Lease that Landlord has commitments, with respect to all
     or a portion of the Premises, to another Tenant, then Tenant shall be
     responsible to Landlord for Landlord's consequential damages if Tenant
     fails to surrender the Premises when required by this Lease.

          29.  Surrender of the Premises. Upon the expiration or other
     termination of this Lease, Tenant shall quit and surrender to Landlord the
     Premises and every part thereof; including any Alterations, broom clean and
     in good condition and state of repair, reasonable wear and tear and damage
     due to casualty or condemnation excepted. If Tenant is not then in default,
     Tenant shall remove all personality and equipment not attached to the
     Premises which it has placed upon the Premises, and repair any damage
     caused by such removal. If Tenant shall fail or refuse to remove all of
     Tenant's effects, personality and equipment from the Premises upon the
     expiration or termination of this Lease for any cause whatsoever or upon
     the Tenant being dispossessed by process of law or otherwise, such effects,
     personality and equipment shall be deemed conclusively to be abandoned and
     may be appropriated, sold, stored, destroyed or otherwise disposed of by
     Landlord without written notice to Tenant or any other party and without
     obligation to account for them. Tenant shall pay Landlord on demand any and
     all expenses incurred by Landlord in the removal of such property,
     including, without limitation, the cost of repairing any damage to the
     Building or Project caused by the removal of such property and storage
     charges (if Landlord elects to store such property). The covenants and
     conditions of this Section 29 shall survive any expiration or termination
     of this Lease.

          30.  Notices. All notices required or permitted to be given hereunder
     shall be in writing and may be delivered in person to either party or may
     be sent by overnight courier or by United States mail, certified, return
     receipt requested, postage prepaid. Any such notice shall be deemed
     received by the party to whom it was sent (i) in the case of personal
     delivery or courier delivery, on the date of delivery to such party, and
     (ii) in the case of certified mail, on the date receipt is acknowledged on
     the return receipt for such notice or, if delivery is rejected or refused
     or the U.S. Postal Service is unable to deliver same because of changed
     address of which no notice was given pursuant hereto, the first date of
     such rejection, refusal or inability to deliver. All such notices shall be
     addressed to Landlord or Tenant at their respective address set forth
     hereinabove in the Basic Lease Information or at such other address as
     either party shall have theretofore given to the other by notice as herein
     provided. If Tenant is notified in writing of the identity and address of
     Landlord's mortgagee or ground or underlying lessor, Tenant shall give to
     such mortgagee or ground or underlying lessor written notice of any default
     by Landlord tinder the terms of this Lease by registered or certified mail,
     and such mortgagee or ground or underlying lessor shall be given a
     reasonable opportunity to cure such default prior to Tenant's exercising
     any remedy available to Tenant.

          31.  Damage or Theft of Personal Property.  As a material part of the
     consideration to Landlord, all personal property brought into Premises by
     Tenant, or Tenant's employees or business visitors, shall be at the risk of
     Tenant only, and Landlord shall not be liable for theft thereof or any
     damage thereto occasioned by any act or omission of co-tenants, occupants,
     invitees or other users of the Building or any other person. Landlord shall
     not at any time be liable for damage to any property in or upon the
     Premises which results from power surges or other deviations from the
     constancy of electrical service or from gas, smoke, water, or rain, which
     issues or leaks from or forms upon any part of the Building or from the
     pipes or plumbing work of the same, or from any other place whatsoever,
     except to the extent caused by the gross negligence or willful misconduct
     of Landlord, its agents, employees or contractors.

          32.  Eminent Domain.

                                      20
<PAGE>

               (a)  If all or part of the Premises shall be taken for any public
     or quasi-public use by virtue of the exercise of the power of eminent
     domain or by private purchase in lieu thereof; this Lease shall terminate
     as to the part so taken as of the date of taking, and, in the case of a
     partial taking, either Landlord or Tenant shall have the right to terminate
     this Lease as to the balance of the Premises by written notice to the other
     within thirty (30) days after such date; provided, however, that a
     condition to the exercise by Tenant of such right to terminate shall be
     that the portion of the Premises taken shall be of such extent and nature
     as substantially to handicap, impede or impair Tenant's use of the balance
     of the Premises. If title to so much of the Building is taken that a
     reasonable amount of reconstruction thereof will not in Landlord's sole
     discretion result in the Building being a practical improvement and
     reasonably suitable for use for the purpose for which it is designed, then
     this Lease shall terminate on the date that the condemning authority
     actually takes possession of the part so condemned or purchased.

               (b)  If this Lease is terminated under the provisions of this
     Section 32, Rent shall be apportioned and adjusted as of the date of
     termination.

               (c)  If there is a partial taking of the Building and this Lease
     is not thereupon terminated under the provisions of this Section 32, then
     this Lease shall remain in full force and effect, and Landlord shall,
     within a reasonable time thereafter, repair or reconstruct the remaining
     portion of the Building to the extent necessary to make the same a complete
     architectural unit; provided that in complying with its obligations
     hereunder Landlord shall not be required to expend more than the net
     proceeds of the condemnation award which are paid to Landlord.

               (d)  All compensation awarded or paid to Landlord upon a total or
     partial taking of the Premises or the Building shall belong to and be the
     property of Landlord without any participation by Tenant. Nothing herein
     shall be construed to preclude Tenant from prosecuting any claim directly
     against the condemning authority for moving expenses, loss of business, for
     damage to, and cost of removal of; trade fixtures, furniture and other
     personal property belonging to Tenant, and for the unamortized cost of
     leasehold improvements to the extent same were installed at Tenant's
     expense (and not with the proceeds of the Tenant Improvement Allowance);
     provided, however, that no such claim shall diminish or adversely affect
     Landlord's award. In no event shall Tenant have or assert a claim for the
     value of any unexpired term of this Lease. Subject to the foregoing
     provisions of this paragraph (d), Tenant hereby assigns to Landlord any and
     all of its right, title and interest in or to any compensation awarded or
     paid for the fee as a result of any such taking.

