Document:

<PAGE>   1
                                                                   Exhibit 10.27

                               AGREEMENT OF LEASE

                                     between

                           HUDSON TELECOM CENTER, LLC,

                                    Landlord

                                       and

                    NET2000 COMMUNICATIONS REAL ESTATE, INC.,

                                     Tenant

                                325 Hudson Street
                               New York, New York

                              Mayer, Brown & Platt
                                  1675 Broadway
                            New York, New York 10019
<PAGE>   2
                                TABLE OF CONTENTS

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DEFINITIONS ............................................................       1

ARTICLE 1
DEMISE, PREMISES, TERM, RENT ...........................................       7

ARTICLE 2
USE AND OCCUPANCY ......................................................       9

ARTICLE 3
ALTERATIONS ............................................................       9

ARTICLE 4
REPAIRS-FLOOR LOAD .....................................................      13

ARTICLE 5
WINDOW CLEANING ........................................................      15

ARTICLE 6
REQUIREMENTS OF LAW ....................................................      15

ARTICLE 7
SUBORDINATION ..........................................................      16

ARTICLE 8
RULES AND REGULATIONS ..................................................      19

ARTICLE 9
INSURANCE, PROPERTY LOSS OR DAMAGE; REIMBURSEMENT ......................      20

ARTICLE 10
DESTRUCTION-FIRE OR OTHER CAUSE ........................................      22

ARTICLE 11
EMINENT DOMAIN .........................................................      23

ARTICLE 12
ASSIGNMENT, SUBLETTING, MORTGAGE, ETC ..................................      25

ARTICLE 13
ELECTRICITY AND FUEL ...................................................      30
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                                TABLE OF CONTENTS
                                   (continued)

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ARTICLE 14
ACCESS TO PREMISES .....................................................      32

ARTICLE 15
CERTIFICATE OF OCCUPANCY ...............................................      33

ARTICLE 16
DEFAULT ................................................................      33

ARTICLE 17
REMEDIES AND DAMAGES ...................................................      36

ARTICLE 18
FEES AND EXPENSES ......................................................      38

ARTICLE 19
NO REPRESENTATIONS BY LANDLORD .........................................      39

ARTICLE 20
END OF TERM ............................................................      40

ARTICLE 21
QUIET ENJOYMENT ........................................................      41

ARTICLE 22
FAILURE TO GIVE POSSESSION .............................................      41

ARTICLE 23
NO WAIVER ..............................................................      42

ARTICLE 24
WAIVER OF TRIAL BY JURY ................................................      42

ARTICLE 25
INABILITY TO PERFORM ...................................................      43
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                               TABLE OF CONTENTS
                                   (continued)

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ARTICLE 26
BILLS AND NOTICES ......................................................      43

ARTICLE 27
ESCALATION .............................................................      44

ARTICLE 28
SERVICES ...............................................................      49

ARTICLE 29
PARTNERSHIP TENANT .....................................................      52

ARTICLE 30
SECURITY ...............................................................      53

ARTICLE 31
[Intentionally Omitted .................................................      54

ARTICLE 32
CAPTIONS ...............................................................      54

ARTICLE 33
PARTIES BOUND ..........................................................      55

ARTICLE 34
BROKER .................................................................      55

ARTICLE 35
INDEMNITY ..............................................................      55

ARTICLE 36
ADJACENT EXCAVATION-SHORING ............................................      56

ARTICLE 37
MISCELLANEOUS ..........................................................      57

ARTICLE 38
RENT CONTROL ...........................................................      58
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                                TABLE OF CONTENTS
                                   (continued)

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ARTICLE 39
ROOF RIGHTS AND TELECOMMUNICATIONS CARRIERS ...........................       59

ARTICLE 40
RENEWAL TERM ..........................................................       59

SCHEDULE A
RULES AND REGULATIONS .................................................      A-1

SCHEDULE B
ROOF RIGHTS, LOADING DOCK AND BASEMENT ................................      B-1

SCHEDULE C
TELECOMMUNICATIONS CARRIERS ...........................................      C-1

EXHIBIT A
LANDLORD'S WORK .......................................................      A-1

EXHIBIT B
LANDLORD'S BASE BUILDING WORK .........................................      B-1
</TABLE>

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<PAGE>   6
         AGREEMENT OF LEASE, made as of the 31st day of October, 1999, between
Landlord and Tenant.

                                  WITNESSETH:

                  The parties hereto, for themselves, their legal
representatives, successors and assigns, hereby covenant as follows.

                                  DEFINITIONS

                  Capitalized terms used herein and not defined elsewhere in
this Lease shall have the meanings set forth below, each of which definition
shall be included within, and an integral and substantive part of, the terms,
covenants and provisions of this Lease:

                  "ADA" shall mean the Americans with Disabilities Act of 1990,
Public Law 101-336, U.S.C. Section 12101 et seq., as the same may be hereafter
amended from time to time, together with all regulations and guidelines
promulgated pursuant thereto or in connection therewith.

                  "ADA Bathroom" shall have the meaning set forth in Article
19 hereof.

                  "ADA Tenant Fund" shall have the meaning set forth in Section
3.4 hereof.

                  "Alterations" shall mean alterations, installations,
improvements, additions or other physical work or changes in or about the
Premises or any Licensed Area.

                  "Applicable Rate" shall mean the lesser of (x) two (2)
percentage points above the then current Base Rate, and (y) the maximum rate
permitted by applicable law.

                  "Assessed Valuation" shall have the meaning set forth in
Section 27.1 hereof.

                  "Bankruptcy Code" shall mean 11 U.S.C. Section 101 et seq., or
any statute of similar nature and purpose.

                  "Base Rate" shall mean the rate of interest publicly announced
from time to time by Citibank, N.A., or its successor, as its "base rate" (or
such other term as may be used by Citibank, N.A., from time to time, for the
rate presently referred to as its "base rate").

                  "Base Taxes" shall have the meaning set forth in Section 27.1
hereof.

                  "Broker" shall have the meaning set forth in Article 34
hereof.
<PAGE>   7
                  "Building" shall mean all the buildings, equipment and other
improvements and appurtenances of every kind and description now located or
hereafter erected, constructed or placed upon the land and any and all
alterations and replacements thereof, additions thereto and substitutions
therefor, known by the address of 325 Hudson Street, New York, New York.

                  "Building Systems" shall mean the mechanical, gas, electrical,
sanitary, heating, air conditioning, ventilating, elevator, plumbing,
life-safety and other service systems of the Building except for the
distribution portions located within the Premises.

                  "Business Days" shall mean all days, excluding Saturdays,
Sundays and all days observed by either the State of New York or the Federal
Government or by the labor unions servicing the Building as legal holidays.

                  "Carriers" shall have the meaning set forth in Schedule C,
attached hereto and made a part hereof.

                  "Commencement Date" shall have the meaning set forth in
Section 1.1 hereof.

                  "Comparison Year" shall have the meaning set forth in Section
27.1 hereof.

                  "Consumer Price Index" shall mean the Consumer Price Index
for All Urban Consumers published by the Bureau of Labor Statistics of the
United States Department of Labor, New York, N.Y. - Northeastern N.J. Area, All
Items (1982-84=100), or any successor index thereto, appropriately adjusted. In
the event that the Consumer Price Index is converted to a different standard
reference base or otherwise revised, the determination of adjustments provided
for herein shall be made with the use of such conversion factor, formula or
table for converting the Consumer Price Index as may be published by the Bureau
of Labor Statistics or, if said Bureau "shall not publish the same, then with
the use of such conversion factor, formula or table as may be published by
Prentice-Hall, Inc., or any other nationally recognized publisher of similar
statistical information. If the Consumer Price Index ceases to be published, and
there is no successor thereto, such other index as Landlord and Tenant shall
agree upon in writing shall be substituted for the Consumer Price Index. If
Landlord and Tenant are unable to agree as to such substituted index, such
matter shall be submitted to the American Arbitration Association or any
successor organization for determination in accordance with the regulations and
procedures thereof then obtaining for commercial arbitration. The costs of such
arbitration shall be shared equally by Landlord and Tenant.

                  "Deficiency" shall have the meaning set forth in Section 17.2
hereof.

                  "Electricity Additional Rent" shall have the meaning set forth
in Section 13.2 hereof.

                  "Escalation Rent" shall mean either individually or
collectively, as the case may be, the Tax Payment and the Porters' Wage Payment.

                                      -2-
<PAGE>   8
                  "Event of Default" shall have the meaning set forth in Section
16.1 hereof.

                  "Expiration Date" shall mean the Fixed Expiration Date or such
earlier or later date on which the Term shall sooner or later end pursuant to
any of the terms, conditions or covenants of this Lease or pursuant to law.

                  "Fair Market Rent" shall have the meaning set forth in Section
40.3 hereof.

                  "First Rental Period" shall have the meaning set forth in
Section 1.1 hereof.

                  "Fixed Expiration Date" shall have the meaning set forth in
Section 1.1 hereof.

                  "Fixed Rent" shall have the meaning set forth in Section 1.1
hereof.

                  "Generator" shall have the meaning set forth in Schedule C,
attached hereto and made a part hereof.

                  "Governmental Authority (Authorities)" shall mean the United
States of America, the State of New York, the City of New York, any political
subdivision thereof and any agency, department, commission, board, bureau or
instrumentality of any of the foregoing, now existing or hereafter created,
having jurisdiction over the Real Property or any portion thereof.

                  "HVAC" shall mean heat, ventilation and air conditioning.

                  "Increase" shall have the meaning set forth in Section 27.4
hereof.

                  "Indemnitees" shall mean Landlord, Mortgagee and Lessor, the
partners comprising Landlord, Mortgagee and Lessor and the partners,
shareholders, officers, directors, employees and agents (including, without
limitation, leasing and managing agents) of Landlord, Mortgagee and Lessor and
of the partners thereof.

                  "Initial Alterations" shall mean the Alterations to be made by
Tenant to initially prepare the Premises and Licensed Areas for Tenant's use and
occupancy.

                  "Landlord", on the date as of which this Lease is made, shall
mean Hudson Telecom Center, LLC, having an office at 400 Montgomery Street, San
Francisco, California 94104, but after a sale or transfer of the Building or
Real Property, "Landlord" shall mean the fee owner of the Building or Real
Property, as the case may be, and if there shall exist a Superior Lease, the
Lessee thereunder.

                  "Landlord's Appraiser" shall have the meaning set forth in
Section 40.3. hereof.

                  "Landlord's Determination" shall have the meaning set forth in
Section 40.3 hereof.

                                      -3-
<PAGE>   9
                  "Landlord's Notice" shall have the meaning set forth in
Section 40.3 hereof.

                  "Landlord's Work" shall have the meaning set forth in Article
19 hereof.

                  "Landlord's Base Building Work" shall mean the items set forth
in Exhibit B attached hereto.

                  "Lessor(s)" shall mean a lessor under a Superior Lease.

                  "Licensed Area(s)" shall mean, individually and collectively
as the context requires, an area or areas of the Building where Tenant is
granted a nonexclusive or exclusive license pursuant to the terms of this Lease
to install, maintain and operate (w) its telecommunication equipment and
facilities, including, without limitation, the appropriate wiring and cabling
associated therewith, in order to conduct its business and (x) the Generator.

                  "Licensed Area(s) Fair Market Rent" shall have the meaning set
forth in Section 40.3 hereof.

                  "Licensed Area(s) Rental Value" shall have the meaning set
forth in Section 40.3 hereof.

                  "Licensed Area Space Factor" shall mean the number of rentable
square feet contained in the Licensed Area(s), as determined by Landlord and set
forth in a notice given by Landlord to Tenant after such determination.

                  "Local 32B" shall have the meaning set forth in Section 27.1
hereof.

                  "Mortgage(s)" shall mean any trust indenture or mortgage which
may now or hereafter affect the Real Property, the Building or any Superior
Lease and the leasehold interest created thereby, and all renewals, extensions,
supplements, amendments, modifications, consolidations and replacements thereof
or thereto, substitutions therefor, and advances made thereunder.

                  "Mortgagee(s)" shall mean any trustee, mortgagee or holder of
a Mortgage.

                  "Mutual Determination" shall have the meaning set forth in
Section 40.3 hereof.

                  "Nondisturbance Agreement" shall have the meaning set forth in
Section 7.1 hereof.

                  "Overtime Periods" shall have the meaning set forth in Section
28.3 hereof.

                  "Parties" shall have the meaning set forth in Section 37.2
hereof.

                                      -4-
<PAGE>   10
                  "Partner" or "partner" shall mean any general partner of
Tenant.

                  "Partnership Tenant" shall have the meaning set forth in
Article 29 hereof.

                  "Person(s)" or "person(s)" shall mean any natural person or
persons, a partnership, a corporation and any other form of business or legal
association or entity.

                  "Porters" shall have the meaning set forth in Section 27.1
hereof.

                  "Porters' Wage Factor" shall have the meaning set forth in
Section 27.1 hereof.

                  "Porters' Wage Payment" shall have meaning set forth in
Section 27.1 hereof.

                  "Premises" shall mean, subject to the provisions of Section
4.3 hereof, the entire rentable area of the tenth (10th) Floor of the Building
which contains approximately eighteen thousand six hundred ninety-seven (18,697)
rentable square feet.

                  "Premises Fair Market Rent" shall have the meaning set forth
in Section 40.3 hereof.

                  "Premises Rental Value" shall have the meaning set forth in
Section 40.3 hereof.

                  "Prevailing Rate" shall have the meaning set forth in Section
12.6 hereof.

                  "R.A.B." shall have the meaning set forth in Section 27.1
hereof.

                  "Real Property" shall mean the Building, together with the
plot of land upon which it stands.

                  "Related Entity" shall have the meaning set forth in Section
12.4 hereof.

                  "Renewal Notice" shall have the meaning set forth in Section
40.1 hereof.

                  "Renewal Option" shall have the meaning set forth in Section
40.1 hereof.

                  "Renewal Term" shall have the meaning set forth in Section
40.1 hereof.

                  "Rent Commencement Date" shall mean the date which is five (5)
months after the Commencement Date.

                  "Rent Notice" shall have the meaning set forth in Section 40.3
hereof.

                  "Rent Per Square Foot" shall have the meaning set forth in
Section 12.7 hereof.

                                      -5-
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                  "Rental" shall mean and be deemed to include Fixed Rent,
Escalation Rent, all additional rent and any other sums payable by Tenant
hereunder.

                  "Requirement Period" shall have the meaning set forth in
Section 27.4 hereof.

                  "Requirements" shall mean all present and future laws, rules,
orders, ordinances, regulations, statutes, requirements, codes and executive
orders, extraordinary as well as ordinary, of all Governmental Authorities now
existing or hereafter created, and of any and all of their departments and
bureaus, and of any applicable fire rating bureau, or other body exercising
similar functions, affecting the Real Property or any portion thereof, or any
street, avenue or sidewalk comprising a part of or in front thereof or any vault
in order under the same, or requiring removal of any encroachment, or affecting
the maintenance, use or occupation of the Real Property or any portion thereof.

                  "Rules and Regulations" shall mean the rules and regulations
annexed hereto and made a part hereof as Schedule A, and such other and further
reasonable rules and regulations as Landlord or Landlord's agents may from time
to time adopt on at least ten (10) Business Days' prior written notice, subject
to Tenant's rights to dispute the reasonableness thereof as provided in Article
8 hereof.

                  "Second Rental Period" shall have the meaning set forth in
Section 1.1 hereof.

                  "Space Factor" shall mean the sum of (x) eighteen thousand six
hundred ninety-seven (18,697) and (y) the Licensed Area Space Factor as the same
may be increased or decreased pursuant to the terms hereof.

                  "Sublease Expenses" shall have the meaning set forth in
Section 12.7 hereof.

                  "Sublease Profit" shall have the meaning set forth in Section
12.7 hereof.

                  "Sublease Rent" shall have the meaning set forth in Section
12.7 hereof.

                  "Sublease Rent Per Square Foot" shall have the meaning set
forth in Section 12.7 hereof.

                  "Sublease Statement" shall have the meaning set forth in
Section 12.6 hereof.

                  "Superior Lease(s)" shall mean all ground or underlying leases
of the Real Property or the Building heretofore or hereafter made and all
renewals, extensions, supplements, amendments and modifications thereof.

                  "Tax Payment" shall have the meaning set forth in Section 27.2
hereof.

                  "Tax Statement" shall have the meaning set forth in Section
27.1 hereof.

                                      -6-
<PAGE>   12
                  "Tax Year" shall have the meaning set forth in Section 27.1
hereof.

                  "Taxes" shall have the meaning set forth in Section 27.1
hereof.

                  "Tenant", on the date as of which this Lease is made, shall
mean Net2000 Communications Real Estate, Inc., a Delaware corporation, having
its principal office at Net2000 Communications, 2195 Fox Mill, Herndon, Virginia
29171, but thereafter "Tenant" shall mean only the tenant under this Lease at
the time in question; provided, however, that the originally named Tenant, any
successor thereto or any assignee shall not be released from liability hereunder
in the event of any assignment of this Lease.

                  "Tenant's Appraiser" shall have the meaning set forth in
Section 40.3 hereof.

                  "Tenant's Determination" shall have the meaning set forth in
Section 40.3 hereof.

                  "Tenant's Notice" shall have the meaning set forth in Section
40.3 hereof.

                  "Tenant's Property" shall mean Tenant's movable fixtures and
movable partitions, telephone and other communication equipment, computer
terminals, furniture, furnishing, decorations and other items of personal
property.

                  "Tenant's Share" shall mean Ten and 71/100 percent (10.71%),
as the same may be increased or decreased pursuant to the terms hereof.

                  "Term" shall mean a term which shall commence on the
Commencement Date and shall expire on the Expiration Date.

                  "Third Appraiser" shall have the meaning set forth in Section
40.3 hereof.

                  "Wage Rate" shall have the meaning set forth in Section 27.1
hereof.

                  "Wage Statement" shall have the meaning set forth in Section
27.1 hereof.

                  "Unavoidable Delays" shall have the meaning set forth in
Article 25 hereof.

                                    ARTICLE 1
                          DEMISE, PREMISES, TERM, RENT

                  Section 1.1 Landlord hereby leases to Tenant and Tenant hereby
hires from Landlord the Premises for the Term to commence on the date which is
the earlier of (x) the date Landlord shall complete item (a) of Landlord's Work
and deliver possession of the Premises to Tenant and (y) the date on which
Tenant shall take possession of the Premises or any part thereof (the earlier of
the dates set forth in clauses (x) and (y) is referred to as the "Commencement
Date") and to end on the last day of the month in which occurs the date
immediately preceding

                                      -7-
<PAGE>   13
the fifteenth (15th) anniversary of the Rent Commencement Date (the "Fixed
Expiration Date"), at an annual rent (the "Fixed Rent") of:

         with respect to the Premises:

                  (1) Five Hundred Ninety-Eight Thousand Three Hundred Four and
00/100 Dollars ($598,304.00; $49,858.67 per month) for the period commencing on
the Rent Commencement Date and ending on the day immediately preceding the fifth
(5th) anniversary of the Commencement Date (the "First Rental Period");

                  (2) Six Hundred Fifty-Four Thousand Three Hundred Ninety-Five
and 00/100 Dollars ($654,393.00; $54,532.92 per month) for the period
commencing on the day next succeeding the end of the First Rental Period and
ending on the day immediately preceding the tenth (10th) anniversary of the
Commencement Date (the "Second Rental Period");

                  (3) Seven Hundred Ten Thousand Four Hundred Eighty-Six and
00/100 Dollars ($710,486.00; $59,207.17 per month) for the period commencing on
the day next succeeding the end of the Second Rental Period and ending on the
Fixed Expiration Date (the "Third Rental Period"); and

with respect to the Licensed Area(s):

(1)      the product of (x) the Licensed Area Space Factor and (y) Sixteen and
         00/100 Dollars for the First Rental Period; and

(2)      the product of (x) the Licensed Area Space Factor and (y) Seventeen and
         50/100 Dollars for the Second Rental Period; and

(3)      the product of (x) the Licensed Area Space Factor and (y) Eighteen and
         00/100 Dollars for the Third Rental Period;

which Tenant agrees to pay in lawful money of the United States which shall be
legal tender in payment of all debts and dues, public and private, at the time
of payment, in equal monthly installments in advance, on the first (1st) day of
each calendar month during the Term commencing on the Rent Commencement Date, at
the office of Landlord or such other place as Landlord may designate, without
any set-off, offset, abatement or deduction whatsoever, except that Tenant shall
pay the first monthly installment of Fixed Rent on the full execution hereof.

         Section 1.2 If the Rent Commencement Date shall occur on a date other
than the first (1st) day of any calendar month, on the Rent Commencement Date
Tenant shall pay to Landlord a sum equal to Eight Hundred Thirty and 98/100
Dollars ($830.98), multiplied by the number of calendar days in the period from
the Rent Commencement Date to the last day of the month in which the Rent
Commencement Date shall occur, both dates inclusive.

                                      -8-
<PAGE>   14
                                    ARTICLE 2
                                USE AND OCCUPANCY

         Section 2.1 Tenant shall use and occupy the Premises as general and
executive offices (including uses and activities incidental thereto) including
for the installation, operation and maintenance of switching and transmission
equipment and the Licensed Area(s) for the Generator and other peripheral
equipment in connection with Tenant's telecommunication business and, in each
instance, for no other purpose.

         Section 2.2 Tenant shall not use the Premises or any part thereof, or
permit the Premises or any part thereof to be used, (1) for a banking, trust
company, depository, guarantee or safe deposit business, retail brokerage or
securities business, (2) as a savings bank, a savings and loan association, or
as a loan company, (3) by the United States government, the City or State of New
York, any foreign government, the United Nations or any agency or department of
any of the foregoing, or (4) as an employment agency, executive search firm or
similar enterprise, labor union, school, or vocational training center (except
for the training of employees of Tenant intended to be employed at the
Premises).

                                    ARTICLE 3
                                   ALTERATIONS

         Section 3.1 (A) Tenant shall not make any Alterations without
Landlord's prior consent. Landlord agrees not to unreasonably withhold or delay
its consent to any proposed Alterations, provided that such Alterations (i) do
not affect any part of the Building other than the Premises, or require any
alterations to be performed in, or made to, any portion of the Building or the
Real Property other than the Premises, (ii) do not adversely affect the Building
Systems, (iii) do not affect any service required to be furnished by Landlord to
Tenant (unless Tenant agrees to waive same) or to any other tenant or occupant
of the Building, (iv) do or will not affect the certificate of occupancy for the
Building or the Premises, and (v) do not affect the structural components or
integrity of the Building. Notwithstanding the foregoing, as part of the Initial
Alterations, Landlord agrees not to unreasonably withhold or delay its consent
to any of the following Alterations: (1) the installation of a dry cooler unit
to furnish air conditioning to the Premises which dry cooler equipment shall be
located on the roof of the Building at a location designated by Landlord in its
sole discretion, subject to the provisions of Schedule B attached hereto and
made a part hereof, (2) the installation of four inch condensate drains in the
Premises for the HVAC equipment to be installed by Tenant in the Premises, (3)
the removal or capping of any heating systems or portions thereof (other than
steam risers and returns) located in the Premises, (4) an FM-200 fire
suppression system within the Premises (which system shall be connected to the
Building life safety system), (5) the relocation of any piping or other
equipment presently hung from the ceiling of the Premises, (6) the modification
of the Building's sprinkler system serving the Premises to a dry pipe system and
to relocate any sprinkler piping passing through the Premises, provided that
with respect to each of the items numbered (1) through (6), (w) the Building
Systems of the Building are not adversely affected thereby, (x)

                                      -9-
<PAGE>   15
services to any other portion of the Building, including, without limitation,
any tenantable space is not adversely affected (y) the use and occupancy of any
other tenantable space shall not be affected and (z) such Alterations are
performed in accordance with, and subject to, the terms and conditions of this
Article 3 as part of the Initial Alterations.

                  (B) (1) Prior to making any Alterations Tenant shall (i) if
required hereunder, submit to Landlord detailed plans and specifications
(including layout, architectural, mechanical and structural drawings) for each
proposed Alteration and shall not commence any such Alteration without first
obtaining Landlord's approval of such plans and specifications, (ii) supply such
additional information regarding the Alteration as Landlord shall reasonably
request, (iii) at Tenant's expense, obtain all permits, approvals and
certificates required by any Governmental Authorities, and (iv) furnish to
Landlord certificates thereof of workers' compensation (covering all persons to
be employed by Tenant, and Tenant's contractors and subcontractors in connection
with such Alteration) and comprehensive public liability (including property
damage coverage) insurance in such form, with such companies authorized to do
business in New York, for such periods and in such amounts as Landlord may
reasonably approve, naming Landlord and its agents, any Lessor and any
Mortgagee, as additional insures. Upon completion of such Alteration, Tenant, at
Tenant's expense, shall obtain certificates of final approval of such Alteration
required by any Governmental Authority and shall furnish Landlord with copies
thereof (it being agreed that all filings with Governmental Authorities to
obtain such permits, approvals and certificates shall be made at Tenant's
expense, by a Person designated by Landlord), together with the "as-built" plans
and specifications for such Alterations. All Alterations shall be made and
performed substantially in accordance with the plans and specifications therefor
as approved by Landlord, and strictly in compliance with all Requirements,
Insurance Requirements, the Rules and Regulations and all rules and regulations
relating to Alterations promulgated by Landlord, in its reasonable judgment. No
materials or equipment to be incorporated in the Premises as a result of any
Alterations or a part thereof shall be subject to any lien, encumbrance, chattel
mortgage or title retention or security agreement. In addition, no Alteration at
a cost for labor and materials (as reasonably estimated by Landlord's architect,
engineer or contractor) in excess of Fifty Thousand and 00/100 Dollars
($50,000.00) (which amount shall be increased on the third (3rd) anniversary of
the Commencement Date and annually thereafter by the annual percentage increase,
if any, in the Consumer Price Index from that in effect on the immediately
preceding anniversary of the Commencement Date), either individually or in the
aggregate with any other Alteration constructed in any twelve (12) month period,
shall be undertaken prior to Tenant's delivering to Landlord either (i) a
performance bond and labor and materials payment bond (issued by a surety
company and in form reasonably satisfactory to Landlord), each in an amount
equal to 125% of such estimated cost, or (ii) such other security as shall be
reasonably satisfactory to Landlord. All Alterations requiring Landlord's
consent shall be performed only under the supervision of an independent
licensed architect reasonably satisfactory to Landlord.

                  (C) Tenant shall be permitted to perform Alterations during
the hours reasonably prescribed by Landlord taking into account the nature of
the Alterations and the use and occupancy of the Building by other tenants. All
Tenant's Property installed by Tenant and

                                      -10-
<PAGE>   16
all Alterations in and to the Premises which may be made by Tenant at its own
cost and expense prior to and during the Term, shall remain the property of
Tenant, and upon the Expiration Date or earlier end of the Term, shall be
removed from the Premises by Tenant; provided, however, that Tenant shall repair
and restore in a good and worker like manner to good condition any damage to the
Premises or the Building caused by such removal.

                  (D) All Alterations shall be performed by contractors,
subcontractors or mechanics approved by Landlord (which approval shall not be
unreasonably withheld except with respect to any Alterations affecting any
Building System or structural components of the Building), at Tenant's expense
and at such times and in such manner as Landlord may from time to time
reasonably designate. Landlord agrees that provided that Tenant shall furnish
Landlord with all information reasonably requested by Landlord with respect to a
proposed contractor, Landlord shall either approve or disapprove such contractor
within ten (10) days after such request is made and such information is
furnished to Landlord.

                  (E) Any mechanic's lien filed against the Premises or the Real
Property for work claimed to have been done for, or materials claimed to have
been furnished to, Tenant shall be discharged by Tenant within fifteen (15) days
after Tenant shall have received notice thereof, at Tenant's expense, by payment
or filing the bond required by law. Tenant shall not, at any time prior to or
during the Term, employ, or permit the employment of, any contractor, mechanic,
laborer or subcontractor in the Premises, whether in connection with any
Alteration or otherwise, if such employment would unreasonably interfere or
cause any conflict with other contractors, mechanics, laborers or subcontractors
engaged in the construction, maintenance or operation of the Building by
Landlord, Tenant or others, or of any adjacent property owned by Landlord. In
the event of any such interference or conflict, Tenant, upon demand of Landlord,
shall cause all contractors, mechanics, laborers or subcontractors causing such
interference or conflict to leave the Building immediately.

         Section 3.2 Tenant shall pay to Landlord within thirty (30) days of
demand and as additional rent in connection with any Alteration, including,
without limitation, the Initial Alterations, the reasonable out-of-pocket
expenses incurred by Landlord in connection with such Alteration.

         Section 3.3 With respect to all Alterations, including, without
limitation all repair work and improvements made by Tenant pursuant to the
provisions of this Lease, Landlord shall have the right at all times to monitor
the performance of an Alteration for compliance with the Building regulations
and procedures, Requirements, Insurance Requirements, Rules and Regulations and
the terms and conditions of this Article 3. If Landlord reasonably determines
that any of such Building regulations and procedures, Requirements, Insurance
Requirements, Rules and Regulations or terms and conditions are not being
complied with in all material respects, Landlord shall notify Tenant of such
non-compliance, and if such non-compliance is not corrected (i) within fifteen
(15) days of such written notice, or (ii) immediately in cases of emergency or
in cases where the safety of people or property is threatened, then Landlord may
immediately require the cessation of all work being performed in or around the
Premises until

                                      -11-
<PAGE>   17
such time as Landlord is reasonably satisfied that the applicable Building
regulations and procedures, Requirements, Insurance Requirements, Rules and
Regulations or terms and conditions will be observed.

         Section 3.4 (A) In the event Landlord shall elect pursuant to Article
19 below not to construct the ADA Bathroom as described in clause (b) of
Landlord's Work, Landlord shall contribute an amount not to exceed Twenty-Five
Thousand and 00/100 Dollars ($25,000.00) (the "ADA Tenant Fund") toward the cost
of the construction of the ADA Bathroom only, provided that up to ten percent
(10%) of the ADA Tenant Fund may be applied toward so-called "soft costs"
incurred by Tenant in connection with the construction of the ADA Bathroom only,
including the reasonable fees and disbursements of architects, engineers and
other professionals and consultants, together with permit, filing and other
similar fees and charges.

                  (B) Landlord shall, within fifteen (15) days after receipt of
the items set forth in Section 3.4(C) hereof, render payment to Tenant for
construction of the ADA Bathroom, provided that there shall be no default which
has occurred and is continuing on the date of the request for such payment and
on the date such payment is to be made. The payment for such construction shall
be made from the ADA Tenant Fund.

                  (C) Landlord's obligation to make payment from the ADA Tenant
Fund shall be subject to Landlord's verification of the total cost of the ADA
Bathroom and receipt of: (a) a request for such payment from Tenant signed by
the designated representative of Tenant, together with a certification regarding
(i) the fact that the ADA Bathroom has been completed and (ii) aggregate amount
paid by Tenant with respect to construction of the ADA Bathroom, (b) copies of
all receipts, invoices and bills for the completed work and materials furnished
in connection with the construction of the ADA Bathroom and incorporated in the
Premises which have been paid by Tenant, (c) copies of all contracts, work
orders, change orders and other materials relating to the work or materials
which are the subject of the requested payment, (d) a certificate of Tenant's
independent licensed architect stating (i) that, in his opinion, the ADA
Bathroom construction was performed in a good and workerlike manner and
substantially in accordance with the final detailed plans and specifications for
such ADA Bathroom, as approved by Landlord and (ii) the construction of the ADA
Bathroom is complete other than minor punchlist items and (e) unconditional
waivers of lien from all contractors, subcontractors and materialmen who
performed the work, or furnished the materials in connection with the ADA
Bathroom.

                  (D) In no event shall the amount paid by Landlord to Tenant
under this Section 3.4 exceed the amount of the ADA Tenant Fund. Upon the
completion of the construction of the ADA Bathroom, any amount of the ADA Tenant
Fund which has not been used to pay for the construction of the ADA Bathroom
shall be retained by Landlord. Upon the payment of the entire ADA Tenant Fund
(or the portion thereof if upon completion of the ADA Bathroom the ADA Tenant
Fund is not exhausted), Landlord shall have no further obligation or liability
whatsoever to Tenant for further disbursement of any portion of the ADA Tenant
Fund to Tenant. It is expressly understood and agreed that Tenant shall
complete, at its sole cost and

                                      -12-
<PAGE>   18
expense, the ADA Bathroom, whether or not the ADA Tenant Fund is sufficient to
fund such completion. Any costs to complete the construction of the ADA Bathroom
in excess of the ADA Tenant Fund shall be the sole responsibility and obligation
of Tenant.

                                    ARTICLE 4
                               REPAIRS-FLOOR LOAD

         Section 4.1 Landlord shall operate, maintain and make all necessary
repairs (both structural and nonstructural) to the Building Systems and the
public portions of the Building and the structural portions of the Premises,
both exterior and interior, as well as latent defects in the portions of the
Building outside of the Premises and the structural components of the Premises,
in conformance with standards applicable to comparable buildings in Manhattan.
Tenant shall give Landlord prompt notice after discovery by Tenant of any
condition in any Building System, located in, servicing or passing through the
Premises which gives rise to or may give rise to an obligation of Landlord to
repair. Tenant, at Tenant's sole cost and expense, shall take good care of the
Premises and the exclusive Licensed Area(s) and the fixtures, equipment and
appurtenances therein and make all nonstructural repairs thereto as and when
needed to preserve them in good working order and condition, except for
reasonable wear and tear, obsolescence and damage for which Tenant is not
responsible pursuant to the provisions of Articles 10 and 11 hereof.
Notwithstanding the foregoing, all damage or injury to the Premises or to any
other part of the Building, or to its fixtures, equipment and appurtenances,
whether requiring structural or nonstructural repairs, caused by or resulting
from carelessness, negligent omission, neglect or improper conduct of, or
Alterations made by, Tenant, Tenant's agents, employees, invitees or licensees,
and not covered by Landlord's insurance policies and any waiver of subrogation
in favor of Tenant thereon, shall be repaired at Tenant's sole reasonable cost
and expense, either by Tenant to the reasonable satisfaction of Landlord (if the
required repairs are nonstructural in nature and do not affect any Building
System), or by Landlord (if the required repairs are structural in nature or
affect any Building System). Tenant also shall repair all damage to the Building
and the Premises and the Licensed Area(s) to the extent caused by the moving,
placement or replacement of Tenant's Property. All the aforesaid repairs shall
be of first quality and class consistent with first class office building work
or construction and shall be made in accordance with the provisions of Article 3
hereof If Tenant fails after thirty (30) days' notice (or such shorter period
(but in no event less than five (5) days or such shorter period as may be
required due to an emergency) as Landlord may be permitted pursuant to any
Superior Lease or Mortgage) to proceed with due diligence to make repairs
required to be made by Tenant, the same may be made by Landlord at the
reasonable expense of Tenant, and the expenses thereof incurred by Landlord,
with interest thereon at the Applicable Rate from the time the expense was
incurred, shall be forthwith paid to Landlord as additional rent within thirty
(30) days after rendition of a bill or statement therefor.

