Document:

<PAGE>
                                                                   Exhibit 10.34

                              AGREEMENT OF LEASE

                                    Between

                             55 BROAD STREET L.P.,

                                     Owner

                                      and

                        BOTTOMLINE TECHNOLOGIES, INC.,

                                    Tenant

                                   Premises

                         Portion Eighth (18/th/) Floor
                                 --------------

                    New York Information Technology Center

                                55 Broad Street
                              New York, New York

                         Dated May _____________, 2000
<PAGE>

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

ARTICLE 1      Demised Premises, Term, Rents
ARTICLE 2      Use and Occupancy
ARTICLE 3      Alterations
ARTICLE 4      Ownership of Improvements
ARTICLE 5      Repairs
ARTICLE 6      Compliance With Laws
ARTICLE 7      Subordination, Attornment, Etc.
ARTICLE 8      Property Loss, Etc.
ARTICLE 9      Destruction-Fire or Other Casualty
ARTICLE 10     Eminent Domain
ARTICLE 11     Assignment and Subletting
ARTICLE 12     Existing Conditions/Present Occupant
ARTICLE 13     Access to Demised Premises
ARTICLE 14     Vault Space
ARTICLE 15     Certificate of Occupancy
ARTICLE 16     Default
ARTICLE 17     Remedies
ARTICLE 18     Damages
ARTICLE 19     Fees and Expenses; Indemnity
ARTICLE 20     Entire Agreement
ARTICLE 21     End of Term
ARTICLE 22     Quiet Enjoyment
ARTICLE 23     Escalation
ARTICLE 24     No Waiver
ARTICLE 25     Mutual Waiver of Trial by Jury
ARTICLE 26     Inability to Perform
ARTICLE 27     Notices
ARTICLE 28     Partnership Tenant
ARTICLE 29     Utilities and Services
ARTICLE 30     Table of Contents, Etc.
ARTICLE 31     Miscellaneous Definitions, Severability and Interpretation
               Provisions
ARTICLE 32     Adjacent Excavation
ARTICLE 33     Building Rules
ARTICLE 34     Broker
ARTICLE 35     Security
ARTICLE 36     Arbitration, Etc.
ARTICLE 37     Parties Bound
SCHEDULE A     Building Rules
EXHIBIT 1      Plan of Demised Premises

                                     -i-

<PAGE>

          LEASE dated as of the _______ day of May, 2000, between 55 BROAD
STREET L.P., a Delaware limited partnership having its principal office at 345
Park Avenue, Borough of Manhattan, City, County, and State of New York, as
landlord (referred to as "Owner"), and BOTTOMLINE TECHNOLOGIES, INC., a Delaware
                          -----
corporation authorized to transact business in the State of New York, having an
office at 155 Fleet Street, Portsmouth, NH 03801, as tenant (referred to as
"Tenant").
 ------

                             W I T N E S S E T H:

Owner and Tenant hereby covenant and agree as follows:

                                   ARTICLE 1

                         DEMISED PREMISES, TERM, RENTS
                         -----------------------------

          Section 1.01.  Demised Premises:  Owner hereby leases to Tenant and
                         ----------------
Tenant hereby hires from Owner that portion of the eighteenth (18/th/) floor
                                    ----------------------------------------
indicated by outlining and diagonal markings on the floor plan initialled by the
parties and annexed hereto as Exhibit "1" in the building known as 55 Broad
Street, in the Borough of Manhattan, City of New York (said building is referred
to as the "Building", and the Building together with the plot of land upon which
           --------
it stands is referred to as the "Real Property"), at the annual rental rate or
                                 -------------
rates set forth in Section 1.03, and upon and subject to all of the terms,
covenants and conditions contained in this Lease.  The premises leased to
Tenant, together with all appurtenances, fixtures, improvements, additions and
other property attached thereto or installed therein at the commencement of, or
at any time during, the term of this Lease, other than Tenant's Personal
Property (as defined in Article 4), are referred to, collectively, as the
"Demised Premises".
 ----------------

          Section 1.02.  Demised Term:  A.  The Demised Premises are leased for
                         ------------
a term (referred to as the "Demised Term") to commence on June 1, 2000 and to
                            ------------
end on July 31, 2003, unless the Demised Term shall sooner terminate pursuant to
any of the terms, covenants or conditions of this Lease or pursuant to law.

                         B.   The date upon which the Demised Term shall
commence pursuant to Subsection A of this Section is referred to as the
"Commencement Date" and the date fixed pursuant to said Subsection A as the date
 -----------------
upon which the Demised Term shall end is referred to as the "Expiration Date".
                                                             ---------------

                         C.   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 import then in force and further waives the right to recover any
damages which may result from Owner's failure to deliver possession of the
Demised Premises on the date set forth in Subsection A of this Section, whether
or not due to the holding over of the Present Occupant (defined in Article 12),
for the commencement of the Demised Term.