               (e)  Notwithstanding anything to the contrary contained in this
     Section, if; during the Lease Term, the use or occupancy of any part of the
     Building or the Premises shall be taken or appropriated temporarily for a
     period of one hundred eighty (180) days or less for any public or quasi-
     public use under any governmental law, ordinance, or regulations, or by
     right of eminent domain, this Lease shall be and remain unaffected by such
     taking or appropriation and Tenant shall continue to pay in full all Rent
     payable hereunder by Tenant during the Lease Term. In the event of any such
     temporary appropriation or taking, Tenant shall be entitled to receive that
     portion of any award which represents compensation for the loss of use or
     occupancy of the Premises during the Lease Term, and Landlord shall be
     entitled to receive that portion of any award which represents the cost of
     restoration and compensation for the loss of use or occupancy of the
     Premises after the end of the Lease Term.

          33.  Parties.  The term "Landlord", as used in this Lease, shall
     include Landlord and its assigns and successors. It is hereby covenanted
     and agreed by Tenant that should Landlord's interest in the Premises cease
     to exist for any reason during the Lease Term, then notwithstanding the
     happening of such event, this Lease nevertheless shall remain in full force
     and effect, and Tenant hereby agrees to attorn to the then owner of the
     Premises. The term "Tenant" shall include Tenant and its heirs, legal
     representatives and successors, and shall also include Tenant's assignees
     and sublessees, if this Lease shall be validly assigned or the Premises
     sublet for the balance of the Lease Term or any renewals or extensions
     thereof. Landlord's right to transfer or assign Landlord's interest in and
     to the Premises, or any part or parts thereof, shall be unrestricted; in
     the event of any such transfer or assignment by Landlord which includes the
     Premises, Landlord's obligations to Tenant hereunder shall cease as of the
     date of transfer with respect to obligations accruing thereafter and Tenant
     shall look only and solely to Landlord's assignee or transferee for
     performance thereof, provided such assignee or transferee assumes the
     obligations of Landlord under this Lease arising from and after the date of
     assignment.

                                      21
<PAGE>

     34.  Liability of Tenant. Tenant hereby assumes all risk of damage to
property and injury to persons, in, on, or about the Premises from any cause
whatsoever and agrees that Landlord, and its partners, joint venturers, members
and shareholders, and their respective officers, agents, property managers,
servants, employees, and independent contractors (collectively, "Landlord
Parties") shall not be liable for, and are hereby released from any
responsibility for, any damage to property or injury to persons or resulting
from the loss of use thereof, which damage or injury is sustained by Tenant or
by other persons claiming through Tenant. Tenant shall indemnify, defend,
protect, and hold harmless the Landlord Parties from any and all loss, cost,
damage, injury, expense and liability, including, without limitation, court
costs and reasonable attorneys' fees (collectively, "Claims") incurred in
connection with or arising from any cause in or on the Premises (including,
without limitation, Tenant's installation, placement and removal of Alterations,
fixtures and/or equipment in, on or about the Premises), and any willful
misconduct or negligence of Tenant or of the contractors, agents, servants,
employees, licensees or invitees of Tenant in, on or about the Premises,
Building and Project; provided, however, that the terms of the foregoing
assumption of risk, release of Landlord and the Landlord Parties, and indemnity
of Landlord and the Landlord Parties shall not apply to any Claims to the extent
resulting from (i) the gross negligence or willful misconduct of Landlord or the
Landlord Parties acting within the scope of their employment and (ii) events not
insured or required to be insured by Tenant under this Lease. The provisions of
this Section 34 shall survive the expiration or sooner termination of this
Lease.

     35.  Force Majeure.  In the event of strike, lockout, labor trouble, civil
commotion, Act of God, or any other cause beyond a party's control (collectively
"Force Majeure") resulting in Landlord's inability to supply the services or
perform the other obligations required of Landlord hereunder, this Lease shall
not terminate and Tenant's obligation to pay Rent and all other charges and sums
due and payable by Tenant shall not be affected or excused and Landlord shall
not be considered to be in default under this Lease. If, as a result of Force
Majeure, Tenant is delayed in performing any of its obligations under this
Lease, other than Tenant's obligation to pay Rent and all other charges and sums
payable by Tenant hereunder, Tenant's performance shall be excused for a period
equal to such delay and Tenant shall not during such period be considered to be
in default under this Lease with respect to the obligation, the performance of
which has thus been delayed.

     36.  Landlord's Liability.  Landlord shall have no personal liability with
respect to any of the provisions of this Lease. If Landlord is in default with
respect to its obligations under this Lease, Tenant shall look solely to the
equity of Landlord in and to the Building and the Land described in Exhibit "A"
hereto (and any proceeds or profits therefrom) for satisfaction of Tenant's
remedies, if any. It is expressly understood and agreed that Landlord's
liability under the terms of this Lease shall in no event exceed the amount of
its interest in and to said Land and Building. In no event shall any of the
Landlord Parties be personally liable with respect to any of the provisions of
this Lease and Tenant hereby expressly waives and releases such personal
liability on behalf of itself and all persons claiming by, through or under
Tenant.