         Section 4.2 Tenant shall not place a load upon any floor of the
Premises exceeding two hundred (200) pounds per useable square foot "live load,"
and with respect to the Licensed Area(s) Tenant shall not place a load thereupon
exceeding the "live load" for which

                                      -13-
<PAGE>   19
such Area was designed. Tenant shall neither place nor move any safe, heavy
machines or machinery, heavy equipment, bulky matter or fixtures into or out of
the Building without Landlord's prior consent, which consent shall not be
unreasonably withheld. All work in connection therewith shall comply with the
Requirements and Insurance Requirements, and shall be done during such hours as
Landlord may reasonably designate. Business machines and mechanical equipment
shall be placed and maintained by Tenant at Tenant's expense in settings
sufficient in Landlord's reasonable judgment to absorb and prevent vibration,
noise and annoyance, other than a de minimis amount thereof Except as expressly
provided in this Lease, there shall be no allowance to Tenant for a diminution
of rental value and no liability on the part of Landlord by reason of
inconvenience, annoyance or injury to business arising from Landlord, Tenant or
others making, or failing to make, any repairs, alterations, additions or
improvements in or to any portion of the Building or the Premises, or in or to
fixtures, appurtenances or equipment thereof.

         Section 4.3 Subject to the provisions of Section 4.4 hereof, Landlord
also shall have the right at any time, without the same constituting (i) a
breach by Landlord of any provisions of this Lease, (ii) a breach of Tenant's
quiet enjoyment, (iii) an actual or constructive eviction, or (iv) a release of
Tenant's obligations to pay Fixed Rent, Escalation Rent, or any items of Rental,
and without incurring any liability to Tenant therefor, to repair, change or
otherwise alter the arrangement or location of entrances or passageways, doors
and doorways, and corridors, elevators, stairs, toilets, or other space within
the Building other than the Premises and to change the name, number or
designation by which the Building is commonly known, provided any such repair,
change or alteration (a) does not unreasonably deprive Tenant of access to the
Building or the Premises, or (b) does not reduce the rentable area (except by a
de minimis amount) of the Premises. All parts (except surfaces facing the
interior of the Premises) of all floors, ceilings, walls, windows and doors
bounding the Premises (including exterior Building walls, exterior core corridor
walls, all roofs adjacent to the Premises, ail space in or adjacent to the
Premises used for shafts, stacks, stairways, chutes, pipes, conduits, ducts, fan
rooms, heating, air cooling, plumbing and other mechanical facilities, service
closets, and other Building facilities) are not part of the Premises, and
Landlord shall have the use thereof, as well as access thereto through the
Premises for the purposes of operation, maintenance, alteration and repair.

         Section 4.4 Landlord shall use its reasonable efforts to minimize
interference with Tenant's access to the Building and the Premises and
enjoyment, use and occupancy of the Premises in making any repairs, alterations,
additions or improvements and to perform and complete such repairs, alterations,
additions or improvements with due diligence; provide however, that Landlord
shall have no obligation to employ contractors or labor at so-called overtime or
other premium pay rates or to incur any other overtime costs or expenses
whatsoever.

                                      -14-
<PAGE>   20
                                    ARTICLE 5
                                WINDOW CLEANING

         Tenant shall not clean, nor require, permit, suffer or allow any window
in the Premises to be cleaned from the outside in violation of Section 202 of
the Labor Law, or any other applicable law, or of the rules of the Board of
Standards and Appeals, or of any other board or body having or asserting
jurisdiction.

                                    ARTICLE 6
                              REQUIREMENTS OF LAW

         Section 6.1 (A) Tenant, at its sole expense, shall comply with all
Requirements, including, without limitation, ADA (subject to Landlord's
obligations pursuant to Article 19 hereof), applicable to the manner of use of
the Premises and the Licensed Area(s) by Tenant, the making of Alterations or
the result of the making thereof and those applicable by reason of the nature or
type of business conducted in, or manner of use by Tenant of, the Premises and
the Licensed Area(s). Tenant shall not do or permit to be done any act or thing
upon the Premises or the Licensed Area(s) which will invalidate or be in
conflict with a standard all-risk insurance policy; and shall not do, or permit
anything to be done in or upon the Premises or the Licensed Area(s), or bring or
keep anything therein, except as now or hereafter permitted by the New York City
Fire Department, New York Board of Fire Underwriters, the Insurance Services
Office or other authority having jurisdiction and then only in such quantity and
manner of storage as not to increase the rate for fire insurance applicable to
the Building, or use the Premises in a manner (as opposed to mere use as general
"offices") which specifically because of such use shall increase the rate of
fire insurance on the Building or on property located therein, over that in
similar type buildings or in effect on the Commencement Date. If by reason of
Tenant's failure to comply with the provisions of this Article, the fire
insurance rate shall be higher than it otherwise would be, then Tenant shall
desist from doing or permitting to be done any such act or thing and shall
reimburse Landlord, as additional rent hereunder, for that part of all fire
insurance premiums thereafter paid by Landlord which shall have been charged
because of such failure by Tenant, and shall make such reimbursement within
thirty (30) days of demand by Landlord. In any action or proceeding wherein
Landlord and Tenant are parties, a schedule or "make up" of rates for the
Building or the Premises issued by the Insurance Services Office, or other body
fixing such fire insurance rates, shall be conclusive evidence of the facts
therein stated and of the several items and charges in the fire insurance rates
then applicable to the Building.

                                      -15-
<PAGE>   21
         (B) Landlord, at its sole cost and expense (but subject to recoupment
as provided in Article 27 hereof), shall comply with all other Requirements
applicable to the Premises and the Building, other than those Requirements which
Tenant or other tenants or occupants of the Building shall be required to comply
with, subject to Landlord's right to contest the applicability or legality
thereof. Landlord acknowledges that except as described in Section 6.1(A)
hereof Tenant shall have no responsibility for failure of the Building or the
common areas of the Building in which Tenant has appurtenant rights to comply
with any Requirements which are in effect and applicable to the Building or the
common areas of the Building in which Tenant has appurtenant rights any other
rights under this Lease.

                                    ARTICLE 7
                                  SUBORDINATION

         Section 7.1 If a Mortgage or Superior Lease shall encumber the
Premises, (a) any such Mortgagee shall execute and deliver to Tenant an
agreement to the effect that, if there shall be a foreclosure of its Mortgage,
such Mortgagee will not make Tenant a party defendant to such foreclosure, evict
Tenant, disturb Tenant's possession under this Lease, or terminate or disturb
Tenant's leasehold estate or rights hereunder provided no Event of Default shall
then be existing and/or (b) any such Lessor shall execute and deliver to Tenant
an agreement to the effect that if its Superior Lease shall terminate or be
terminated for any reason, Lessor will recognize Tenant as the direct Tenant of
such Lessor on the same terms and conditions as are contained in this Lease
(subject to the provisions, hereinafter set forth, including, without
limitation, Section 7.2 hereof) provided no Event of Default shall then be
existing (any such agreement, or any agreement of similar import, shall be
reasonably satisfactory to such Lessor or Mortgagee and shall contain such terms
and conditions which are reasonable and customary, including, without
limitation, the terms set forth in Section 7.2, being hereinafter called a
"Nondisturbance Agreement"). Provided that any Mortgagee or Lessor has delivered
a Nondisturbance Agreement to Tenant as set forth in this Section 7.1, this
Lease shall be subject and subordinate to such Superior Lease and to such
Mortgage, and to all renewals, extensions, supplements, amendments,
modifications, consolidations and replacements thereof or thereto, substitutions
therefor, and advances made thereunder. This clause shall be self-operative and
no further instrument of subordination shall be required to make the interest of
any Lessor or Mortgagee superior to the interest of Tenant hereunder, however,
Tenant shall execute and deliver promptly any certificate that Landlord may
request in confirmation of such subordination. If the date of expiration of any
Superior Lease shall be the same day as the Expiration Date, the Term shall end
and expire twelve (12) hours prior to the expiration of the Superior Lease.
Tenant shall not do anything that would constitute a default under any Superior
Lease or Mortgage, or omit to do anything that Tenant is obligated to do under
the terms of this Lease so as to cause Landlord to be in default thereunder. If,
in connection with the financing of the Real Property, the Building or the
interest of the lessee under any Superior Lease, or if in connection with the
entering into of a Superior Lease, any Mortgagee or Lessor shall request
reasonable modifications of this Lease that do not increase the monetary
obligations of Tenant under this Lease or materially or adversely affect the
rights or obligations of Tenant under this Lease, Tenant shall make such
modifications.

                                      -16-
<PAGE>   22
         Section 7.2 If at any time prior to the expiration of the Term, any
Superior Lease shall terminate or be terminated for any reason or any Mortgagee
comes into possession of the Real Property or the Building or the estate created
by any Superior Lease by receiver or otherwise, Tenant agrees, subject to the
terms of any Nondisturbance Agreement then in effect, at the election and upon
demand of any owner of the Real Property or the Building, or of the Lessor, or
of any Mortgagee in possession of the Real Property or the Building, to attorn,
from time to time, to any such owner, Lessor or Mortgagee or any person
acquiring the interest of Landlord as a result of any such termination, or as a
result of a foreclosure of the Mortgage or the granting of a deed in lieu of
foreclosure, upon the then executory terms and conditions of this Lease, subject
to the provisions of Section 7.1 hereof and this Section 7.2, for the remainder
of the Term, provided that such owner, Lessor or Mortgagee, as the case may be,
or receiver caused to be appointed by any of the foregoing, shall then be
entitled to possession of the Premises, and provided further that such owner,
Lessor or Mortgagee, as the case may be, or anyone claiming by, through or under
such owner, Lessor or Mortgagee, as the case may be, including a purchaser at a
foreclosure sale, shall not be:

                  (1) liable for any act or omission of any prior landlord
(including, without limitation, the then defaulting landlord), or

                  (2) subject to any defense or offsets which Tenant may have
against any prior landlord (including, without limitation, the then defaulting
landlord), or

                  (3) bound by any payment of Rental which Tenant may have made
to any prior landlord (including, without limitation, the then defaulting
landlord) more than thirty (30) days in advance of the date upon which such
payment was due, or

                  (4) bound by any obligation to make any payment to or on
behalf of Tenant, including, without limitation, payments on account of any ADA
Tenant Fund, or

                  (5) bound by any obligation to perform any work or to make
improvements to the Premises, except for (i) repairs and maintenance pursuant to
the provisions of Article 4, the need for which repairs and maintenance first
arises after the date upon which such owner, Lessor, or Mortgagee shall be
entitled to possession of the Premises, (ii) repairs to the Premises or any part
thereof as a result of damage by fire or other casualty pursuant to Article 10
hereof, but only to the extent that such repairs can be reasonably made from the
net proceeds of any insurance actually made available to such owner, Lessor or
Mortgagee, and (iii) repairs to the Premises as a result of a partial
condemnation pursuant to Article 11 hereof, but only to the extent that such
repairs can be reasonably made from the net proceeds of any award made available
to such owner, Lessor or Mortgagee, or

                  (6) bound by any amendment or modification of this Lease made
without its consent, or

                                      -17-
<PAGE>   23
                  (7) bound to return Tenant's security deposit, if any, until
such deposit has come into its actual possession and Tenant would be entitled to
such security deposit pursuant to the terms of this Lease.

Notwithstanding the foregoing, this Lease shall not terminate by reason of the
termination of any Superior Lease without the prior written consent of the
Mortgagee. The provisions of this Section 7.2 shall inure to the benefit of any
such owner, Lessor or Mortgagee, shall apply notwithstanding that, as a matter
of law, this Lease may terminate upon the termination of any such Superior
Lease, and shall be self-operative upon any such demand, and no further
instrument other than a Nondisturbance Agreement shall be required to give
effect to said provisions. Tenant, however, within five (5) days after written
notice of any such owner, Lessor or Mortgagee, shall execute, from time to time,
instruments in confirmation of the foregoing provisions of this Section 7.2,
including a Nondisturbance Agreement reasonably satisfactory to any such owner,
Lessor or Mortgagee, and acknowledging such attornment and setting forth the
terms and conditions of its tenancy. Nothing contained in this Section 7.2 shall
be construed to impair any right otherwise exercisable by any such owner, Lessor
or Mortgagee.

If required by the Mortgagee or the Lessor, Tenant promptly shall join in any
Nondisturbance Agreement to indicate its concurrence with the provisions thereof
and its agreement set forth in Section 7.2 hereof to attorn to such Mortgagee or
Lessor, as the case may be, as Tenant's landlord hereunder. Tenant shall
promptly so accept, execute and deliver any Nondisturbance Agreement proposed by
any such Mortgagee or Lessor which conforms with the provisions of this Article
7. Any such Nondisturbance Agreement may also contain other reasonable and
customary terms and conditions as may otherwise be required by such Mortgagee or
Lessor.

         Section 7.3 (a) From time to time, within fifteen (15) days next
following request by Landlord, any Mortgagee or any Lessor, Tenant shall deliver
to Landlord, such Mortgagee or such Lessor a written statement executed by
Tenant, in form reasonably satisfactory to Landlord, such Mortgagee or such
Lessor, (1) stating that this Lease is then in full force and effect and has not
been modified (or if modified, setting forth all modifications), (2) setting
forth the date to which the Fixed Rent, additional rent and other items of
Rental have been paid, (3) stating whether or not, to the best knowledge of
Tenant, Landlord is in default under this Lease, and, if Landlord is in default,
setting forth the specific nature of all such defaults, and (4) as to any other
matters reasonably requested by Landlord, such Mortgagee or such Lessor. Tenant
acknowledges that any statement delivered pursuant to this Section 7.3(a) may
be relied upon by any purchaser or owner of the Real Property or the Building,
or Landlord's interest in the Real Property or the Building or any Superior
Lease, or by any Mortgagee, or by an assignee of any mortgagee, or by any
Lessor.

                  (b) From time to time, within seven (7) days next following
request by Tenant, Landlord shall deliver to Tenant a written statement executed
by Landlord, in form reasonably satisfactory to Tenant, (1) stating that this
Lease is then in full force and effect and has not been modified (or if
modified, setting forth all modifications), (2) setting forth the date to which
the Fixed Rent, additional rent and other items of Rental have been paid, (3)
stating whether or not, to the best

                                      -18-
<PAGE>   24
knowledge of Landlord, Tenant is in default under this Lease, and, if Tenant is
in default, setting forth the specific nature of all such defaults, and (4) as
to any other matters reasonably requested by Tenant.

         Section 7.4 As long as any Superior Lease or Mortgage shall exist,
Tenant shall not seek to terminate this Lease by reason of any act or omission
of Landlord until Tenant shall have given written notice of such act or omission
to all Lessors and Mortgagees at such addresses as shall have been furnished to
Tenant by such Lessors and Mortgagees and, if any such Lessor or Mortgagee, as
the case may be, shall have notified Tenant within thirty (30) Business Days
following receipt of such notice of its intention to remedy such act or
omission, until a reasonable period of time shall have elapsed following the
giving of such notice, during which period such Lessors and Mortgagees shall
have the right, but not the obligation, to remedy such act or omission.

         Section 7.5. Tenant hereby irrevocably waives any and all right(s) it
may have in connection with any zoning lot merger or transfer of development
rights with respect to the Real Property including, without limitation, any
rights it may have to be a party to, to contest, or to execute, any Declaration
of Restrictions (as such term is defined in Section 12-10 of the Zoning
Resolution of The City of New York effective December 15, 1961, as amended) with
respect to the Real Property, which would cause the Premises to be merged with
or unmerged from any other zoning lot pursuant to such Zoning Resolution or to
any document of a similar nature and purpose, and Tenant agrees that this Lease
shall be subject and subordinate to any Declaration of Restrictions or any other
document of similar nature and purpose now or hereafter affecting the Real
Property. In confirmation of such subordination and waiver, Tenant shall execute
and deliver promptly any certificate or instrument that Landlord reasonably may
request.

                                    ARTICLE 8
                             RULES AND REGULATIONS

         Tenant and Tenant's contractors, employees, agents, invitees and
licensees and any Person claiming by, through or under Tenant shall comply with
the Rules and Regulations. If Tenant disputes the reasonableness of any
additional Rule or Regulation hereafter adopted by Landlord, the dispute shall
be determined by arbitration in the City of New York in accordance with the
rules and regulations then obtaining of the American Arbitration Association or
its successor. Any such determination shall be final and conclusive upon the
parties hereto. The right to dispute the reasonableness of any additional Rule
or Regulation upon Tenant's part shall be deemed waived unless the same shall be
asserted by service of a notice upon Landlord within fifteen (15) days after
receipt by Tenant of notice of the adoption of any such additional Rule or
Regulation. The costs of such arbitration shall be paid by the unsuccessful
party. Nothing in this Lease contained shall be construed to impose upon
Landlord any duty or obligation to enforce the Rules and Regulations or terms,
covenants or conditions in any other lease against any other tenant, and
Landlord shall not be liable to Tenant for violation of the same by any

                                      -19-
<PAGE>   25
other tenant, its employees, agents, visitors or licensees, except that Landlord
shall not enforce any Rule or Regulation against Tenant which Landlord shall not
then be enforcing against all other office tenants in the Building.

                                    ARTICLE 9
                  INSURANCE, PROPERTY LOSS OR DAMAGE: REIMBURSE

         Section 9.1 (A) Except due to the gross negligence of Landlord, its
agents or employees, neither Landlord nor its agents shall be liable (i) for any
injury or damage to persons or property, or interruption of Tenant's business,
resulting from fire or other casualty, (ii) for any such damage caused by other
tenants or persons in the Building or caused by construction of any private,
public or quasi-public work, nor (iii) for any latent defect in the Premises,
the Licensed Area(s) or in the Building (except to the extent Landlord shall be
required to repair same pursuant to Article 4 hereof). Nothing in the foregoing
shall affect any right of Landlord to the indemnity from Tenant to which
Landlord may be entitled under Article 35 hereof in order to recoup for payments
made to compensate for losses of third parties.

                  (B) Subject to the provisions of Section 4.4 hereof, if at any
time any windows of the Premises are temporarily closed, darkened or bricked-up
by reason of repairs, maintenance, alterations or improvements to the Building
or due to any Requirement, or any of such windows are permanently closed,
darkened or bricked up due to any Requirement, Landlord shall not be liable for
any damage Tenant may sustain thereby and Tenant shall not be entitled to any
compensation therefor nor abatement of Fixed Rent or any other item of Rental
nor shall the same release Tenant from its obligations hereunder or constitute
an eviction.

         Section 9.2 Tenant shall obtain and keep in full force and effect (i)
an "all-risk" insurance policy for Tenant's Alterations and Tenant's Property at
the Premises and in the Licensed Area(s), (ii) a policy of commercial general
liability and property damage insurance on an occurrence basis on the standard
ISO form with such exceptions, exclusions and endorsements as Landlord shall
reasonably approve, with a broad form contractual liability endorsement, (iii)
such workers compensation insurance as may be required by applicable
Requirements, and (iv) business interruption insurance in commercially
reasonable amounts and periods and covering Tenant's obligations, including,
without limitation, its obligations under this Lease. Such policies shall
provide that Tenant is named as the insured. Landlord, Landlord's managing agent
and any Lessors and any Mortgagees (whose names shall have been furnished to
Tenant) shall be added as additional insureds, as their respective interests may
appear. Such policy with respect to clause (ii) above shall include a provision
under which the insurer agrees to indemnify and hold Landlord, Landlord's
managing agent, and such Lessors and Mortgagees harmless from and against all
cost, expense and/or liability arising out of or based upon any and all claims,
accidents, injuries and damages mentioned in Article 35. In addition, the policy
required to be carried pursuant to clause (ii) above shall contain a provision
that no act or omission of Tenant shall affect or limit the obligation of the
insurance company to pay the amount of any loss sustained and that the policy
shall be non-cancelable and non-

                                      -20-
<PAGE>   26
modifiable with respect to Landlord, such managing agent, and such Lessors and
Mortgagees (whose names and addresses shall have been furnished to Tenant)
unless thirty (30) days' written notice shall have been given to Landlord by
certified mail, return receipt requested, which notice shall contain the policy
number and the names of the insured and additional insureds. In addition, upon
receipt by Tenant of any notice of cancellation or any other notice from the
insurance carrier which may adversely affect the coverage of the insureds under
such policy of insurance, Tenant shall immediately deliver to Landlord and any
other additional insureds thereunder a copy of such notice. The minimum limits
of liability under the policy of insurance required to be carried pursuant to
clause (ii) above shall be a combined single limit with respect to each
occurrence in an amount of not less than $3,000,000 for injury (or death) to
persons and damage to property, which amount shall be increased from time to
time to that amount of insurance which in Landlord's reasonable judgment is then
being customarily required by prudent landlords of first-class office buildings
in New York City. All insurance required to be carried by Tenant pursuant to the
terms of this Lease shall be effected under valid and enforceable policies
issued by reputable and independent insurers permitted to do business in the
State of New York, and rated in Best's Insurance Guide, or any successor thereto
(or if there be none, an organization having a national reputation) as having a
general policyholder rating of "A" and a financial rating of at least "13."

         Section 9.3 Landlord shall obtain and keep in full force and effect
insurance against loss or damage by fire and other casualty to the Building as
may be insurable under then available standard forms of "all-risk" insurance
policies, in an amount equal to one hundred percent (100%) of the replacement
value thereof or in such lesser amount as will avoid co-insurance (including an
"agreed amount" endorsement).

         Section 9.4 On or prior to the Commencement Date, each party shall
deliver to the other party appropriate insurance certificates including evidence
of waivers of subrogation required pursuant to Section 9.5, required to be
carried by each party pursuant to this Article 9. Evidence of each renewal or
replacement of a policy shall be delivered by Tenant to Landlord at least twenty
(20) days prior to the expiration of such policy, and a copy of such replacement
policy or certificates thereof shall be delivered by Tenant to Landlord upon
request.

         Section 9.5 The parties hereto shall procure an appropriate clause in,
or endorsement on, any fire or extended coverage insurance covering the
Premises, the Licensed Area(s), the Building and personal property, fixtures and
equipment located thereon or therein, pursuant to which the insurance companies
waive subrogation or consent to a waiver of right of recovery and having
obtained such clauses or endorsements of waiver of subrogation or consent to a
waiver of right of recovery, will not make any claim against or seek to recover
from the other for any loss or damage to its property or the property of others
resulting from fire or other hazards covered by such fire and extended coverage
insurance, provided, however, that the release, discharge, exoneration and
covenant not to sue herein contained shall be limited by and coextensive with
the terms and provisions of the waiver of subrogation clause or endorsements or
clauses or endorsements consenting to a waiver of right of recovery. If the
payment of an additional premium is required for the inclusion of such waiver of
subrogation provision, each

                                      -21-
<PAGE>   27
party shall advise the other of the amount of any such additional premiums and
the other party at its own election may, but shall not be obligated to, pay the
same. If such other party shall not elect to pay such additional premium, the
first party shall not be required to obtain such waiver of subrogation
provision. If either party shall be unable to obtain the inclusion of such
clause even with the payment of an additional premium, then such party shall
attempt to name the other party as an additional insured (but not a loss payee)
under the policy. If the payment of an additional premium is required for naming
the other party as an additional insured (but not a loss payee), each party
shall advise the other of the amount of any such additional premium and the
other party at its own election may, but shall not be obligated to, pay the
same. If such other party shall not elect to pay such additional premium or if
it shall not be possible to have the other party named as an additional insured
(but not loss payee), even with the payment of an additional premium, then (in
either event) such party shall so notify the first party and the first party's
agreement to name the other party as an additional insured shall be satisfied.
Tenant acknowledges that Landlord shall not carry insurance on and shall not be
responsible for damage to, Tenant's Property or Alterations, and that Landlord
shall not carry insurance against, or be responsible for any loss suffered by
Tenant due to, interruption of Tenant's business.

                                   ARTICLE 10
                         DESTRUCTION-FIRE OR OTHER CAUSE

         Section 10.1 If the Premises shall be damaged by fire or other
casualty, and if Tenant shall give prompt notice thereof to Landlord, the damage
to the Premises, excluding damage to Alterations and Tenant's Property, shall be
diligently repaired by and at the expense of Landlord to substantially the
condition prior to the damage, with such modifications as shall be required in
order to comply with Requirements, and from the date of such damage until such
repairs shall be substantially completed (of which substantial completion
Landlord shall promptly notify Tenant) the Fixed Rent, Escalation Rent and Space
Factor shall be reduced in the proportion which the area of the part of the
Premises which is not usable by Tenant and not occupied by Tenant, as determined
by Landlord in its reasonable discretion, bears to the total area of the
Premises. Landlord shall have no obligation to repair any damage to, or to
replace, any Alterations or Tenant's Property.

         Section 10.2 Anything contained in Section 10.1 to the contrary
notwithstanding, if the Building shall be so damaged by fire or other casualty
that, in Landlord's reasonable opinion, substantial alteration, demolition, or
reconstruction of the Building shall be required (whether or not the Premises
shall have been damaged or rendered untenantable), then Landlord, at Landlord's
option, may, not later than forty-five (45) days following the damage, give
Tenant a notice in writing terminating this Lease, provided that Landlord may
not terminate this Lease unless it shall elect to terminate leases (including
this Lease), affecting at least fifty percent (50%) of the rentable area of the
Building. If Landlord elects to terminate this Lease, the Term shall expire upon
a date set by Landlord, but not sooner than the ninetieth (90th) day after such
notice is given, unless sooner if required by any Requirement or any Insurance
Requirement, and Tenant shall vacate the Premises and surrender the same to
Landlord in accordance with the

                                      -22-
<PAGE>   28
provisions of Article 20 hereof. Upon the termination of this Lease under the
conditions provided for in 10.2, Tenant's liability for Fixed Rent and
Escalation Rent and additional rent shall cease and any prepaid portion of Fixed
Rent and Escalation Rent for any period after such date shall be promptly
refunded by Landlord to Tenant.

         Section 10.3 (A) Within forty-five (45) days after notice to Landlord
of any damage described in Section 10.1 hereof, Landlord shall deliver to
Tenant a statement prepared by a reputable contractor setting forth such
contractor's good faith estimate as to the time required to repair such damage,
exclusive of time required to repair any Alterations (which are Tenant's
obligation to repair). If the estimated time period exceeds twelve (12) months
from the date of such statement, Tenant may elect to terminate this Lease by
notice to Landlord not later than thirty (30) days following receipt of such
statement. If Tenant makes such election, the Term shall expire upon the
thirtieth (30th) day after notice of such election is given by Tenant (or such
shorter period as required by any applicable Requirement or Landlord's insurance
carrier), and Tenant shall vacate the Premises and surrender the same to
Landlord in accordance with the provisions of Article 20 hereof.

                  (B) Notwithstanding the foregoing, if the Premises shall be
substantially damaged during the last year of the initial or renewal Term,
Landlord or Tenant may elect by notice, given within thirty (30) days after the
occurrence of such damage, to terminate this Lease and if either party makes
such election, the Term shall expire upon the thirtieth (30th) day after notice
of such election is given by such party and Tenant shall vacate the Premises and
surrender the same to Landlord in accordance with the provisions of Article 20
hereof. Tenant shall have no other options to cancel this Lease under this
Article 10.

         Section 10.4 This Article 10 constitutes an express agreement governing
any 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, and any other law of like nature and purpose now or hereafter in
force shall have no application in any such case.

                                   ARTICLE 11
                                 EMINENT DOMAIN

         Section 11.1 If the whole of the Real Property, the Building or the
Premises shall be acquired or condemned for any public or quasi-public use or
purpose, this Lease and the Term shall end as of the date of the vesting of
title with the same effect as if said date were the Expiration Date. If only a
part of the Real Property and not the entire Premises shall be so acquired or
condemned then, (1) except as hereinafter provided in this Section 11.1, this
Lease and the Term shall continue in force and effect but, if a part of the
Premises is included in the part of the Real Property so acquired or condemned,
from and after the date of the vesting of title, the Fixed Rent and the Space
Factor shall be reduced in the proportion which the area of the part of the
Premises so acquired or condemned bears to the total area of the Premises

                                      -23-
<PAGE>   29
immediately prior to such acquisition or condemnation and Tenant's Share shall
be redetermined based upon the proportion in which the ratio between the
rentable area of the Premises remaining after such acquisition or condemnation
bears to the rentable area of the Building remaining after such acquisition or
condemnation; (2) whether or not the Premises shall be affected thereby,
Landlord, at Landlord's option, may give to Tenant, within sixty (60) days next
following the date upon which Landlord shall have received notice of vesting of
title, a ninety (90) days' notice of termination of this Lease if Landlord shall
elect to terminate leases (including this Lease), affecting at least fifty
percent (50%) of the rentable area of the Building; and (3) if the part of the
Real Property so acquired or condemned shall contain a portion of the Premises
so that by reason of such acquisition or condemnation, Tenant no longer has
reasonable means of access to the Premises or if, in Tenant's reasonable
opinion, the portion of the Premises remaining shall be inadequate for Tenant to
conduct its business at the Premises, Tenant, at Tenant's option, may give to
Landlord, within sixty (60) days next following the date upon which Tenant shall
have received notice of vesting of title, a thirty (30) days' notice of
termination of this Lease. If any such thirty (30) days' notice of termination
is given, by Landlord or Tenant, this Lease and the Term shall come to an end
and expire upon the expiration of said thirty (30) days with the same effect as
if the date of expiration of said thirty (30) days were the Expiration Date. If
a part of the Premises shall be so acquired or condemned and this Lease and the
Term shall not be terminated pursuant to the foregoing provisions of this
Section 11.1, Landlord, at Landlord's expense, shall restore that part of the
Premises not so acquired or condemned to a self-contained rental unit to a
condition similar to that on the Commencement Date exclusive of Tenant's
Alterations. In the event of any termination of this Lease and the Term pursuant
to the provisions of this Section 11.1, the Fixed Rent shall be apportioned as
of the earlier of (i) the date of sooner termination or (ii) vesting of title,
and any prepaid portion of Fixed Rent or Escalation Rent for any period after
such date shall be refunded by Landlord to Tenant.

         Section 11.2 In the event of any such acquisition or condemnation of
all or any part of the Real Property, Landlord shall be entitled to receive the
entire award for any such acquisition or condemnation, Tenant shall have no
claim against Landlord or the condemning authority for the value of any
unexpired portion of the Term and Tenant hereby expressly assigns to Landlord
all of its right in and to any such award. Nothing contained in this Section
11.2 shall be deemed to prevent Tenant from making a separate claim in any
condemnation proceedings for the then value of any Tenant's Property included in
such taking, and for any moving expenses, provided that same does not reduce any
award or payment to Landlord.

         Section 11.3 If the whole or any part of the Premises shall be acquired
or condemned temporarily during the Term for any public or quasi-public use or
purpose, Tenant shall give prompt notice thereof to Landlord and the Term shall
not be reduced or affected in any way and Tenant shall continue to pay in full
all items of Rental payable by Tenant hereunder without reduction or abatement,
and Tenant shall be entitled to receive for itself any award or payments for
such use; provided, however, that:

                                      -24-
<PAGE>   30
                  (i) if the acquisition or condemnation is for a period not
         extending beyond the Term and if such award or payment is made less
         frequently than in monthly installments, the same shall be paid to and
         held by Landlord as a fund which Landlord shall apply from time to time
         to the Rental payable by Tenant hereunder, except that, if by reason of
         such acquisition or condemnation changes or alterations are required to
         be made to the Premises which would necessitate an expenditure to
         restore the Premises, then a portion of such award or payment
         reasonably considered by Landlord as appropriate to cover the expenses
         of the restoration shall be retained by Landlord, without application
         as aforesaid, and applied toward the restoration of the Premises as
         provided in Section 11.1 hereof; or

                  (ii) if the acquisition or condemnation is for a period
         extending beyond the Term, such award or payment shall be apportioned
         between Landlord and Tenant as of the Expiration Date; Tenant's share
         thereof, if paid less frequently than in monthly installments, shall be
         paid to Landlord and applied in accordance with the provisions of
         clause (i) above; provided, however, that the amount of any award or
         payment allowed or retained for restoration of the Premises shall
         remain the property of Landlord if this Lease shall expire prior to the
         restoration of the Premises.

                                   ARTICLE 12
                     ASSIGNMENT, SUBLETTING, MORTGAGE, ETC.

         Section 12.1 Except as expressly permitted herein, Tenant, without the
prior consent of Landlord in each instance, shall not (a) assign its rights or
delegate its duties under this Lease (whether by operation of law, transfers of
interests in Tenant or otherwise), mortgage or encumber its interest in this
Lease, in whole or in part, (b) sublet, or permit the subletting of, the
Premises or any part thereof, or (c) permit the Premises or Licensed Area(s) or
any part thereof to be occupied, or used for desk space, mailing privileges or
otherwise, by any person other than Tenant. As part of, and directly related to,
the conduct of Tenant's business Tenant may, without the prior consent of
Landlord and specifically exempt from the terms of Section 12.2 and Section 12.5
hereof, place telecommunications equipment of its customers in the Premises for
the exclusive use by Tenant for the exclusive transmission to and for the
exclusive benefit of such customers, of telecommunications services; provided,
however, that such customers shall not be granted access to operate such
equipment, or the right to occupy, the Premises in connection therewith. At the
request of Landlord made from time to time, Tenant shall promptly furnish
Landlord with a list of such customers and identify the equipment of such
customers located in the Premises.

         Section 12.2 If Tenant's interest in this Lease is assigned in
violation of the provisions of this Article 12, such assignment shall be void
and of no force and effect against Landlord; provided, however, that Landlord
may collect an amount equal to the then Fixed Rent plus any other item of Rental
from the assignee as a fee for its use and occupancy. If the Premises or any
part thereof are sublet to, or occupied by, or used by, any person other than

                                      -25-
<PAGE>   31
Tenant, whether or not in violation of this Article 12, Landlord, after default
by Tenant under this Lease, may collect any item of Rental of other sums paid by
the subtenant, user or occupant as a fee for its use and occupancy, and shall
apply the net amount collected to the Fixed Rent and other items of Rental
reserved in this Lease. No such assignment, subletting, occupancy or use,
whether with or without Landlord's prior consent, nor any such collection or
application of Rental or fee for use and occupancy, shall be deemed a waiver by
Landlord of any term, covenant or condition of this Lease or the acceptance by
Landlord of such assignee, subtenant, occupant or user as tenant hereunder. The
consent by Landlord to any assignment, subletting, occupancy or use shall not
relieve Tenant from its obligation to obtain the express prior consent of
Landlord to any further assignment, subletting, occupancy or use. Tenant shall
pay to Landlord a processing fee and the actual and reasonable attorneys' fees
and disbursements incurred by or on behalf of Landlord in connection with any
proposed assignment of Tenant's interest in this Lease or any proposed
subletting of the Premises or any part thereof. Neither any assignment of
Tenant's interest in this Lease nor any subletting, occupancy or use of the
Premises or any part thereof by any person other than Tenant, nor any collection
of Rental by Landlord from any person other than Tenant as provided in this
Section 12.2, nor any application of any such Rental as provided in this Section
12.2 shall, in any circumstances, relieve Tenant of its obligations under this
Lease on Tenant's part to be observed and performed. Any person or entity to
which this Lease is assigned pursuant to the provisions of the Bankruptcy Code
shall be deemed without further act or deed to have assumed all of the
obligations arising under this Lease on and after the date of such assignment.
Any such assignee shall execute and deliver to Landlord upon demand an
instrument confirming such assumption. No assignment of this Lease shall relieve
Tenant of its obligations hereunder and, subsequent to any assignment, Tenant's
liability hereunder shall continue notwithstanding any subsequent modification
or amendment hereof or the release of any subsequent tenant hereunder from any
liability, to all of which Tenant hereby consents in advance provided, however,
if any subsequent modification or amendment of this Lease made without the
consent of Tenant shall increase the obligations or liability of Tenant under
this Lease, any prior tenant, including Tenant, shall not be liable with respect
to any such increase, except if any such modification or amendment is made with
a Related Entity of Tenant, Tenant shall be bound by such modification or
amendment.