          Section 1.03.  Fixed Rent:  A.  This Lease is made at the annual
                         ----------
rental rate (referred to as "Fixed Rent") of ONE HUNDRED NINETEEN THOUSAND SIX
                             ----------
HUNDRED SIXTY-FOUR and 00/100 ($119,664.00) DOLLARS.

                         B.   The Fixed Rent, any increases in the Fixed Rent
and any additional rent payable pursuant to the provisions of this Lease shall
be payable by Tenant to Owner at its office (or at such other place as Owner may
designate in a notice to Tenant) 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 or by Tenant's good check drawn on a bank or trust company
whose principal office is located in New York City and which is a member of the
New York Clearinghouse Association, without prior demand therefor and without
any offset or deduction whatsoever except as otherwise specifically provided in
this Lease. The Fixed Rent shall be payable in equal monthly installments of
NINE THOUSAND NINE HUNDRED SEVENTY-TWO and 00/100 ($9,972.00) DOLLARS, in
advance, on the first (1st) day of each month during the Demised Term (except as
otherwise provided in Subsection C of this Section).
<PAGE>

                         C.   The sum of NINETEEN THOUSAND NINE HUNDRED FORTY-
FOUR and 00/100 ($19,944.00) DOLLARS, representing the installment of Fixed Rent
for the first (1st) and second (2/nd/) full calendar months of the Demised Term,
is due and payable on or before July 1, 2000. In the event that the Commencement
Date shall occur on a date other than the first (1st) day of any calendar month,
Tenant shall pay to Owner, on the first (1st) day of the month next succeeding
the month during which the Commencement Date shall occur, a sum equal to THREE
HUNDRED THIRTY-TWO and 40/100 ($332.40) DOLLARS, multiplied by the number of
calendar days in the period from the Commencement Date to the last day of the
month in which the Commencement Date shall occur, both inclusive. Such payment,
together with the sum paid by Tenant upon the execution of this Lease, shall
constitute payment of the Fixed Rent for the period from the Commencement Date
to and including the last day of the next succeeding calendar month.

          Section 1.04.  Tenant's General Covenant:  Tenant covenants (i) to pay
                         -------------------------
the Fixed Rent, any increases in the Fixed Rent, and any additional rent payable
pursuant to the provisions of this Lease, and (ii) to observe and perform, and
to permit no violation of, the terms, covenants and conditions of this Lease on
Tenant's part to be observed and performed.

          Section 1.05.  Rent Holiday:  Provided Tenant is not then in default
                         ------------
in the observance and performance of any of the terms, covenants and conditions
of this Lease on Tenant's part to be observed and performed, Tenant shall be
entitled to a conditional rent holiday and shall not be required to pay any
portion of the Fixed Rent with respect to the period from the Commencement Date
to and including the date thirty (30)__) days next following the Commencement
Date but during such period of thirty (30) days Tenant shall otherwise be
required to comply with all of the other terms, covenants and conditions of this
Lease on Tenant's part to be observed and performed, including, but not limited
to, the provisions of Article 23 and Article 29. If at any time during the
Demised Term Tenant shall be in default in the observance and performance of any
of the terms, covenants and conditions of this Lease on Tenant's part to be
observed and performed, then the total sum of the Fixed Rent and increases
therein so conditionally excused by operation of the foregoing provisions of
this Section shall become immediately due and payable by Tenant to Owner. If, as
of the Expiration Date, Tenant shall not then be in default in the observance
and performance of any of the terms, covenants and conditions of this Lease on
Tenant's part to be observed and performed, Owner shall waive payment of all
such Fixed Rent and increases therein so conditionally excused.

          Section 1.06.  Tenant's Existing License:
                         --------------------------

                    A. A portion of the twenty-eighth (28th) floor of the
Building is presently affected by a license dated May 24, 1998 between Owner, as
licensor, and Tenant, as licensee, for a term which expired on February 29,
2000, and Tenant, as licensee, continues to occupy the premises affected thereby
(said license, as may have been modified by any written agreements, including an
agreement dated March 24, 1998 is referred to as "Tenant's Existing License").
Tenant's Existing License and the term demised therein shall terminate and come
to an end on the date (referred to as the "Surrender Date") one (1) day prior to
the Commencement Date of this Lease, unless sooner terminated pursuant to any of
the terms, covenants or conditions of Tenant's Existing License or pursuant to
law. Tenant agrees to vacate and surrender to Owner the entire premises demised
in Tenant's Existing License free of all tenancies and occupancies on or prior
to the Surrender Date, as if the Surrender Date were the date originally fixed
for the expiration of the term demised in Tenant's Existing License, and Tenant
shall fully comply with the provisions of Tenant's Existing License on or prior
to the Surrender Date. If requested by Owner, Tenant agrees to execute and
deliver to Owner after the Surrender Date, a further agreement, in form
reasonably satisfactory to Owner, evidencing the surrender to Owner of the
premises demised in Tenant's Existing License; however, neither Owner's failure
to request such execution nor Tenant's failure to execute and deliver such
instrument shall vitiate the provisions of this Section 1.06.