     37.  Landlord's Covenant of Quiet Enjoyment. Provided Tenant performs the
terms, conditions and covenants of this Lease, and subject to the terms and
provisions hereof, Landlord covenants and agrees to take all necessary steps to
secure and to maintain for the benefit of Tenant the quiet and peaceful
possession of the Premises, for the Lease Term, without hindrance, claim or
molestation by Landlord or any other person lawfully claiming under Landlord.
The foregoing covenant is in lieu of any other covenant, express or implied.

     38.  Security Deposit.

          (a)  As security for the faithful performance by Tenant throughout the
Lease Term, and any extensions or renewals thereof, of all the terms and
conditions of this Lease on the part of Tenant to be performed, Tenant has
deposited with Landlord on the date of execution of the Lease the Security
Deposit set forth in the Basic Lease Information. The Security Deposit shall be
returned to Tenant, without interest, not later than sixty (60) days after the
expiration or earlier termination of this Lease provided Tenant has fully and
faithfully observed and performed all of the terms, covenants, agreements,
warranties and conditions hereof on its part to be observed and performed.
Landlord shall have the right to use, retain or apply all or any part of the
Security Deposit, including all amounts which may be added thereto pursuant to
the terms hereof, toward the cure of any default of Tenant, including, but not
limited to, for the payment of any Rent or any other sum in default, or for the
payment of any amount that Landlord may spend or become obligated to spend by
reason of Tenant's default, or to compensate

                                      22
<PAGE>

Landlord for any other loss or damage that Landlord may suffer by reason of
Tenant's default. If all or any part of the Security Deposit is so applied by
Landlord, then Tenant shall within five (5) days after written demand therefor,
pay to Landlord an amount sufficient to return the Security Deposit to the
balance on deposit with Landlord prior to said application (and Tenant's failure
to do so shall be a default under this Lease.)

          (b)  In the event of a sale or transfer of Landlord's interest in the
Premises or the Building or a lease by Landlord of the Building, Landlord shall
have the right to transfer the Security Deposit to the purchaser or lessee, as
the case may be, and in such event Landlord shall be relieved of all liability
to Tenant for the return of the Security Deposit. The Tenant shall look solely
to the new owner or lessor for the return of said Security Deposit. The Security
Deposit shall not be mortgaged, assigned or encumbered by Tenant. In the event
of a permitted assignment under this Lease by Tenant, the Security Deposit shall
be held by Landlord as a deposit made by the permitted assignee and the Landlord
shall have no further liability with respect to the return of said Security
Deposit to the original Tenant.

          (c)  Landlord shall not be required to keep the Security Deposit
separate from its general accounts.

          (d)  Tenant shall provide Landlord with the letters of credit in the
form and at the time required by Exhibit "F" and at the times described in
Section 4.4. All proceeds of such letters of credit, if drawn by Landlord, may
be used by Landlord to pay for amounts for which Tenant is responsible hereunder
and to reimburse Landlord for damages it suffers and costs it incurs in
connection with any event of default by Tenant.

     39.  Hazardous Substances. Tenant hereby covenants and agrees that Tenant
shall not cause or permit any "Hazardous Substances" (as hereinafter defined) to
be generated, placed, held, stored, used, located or disposed of at the Project
or any part thereof except for Hazardous Substances as are commonly and legally
used or stored as a consequence of using the Premises for general office and
administrative purposes, but only so long as the quantities thereof do not pose
a threat to public health or to the environment or would necessitate a "response
action", as that term is defined in CERCLA (as hereinafter defined), and so long
as Tenant strictly complies or causes compliance with all applicable
governmental rules and regulations concerning the use, storage, production,
transportation and disposal of such Hazardous Substances. Promptly upon receipt
of Landlord's request, Tenant shall submit to Landlord true and correct copies
of any reports filed by Tenant with any governmental or quasi-governmental
authority regarding the generation, placement, storage, use, treatment or
disposal of Hazardous Substances on or about the Premises. For purposes of this
Section 39, "Hazardous Substances" shall mean and include those elements or
compounds which are contained in the list of Hazardous Substances adopted by the
United States Environmental Protection Agency (EPA) or in any list of toxic
pollutants designated by Congress or the EPA or which are defined as hazardous,
toxic, pollutant, infectious or radioactive by any other federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to or imposing liability (including, without limitation, strict
liability) or standards of conduct concerning, any hazardous, toxic or dangerous
waste, substance or material, as now or at any time hereinafter in effect
(collectively "Environmental Laws"). Tenant hereby agrees to indemnify Landlord
and hold Landlord harmless from and against any and all losses, liabilities,
including strict liability, damages, injuries, expenses, including reasonable
attorneys' fees, costs of settlement or judgment and claims of any and every
kind whatsoever paid, incurred or suffered by, or asserted against, Landlord by
any person, entity or governmental agency for, with respect to, or as a direct
or indirect result of' the presence in, or the escape, leakage, spillage,
discharge, emission or release from, the Premises of any Hazardous Substances
caused by Tenant (including, without limitation, any losses, liabilities,
including strict liability, damages, injuries, expenses, including reasonable
attorneys' fees, costs of any settlement or judgment or claims asserted or
arising under the Comprehensive Environmental Response, Compensation and
Liability Act ["CERCLA"], any so-called federal, state or local "Superfund" or
"Superlien" laws or any other Environmental Law); provided, however, that the
foregoing indemnity is limited to matters arising solely from Tenant's violation
of the covenant contained in this Section 39. The obligations of Tenant under
this Section shall survive any expiration or termination of this Lease. Landlord
represents and warrants to Tenant that, to the best of Landlord's knowledge,
there will not be as of the Final Delivery Date, any Hazardous Substances
located on or about the Project or the Premises, except for Hazardous Substances
as are commonly and legally used in the construction of the Building and the
tenant improvements to the Premises, provided that such use complies with all
applicable Environmental Laws.