         Section 12.3 As long as Net2000 Communications Real Estate, Inc. or a
Related Entity is Tenant hereunder, Tenant shall have the privilege subject to
the terms and conditions hereinafter set forth, without the consent of Landlord,
to assign its interest in this Lease (i) to any corporation which is a successor
to Net2000 Communications Real Estate, Inc. either by merger or consolidation,
(ii) to a purchaser of all or substantially all of Net2000 Communications Real
Estate, Inc.'s assets (provided such purchaser shall have also assumed
substantially all of Tenant's liabilities), or (iii) to a corporation or other
entity which shall (1) control, (2) be under the control of, or (3) be under
common control with, Net2000 Communications Real Estate, Inc. (the term
"control" as used herein shall be deemed to mean ownership of more than 50% of
the outstanding voting stock of a corporation, or other majority equity and
control interest if Tenant is not a corporation) (any such entity being a
"Related Entity"). Tenant may also sublease all or any portion of the Premises
to a Related Entity without the consent of Landlord. Any assignment or
subletting described above may only be made upon the condition that (a) Tenant

                                      -26-
<PAGE>   32
shall give Landlord at least thirty (30) days' prior written notice thereof, (b)
any such assignee or subtenant shall continue to use the Premises as permitted
under Section 2.1 hereof, (c) the principal purpose of such assignment or
sublease is not the acquisition of Tenant's interest in this Lease (except if
such assignment or sublease is made to a Related Entity and is made for a valid
intracorporate business purpose and is not made to circumvent the provisions of
Section 12.1 of this Article), and (d) any such assignee (other than a Related
Entity) shall have a net worth and annual income and cash flow, determined in
accordance with generally accepted accounting principles, consistently applied,
after giving effect to such assignment, equal to or greater than Tenant's net
worth and annual income and cash flow, as so determined, on the date of such
assignment. Tenant shall, within ten (10) business days after execution thereof,
deliver to Landlord (a) a duplicate original instrument of assignment in form
and substance reasonably satisfactory to Landlord, duly executed by Tenant, and
(b) an instrument in form and substance reasonably satisfactory to Landlord,
duly executed by the assignee, in which such assignee shall assume observance
and performance of, and agree to be personally bound by, all of the terms,
covenants and conditions of this Lease on Tenant's part to be observed and
performed and (c) a duplicate original sublease in form and substance in
accordance with the provisions of this Article 6 duly executed by Tenant, as
sublandlord, and such Related Entity, as subtenant. Except as set forth above,
either a transfer of a controlling interest in the shares of Tenant (if Tenant
is a corporation or trust) or a transfer of a majority of the total interest in
Tenant (if Tenant is a partnership) at any one time or over a period of time
through a series of transfers, shall be deemed an assignment of this Lease and
shall be subject to all of the provisions of this Article 12, including, without
limitation the requirement that Tenant obtain Landlord's prior consent thereto.
The transfer of shares of Tenant (if Tenant is a corporation or trust) for
purposes of this Section 12.4 shall not include the sale of shares by persons
other than those deemed "insiders" within the meaning of the Securities Exchange
Act of 1934, as amended, which sale is effected through the "over-the-counter"
market or through any recognized stock exchange.

         Section 12.4 (A) Notwithstanding the provisions of Section 12.1 hereof,
if Landlord shall not exercise its rights pursuant to paragraph (B) of this
Section 12.4, Landlord shall not unreasonably withhold its consent to any
subletting of the Premises (if Tenant proposes to sublet a portion of the
Premises then, unless the context otherwise requires, references in this Section
12.4 to the Premises shall be deemed to refer to the portion of the Premises
proposed to be sublet by Tenant), provided that:

                  (1) the Premises shall not without Landlord's prior consent,
have been publicly advertised for subletting at a rental rate less than the
prevailing rental rate set by Landlord for comparable space in the Building (the
"Prevailing Rate");

                  (2) no Event of Default shall then exist;

                  (3) the proposed subtenant shall have a financial standing, be
of a character, be engaged in a business, and propose to use the Premises in a
manner in keeping with the standards in such respects of the other tenancies in
the Building,

                                      -27-
<PAGE>   33
                  (4) if Landlord has or within six (6) months thereafter
reasonably expects to have suitable space available in the Building comparable
to the space Tenant proposes to sublet, the proposed subtenant shall not be a
person or entity with whom Landlord is then negotiating or has received or given
an offer to comparable lease space in the Building;

                  (5) the character of the business to be conducted or the
proposed use of the Premises by the proposed subtenant shall not (a) be likely
to materially increase Landlord's operating expenses beyond that which would be
incurred for use by Tenant or for use in accordance with the standards of use of
other tenancies in the Building; (b) materially increase the burden on existing
cleaning services or elevators over the burden prior to such proposed
subletting; (c) require any alterations to be performed in or made to any
portion of the Building or the Real Property other than the Premises; or (d)
violate any provision or restrictions herein relating to the use or occupancy of
the Premises;

                  (6) the subletting shall be expressly subject to all of the
terms, covenants, conditions and obligations on Tenant's part to be observed and
performed under this Lease and the further condition and restriction that the
sublease shall not be assigned, encumbered or otherwise transferred or the
subleased premises further sublet by the subtenant in whole or in part, or any
part thereof suffered or permitted by the subtenant to be used or occupied by
others, without the prior written consent of Landlord in each instance;

                  (7) the subletting shall end no later than one (1) day before
the Expiration Date and shall not be for a term of less than two (2) years
unless it commences less than two (2) years before the Expiration Date;

                  (8) no subletting shall be for less than 2,200 contiguous
rentable square feet and at no time shall there be more than three (3)
occupants, including Tenant, in the Premises; and

                  (9) such sublease shall expressly provide that in the event of
termination, re-entry or dispossess of Tenant by Landlord under this Lease,
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 pursuant to the then executory provisions
of such sublease, except that Landlord shall not (i) be liable for any previous
act or omission of Tenant under such sublease, (ii) be subject to any offset,
not expressly provided in such sublease, which therefore accrued to such
subtenant against Tenant, (iii) be bound by any previous modification of such
sublease or by any previous prepayment of more than one month's rent unless
previously approved by Landlord, (iv) be bound by any covenant to undertake or
complete any construction of the Premises or any portion thereof demised by such
sublease and (v) be bound by any obligation to make any payment to or on behalf
of the subtenant, except for services, repairs, maintenance and restoration
provided for under the sublease to be performed after the date of such
termination, re-entry or dispossess by Landlord under this Lease and which
Landlord is required to perform hereunder with respect to the subleased space at
Landlord's expense, it being expressly understood, however, that Landlord shall
not be bound by any

                                      -28-
<PAGE>   34
obligation to make payment to or on behalf of a subtenant with respect to
construction performed by or on behalf of such subtenant at the subleased
premises.

                  (B) At least ten (10) Business Days prior to any proposed
subletting Tenant shall submit a statement to Landlord (a "Sublease Statement")
containing the following information: (a) the name and address of the proposed
subtenant, (b) a description of the portion of the Premises to be sublet, (c)
the terms and conditions of the proposed subletting including the rent payable,
(d) the nature and character of the business of the proposed subtenant and (e)
any other information that Landlord may reasonably request. Landlord shall have
the right, exercisable within fifteen (15) days after Landlord's receipt of the
Sublease Statement, to terminate this Lease with respect to the portion of the
Premises to be sublet (the "Offered Space"). If Landlord exercises its option to
terminate this Lease with respect to the Offered Space, then the Fixed Rent,
Tenant's Share and Space Factor shall be reduced in the proportion to which the
rentable square footage of the Offered Space bears to the total rentable area of
the Premises immediately prior to Landlord's termination of this Lease with
respect to the Offered Space.

                           (1) The failure by Landlord to exercise its option
under Section 12.4(B) with respect to any subletting shall not be deemed a
waiver of such option with respect to any extension of such subletting or any
subsequent subletting of the Premises affected thereby.

         Section 12.5 (A) In connection with any subletting of all or any
portion of the Premises, Landlord shall be entitled to and Tenant shall pay to
Landlord a sum equal to fifty percent (50%) of any Sublease Profit derived
therefrom. All sums payable hereunder by Tenant shall be calculated on an
annualized basis, but shall be paid to Landlord, as additional rent, within ten
(10) days after receipt thereof by Tenant.

                  (B) For purposes of this Lease:

                           (1) "Rent Per Square Foot" shall mean the sum of the
then Fixed Rent, Escalation Rent and Electricity Additional Rent divided by the
Space Factor.

                           (2) "Sublease Profit" shall mean the product of (x)
the Sublease Rent Per Square Foot less the Rent Per Square Foot, and (y) the
number of rentable square feet constituting the portion of the Premises sublet
by Tenant.

                           (3) "Sublease Rent" shall mean any rent or other
consideration paid to Tenant directly or indirectly, by any subtenant, including
Landlord or its designee pursuant to Section 12.4(C) hereof, or any other amount
received by Tenant from or in connection with any subletting (including, but not
limited to sums paid for the sale or rental, or consideration received on
account of any contribution, of Tenant's Property or sums paid in connection
with the supply of electricity or HVAC or use of any services, equipment or
facilities located within the Licensed Area(s)) after deducting therefrom the
following sublease expenses (the "Sublease Expenses"): (i) in the event of a
sale of Tenant's Property, the then unamortized

                                      -29-
<PAGE>   35
or undepreciated cost thereof determined on the basis of Tenant's federal income
tax returns, (ii) the reasonable out-of-pocket costs and expenses of Tenant in
making such sublease such as brokers' fees, attorneys' fees, and advertising
fees paid to unrelated third parties, (iii) any sums paid to Landlord for a
processing fee and reasonable attorneys' fees and disbursements in connection
with such subletting, (iv) the cost of improvements or alterations costs made by
Tenant expressly and solely for the purpose of preparing that part of the
Premises for such subtenancy and (v) the unamortized unreimbursed cost of any
Tenant's Property leased to and used by such subtenant. In determining Sublease
Rent, the costs set forth in clauses (ii), (iii), (iv) and (v) shall be deducted
as and when incurred by Tenant.

                           (4) "Sublease Rent per Square Foot" shall mean the
Sublease Rent divided by the rentable square feet of the space demised under a
sublease.

                           (5) Sublease Profit shall be recalculated from time
to time to reflect any corrections in the prior calculation thereof due to (i)
subsequent payments received or made by Tenant, (ii) the final adjustment of
payments to be made by or to Tenant or (iii) mistake. Promptly upon the making
or receipt of any such discovery of any such mistake, Tenant shall submit to
Landlord a recalculation of the Sublease Profit as the case may be, and an
adjustment shall be made between Landlord and Tenant, if applicable with respect
thereto on account of prior payments made or credits received pursuant to this
Section 12.7.

                           (6) As used in this Section 12.5, "Tenant" shall also
include any Related Entity.

                                   ARTICLE 13
                              ELECTRICITY AND FUEL

         Section 13.1 Tenant shall at all times comply with the rules,
regulations, terms and conditions applicable to service, equipment, wiring and
requirements of the public utility or other electricity provider supplying
electricity to the Building. Landlord shall make available to Tenant in the
basement of the Building 2,800 amps, 208 volts, 3 phase 4 wire electrical
capacity. In the event that Tenant at any time during the Term fails to utilize
such electrical capacity or any reduced electrical capacity, Landlord may (but
shall not be obligated), upon written notice to Tenant (a) if required to do so
by any utility company, Governmental Authority or quasi-Governmental Authority
or (b) if the failure to do so would adversely affect the Building, reduce the
electrical capacity available to the Premises to the amount then being utilized
by Tenant. As part of the Initial Alterations, Tenant, at its sole cost and
expense, shall perform the work referred to in Paragraph B and Paragraph C of
Schedule B. Tenant shall not use or consume electric current that (a) exceeds
or, in Landlord's sole reasonable judgment, would exceed such capacity or (b)
exceeds the capacity of any of the electrical facilities and installations,
including, without limitation, any risers, serving the Premises. In the event
that, in Landlord's sole reasonable judgment, Tenant's electrical requirements
exceed such capacity, Landlord shall so notify Tenant of same. Within five (5)
days after receipt of such notice, Tenant shall cease such usage. If Tenant
shall require electric capacity in addition to the above-mentioned capacity and
Tenant is able to demonstrate

                                      -30-
<PAGE>   36
to Landlord's reasonable satisfaction that it will utilize all of its existing
capacity as well as any future capacity, and Landlord shall determine in its
reasonable judgment that any additional capacity shall neither adversely affect
the supply of electricity to existing tenants or prospective tenants of any
vacant space in the Building nor the supply of electricity to the Building for
the operation thereof, Tenant, at its sole cost and expense, shall have the
right, with Landlord's reasonable cooperation but at no cost or expense to
Landlord, to apply for the same directly to the public utility furnishing
electricity to the Building. If such additional capacity shall require the
installation of a vault and/or transformer, risers, switch gear or any other
equipment or facilities, Tenant, at its sole cost and expense, shall be
responsible for such installation and shall pay to Landlord as additional rent
hereunder Landlord's charges for the additional riser and basement space
required for such additional equipment. Moreover, to the extent that any such
installation, including, without limitation, any vault or transformer shall not
be fully utilized by Tenant, Landlord, may, upon written notice to Tenant, (a)
if required to do so by any utility company, Governmental Authority or
quasi-Governmental Authority or (b) the failure to do so would adversely affect
the Building, divert and utilize any such excess capacity for its own use or the
use by another tenant or occupant of the Building. In any such instance,
Landlord shall not use or allow another tenant to use Tenant's vault,
transformer, risers, switch gear, or any other equipment or facilities of Tenant
which have been installed for the purpose of facilitating such additional
electrical capacity. Any such installation shall be deemed an Alteration
hereunder and subject to the provisions of Article 3 hereof.

         Section 13.2 (A) Unless Landlord elects or is required to have Tenant
obtain electricity from the public utility company furnishing electricity to the
Building pursuant to the provisions of Section 13.3 hereof, electricity shall be
supplied by Landlord to the Premises and Tenant shall pay to Landlord, as
additional rent for such service, the amounts (the "Electricity Additional
Rent") as determined by a meter or submeter (installed by Landlord, at
Landlord's cost, for the purposes of measuring such consumption) at charges,
terms and rates set from time to time during the Term by the public utility
corporation serving the Buildings under the service classification in effect
pursuant to which Landlord purchases electricity.

                  (B) If electricity shall hereafter be supplied to the Building
on a "primary service" basis from the public utility corporation, Tenant shall
also pay to Landlord in equal monthly installments, as additional rent, an
amount equal to Tenant's Share of the costs incurred by Landlord in converting
the Building to such "primary service," amortized over the useful life as
Landlord actually establishes for income tax purposes pursuant to the Internal
Revenue Code of 1986, as amended, of the improvements made in connection
therewith.

                  (C) Where more than one meter measures the electricity
supplied to Tenant, the electricity rendered through each meter may be computed
and billed separately in accordance with the provisions hereinabove set forth.
Bills for the Electricity Additional Rent shall be rendered to Tenant at such
time as Landlord may elect, and Tenant shall pay the amount shown thereon to
Landlord within ten (10) days after receipt of such bill.

                                      -31-
<PAGE>   37
         Section 13.3 If Landlord shall be required or shall elect to
discontinue furnishing electricity to Tenant, this Lease shall continue in full
force and effect and shall be unaffected thereby, except only that from and
after the effective date of such discontinuance, Landlord shall not be obligated
to furnish electricity to Tenant and Tenant shall not be obligated to pay the
Electricity Additional Rent. If Landlord so discontinues furnishing electricity
to Tenant, Tenant shall diligently obtain electric energy directly from the
public utility furnishing electric service to the Building. The costs of such
service shall be paid by Tenant directly to such public utility. Such
electricity may be furnished to Tenant by means of the existing electrical
facilities serving the Premises, at no charge, to the extent the same are
available, suitable and safe for such purposes as determined by Landlord. All
meters and all additional panel boards, feeders, risers, wiring and other
conductors and equipment which may be required to obtain electricity shall be
installed by Landlord at Tenant's expense. Landlord, to the extent permitted by
applicable Requirements, shall not discontinue furnishing electricity to the
Premises until such installations have been made and Tenant shall be able to
obtain electricity directly from the public utility.

                                   ARTICLE 14
                               ACCESS TO PREMISES

         Section 14.1 (A) Tenant shall permit Landlord, Landlord's agents and
public utilities servicing the Building to erect, use and maintain, concealed
ducts, pipes and conduits in and through the Premises, and Landlord agrees to
use reasonable efforts to minimize any such activity so as not to disrupt
Tenant's business operations. Landlord or Landlord's agents shall have the right
to enter the Premises at all reasonable times upon reasonable prior notice
(except in case of emergency), which notice may be oral, to examine the same, to
show them to prospective purchasers, Mortgagees or lessees of the Building or
space therein, and to make such repairs, alterations, improvements or additions
(i) as Landlord may deem necessary to the Premises or to any other portion of
the Building, or (ii) which Landlord may elect to perform following ten (10)
days after notice following Tenant's failure to make or commence making and
thereafter diligently prosecute to completion repairs or perform any work which
Tenant is obligated to make or perform under this Lease, or (iii) for the
purpose of complying with all Requirements and Insurance Requirements, and
Landlord shall be allowed to take all material into and upon the Premises that
may be required therefor without the same constituting a breach by Landlord of
any provisions of this Lease, a breach of Tenant's quiet enjoyment, an eviction
or constructive eviction of Tenant in whole or in part, or a release of Tenant's
obligations to pay Fixed Rent, Escalation Rent, or any item of Rental, and the
Fixed Rent, Escalation Rent (and any other item of Rental) shall in no wise
abate while said repairs, alterations, improvements or additions are being made,
by reason of loss or interruption of business of Tenant, or otherwise.

                  (B) Any work performed or installations made pursuant to this
Article 14 shall be made with reasonable diligence and otherwise pursuant to
Section 4.4 hereof.

                  (C) Any pipes, ducts, or conduits installed in or through the
Premises pursuant to this Article 14 shall either be concealed behind, beneath
or within partitioning,

                                      -32-
<PAGE>   38
columns, ceilings or floors located or to be located in the Premises, or
completely furred at points immediately adjacent to partitioning columns or
ceilings located or to be located in the Premises, provided that the
installation of such pipes, ducts, or conduits, when completed, shall not reduce
the usable area of the Premises beyond a de minimis amount.

         Section 14.2 Upon reasonable prior notice to Tenant, Landlord may
exhibit the Premises to prospective tenants thereof during the twelve (12) month
period prior to the Expiration Date. If Tenant shall not be present when for any
reason entry into the Premises shall be necessary or permissible under the terms
of this Lease, Landlord or Landlord's agents may enter the same without
rendering Landlord or such agents liable therefor (during such entry Landlord or
Landlord's agents shall accord reasonable care under the circumstances to
Tenant's Property), and without in any manner affecting this Lease. Nothing
herein contained, however, shall be deemed or construed to impose upon Landlord
any obligation, responsibility or liability whatsoever, for the care,
supervision or repair of the Building or any part thereof, other than as herein
provided. Subject to Unavoidable Delays, Requirements and Insurance
Requirements, Tenant shall have access to the Premises and the Licensed Areas
and related ancillary facilities in the Building seven (7) days a week,
twenty-four (24) hours a day.

                                   ARTICLE 15
                            CERTIFICATE OF OCCUPANCY

         Tenant shall not at any time use or occupy the Premises in violation of
the certificate of occupancy at such time issued for the Premises or for the
Building and in the event that any department of the City or State of New York
shall hereafter contend or declare by notice, violation, order or in any other
manner whatsoever that the Premises are used for a purpose which is a violation
of such certificate of occupancy, Tenant shall, upon five (5) Business Days'
written notice from Landlord or any Governmental Authority, immediately
discontinue such use of the Premises. A temporary or permanent certificate of
occupancy will be in force upon the Commencement Date; provided, however,
neither such certificate, nor any provision of this Lease, nor any act or
omission of Landlord, shall be deemed to constitute a representation or warranty
that the Premises, or any part thereof, lawfully may be used or occupied for any
particular purpose or in any particular manner.

                                   ARTICLE 16
                                     DEFAULT

         Section 16.1 Each of the following events shall be an "Event of
Default" hereunder:

                  (A) if Tenant shall default (i) in the payment when due of (x)
any installment of Fixed Rent or (y) amounts owed to Landlord with respect to
the Initial Alterations for five (5) days after notice of such default is given
to Tenant, (ii) in the payment when due of

                                      -33-
<PAGE>   39
any other item of Rental and such default shall continue for thirty (30) days
after notice of such default is given to Tenant or (iii) in the performance when
due of any other obligation under this Lease and such default shall continue for
thirty (30) days after notice of such default is given to Tenant, except in the
case of any such default which cannot be cured within thirty (30) days after
such notice, then, provided that Tenant has commenced to cure such default and
is diligently pursuing such cure, ninety (90) days after such notice, except
that if Landlord shall have given one (1) such notice with respect to any of
items (i), (ii) or (iii) in any twelve (12) month period, Tenant shall not be
entitled to any further notice of its delinquency in the payment of Rental until
such time as twelve (12) consecutive months shall have elapsed without Tenant
having defaulted in any such payment; or

                  (B) if the Premises shall become abandoned; or

                  (C) if Tenant's interest in this Lease shall devolve upon or
pass to any person, whether by operation of law or otherwise, except as
expressly permitted under Article 12 hereof; or

                  (D)(1) if Tenant shall commence or institute any case,
proceeding or other action (A) 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 existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property; or

                           (2) if Tenant shall make a general assignment for the
benefit of creditors; or

                           (3) if any case, proceeding or other action shall be
commenced or instituted against Tenant (A) seeking to have an order for relief
entered against it 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 existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, or (B) seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its property, which in either of such
cases (i) results in any such entry of an order for relief, adjudication of
bankruptcy or insolvency or such an appointment or the issuance or entry of any
other order having a similar effect or (ii) remains undismissed for a period of
ninety (90) days; or

                           (4) if any case, proceeding or other action shall be
commenced or instituted against Tenant seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its property which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within ninety (90) days from the entry thereof; or

                                      -34-
<PAGE>   40
                           (5) if Tenant shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (1), (2), (3) or (4) above; or

                           (6) if a trustee, receiver or other custodian is
appointed for any substantial part of the assets of Tenant which appointment is
not vacated or effectively stayed within ten (10) Business Days; or

                  (E) if Tenant shall default in the observance or performance
of any other material term, covenant or condition of this Lease on Tenant's part
to be observed or performed and Tenant shall fail to remedy such default within
thirty (30) days after notice by Landlord to Tenant of such default; provided,
however, that if such default is of such a nature that it can be remedied but
cannot be completely remedied within said period of thirty (30) days, Tenant
shall not be in default hereunder if (x) it commences to remedy such default
within said period of thirty (30) days and thereafter diligently prosecutes to
completion all steps necessary to remedy such default, and (y) the continuance
of such default would not subject Landlord, Lessor under a Superior Lease, or a
Mortgagee to criminal liability; or

                  (F) if this Lease is assigned (or all or a portion of the
Premises are subleased) to a Related Entity and such Related Entity shall no
longer (i) control, (ii) be under common control with, or (iii) be under the
control of Net2000 Communications Real Estate, Inc. (or any permitted successor
by merger, consolidation or purchase as provided herein).

         Section 16.2 (A) If an Event of Default (i) described in Section
16.1(D) hereof shall occur, or (ii) described in Section 16.1(A), (B), (C), (E),
or (F) shall occur and Landlord, at any time thereafter prior to the curing of
the Event of Default, at its option gives written notice to Tenant stating that
this Lease and the Term shall expire and terminate on the date Landlord shall
give Tenant such notice, which date shall be at least five (5) days after the
date of sending of the written notice to Tenant then this Lease and the Term and
all rights of Tenant under this Lease shall expire and terminate as if the date
on which the Event of Default described in clause (i) above occurred or the date
such notice is given to Tenant by Landlord were the Fixed Expiration Date and
Tenant immediately shall quit and surrender the Premises, but Tenant shall
nonetheless be liable for all of its obligations hereunder, as provided in
Articles 17 and 18 hereof. Anything contained herein to the contrary
notwithstanding, if such termination shall be stayed by order of any court
having jurisdiction over any proceeding described in Section 16.1(D) hereof, or
by federal or state statute, then, following the expiration of any such stay, or
if the trustee appointed in any such proceeding, Tenant or Tenant as
debtor-in-possession shall fail to assume Tenant's obligations under this Lease
within the period prescribed therefor by law or within one hundred twenty (120)
days after entry of the order for relief or as may be allowed by the court, or
if said trustee, 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 or adequate assurance of the complete and continuous future performance
of Tenant's obligations under this Lease as provided in Section 12.3(B),
Landlord, to the extent permitted by law or by leave of the court having
jurisdiction over such proceeding, shall have the right, at its election, to
terminate this Lease on

                                      -35-
<PAGE>   41
five (5) days' notice to Tenant, Tenant as debtor-in-possession or said trustee
and upon the expiration of said five (5) day period this Lease shall cease and
expire as aforesaid and Tenant, Tenant as debtor-in-possession or said trustee
shall immediately quit and surrender the Premises as aforesaid.

                  (B) If an Event of Default described in Section 16.1(A) hereof
shall occur, or this Lease shall be terminated as provided in Section 16.2(A)
hereof, Landlord, without notice, may reenter and repossess the Premises without
being liable to indictment, prosecution or damages therefor and may dispossess
Tenant by summary proceedings or otherwise.

         Section 16.3 If, at any time, (i) Tenant shall comprise two (2) or more
persons, or (ii) Tenant's obligations under this Lease shall have been
guaranteed by any person other than Tenant, or (iii) Tenant's interest in this
Lease shall have been assigned, the word "Tenant", as used in Section 16.1(E),
shall be deemed to mean any one or more of the persons primarily or secondarily
liable for Tenant's obligations under this Lease. Any monies received by
Landlord from or on behalf of Tenant during the pendency of any proceeding of
the types referred to in Section 16.1(E) 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 Rental or a waiver
on the part of Landlord of any rights under Section 16.2.

                                   ARTICLE 17
                              REMEDIES AND DAMAGES

         Section 17.1 (A) If there shall occur any Event of Default, or this
Lease and the Term shall expire and come to an end as provided in Article 16
hereof:

                  (1) Tenant shall quit and peacefully surrender the Premises
and Licensed Area(s) 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 Term shall expire and come to an end, re-enter the Premises and the Licensed
Area(s) or any part thereof without notice, either by summary proceedings, or by
any other applicable action or proceeding, or by force or otherwise (without
being liable to indictment, prosecution or damages therefor), and may repossess
the Premises and the Licensed Area(s) and dispossess Tenant and any other
persons from the Premises and the Licensed Area(s) and remove any and all of
their property and effects from the Premises and the Licensed Area(s); and

                  (2) Landlord, at Landlord's option, may relet the whole or any
part or parts of 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 or any part thereof and shall in no event be
liable for refusal or failure to relet the Premises or any part thereof, and no
such refusal or failure shall

                                      -36-
<PAGE>   42
operate to relieve Tenant of any liability under this Lease or otherwise affect
any such liability, and Landlord, at Landlord's option, 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.

                  (B) Tenant hereby waives the service of any notice of
intention to re-enter or to institute legal proceedings to that end which may
otherwise be required to be given under any present or future law. Tenant, on
its own behalf and on behalf of all persons claiming through or under Tenant,
including all creditors, does hereby waive any and all rights which Tenant and
all such persons might otherwise have under any present or future law to redeem
the Premises and the Licensed Area(s), or to re-enter or repossess the Premises
and the Licensed Area(s), or to restore the operation of this Lease, after (a)
Tenant shall have been dispossessed by a judgment or by warrant of any court or
judge, or (b) any re-entry by Landlord, or (c) any expiration or termination of
this Lease and the Term, whether such dispossess, re-entry, expiration or
termination shall be by operation of law or pursuant to the provisions of this
Lease. The words "re-enter," "re-entry" and "re-entered" as used in this Lease
shall not be deemed to be restricted to their technical legal meanings. In the
event of a breach or threatened breach by Tenant, or any persons claiming
through or under Tenant, of any term, covenant or condition of this Lease,
Landlord shall have the right to enjoin such breach and the right to invoke any
other remedy allowed by law or in equity as if re-entry, summary proceedings and
other special remedies were not provided in this Lease for such breach. The
right to invoke the remedies hereinbefore set forth are cumulative and shall not
preclude Landlord from invoking any other remedy allowed at law or in equity.

         Section 17.2 (A) If this Lease and the Term shall expire and come to an
end as provided in Article 16 hereof, or by or under any summary proceeding or
any other action or proceeding, or if Landlord shall re-enter the Premises as
provided in Section 17.1, or by or under any summary proceeding or any other
action or proceeding, then, in any of said events:

                           (1) Tenant shall pay to Landlord all Fixed Rent,
Escalation Rent and other items of Rental payable under this Lease by Tenant to
Landlord to the date upon which this Lease and the Term shall have expired and
come to an end or to the date of re-entry upon the Premises by Landlord, as the
case may be;

                           (2) Tenant also shall be liable for and shall pay to
Landlord, as damages, any deficiency (referred to as "Deficiency") between the
Rental for the period which otherwise constituted the unexpired portion of the
Term and the net amount, if any, of rents collected under any reletting effected
pursuant to the provisions of clause (2) of Section 17.1 for any part of such
period (first deducting from the rents collected under any such reletting all of
Landlord's reasonable expenses in connection with the termination of this Lease,
Landlord's re-entry upon the Premises and with such reletting including, but not
limited to, actual costs for all repossession costs, brokerage commissions,
legal expenses, reasonable attorneys' fees and

                                      -37-
<PAGE>   43
disbursements, alteration costs, contribution to work and 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 Fixed Rent, 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

                           (3) 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, on demand, in lieu of any further
Deficiency as and for liquidated and agreed final damages, a sum equal to the
amount by which the Rental for the period which otherwise would have constituted
the unexpired portion of the Term exceeds the then fair and reasonable rental
value of the Premises for the same period, both discounted to present worth at
the Base Rate less the aggregate amount of Deficiencies theretofore collected by
Landlord pursuant to the provisions of clause (A)(2) of this Section 17.2 for
the same period; if, before presentation of proof of such liquidated damages to
any court, commission 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 Term, or any part thereof, the amount of rent reserved
upon such reletting shall be deemed, prima facie, to be the fair and reasonable
rental value for the part or the whole of the Premises so relet during the term
of the reletting.

                  (B) If the Premises, or any part thereof, 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 17.2. Tenant shall in no event be
entitled to any rents collected or payable under any reletting, whether or not
such rents shall exceed the Fixed Rent reserved in this Lease. Solely for the
purposes of this Article 17, the term "Escalation Rent" as used in Section
17.2(A) shall mean the Escalation Rent in effect immediately prior to the
Expiration Date, or the date of re-entry upon the Premises by Landlord, as the
case may be, adjusted to reflect any increase pursuant to the provisions of
Article 27 hereof for the Operating Year immediately preceding such event.
Nothing contained in Article 16 hereof or this Article 17 shall be deemed to
limit or preclude the recovery by Landlord from Tenant of the maximum amount
allowed to be obtained as damages by any statute or rule of law, or of any sums
or damages to which Landlord may be entitled in addition to the damages set
forth in this Section 17.2.

                                   ARTICLE 18
                                FEES AND EXPENSES

         Section 18.1 If Tenant shall default under this Lease, or if Tenant
shall fail to comply with its obligations under this Lease and the preservation
of property or the safety of any tenant, occupant or other person is threatened,
Landlord may (1) perform the same for the account of Tenant, or (2) make any
reasonable expenditure or incur any obligation for the payment of money,
including, but not limited to, reasonable attorneys' fees and disbursements in

                                      -38-
<PAGE>   44
instituting, prosecuting or defending any action or proceeding, and the cost
thereof, with interest thereon at the Applicable Rate from the date Tenant is
presented with a bill or statement, shall be deemed to be additional rent
hereunder and shall be paid by Tenant to Landlord within ten (10) days of
rendition of any bill or statement to Tenant therefor.

         Section 18.2 If Tenant shall fail to pay any installment of Fixed Rent,
Escalation Rent or any other item of Rental when due, Tenant shall pay to
Landlord, in addition to such installment of Fixed Rent, Escalation Rent or
other item of Rental, as the case may be, as a late charge and as additional
rent, (a) a sum equal to interest at the Applicable Rate on the amount unpaid,
computed from the date such payment was due to and including the date of payment
and (b) a late charge equal to ten percent (10%) of such overdue amount.

                                   ARTICLE 19
                         NO REPRESENTATIONS BY LANDLORD

         Section 19.1 Landlord and Landlord's agents have made no
representations or promises with respect to the Building, the Real Property, the
Premises or the Licensed Area(s), except as herein expressly set forth, and no
rights, easements or licenses are acquired by Tenant by implication or otherwise
except as expressly set forth herein. Tenant shall accept possession of the
Premises and the Licensed Area(s) in the condition which shall exist on the
Commencement Date "as is", and Landlord shall have no obligation to perform any
work or make any installations in order to prepare the Building, Premises or
Licensed Area(s) for Tenant's use and occupancy, except as set forth in Section
19.2 and Section 19.3 hereof.

         Section 19.2 Landlord shall (a) demolish the improvements existing in
the Premises as of the date hereof, and remove all debris therefrom, (b) using
building standard materials construct a unisex bathroom (the "ADA Bathroom") in
the Premises in a location approved by Landlord, which consent shall not be
unreasonably withheld or delayed, which bathroom shall comply with all
applicable Requirements, including, without limitation, ADA, (c) provide tie-ins
for the Premises to the Building fire alarm and life safety systems and (d)
complete the renovations and installations set forth on Exhibit A attached
hereto (the items described in clauses (a), (b), (c) and (d) are referred to as
"Landlord's Work"; provided, however, that Landlord may elect in lieu of
constructing the ADA Bathroom to require Tenant to construct the ADA Bathroom
and to pay to Tenant the ADA Tenant Fund in accordance with Section 3.4.
Landlord shall deliver to Tenant on or before the Commencement Date an ACP-5
certificate for the Premises. Tenant acknowledges and agrees that Landlord may
be performing the items of Landlord's Work, including the construction of the
ADA Bathroom, other than item (a) after the Commencement Date and the
performance of such construction work shall not affect the validity of this
Lease or the obligations of Tenant hereunder or give rise to any claim for
damages by Tenant on a claim for eviction, constructive or otherwise. In
connection with the construction of the ADA Bathroom, Landlord shall use
reasonable efforts to minimize interference with the performance of Tenant's
Initial Alterations. Tenant shall within ten (10) days after demand, which may
be made from time to time, pay to Landlord, as additional rent,

                                      -39-
<PAGE>   45
105% of (x) the cost and expense of performing the work in items number (1),
(2) and (3) on Exhibit A attached hereto and (y) one-sixth (1/6th) of the cost
and expense of ongoing maintenance, repair and if necessary, replacement of the
ventilation system referred to in items number (2) and (3) on Exhibit A attached
hereto and (z) Tenant's Share of the cost and expense of performing the work in
item number (4) on Exhibit A attached hereto.