                              B.   Provided Tenant, as licensee, is not then in
default under any of its obligations under Tenant's Existing License or this
Section, Tenant shall be released from its obligations under Tenant's Existing
License accruing after the Surrender Date, except as otherwise provided in this
Section. If Tenant shall vacate
<PAGE>

the premises demised in Tenant's Existing License or any part thereof at any
time prior to the Surrender Date, such premises or such part thereof shall be
deemed surrendered to Owner at such time. Nothing contained in this Section,
shall be deemed to affect Tenant's obligation to pay the license fee reserved in
Tenant's Existing License, and any increases therein, accruing with respect to
all periods to and including the Surrender Date, and regardless of when Tenant
shall vacate the premises demised in Tenant's Existing License, Tenant shall not
be entitled to any refund, abatement or apportionment of the License Fee or
annual rental rate reserved in Tenant's Existing License or any such increases
for such periods.

                              C.   All unpaid portions of the License Fee and
any increases therein and any additional fees due under Tenant's Existing
License with respect to all periods to and including the later of (i) the
Surrender Date or (ii) the date upon which Tenant shall vacate and surrender the
premises demised in Tenant's Existing License in accordance with the provisions
of this Section and Tenant's Existing License shall, at Owner's election, be
payable by Tenant to Owner as additional rent under this Lease.

                              D.   Tenant represents and warrants to Owner that
Tenant is not in default under any of the terms, covenants or conditions of
Tenant's Existing License and that Tenant has not at any time heretofore
committed or suffered, and will not at any time hereafter commit or suffer, any
act, deed, matter or thing whatsoever whereby the premises demised in Tenant's
Existing License or any part thereof are or shall be at any time hereafter in
any way impeached, charged, affected or encumbered. Tenant's obligations under
the applicable provisions of Tenant's Existing License shall survive the
expiration of the term thereof.

                              E.   Except to the extent expressly modified by
the foregoing provisions of this Section, Tenant's Existing License is hereby
ratified and confirmed in respects.

                                   ARTICLE 2

                               USE AND OCCUPANCY
                               -----------------

          Section 2.01.  General Covenant of Use:  Tenant shall use and occupy
                         -----------------------
the Demised Premises for the following purpose:  general offices for technology,
research and development.

          Section 2.02.  No Adverse Use:  Tenant shall not use or occupy, or
                         --------------
permit the use or occupancy of, the Demised Premises or any part thereof, for
any purpose other than the purpose specifically set forth in Section 2.01, or in
any manner which, in Owner's reasonable judgment, (a) shall adversely affect or
interfere with (i) any services required to be furnished by Owner to Tenant or
to any other tenant or occupant of the Building, or (ii) the proper and
economical rendition of any such service, or (iii) the use or enjoyment of any
part of the Building by any other tenant or occupant, or (b) shall tend to
impair the character or dignity of the Building.

                                   ARTICLE 3

                                  ALTERATIONS
                                  -----------

                                       3
<PAGE>

          Section 3.01.  General Alteration Covenants:  Tenant shall not make or
                         ----------------------------
perform, or permit the making or performance of, any alterations, installations,
improvements, additions or other physical changes in or about the Demised
Premises (referred to collectively, as "Alterations" and individually as an
                                        -----------
"Alteration") without Owner's prior consent in each instance.  Owner agrees not
 ----------
unreasonably to withhold its consent to any non-structural Alterations proposed
to be made by Tenant to adapt the Demised Premises for Tenant's business
purposes.  Owner agrees that Tenant may, without Owner's prior written consent,
make any merely decorative changes and other non-structural Alterations in the
Demised Premises, the estimated cost of which constituting a single project
shall not exceed FIFTY THOUSAND and 00/100 ($50,000.00) DOLLARS and which shall
not affect the electrical, plumbing and heating, ventilation and air
conditioning systems in the Builiding or any portion of the Building outside the
Demised Premises.  Notwithstanding the foregoing provisions of this Section or
Owner's consent to any Alterations, all Alterations and decorations shall be
made and performed in conformity with and subject to the following provisions:

                         A.   All Alterations and decorations, shall be made and
performed at Tenant's sole cost and expense and at such time and in such manner
as Owner may, from time to time, designate;

                         B.   No Alteration shall adversely affect the
structural integrity of the Building;

                         C.   Alterations and decorations shall be made only by
contractors or mechanics approved by Owner, such approval not unreasonably to be
withheld (notwithstanding the foregoing, all Alterations requiring mechanics in
heating, ventilation, air conditioning, electrical, plumbing, sprinkler and
other mechanical trades with respect to which Owner has adopted or may hereafter
adopt a list or lists of approved contractors shall be made only by contractors
selected by Tenant from such list or lists provided there are at least three (3)
contractors on each such list and the prices charged by such contractors are
competitive for similar work in the Borough of Manhattan in comparable first
class office buildings);