                                      23
<PAGE>

     40.  Broker.  CB Richard Ellis, Inc. has represented Landlord in this
transaction, and The Staubach Company has represented Tenant in this transaction
(collectively, "Brokers"). Brokers are entitled to a leasing commission from
Landlord by virtue of this Lease, which leasing commission shall be paid in
accordance with the terms of a separate agreement between Landlord and Brokers.
Tenant hereby authorizes Brokers and Landlord to identify Tenant as a tenant of
the Building and to state the amount of space leased by Tenant in advertisements
and promotional materials relating to the Building. Landlord and Tenant
represent and warrant to each other that (except with respect to the Brokers no
broker, agent, commission salesperson, or other person has represented Landlord
or Tenant in the negotiations for and procurement of this Lease and of the
Premises and that (except with respect to the Brokers) no commissions, fees, or
compensation of any kind are due and payable in connection herewith to any
broker, agent, commission salesperson, or other person as a result of any act or
agreement of Landlord or Tenant.  Landlord and Tenant agree to indemnify and
hold each other harmless from all loss, liability, damage, claim, judgment, cost
or expense (including reasonable attorneys' fees and court costs) suffered or
incurred by the other party as a result of a breach by Landlord or Tenant, as
applicable, of the representation and warranty contained in the immediately
preceding sentence or as a result of Landlord's or Tenant's failure to pay
commissions, fees, or compensation due to any broker who represented Landlord or
Tenant, whether or not disclosed, or as a result of any claim for any fee,
commission or similar compensation with respect to this Lease made by any
broker, agent or finder (other than the Brokers) claiming to have dealt with
Landlord or Tenant, whether or not such claim is meritorious.

     41.  Signage.

          (a)  Tenant shall be entitled, at its sole cost and expense, to
identification signage on the entry door to the Premises and to. Building
standard floor lobby directional signage on the floor on which the Premises are
located. The location, quality, design, style, lighting and size of such signage
shall be consistent with the Landlord's building standard signage program and
shall be subject to Landlord's prior written approval, in its sole discretion.
Upon the expiration or earlier termination of this Lease, Tenant shall be
responsible, at its sole cost and expense, for the removal of such signage and
the repair of all damage to the Building caused by such removal.

          (b)  Tenant shall be entitled to the number of lines on the Building
directory to display Tenant's name and location in the Building as are
proportionate to its occupancy in the Building.

          (c)  Any signs, notices, logos, pictures, names or advertisements
which are installed outside of the Premises and that have not been individually
approved by Landlord may be removed without notice by Landlord at the sole
expense of Tenant. Tenant may not install any signs on the exterior or roof of
the Building or the common areas of the Building or the Project. Any signs,
window coverings, or blinds (even if the same are located behind the Landlord
approved window coverings for the Building), or other items visible from the
exterior of the Premises or Building are subject to the prior approval of
Landlord, in its sole discretion.

          (d)  At Landlord's option, either (i) Landlord will not install any
monument sign for the Project, or (ii) Landlord will install, at Landlord's
cost, one (1) monument sign for the Project identifying only the name and/or
address of the Project and not identifying any tenant or occupant of the
Project, or (iii) Landlord will install, at Landlord's cost, one (1) monument
sign for the Project identifying the name and/or address of the Project and the
name or names of certain tenants of the Project, in which case, subject to the
limitations hereinafter set forth in this paragraph (d), Tenant's name shall be
more prominent on such monument sign than that of any other Tenant of the
Project. The cost of maintaining, repairing and replacement any such monument
sign for the Project shall be included in Operating Expenses. In the event
Landlord makes the election set forth in clause (iii) above, for so long as
Tenant shall lease at least 125,000 RSF in the Building, Tenant shall have the
right, at Tenant's cost, to place Tenant's graphics identifying the name of
Tenant on such monument sign. The graphics of no other tenant shall have a
permissible height which is greater than the permissible height of Tenant's
graphics on such monument sign. The size, design, color and placement location
of Tenant's graphics for such monument sign and the method of attachment thereto
shall be subject to the prior written approval of Landlord, which approval shall
not be unreasonably withheld or delayed, except that Landlord may establish
uniform standards for such graphics, in which case Tenant's graphics shall
conform to such standards. In the event the removal of Tenant's graphics from
such monument sign causes any damage or defacement of such monument sign, Tenant
shall be responsible for the

                                      24
<PAGE>

reasonable cost of repair of such monument sign. Such obligation shall survive
any expiration or termination of this Lease.

          (e)  For so long as Tenant shall lease at least 125,000 RSF in the
Building, Tenant shall have the right, at Tenant's cost, to place Tenant's
graphics identifying the name of Tenant at or near the low-rise elevator bank on
the first floor of the Building at a specific location designated by Landlord,
and Tenant's name shall be the top name of the tenants listed at such location.
The graphics of no other tenant shall have a permissible height which is greater
than the permissible height of Tenant's graphics in the Building lobby. The
size, design and color of Tenant's graphics at such first floor elevator bank
location and the method of attachment of such graphics shall be subject to the
prior written approval of Landlord, which approval shall not be unreasonably
withheld or delayed, except that Landlord may establish uniform standards for
such graphics, in which case Tenant's graphics shall conform to such standards.
In the event the removal of Tenant's graphics from such first floor elevator
bank location causes any damage to the Building, Tenant shall be responsible for
the reasonable cost of repair of such damage. Such obligation shall survive any
expiration or termination of this Lease.