         Section 19.3 Landlord shall complete items numbered 4, 5 and 6 of
Landlord's Base Building Work, as set forth on Exhibit B attached hereto, no
later than the Rent Commencement Date. Tenant acknowledges and agrees (i) that
items 4, 5 and 6 of Landlord's Base Building Work will not be complete by the
Commencement Date and (ii) that Landlord shall be performing other portions of
the Landlord's Base Building Work after the Rent Commencement Date and the
performance of such work shall not affect the validity of this Lease or the
obligations of Tenant hereunder or give rise to any claim for rescission or
damages by Tenant on a claim for eviction, constructive or otherwise; provide
that the performance of such work by Landlord shall not materially and
substantially interfere with Tenant's business operations.

         Section 19.4 In the event items 4, 5 and 6 of Landlord's Base Building
Work and all items of Landlord's Work are not substantially complete by the Rent
Commencement Date, then provided that, solely as a result of such items not
being substantially complete, Tenant shall not be able to use the Premises for
the conduct of business and Tenant shall not occupy the Premises or the Licensed
Areas for the conduct of business, Tenant shall be entitled to an abatement of
Fixed Rent for each day such Work, in Landlord's reasonable opinion, is not
substantially complete and Tenant is unable to use the Premises for conducting
its business.

                                   ARTICLE 20
                                   END OF TERM

         Upon the expiration or other termination of this Lease, Tenant shall
quit and surrender to Landlord the Premises, vacant, broom clean, in good order
and condition, ordinary wear and tear and damage for which Tenant is not
responsible under the terms of this Lease excepted, and Tenant shall remove all
of Tenant's Property and such Alterations as may be required to be removed
pursuant to Article 3 hereof; this obligation shall survive the expiration or
sooner termination of the Term. If the last day of the Term or any renewal
thereof falls on Saturday or Sunday, this Lease shall expire on the Business Day
immediately preceding. Tenant expressly waives, for itself and for any person
claiming through or under Tenant, any rights which Tenant or any such person may
have under the provisions of Section 2201 of the New York Civil Practice Law and
Rules and of any successor law of like import then in force in connection with
any holdover or summary proceedings which Landlord may institute to enforce the
foregoing provisions of this Article 20. Tenant acknowledges that possession of
the Premises must be surrendered to Landlord on the Expiration Date. The parties
recognize and agree that the damage to Landlord resulting from any failure by
Tenant to timely surrender possession of the Premises and the Licensed Area(s)
as aforesaid will be extremely substantial,

                                      -40-
<PAGE>   46
will exceed the amount of the monthly installments of the Fixed Rent and
Escalation Rent theretofore payable hereunder, and will be impossible to measure
accurately. Tenant therefore agrees that if possession of the Premises, and the
Licensed Area(s) are not surrendered to Landlord on or before the Expiration
Date, in addition to any other rights or remedies Landlord may have hereunder or
at law, and without in any manner limiting Landlord's right to demonstrate and
collect any damages suffered by Landlord and arising from Tenant's failure to
surrender the Premises as provided herein, Tenant shall pay to Landlord on
account of use and occupancy of the Premises for each month and for each portion
of any month during which Tenant holds over in the Premises after the Expiration
Date, a sum equal to one and one-half (1.5) times the aggregate of that portion
of the Fixed Rent, Escalation Rent and other items of Rental which were payable
under this Lease during the last month of the Term. Nothing herein shall permit
Tenant to retain possession of the Premises without written consent after the
Expiration Date or to limit in any manner Landlord's right to regain possession
of the Premises and/or the Licensed Area(s) through summary proceedings, or
otherwise, and no acceptance by Landlord of payments from Tenant after the
Expiration Date shall be deemed to be other than on account of the amount to be
paid by Tenant in accordance with the provisions of this Article 20. The
provisions of this Article 20 shall survive the Expiration Date.

                                   ARTICLE 21
                                 QUIET ENJOYMENT

         Provided no Event of Default has occurred and is continuing, Tenant may
peaceably and quietly enjoy the Premises subject, nevertheless, to the terms and
conditions of this Lease including, but not limited to, Section 37.2 hereof and
Article 7 hereof, including, without limitation, all Superior Leases and
Mortgages.

                                   ARTICLE 22
                           FAILURE TO GIVE POSSESSION

         Tenant waives any right to rescind this Lease under Section 223-a of
the New York Real Property law or any successor statute of similar nature and
purpose then in force and further waives the right to recover any damages which
may result from Landlord's failure for any reason to deliver possession of the
Premises on the date set forth in Section 1.1 hereof for the commencement of
the Term. If Landlord shall be unable to give possession of the Premises on the
date set forth in Section 1.1 hereof for the commencement of the Term, and
provided that Tenant is not responsible for such inability to give possession,
the Commencement Date shall be deemed to be the date upon which Landlord shall
have delivered possession of the Premises to Tenant and, except as hereinafter
provided, the Rent Commencement Date and the Fixed Expiration Date shall each be
postponed by one day for each day that Landlord fails to deliver possession of
the Premises to Tenant. No such failure to give possession on the date set forth
in

                                      -41-
<PAGE>   47
Section 1.1 hereof for the commencement of the Term or on the Commencement 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 in any way to extend
the Term except as provided in this Article 22.

                                   ARTICLE 23
                                    NO WAIVE

         Section 23.1 No act or thing done by Landlord or Landlord's agents
during the Term shall be deemed an acceptance of a surrender of the Premises,
and no agreement to accept such surrender shall be valid unless in writing
signed by Landlord.

         Section 23.2 The failure of Landlord or Tenant to seek redress for
violation of, or to insist upon the strict performance of, any covenant or
condition of this Lease, or any of the Rules and Regulations set forth or
hereafter adopted by Landlord, shall not prevent a subsequent act, which would
have originally constituted a violation, from having all of the force and effect
of an original violation. The receipt by Landlord or payment by Tenant of Fixed
Rent, Escalation Rent or any other item of Rental with knowledge of the breach
of any covenant of this Lease shall not be deemed a waiver of such breach. The
failure of Landlord to enforce any of the Rules and Regulations set forth, or
hereafter adopted, against Tenant or any other tenant in the Building shall not
be deemed a waiver of any such Rules and Regulations. No provision of this Lease
shall be deemed to have been waived by Landlord or Tenant, unless such waiver be
in writing signed by Landlord or Tenant, as the case may be. No payment by
Tenant or receipt by Landlord of a lesser amount than the monthly Fixed Rent or
other item of Rental herein stipulated shall be deemed to be other than on
account of the earliest stipulated Fixed Rent or other item of Rental, or as
Landlord may elect to apply same, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as Fixed Rent or other
item of Rental be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such Fixed Rent or other item of Rental or pursue any other remedy in
this Lease provided. This Lease contains the entire agreement between the
parties and all prior negotiations and agreements are merged herein. Any
executory agreement hereafter made shall be ineffective to change, modify,
discharge or effect an abandonment of this Lease in whole or in part unless such
executory agreement is in writing and signed by the party against whom
enforcement of the change, modification, discharge or abandonment is sought.

                                   ARTICLE 24
                            WAIVER OF TRIAL BY JURY

         The respective parties hereto shall and they hereby do waive trial by
jury in any action, proceeding or counterclaim brought by either of the parties
hereto against the other (except for personal injury or property damage) on any
matters whatsoever arising out of or in

                                      -42-
<PAGE>   48
any way connected with this Lease, the relationship of Landlord and Tenant
Tenant's use or occupancy of the Premises, or for the enforcement of any remedy
under any statute, emergency or otherwise. If Landlord commences any summary
proceeding against Tenant, Tenant will not interpose any counterclaim of
whatever nature or description in any such proceeding (unless failure to impose
such counterclaim would preclude Tenant from asserting in a separate action the
claim which is the subject of such counterclaim), and will not seek to
consolidate such proceeding with any other action which may have been or will be
brought in any other court by Tenant.

                                   ARTICLE 25
                              INABILITY TO PERFORM

         Except as provided herein, this Lease and the obligation of Tenant to
pay Rental hereunder and perform all of the other covenants and agreements
hereunder on the part of Tenant to be performed shall in no wise be affected,
impaired or excused because Landlord is unable to fulfill any of its obligations
under this Lease expressly or impliedly to be performed by Landlord or because
Landlord is unable to make, or is delayed in making any repairs, additions,
alterations, improvements or decorations or is unable to supply or is delayed in
supplying any equipment or fixtures, if Landlord is prevented or delayed from so
doing by reason of strikes or labor troubles, or by any cause whatsoever
reasonably beyond Landlord's control, including but not limited to, laws,
governmental preemption in connection with a national emergency or by reason of
any Requirements of any Governmental Authority or by reason of the conditions of
supply and demand which have been or are affected by war or other emergency
("Unavoidable Delays"). Landlord shall promptly notify Tenant of any Unavoidable
Delay which prevents Landlord from fulfilling any of its obligations under this
Lease.

                                   ARTICLE 26
                               BILLS AND NOTICES

         Except as otherwise expressly provided in this Lease, any bills,
statements, consents, notices, demands, requests or other communications given
or required to be given under this Lease shall be in writing and shall be deemed
sufficiently given or rendered if delivered by hand (against a signed receipt)
or if sent by registered or certified mail (return receipt requested) or via a
nationally recognized overnight delivery service addressed

                  if to Tenant: (a) at Tenant's business address of 2195 Fox
         Mill Road, Herndon, Virginia 20171, Attn: Mr. Barry J. Saville, 2195
         Fox Mill Road, Herndon, Virginia 20171, Attn: General Counsel and c/o
         the Premises at the Building, or (b) at any place where Tenant or any
         agent or employee of Tenant be found if mailed subsequent to Tenant's
         vacating, deserting, abandoning or surrendering the Premises, in each
         case with a copy to Watt, Tieder, Hoffar, Fitzgerald, L.L.P., 7929
         Westpark Drive, Suite 400, McLean, Virginia 22102, Attention: John G.
         Lavoie, Esquire, or

                                      -43-
<PAGE>   49
                  if to Landlord: Hudson Telecom Center LLC, c/o The Bristol
         Group, 400 Montgomery Street, San Francisco, California 94104,
         Attention: Mr. Jeffrey Kott, and with copies to (x) Mayer, Brown &
         Platt, 1675 Broadway, New York, New York 10019, Attn.: Mr. Robert I.
         Bressman, Esq. and (y) any Mortgagee or Lessor which shall have
         requested same, by notice given in accordance with the provisions of
         this Article 26 at the address designated by such Mortgagee or Lessor,
         or

to such other address(es) as either Landlord or Tenant may designate as its new
address(es) for such purpose by notice given to the other in accordance with the
provisions of this Article 26. Any such bill, statement, consent, notice,
demand, request or other communication shall be deemed to have been rendered or
given on the date when it shall have been hand delivered or three (3) Business
Days from when it shall have been mailed as provided in this Article 26.

                                   ARTICLE 27
                                   ESCALATION

         Section 27.1 For the purposes of this Article 27, the following terms
shall have the meanings set forth below.

                  (A) "Assessed Valuation" shall mean the amount for which the
Real Property is assessed pursuant to applicable provisions of the New York City
Charter and of the Administrative Code of the City of New York for the purpose
of imposition of Taxes.

                  (B) "Base Taxes" " shall mean the Taxes for the Tax Year
commencing July 1, 1999 and ending June 30, 2000.

                  (C) "Base Wage Rate" shall mean the Wage Rate in effect as of
January 1, 2000.

                  (D) "Comparison Year" shall mean the calendar year 2000 and
such subsequent calendar year during the Term.

                  (E) "Local 32B" shall mean Local 32B-32J of the Building
Service Employees International Union, AFL-CIO, or its successor, or if there
shall be no successor, then any other union representing employees employed at
the Building and performing similar services.

                  (F) "Porters" shall mean that classification of employee
engaged in the general maintenance and operation of Class A office buildings
most nearly comparable to the classification now applicable to porters in the
current agreement between R.A.B. and Local 32B (which classification is
currently termed "others" in said agreement).

                                      -44-
<PAGE>   50
                  (G) "Porters' Wage Factor" shall mean the sum of (x)
eighteen thousand six hundred ninety-seven (18,697) and (y) the Licensed Area
Space Factor.

                  (H) "Porters' Wage Payment" shall mean the amount obtained by
multiplying the Porters' Wage Factor by the amount by which the Wage Rate in
effect on January 1 of a Comparison Year exceeds the Base Wage Rate.

                  (I) "R.A.B." shall mean the Realty Advisory Board on Labor
Relations, Incorporated, or its successor.

                  (J) "Tax Statement" shall mean a statement setting forth a
comparison of Taxes for a Tax Year with the Base Taxes and the Tax Payment due
for such Tax Year pursuant to the provisions of this Article 27.

                  (K) "Tax Year" shall mean the period July 1 through June 30
(or such other period as hereinafter may be duly adopted by The City of New York
as its fiscal year for real estate tax purposes), any portion of which occurs
during the Term.

                  (L) "Taxes" shall mean the aggregate amount of real estate
taxes and any general or special assessments (exclusive of penalties and
interest thereon) imposed upon the Real Property (including, without limitation,
(i) assessments made upon or with respect to any "air" and "development" rights
now or hereafter appurtenant to or affecting the Real Property, (ii) any fee,
tax or charge imposed by any Governmental Authority for any vaults, vault space
or other space within or outside the boundaries of the Real Property, and (iii)
any taxes or assessments levied after the date of this Lease in whole or in part
for public benefits to the Real Property or the Building, including any Business
Improvement District taxes and assessments) without taking into account any
discount that Landlord may receive by virtue of any early payment of Taxes or on
account of any exemption or abatements of Taxes to which the Real Property is
entitled; provided, that if because of any change in the taxation of real
estate, any other tax or assessment, however denominated (including, without
limitation, any franchise, income, profit, sales, use, occupancy, gross receipts
or rental tax) is imposed upon Landlord or the owner of the Real Property or the
Building, or the occupancy, rents or income therefrom, in substitution for any
of the foregoing Taxes, such other tax or assessment shall be deemed part of
Taxes computed as if Landlord's sole asset were the Real Property. With respect
to any Tax Year, all reasonable expenses, including actual and reasonable
attorneys' fees and disbursements, experts' and other witnesses' fees, incurred
in contesting the validity or amount of any Taxes or in obtaining a refund of
Taxes shall be considered as part of the Taxes for such Tax Year. Anything
contained herein to the contrary notwithstanding, Taxes shall not be deemed to
include (i) any taxes on Landlord's net income or profits and shall also not
include: business, professional, occupational and license taxes (BPOL), gift,
transfer, excise, capital stock or succession taxes, (ii) franchise taxes, (iii)
estate or inheritance taxes or (iv) any similar taxes imposed on Landlord,
unless such taxes are levied, assessed or imposed in lieu of or as a substitute
for the whole or any part of the taxes, assessments, levies, impositions which
now constitute Taxes. In determining the amount of Taxes for any Tax Year (or
for the partial

                                      -45-
<PAGE>   51
calendar years in which the Term shall commence or expire), Taxes payable in
such Tax Year shall be apportioned for the portions of the Tax Years occurring
within such partial years.

                  (M) "Wage Rate" shall mean the composite hourly wage rate,
including the regular hourly wage rate required to be paid to Porters pursuant
to any agreement between R.A.B. and Local 32B in effect during the year in
question, exclusive of fringe benefits, which Wage Rate shall be based upon the
minimum effective number of hours in a calendar week which Porters are required
to work pursuant to such agreement, provided that if any such agreement shall
require Porters to be regularly employed on days or during hours when overtime
or other premium pay rates are in effect, then the term "regular hourly wage
rate" shall mean the regular average hourly wage rate for the hours in a
calendar week which Porters are required to be regularly employed (whether or
not actually at work in the Building), e.g., if as of November 1, 1999, an
agreement between R.A.B. and Local 32B would require the regular employment of
Porters for thirty-five (35) hours during a calendar week at a regular hourly
wage of $4.00 for the first thirty (30) hours and at an overtime hourly average
wage of $5.00 for the remaining five (5) hours, then the regular hourly wage
hereunder, as of November 1, 1999, would be the sum arrived at by dividing the
total weekly average wages of $145.00 by the minimum effective number of
required hours of employment per week. The computation of the regular hourly
wage rate shall be on the same basis whether based on an hourly or other pay
scale but predicated on the minimum effective number of hours during such
calendar week which Porters are required to work under such agreement whether
paid by Landlord or any independent contractor. If there is no such agreement in
effect from which such regular hourly rate is determinable, the computations
shall be made on the basis of the regular hourly wage rate, calculated as
provided above, being paid by Landlord or by the contractor performing porter or
cleaning services for Landlord as of the date any adjustment provided herein
shall be made and an appropriate retroactive adjustment shall be made when the
regular hourly wage rate is finally determined. If length of service shall be a
factor in determining any element of wages, it shall be conclusively presumed
that all employees have two (2) years of service.

                  (N) "Wage Statement" shall mean the written statement
furnished by Landlord to Tenant setting forth the Porters' Wage Payment.

         Section 27.2 (A) If the Taxes payable for any Tax Year (any part or all
of which falls within the Term) shall represent an increase above the Base
Taxes, then Tenant shall pay as additional rent for such Tax Year and continuing
thereafter until a new Tax Statement is rendered to Tenant, Tenant's Share of
such increase (the "Tax Payment"). Tenant shall not be entitled to any credit
against any Tax Payment on account of any discount that Landlord may receive by
virtue of any early payment of Taxes or on account of any exemptions or
abatements of Taxes to which the Real Property is entitled, attributable, in
whole or in part, to any other real property owned by Landlord or any affiliate
or any property with respect to which Landlord or such affiliate is the lessee
under any ground or underlying lease, and Taxes shall be calculated without
taking into account any such discounts, exemptions or abatements. The Taxes
shall be computed initially on the basis of the Assessed Valuation in effect at
the time the Tax Statement is rendered (as the Taxes may have been settled or
finally adjudicated prior to such time),

                                      -46-
<PAGE>   52
regardless of any then pending application, proceeding or appeal respecting the
reduction of any such Assessed Valuation, but shall be subject to subsequent
adjustment as provided in Section 27.3(A) hereof.

                  (B) At any time during or after the Term, Landlord may render
to Tenant a Tax Statement or Statements showing (i) a comparison of the Taxes
for a Tax Year with the Base Taxes and (ii) the amount of the Tax Payment
resulting from such comparison. Tenant shall pay Landlord, in two (2) equal
installments, in advance, on June 10th and December 10th of each year, the Tax
Payment shown thereon. If Taxes are required to be paid in full or on any other
date or dates than as presently required by the Governmental Authority imposing
the same, then the due date of the installments of the Tax Payment shall be
correspondingly accelerated or revised so that the Tax Payment (or the two (2)
installments thereof) is due at least twenty (20) days prior to the date the
corresponding payment is due to the Governmental Authority. If the Tax Year
established by The City of New York shall be changed, any Taxes for the Tax Year
prior to such change which are included within the new Tax Year and which were
the subject of a prior Tax Statement shall be apportioned for the purpose of
calculating the Tax Payment payable with respect to such new Tax Year.
Landlord's failure to render a Tax Statement during or with respect to any Tax
Year shall not eliminate or reduce Tenant's obligation to make Tax Payments
pursuant to this Article 27 for such Tax Year, and shall not prejudice
Landlord's right to render a Tax Statement during or with respect to any
subsequent Tax Year. Upon written request, but not more often than once a year,
Landlord shall furnish Tenant with a reproduced copy of the tax bill (or
receipted bill) for the Taxes for the current or next succeeding Tax Year (if
theretofore issued by the Governmental Authority).

                  (C) The Tax Payment shall be pro rated for any partial Tax
Year in which the Term of this Lease shall expire. If a Tax Statement is
furnished to Tenant after the commencement of the Tax Year in respect of which
such Tax Statement is rendered, Tenant shall within ten (10) Business Days
thereafter, pay to Landlord an amount equal to the amount of any underpayment of
the Tax Payment with respect to such Tax Year and, in the event of an
overpayment, Landlord shall either pay to Tenant or, at Landlord's election,
credit against subsequent payments of Fixed Rent, the amount of Tenant's
overpayment.

         Section 27.3 (A) Only Landlord shall be eligible to institute tax
reduction or other proceedings to reduce the Assessed Valuation. In the event
that, after a Tax Statement has been sent to Tenant, an Assessed Valuation which
had been utilized in computing the Taxes for a Tax Year other than the Base Tax
Year is reduced (as a result of settlement, final determination of legal
proceedings or otherwise), and as a result thereof a refund of Taxes is actually
received by or on behalf of Landlord, then, promptly after receipt of such
refund, Landlord shall send Tenant a Tax Statement adjusting the Taxes for such
Tax Year (taking into account the expenses mentioned in Section 27.1(L)) and
setting forth Tenant's Share of such refund and Tenant shall be entitled to
receive such Share by way of a credit against the Fixed Rent next becoming due
after the sending of such Tax Statement or, if no further Fixed Rent shall be
due, enclosing payment of the amount of Tenant's Share of such refund to Tenant;
provided, however, that Tenant's Share of such refund shall be limited to the
portion of the Tax Payment, if any, which

                                      -47-
<PAGE>   53
Tenant had theretofore paid to Landlord attributable to increases in Taxes for
the Tax Year to which the refund is applicable on the basis of the Assessed
Valuation before it had been reduced.

                  (B) In the event that, after a Tax Statement has been sent to
Tenant, the Assessed Valuation which had been utilized in computing the Base
Taxes is reduced (as a result of settlement, final determination of legal
proceedings or otherwise) then the Base Taxes shall be retroactively adjusted to
reflect such reduction, and all Tax Payments shall be calculated with giving
effect to such reduction in the Assessed Valuation with respect to such Base
Taxes.

         Section 27.4 (A) If the Wage Rate in effect for any Comparison Year (or
portion thereof, any part or all of which falls within the Term from and after
the Rent Commencement Date) shall be greater than the Base Wage Rate, then for
such Comparison Year, and continuing thereafter until a new Wage Statement is
rendered to Tenant, Tenant shall pay to Landlord, as additional rent, an amount
equal to the Porters' Wage Payment shown thereon as provided in paragraph (B)
below. Landlord shall render a Wage Statement to Tenant at any time during or
after the Term. The Porters' Wage Payment shall be prorated for any partial
calendar year in which the term of this Lease shall commence or expire.
Notwithstanding the foregoing, if, by reason of any Requirement, an increase in
the Wage Rate is reduced or does not take effect, or increases in the Wage Rate
are limited or prohibited, then for the period covered by such Requirement
("Requirement Period"), the applicable increase (the "Increase") in the Wage
Rate for purposes of this Article shall be the maximum increase or increases in
the Wage Rate permitted during the Requirement Period, and, upon the expiration
thereof, Tenant shall pay to Landlord, on demand, to the extent permitted by
applicable Requirements, the amount by which the aggregate Porters' Wage
Payments applicable to the Requirement Period exceeds the aggregate increase
paid for such period by Tenant pursuant to such Requirement, together with
interest thereon at the lesser of (i) the Base Rate or (ii) the maximum rate
permitted by law.

                  (B) At any time during or after each Comparison Year, Landlord
shall render to Tenant a Wage Statement setting forth the Porters' Wage Payment
for such Comparison Year. On the first day of the month following the furnishing
to Tenant of a Wage Statement, Tenant shall pay to Landlord an amount equal to
one-twelfth (1 /12th) of the Porters' Wage Payment shown thereon to be due for
such Comparison Year. If Landlord furnishes a Wage Statement for a Comparison
Year subsequent to the commencement thereof, then (i) until the first day of the
month following the month in which the Porters' Wage Statement is furnished to
Tenant, Tenant shall continue to pay to Landlord on the first day of each month
an amount equal to the monthly sum payable by Tenant to Landlord with respect to
the immediately previous Comparison Year;, (ii) promptly after the Wage
Statement is furnished to Tenant, Landlord shall give notice to Tenant stating
whether the amount previously paid by Tenant to Landlord for the current
Comparison Year was greater or less than the installments of the Porters' Wage
Payment to be paid for the current Comparison Year in accordance with the Wage
Statement, and (a) if there shall be a deficiency, Tenant shall pay the amount
thereof within ten (10) days after demand therefor, or (b) if there shall have
been an overpayment, Landlord shall credit the amount thereof against the next
monthly installments of the Fixed Rent payable under this Lease; and (iii) on
the first day of the month following the month in which the Wage

                                      -48-
<PAGE>   54
Statement is furnished to Tenant, and monthly thereafter throughout the
remainder of the current Comparison Year, Tenant shall pay to Landlord an amount
equal to one-twelfth (1/12th) of the Porters' Wage Payment shown on the Wage
Statement. Porters' Wage Payments shall be collectible by Landlord in the same
manner as Fixed Rent. Landlord's failure to render a Wage Statement shall not
prejudice Landlord's right to render a Wage Statement during or with respect to
any subsequent Comparison Year, and shall not eliminate or reduce Tenant's
obligation to make Porters' Wage Payments for such Comparison Year.

         Section 27.5 The expiration or termination of this Lease during any
Comparison Year or Tax Year shall not affect the rights or obligations of the
parties hereto respecting payments of Escalation Rent for such Comparison Year
or Tax Year and any Porters' Wage Statement or Tax Statement relating to such
Escalation Rent, may be sent to Tenant subsequent to, and all such rights and
obligations shall survive, any such expiration or termination. In determining
the amount of Escalation Rent for the Comparison Year and Tax Year in which the
Term shall expire, the payment of Escalation Rent for such Comparison Year and
Tax Year shall be prorated based on the number of days of the Term which fall
within such Comparison Year and Tax Year. Any payments due under such Porters'
Wage Statement or Tax Statement shall be payable within twenty (20) days after
such Statement is sent to Tenant.

                                   ARTICLE 28

                                    SERVICES

         Section 28.1 (A) Landlord shall provide passenger elevator service to
the Premises at all times.

                  (B) Commencing on the Commencement Date, there shall be one
(1) freight elevator serving the Premises on call on a "first come, first
served" basis on Business Days from 8:00 a.m. to 5:00 p.m., and on a
reservation, "first come, first served" basis from 5:00 p.m. to 8:00 a.m. on
Business Days and at any time on days other than Business Days. If Tenant shall
use the freight elevators (subject to availability) serving the Premises between
5:00 p.m. and 8:00 a.m. on Business Days or at any time on any other days,
Tenant shall pay Landlord additional rent for such use at Landlord's standard
rates. Tenant acknowledges that such charge by Landlord for the freight elevator
service may be increased from time to time during the term hereof based on
increases in Landlord's cost to provide such service. The foregoing
notwithstanding, in connection with (x) the performance of any Alterations,
including, without limitation, the Initial Alterations, (y) Tenant's initial
move of Tenant's Property into the Premises and (z) delivery to or from the
Premises of large or bulky deliveries, Tenant shall only be permitted to use the
freight elevators (subject to availability) serving the Premises between 5:00
p.m. and 8:00 a.m. on Business Days or at any time on Saturdays and Sundays and
shall pay Landlord additional rent for such use at Landlord's standard
rates.

                                      -49-
<PAGE>   55
         Section 28.2 Landlord shall have no obligation during the Term to
provide HVAC to the Premises. Subject to Article 3 hereof, Tenant shall be
permitted to install its own HVAC system to serve the Premises.

         Section 28.3 The Fixed Rent does not reflect or include any charge to
Tenant for the furnishing of any necessary freight elevator facilities during
periods ("Overtime Periods") other than the hours and days set forth above.
Accordingly, if Landlord shall furnish any such freight elevator facilities
Section 28.1 (B) hereof) to the Premises at the request of Tenant during
Overtime Periods, Tenant shall pay Landlord additional rent for such freight
elevator service, including the services of the operator thereof, as set forth
in Section 28.1 (B) hereof and Tenant shall pay Landlord additional rent for
such service at the standard rate per hour for such services. Landlord shall not
be required to furnish any such services during any Overtime Periods unless
Landlord has received advance notice from Tenant requesting such services prior
to 2:00 p.m. of the day upon which such services are requested or by 2:00 p.m.
of the last preceding Business Day if such Overtime Periods are to occur on a
day other than a Business Day. If Tenant fails to give Landlord such advance
notice, then, failure by Landlord to furnish or distribute any such services
during such Overtime Periods shall not constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or diminution
of Rental, or relieve Tenant from any of its obligations under this Lease, or
impose any liability upon Landlord or its agents by reason of inconvenience or
annoyance to Tenant or injury to or interruption of Tenant's business or
otherwise.

         Section 28.4 Tenant, at Tenant's expense, shall cause the Premises and
the exclusive Licensed Area(s) to be cleaned in a manner reasonably satisfactory
to Landlord and by a Person approved by Landlord. Tenant shall pay to Landlord
the cost of removal of any of Tenant's refuse and rubbish from the Premises and
the Building. Bills for the same shall be rendered by Landlord to Tenant at such
time as Landlord may elect and shall be due and payable when rendered as
additional rent. Tenant, at Tenant's expense, shall cause all portions of the
Premises used for the storage, preparation, service or consumption of food or
beverages to be cleaned daily in a manner satisfactory to Landlord, and to be
exterminated against infestation by vermin, rodents or roaches regularly and, in
addition, whenever there shall be evidence of any infestation. Tenant shall not
permit any Person to enter the Premises or the Building for the purpose of
providing such extermination services, other than persons first approved by
Landlord, such approval not to be withheld unreasonably.

         Section 28.5 If the "sprinkler system" installed in the Building or any
of its appurtenances shall be damaged or injured or not in proper working order
by reason of any act, including, without limitation, the performance of any
Alterations thereto, or omission of Tenant, Tenant's agents, servants,
employees, licensees or visitors, Tenant shall forthwith restore the same to
good working condition at its own expense; and if the New York Board of Fire
Underwriters or the Insurance Services Office or any bureau, department or
official of the state or city government shall require that any changes,
modifications, alterations or additional sprinkler heads or other equipment be
made or supplied by reason of Tenant's particular business, or the Alterations
made by Tenant, or the location of the partitions, trade fixtures, or

                                      -50-
<PAGE>   56
other contents of the Premises placed by or on behalf of Tenant, Tenant shall,
at Tenant's reasonable expense, promptly make and supply such changes,
modifications, alterations, additional sprinkler heads or other equipment.

         Section 28.6 Landlord shall provide to the lavatories in the core area
of the Premises hot and cold water for ordinary drinking and lavatory purposes
and to the pantries and other lavatories in the Premises hot and cold water for
such purposes. If Tenant requires, uses or consumes water for any purpose in
addition to ordinary drinking or lavatory purposes, Landlord may install a water
meter and thereby measure Tenant's water consumption for all such additional
purposes. In such event (1) Tenant shall pay Landlord for the cost of the meter
and the cost of the installation thereof and through the duration of Tenant's
occupancy Tenant shall keep said meter and equipment in good working order and
repair at Tenant's own cost and expense; (2) Tenant shall pay for water consumed
as shown on said meter above the cost of ordinary water usage, as and when bills
are rendered as additional rent, and on default in making such payment Landlord
may pay such charges and collect the same from Tenant; and (3) Tenant shall pay
the sewer rent, charge or any other tax, rent, levy or charge which now or
hereafter is assessed, imposed or shall become a lien upon the Premises or the
realty of which they are a part pursuant to any Requirement made or issued in
connection with any such metered use, consumption, maintenance or supply of
water, water system, or sewage or sewage connection or system. The bill rendered
by Landlord for the above shall be based upon Tenant's actual consumption and
shall be payable by Tenant as additional rent within ten (10) Business Days of
rendition.

         Section 28.7 Landlord does not warrant that any services to be provided
by Landlord to Tenant pursuant to the terms of this Lease, or any other services
which Landlord shall supply (a) will be adequate for Tenant's particular
purposes or as to any other particular need of Tenant, (b) will be free of
interruption, curtailment or failure to supply. Furthermore, Landlord reserves
the right to stop service of the elevator, electrical, plumbing or other
services through the Building Systems or facilities in the Building when
necessary, by reason of accident or emergency, or for repairs, additions,
alterations, replacements or improvements in the reasonable judgment of Landlord
desirable or necessary to be made, until said repairs, alterations, replacements
or improvements shall have been completed (which repairs, alterations and
improvements shall be performed in accordance with Section 4.4 hereof). Except
as set forth in this Article 28, Landlord shall have no responsibility or
liability for interruption, curtailment or failure to supply HVAC, elevator,
electrical, plumbing or other Building Systems or facilities when prevented by
Unavoidable Delays or by any Requirement of any Governmental Authority or due to
the exercise of its right to stop service as provided in this Section 28.7. The
exercise of such right or such failure by Landlord shall not constitute an
actual or constructive eviction, in whole or in part, or, except as provided in
Section 14.3 hereof, entitle Tenant to any compensation or to any abatement or
diminution of Rental, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Landlord or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business, or otherwise. Landlord agrees to use reasonable efforts to provide
Tenant with prior oral notice of any anticipated stoppage of service.

                                      -51-
<PAGE>   57
         Notwithstanding the foregoing in the event that Landlord intends to
enter the Premises to make repairs (including without limitation electrical,
mechanical, or plumbing work) that will involve disruption or interruption to
such Tenant's continuous telecommunications operations, Landlord agrees to
provide Tenant with not less than seventy-two (72) hours prior written notice of
Landlord's intent to enter the Premises, specifying in reasonable detail the
nature of the repairs and the extent, if known, of the planned interruption of
any utilities or Landlord's services. In the event that Landlord intends to
enter the Premises to make repairs that will not involve disruption or
interruption to Tenant's operations, Landlord agrees to provide Tenant with not
less than forty-eight (48) hours prior written notice of Landlord's intent to
enter the Premises. In either case, in the event that any interruption in the
services which Landlord is obligated to provide in this Article 28 is reasonably
expected, Landlord agrees to cooperate reasonably with Tenant in arranging for
temporary services. The foregoing provisions shall not apply in the case of an
emergency, in which case Landlord agrees to provide to Tenant as much notice,
which may be oral, as is practicable under the circumstances, and agrees to use
reasonable care and precaution in order to minimize the interruption or
disruption to Tenant's operations.

                                   ARTICLE 29

                                  PARTNERSHIP

         If Tenant is a partnership or a professional corporation (or is
comprised of two (2) or more Persons, individually or as co-partners of a
partnership or shareholders of a professional corporation) or if Tenant's
interest in this Lease shall be assigned to a partnership or a professional
corporation (or to two (2) or more Persons, individually or as co-partners of a
partnership or shareholders of a professional corporation) pursuant to Article
12 hereof (any such partnership, professional corporation and such Persons are
referred to in this Article 29 as "Partnership Tenant"), the following
provisions shall apply to each such Partnership Tenant: (a) none of the parties
comprising Partnership Tenant shall be personally liable for the obligations of
Tenant hereunder, (b) each of the parties comprising Partnership Tenant hereby
consents in advance to, and agrees to be bound by (x) 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 (except
for any instrument which contradicts subparagraph (a) above), and (y) any
notices, demands, requests or other communications which may hereafter be given
by Partnership Tenant or by any of the parties comprising Partnership Tenant;
and (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.