                         D.   No Alteration or decoration shall affect any part
of the Building other than the Demised Premises or adversely affect any service
required to be furnished by Owner to Tenant or to any other tenant or occupant
of the Building (including, without limitation, the Building-wide standard
systems required to provide elevator, heat, ventilation, air-conditioning and
electrical and plumbing services in the Building);

                         E.   No Alteration shall reduce the value or utility of
the Building or any portion thereof;

                         F.   No Alteration shall affect the Certificate of
Occupancy for the Building or the Demised Premises;

                         G.   No Alteration or decoration shall affect the
outside appearance of the Building or the color or style of any venetian blinds
(except that Tenant may remove any venetian blinds provided that they are
promptly replaced by Tenant with blinds of a similar type, material and color);

                         H.   All business machines and mechanical equipment
shall be placed and maintained by Tenant in settings sufficient, in Owner's
judgment, to absorb and prevent vibration, noise and annoyance to other tenants
or occupants of the Building;

                         I.   Tenant shall submit to Owner detailed plans and
specifications stamped by Tenant's architect (including layout, architectural,
mechanical and structural drawings) for each proposed Alteration and shall not
commence any such Alteration without first obtaining Owner's approval of such
plans and specifications, such approval not unreasonably to be withheld or
delayed, notwithstanding the foregoing, Tenant shall not be required to submit
any detailed plans and specifications for any Alterations unless such plans and
specifications are, in the ordinary course, prepared for such Alterations or are
required to be prepared in connection with any filings or other applicable
requirements of any law, order, rule or regulation of any Federal, State, County
or Municipality, including but not limited to, the Department of Buildings of
the City of New York, and in those cases where Tenant shall not be

                                       4
<PAGE>

required to submit such detailed plans and specifications, Tenant shall submit
to Owner, in lieu thereof, information with respect to such Alterations in
reasonably sufficient detail so as to enable Owner to determine the nature and
extent of the work to be performed, and following the completion of each
Alteration, Tenant shall submit to Owner a computerized "as built" drawing file
for the Demised Premises (or if the Demised Premises comprise more than one (1)
floor, for each floor of the Demised Premises being altered) and in those cases
where Tenant shall not be so required to submit such detailed plans and
specifications, Tenant shall submit to Owner, in lieu thereof, information with
respect to such Alterations in reasonably sufficient detail so as to enable
Owner to determine the nature and extent of the work to be performed; such file
will be in DXF format and contain, on a separate layer, all ceiling-height
partitions and doors within the Demised Premises (or if the Demised Premises
comprise more than one (1) floor, within each floor of the Demised Premises
being altered);

                         J.   Prior to the commencement of each proposed
Alteration, Tenant shall have procured and paid for and exhibited to Owner, so
far as the same may be required from time to time, all permits, approvals and
authorizations of all Governmental Authorities (as defined in Section 6.01.)
having or claiming jurisdiction;

                         K.   Prior to the commencement of each proposed
Alteration and decoration, Tenant shall furnish to Owner duplicate original
policies of workmen's compensation insurance covering all persons to be employed
in connection with such Alteration or decoration, including those to be employed
by all contractors and subcontractors, and of comprehensive public liability
insurance (including property damage coverage) in which Owner, its agents, the
holder of any Mortgage (as defined in Section 7.01.) and any lessor under any
Superior Lease (as defined in Section 7.01.) shall be named as parties insured,
which policies shall be issued by companies, and shall be in form and amounts,
satisfactory to Owner and shall be maintained by Tenant until the completion of
such Alteration;

                         L.   In the event Owner or its agents employ any
independent architect or engineer to examine any plans or specifications
submitted by Tenant to Owner in connection with any proposed Alteration, Tenant
agrees to pay to Owner a sum equal to any reasonable out-of-pocket fees incurred
by Owner in connection therewith.

                         M.   All fireproof wood test reports, electrical and
air conditioning certificates, and all other permits, approvals and certificates
required by all Governmental Authorities shall be timely obtained by Tenant and
submitted to Owner;

                         N.   All Alterations and decorations, once commenced,
shall be made promptly and in a good and workmanlike manner;

                         O.   Notwithstanding Owner's approval of plans and
specifications for any Alteration, all Alterations and decorations shall be made
and performed in full compliance with all Legal Requirements (as defined in
Section 6.01.) and with all applicable rules, orders, regulations and
requirements of the New York Board of Fire Underwriters and the New York Fire
Insurance Rating Organization or any similar body;

                         P.   All Alterations and decorations shall be made and
performed in accordance with the Building Rules and Building Rules for
Alterations;

                         Q.   All materials and equipment to be installed,
incorporated or located in the Demised Premises as a result of all Alterations
shall be new and first quality;

                         R.   No materials or equipment shall be subject to any
lien, encumbrance, chattel mortgage or title retention or security agreement of
any kind;

                                       5
<PAGE>

                         S.   Tenant, before commencement of each Alteration,
the estimated cost of which constituting a single project shall exceed ONE
HUNDRED THOUSAND and 00/100 ($100,000.00) DOLLARS shall furnish to Owner a
performance bond or other security satisfactory to Owner, in an amount at least
equal to the estimated cost of such Alteration, guaranteeing the performance and
payment thereof;

                         T.   No Alteration shall be commenced unless any
preceding Alteration shall have been fully paid for and proof of such payment
furnished to Owner;

                         U.   Following the completion of each Alteration,
Tenant, at Tenant's expense, shall obtain certificates of final approval of such
Alteration required by any Governmental Authority and shall furnish Owner with
copies thereof.