     42.  Arbitration

          (a)  Exclusive Remedy/Payment Under Protest. The provisions of this
Section 42 contain the sole and exclusive method, means and procedure to resolve
any and all disputes or disagreements, including whether any particular matter
constitutes, or with the passage of time would constitute, an event of default,
except as provided in paragraph (g) below. The parties hereby irrevocably waive
any and all rights to the contrary and shall at all times conduct themselves in
strict, full, complete and timely accordance with the provisions of this Section
42. Any and all attempts to circumvent the provisions of this Section 42 shall
be absolutely void. As to any matter submitted to arbitration to determine
whether it would, with the passage of time, constitute an event of default, such
passage of time shall not commence to run until any such affirmative
determination, so long as it is simultaneously determined that the challenge of
such matter as a potential event of default was made in good faith, except with
respect to the payment of money. With respect to the payment of money, such
passage of time shall not commence to run only if the party which is obligated
to make the payment does in fact make the payment to the other party. Such
payment can be made "under protest," which shall occur when such payment is
accompanied by a good-faith notice stating why the party has elected to make a
payment under protest. Such protest will be deemed waived unless the subject
matter identified in the protest is submitted to arbitration as set forth as
follows:

          (b)  Arbitration Panel. Within sixty (60) days after delivery of
written notice ("Notice of Dispute") of the existence and nature of any dispute
given by any party to the other party, and unless otherwise provided herein in
any specific instance, the parties shall each: (i) appoint one (1) lawyer
actively engaged in the licensed and full-time practice of law, specializing in
real estate leasing matters, in San Francisco County for a continuous period
immediately preceding the date of delivery ("Dispute Date") of the Notice of
Dispute of not less than ten (10) years, but who has at no time ever represented
or acted on behalf of any of the parties, and (ii) deliver written notice of the
identity of such lawyer and a copy of his or her written acceptance of such
appointment and acknowledgment of and agreement to be bound by the time
constraints and other provisions of this Section 42 ("Acceptance") to the other
parties hereto. The party who selects the lawyer may not consult with such
lawyer, directly or indirectly, to determine the lawyer's position on the issue
which is the subject of the dispute. In the event that any party fails to so
act, such arbitrator shall be appointed pursuant to the same procedure that is
followed when agreement cannot be reached as to the third arbitrator. Within ten
(10) days after such appointment and notice, such lawyers shall appoint a third
lawyer (together with the first two (2) lawyers, "Arbitration Panel") of the
same qualification and background and shall deliver written notice of the
identity of such lawyer and a copy of his or her written Acceptance of such
appointment to each of the parties. In the event that agreement cannot be
reached on the appointment of a third lawyer within such period, such
appointment and notification shall be made as quickly as possible by any court
of competent jurisdiction, by any licensing authority, agency or organization
having jurisdiction over such lawyers, by any professional association of
lawyers in existence for not less than ten (10) years at the time of such
dispute or disagreement and the geographical membership boundaries of which
extend to San Francisco County or by any arbitration association or organization
in existence for not less than ten (10) years at the time of such dispute or
disagreement and the geographical boundaries of which extend to San Francisco
County, as determined by the party giving such Notice of Dispute and
simultaneously confirmed in writing delivered by such party to the other party.
Any such court, authority, agency, association or organization shall be entitled
either to

                                      25
<PAGE>

directly select such third lawyer or to designate in writing, delivered to each
of the parties, an individual who shall do so. In the event of any subsequent
vacancies or inabilities to perform among the Arbitration Panel, the lawyer or
lawyers involved shall be replaced in accordance with the provisions of this
Section 42 as if such replacement was an initial appointment to be made under
this Section 42 within the time constraints set forth in this Section 42,
measured from the date of notice of such vacancy or inability, to the person or
persons required to make such appointment, with all the attendant consequences
of failure to act timely if such appointed person is a party hereto.

          (c)  Duty. Consistent with the provisions of this Section 42, the
members of the Arbitration Panel shall utilize their utmost skill and shall
apply themselves diligently so as to hear and decide, by majority vote, the
outcome and resolution of any dispute or disagreement submitted to the
Arbitration Panel as promptly as possible, but in any event on' or before the
expiration of thirty (30) days after the appointment of the members of the
Arbitration Panel. None of the members of the Arbitration Panel shall have any
liability whatsoever for any acts or omissions performed or omitted in good
faith pursuant to the provisions of this Section 42.

          (d)  Authority. The Arbitration Panel shall (i) enforce and interpret
the rights and obligations set forth in this Lease to the extent not prohibited
by law, (ii) fix and establish any and all rules as it shall consider
appropriate in its sole and absolute discretion to govern the proceedings before
it, including any and all rules of discovery, procedure and/or evidence, and
(iii) make and issue any and all orders, final or otherwise, and any and all
awards, as a court of competent jurisdiction sitting at law or in equity could
make and issue, and as it shall consider appropriate in its sole and absolute
discretion, including the awarding of monetary damages (but shall not award
consequential damages to either party and shall not award punitive damages
except in situations involving knowing fraud or egregious conduct condoned by,
or performed by, the person who, in essence, occupies the position which is the
equivalent of the chief executive officer of the party against whom damages are
to be awarded), the awarding of reasonable attorneys' fees and costs to the
prevailing party as determined by the Arbitration Panel and the issuance of
injunctive relief. If the party against whom the award is issued complies with
the award, within the time period established by the Arbitration Panel, then no
event of default will be deemed to have occurred, unless the event of default
pertained to the non-payment of money by Tenant or Landlord, and Tenant or
Landlord failed to make such payment under protest.