                                      -52-
<PAGE>   58
                                   ARTICLE 30

                                    SECURITY

         Tenant shall deposit with Landlord on the signing of this Lease the sum
of Five Hundred Ninety-Eight Thousand Three Hundred Four and 00/100 Dollars
($598,304.00), or at Tenant's option, a "clean," unconditional, irrevocable and
transferable letter of credit (the "Letter of Credit") in the same amount,
issued by and drawn on a bank satisfactory to Landlord and which is a member of
the New York Clearing House for the account of Landlord as security for the
faithful performance and observance by Tenant of the terms, conditions and
provisions of this Lease, including without limitation the surrender of
possession of the Premises and Licensed Area(s) to Landlord as herein provided.
Provided that no Event of Default shall have occurred and be continuing, Tenant
shall have the right (i) on the fifth (5th) anniversary of the Commencement Date
to reduce the amount of the Letter of Credit to the sum of Four Hundred
Forty-Eight Thousand Seven Hundred Twenty-Eight and 00/100 Dollars ($448,728.00)
and (ii) on the tenth (10th) anniversary of the Commencement Date to reduce the
amount of the Letter of Credit to the sum of Two Hundred Ninety-Nine Thousand
One Hundred Fifty-Two and 00/100 Dollars ($299,152.00). The Letter of Credit
shall provide (a) for the continuance of such credit for the period of at least
one (1) year from the date of issuance thereof, (b) for the automatic extension
of such Letter of Credit for additional periods of one (1) year from the initial
and each future expiration date thereof (the last such extension to provide for
the continuance of such Letter of Credit for at least three (3) months beyond
the Expiration Date), unless the bank which issued the Letter of Credit gives
Landlord notice of its intention not to renew such Letter of Credit not less
than sixty (60) days prior to the initial or any future expiration date of such
Letter of Credit, and (c) that in the event such notice is given by such bank
and Tenant shall not have delivered a new Letter of Credit in accordance with
the terms and conditions hereof at least thirty (30) days prior to the
expiration of the existing Letter of Credit, Landlord shall, after notice to
Tenant, have the right to present and draw on such Letter of Credit. In the
event that notice is given by such bank of its intention not to renew as above
and Tenant shall not have delivered a new Letter of Credit in accordance with
the terms and conditions hereof at least thirty (30) days prior to the
expiration of the existing Letter of Credit provided, then, in any such event,
Landlord may, after notice to Tenant, present and draw on such Letter of Credit
upon presentation by Landlord to such bank of a sight-draft and the Letter of
Credit and the proceeds of such Letter of Credit shall then be held and applied
as security (and be replenished, if necessary) as provided in this Article 30.
If an Event of Default exists in respect of any of the terms, provisions and
conditions of this Lease, including, but not limited to, the payment of Fixed
Rent or any other item of Rental, Landlord may apply or retain the whole or any
part of the security so deposited, or present the Letter of Credit for payment
and apply or retain the whole or any part of the proceeds thereof, as the case
may be, to the extent required for the payment of any Fixed Rent or any other
item of Rental as to which Tenant is in default or for any sum which Landlord
may expend or be required to expend by reason of Tenant's default in respect of
any of the terms, covenants and conditions of this Lease, including, but not
limited to, any damages or deficiency in the reletting of the Premises or
relicensing of the Licensed Area(s), whether such damages or deficiency accrue
or accrues before or after summary proceedings or other re-entry by Landlord. If
Landlord applies or retains any part of the proceeds of the Letter

                                      -53-
<PAGE>   59
of Credit or the security so deposited, or if the value of the security so
deposited declines for any reason whatsoever, as the case may be, Tenant, upon
demand, shall deposit with Landlord the amount so applied or retained or the
amount by which the value has declined so that Landlord shall have the full
deposit on hand at all times during the Term. If Tenant shall fully and
faithfully comply with all of the terms, provisions, covenants and conditions of
this Lease, the Letter of Credit and/or security, as the case may be, shall be
returned to Tenant after the Expiration Date and after delivery of possession of
the entire Premises and Licensed Area(s) to Landlord. In the event of a sale of
the Real Property or the Building or leasing of the Building, Landlord shall
have the right to transfer the Letter of Credit or security to the vendee or
lessee and Landlord shall thereupon be released by Tenant from all liability for
the return of such Letter of Credit or security, as the case may be, and Tenant
shall cause the bank which issued the Letter of Credit to issue an amendment to
the Letter of Credit or issue a new Letter of Credit naming the vendee or lessee
as the beneficiary thereunder. Tenant shall look solely to the new landlord for
the return of the Letter of Credit or security, as the case may be. The
provisions hereof shall apply to every transfer or assignment of the Letter of
Credit or security made to a new landlord. Tenant shall not assign or encumber
or attempt to assign or encumber the monies deposited herein as security and
neither Landlord nor its successors or assigns shall be bound by any such
assignment, encumbrance, attempted assignment or attempted encumbrance. Tenant
shall renew any Letter of Credit from time to time, at least sixty (60) days
prior to the expiration thereof, and deliver to Landlord a new Letter of Credit
or an endorsement to the Letter of Credit, and any other evidence required by
Landlord that the Letter of Credit has been renewed for a period of at least one
(1) year. If Tenant shall fail to renew the Letter of Credit as aforesaid,
Landlord may present the Letter of Credit for payment and retain the proceeds
thereof as security in lieu of the Letter of Credit. If at any time the security
held hereunder shall consist of cash, and not a Letter of Credit, Landlord shall
hold the same in an interest bearing money-market account and the interest
thereon (less a one percent (1%) administrative fee per annum and less the
amount of such interest which has been applied in the same manner that the
remainder of the security has been applied) shall be paid to Tenant to the
extent and at the same time the remainder of the security shall be returned to
Tenant hereunder.

                                   ARTICLE 31
                            [Intentionally Omitted]

                                   ARTICLE 32
                                    CAPTIONS

         The captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this Lease nor
the intent of any provision thereof.

                                      -54-
<PAGE>   60
                                   ARTICLE 33
                                  PARTIES BOUND

         The covenants, conditions and agreements contained in this Lease shall
bind and inure to the benefit of Landlord and Tenant and their respective legal
representatives, successors, and, except as otherwise provided in this Lease,
their assigns.

                                   ARTICLE 34
                                     BROKER

         Each party represents and warrants to the other that it has not dealt
with any broker or Person in connection with this Lease other than Cushman &
Wakefield, Inc. and Insignia/ESG (collectively, the "Broker"). The execution and
delivery of this Lease by each party shall be conclusive evidence that such
party has relied upon the foregoing representation and warranty. Tenant shall
indemnify and hold Landlord harmless from and against any and all claims for
commission, fee or other compensation by any Person (other than Broker) who
shall claim to have dealt with Tenant in connection with this Lease and for any
and all costs incurred by Landlord in connection with such claims, including,
without limitation, reasonable attorneys' fees and disbursements. Landlord shall
pay the Broker any commission, fee or compensation due the Broker in connection
with this Lease and shall indemnify and hold Tenant harmless from and against
any and all claims for commission, fee or other compensation by the Broker and
any Person who shall claim to have dealt with Landlord in connection with this
Lease and for any and all costs incurred by Tenant in connection with such
claims, including, without limitation, reasonable attorneys' fees and
disbursements. This provision shall survive the expiration or earlier
termination of this Lease.

                                   ARTICLE 35

                                   INDEMNITY

         Section 35.1 Tenant shall indemnify and save the Indemnities harmless
from and against (a) all claims of whatever nature against the Indemnities
arising from any act, omission or negligence of Tenant, its contractors,
licensees, agents, servants, employees, invitees or visitors, (b) all claims
against the Indemnities arising from any accident, injury or damage caused to
any person or to the property of any person and occurring during the Term in or
about the Premises or the exclusive Licensed Area(s), (c) all claims against the
Indemnities arising from any accident, injury or damage occurring outside of the
Premises but anywhere within or about the Real Property, where such accident,
injury or damage results or is claimed to have resulted from an act, omission or
negligence of Tenant or Tenant's agents, employees, invitees or visitors, and
(d) any breach, violation of nonperformance of any covenant, condition or
agreement in this Lease set forth and contained on the part of Tenant to be
fulfilled, kept, observed and performed; provided, however, that the foregoing
shall not be construed to require Tenant to indemnify Landlord against any
claims arising out of the negligence or the wilful act

                                      -55-
<PAGE>   61
of Landlord or its contractors, licensees, agents, servants, employees, invitees
or visitors. This indemnity and hold harmless agreement shall include indemnity
from and against any and all liability, fines, suits, demands, costs and
reasonable expenses of any kind or nature (including, without limitation,
attorneys' fees and disbursements) incurred in or in connection with any such
claim or proceeding brought thereon, and the defense thereof but shall be
limited to the extent any insurance proceeds collectible by Landlord under
policies owned by Landlord or such injured party with respect to such damage or
injury are insufficient to satisfy same. Tenant shall have no liability for any
consequential damages suffered either by Landlord or by any party claiming
through Landlord.

         Landlord shall indemnify and save Tenant harmless from and against all
third party claims arising from (a) any act or omission of Landlord, its agents
or employees and (b) Landlord's or its agent's or employee's ownership,
management or control of the Building, the land upon which the Building is
located, or the common areas. The foregoing shall not be construed to require
Landlord to indemnify Tenant against any claims arising out of the negligence or
wilful act of Tenant or its contractors, licensees, agents, servants,
employees, invitees or visitors. This indemnity and hold harmless agreement
shall be limited to the extent any insurance proceeds collectible by Tenant
under policies owned by Tenant with respect to such damage or injury are
insufficient to satisfy same. Landlord shall have no liability for any
consequential damages suffered either by Tenant or by any party claiming through
Tenant.

         Section 35.2 If any claim, action or proceeding is made or brought
against Landlord, with respect to which claim, action or proceeding Tenant shall
be obligated to indemnify Landlord against, pursuant to the terms of this Lease,
then, upon demand by Landlord, Tenant at its sole cost and expense, shall resist
or defend such claim, action or proceeding in Landlord's name, if necessary, by
such attorneys as Landlord shall approve, which approval shall not be
unreasonably withheld. Attorneys for Tenant's insurer shall hereby be deemed
approved for purposes of this Section 35.2. The provisions of this Article 35
shall survive the expiration or earlier termination of this Lease.

                                   ARTICLE 36
                          ADJACENT EXCAVATION-SHORING

         If an excavation shall be made upon land adjacent to the Premises, or
shall be authorized to be made, Tenant shall, upon reasonable advance notice,
afford to the person causing or authorized to cause such excavation, license to
enter upon the Premises for the purpose of doing such work as said person shall
deem necessary to preserve the wall or the Building from injury or damage and to
support the same by proper foundations without any claim for damages or
indemnity against Landlord, or diminution or abatement of Rental.

                                      -56-
<PAGE>   62
                                   ARTICLE 37
                                 MISCELLANEOUS

         Section 37.1 This Lease is offered for signature by Tenant and it is
understood that this Lease shall not be binding upon Landlord or Tenant unless
and until Landlord and Tenant shall have executed and delivered a fully executed
copy of this Lease to each other.

         Section 37.2 Neither the partners (direct or indirect) members,
comprising Landlord, nor the shareholders (nor any of the partners comprising
same), partners, directors or officers of any of the foregoing (collectively,
the "Parties") shall be liable for the performance of Landlord's obligations
under this Lease. Tenant shall look solely to Landlord to enforce Landlord's
obligations hereunder and shall not seek any damages against any of the Parties.
The obligations of Landlord under this Lease shall not be binding upon Landlord
named herein after the sale, conveyance, assignment or transfer by such Landlord
(or upon any subsequent landlord after the sale, conveyance, assignment or
transfer by such subsequent landlord) of its interest in the Building or the
Real Property, as the case may be, and in the event of any such sale,
conveyance, assignment or transfer, and the transfer of the security deposit to
the purchaser, grantee, assignee or transferee, as the case may be, Landlord
shall be and hereby is entirely freed and relieved of all covenants and
obligations of Landlord hereunder to the extent that such transferee assumes the
obligations of Landlord under this Lease, subject to the terms hereof. Prior
to any such sale, conveyance, assignment or transfer, the liability of Landlord
for Landlord's obligations under this Lease shall be limited to Landlord's
interest in the Real Property and Tenant shall not look to any other property or
assets of Landlord or the property or assets of any of the Parties in seeking
either to enforce Landlord's obligations under this Lease or to satisfy a
judgment for Landlord's failure to perform such obligations. After any such
sale, conveyance, assignment or transfer, to the extent that the transferee
shall have not assumed Landlord's obligations under this Lease, the liability of
Landlord for such obligations shall be limited to the proceeds of such transfer
received by it.

         Section 37.3 Notwithstanding anything contained in this Lease to the
contrary, all amounts payable by Tenant to or on behalf of Landlord under this
Lease, whether or not expressly denominated Fixed Rent, Escalation Rent,
additional rent or Rental, shall constitute rent for the purposes of Section
502(b)(7) of the Bankruptcy Code.

         Section 37.4 Tenant shall reimburse Landlord as additional rent, within
ten (10) days after rendition of a statement, for all expenditures made by, or
damages or fines sustained or incurred by, Landlord, due to any Event of Default
by Tenant under this Lease, with interest thereon at the Applicable Rate.

         Section 37.5 This Lease shall not be recorded.

         Section 37.6 Tenant hereby waives any claim against Landlord which
Tenant may have based upon any assertion that Landlord has unreasonably withheld
or unreasonably delayed any consent or approval requested by Tenant, and Tenant
agrees that its sole remedy

                                      -57-
<PAGE>   63
shall be an action or proceeding to enforce any related provision or for
specific performance, injunction or declaratory judgment except in the case that
Landlord has maliciously or otherwise in bad faith withheld any such consent or
approval in which case Tenant may bring an action against Landlord for damages.
In the event of such determination, the requested consent or approval shall be
deemed to have been granted; however, Landlord shall have no liability to Tenant
for its refusal or failure to give such consent or approval in the absence of a
judicial determination of malice or bad faith on the part of Landlord. Tenant's
sole remedy for Landlord's unreasonably withholding or delaying consent or
approval shall be as provided in this Section 37.6.

         Section 37.7 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 set forth in a written instrument executed by
Landlord.

         Section 37.8 Landlord hereby waives any lien rights which it may
otherwise have concerning all of Tenant's trade fixtures and equipment, which
shall include furniture, moveable fixtures, equipment and supplies utilized by
Tenant in its business operations; and Tenant shall have the right to remove the
same at any time without Landlord's consent. Landlord acknowledges that pursuant
to a master purchase agreement by and between the parent corporation of Tenant
("NCGI") and Nortel Networks Inc and/or its affiliates ("Nortel Networks"), NCGI
purchased certain equipment to be located at the Premises. Landlord agrees to
endeavor to provide to Nortel Networks (or its successors or assigns of whom
Landlord shall have received notice) at its address specified below (or at the
addresses of its successors or assigns of which Landlord is subsequently
notified by notice given to Landlord in accordance with the provisions hereof),
a copy of any notice of default delivered to Tenant under this Lease
substantially concurrently with the delivery of such notice to Tenant, provided,
however, that the failure to provide such copy to Nortel Networks shall not
affect the effectiveness of any such notice to Tenant. For purposes of this
Section, the address of Nortel Networks is: Nortel Networks Inc., GMS 991 15
A40,2221 Lakeside Boulevard, Richardson, Texas 75082-4399, Attention: Charles M.
Helm, Esq.

                                   ARTICLE 38
                                  RENT CONTROL

         If at the commencement of, or at any time or times during the Term of
this Lease, the Rental reserved in this Lease shall not be fully collectible by
reason of any Requirement, Tenant shall enter into such agreements and take such
other steps (without additional expense to Tenant) as Landlord may reasonably
request and as may be legally permissible to permit Landlord to collect the
maximum rents which may from time to time during the continuance of such legal
rent restriction be legally permissible (and not in excess of the amounts
reserved therefor under this Lease). Upon the termination of such legal rent
restriction prior to the expiration of the Term, (a) the Rental shall become and
thereafter be payable hereunder in

                                      -58-
<PAGE>   64
accordance with the amounts reserved in this Lease for the periods following
such termination "and (b) Tenant shall pay to Landlord, if legally permissible,
an amount equal to (i) the items of Rental which would have been paid pursuant
to this Lease but for such legal rent restriction less (ii) the rents paid by
Tenant to Landlord during the period or periods such legal rent restriction was
in effect.

                                   ARTICLE 39
                  ROOF RIGHTS AND TELECOMMUNICATIONS CARRIERS

         A. Tenant shall have the right to have access to portions of the roof
of the Building as set forth on Schedule B attached hereto and made a part
hereof, for the purposes set forth therein.

         B. Tenant shall have the right to engage Carriers on the terms and
conditions provided for in Schedule C attached hereto and made a part hereof.

                                   ARTICLE 40
                                  RENEWAL TERM

         Section 40.1 Tenant shall have the option (the "Renewal Option") to
extend the term of this Lease for one (1) additional period of five (5) years
(the "Renewal Term"), which Renewal Term shall (i) commence on the date
immediately succeeding the Fixed Expiration Date, and (ii) end on the fifth
(5th) anniversary of the Fixed Expiration Date, provided that (a) Net2000
Communications Real Estate, Inc. shall be tenant hereunder, (b) this Lease shall
not have been previously terminated, (c) Tenant shall occupy at least eighty
percent (80%) of the Premises for the conduct of its business and (d) no Event
of Default shall then be occurring (x) on the date Tenant gives Landlord written
notice (the "Renewal Notice") of Tenant's election to exercise the Renewal
Option, and (y) on the Fixed Expiration Date, Such Renewal Option may be
exercised with respect to the entire Premises only and shall be exercisable by
Tenant delivering the Renewal Notice to Landlord at least twelve (12) months
prior to the Fixed Expiration Date. Time is of the essence with respect to the
giving of the Renewal Notice. Upon the giving of the Renewal Notice, Tenant
shall have no further right or option to extend or renew the Term.

         Section 40.2 If Tenant exercises the Renewal Option, the Renewal Term
shall be upon the same terms, covenants and conditions as those contained in
this Lease, except that (i) the Fixed Rent shall be deemed to mean the Fixed
Rent as determined pursuant to Section 40.3 hereof, (ii) Tenant shall not be
entitled to any rent abatement or credit against the Fixed Rent pursuant to
Article I hereof, (iii) the provisions of Article 19 with respect to Landlord's
Work shall not be applicable during the Renewal Term, (iv) Tenant shall not be
entitled to the ADA Tenant Fund with respect to the Renewal Term and (v) the
provisions of Section 40.1 of this Article relative to Tenant's right to renew
the Term of this Lease shall not be applicable. It is

                                      -59-
<PAGE>   65
expressly understood that during the Renewal Term, Tenant shall have no further
right to renew this Lease.

         Section 40.3 For the Renewal Term the Fixed Rent shall be determined as
follows:

         (A) The Fixed Rent for the Premises for the Renewal Term shall be an
amount equal to the greater of (a) the annual fair market rental value of the
Premises (the "Premises Fair Market Rent") on the first day of the Renewal Term
or (b) the Fixed Rent payable by Tenant on the Fixed Expiration Date (the
greater of (a) and (b) being hereinafter referred to as the "Premises Rental
Value"). The Fixed Rent for the Licensed Area(s) for the Renewal Term shall be
an amount equal to the greater of (x) the annual fair market value of the
Licensed Area(s) (the "Licensed Area(s) Fair Market Rent") on the first day of
the Renewal Term or (y) the Fixed Rent payable by Tenant on the Fixed Expiration
Date (the greater of (x) and (y) being hereinafter referred to as the "Licensed
Area(s) Rental Value"). The Premises Fair Market Rent and the Licensed Area(s)
Fair Market Rent are sometimes hereinafter referred to as the "Fair Market
Rent." The Fair Market Rent shall be determined as if the Premises and the
Licensed Area(s) were available in the then rental market for comparable first
class market buildings in midtown Manhattan and assuming that Landlord has had a
reasonable time to locate a tenant who rents with the knowledge of the uses to
which the Premises and the Licensed Area(s) can be adapted, and that neither
Landlord nor the prospective tenant is under any compulsion to rent, taking into
account:

                  (i) the fact that the Base Taxes and the Base Wage Rate
provided herein shall not change for the purpose of calculating the escalation
payments payable pursuant to Article 27 hereof, which payments shall continue to
be made during the Renewal Term;

                  (ii) the fact that as of the commencement of the Renewal Term,
Tenant shall not be required to pay, in addition to the escalation payments
presently provided for under this Lease, Tenant's Share of such other escalation
payments which Landlord is then charging tenants under other leases or offers
for leases in the Building or in other buildings then owned by Landlord or its
affiliates or under common management with the management company then managing
the Building or of such other escalation payments which other landlords are then
charging tenants under leases or offers for leases in other office buildings
which are similar in character or location to the Building;

                  (iii) the fact that Landlord shall not be obligated to perform
any work, including, without limitation, Landlord's Work, in the Premises or the
Licensed Area(s) to prepare the same for Tenant's occupancy and use;

                  (iv) the fact that Tenant shall not be entitled to the ADA
Tenant Fund during the Renewal Term; and

                                      -60-
<PAGE>   66
                  (v) the fact that Tenant shall not be entitled to any rent
abatement or credit against the Fixed Rent during the Renewal Term.

         During the Renewal Term, Escalation Rent shall continue to be paid
pursuant to Article 27 hereof.

         (B) For purposes of determining the Fair Market Rent, the following
procedure shall apply:

             (1) the Fair Market Rent shall be determined by Landlord on the
basis of the highest and best use of the Premises assuming that (i) the Premises
are free and clear of all leases and tenancies (including this Lease) and (ii)
the Licensed Area(s) are free and clear of all licenses (including the license
created by this Lease), and, at the election of Landlord, that the Premises and
the Licensed Area(s), as the case may be, are occupied by one (1) tenant or are
subdivided and occupied by more than one (1) tenant, whether improved or
unimproved.

             (2) Landlord shall give Tenant written notice (the "Rent Notice")
within one hundred twenty (120) days prior to the Fixed Expiration Date, which
Rent Notice shall set forth Landlord's determination of the Premises Fair Market
Rent and the Licensed Area(s) Fair Market Rent ("Landlord's Determination"). If
Landlord shall fail or refuse to give such Notice as aforesaid with respect to
the Premises Fair Market Rent, the Premises Rental Value shall be deemed to be
the Fixed Rent then payable by Tenant on the Fixed Expiration Date with respect
to the Premises, and if Landlord shall fail or refuse to give such Notice as
aforesaid with respect to the Licensed Area(s) Fair Market Rent, the Licensed
Area(s) Rental Value shall be deemed to be the Fixed Rent then payable by Tenant
on the Fixed Expiration Date with respect to the Licensed Area(s).

             (3) If Landlord's Determination with respect to the Premises or the
Licensed Area(s) exceeds the Fixed Rent with respect to the Premises and the
Licensed Area(s), respectively, payable by Tenant on the Fixed Expiration Date,
then Tenant shall give Landlord written notice ("Tenant's Notice"), within
thirty (30) days after Tenant's receipt of the Rent Notice, of whether Tenant
accepts or disputes Landlord's Determination with respect to the Premises or the
Licensed Area(s), as the case may be. If Tenant in Tenant's Notice accepts
Landlord's Determination or if Tenant fails or refuses to give Tenant's Notice
as aforesaid, Tenant shall be deemed to have accepted Landlord's Determination
for the Renewal Term in accordance with the terms of this Article. If Tenant in
Tenant's Notice disputes Landlord's Determination, Tenant shall deliver to
Landlord, within thirty (30) days after Tenant's receipt of the Rent Notice,
Tenant's determination of the Premises Fair Market Rent or the Licensed Area
Fair Market Rent, as the case may be ("Tenant's Determination"), as determined
by an independent real estate appraiser ("Tenant's Appraiser") together with a
copy of the appraisal prepared by Tenant's Appraiser.

             (4) Landlord shall give Tenant written notice ("Landlord's
Notice"), within thirty (30) days after Landlord's receipt of Tenant's
Determination, of whether Landlord

                                      -61-
<PAGE>   67
accepts or disputes Tenant's Determination. If Landlord in Landlord's Notice
accepts Tenant's Determination or if Landlord fails or refuses to give
Landlord's Notice as aforesaid. Landlord shall be deemed to have accepted
Tenant's Determination. If Landlord in Landlord's Notice disputes Tenant's
Determination, Landlord shall appoint an independent real estate appraiser
("Landlord's Appraiser"). If within thirty (30) days after Tenant's receipt of
Landlord's Notice in dispute, Landlord's Appraiser and Tenant's Appraiser shall
mutually agree upon the determination (the "Mutual Determination") of the
Premises Fair Market Rent or Licensed Area(s) Fair Market Rent, as the case may
be, their determination shall be final and binding upon the parties. If
Landlord's Appraiser and Tenant's Appraiser shall be unable to reach a Mutual
Determination within said thirty (30) day period, both of the Appraisers shall
jointly select a third independent real estate appraiser ("Third Appraiser")
whose fee shall be borne equally by Landlord and Tenant. In the event that
Landlord's Appraiser and Tenant's Appraiser shall be unable to jointly agree on
the designation of the Third Appraiser within five (5) days after they are
requested to do so by either party, then the parties agree to allow the American
Arbitration Association, or any successor organization to designate the Third
Appraiser in accordance with the rules, regulations and/or procedures then
obtaining of the American Arbitration Association or any successor organization.

             (5) The Third Appraiser shall conduct such hearings and
investigations as he may deem appropriate and shall, within thirty (30) days
after the date of designation of the Third Appraiser, choose either Landlord's
or Tenant's Determination, and such choice by the Third Appraiser shall be
conclusive and binding upon Landlord and Tenant. Each party shall pay its own
counsel fees and expenses if any, in connection with any arbitration under this
Section, including the expenses and fees of any Appraiser selected by it in
accordance with provisions of this Article. Any Appraiser appointed pursuant to
this Article shall be an independent real estate appraiser with at least ten
(10) years' experience in leasing and valuation of properties which are similar
in character to the Building, and a member of the American Institute of
Appraisers of the National Association of Real Estate Boards and a member of the
Society of Real Estate Appraisers. The Appraisers shall not have the power to
add to, modify or change any of the provisions of this Lease.

             (6) It is expressly understood that any determination of the Fair
Market Rent pursuant to this Article shall be based on the criteria stated in
Section 40.3 hereof.

         (C) After a determination has been made of the Rental Value for the
Renewal Term, the parties shall execute and deliver to each other an instrument
setting forth the Rental Value as hereinabove determined.

         (D) If the final determination of the Rental Value shall not be made on
or before the first day of the Renewal Term in accordance with the provisions of
this Article, pending such final determination Tenant shall continue to pay, as
the Fixed Rent for the Renewal Term, an amount equal to Landlord's Determination
(subject to escalation pursuant to Article 27 hereof). If, based upon the final
determination hereunder of the Rental Value, the payments made by Tenant on
account of the Fixed Rent for such portion of the Renewal Term were (i) less

                                      -62-
<PAGE>   68
than the Rental Value payable for the Renewal Term, Tenant shall pay to Landlord
the amount of such deficiency within five (5) days after demand therefor or
(ii) greater than the Rental Value payable for the Renewal Term, Landlord
promptly shall refund to Tenant the amount of such excess.

                                      -63-
<PAGE>   69
         IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Lease as of the day and year first above written.

                       Landlord

                       HUDSON TELECOM CENTER, LLC

                       By: See Attached Signature Block
                          ------------------------------------
                          Name:
                          Title:

                       Tenant

                       NET2000 COMMUNICATIONS REAL ESTATE, INC.

                       By: /s/ Jason Karp
                          -------------------------------------
                          Name:  Jason Karp
                          Title: Director-Legal and Regulatory Affairs
                                 Assistant Secretary

                                      -64-
<PAGE>   70
          Signature Block for Lease Between Hudson Telecom Center, LLC
                                       and
                    Net 2000 Communications Real Estate Inc.

Hudson Telecom Center, LLC,
a Delaware limited liability company

By: Bristol Telecom Center, LLC,
    a Delaware limited liability company
    Member

    By: Bristol Realty Holdings, LLC,
        a Delaware limited liability company,
        Its Sole Member

        By: Bristol Group, Inc.,
            a California corporation,
            Member

            /s/ Jeffrey S. Kott
            -------------------
            Jeffrey S. Kott
            Principal

            /s/ James J. Curtis
            -------------------
            James J. Curtis
            Principal
<PAGE>   71
                                   SCHEDULE A

                              RULES AND REGULATIONS

         (1) The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors, or halls shall not be obstructed or encumbered by Tenant
or used for any purpose other than ingress and egress to and from the Premises
and for delivery of merchandise and equipment in prompt and efficient manner,
using elevators and passageways designated for such delivery by Landlord.

         (2) No awnings, air-conditioning units, fans or other projections shall
be attached to the outside walls of the Building. No curtains, blinds, shades,
or screens, other than those which conform to Building standards as established
by Landlord from time to time, shall be attached to or hung in, or used in
connection with, any window or door of the Premises, without the prior written
consent of Landlord which shall not be unreasonably withheld or delayed. Such
awnings, projections, curtains, blinds, shades, screens or other fixtures must
be of a quality, type, design and color, and attached in the manner reasonably
approved by Landlord. All electrical fixtures hung in offices or spaces along
the perimeter of the Premises must be of a quality, type, design and bulb color
approved by Landlord, which consent shall not be withheld or delayed
unreasonably unless the prior consent of Landlord has been obtained for other
lamping.

         (3) No sign, advertisement, notice or other lettering shall be
exhibited, inscribed, painted or affixed by Tenant on any part of the outside of
the Premises or Building or on the inside of the Premises if the same can be
seen from the outside of the Premises without the prior written consent of
Landlord except that the names of Tenant and any Related Entity may appear on
the entrance door of the Premises. In the event of the violation of the
foregoing by Tenant, if Tenant has refused to remove same after reasonable
notice from Landlord, Landlord may remove same without any liability, and may
charge the reasonable expense incurred by such removal to Tenant. Interior signs
on doors and directory tablet shall be of a size, color and style reasonably
acceptable to Landlord.

         (4) The exterior windows and doors that reflect or admit light and air
into the Premises or the halls, passageways or other public places in the
Building, shall not be covered or obstructed by Tenant.

         (5) No showcases or other articles shall be put in front of or affixed
to any part of the exterior of the Building, nor placed in the halls, corridors
or vestibules, nor shall any article obstruct any air-conditioning supply or
exhaust without the prior written consent of Landlord.

         (6) The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags, acids or other substances shall be deposited therein.
All damages resulting from any misuse of the fixtures shall be borne by Tenant.

                                      A-1
<PAGE>   72
         (7) Subject to the provisions of Article 3 of this Lease, Tenant shall
not mark, paint, drill into, or in any way deface any part of the Premises or
the Building. No boring, cutting or stringing of wires shall be permitted,
except with the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed, and as Landlord may direct.

         (8) No space in the Building shall be used for manufacturing, for the
storage of merchandise, or for the sale of merchandise, goods or property of any
kind at auction or otherwise.

         (9) Tenant shall not make, or permit to be made, any unseemly or
unreasonably disturbing noises or unreasonably disturb or unreasonably interfere
with occupants of this or neighboring buildings or premises or those having
business with them whether by the use of any musical instrument, radio,
television set, talking machine, unmusical noise, whistling, singing, or in any
other way.

         (10) Tenant, or any of Tenant's employees, agents, visitors or
licensees, shall not at any time bring or keep upon the Premises any
inflammable, combustible or explosive fluid, chemical or substance except such
as are incidental to usual office occupancy.

         (11) No additional locks or bolts of any kind shall be placed upon any
of the doors or windows by Tenant, nor shall any changes be made in existing
locks or the mechanism thereof, unless Tenant promptly provides Landlord with
the key or combination thereto. Tenant must, upon the termination of its
tenancy, return to Landlord all keys of stores, offices and toilet rooms, and in
the event of the loss of any keys furnished at Landlord's expense, Tenant shall
pay to Landlord the reasonable cost thereof.

         (12) No bicycles, vehicles or animals of any kind, except for seeing
eye dogs, shall be brought into or kept by Tenant in or about the Premises or
the Building.

         (13) All removals, or the carrying in or out of any safes, freight,
furniture or bulky matter of any description must take place in the manner and
during the hours which Landlord or its agent reasonably may determine from time
to time. Landlord reserves the right to inspect all safes, freight or other
bulky articles to be brought into the Building and to exclude from the Building
all safes, freight or other bulky articles which violate any of these Rules and
Regulations or the Lease of which these Rules and Regulations are a part.

         (14) Tenant shall not occupy or permit any portion of the Premises
demised to it to be occupied as an office for a public stenographer or typist,
or for the possession, storage, manufacture, or sale of liquor, narcotics, dope,
or as a barber or manicure shop, or as an employment bureau. Tenant shall not
engage or pay any employees on the Premises, except those actually working for
Tenant at the Premises, nor advertise for labor giving an address at the
Premises.

                                      A-2
<PAGE>   73
         (15) Tenant shall not purchase spring water, ice, towels or other like
service, or accept barbering or bootblacking services in the Premises, from any
company or persons not approved by Landlord, which approval shall not be
withheld or delayed unreasonably and at hours and under regulations other than
as reasonably fixed by Landlord.

         (16) Landlord shall have the right to prohibit any advertising by
Tenant which, in Landlord's reasonable opinion, tends to impair the reputation
of the Building or its desirability as a building for offices, and upon written
notice from Landlord, Tenant shall refrain from or discontinue such advertising.

         (17) Landlord reserves the right to exclude from the Building between
the hours of 6:00 p.m. and 8:00 a.m. and at all hours on Saturdays, Sundays and
legal holidays all persons who do not present a pass to the Building signed or
approved by Landlord. Tenant shall be responsible for all persons for whom a
pass shall be issued at the request of Tenant.

         (18) Tenant shall, at its expense, provide artificial light for the
employees of Landlord while doing janitor service or other cleaning, and in
making repairs or alterations in the Premises.

         (19) The requirements of Tenant will be attended to only upon written
application at the office of the Building. Building employees shall not perform
any work or do anything outside of the regular duties, unless under special
instructions from the office of Landlord.

         (20) Canvassing, soliciting and peddling in the Building is prohibited
and Tenant shall cooperate to prevent the same.

         (21) There shall not be used in any space, or in the public halls of
the Building, either by Tenant or by jobbers or others, in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and side guards.

         (22) Tenant may, at its sole cost and expense and subject to compliance
with all applicable Requirements and the provisions of Articles 3 and 4 of this
Lease, install and maintain vending machines for the exclusive use by Tenant,
its officers, employees and business guests, provided that each machine, where
necessary shall have a waterproof mat thereunder and be connected to a drain.

         (23) Tenant shall keep the entrance door to the Premises closed at all
times.

         (24) Tenant shall comply with and abide by the reasonable standard
operating procedures established by Landlord for the Building.

                                      A-3
<PAGE>   74
         (25) Tenant shall, at its expense, issue to each employee of Tenant, an
identification card containing the name of the company and a photograph and
signature of such employee.

         Landlord shall provide Tenant with prior written notice of any material
changes, modifications or amendments to the Rules and Regulations set forth
herein.