                         V.   Tenant agrees that Tenant will not install, affix,
add or paint in or on, nor permit, any work of visual art (as defined in the
Federal Visual Artists' Rights Act of 1990 or any successor law of similar
import) or other Alteration to be installed in or on, or affixed, added to, or
painted on, the interior or exterior of the Demised Premises, or any part
thereof, including, but not limited to, the walls, floors, ceilings, doors,
windows, fixtures and on land included as part of the Demised Premises, which
work of visual art or other Alteration would, under the provisions of the
Federal Visual Artists' Rights Act of 1990, or any successor law of similar
import, require the consent of the author or artist of such work or Alteration
before the same could be removed, modified, destroyed or demolished.

                         W.   Under no circumstances shall Tenant be permitted
to locate any telecommunications facilities in the telecommunications closets of
the Building. With respect to Tenant's telecommunications facilities, (i)
Tenant, without separate additional cost by Tenant payable to Owner, shall
contract separately with all providers of Tenant's telecommunications facilities
(each of which is referred to as a "Provider") and pay each Provider for all
services provided by it to Tenant, and (ii) each Provider shall use,
exclusively, the telecommunications cable distribution system in the Building
designated by Owner and shall contract separately with the company providing
cable distribution service in the Building (referred to as the
"Telecommunications Cable Distribution Company") for the supply and maintenance
of distribution cables. The Provider and Tenant shall comply with all reasonable
rules and regulations adopted by Owner and the Telecommunications Cable
Distribution Company. Owner shall not be liable to Tenant or anyone claiming
through or under Tenant for any damages, including, but not limited to, special,
incidental, remote or consequential damages, including, without limitation, lost
revenue, lost profits and additional operating or personnel expenses arising
from any acts, omissions or negligence of the Provider and the
Telecommunications Cable Distribution Company.

          Section 3.02.  No Consent to Contractor/No Mechanics Lien:  Nothing in
                         ------------------------------------------
this Lease shall be deemed or construed in any way as constituting the consent
or request of Owner, express or implied, by inference or otherwise, to any
contractor, subcontractor, laborer or materialmen, for the performance of any
labor or the furnishing of any material for any specific Alteration to, or
repair of, the Demised Premises, the Building, or any part of either.  Any
mechanic's or other lien filed against the Demised Premises or the Building or
the Real Property for work claimed to have been done for, or materials claimed
to have been furnished to, Tenant or any person claiming through or under Tenant
or based upon any act or omission or alleged act or omission of Tenant or any
such person shall be discharged by Tenant, at Tenant's sole cost and expense,
within ten (10) days after the filing of such lien.

          Section 3.03.  Labor Harmony:  Tenant shall not, at any time prior to
                         -------------
or during the Demised Term, directly or indirectly employ, or permit the
employment of, any contractor, mechanic or laborer in the Demised Premises,
whether in connection with any Alteration or otherwise, if such employment will
interfere or cause any conflict with other contractors, mechanics, or laborers
engaged in the construction, maintenance or operation of the Building by Owner,
Tenant or others.  In the event of any such interference or conflict, Tenant,
upon demand of Owner, shall cause all contractors, mechanics or laborers causing
such interference or conflict to leave the Building immediately.

          Section 3.04.  Compliance with Fire Safety:  Without in any way
                         ---------------------------
limiting the generality of the provisions of Section 3.01, all Alterations shall
be made and performed in full compliance with all standards and

                                       6
<PAGE>

practices adopted by Owner for fire safety in the Building. No Alteration shall
affect all or any part of any Class E Fire Alarm and Communication system
installed in the Demised Premises, except that in connection with any such
Alteration Tenant may relocate certain components of such system, provided (i)
such relocation shall be performed in a manner first reasonably approved by
Owner, (ii) the new location of any such component shall be first reasonably
approved by Owner, (iii) prior to any such relocation Tenant shall submit to
Owner detailed plans and specifications therefor which shall be first reasonably
approved by Owner and (iv) Owner shall have the election of relocating such
components either by itself or by its contractors, in which event all reasonable
expenses incurred by Owner shall be reimbursed by Tenant upon demand of Owner,
as additional rent.