          (e)  Appeal. The decision of the Arbitration Panel shall be final and
binding, may be confirmed and entered by any court of competent jurisdiction at
the request of any party and may not be appealed to any court of competent
jurisdiction or otherwise except upon a claim of fraud on the part of the
Arbitration Panel, or on the basis of a mistake as to the applicable law. The
Arbitration Panel shall retain jurisdiction over any dispute until its award has
been implemented, and judgment on any such award may be entered in any court
having appropriate jurisdiction.

          (f)  Compensation. Each member of the Arbitration Panel shall be
compensated for any and all services rendered under this Section 42 at a rate of
compensation equal to the sum of (i) Four Hundred Dollars ($400.00) per hour and
(ii) the sum of Ten Dollars ($10.00) per hour multiplied by the number of full
years of the expired term under this Lease, plus reimbursement for any and all
expenses incurred in connection with the rendering of such services, payable in
lull promptly upon conclusion of the proceedings before the Arbitration Panel.
Such compensation and reimbursement shall be borne by the nonprevailing party as
determined by the Arbitration Panel in its sole and absolute discretion.

          (g)  Exception. Notwithstanding the foregoing, Landlord shall have the
right to exercise its remedy of unlawful detainer against Tenant following the
failure of Tenant to pay any portion of the Rent or other sums due hereunder,
and without regard to the other provisions of this Section 42. In addition,
Landlord and Tenant hereby waive trial by jury in any action, proceeding or
counterclaim brought by either of them against the other or in connection with
any matter whatsoever arising out of or in connection with this Lease, the
relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises
or any claim of injury or damage or the enforcement of any remedy under any
statute, or otherwise.

     43.  Miscellaneous

                                      26
<PAGE>

          (a)  Submission of Lease. The submission of this Lease for examination
does not constitute an offer to lease and this Lease shall be effective only
upon execution hereof by Landlord and Tenant.

          (b)  Severability. If any clause or provision of this Lease is
illegal, invalid or unenforceable tinder present or future laws, the remainder
of this Lease shall not be affected thereby, and in lieu of each clause or
provision of this Lease which is illegal, invalid or unenforceable, there shall
be added as a part of this Lease a clause or provision as nearly identical to
the said clause or provision as may be legal, valid and enforceable.

          (c)  Entire Agreement. This Lease contains the entire agreement of the
parties and no representations, inducements, promises or agreements, oral or
otherwise, between the parties not embodied herein shall be of any force or
effect. This Lease supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements, and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease. There are no representations or warranties between the parties, and all
reliance with respect to representation is based totally upon the
representations and agreements contained in this Lease. This Lease may not be
altered, waived, amended or extended except by an instrument in writing signed
by Landlord and Tenant. This Lease is not in recordable form, and Tenant agrees
not to record or cause to be recorded this Lease or any short form or memorandum
thereof.

          (d)  Headings. The use of headings herein is solely for the
convenience of indexing the various paragraphs hereof and shall in no event be
considered in construing or interpreting any provision of this Lease.

          (e)  Governing Law. The laws of the State of California shall govern
the validity, performance and enforcement of this Lease.

          (f)  Authority. Each of Landlord and Tenant shall deliver to one
another, on or before forty-five (45) days after the date hereof, a resolution
of its members or Board of Directors, duly certified and in such form as the
receiving party shall reasonably require to the effect that such party has duly
authorized and executed this Lease.

          (g)  Financial Statements. Upon Landlord's written request therefor,
but not more often than once per year, Tenant shall promptly furnish to Landlord
a financial statement with respect to Tenant for its most recent fiscal year
prepared in accordance with generally accepted accounting principles and
certified by Tenant as fairly presenting the financial condition of Tenant,
which statement Landlord agrees to keep confidential and not use except in
connection with proposed sale or loan transactions.

          (h)  Joint and Several Liability. If Tenant comprises more than one
person, corporation, partnership or other entity, the liability hereunder of all
such persons, corporations, partnerships or other entities shall be joint and
several.

          (i)  Non-Waiver. No waiver of any provision of this Lease shall be
implied by any failure of Landlord or Tenant to enforce any remedy on account of
the violation of such provision, even if such violation shall continue or be
repeated subsequently. Any waiver by Landlord or Tenant of any provision of this
Lease may only be in writing, and no express waiver shall affect any provision
other than the one specified in such waiver and that one only for the time and
in the manner specifically stated. No receipt of monies by Landlord from Tenant
after the termination of this Lease shall in any way alter the length of the
Lease Term or of Tenant's right of possession hereunder or after the giving of
any notice shall reinstate, continue or extend the Lease Term or affect any
notice given Tenant prior to the receipt of such monies, it being agreed that
after the service of notice or the commencement of a suit or after final
judgment for possession of the Premises, Landlord may receive and collect any
Rent due, and the payment of said Rent shall not waive or affect said notice,
suit or judgment.

          (j)  Landlord's Right to Cure Default and Payments by Tenant.

                                      27
<PAGE>

               (i)  All covenants and agreements to be kept or performed by
Tenant under this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any reduction of Rent. If Tenant shall fail to perform any
of its performance obligations under this Lease, within a reasonable time after
such performance is required by the terms of this Lease and the delivery of
written notice by Landlord to Tenant of such failure, Landlord may, but shall
not be obligated to, after reasonable prior notice to Tenant, make any such
payment or perform any such act on Tenant's part without waiving its right based
upon any default of Tenant and without releasing Tenant from any obligations
hereunder.