                                      A-4
<PAGE>   75
                                   SCHEDULE B

                     ROOF RIGHTS, LOADING DOCK AND BASEMENT

         A. Roof Rights

             (1) Subject to the rights of other tenants in the Building,
Landlord shall make available to Tenant, for Tenant's own use (and not for
resale purposes) sufficient (as reasonably determined by Landlord) space on the
roof of the Building for any HVAC equipment which may be installed by Tenant in
accordance with Section 3.1 (such HVAC equipment shall be referred to as the
"Roof Equipment") at a location designated by Landlord in its sole discretion.
The area so designated shall be an exclusive Licensed Area, however, Tenant's
use of the roof of the Building shall be on a nonexclusive basis. In connection
therewith, and subject to the rights of other tenants and occupants of the
Building, Landlord shall make available to Tenant access to the roof for the
construction, installation, maintenance, repair, operation and use of the Roof
Equipment, as well as reasonable space in the Building to run ductwork from the
HVAC equipment to the Premises. The installation of the Roof Equipment shall
constitute an Alteration and shall be performed, at Tenant's sole cost and
expense (including, without limitation, any costs and expenses in connection
with reinforcing the roof of the Building, if required), in accordance with and
subject to the provisions of Article 3 hereof. All of the provisions of this
Lease with respect to Tenant's obligations hereunder shall apply to the
installation, use and maintenance of the Roof Equipment, including, without
limitation, provisions relating to compliance with Requirements, Insurance
Requirements, insurance, indemnity, repairs and maintenance. The license granted
to Tenant in this Schedule B shall not be assignable by Tenant separate and
apart from this Lease.

             (2) Tenant shall exercise its rights and perform its obligations
hereunder in such a way as to not cause interference with the use of the roof by
Landlord or other tenants or occupants of the Building and users of the roof. In
the event that the operation of Tenant's facilities causes or results in
interference with the operations of Landlord or other tenants, occupants or
users, Tenant agrees to eliminate such interference, including, without
limitation, reconfiguring or relocating Tenant's HVAC equipment, re-engineering
Tenant's roof operation, working with Landlord or other tenants, occupants or
users, and all other steps deemed necessary by Landlord to eliminate such
interference.

             (3) Landlord shall not have any obligations with respect to the
Roof Equipment or compliance with any Requirements relating thereto (including,
without limitation, the obtaining of any required permits or licenses, or the
maintenance thereof), nor shall Landlord be responsible for any damage that may
be caused to Tenant or the Roof Equipment by any other tenant or occupant of the
Building.

             (4) Tenant shall (i) be solely responsible for any damage caused as
a result of the use of the Roof Equipment, (ii) promptly pay any tax, license,
permit or other fees or charges

                                      B-1
<PAGE>   76
imposed pursuant to any Requirements relating to the installation, maintenance
or use of the Roof Equipment, (iii) promptly comply with all precautions and
safeguards recommended by Landlord's insurance company and all Governmental
Authorities, and (iv) perform all necessary repairs or replacements to, or
maintenance of, the Roof Equipment, except that at Landlord's option, Landlord
may elect to perform such repairs, replacements or maintenance at Tenant's sole
cost and expense.

         B. As part of the Initial Alterations, Tenant shall have the right to
install an emergency generator (the "Generator") in an area designated by
Landlord. In addition, as part of the Initial Alterations Tenant shall have the
right to install an emergency generator plug on the exterior of the Building in
a location selected by Landlord, in its sole discretion for the sole purpose of
connecting the Premises to the Generator. Such installation shall be an
Alteration under this Lease, and shall be performed in accordance with, and
subject to, the terms and conditions set forth in Article 3 of this Lease.
Tenant shall have the right to test the Generator once per week at a time
reasonably acceptable to Landlord.

         C. As part of the Initial Alterations, Tenant shall, at its sole cost
and expense, (i) construct an electrical room in the basement at a location
designated by Landlord in which to install Tenant's electrical transformer, (ii)
install such equipment as shall be necessary to bring the electrical capacity
provided to Tenant pursuant to Section 13.1 from Landlord's electrical room in
the basement to Tenant's electrical room in the basement, unless Landlord, at
its option, completes such work, (iii) install two (2) four inch (4") conduits
within the existing Building risers from Tenant's electrical room in the
basement to bring the electrical capacity from the basement to the Premises and
(iv) distribute such capacity within the Premises in a manner approved by
Landlord and as required for Tenant's business operations.

         D. As part of the Initial Alterations, Tenant shall have the right to
perform or install the following (i) eight(8) covered cable trays for fiber
optic cable to run from the point of entry to the Building to the "meet-me" room
of the Building located in the basement and from the "meet-me" room of the
Building located in the basement to the Premises; (ii) eight (8) six inch (6")
glycol risers subject to Landlord's approval as to their location; (iii) two (2)
bus ducts for Tenant's primary power from Tenant's electrical closet in the
basement to the Premises, subject to Landlord's approval as to their location;
and (iv) two (2) bus ducts for Tenant's emergency power from the Generator to
the Premises, subject to Landlord's approval as to their location.

         E. Tenant may, at its sole cost and expense, install a fuel storage
tank located in the basement of the Building, and use heating fuel therefrom,
subject to Landlord's approval as to its location. Landlord shall, at Tenant's
expense, install a submeter(s) on such tanks for the purpose of measuring
Tenant's fuel consumption and Tenant shall pay to Landlord from time to time
within ten (10) days after demand 105% of (a) Tenant's pro rata share (based on
the ratio of Tenant's fuel tanks installed to the number of total fuel tanks
purchased, installed and maintained) of the cost of the purchase, installation,
maintenance, repair and, if necessary, the

                                      B-2
<PAGE>   77
replacement of the fuel tanks plus (b) the cost to Landlord of the fuel consumed
by Tenant as shown by such submeter(s).

         F. Tenant acknowledges and agrees that the privileges granted Tenant
under this Schedule B shall merely constitute a license and shall not, now or at
any time after the installation of the Generator, be deemed to grant Tenant a
leasehold or other real property interest in the Building or any portion
thereof. The license granted to Tenant in this Schedule B shall automatically
terminate and expire upon the expiration or earlier termination of this Lease
and the termination of such license shall be self-operative and no further
instrument shall be required to effect such termination.

                                      B-3
<PAGE>   78
                                   SCHEDULE C

                           TELECOMMUNICATIONS CARRIERS

         Tenant shall have the right at no additional cost to Tenant to select
and utilize at least three (3) telecommunications carriers and as many
additional telecommunications carriers (the "Carriers") as Tenant shall be able
to accommodate within the conduits which have been allocated to Tenant pursuant
to Schedule B, item (C)(iii) in the riser equipment located upon the Premises
and the Building, provided that, all such Carriers shall be subject to all
applicable Requirements, to Landlord's approval which shall not be unreasonably
withheld or delayed and to the execution by such Carriers of an agreement
acceptable in form and substance including, without limitation, appropriate
indemnity and insurance provisions, to Landlord in its sole discretion pursuant
to which Landlord shall grant to the Carriers a license (which shall be
coextensive with the rights and privileges granted to Tenant under this Lease)
to install, operate, maintain, repair and replace cable and related equipment
within the Premises and such vertical risers and horizontal pathways within the
Building but outside of the Premises which are necessary to provide
telecommunications and data services to Tenant at the Premises. The License
contemplated herein shall be intended to permit the Carriers to co-locate with
Tenant at the Premises and shall not be intended to grant an exclusive right to
Tenant or any of the Carriers. Landlord reserves the right at its sole
discretion to grant, renew or extend licenses to other telecommunications and
data carriers for the purposes of locating telecommunications equipment in the
Building which may serve Tenant or other tenants in the Building. Nothing herein
shall grant to Carriers any greater rights or privileges than Tenant is granted
pursuant to the terms of this Lease. Tenant shall be responsible for ensuring
that such Carriers comply with the terms and conditions imposed upon Tenant
under this Lease, and, any failure by such Carriers to observe and comply with
the applicable terms, conditions, agreement and covenants on behalf of Tenant,
shall be a default hereunder.

                                      C-1
<PAGE>   79
                                   EXHIBIT A

                                 LANDLORD'S WORK

1.       Landlord shall close, by bricking over or otherwise, the windows in the
Premises located on the north side of the Building.

2.       Landlord shall install a ventilation system to ventilate the Generator.

3.       Landlord shall install a ventilation system to ventilate Tenant's fuel
room in the basement of the Building.

4.       Landlord shall provide a central Building signal and safety ground.

         All Landlord's Work shall be performed using building standard
         materials.

                                      A-1
<PAGE>   80
                                   EXHIBIT B

                         LANDLORD'S BASE BUILDING WORK

1.       Landlord shall install window and roof replacements.

2.       Landlord shall complete stairwell improvements.

3.       Landlord shall upgrade existing elevators.

4.       Landlord shall install a stub-up as support for the installation of
         Tenant's steel frame and dunnage equipment.

5.       Landlord shall upgrade utility shafts and install utility supports in
         critical areas of the Building.

6.       Landlord shall install core plumbing risers and fire protection risers.

7.       Landlord shall install grounding systems.

8.       Landlord shall install fire pumps, fire alarms and a base Building
         security system.

         All of Landlord's Base Building work shall be undertaken by Landlord
using building standard materials and procedures to the extent reasonably
necessary, in Landlord's sole, but reasonable, judgment, to prepare the Building
to accommodate Tenant's operations.

                                      B-1<PAGE>   1
                                                                   EXHIBIT 10.28

                                     LEASE

LANDLORD:           Hood Business Park LLC, a Massachusetts
                    Limited Liability Company

TENANT:             Net 2000 Communications Real Estate, Inc., a
                    Delaware Corporation

PREMISES:           Hood Business Park, Charlestown, Massachusetts

DATED:              December 6th, 1999

<PAGE>   2

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE             CAPTION                                               PAGE
<S>                                                                       <C>
       I            REFERENCE DATA                                         1
                    (A) Subjects Referred To                               1
                    (B) Exhibits                                           2
       II           PREMISES                                               3
       III          TERM AND CONSTRUCTION                                  4
                    (A) Term                                               4
                    (B) Landlord's Required Work                           4
                    (C) Tenant's Work                                      4
                    (D) General Construction Provisions.                   4
       IV           LANDLORD'S COVENANTS                                   5
                    (A) Landlord's Covenants During The Term               5
                    (B) Interruptions                                      5
       V            RENT                                                   6
                    (A) Fixed Rent                                         6
                    (B) Additional Rent - Taxes                            6
                    (C) Additional Rent - Operating Costs                  7
                    (D) Monthly Payments                                  10
                    (E) Additional Rent - Electricity, Gas, Water &
                          Sewer                                           10
       VI           TENANT'S COVENANTS                                    11
       VII          DEFAULT                                               16
                    (A) Events of Default                                 16
                    (B) Obligations Thereafter                            17
       VIII         CASUALTY AND TAKING                                   17
                    (A) Casualty And Taking                               17
                    (B) Reservation Of Award                              18
       IX           MORTGAGEE                                             18
                    (A) Subordination To Mortgages                        18
                    (B) Limitation On Mortgagee's Liability               19
                    (C) No Release Or Termination                         19
       X            GENERAL PROVISIONS                                    20
                    (A) Captions                                          20
                    (B) Short Form Lease                                  20
                    (C) Relocation                                        20
                    (D) Notices                                           20
                    (E) Successors And Assigns                            21
                    (F) No Surrender                                      21
                    (G) Waivers And Remedies                              21
                    (H) Self-Help                                         22
                    (I) Estoppel Certificate                              22
                    (J) Waiver Of Subrogation                             23
                    (K) Brokers                                           23
                    (L) Landlord's Defaults                               24
                    (M) Effectiveness Of Lease                            24
                    (N) Hazardous Materials                               24
                    (O) Delays                                            25
                    (P) Compliance With Laws                              25
                    (Q) Waiver Of Landlord's Lien                         25
</TABLE>

<PAGE>   3

<TABLE>
<S>                                                                       <C>
                    (R) Telecommunications                                26
                    (S) Generator                                         27
       XI           SECURITY DEPOSIT                                      27
       XII          MODIFICATION                                          29
       XIII         OPTION                                                29
                    (A) Option Term                                       29
                    (B) Option Rent                                       29

                    Exhibit A   Plan Showing Location Of The Building
                    Exhibit A-1 Condition of Building
                    Exhibit B   Landlord's Required Work
                    Exhibit C   Tenant's Work
                    Exhibit D   Landlord's Services
                    Exhibit E   Rules And Regulations
                    Exhibit F   Legal Description Of Lot
</TABLE>

<PAGE>   4

       Lease dated as of the 6th day of December, 1999, by and between Hood
Business Park LLC, a Massachusetts Limited Liability Company, as landlord
("Landlord"), and Net 2000 Communications Real Estate, Inc., a Delaware
corporation), as tenant ("Tenant").

                                   ARTICLE I
                                 REFERENCE DATA

1.   (A)  SUBJECTS REFERRED TO:

     Each reference in this lease to any of the following subjects shall be
construed to incorporate the data stated for the subject in this Section 1(A):

     LANDLORD'S ADDRESS: 90 Everett Avenue
                         Chelsea, MA  02150-2301

     LANDLORD'S MANAGING AGENT:    Nordblom Company
                                   31 Third Avenue
                                   Burlington, MA 01803-4470

     TENANT'S ADDRESS:   500 Rutherford Avenue
                         Charlestown, MA  02129

     BUILDING: That certain building designated as "500 Rutherford
               Avenue, Charlestown, MA  02129".

     RENTABLE FLOOR AREA OF TENANT'S SPACE:
     APPROXIMATELY 21,895 SQUARE FEET OF OFFICE SPACE

     TOTAL RENTABLE FLOOR AREA OF THE BUILDING:

               WAREHOUSE:  109,148 SQUARE FEET
               OFFICE:    191,717 SQUARE FEET
                          -------
               TOTAL:     300,865

     APPROXIMATE DELIVERY DATE:    WITHIN THIRTY (30) DAYS
                                   OF FULL LEASE
                                   EXECUTION

     ORIGINAL TERM: TEN (10) YEARS FROM THE
                    COMMENCEMENT DATE

     OPTION TERM:   ONE (1) OPTION FOR TEN (10) YEARS

     TENANT'S CONSTRUCTION PERIOD: NINETY (90) DAYS FROM
                                   THE DELIVERY DATE
                                   ("THE COMMENCEMENT
                                   DATE")

                                       1
<PAGE>   5
     FIXED RENT:

              DURING THE PERIOD COMMENCING ON THE COMMENCEMENT DATE AND
              CONTINUING THROUGH THE FIRST FIVE (5) YEARS OF THE ORIGINAL TERM
              -- THAT AMOUNT PER ANNUM EQUAL TO THE PRODUCT OF $17.75 AND THE
              RENTABLE SQUARE FOOT FLOOR AREA OF THE DEMISED PREMISES; AND

              DURING EACH YEAR OF THE BALANCE OF THE ORIGINAL TERM -- THAT
              AMOUNT PER ANNUM EQUAL TO THE PRODUCT OF $20.50 AND THE RENTABLE
              SQUARE FOOT FLOOR AREA OF THE DEMISED PREMISES.

     ADDITIONAL RENT FOR TAXES AND OPERATING COSTS:

              TENANT'S PRO RATA SHARE OF TAXES = 7.28 %

              TENANT'S PRO RATA SHARE OF OPERATING COSTS PRESENTLY ESTIMATED TO
              BE = 11.42%

     SECURITY AND RESTORATION DEPOSIT:

              DURING THE FIRST SIXTY (60) MONTHS OF THE TERM, AN AMOUNT EQUAL TO
              THE PRODUCT OF NINE (9) AND THE MONTHLY FIXED RENT PAYABLE DURING
              THE FIRST YEAR OF THE ORIGINAL TERM; DURING THE BALANCE OF THE
              TERM SAID AMOUNT SHALL BE REDUCED TO THE PRODUCT OF SIX (6) AND
              THE MONTHLY FIXED RENT PAYABLE UNDER THE LEASE AS OF THE SIXTY
              FIRST (61ST) MONTH OF THE TERM.

     GUARANTOR:           N/A

     PERMITTED USE:       GENERAL OFFICE USE AND AS A TELECOMMUNICATIONS SWITCH
                          FACILITY AND EQUIPMENT SUPPORT FUNCTIONS, PACKAGING,
                          ASSEMBLY/TESTING, DISTRIBUTION AND RELATED PURPOSES.
                          ANY SPECIAL PERMITS, REQUIREMENTS OF LAW OR LOCAL
                          AUTHORITIES, CHANGES IN CERTIFICATE OF OCCUPANCY AND
                          THE LIKE, AS NECESSARY DUE TO TENANT'S USE, SHALL BE
                          AT TENANT'S SOLE COST AND EXPENSE.

     PUBLIC LIABILITY INSURANCE LIMITS: BODILY INJURY:

                                   $1,000,000
     PROPERTY DAMAGE:              $ 500,000

     (B)  EXHIBITS

     The exhibits listed below in this Section are incorporated in this lease by
reference and are to be construed as part of this lease:

                                       2
<PAGE>   6

     EXHIBIT A          Plan Showing Location of the Building
     EXHIBIT A-1        Condition of Building
     EXHIBIT B          Landlord's Required Work
     EXHIBIT C          Tenant's Work
     EXHIBIT D          Landlord's Services
     EXHIBIT E          Rules and Regulations
     EXHIBIT F          Legal Description of Lot

                                   ARTICLE II
                                    PREMISES

2.   PREMISES

     Subject to and with the benefit of the provisions of this lease, Landlord
hereby leases to Tenant, and Tenant leases from Landlord, Tenant's space in the
Building comprising approximately 21,895 square feet of rentable office floor
area on the east side of the second floor, excluding exterior faces of exterior
walls, all common facilities of the Building and all building service fixtures
and equipment serving (exclusively or in common) other parts of the Building.
The Building is outlined in red upon the plan attached as Exhibit A. Tenant's
space, with such exclusions, is hereinafter referred to as "the demised
premises". Tenant shall have, as appurtenant to the demised premises, the right
to use in common with others entitled thereto, subject to reasonable rules from
time to time made by Landlord of which Tenant is given notice: (i) the common
facilities from time to time included in the Building or on the parcel of land
on which the Building is located (said parcel being more particularly described
in Exhibit F and being hereafter referred to as "the Lot"), to the extent from
time to time designated by Landlord; and (ii) the building service fixtures and
equipment serving the demised premises. The Lot is represented by the area
outlined by a bold line upon said Exhibit A. It is understood and agreed that
said plan is intended only to show the approximate size of the Lot as presently
constituted and the approximate size and location of the Building and for no
other purpose. Landlord reserves the right from time to time (a) to install,
repair, replace, use, maintain and relocate for service to the demised premises
and to other parts of the Building or either, building service fixtures and
equipment wherever located in the Building; including, without limitation, the
right to enter the demised premises to access the second floor primary electric
room located within the demised premises; (b) to alter, relocate or eliminate
any other common facility; (c) to designate specific parking areas upon the Lot
to be for the exclusive use of one or more users thereof; (d) to designate
specific traffic routes for trucks and other delivery vehicles; (e) to alter the
size of the Building, including, without limitation, converting warehouse space
to office space or office space to warehouse space; and (f) to increase and/or
decrease the size of the Lot by the acquisition of adjacent land and/or the
disposition of any portions thereof. No such increase or decrease shall be
deemed to have occurred until Landlord shall give Tenant notice thereof.
Landlord agrees that except in an emergency it shall provide Tenant with prior
reasonable notice before performing any work to the demised premises and,
further, Landlord agrees that there shall be no unreasonable impairment of
access to or egress from Tenant's business in the demised premises.

                                       3
<PAGE>   7

                                  ARTICLE III
                             TERM AND CONSTRUCTION

3.   (A) TERM

     To have and to hold for a period of ten (10) years ("the Term" or "the
Original Term") commencing upon the ninetieth (90th) day following the delivery
of the demised premises to Tenant with Landlord's Work substantially complete
(being hereafter referred to as "the Commencement Date") and, unless sooner
terminated as provided herein, ending at the end of the Term; provided that if
the Term (calculated as aforesaid) would expire prior to the last day of a
calendar month, the Term shall be extended so as to expire on the last day of
such calendar month.

     (B) LANDLORD'S REQUIRED WORK

     Landlord agrees to use reasonable efforts to complete Landlord's Required
Work (described in Exhibit B) on or before the Approximate Delivery Date, which
shall, however, be extended for a period equal to that of any delays due to
governmental regulations, scarcity of or inability to obtain labor or materials,
labor difficulties, casualty or other causes reasonably beyond Landlord's
control. Tenant's Construction Period shall commence upon the execution of this
lease by both Landlord and Tenant and delivery of the demised premises to Tenant
("Delivery Date"). Landlord agrees that upon the execution of this lease, Tenant
may access Tenant's space provided Tenant shall not interfere with the
performance of Landlord's Required Work.

     (C) TENANT'S WORK

     Tenant agrees to perform Tenant's Work in accordance with the provisions of
Exhibit C.

     (D) GENERAL CONSTRUCTION PROVISIONS

     All construction work required or permitted by this lease, whether by
Landlord or by Tenant, shall be done in a good and workmanlike manner and in
compliance with all applicable laws and all lawful ordinances, regulations and
orders of governmental authorities and insurance rating or inspection bureaus
having jurisdiction over the Building. Either party may inspect the work of the
other at reasonable times and shall promptly give notice of observed defects.
Landlord's Required Work shall be deemed to have been performed upon the
Approximate Delivery Date except for items which are incomplete or do not
conform with the requirements of Exhibit B and as to which Tenant shall, in
either case, have given written notice to Landlord prior to the expiration of
Tenant's Construction Period.

     (E) CONSTRUCTION ALLOWANCE

     As an inducement for Tenant to execute this lease and prepare the demised
premises for Tenant's occupancy, Landlord shall pay to Tenant that amount equal
to the product of $3.00 and the rentable square foot floor area of the demised
premises. So long as Tenant shall not then be in default in the performance of
its agreements contained in this lease beyond any applicable cure period,
Landlord shall pay said sum to Tenant upon the last to occur of: (a) the receipt
by Landlord of the rent payable hereunder for the first full month of the Term
of

                                       4
<PAGE>   8

this lease; or (b) the receipt by Landlord of waivers of liens from all
contractors and subcontractors supplying labor and/or material for Tenant's
work.

                                   ARTICLE IV
                              LANDLORD'S COVENANTS

4.   (A) LANDLORD'S COVENANTS DURING THE TERM:

     Landlord covenants during the Term:

     (1) To furnish, through Landlord's employees or independent contractors,
the services listed in Exhibit D; and

     (2) Except as otherwise provided in this lease, to make such structural
repairs to the roof, foundation, exterior walls, and common facilities of the
Building and the Building service fixtures and the Lot as may be necessary to
keep them in serviceable condition.

     (3) Landlord agrees to save Tenant harmless from, and indemnify Tenant
against, to the extent permitted by law, any and all injury, loss or damage and
any and all claims for injury, loss or damage, of whatever nature caused by or
resulting from, any act, omission or negligence of Landlord or its agents or
employees. It is a condition of this indemnification that the Landlord shall be
notified with reasonable promptness of any suits, proceedings, claims or demands
with respect to which the Tenant requests indemnification, and the Landlord
shall have the right to assume the entire control of the defense, compromise or
settlement thereof and the Tenant shall cooperate fully with the Landlord in
such defense.

     (B) INTERRUPTIONS

     Landlord shall not be liable to Tenant for any compensation or reduction of
rent by reason of inconvenience or annoyance or for loss of business arising
from (a) power losses or shortages, or (b) the necessity of Landlord's entering
the demised premises for any of the purposes in this lease authorized, including
without limitation, for repairing or altering the demised premises or any
portion of the Building or for bringing materials into and/or through the
demised premises in connection with the making of repairs or alterations.

     In case Landlord is prevented or delayed from making any repairs,
alterations or improvements or furnishing any service or performing any other
covenant or duty to be performed on Landlord's part, by reason of any cause
reasonably beyond Landlord's control, Landlord shall not be liable to Tenant
therefor, nor, except as expressly otherwise provided in Article VIII, shall
Tenant be entitled to any abatement or reduction of rent by reason thereof, nor
shall the same give rise to a claim in Tenant's favor that such failure
constitutes actual or constructive, total or partial, eviction from the demised
premises. Landlord reserves the right to stop any service or utility system when
necessary in Landlord's opinion by reason of accident or emergency or until
necessary repairs have been completed. Except in case of emergency repairs,
Landlord will give Tenant reasonable advance notice of any contemplated stoppage
and, in any event, Landlord will use reasonable efforts to avoid unnecessary
inconvenience to Tenant by reason thereof.

                                       5
<PAGE>   9
                                    ARTICLE V
                                      RENT

          5. (A) FIXED RENT

                 Tenant agrees to pay, without any offset or reduction whatever
          (except as made in accordance with the express provisions of this
          lease), fixed monthly rent equal to 1/12th of the Fixed Rent, such
          rent to be paid in equal installments in advance on the first day
          of each calendar month included in the Term commencing on the
          Commencement Date and for any portion of a calendar month at the
          beginning or end of Tenant's obligation to pay rent, a portion of
          such fixed monthly rent, prorated on a per diem basis. All
          payments of Fixed and additional rent shall be made in lawful
          money of the United States and shall be made to Hood Business Park
          LLC and sent to Landlord's Managing Agent at Managing Agent's
          Address set forth in Section (A) of Article I above, or to such
          other person and/or at such other address as Landlord may from
          time to time designate.

                 If any payment of rent or any other payment payable hereunder
          by Tenant to Landlord shall not be paid when due, the same shall
          bear interest from the date when the same was payable until the
          date paid at the lesser of (a) fifteen percent (15%) per annum, or
          (b) the highest lawful rate of interest which Landlord may charge
          to Tenant without violating any applicable law. Such interest
          shall constitute additional rent payable hereunder and shall be
          "the Lease Interest Rate".

                 (B) ADDITIONAL RENT - TAXES

                 (1) For the purposes of this Section, "Tax Year" shall mean the
          twelve-month period in use in the City of Boston for the purpose
          of imposing ad valorem taxes upon real property. In the event
          that said City changes the period of its tax year, "Tax Year"
          shall mean a twelve-month period commencing on the first day of
          such new tax year, and each twelve-month period commencing on an
          anniversary of such date during the Term of this lease. For
          purposes of this Section "the Property" shall mean the Lot and all
          improvements thereon, including the Building; and "the Factor"
          shall mean a fraction the numerator of which is the Rentable Floor
          Area of the demised premises and the denominator of which is the
          Total Rentable Floor Area of The Building. For purposes of this
          Section "the Building's Share of Real Estate Taxes" shall mean the
          sum of (i) the real estate taxes upon the Building (determined in
          accordance with the real estate tax bill, the assessor's records
          or a certification from the assessor), plus (ii) the product of
          the real estate taxes upon the Lot and a fraction the numerator of
          which is the number of square feet of rentable floor area
          contained within the Building and the denominator of which is the
          number of square feet of rentable floor area contained within all
          buildings located upon the Lot provided, however, that for
          purposes of this subsection (ii), if any portion of the Lot shall
          be separately assessed, the real estate taxes toward which Tenant
          shall be obligated to contribute shall include only those taxes on
          those portions of the Lot jointly assessed with the portion of the
          Lot on which the Building is located; and the denominator of said
          fraction shall be the number of square feet of rentable floor area
          contained within all buildings located upon those portions of the
          Lot which are jointly assessed with the portion of the Lot on
          which the Building is located.

                 (2) During the Term Tenant shall pay to Landlord, as additional
          rent, an amount equal to the Building's Share of Real Estate Taxes
          imposed with respect
                                        6
<PAGE>   10

          to the Property for each Tax Year multiplied by the Factor, such
          amount to be apportioned on a per diem basis for any fraction of a
          Tax Year contained within the Term.

                 (3) If Landlord shall receive any tax refund or rebate or sum
          in lieu thereof with respect to any Tax Year, then out of any balance
          remaining thereof, after deducting Landlord's reasonable expenses
          incurred in obtaining such refund, rebate or other sum, Landlord
          shall pay to Tenant, provided that Tenant is not then in default
          in the performance of any of its obligations hereunder, an amount
          equal to the Building's Share of such balance multiplied by the
          Factor; but in no event shall Landlord pay to Tenant out of such
          refund, rebate or other sum for any Tax Year more than the amount
          paid by Tenant to Landlord pursuant to this Section (B) for such
          Tax Year.

                 (4) Any betterment assessment, so-called "rent tax" or any
          other tax levied or imposed by any governmental authority in
          addition to, in lieu of or as a substitute for real estate taxes
          shall nevertheless be deemed to be real estate taxes for the purpose
          of this Section (B).  Furthermore, to the extent that any equipment
          installed as part of the Property (e.g. heating or air conditioning
          equipment) shall be classified as personal property for purposes of
          taxation, any personal property taxes thereon shall be deemed to be
          real estate taxes for purposes of this Section (B). Real estate taxes
          shall not include any tax upon Landlord's net income or profits and
          shall also not include: business, professional, occupational and
          license taxes, federal, state or local income taxes, franchise, gift,
          transfer, excise, capital stock, estate, succession, or inheritance
          taxes. Landlord shall pay all real property taxes and assessments by
          the date due, and shall, upon Tenant's written request, furnish
          Tenant with evidence of such payment. Landlord shall not include in
          taxes any interest or penalties incurred by Landlord by reason of
          Landlord's failure to pay in a timely manner any real property taxes
          and assessments provide Tenant has timely paid same. Landlord shall
          use its reasonable efforts in good faith to effect an equitable
          proration of real estate taxes and assessments on the Building and
          any other property owned by Landlord or an affiliate of Landlord.
          Landlord shall not recover more than one hundred percent (100%) of
          the real estate taxes, assessments and insurance premiums actually
          incurred by Landlord.

                 (5) In the event of any taking by eminent domain under
          circumstances whereby this lease shall not terminate, each of the
          Building's Share of Real Estate Taxes and the Factor shall be adjusted
          in order to reflect any change in rentable floor area.

                 (C)    ADDITIONAL RENT - OPERATING COSTS

                 (1) For the purposes of this Section, the following terms shall
          have the following respective meanings:

                 Operating Year: Each successive fiscal year (as adopted by
          Landlord) in which any part of the Term of this lease shall fall.

                    "Operating Expenses" shall mean all reasonable and actual
          costs or expenses incurred for the operation, cleaning, maintenance,
          repair and upkeep of the Property, including, without limitation, all
          costs of maintaining and repairing the Property (including snow
          removal, landscaping and grounds maintenance parking lot operation and
          maintenance, security, operation and repair of ventilating and
          air-conditioning equipment, elevators, lighting and any other

                                       7

<PAGE>   11

          Building equipment or systems) and of all repairs and replacements
          (other than repairs or replacements for which Landlord has received
          full reimbursement from contractors, other tenants of the Building or
          from others) necessary to keep the Property in good working
          order, repair, appearance and condition; all costs, including material
          and equipment costs for cleaning and janitorial services to the
          Building (including window cleaning of the Building); all costs of
          any reasonable insurance carried by Landlord relating to the
          Property; all costs related to provision of heat (including oil,
          electric, steam and/or gas), air-conditioning, and water (including
          sewer charges) and other utilities to the Building, (but excluding
          the reheat units in Tenant's VAV units); payments under all service
          contracts relating to the foregoing; all compensation, fringe
          benefits, payroll taxes and workmen's compensation insurance premiums
          related thereto with respect to any employees of Landlord or its
          affiliates engaged in security and maintenance of the Property;
          actual and reasonable attorneys' fees and disbursements (exclusive of
          any such fees and disbursements incurred in tax abatement proceedings
          or the preparation of leases) and auditing and other professional
          fees and expenses; and a management fee at market rates customarily
          paid with respect to buildings similar to the Building. Landlord
          shall provide Tenant a statement of Operating Expenses annually. Said
          statement shall be in reasonable detail and shall include a
          computation of Tenant's share.

          There shall not be included in such Operating Expenses: (i) brokerage
          fees (including rental fees) related to the operation of the
          Building; (ii) interest and depreciation charges incurred on the
          Property; (iii) expenditures made by Tenant with respect to (a)
          cleaning, maintenance and upkeep of the demised premises; and (b) the
          provision of electricity to the demised premises; (iv) income, excess
          profit, franchise taxes or other such taxes imposed on or measured by
          the gross or net income of Landlord from the operation of the
          Building; (v) rent for a management office and rent and expenses for
          a marketing office; (vi) any amounts paid to any person, firm or
          corporation related to or otherwise affiliated with Landlord or any
          general partner, officer, director or shareholder of Landlord or any
          of the foregoing, to the extent the same exceeds arms length
          reasonable prices paid in Boston, Massachusetts Metropolitan area for
          similar services or goods; costs incurred from removing any hazardous
          materials or other toxic materials or substances from either the
          Building or the demised premises, which materials or substances were
          present as of the date of this lease; (vii) costs relating to
          maintaining Landlord's existence, either as a corporation,
          partnership, trust or other entity, such as trustee's fees, annual
          fees, partnership expenses and legal and accounting fees (other than
          with respect to Building operations); (viii) attorney's fees and
          other costs and expenses incurred in connection with the negotiations
          or disputes with present or prospective tenants, other occupants of
          the Building, or other third parties; (ix) ground rent, if Landlord's
          interest in the land upon which the Building is located is derived
          solely from a ground lease; (x) costs or expenses of electricity
          provided to any leasable spaces within the Building; (xi) utilities
          and expenses incurred by any tenant directly (including HVAC, and
          cleaning services); and (xii) any other expenses for which Landlord
          actually received direct reimbursement from insurance, condemnation
          awards, other tenant's or any other source. Operating Expenses shall
          also be reduced by all cash discounts, trade discounts or quantity
          discounts received by Landlord or Landlord's managing agent in the
          purchase of any goods, utilities or services in connection with the
          prudent operation of the Building and the calculation of any expenses
          hereunder, it is understood that no expense shall be charged more
          than once. Landlord shall use its reasonable efforts in good faith to
          effect an equitable proration of bills for services rendered to the
          Building and to any other property owned by Landlord or an affiliate
          of
                                        8
<PAGE>   12

          Landlord. Landlord shall not recover more than one hundred percent
          (100%) of the Operating Expenses actually incurred by Landlord.
          Landlord agrees that it shall give Tenant copies of invoices upon
          request.

          If, during the Term of this lease, Landlord shall replace any capital
          items or make any capital expenditures reasonably necessary to
          maintain the structural integrity of the demised premises or the
          Building or of the utility systems servicing the demised premises, or
          which result in reducing Operating Expenses (collectively called
          "capital expenditures") the total amount of which is not properly
          included in Operating Expenses for the calendar year in which they
          were made, there shall nevertheless be included in Operating Expenses
          for each calendar year in which and after such capital expenditure is
          made the annual charge-off of such capital expenditure. (Annual
          charge-off shall be determined by (i) dividing the original cost of
          the capital expenditure by the number of years of useful life thereof
          [the useful life shall be reasonably determined by Landlord in
          accordance with generally accepted accounting principles and
          practices in effect at the time of acquistion of the capital item];
          and (ii) adding to such quotient an interest factor computed on the
          unamortized balance of such capital expenditure based upon an
          interest rate reasonably determined by Landlord as being the interest
          rate then being charged for long term mortgages by institutional
          lenders on like properties within the locality in which the Building
          is located.) Provided, further, that if Landlord reasonably concludes
          on the basis of engineering estimates that a particular capital
          expenditure will effect savings in Operating Expenses and that such
          annual projected savings will exceed the annual charge-off of capital
          expenditure computed as aforesaid, then and in such events, the annual
          charge-off shall be shall be determined by dividing the amount of such
          capital expenditure by the number of years over which the projected
          amount of such savings shall fully amortize the cost of such item or
          the amount of such capital expenditure; and by adding the interest
          factor, as aforesaid.

                 The foregoing are intended to describe only the extent of
          potential cost and expenses and impose no obligation on Landlord to
          incur same.

                 Building's Share of Operating Expenses: One hundred percent
          (100%) of the Operating Expenses with respect to the Building plus
          the product of the Operating Expenses with respect to the Lot and a
          fraction the numerator of which is the rentable floor area contained
          within the building and the denominator of which is the rentable
          floor area contained within all of the buildings located upon the Lot
          and not separately maintained by the tenants thereof.