          Section 3.05.  Sprinklers:  The Demised Premises shall contain a
                         ----------
sprinkler system and notwithstanding anything to the contrary set forth in
Sections 5.01 and 6.01, Owner, at Owner's expense, shall perform routine
maintenance of, and shall repair and replace if necessary, said sprinkler system
and any replacements thereof, unless such repair or replacement is due to
Tenant's acts, omissions or negligence, in which event Owner shall repair or
replace same, at Tenant's sole cost and expense.  Owner shall also perform
controlled inspections of said sprinkler system as and when required by law and
Tenant shall give Owner reasonable access to perform such repairs, maintenance
and inspections.  Any sprinkler system and any replacements thereof whether made
at Tenant's expense or Owner's expense, shall be deemed the property of Owner.

          Section 3.06.  Hazardous Material:  If any Legal Requirement of any
                         ------------------
Governmental Authority requires that any hazardous material contained in or
about the Demised Premises and installed therein by Tenant or any person
claiming through or under Tenant be removed or dealt with in any particular
manner in connection with any Alterations of the Demised Premises or otherwise,
then it shall be Tenant's obligation, at Tenant's expense, to remove or so deal
with such hazardous material in accordance with all such laws, orders, rules and
regulations.  In the event Tenant is required to remove or so deal with such
hazardous material in accordance with the provisions of the foregoing sentence
then, notwithstanding anything to the contrary contained herein, Owner, at
Owner's election, shall have the option to itself remove or so deal with such
hazardous material and, in such event, Tenant shall pay to Owner all of Owner's
costs in connection therewith within ten (10) days next following the rendition
of a statement thereof by Owner to Tenant.

          Section 3.07.  Dispute Resolution:  Any dispute with respect to the
                         ------------------
reasonability of any failure or refusal of Owner to grant its consent or
approval to any request for such consent or approval pursuant to the provisions
of Section 3.01 with respect to which request Owner has agreed, in such Section
not unreasonably to withhold such consent or approval, shall be determined by
arbitration in accordance with the provisions of Article 36.

          Section 3.08.  Fire Alarm and Communication System Connection Fees:
                         ---------------------------------------------------
In the event that Tenant, pursuant to the provisions of this Lease, including,
but not limited to, the provisions of this Article 3 and Article 6, connects any
of the following equipment to any Class E Fire Alarm and Communication system
installed in the Demised Premises, Tenant shall pay to Owner as a one (1) time
connection fee the following sums set forth opposite the equipment listed below
(which sums shall be subject to increases due to increases in the cost to Owner
of operating and maintaining such Class E Fire Alarm and Communication system
over such costs on the date of this Lease):

          A.   Speakers in excess of 4 per
               floor of the Demised Premises (or
               if the Demised Premises contain
               less than one (1) floor, in excess
               of four in the Demised Premises)             $500.00 per device

          B.   Strobe Lights (single unit)                  $100.00 per device

          C.   Combination Speaker/Strobe
               light                                        $250.00 per device

                                       7
<PAGE>

          D.   Duct Detectors (supplementary
               air conditioning systems)                  $500.00 per point

          E.   Smoke Detectors (multi-purpose)            $500.00 per point

          F.   Preaction Sprinkler System:
                                        waterflow         $500.00 per point
                                        tamper            $500.00 per point

          G.   Warden Phone (additional)                  $1,000.00 per unit

          H.   Fail Safe Door Release                     $250.00 per connection

          Section 3.09.  A.  In the event that, at any time during the Demised
Term, in connection with any Alterations proposed to be performed by Tenant in
the Demised Premises Tenant is unable to obtain a New York City Department of
Environmental Protection Form ACP5 dated 10/88 (or any successor form), signed
by a certified asbestos investigator, or any other form or approval required by
Federal, State, County or Municipal authorities, indicating that said
Alterations do not constitute an asbestos project, Owner agrees, upon notice
from Tenant to such effect, to perform such work as shall be required to enable
Tenant to obtain any such form or approval.

          B.   If any laws, orders, rules or regulations of any Federal, State,
County or Municipal authority require that any asbestos or other hazardous
material contained in or about the Demised Premises be removed or dealt with in
any particular manner, then it shall be Owner's obligation, at Owner's expense,
to remove or so deal with such asbestos or other hazardous material in
accordance with such laws, orders, rules and regulations.

          C.   Notwithstanding the provisions of subsections A and B of this
Section, in the event any work performed by Owner pursuant to the provisions of
either or both of such subsections is in any way disturbed or damaged by Tenant
or any person claiming through or under Tenant, or asbestos or other hazardous
material is installed in the Demised Premises by or on behalf of Tenant, or any
person claiming through or under Tenant, Owner shall have no responsibility in
connection with the disturbed or damaged work or the asbestos or other hazardous
material so installed by Tenant or any person claiming through or under Tenant
and no obligation to perform any work with respect to the disturbed or damaged
work or the asbestos or other hazardous material so installed by Tenant or any
person claiming through or under Tenant, but it shall be Tenant's obligation, at
Tenant's expense, to (i) perform such work with respect to such disturbed or
damaged work or the asbestos or other hazardous material so installed by Tenant
or any person claiming through or under Tenant as shall be required to enable
Tenant to obtain any form or approval referred to in subsection A, and (ii)
remove or so deal with such asbestos or other hazardous material in accordance
with all such laws, orders, rules and regulations referred to in subsection B.