               (ii) Except as may be specifically provided to the contrary in
this Lease, Tenant shall pay to Landlord, within fifteen (15) days after
delivery by Landlord to Tenant of statements therefor: (i) sums equal to
expenditures reasonably made and obligations incurred by Landlord in connection
with the remedying by Landlord of Tenant's defaults pursuant to the provisions
of this paragraph (j); (ii) sums equal to all losses, costs, liabilities,
damages and expenses referred to in Sections 15 (Insurance) and 34 (Liability of
Tenant) of this Lease; and (iii) sums equal to all expenditures made and
obligations incurred by Landlord in collecting or attempting to collect the Rent
that is past due or in enforcing or attempting to enforce any rights of Landlord
under this Lease or pursuant to law, including, without limitation, all legal
fees and other amounts so expended. Tenant's obligations under this Article
shall survive the expiration or sooner termination of the Lease Term.

          (k)  Terms. The necessary grammatical changes required to make the
provisions hereof apply either to corporations, partnerships, limited liability
companies, individuals, men or women, as the case may require, shall in all
cases be assumed as though in each case fully expressed.

          (l)  Relationship of Parties. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venture or any
association between Landlord and Tenant, it being expressly understood and
agreed that neither the method of computation of Rent nor any act of the parties
hereto shall be deemed to create any relationship between Landlord and Tenant
other than the relationship of landlord and tenant.

          (m)  Application of Payments. Landlord shall have the right to apply
payments received from Tenant pursuant to this Lease, regardless of Tenant's
designation of such payments, to satisfy any obligations of Tenant hereunder, in
such order and amounts as Landlord, in its sole discretion, may elect.

          (n)  Confidentiality. Tenant acknowledges that the content of this
Lease and any related documents are confidential information. Tenant shall keep
such confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal, and space planning consultants except in the event of any arbitrated or
litigated dispute between Landlord and Tenant or as required by law.

          (o)  Building Name and Signage. Subject to Section 41 (Signature),
Landlord shall have the right at any time to change the name of the Building and
Project and to install, affix and maintain any and all signs on the exterior and
on the interior of the Building or any portion of the Project as Landlord may,
in Landlord's sole discretion, desire. Tenant shall not use the name of the
Building or Project or use pictures or illustrations of the Building or Project
in advertising or other publicity, without the prior written consent of
Landlord. Notwithstanding the foregoing, no other tenant shall be entitled to
signage larger than Tenant's on the exterior of the Building.

          (p)  Exhibits. Exhibits "A" - "K", inclusive, and any other
attachments specified in the Basic Lease Information, are attached to and made a
part of this Lease and incorporated into this Lease by this reference.

          (q)  Roof Rights. During the Lease Term, Tenant shall have the right,
at its expense, to install and operate up to two (2), 24 inch satellite dishes
or antennas, or a combination thereof, including cables thereto on the roof of
the Building. The location of such antennas or satellite dishes shall be subject
to Landlord's reasonable approval, and such equipment may not interfere with the
installation, use or maintenance of other equipment installed on the roof of the
Building by Landlord or other tenants. Such installation shall also be
consistent with Landlord's plan regarding the esthetics of the Building. All of
such telecommunications equipment, if installed, shall

                                      28
<PAGE>

be removed by Tenant at its expense on the expiration or earlier termination of
the Lease and all damages caused by such removal shall be paid upon demand by
Tenant to Landlord. In consideration for permission to install any additional
telecommunications equipment on the roof of the Building (should Landlord
consent), Tenant shall pay to Landlord, as Additional Rent, such sum as Landlord
shall reasonably determine. Tenant's access to and use of the roof shall be
subject to such rules and regulations as Landlord shall promulgate from time to
time, and Tenant agrees to abide thereby.

          (r)  Transportation Management.

               (i)  Tenant shall reasonably comply with all present or future
programs intended to manage parking, transportation or traffic in and around the
Building, and in connection therewith, Tenant shall take responsible action for
the transportation planning and management of all employees located at the
Premises by working directly with Landlord, any governmental transportation
management organization or any other transportation-related committees or
entities. Such programs may include, without limitation: (i) reasonable
restrictions on the number of peak-hour vehicle trips generated by Tenant; (ii)
increased vehicle occupancy; (iii) implementation of an in-house ridesharing
program and an employee transportation coordinator; (iv) working with employees
and any Building or area-wide ridesharing program manager; (v) instituting
reasonable employer-sponsored incentives (financial or in-kind) to encourage
employees to rideshare; and (vi) utilizing flexible work shifts for employees.

               (ii) Pursuant to the City of San Francisco Planning Code Section
163, the Landlord has entered, or may enter into an agreement with the San
Francisco Department of City Planning to provide and implement a transportation
management program for tenants of the Building and to participate in a program
designed to coordinate commute alternatives marketing and brokerage for
employees in the Greater Downtown San Francisco, California area. During the
term of the Tenant's tenancy, Landlord agrees to provide transportation
brokerage and commute assistance services, as part of Operating Expenses, to the
Tenant to assist the Tenant in meeting the transportation needs of its
employees. Tenant agrees to cooperate reasonably with and assist the Landlord's
transportation management coordinator (the "Coordinator"), through designation
of a responsible employee, to distribute to Tenant's employees written materials
promoting and encouraging the use of public transit and/or ridesharing, and
distribute and return to the Coordinator transportation survey questionnaire
forms. Tenant may agree, at its option, to participate in other activities
required of Landlord and/or ridesharing by employees in the Building.

          (s)  Emergency Generator. Tenant shall have the right to install or
cause to be installed an emergency or backup generator on the roof of the
Building (or in such other place as Landlord shall determine) in compliance with
the reasonable requirements of Landlord. Landlord shall have the right to charge
fair market rent for the space for the generator. It shall be the sole
responsibility of Tenant to pay for the installation, maintenance and use of
such generator, and such installation shall be subject to the provisions of
Article 12 [Alterations]. No such installation shall begin until Tenant provides
Landlord with evidence acceptable to Landlord that Tenant has obtained all
required permits and licenses for the installation and use of such generator.