                 (2)  During the Term Tenant shall pay to Landlord, as
          additional rent, an amount equal to the Building's Share of Operating
          Expenses for each Operating Year multiplied by a fraction, the
          numerator of which is the rentable floor area of the demised premises
          and the denominator of which is the total rentable floor area of
          office space within the Building, such amount to be apportioned on a
          per diem basis for any fraction of an Operator Year contained within
          the Term. Tenant's prorata share for heating, ventilating and air
          conditioning expenses shall not include said expenses for the 17,000
          square feet operating on Tenant's own system.

          (3)  In the event of any taking by eminent domain under circumstances
          whereby this lease shall not terminate, each of the Building's Share
          of Operating Expenses and the Factor shall be appropriately adjusted
          to reflect any change in rentable floor area.

                                       9
<PAGE>   13
       (D) MONTHLY PAYMENTS

       Payment on account of the additional rent described in Sections (B) and
(C) above shall be paid, as part of Tenant's total rent, monthly, and at the
times and in the fashion herein provided for the payment of Fixed Rent. For an
initial period from the Commencement Date until the end of the Tax Year during
which the term of this lease shall commence, the monthly amount so to be paid
shall be that amount reasonably estimated by Landlord for such purpose at the
commencement of the Term. Promptly after the end of said Tax Year, and promptly
after the end of each Tax Year thereafter, Landlord shall make a determination
of Tenant's share of real estate taxes and Operating Expenses; and if the
aforesaid payments theretofore made for such period by Tenant exceed Tenant's
share, such overpayment shall be credited against the payments thereafter to be
made by Tenant pursuant to this Section (D); and if Tenant's share is greater
than such payments theretofore made on account for such period, Tenant shall
make a suitable payment to Landlord. The initial monthly payment on account of
said additional rent shall be replaced after Landlord's determination of
Tenant's share for the preceding Tax Year by a payment which is one-twelfth
(1/12th) of Tenant's actual share thereof for the immediately preceding Tax
Year, with adjustments as appropriate where such period is less than a full
twelve-month period. Appropriate adjustments shall be made in said monthly
payment if the real estate taxes upon the Property for the current Tax Year
shall be known prior to the end of said Tax Year and/or if real estate taxes
shall be payable to the taxing authority in installments, all to the end that as
each payment of real estate taxes shall become payable Landlord shall have
received from Tenant payments sufficient in amount to pay Tenant's share of the
Building's Share of Real Estate Taxes then payable by Landlord. At Landlord's
election, Landlord may use its fiscal year rather than Tax Years for purposes of
the adjustments described in this Section.

       (E) ADDITIONAL RENT - ELECTRICITY, GAS, WATER & SEWER

       (1) If the demised premises shall have utility meters measuring only the
amount of the utilities consumed in the demised premises, commencing upon
Tenant's entry into the demised premises to perform Tenant's work, Tenant shall
pay to the utility companies furnishing such utilities, promptly upon the
receipt of bills therefor, the cost of such utilities consumed in the demised
premises. If the demised premises shall not have a utility meter for a utility
provided to the demised premises, then Tenant shall pay to Landlord upon demand
from time to time, as additional rent, the cost of such utility consumed in the
demised premises, as said cost shall be determined from time to time by a
reputable electrical engineer, selected by Landlord, who shall survey the
utility demands of the demised premises and of all other premises served by the
same utility meter as the demised premises and shall determine the cost of such
utility consumed in the demised premises on the basis of such survey. In lieu of
conducting surveys with respect to such utility consumption, Landlord may
install check-meters which will indicate the consumption of such utility within
the demised premises or within one or more other premises served by the same
utility meter which serves the demised premises. Tenant's charge shall in all
events be Tenant's cost of utility usage as so required with no profit increment
to Landlord.

       (2) Tenant's use of electricity in the demised premises shall not at any
time exceed the capacity of any of the electrical conductors or equipment in or
otherwise serving the demised premises. Landlord shall provide 1200 amp/480
volts or equivalent service to the Building. Tenant shall do all work necessary

                                       10

<PAGE>   14

and provide all necessary equipment in order to bring said 1200 amp/480 volts or
equivalent service to the demised premises. Tenant shall notify Landlord of such
work on the electrical system and shall provide Landlord with plans of such
work, which plans Landlord shall provide comments to within ten (10) days of
receipt. If Landlord fails to provide comments within such time, said plans
shall be deemed approved.

                                   ARTICLE VI
                               TENANTS COVENANTS

6. TENANT'S COVENANTS DURING THE TERM.

       Tenant covenants during the Term and such other time as Tenant occupies
any part of the demised premises:

       (1) To pay when due (a) all Fixed Rent and additional rent, (b) all taxes
which may be imposed on Tenant's personal property in the demised premises
(including, without limitation, Tenant's fixtures and equipment) regardless to
whomever assessed, and (c) all charges by any public utility for telephone and
other utility services rendered to the demised premises;

       (2) Except as otherwise provided in Article VIII and Section 4(A)(2), to
keep the demised premises in good order, repair and condition, reasonable wear
only excepted; to replace all light bulbs as necessary; maintain and replace all
interior glass; keep all utilities, pipes, conduits, drains and other
installations used in connection with the demised premises, including, without
limitation, the heating, ventilating and air conditioning systems which serve
only the demised premises in good order, condition and repair; and at the
expiration or termination of this lease peaceably to yield up the demised
premises and all changes and additions therein in such order, repair and
condition, first removing all goods and effects of Tenant and those claiming
under Tenant and any items the removal of which is required by any agreement
between Landlord and Tenant (or specified therein to be removed at Tenant's
election and which Tenant elects to remove), and repairing all damage caused by
such removal and restoring the demised premises and leaving them clean and neat.
Notwithstanding anything to the contrary contained herein, Tenant shall
forthwith remove from the demised premises (repairing any damage caused by such
removal) any installations, alterations, additions or improvements made by
Tenant except for those set forth on Exhibits B and C attached at the
commencement of the Term, and which Landlord requests Tenant to remove within
sixty (60) days after the expiration or termination of the term of this lease,
such removal to include returning the previously modified portions of the
demised premises to their condition prior to the making of such installations,
alterations, additions or improvements. Tenant's obligations hereunder shall
survive the expiration or termination of the term of this lease. For purposes of
this Section (2) the word "repairs" includes the making of replacements when
necessary. Tenant shall keep the demised premises clean and free of refuse and
provide all necessary janitorial services to the demised premises;

       (3) Continuously from the Commencement Date, to use and occupy the
demised premises only for the Permitted Use; and not to injure or deface the
demised premises, Building, or Lot; and not to permit in the demised premises
any auction sale, nuisance, or the emission from the demised premises of any
objectionable noise or odor; nor any use thereof which is improper, offensive,
contrary to law or ordinances, or liable to invalidate or increase the premiums

                                       11

<PAGE>   15

for any insurance on the Building (or any portion thereof) or its contents, or
liable to render necessary any alteration or addition to the Building. Tenant
shall obtain Landlord's consent prior to the installation of antennae or other
transmitting devices on the roof of the Building, and Tenant shall pay the fair
market rent (determined in the same manner as set forth in Section (B) of
Article 13 below) for locating said antennae and/or equipment on the roof of the
Building provided, however, that there shall be no charge for one (1) of
Tenant's GPS antennae. All antennae shall be reasonable in size and located in
an area approved by Landlord;

       (4) To comply with the rules and regulations set forth in Exhibit E and
all other reasonable rules and regulations hereafter made by Landlord (but only
after copies thereof have been delivered to Tenant) for the care and use of the
Building and Lot and their facilities and approaches, it being expressly
understood, however, that Landlord shall not be liable to Tenant for the failure
of other tenants of the Building to conform to such rules and regulations;

       (5) To keep the demised premises equipped with all safety appliances
required by law or ordinance or any other regulation of any public authority
and/or any insurance inspection or rating bureau having jurisdiction, and to
procure all licenses and permits required because of any use made by Tenant and,
if requested by Landlord, to do any work required because of such use, it being
understood that the foregoing provisions shall not be construed to broaden in
any way the Permitted Use;

       (6) Not without the prior written consent of Landlord to assign,
hypothecate, pledge or otherwise encumber this lease, to make any sublease or to
permit occupancy of the demised premises or any part thereof by anyone other
than Tenant, voluntarily or by operation of law, and as additional rent, to
reimburse Landlord promptly upon demand for reasonable legal and other expenses
incurred by Landlord in connection with any request by Tenant for consent to
assignment or subletting. Without intending to limit Landlord's discretion in
granting or withholding such consent, it is agreed that if Tenant requests
Landlord's consent to assign this lease or sublet more than fifty percent (50%)
of the demised premises, Landlord shall have the option, exercisable by written
notice to Tenant given within sixty days after receipt of such request, to
terminate this lease as of a date specified in such notice which shall be not
less than thirty or more than sixty days after the date of such notice. If
Landlord shall so terminate this lease, rent shall be apportioned as of the date
of termination, and Landlord may lease the demised premises or any portion
thereof to any person or entity (including without limitation, Tenant's proposed
assignee or subtenant, as the case may be) without any liability whatsoever to
Tenant by reason thereof. Landlord agrees that if it shall not exercise the
aforesaid right of termination, Landlord shall not unreasonably withhold, delay
or condition its consent to a request by Tenant to assign this lease or sublet
the demised premises as aforesaid. If Landlord shall consent to any assignment
of this lease by Tenant or a subletting of the whole of the demised premises by
Tenant at a rent which exceeds the rent payable hereunder by Tenant, or if
Landlord shall consent to a subletting of a portion of the demised premises by
Tenant at a rent in excess of the subleased portion's prorata share of the rent
payable hereunder by Tenant, then Tenant shall pay to Landlord, as additional
rent forthwith upon Tenant's receipt of each installment of any such excess
rent, one half (1/2) the amount of any such excess rent. Each request by Tenant
for permission to assign this lease or to sublet the whole or any part of the
demised premises shall be accompanied by a warranty by Tenant as to the amount
of rent to be paid to Tenant by the

                                       12

<PAGE>   16

proposed assignee or sublessee. For purposes of this Section (6), the term
"rent" shall mean all fixed rent, additional rent or other payments and/or
consideration payable by one party to another for the use and occupancy of
premises. Tenant agrees, however, that neither it nor anyone claiming under it
shall enter into any sublease, license, concession or other agreement for use,
occupancy or utilization of space in the demised premises which provides for
rental or other payment for such use, occupancy or utilization based, in whole
or in part, on the net income or profits derived by any person or entity from
the space leased, used, occupied or utilized (other than an amount based on a
fixed percentage or percentages of receipts or sales), and Tenant agrees that
any such purported sublease, license, concession or other agreement shall he
absolutely void and ineffective as a conveyance of any right or interest in the
possession, use, occupancy, or utilization of any part of the demised premises.
Tenant further agrees that any sublease, license, concession or agreement for
use, occupancy or utilization of space in the demised premises entered into by
it or by anyone claiming under it shall contain the provisions set forth in the
immediately preceding sentence. Tenant further agrees that if a sublease is
entered into, neither the rent payable thereunder nor the amount thereof passed
on to any person or entity shall have deducted therefrom any expenses or costs
related in any way to the subleasing of such space. If and whenever Tenant shall
not be a so-called "publicly held" company, it is understood and agreed that the
transfer of fifty percent (50%) or more of the stock in Tenant of any class
(whether at one time or at intervals) shall constitute an "assignment" of
Tenant's interest in this lease. If there shall be any assignment or subletting
by Tenant pursuant to the provisions of this paragraph, Tenant shall remain
primarily liable for the performance and observance of the covenants and
agreements herein contained on the part of Tenant to be performed and observed,
such liability to be (in the case of any assignment) joint and several with that
of such assignee. It is expressly understood and agreed that no assignment of
Tenant's interest in this lease shall be effective until such time as Tenant
shall deliver to Landlord an agreement from the assignee, which agreement shall
be reasonably satisfactory to Landlord in form and substance and shall provide
that the assignee agrees with Landlord to be primarily liable for the
performance and observance of the covenants and agreements herein contained on
the part of Tenant to be performed and observed, such liability to be joint and
several with that of Tenant. Landlord hereby agrees, however, that Tenant may
assign its interest in this lease or sublet the whole of the demised premises to
a) a corporation which owns all of the outstanding stock of Tenant ("Tenant's
Parent"); (b) a corporation wholly owned by Tenant or by Tenant's Parent ("a
Subsidiary"); or (c) a corporation resulting from the consolidation, joint
venture, partnership or merger of Tenant with any other corporation.
Notwithstanding the foregoing provisions, if the assignment or subletting is to
a Subsidiary, said assignment or subletting shall be valid only for such period
of time as said Subsidiary is wholly owned by Tenant or Tenant's Parent. In the
event that Tenant or Tenant's Parent shall ever sell or otherwise transfer any
interest in said Subsidiary to another person or entity, unless Landlord shall
have specifically assented thereto, the same shall be deemed to be a material
breach of this lease. Notwithstanding any terms of this lease to the contrary,
Tenant shall have the right to locate or collocate customer equipment and/or
equipment cabinets within the demised premises, provided that such equipment is
consistent and compatible with the utilities and services provided to the
demised premises. The parties hereto confirm and agree that the location or
collocation of such customer equipment shall not constitute a subletting or
assignment pursuant to the terms of this lease and shall not be subject to any
of the operative terms or provisions or regulating, subletting or assignment
hereunder;

                                       13

<PAGE>   17
      (7)   To defend Landlord, with counsel acceptable to Landlord, save
Landlord harmless from, and indemnify Landlord against any liability for injury,
loss, accident or damage to any person or property and from any claims, actions,
proceedings and expenses and costs in connection therewith (including, without
implied limitation, reasonable counsel's fees): (i) arising from the omission,
fault, willful act, negligence or other misconduct of Tenant or anyone claiming
under Tenant, or from any use made or thing done or occurring upon or about the
demised premises but not due to the ommission, fault, willful act, negligence or
other misconduct of Landlord, or (ii) resulting from the failure of Tenant to
perform and discharge its covenants and obligations under this lease;

      (8)   To maintain public liability insurance upon the demised premises in
amounts which shall, at the beginning of the Term, be at least equal to
$1,000,000.00 for bodily injury or death to one or more individuals and
$500,000.00 for damage to property, and from time to time (but not more often
than once annually) during the Term, shall be for such higher limits, if any, as
are customarily carried in the area in which the demised premises are located
upon property similar in type and use to the demised premises. Such insurance
shall name Landlord, Landlord's Managing Agent, and Landlord's Mortgagee as
additional insureds. Tenant shall deliver to Landlord certificates thereof, at
least fifteen (15) days prior to the Commencement Date, and each renewal
certificate thereof, at least fifteen (15) days prior to the expiration of the
policy it renews. Each such policy shall be written by a responsible insurance
company authorized to do business in the Commonwealth of Massachusetts and shall
provide that the same shall not be modified or terminated without at least
twenty (20) days' prior written notice to each named insured;

      (9)   To keep all employees working in the demised premises covered by
workmen's compensation insurance in amounts required by law, and to furnish
Landlord with certificates thereof;

     (10)   To permit Landlord and its agents entry: to examine the demised
premises at reasonable times upon five (5) days prior notice (except in an
emergency when Landlord may enter at any time upon whatever notice is reasonable
in the circumstances) and, if Landlord shall so elect, to make repairs,
alterations and replacements; to remove, at Tenant's expense, any changes,
additions, signs, curtains, blinds, shades, awnings, aerials, flagpoles, or the
like not consented to in writing; and to show the demised premises to
prospective tenants during the six (6) months preceding the expiration of the
Term and to prospective purchasers and mortgagees at all reasonable times.
Landlord agrees that in exercising its rights pursuant to this Section (10) it
shall not unreasonably interfere with Tenant's business in the demised premises;

     (11)   Not to place a load upon any part of the floor of the demised
premises exceeding that for which said floor was designed or in violation of
what is allowed by law; and not to move any safe, vault or other heavy equipment
in, about or out of the demised premises except in such manner and at such
times as Landlord shall approve in writing in each instance. Tenant's business
machines and mechanical equipment which cause vibration or noise that may be
transmitted to the Building structure or to any other space in the Building
shall be placed and maintained by Tenant in settings of cork, rubber, spring, or
other types of vibration eliminators sufficient to confine such vibration or
noise to the demised premises. The present floor load is 150 lbs. per square
foot. Tenant, at Tenant's expense and subject to Landlord's prior approval shall
be permitted to

                                       14
<PAGE>   18

upgrade an area of the demised premises of approximately 1000 rentable square
feet to a floor loading capacity of 300 lbs. per square foot, or such increased
limit in the battery room reasonably approved by Landlord. Tenant shall have the
right to place a reasonable amount of heating, ventilating and air conditioning
equipment approved by Landlord on the roof of the Building in locations and in a
manner reasonable acceptable to Landlord, which approval shall not be
unreasonably withheld or delayed;

     (12)   All the furnishings, fixtures, equipment, effects and property of
every kind, nature and description of Tenant and of all persons claiming by,
through or under Tenant which, during the continuance of this lease or any
occupancy of the demised premises by Tenant or anyone claiming under Tenant, may
be on the demised premises or elsewhere in the Building or on the Lot shall be
at the sole risk and hazard of Tenant, and if the whole or any part thereof
shall be destroyed or damaged by fire, water or otherwise, or by the leakage or
bursting of water pipes, steam pipes, or other pipes, by theft, or from any
other cause, no part of said loss or damage is to be charged to or to be borne
by Landlord, unless caused by the negligence or willful act of Landlord, its
agents, servants, contractors or employees;

     (13)   To pay promptly when due the entire cost of any work done on the
demised premises by Tenant and those claiming under Tenant; not to cause or
permit any liens for labor or materials performed or furnished in connection
therewith to attach to the demised premises; and immediately to discharge any
such liens which may so attach;

     (14)   Not to make any alterations, improvements, changes or additions to
the demised premises without Landlord's prior written consent. Landlord agrees
that it shall not unreasonably withhold its consent to alterations,
improvements, changes or additions to the demised premises provided same are (i)
interior; (ii) non-structural; (iii) do not affect the common utility lines or
other common mechanical systems of the Building; and (iv) costs less than Forty
Two Thousand Dollars ($42,000.00);

     (15)   To pay to Landlord two (2) times the total of the Fixed Rent and
additional rent then applicable for each month or portion thereof that Tenant
shall retain possession of the demised premises or any part thereof after the
termination of this lease, whether by lapse of time or otherwise, and also to
pay all damages sustained by Landlord on account thereof (but not consequential
or punitive damages); however, the provisions of this subsection shall not
operate as a waiver by Landlord of any right of re-entry provided in this lease
or as a matter of law;

     (16)   To insure the contents, equipment, and improvements of Tenant and
those claiming under Tenant, under policies covering at least fire and the
standard extended coverage risks, in amounts equal to the replacement cost
thereof, the terms of which policies shall provide that such insurance shall not
be canceled without at least twenty (20) days' prior written notice to Landlord.
Copies of such insurance certificates thereof, shall be delivered to Landlord at
least fifteen (15) days prior to the Commencement Date and each renewal policy
or certificate thereof, at least fifteen (15) days prior to the expiration of
the policy it renews; and

     (17)   To pay Landlord's expenses, including actual and reasonable
attorney's fees, incurred in enforcing any obligation of Tenant in this lease.

                                       15
<PAGE>   19

                                   ARTICLE VII
                                     DEFAULT

 7.   (A)  EVENTS OF DEFAULT

      (1)  If Tenant shall default in the payment of Fixed Rent, additional rent
or other payments required of Tenant, and if Tenant shall fail to cure said
default within seven (7) days after receipt of notice of said default from
Landlord, or (2) if Tenant shall default in the performance or observance of any
other agreement or condition on its part to be performed or observed and if
Tenant shall fail to cure said default within thirty (30) days after receipt of
notice of said default from Landlord (but if longer than thirty (30) days shall
be reasonably required to cure said default, then if Tenant shall fail to
commence the curing of such default within fifteen days after receipt of said
notice and diligently prosecute the curing thereof to completion), or (3)
subject to the provisions of Section (Q) of Article 10 below, if any person
shall levy upon, or take this leasehold interest or any part thereof upon
execution, attachment or other process of law, or (4) if Tenant or Guarantor
shall make an assignment of its property for the benefit of creditors, or (5) if
Tenant or Guarantor shall be declared bankrupt or insolvent according to law, or
(6) if any bankruptcy proceedings shall be commenced by or against Tenant or
Guarantor, or (7) if a receiver, trustee or assignee shall be appointed for the
whole or any part of Tenant's or Guarantor's property, then in any of said
cases, Landlord lawfully may immediately, or at any time thereafter, and without
any further notice or demand, enter into and upon the demised premises or any
part thereof in the name of the whole, and hold the demised premises as if this
lease had not been made, and expel Tenant and those claiming under it and
remove its or their property without being taken or deemed to be guilty of any
manner of trespass (or Landlord may send written notice to Tenant of the
termination of this lease), and upon entry as aforesaid (or in the event that
Landlord shall send Tenant notice of termination as above provided, on the fifth
day next following the date of sending of the notice), the term of this
lease shall terminate. Notwithstanding the provisions of clauses(1) of the
immediately preceding sentence, if Landlord shall have rightfully given Tenant
notice of default pursuant to said clause twice during any twelve-month period,
and if Tenant shall thereafter default in time payment of Fixed Rent, additional
rent or other payments required of Tenant, then Landlord may exercise the right
of termination provided for it in said immediately preceding sentence without
first giving Tenant notice of such default and the opportunity to cure the same
within the time provided in said clause (1). Tenant hereby expressly waives any
and all rights of redemption granted by or under any present or future laws in
the event of Tenant being evicted or dispossessed for any cause, or in the event
Landlord terminates this lease as provided in this Article.

      (B)  OBLIGATIONS THEREAFTER

      In case of any such termination, Tenant will indemnify Landlord each month
against all loss of Fixed Rent and additional rent and against all obligations
which Landlord may incur by reason of any such termination between the time of
termination and the expiration of the Term; or at the election of Landlord,
exercised at the time of termination or at any time thereafter, Tenant will
indemnify Landlord each month until the exercise of the election against all
loss of Fixed Rent and additional rent and against all obligations which
Landlord may incur by reason of such termination during the period between the
time of the termination and the exercise of the election, and upon the exercise
of the election

                                       16
<PAGE>   20

Tenant will pay to Landlord as damages such amount as at the time of the
exercise of the election represents the amount by which the rental value of the
demised premises for the period from the exercise of the election until the
expiration of the Term shall be less than the amount of rent and other payments
provided herein to be paid by Tenant to Landlord during said period (less a ten
percent (10%) discount rate). It is understood and agreed that at the time of
the termination or at any time thereafter Landlord may rent the demised
premises, and for a term which may expire before or after the expiration of the
Term, without releasing Tenant from any liability whatsoever, that Tenant shall
be liable for any expenses incurred by Landlord in connection with obtaining
possession of the demised premises, with removing from the demised premises
property of Tenant and persons claiming under it (including warehouse charges),
with putting the demised premises into good condition for reletting, and with
any reletting, including, but without limitation, actual and reasonable
attorneys' fees and brokers fees, and that any monies collected from any
reletting shall be applied first to the foregoing expenses and then to the
payment of Fixed Rent, additional rent and all other payments due from Tenant to
Landlord.

                                  ARTICLE VIII
                               CASUALTY AND TAKING

8.    (A) CASUALTY AND TAKING

      In case during the Term all or any substantial part of the demised
premises, the Building, or Lot or any one or more of them, are damaged by fire
or any other casualty or by action of public or other authority or are taken by
eminent domain, this lease shall terminate at Landlord's election, which may be
made notwithstanding Landlord's entire interest may have been divested, by
notice given to Tenant within thirty days after the occurrence of the event
giving rise to the election to terminate. Said notice shall, in the case of
damage as aforesaid, specify the effective date of termination which shall be
not less than thirty nor more than sixty days after the date of notice of such
termination. In the case of any such taking by eminent domain, the effective
date of the termination shall be the day on which the taking authority shall
take possession of the taken property. Fixed Rent and additional rent shall be
apportioned and adjusted as of the effective date of any such termination. If in
any such case the demised premises are rendered unfit for use and occupation and
this lease is not so terminated, Landlord shall use due diligence to put the
demised premises, or, in the case of a taking, what may remain thereof
(excluding any items which Tenant may be required or permitted to remove from
the demised premises at the expiration of the Term) into proper condition for
use and occupation, but Landlord shall not be required to spend more than the
net proceeds of insurance or award of damages it receives therefor, and a just
proportion of the Fixed Rent and additional rent according to the nature and
extent of the injury to the demised premises shall be abated until the demised
premises or such remainder shall have been put by Landlord in such condition;
and in case of a taking which permanently reduces the area of the demised
premises, a just proportion of the Fixed Rent shall be abated for the remainder
of the Term. Landlord agrees that if there shall be damage or destruction by
fire or casualty or by action of public or other authority or taking by eminent
domain, and if this lease shall not be terminated as provided for herein, and if
the demised premises shall not be repaired or restored within twelve (12) months
from the receipt by Landlord of the insurance proceeds or awards therefore,
Tenant shall have the right to terminate this lease by written notice to
Landlord given within sixty (60) days following the expiration of said twelve
(12) month period; provided, however,

                                       17
<PAGE>   21
that said restoration shall not have been completed by Landlord prior to
Landlord's receipt of said notice.

      (B) RESERVATION OF AWARD

      Landlord reserves to itself any and all rights to receive awards made for
damage to the demised premises, Building or Lot and the leasehold hereby
created, or any one or more of them, accruing by reason of any exercise of the
right of eminent domain or by reason of anything done in pursuance of public or
other authority. Tenant hereby releases and assigns to Landlord all of Tenant's
rights to such awards, and covenants to deliver such further assignments and
assurances thereof as Landlord may from time to time request. It is agreed and
understood, however, that Landlord does not reserve to itself, and Tenant does
not assign to Landlord, any damages payable for (i) movable equipment installed
by Tenant or anybody claiming under Tenant at its own expense or (ii)
relocation expenses, but in each case only if and to the extent that such
damages are recoverable by Tenant from such authority in a separate action and
without reducing Landlord's award of damages.

      (C) FIRE AND OTHER CASUALTY

      Landlord shall keep the Building insured at least against such casualties
and in such amounts as shall be required by the holder of a mortgage upon
premises of which the Building are a part, but in any event such insurance
shall cover loss due to fire and the usual extended coverage casualties and
shall be in an amount not less than eighty percent (80%) of the full
replacement value thereof exclusive of the foundation. Such insurance may be
written with a so-called eighty percent (80%) or ninety percent (90%)
co-insurance clause. Insurance against any or all of such risks may be
maintained under a blanket policy covering the demised premises and other real
estate of Landlord and/or its affiliated business organizations. It is
expressly understood and agreed that nothing in this lease contained shall be
deemed to create in Tenant any interest in said insurance policies or the
proceeds thereof.

                                   ARTICLE IX
                                   MORTGAGEE

9.    (A) SUBORDINATION TO MORTGAGES

      It is agreed that the rights and interest of Tenant under this lease
shall be: (i) subject and subordinate to the lien of any present or future
first mortgage and to any and all advances to be made thereunder, and to the
interest thereon, upon the demised premises or any property of which the
demised premises are a part, if the holder of such mortgage shall elect, by
notice to Tenant, to subject and subordinate the rights and interest of Tenant
under this lease to the lien of its mortgage; or (ii) prior to the lien of any
present or future first mortgage, if the holder of such mortgage shall elect,
by notice to Tenant, to give the rights and interest of Tenant under this lease
priority to the lien of its mortgage. It is understood and agreed that the
holder of such mortgage may also elect, by notice to Tenant, to make some
provisions hereof subject and subordinate to the lien of its mortgage while
granting other provisions hereof priority to the lien of its mortgage. In the
event of any of such elections, and upon notification by the holder of such
mortgage to that effect, the rights and interest of Tenant under this lease
shall be deemed to be subordinate to, or to have priority over, as the case may
be, the lien of said mortgage, irrespective of the time of execution or time of

                                       18

<PAGE>   22

recording of any such mortgage. Tenant agrees that it will, within fifteen (15)
business days of request by Landlord, execute, acknowledge and deliver any and
all instruments deemed by Landlord necessary or desirable to evidence or to
give notice of such subordination or priority. Tenant also agrees that if it
shall fail at any time to execute, acknowledge and deliver any such instrument
requested by Landlord, Landlord may, deem such information accurate. The word
"mortgage" as used herein includes mortgages, deeds of trust or other similar
instruments and modifications, consolidations, extensions, renewals,
replacements and substitutes thereof. Whether the lien of any mortgage upon the
demised premises or any property of which the demised premises are a part shall
be superior or subordinate to this lease and the lien hereof, Tenant agrees
that it will, upon request, attorn to the holder of such mortgage or anyone
claiming under such holder and their respective successors and assigns in the
event of foreclosure of or similar action taken under such mortgage. Tenant
further agrees that it shall not subordinate its interest in this lease to the
lien of any junior mortgage, security agreement or lease affecting the demised
premises, unless the holder of the first mortgage upon the demised premises or
property which includes the demised premises shall consent thereto.
Notwithstanding anything to the contrary contained in this Article 9, if Tenant
shall be required to subordinate this lease and the lien hereof to the lien of
any mortgage, Landlord shall use its best efforts to cause the present holder
of such mortgage to enter into an agreement with Tenant, recordable in form, to
the effect that in the event of foreclosure of, or similar action taken under,
such mortgage, Tenants possession of the demised premises shall not be
terminated or disturbed by such mortgage holder or anyone claiming under such
mortgage holder so long as Tenant shall not be in default under this lease. As
a condition to Tenant's subordination to any future mortgagee, Landlord shall
secure for Tenant such a nondisturbance agreement from each future mortgagee
hereafter encumbering the Building and the Lot recognizing Tenant's rights
under this lease.

      (B) LIMITATION ON MORTGAGEE'S LIABILITY

      Upon entry and taking possession of the mortgaged premises for any
purpose, the holder of a mortgage shall have all rights of Landlord, and during
the period of such possession Landlord, not such mortgage holder, shall have
the duty to perform all of Landlord's obligations hereunder. No such holder
shall be liable, either as a mortgagee or as holder of a collateral assignment
of this lease, to perform, or be liable in damages for failure to perform, any
of the obligations of Landlord unless and until such holder shall succeed to
Landlord's interest herein through foreclosure of its mortgage or the taking of
a deed in lieu of foreclosure, and thereafter such mortgage holder shall not be
liable for the performance of any of Landlord's obligations hereunder, except
for the performance of those obligations which arise during the period of time
that such mortgage holder holds Landlord's right, title and interest in this
lease, such liability to be limited to the same extent as Landlord's liability
is limited pursuant to Section 10(E) hereof.

      (C) NO RELEASE OR TERMINATION

      No act or failure to act on the part of Landlord which would entitle
Tenant under the terms of this lease, or by law, to be relieved of any of
Tenant's obligations hereunder or to terminate this lease, shall result in a
release or termination of such obligations or a termination of this lease
unless (i) Tenant shall have first given written notice of Landlord's act or
failure to act to Landlord's mortgagees of record, if any, specifying the act
or failure to act on

                                       19

<PAGE>   23

the part of Landlord which could or would be the basis of Tenant's rights and
(ii) such mortgagees, after receipt of such notice, have failed or refused to
correct or cure the condition complained of within a reasonable time
thereafter, but nothing contained in this Section (C) shall be deemed to impose
any obligation on any such mortgagee to correct or cure any such condition.
"Reasonable time" as used above means and includes a reasonable time to obtain
possession of the mortgaged premises, if the mortgagee elects to do so, and
thirty (30) days thereafter (but if it shall reasonably require more than
thirty (30) days then such longer period, provided mortgagee promptly thereafter
commences to cure and diligently prosecutes the curing of same to completion
with due diligence) to correct or cure the condition. Finally, Tenant agrees
that so long as any present or future mortgage shall remain in effect Tenant
shall not alter, modify, amend, change, surrender or cancel this lease nor pay
the rent due hereunder in advance for more than thirty (30) days, except as may
be required herein, without the prior written consent of the holder thereof,
and subject to the provisions of Section (A) of this Article 9, Tenant will not
seek to be made an adverse or defendant party in any action or proceeding
brought to enforce or foreclose such mortgage.

                                   ARTICLE X
                               GENERAL PROVISIONS

10.   (A) CAPTIONS

      The captions of the Articles are for convenience and are not to be
considered in construing this lease.

      (B) SHORT FORM LEASE

      Upon request of either party both parties shall execute and deliver a
short form of this lease in form appropriate for recording, and if this lease
is terminated before the Term expires, an instrument in such form acknowledging
the date of termination. No such short form lease shall contain any indication
of the amount of the rentals payable hereunder by Tenant.

      (C) RELOCATION

      Intentionally Omitted.

      (D) NOTICES

      All notices and other communications authorized or required hereunder
shall be in writing and shall be given by mailing the same by certified or
registered mail, return receipt requested, postage prepaid, by mailing the same
by a nationally recognized overnight delivery service or by having the same
delivered by a commercial delivery service such as Federal Express, UPS,
Purolator Courier and the like. If given to Tenant the same shall be directed
to Tenant at Tenant's Address or to such other person or at such other address
as Tenant may hereafter designate by notice to Landlord; and if given to
Landlord the same shall be directed to Landlord at Landlord's Address, or to
such other person or at such other address as Landlord may hereafter designate
by notice to Tenant. In the event the notice directed as above provided shall
not be received upon attempted delivery thereof to the proper address and shall
be returned by the Postal Service or delivery service to the sender because of
a refusal of receipt, the absence of a person to receive, or otherwise, the
time of the giving of such notice shall be the first business day on which
delivery was so attempted.

                                       20

<PAGE>   24

      After receiving notice from Landlord or from any person, firm or
other entity that such person, firm or other entity holds a mortgage which
includes the demised premises as part of the mortgaged premises, no notice from
Tenant to Landlord shall be effective unless and until a copy of the same is
given by certified or registered mail to such holder, and the curing of any of
Landlord's defaults by such holder shall be treated as performance by Landlord,
it being understood and agreed that such holder shall be afforded a reasonable
period of time after the receipt of such notice in which to effect such cure.

      (E) SUCCESSORS AND ASSIGNS

      The obligations of this lease shall run with the land, and this lease
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns, except that
the Landlord named herein and each successive owner of Landlord's interest in
this lease shall be liable only for the obligations of Landlord accruing during
the period of its ownership. Whenever Landlord's interest in this lease is
owned by a trustee or trustees, the obligations of Landlord shall be binding
upon Landlord's trust estate, but not upon any trustee, beneficiary or
shareholder of the trust individually. Without limiting the generality of the
foregoing, and whether or not Landlord's interest in this lease is owned by a
trustee or trustees, Tenant specifically agrees to look solely to Landlord's
interest in the Building and Lot for recovery of any judgment from Landlord, it
being specifically agreed that neither Landlord, any trustee, beneficiary or
shareholder of any trust estate for which Landlord acts nor any person or
entity claiming by, through or under Landlord shall ever otherwise be
personally liable for any such judgment.

      (F) NO SURRENDER

      The delivery of keys to any employee of Landlord or to Landlord's agent
or any employee thereof shall not operate as a termination of this lease or a
surrender of the demised premises.