                                   ARTICLE 4

                           OWNERSHIP OF IMPROVEMENTS
                           -------------------------

                                       8
<PAGE>

          Section 4.01.  General Rights of Owner and Tenant:  All
                         ----------------------------------
appurtenances, fixtures, improvements, additions and other property attached to
or installed in the Demised Premises, whether by Owner or Tenant or others, and
whether at Owner's expense, or Tenant's expense, or the joint expense of Owner
and Tenant, shall be and remain the property of Owner, except that any such
fixtures, improvements, additions and other property installed at the sole
expense of Tenant with respect to which Tenant has not been granted any credit
or allowance by Owner, and which are removable without material damage to the
Demised Premises shall be and remain the property of Tenant and are referred to
as "Tenant's Personal Property". Any replacements of any property of Owner,
    --------------------------
whether made at Tenant's expense or otherwise, shall be and remain the property
of Owner.

                                   ARTICLE 5

                                    REPAIRS
                                    -------

          Section 5.01.  Tenant's Repair Obligations:  Tenant shall take good
                         ---------------------------
care of the Demised Premises (including, but not limited to, any Class E Fire
Alarm and Communication system and any sprinkler system installed therein and
any installations made or equipment installed therein as a result of any
requirement of New York City Local Law #16 of 1984 or any successor law or like
import) and, at Tenant's sole cost and expense, shall make all repairs and
replacements, structural and otherwise, ordinary and extraordinary, foreseen and
unforeseen as and when needed to preserve the Demised Premises (including, but
not limited to, any Class E Fire Alarm and Communication system and any
installations made or equipment installed therein as a result of any requirement
of New York City Local Law #16 of 1984 or any successor law of like import) in
good and safe working order and in first class repair and condition, except that
Tenant shall not be required to make any repairs or replacements to the Demised
Premises unless necessitated or occasioned by the acts, omissions or negligence
of Tenant or any person claiming through or under Tenant or any of their
servants, employees, contractors, agents, visitors or licensees, or by the
manner of use or occupancy of the Demised Premises by Tenant or any such person
(in contradistinction to the mere use or occupancy of the Demised Premises for
the purposes set forth in Section 2.01).  Without affecting Tenant's obligations
set forth in the preceding sentence, Tenant, at Tenant's sole cost and expense,
shall also (i) make all repairs and replacements, and perform all maintenance as
and when necessary, to the lamps, tubes, ballasts, and starters in the lighting
fixtures installed in the Demised Premises, (ii) make all repairs and
replacements, as and when necessary, to Tenant's Personal Property and to any
Alterations made or performed by or on behalf of Tenant or any person claiming
through or under Tenant, and (iii) if the Demised Premises shall include any
space on any ground, street, mezzanine or basement floor in the Building, make
all replacements, as and when necessary, to all windows and plate and other
glass in, on or about such space, and obtain and maintain, throughout the
Demised Term, plate glass insurance policies issued by companies, and in form
and amounts, satisfactory to Owner, in which Owner, its agents and any lessor
under any ground or underlying lease shall be named as parties insured, and (iv)
perform all maintenance and make all repairs and replacements, as and when
necessary, to any air conditioning equipment, private elevators, escalators,
conveyors or mechanical systems (other than the Building's standard equipment
and systems) which may be installed in the Demised Premises by Owner, Tenant or
others.  However, the provisions of the foregoing sentence shall not be deemed
to give to Tenant any right to install air conditioning equipment, elevators,
escalators, conveyors or mechanical systems.  All repairs and replacements made
by or on behalf of Tenant or any person claiming through or under Tenant shall
be made and performed in conformity with, and subject to the provisions of
Article 3 and shall be at least equal in quality and class to the original work
or installation.   The necessity for, and adequacy of, repairs and replacements
pursuant to this Article 5 shall be measured by the standard which is
appropriate for first class office buildings of similar construction and class
in the Borough of Manhattan, City of New York.

          Section 5.02.  Supplementing the provisions of Section 5.01, Owner, at
Owner's sole cost and expense, shall timely make (i) all structural repairs to
the Demised Premises and the Building as and when required, (ii) all repairs
necessary to furnish the plumbing, electrical, air conditioning, ventilating,
heating and elevator services required to be furnished by Owner to Tenant under
the provisions of Article 29, and (iii) all necessary repairs to the public
portions of the Building which affect Tenant's use and enjoyment of the Demised
Premises, except that Owner

                                       9
<PAGE>

shall not be required to make any of the repairs referred to in subdivision (i),
(ii) or (iii) of this sentence if Tenant is obligated to make such repairs
pursuant to the provisions of Section 5.01. Notwithstanding the foregoing
provisions of this Section, Owner shall have no obligation to make any repairs
unless and until specific actual notice of the necessity therefor shall have
been given to Owner.