          (t)  Parking. Tenant shall have the right to lease from Landlord, or
Landlord's parking operator, up to the number of parking spaces in the Building
which is in the same ratio to the total number of parking spaces which Landlord
makes available to tenants of the Building from time to time as the number of
RSF in the Premises is to the total number of RSF in the Building. Tenant shall
pay Landlord or its parking operator directly for said parking spaces, as rent,
such monthly amount as Landlord or its parking operator shall establish from
time to time as the fair market monthly rental value of said parking spaces.
Landlord or its parking operator shall charge for all parking spaces in the
Building on a uniform basis. All parking in the Building shall be subject to
such uniform and reasonable rules as Landlord shall establish from time to time.
If at any time Tenant elects to lease fewer than the total number of parking
spaces it is entitled to lease, Landlord may allocate the spaces Tenant does not
lease to other tenants or to the public or for Landlord's use.

                                 [END OF TEXT]

                                      29
<PAGE>

          IN WITNESS WHEREOF, the parties have executed this Lease as of the
date first above written.

                                    "LANDLORD"

                                    COUSINS/MYERS II, LLC, a Delaware limited
                                    liability company

                                    By:  Cousins Properties Incorporated, a
                                         Georgia corporation, Managing Member

                                         By____________________________________
                                         Name__________________________________
                                         Title_________________________________

                                    "TENANT"

                                    DIGITAL ISLAND, INC a Delaware corporation

                                         By____________________________________
                                         Name__________________________________
                                         Title_________________________________

                                         Attest:_______________________________
                                         Name__________________________________
                                         Title_________________________________
<PAGE>

                                  EXHIBIT "G"

                             BASE RENT DESCRIPTION

     1.  Base Rental. Base Rental for each floor of the Premises is as follows:

<TABLE>
<CAPTION>
                   RSF IN
                     THE
  FLOOR           PREMISES            LEASE PERIOD 1                   LEASE PERIOD 1                LEASE PERIOD 1
----------------------------------------------------------------------------------------------------------------------------
                                               Annual Base                       Annual Base                     Annual Base
                                 Rate/RSF        Rental          Rate/RSF          Rental         Rate/RSF         Rental
----------------------------------------------------------------------------------------------------------------------------
<S>        <C>              <C>           <C>              <C>              <C>              <C>            <C>
5                   20,192        $40.00       $  807,680           $42.00       $  848,064         $44.00        $  888,448
----------------------------------------------------------------------------------------------------------------------------
6                   20,192         40.00          807,680            42.00          848,064          44.00           888,448
----------------------------------------------------------------------------------------------------------------------------
7                   19,981         40.00          799,240            42.00          839,202          44.00           879,164
----------------------------------------------------------------------------------------------------------------------------
8                   16,277         43.00          699,911            45.00          732,465          47.00           765,019
----------------------------------------------------------------------------------------------------------------------------
9                   16,277         43.00          699,911            45.00          732,465          47.00           765,019
----------------------------------------------------------------------------------------------------------------------------
10                  16,277         43.00          699,911            45.00          742,465          47.00           765,019
----------------------------------------------------------------------------------------------------------------------------
11                  16,277         44.00          716,188            46.00          748,742          48.00           781,296
----------------------------------------------------------------------------------------------------------------------------
12                  16,277         44.00          716,188            46.00          748,742          48.00           781,296
----------------------------------------------------------------------------------------------------------------------------
14                  16,275         46.00          748,650            48.00          781,200          50.00           813,750
----------------------------------------------------------------------------------------------------------------------------
Total              158,025                     $6,695,359                        $7,011,409                       $7,327,459
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

          This Exhibit G shall be amended by Landlord to reflect the proper Base
Rent upon an adjustment to the RSF of the Building or the Premises pursuant to
Section 1(b) or the expansion of the Premises pursuant to Exhibit E.

          2.   Rent Escalation.

          (a)  As used in this Article 2, the term "Lease Period" shall
mean the forty-eight (48) month period commencing on the Rent Commencement Date,
or, if the Rental Commencement Date is not on the first day of a calendar month,
commencing on the first day of the first calendar month following the Rent
Commencement Date, and each successive forty-eight (48) month period thereafter
during the Lease Term. The term "Subsequent Period" shall mean each Lease Period
of the Lease Term following the first Lease Period. The term "Prior Period"
shall mean the Lease Period prior to each Subsequent Period. The term "Index"
shall mean the Consumer Price Index for all Urban Consumers (U.S. City Average;
Base 1982-84-100), published by the Bureau of Labor Statistics of the United
States Department of Labor. The term "Base Month" shall mean the calendar month
which is two (2) months prior to the month during which this Lease is fully
executed by Landlord and Tenant. The term "Comparison Month" shall mean the
calendar month which is two (2) months prior to the first full month of each
Subsequent Period in question.

          (b)  On the first day of each Subsequent Period, the Base Rental Rate
shall be increased to an amount equal to the Base Rental Rate for the first
Lease Period as set forth in the following chart contained in Section 1 above,
plus an amount equal to the product of fifteen (15) times the percentage
increase in the Index for the Comparison Month as compared to the Index for the
Base Month, multiplied by the Base Rental Rate for the first Lease Period;
provided, however, in no event shall the Base Rental Rate for a Subsequent
Period be less than the Base Rental Rate applicable to the Prior Period and in
no event shall the Base Rental Rate for the Subsequent Period be greater than
the amounts for the Lease Periods shown in the above chart.

                                  EXHIBIT "G"

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