      (G) WAIVERS AND REMEDIES

      The failure of Landlord or of Tenant to seek redress for violation of, or
to insist upon the strict performance of any covenant or condition of this
lease, or, with respect to such failure of Landlord, any of the rules and
regulations referred to in Section 6(4), whether heretofore or hereafter
adopted by Landlord, shall not be deemed a waiver of such violation nor prevent
a subsequent act, which would have originally constituted a violation, from
having all the force and effect of an original violation, nor shall the failure
of Landlord to enforce any of said rules and regulations against any other
tenant in the Building be deemed a waiver of any such rules or regulations as
far as Tenant is concerned. The receipt by Landlord of Fixed Rent or additional
rent with knowledge of the breach of any covenant of this lease shall not be
deemed a waiver of such breach by Landlord unless such waiver be in writing
signed by Landlord. No consent or waiver express or implied, by Landlord or
Tenant to or of any breach of any agreement or duty shall be construed as a
waiver or consent to or of any other breach of the same or any other agreement
or duty. No acceptance by Landlord of a lesser sum than the Fixed Rent and
additional rent then due shall be deemed to be other than on account of the
earliest installment of such rent due, nor shall any endorsement or statement
on any check or any letter accompanying any check or payment as rent be deemed
as accord and satisfaction, and Landlord may accept

                                       21

<PAGE>   25
such check or payment without prejudice to Landlord's right to recover the
balance of such installment or pursue any other remedy available to it. The
specific remedies to which Landlord may resort under the terms of this lease
are cumulative and are not intended to be exclusive of any other remedies or
means of redress to which it may be lawfully entitled in case of any breach or
threatened breach by Tenant of any provisions of this lease. In addition to the
other remedies provided in this lease, Landlord shall be entitled to the
restraint by injunction of the violation or attempted or threatened violation
of any of the covenants, conditions or provisions of this lease or to a decree
compelling specific performance of any such covenants, conditions or
provisions. If any term of this lease, or the application thereof to any person
or circumstances shall be held, to any extent, to be invalid or unenforceable,
the remainder of this lease, or the application of such term to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall not be affected thereby, and each term of this lease shall
be valid and enforceable to the fullest extent permitted by law. If any
interest to be paid by Tenant hereunder shall exceed the highest lawful rate
which Landlord may recover from Tenant, such interest shall be reduced to such
highest lawful rate of interest.

      (H) SELF-HELP

      If Tenant shall at any time default in the performance of any obligation
under this lease, Landlord shall have the right, but shall not be obligated, to
enter upon the demised premises and to perform such obligation, notwithstanding
the fact that no specific provision for such performance by Landlord is made in
this lease with respect to such default. In performing such obligation,
Landlord may make any payment of money or perform any other act. All sums so
paid by Landlord (together with interest, from the time paid by Landlord until
the time Tenant repays the same to Landlord, at the rate of interest per annum
as set forth in Section (A) of Article V above, shall be deemed to be
additional rent and shall be payable to Landlord immediately on demand.
Landlord may exercise the foregoing right without waiving any other of its
rights or releasing Tenant from any of its obligations under this lease. In the
event Landlord fails to cure (or fails to promptly commence and diligently
pursue the cure of) any breach or failure by Landlord to comply with any of
Landlord's obligations under this lease with regard to the demised premises
within a reasonable period (not to exceed thirty (30) days except in the case
of an emergency in which case such shorter time as is warranted by the
particular circumstances) after Tenant furnishes Landlord with written notice
of such failure, then Tenant shall have right (but not the obligation) to
perform such obligation on Landlord's account and Landlord shall reimburse
Tenant within thirty (30) days of demand for the amount expended by Tenant in
performing such obligation (including, but not limited to, reasonable
attorneys' fees and cost of collection). If Landlord fails to make any payment
of any sum payable to Tenant hereunder within said thirty (30) days, then such
payment shall bear interest at the Lease Interest Rate from the date payable
until the date paid.

      (I) ESTOPPEL CERTIFICATE

      Tenant agrees from time to time after the Commencement Date, upon not
less than fifteen (15) business days' prior written request by Landlord, to
execute, acknowledge and deliver to Landlord a statement in writing certifying
that this lease is unmodified and in full force and effect; that Landlord has
completed Landlord's Required Work; that Tenant has no defenses, offsets or
counterclaims against its obligations to pay the Fixed Rent and additional rent
and to perform its

                                       22

<PAGE>   26

other covenants under this lease; that there are no uncured defaults of
Landlord or Tenant under this lease (or, if there have been any modifications,
that this lease is in full force and effect as modified and stating the
modifications, and, if there are any defenses, offsets, counterclaims, or
defaults, setting them forth in reasonable detail); and the dates to which the
Fixed Rent, additional rent and other charges have been paid. Any such
statement delivered pursuant to this Section (I) may be relied upon by any
prospective purchaser or mortgagee of premises which include the demised
premises or any prospective assignee of any mortgage.

      (J) WAIVER OF SUBROGATION

      (1) Tenant hereby releases Landlord to the extent of Tenant's insurance
coverage, from any and all liability for any loss or damage caused by fire or
any of the extended coverage casualties or any other casualty insured against,
even if such fire or other casualty shall be brought about by the fault or
negligence of Landlord or its agents, provided, however this release shall be
in force and effect only with respect to loss or damage occurring during such
time as Tenant's policies covering such loss or damage shall contain a clause
to the effect that this release shall not affect said policies or the right of
Tenant to recover thereunder. Tenant agrees that its fire and other casualty
insurance policies will include such a clause so long as the same is includable
without extra cost, or if extra cost is chargeable therefor, so long as
Landlord pays such extra cost. If extra cost is chargeable therefor, Tenant
will advise Landlord thereof and of the amount thereof. Landlord at its
election, may pay the same, but shall not be obligated to do so.

      (2) Landlord hereby releases Tenant, to the extent of the Landlord's
insurance coverage, from any and all liability for any loss or damage caused by
fire or any of the extended coverage casualties or any other casualty insured
against, even if such fire or other casualty shall be brought about by the
fault or negligence of Tenant or its agents, provided, however, this release
shall be in force and effect only with respect to loss or damage occurring
during such time as Landlord's policies covering such loss or damage shall
contain a clause to the effect that this release shall not affect said policies
or the right of Landlord to recover thereunder. Landlord agrees that its fire
and other casualty insurance policies will include such a clause so long as the
same is includable without extra cost, or if extra cost is chargeable therefor,
so long as Tenant pays such extra cost. If extra cost is chargeable therefor,
Landlord will advise Tenant thereof and of the amount thereof. Tenant at its
election may pay the same, but shall not be obligated to do so.

      (K)  BROKERS

      Tenant and Landlord hereby represents and warrant to the other that they
have dealt with no broker in connection with this lease other than Thompson,
Doyle, Hennessey & Everest and CB Richard Ellis Whittier Partners ("the Listed
Broker/s"), and there are no other brokerage commissions or other finders' fees
payable in connection herewith. Tenant hereby agrees to hold Landlord harmless
from, and indemnified against, all loss or damage (including without
limitation, the cost of defending the same) arising from any claim by any
broker other than"the Listed Broker/s, claiming to have dealt with Tenant.
Landlord shall pay the commission due the Listed Broker(s) by separate
agreement. Landlord hereby agrees to hold Tenant harmless from, and indemnified
against, all loss or damage (including without limitation, the cost of
defending the same) arising

                                       23

<PAGE>   27

from any claim by any broker other than"the Listed Broker/s, claiming to have
dealt with Landlord.

      (L) LANDLORD'S DEFAULTS

      Landlord shall not be deemed to have committed a breach of any obligation
to make repairs or alterations or perform any other act unless: (1) it shall
have made such repairs or alterations or performed such other act negligently;
or (2) it shall have received notice from Tenant designating the particular
repairs or alterations needed or the other act of which there has been failure
of performance and shall have failed to make such repairs or alterations or
performed such other act within thirty (30) days after the receipt of such
notice (but if it shall reasonably require longer than thirty (30) days then
such longer period, provided Landlord promptly commences such performance and
prosecutes the same to completion with due diligence); and in the latter event
Landlord's liability shall be limited to the cost of making such repairs or
alterations or performing such other act, together with interest at the Lease
Interest Rate, and subject, also, to the terms of Section (H) of this Article
10.

      (M) EFFECTIVENESS OF LEASE

      The submission of this lease for examination does not constitute a
reservation of, or option for, the demised premises, and this lease becomes
effective as a lease only upon execution and unconditional delivery thereof by
both Landlord and Tenant.

      (N) HAZARDOUS MATERIALS

      Tenant shall not (either with or without negligence) cause or permit the
escape, disposal or release of any biologically or chemically active or other
hazardous substances, or materials. Tenant shall not allow the storage or use
of such substances or materials in any manner not sanctioned by the applicable
permits, or by law or by the highest standards prevailing in the industry for
the storage and use of such substances or materials, nor allow to be brought
into the Lot any such materials or substances except to use in the ordinary
course of Tenant's business, and then only after written notice is given to
Landlord of the identity of such substances or materials. Tenant shall obtain
and maintain all proper permits required by applicable law or ordinance for the
storage and use of hazardous materials, and Tenant shall furnish evidence of
same upon request. Without limitation, hazardous substances and materials
shall include those described in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section
6901 et seq., any applicable state or local laws and the regulations adopted
under these acts. If any lender or governmental agency shall ever require
testing to ascertain whether or not there has been any release of hazardous
materials, then the reasonable costs thereof shall be reimbursed by Tenant to
Landlord upon demand as additional rent if such requirement applies to the
demised premises. In addition, Tenant shall execute affidavits, representations
and the like from time to time at Landlord's request concerning Tenant's best
knowledge and belief regarding the presence of hazardous substances or
materials on the demised premises. In all events, Tenant shall indemnify
Landlord in the manner elsewhere provided in this lease from any release of
hazardous materials on the demised premises occurring while Tenant is in
possession, or elsewhere if caused by Tenant or persons acting under Tenant.
The within covenants shall survive the expiration or earlier

                                       24

<PAGE>   28

termination of the term of this lease. Landlord represents and warrants that to
the best of Landlord's knowledge it is not in violation of any laws for the
presence, storage amid use of hazardous materials and Landlord has not received
notice of any alleged violation by Landlord of such laws. Landlord hereby
indemnifies Tenant and holds Tenant harmless from the cost of remediating any
hazardous materials on the Lot or in the Building or the Demised Premises and
not brought by Tenant onto or into such area.

      (O) DELAYS

      In any case where either party hereto is required to do any act (other
than make a payment of money), delays caused by or resulting from Act of God,
war, civil commotion, fire or other casualty, labor difficulties, mortgages of
labor, materials or equipment, government regulations or other causes beyond
such party's reasonable control (other than such party's financial condition)
shall not be counted in determining the time during which such act shall be
completed, whether such time be designated by a fixed date, a fixed time or "a
reasonable time". In any case where work is to be paid for out of insurance
proceeds or condemnation awards, due allowance shall be made, both to the party
required to perform such work and to the party required to make such payment,
for delays in the collection of such proceeds and awards.

      (P) COMPLIANCE WITH LAWS

      Landlord represents that the zoning regulations applicable to the
Building and any covenants, conditions or restrictions appertaining to the
Building permit the use of the demised premises for the uses contemplated
hereunder. Landlord hereby covenants and agrees at its expense to maintain the
Building (other than the demised premises) and the common areas of the Building
in compliance with all applicable laws, including but not limited to, ADA (as
hereinafter defined). To the best of Landlord's knowledge and belief, the
Building (other than the demised premises) and common areas of the Building
will be in compliance with such applicable Laws, in effect as of the Lease
Commencement Date. Landlord hereby agrees that Tenant shall have no
responsibility for failure of the Building (other than the demised premises) or
the Building or the common areas of the Building in which Tenant has
appurtenant rights to comply with applicable laws, statutes, ordinances and
regulations which are in effect and applicable to the Building or the common
areas of the Building in which Tenant has appurtenant rights as of the Lease
Commencement Date or pursuant to any other rights under this lease.

      As used in this Section, the Americans with Disabilities Act shall mean
the Americans with Disabilities Act of 1991,42 U.S.C. Section 12.101 et seq and
all regulations applicable thereto promulgated as of the date hereof
(collectively, "ADA"). Tenant shall have the responsibility to comply with the
requirements of the ADA in the demised premises. To the best of Landlord's
knowledge and belief, the common areas of the Building are in compliance with
the requirements of ADA. Landlord represents and warrants that the Landlord work
(base Building) shall be in compliance with or shall be made to comply with the
requirements of ADA.

      (Q) WAIVER OF LANDLORD'S LIEN

      Landlord hereby waives any lien rights which it may otherwise have
concerning all of Tenant's trade fixtures and equipment, which shall include

                                       25

<PAGE>   29

furniture, movable fixtures, equipment, any and all equipment and/or supplies
(collectively, "Personalty") utilized by Tenant in its business operations; and
Tenant shall have the right to remove the same at any time without Landlord's
consent.

      Landlord acknowledges that pursuant to a master purchase agreement by and
between the parent corporation of Tenant ("NCGI") and Nortel Networks Inc.
and/or its affiliates ("Nortel Networks"), said NCGI purchased certain equipment
and services comprising some of Tenant's trade fixtures and equipment ("Nortel
Equipment"). Landlord agrees that Nortel Networks and any other lenders of
Tenant or NCGI pursuant to the relevant credit agreement between such parties,
may enter upon the demised premises to remove said Personalty and/or Nortel
Equipment provided, however, (i) said entry shall be conducted in a manner
calculated not to unreasonably disturb Landlord and any other tenants of the
Property; (ii) any such entry shall be made subject to the terms of this Section
(Q); and (iii) any damage caused by such removal shall be promptly restored by
any such lender.

      The Landlord hereby agrees to provide Nortel Networks (or its successors
or assigns), at its address specified below (or at the addresses of its
successors or assigns of which the Landlord is subsequently notified), a copy of
any notice of default delivered to the Tenant under this lease substantially
concurrently with the delivery of such notice to the Tenant and agrees that,
prior to any termination of this lease as a result of a default of the Tenant
hereunder, the Landlord will provide written notice of such default to Nortel
Networks (or its successors or assigns), at its address specified below (or at
the address of its successors or assigns of which the Landlord is subsequently
notified), and afford Nortel Networks (or its successors or assigns) and the
lenders the same period of time allowed Tenant within which to cure such
default. For purposes of this Section (Q), the address of Nortel Networks is as
follows: Nortel Networks Inc., GMS 991 15 A40, 2221 Lakeside Boulevard,
Richardson, Texas 75082-4399, Attention: Charles M. Helm, Esquire; Telephone:
972/685-7839; Facsimile 972/684-3679.

      (R) TELECOMMUNICATIONS

      Tenant and Tenant's telecommunications companies, including but not
limited to local exchange telecommunications companies and alternative access
vendor services companies ("Telecommunications Companies"), shall have a
reasonable and necessary right of access to and within the lands or Buildings
comprising the Park (including any necessary easements or rights of way), at no
additional fee, costs or expense to Tenant, (except that Tenant shall reimburse
Landlord for the cost incurred by Landlord in reviewing any such easement or
right of way) for the installation and operation of telecommunications lines and
systems including but not limited to voice, video, data, and any other
telecommunications services provided over wire, fiber optic, microwave, wireless
and any other transmission systems, for a part or all of Tenant's
telecommunications within the Building and from the Building to any other
location (hereinafter collectively referred to as "Telecommunications Lines"),
with Landlord's prior written consent, which shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding the foregoing, Tenant may perform any
installation, repair and/or maintenance to its Telecommunications Lines without
Landlord's consent where the equipment being installed, repaired or maintained
is not located in the area in which the Telecommunications Lines or any part
thereof of any other tenant or of Landlord are located. Tenant shall pay the
cost

                                       26

<PAGE>   30

of recording of any such easement and/or right of way. Tenant shall use all
reasonable efforts to cause same to be discharged of record upon expiration of
the Term.

      If at any time, Tenant's Telecommunications Companies or appropriate
governmental authorities relocate the point of demarcation from the location of
Tenant's telecommunications equipment in Tenant's telephone equipment room or
other location, to some other mutually agreed location within the equipment
room, or in any other manner transfer any obligations or liabilities for
telecommunications to Landlord or Tenant, whether by operation of law or
otherwise, upon Landlord's election, Tenant shall, at Tenant's sole expense and
cost: (i) within ninety (90) days after notice is first given to Tenant of
Landlord's election, cause to be completed by an appropriate telecommunications
engineering entity approved in advance in writing by Landlord, all details of
the Telecommunications Lines serving Tenant in the Building which details shall
include all appropriate plans, schematics, and specifications; and (ii) if
Landlord so elects, after written notice to Tenant of same, immediately
undertake the operation, repair and maintenance of the Telecommunications Lines
serving Tenant in the Building; and (iii) upon the termination of this lease for
any reason, or upon expiration of this lease, immediately, after written notice
to Tenant of the same, effect the complete removal of all or any portion or
portions of the Telecommunications Lines serving Tenant in the Building and
repair any damage caused thereby.

      (S) GENERATOR

      Landlord, hereby covenants and agrees that Tenant, at its sole cost and
expense, shall be allowed to install, maintain and operate at the Building in a
location described in Exhibit B attached hereto and as depicted on the plan
attached to Exhibit B, and approved by Landlord a standby generator and
associated diesel fuel storage tank approved by Landlord to backup commercial
power, all of which equipment and fuel shall be stored, maintained and utilized
by Tenant in accordance with all applicable laws, ordinances, covenants,
conditions and restrictions affecting the Building, it being hereby expressly
agreed by the parties that Landlord shall not have any obligations or
liabilities to Tenant, or any other person or entity in connection therewith,
and that Tenant will indemnify, defend and hold Landlord harmless from any and
all claims, demands, losses, liabilities, costs and expenses (including
reasonable attorney's fees, court costs, witness fees and the like) arising out
of or in connection therewith. Tenant shall be responsible for obtaining all
necessary permits, and Tenant's installations shall conform to all applicable
laws, ordinances, covenants, conditions and restrictions affecting the Building.
Tenant shall be responsible for all costs and expenses relating to the
installation, maintenance, operation or removal of such equipment, including,
without limitation, the repair or restoration of any damage caused thereby.

                                   ARTICLE XI
                        SECURITY AND RESTORATION DEPOSIT

      11. Upon the full execution of this lease, Tenant shall deliver to
Landlord cash or an irrevocable letter of credit for the amount of the Security
and Restoration Deposit, from a banking institution reasonably satisfactory to
both Landlord and Tenant, said letter of credit shall expire no earlier than one
(1) year from the date of such letter of credit which shall be promptly
delivered to Landlord. Upon notice of default to Tenant and the expiration of
any applicable

                                       27

<PAGE>   31

                                   ARTICLE XII
                                  MODIFICATION

      12. In the event that any holder or prospective holder of any mortgage
which includes the demised premises as part of the mortgaged premises, shall
request any modification of any of the provisions of this lease, other than a
provision directly related to the rents payable hereunder, the duration of the
term hereof, or the size, use or location of the demised premises, Tenant agrees
that Tenant will enter into an amendment of this lease containing each such
modification so requested.

                                  ARTICLE XIII
                                     OPTION

13. (A) OPTION TERM

        Tenant shall have the right, at its election, to extend the original
Term of this lease for an additional period of ten (10) years commencing upon
the expiration of the original Term, provided that Landlord shall receive
written notice from Tenant of the exercise of its election at least twelve (12)
months prior to the expiration of the original Term and provided further that
Tenant shall not be in default at the time of Landlord's receipt of such notice
in the performance or observance of any of the terms and agreements in this
lease contained on the part of Tenant to he performed or observed. The
expression "the original Term" means the period of ten (10) years referred to in
Section (A) of Article I above. Prior to the exercise by Tenant of said election
to extend the original Term, the expression "the Term of this lease" or any
equivalent expression shall mean the original Term; after the exercise by Tenant
of the aforesaid election, the expression "the Term of this lease" or any
equivalent expression shall mean the original Term as extended. Except as
expressly otherwise provided in this lease, all the agreements and conditions in
this lease contained shall apply to the additional period to which the original
Term shall be extended as aforesaid. If Landlord shall receive notice of the
exercise of the election in the manner and within the time provided aforesaid,
the Term shall be extended upon the receipt of the notice without the
requirement of any action on the part of Landlord.

      (B) OPTION RENT

          During the additional period for which the original Term of this lease
may be extended as set forth in Section (A) of this Article 13 above, the Fixed
Rent payable hereunder shall be adjusted so as to equal the greater of (a) the
Fixed Rent payable immediately prior thereto, or (b) the "fair market rent", as
mutually determined by Landlord and Tenant through the process of negotiation.
Notwithstanding anything to the contrary contained herein, however, if for any
reason whatsoever Landlord and Tenant shall not agree in writing upon the "fair
market rent" for said additional period at least six (6) months prior to the
expiration of the original Term, then the fair market rent for premises of the
size and nature of the demised premises shall be determined by licensed real
estate appraisers having at least five (5) years' experience in the appraisal of
commercial real estate in the Greater Boston area, one such appraiser to be
designated by each of Landlord and Tenant. If either party shall fail to
designate its appraiser by giving notice of the name of such appraiser to the
other party within fifteen (15) days after receiving notice of the name of the
other party's appraiser, then the appraiser chosen by the other party shall
determine the fair

                                       29

<PAGE>   32

market rent and his determination shall be final and conclusive. If the
appraisers designated by Landlord and Tenant shall disagree as to the fair
market rent, but if the difference between their estimates of fair market rent
shall be five percent (5%) or less of the greater of the estimates, then the
average of their estimates shall be the fair market rent for purposes hereof. If
the appraisers designated by Landlord and Tenant shall disagree as to the amount
of fair market rent, and if their estimates of fair market rent shall vary by
more than five percent (5%) of the greater of said estimates, then they shall
jointly select a third appraiser meeting the qualifications set forth above, and
his estimate of fair market rent shall be the fair market rent for purposes
hereof if it is not greater than the greater of the other two estimates and not
less than the lesser of the other two estimates. If said third appraiser's
estimate is greater than the greater of the other two estimates, then the
greater of the other two estimates shall be the fair market rent for purposes
hereof; and if the estimate of the third appraiser shall be less than the lesser
of the other two estimates, then the lesser of the other two estimates shall be
the fair market rent for purposes hereof. Each of Landlord and Tenant shall pay
for the services of its appraiser, and if a third appraiser shall be chosen,
then each of Landlord and Tenant shall pay for one-half of the services of the
third appraiser.

      EXECUTED as a sealed instrument in two or more counterparts as of the day
and year first above written.

                                 LANDLORD:

                                 HOOD BUSINESS PARK LLC
                                 BY: CATAMOUNT RUTHERFORD LLC
                                     ITS MANAGER

                                  /s/ STEPHEN J. KANEB
                                 ----------------------------------
                                 Stephen J. Kaneb, Manager

                                 TENANT:

                                 NET 2000 COMMUNICATIONS REAL ESTATE,
                                 INC.

                                 By          [SIG]
                                   --------------------------------
                                           Vice-President

                                 ATTEST:

                                 By /s/ ANGELA M. BELKA
                                   --------------------------------

                                   Fairfax, VA              Notary

                                        (Corporate Seal)

                                       30

<PAGE>   33

                                   EXHIBIT A

                     PLAN SHOWING LOCATION OF THE BUILDING

                               HOOD BUSINESS PARK

                           CHARLESTOWN, MASSACHUSETTS

                                   [GRAPHIC]

                                         [GRAPHIC]
                                         KEY PLAN

                                         [GRAPHIC]
                                         NORTH

                                         SITE PLAN

                                         [HOOD LOGO]
                                         HOOD BUSINESS PARK
                                         CHARLESTOWN, MASSACHUSETTS

                                         SEPTEMBER 30, 1995

                                         [SMMA LOGO]
<PAGE>   34
                                  EXHIBIT A-1

                             CONDITION OF BUILDING

BASE BUILDING
Extensive interior and exterior renovations have been completed accessing a new
working environment and virtual image. The improvements provided as part of
the base building are summarized below.

LOBBY CORE
A new central lobby core serving all three floors of the office includes:
      -  a first floor lobby with quality finishes and lobbies on the second
         and third floors to complement the first floor
      -  new restrooms at the core
      -  two new passenger elevators
      -  new scale tower with "monumental" stair from first to second floor
      -  an existing freight elevator with outside access so that deliveries
         are not made through the first floor lobby.

FACADE IMPROVEMENTS
Restoration of the Art Deco facade that includes:
      -  new window frames and tinted glazing on all office windows
      -  additional windows to provide more light and views
      -  a new "Grand" entry leading into a first class lobby

SITE IMPROVEMENTS
      -  improved lighting
      -  upgraded parking lot including visitor parking, islands, improved
         circulation and re-striping for parking and circulation.
      -  a comprehensive site signage and graphics program
      -  enhanced landscaping especially in the area of new "Grand" entry.
      -  pedestrian and vehicular access to Spice Street

BUILDING SYSTEMS
      -  new base building HVAC
      -  new base building electrical
      -  new restrooms at core
      -  new fire protection system
      -  new roofing
      -  existing stair towers to be cleaned, painted and revamped

                                       1
<PAGE>   35
                                   EXHIBIT B

                            LANDLORD'S REQUIRED WORK

Landlord Shall:

-     Deliver the premises secure and in broom clean condition and ready for
      Tenant's work.

-     Cap/Remove (4) skylights and replace with waterproof section of roof all
      in compliance with applicable codes.

-     Comply with ADA and local building life safety codes throughout the lease
      term.

-     Provide main sprinkler loop to the demised premises. Tenant, at Tenant's
      expense, will provide a pre-action valve system.

-     Provide tie-ins to Building life and fire safety system(s).

-     Provide pad space (minimum 10' x 10') for Tenant's diesel emergency 500
      KW generator and day tank and access to the same from a designated
      platform. Generator and tank shall be located in the "surge hall" space on
      the roof adjacent to the Tenant's space subject to local codes. (see
      attached plan.) In the event that the city will not allow the fuel tank to
      be located on the roof, then Landlord will work with Tenant to locate the
      tank in another location.

-     Provide access way for an electrical conduit from generator to Tenant's
      service breaker as designated by Landlord.

-     Provide the right and access to install horizontal and vertical conduit
      for fiber optics, subject to Landlord's approval, which approval shall not
      be unreasonably withheld.

-     Provide/Certify a minimum of 150 lbs. Per square foot floor loading to
      the demised Premises.

-     Tenant, at Tenant's expense and subject to Landlord approval, shall be
      allowed to upgrade an area (approximately 1,000 RSF) to a floor loading
      capacity of 300 lbs. Per square foot.

-     Provide 1200 amp/480 volt service to Tenant. Tenant, at Tenant's expense
      and subject to Landlord Approval, shall be responsible for providing all
      work and equipment necessary to bring the service to the Premises, from
      the primary feeder serving the building.

-     Tenant, at Tenant's expense, shall provide any electrical and utility
      metering equipment.

-     Provide supplemental wall connections where necessary along eastern
      exterior wall (above windows).

-     Remove radiator grills along eastern exterior wall.

-     Landlord to complete, or cause to be completed, the common corridor that
      serves as primary access to Tenant. The corridor, which runs generally
      North/South will be constructed in conformance with base building
      standards.

-     Landlord will reimburse Tenant (based on base building standards) for the
      cost in constructing the wall along the northwest corner of Tenant's
      space that defines the mechanical room/corridor.

-     Repair all rough openings in ceiling to comply with current codes and to
      match adjacent ceiling.

-     Treat underside of skylight caps with a coating (paint or equivalent) to
      comply with current code requirements if necessary. Caps were constructed
      with fire treated wood.

-     Provide access for fuel lines to generator location on roof, in the event
      generator is located on roof.

-     Provide and install base building blinds in windows along east elevation.
<PAGE>   36

      All of Tenant's work shall be done at Tenant's sole risk and expense.
Landlord shall not be a party to nor incur any liability as a result of any
contract to perform any of Tenant's work. All of Tenant's work shall be
performed in accordance with the schedule to be adopted by Landlord and
Landlord's general contractor for the performance of all work to be done in the
Building. All of Tenant's work shall be done by Tenant's contractors, labor and
means so that, as far as may be possible, such work shall be done without
interruption on account of strikes, work stoppages or similar causes of delay.
Tenant shall obtain lien waivers from all of its contractors and subcontractors
commencing work in the demised premises so that no mechanics' or materialmen's
liens shall attach to the demised premises or the Building as a result of
Tenant's work.

      All of Tenant's work shall be done by contractors, subcontractors and
labor previously approved by Landlord, which approval shall not be unreasonably
withheld or delayed. Such contractors, subcontractors and labor shall be subject
to the administrative supervision of the Landlord's architect or engineer and
general contractor. Landlord shall give reasonable access and entry to the
demised premises to Tenant and its contractors and subcontractors at reasonable
times and shall allow reasonable use of facilities located in the Building to
enable Tenant to complete Tenant's work. Tenant may bid Tenant's Work to up to
three (3) contractors. Landlord shall assess a one percent (1%)
supervision/management fee for monitoring Tenant's design and construction work.
Said fee shall be calculated on the total cost of Tenant's Work including
Landlord's construction allowance (excluding cost of furniture, fixtures and
equipment). Tenant shall reimburse Landlord for any reasonable and actual
out-of-pocket expenses relating to the approval, review and monitoring of
Tenant's Work.

      On the termination of this lease, Landlord reserves the right to require
Tenant to restore the HVAC duct work to its pre-existing condition in the
event that the relocation of the HVAC duct work by Tenant has adversely affected
the HVAC systems ability to serve the space vacated by the Tenant in the
fashion it was originally designed to.

                                       3
<PAGE>   37
                                    EXHIBIT E

                              RULES AND REGULATIONS

      1. The sidewalks, paved and/or landscaped areas shall not be obstructed or
encumbered by Tenant or used for any purpose other than ingress and egress to
and from the demised premises. No merchandise, boxes or pallets may be stored by
Tenant outside of the demised premises and no cars, trucks or trailers may be
parked on the Lot overnight without the prior written consent of Landlord.

      2. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by Tenant on any part of the demised premises or
Building so as to be visible from outside the demised premises without the prior
written consent of Landlord. In the event of the violation of this paragraph,
Landlord may remove same without any liability, and may charge the expense
incurred in such removal to Tenant, as additional rent.

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

      4. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were designed and
constructed, and no sweepings, rubbish, rags, acids, chemicals, process water,
cooling water or like substances shall be deposited therein. Said plumbing
fixtures and the plumbing system of the Building shall he used only for the
discharge of so-called sanitary waste. All damage resulting from any misuse of
said fixtures and/or plumbing system by Tenant or anyone claiming under Tenant
shall be borne by Tenant.

      5. Tenant must, upon the termination of its tenancy, return to Landlord
all locks, cylinders and keys to the demised premises and any offices therein.

      6. Tenant shall, at Tenants expense, provide artificial light and electric
current for the employees of Landlord and/or Landlord's contractors while making
repairs or alterations in the demised premises.

      7. Tenant shall not make, or permit to be made, any unseemly or disturbing
odors or noises or disturb or interfere with occupants of the Building or those
having business with them, whether by use of any musical instrument, radio,
machine, or in any other way.

      8. Canvassing, soliciting, and peddling in the Building are prohibited and
Tenant shall cooperate to prevent the same.

      9. Tenant shall keep the demised premises free at all times of pests,
rodents and other vermin, and at the end of each business day Tenant shall place
for collection in the place or places provided therefor all trash and rubbish
then in the demised premises.

                                       1
<PAGE>   38
      10. Landlord reserves the right to rescind, alter, waive and/or establish
any rules and regulations, which, in its judgment, are necessary, desirable or
proper for its best interests and the best interests of the occupants of the
Building.

      11. All of the work done by Tenant shall be done by such contractors,
labor and means so that, as far as may be possible, all work on the Property,
whether by Landlord or Tenant, shall be done without interruption on account of
strikes, work stoppages or similar causes of delay.

      12. The buildings of Hood Business Park are smoke free buildings, and
Tenant shall cause its employees and invitees who smoke to restrict such smoking
to areas designated as "smoking areas" by Landlord from time to time.

                                       2
<PAGE>   39
                                    EXHIBIT F

                            LEGAL DESCRIPTION OF LOT

PARCEL II

Being shown as Lot B on a plan entitled "Plan of Land in Boston, Mass.", dated
June 7, 1982 by Dana F. Perkins and Assoc., Inc., Civil Engineers and Surveyors,
recorded with Suffolk County Registry of Deeds, Book 9971, Page 454.

Included within the bounds of said Lot B is registered land shown on Land Court
Plan No. 12912A, dated April 20, 1928, a copy of which is filed with the
Suffolk County Registry District of the Land Court with Certificate of Title No.
24288.

There is appurtenant to said Lot B all rights and easements as may exist of
record, insofar as the same are now in force and applicable to be exercised in
common with all others lawfully entitled thereto, including, without limitation,
those rights and easements set forth or referred to in the following deeds: Deed
from Boston and Maine Railroad to H.P. Hood & Sons, Inc., dated July 21, 1960,
recorded with Suffolk County Registry of Deeds, Book 7493, Page 233; Deed from
David Massif, et al, Trustees of Massif Realty Trust to H.P. Hood &
Sons, Inc. dated December 19, 1963, recorded with Suffolk County Registry of
Deeds, Book 7810, Page 107; Deed from Boston and Maine Corporation to H.P. Hood
& Sons, Inc., dated September 9, 1969, recorded with Suffolk County Registry of
Deeds, Book 8310, Page 483; Deed from Whiting Milk Company, Inc. to H.P. Hood,
Inc., dated May 31, 1973, recorded with Suffolk County Registry of Deeds, Book
8631, Page 705; Deed from Boston and Maine Railroad to H.P. Hood & Sons, Inc.,
dated June 16, 1943, recorded with Suffolk County Registry of Deeds, Book
6040, Page 584; Deed from Boston and Maine Railroad to H.P. Hood & Sons, Inc.,
dated December 20, 1949, recorded with Suffolk County Registry of Deeds, Book
6572, Page 369 and Deed from Boston and Maine Railroad to H.P. Hood & Sons,
Inc. dated May 26, 1953, recorded with Suffolk County Registry of Deeds, Book
6873, Page 2, bounded and described as follows:

S 23 degrees 50' 38" E by said Rutherford Avenue, 1143.99 feet to a point at
land of David Massif; thence turning and running

S 47 degrees 49' 22" W by said land of Massif and by land of W.W.F. Paper Corp.,
716.04 feet to a point at land of B & M; thence turning and running

N 26 degrees 16' 38" W by said land of B & M, 84.52 feet to a point; thence
turning and running

N 35 degrees 33' 36" W still by said land of B & M, 134.90 feet to a point;
thence turning and running

N 30 degrees 10' 18" W still by said land of B & M, 519.55 feet to a point;
thence turning and running

N 26 degrees 23' 18" W still by said land of B & M, 51.62 feet to a point;
thence turning and running

N 30 degreesS 32' 31" W by said land of B & M, 344.11 feet to a point; thence
turning and running

N 49 degrees 53' 49" E still by said land of B & M, 94.19 feet to a point;
thence turning and running

N 45 degrees 39' 59" E still by said land of B & M, 170.84 feet to a point;
thence turning and running

N 49 degrees 55' 29" E still by said land of B & M, 322.29 feet to a point;
thence turning and running

N 51 degrees 14' 19" E still by said land of B & M, 259.17 feet to a point of
beginning.

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