                                   ARTICLE 6

                             COMPLIANCE WITH LAWS
                             --------------------

          Section 6.01.  General Covenants:  Tenant, at Tenant's sole cost and
                         -----------------
expense, shall comply with all Legal Requirements (hereinafter defined) which
shall impose any duty upon Owner or Tenant arising as a result of Tenant's use
of  the Demised Premises or the use or occupation thereof, including, but not
limited to, any requirement that asbestos or other hazardous material installed
in the Demised Premises by Tenant or any person claiming through or under Tenant
be removed or dealt with in any particular manner, except that Tenant shall not
be required to make any Alterations in order so to comply unless such
Alterations shall be necessitated or occasioned, in whole or in part, by the
acts, omissions, or negligence of Tenant or any person claiming through or under
Tenant, or any of their servants, employees, contractors, agents, visitors or
licensees, or by the manner of use or occupancy of the Demised Premises by
Tenant or by any such person (in contradistinction to the mere use or occupancy
of the Demised Premises for the purposes set forth in Section 2.01).  For all
purposes of this Lease the term "Legal Requirements" shall mean all present and
                                 ------------------
future laws, codes, ordinances, statutes, requirements, orders and regulations,
ordinary and extraordinary, foreseen and unforeseen (including, but not limited
to, the New York State Energy Conservation Construction Code, New York City
Local Laws #5 of 1973, #16 of 1984 and #58 of 1987 and the Americans with
Disabilities Act, and any successor laws of like import) of any Governmental
Authority (hereinafter defined) and all directions, requirements, orders and
notices of violations thereof.  For all purposes of this Lease, the term
"Governmental Authority" shall mean the United States of America, the State of
 ----------------------
New York, the County of New York, the Borough of Manhattan, 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 Owner, Tenant, this Lease or the
Real Property or any portion thereof.  Any work or installations made or
performed by or on behalf of Tenant or any person claiming through or under
Tenant pursuant to the provisions of this Article shall be made in conformity
with, and subject to the provisions of Article 3.  Compliance with any
requirement regarding asbestos or other hazardous material shall be made in
conformity with the provisions of Section 3.06.

          Section 6.02.  Tenant's Compliance with Owner's Fire Insurance:
                         -----------------------------------------------
Tenant shall not do anything, or permit anything to be done, in or about the
Demised Premises which shall (i) invalidate or be in conflict with the
provisions of any fire and/or other insurance policies covering the Building or
any property located therein, or (ii) result in a refusal by fire insurance
companies of good standing to insure the Building or any such property in
amounts reasonably satisfactory to Owner, or (iii) subject Owner to any
liability or responsibility for injury to any person or property by reason of
any business operation being conducted in the Demised Premises, or (iv) cause
any increase in the fire insurance rates applicable to the Building or property
located therein at the beginning of the Demised Term or at any time thereafter.
Tenant, at Tenant's expense, shall comply with all present and future rules,
orders, regulations and/or requirements of the New York Board of Fire
Underwriters and the New York Fire Insurance Rating Organization or any similar
body and the issuer of any insurance obtained by Owner covering the Building
and/or the Real Property, whether ordinary or extraordinary, foreseen or
unforeseen, including, but not limited to, any requirement that hazardous
material installed in the Demised Premises by Tenant or any person claiming
through or under Tenant be removed or dealt with in any particular manner and
any requirement of New York City Local Law #5 of 1973, #16 of 1984, #58 of 1987
and the Americans With Disabilities Act or any successor laws of like import.

          Section 6.03.  Fire Insurance Rates:  In any action or proceeding
                         --------------------
wherein Owner and Tenant are parties, a schedule or "make up" of rates
applicable to the Building or property located therein issued by the New York
Fire Insurance Rating Organization, or other similar body fixing such fire
insurance rates, shall be conclusive evidence

                                       10
<PAGE>

and of the several items and charges in the fire insurance rates then applicable
to the Building or property located therein.

                                   ARTICLE 7

                        SUBORDINATION, ATTORNMENT, ETC.
                        -------------------------------

          Section 7.01.  Lease Subordination:  This Lease and all rights of
                         -------------------
Tenant under this Lease are, and shall remain, unconditionally subject and
subordinate in all respects to all ground and underlying leases now or hereafter
in effect affecting the Real Property or any portion thereof, and to all
mortgages which may now or hereafter affect such leases or the Real Property,
and to all advances made or hereafter to be made under such mortgages, and to
all renewals, modifications, consolidations, correlations, replacements and
extensions of, and substitutions for, such leases and mortgages (such leases as
above described are referred to herein collectively as the "Superior Lease" and
                                                            --------------
such mortgages as above described are referred to herein collectively as the

"Mortgage").  The foregoing provisions of this Section shall be self-operative
 --------
and no further instrument of subordination shall be required.  In confirmation
of such subordination, Tenant shall execute and deliver promptly any certificate
or other instrument which Owner, or any lessor under any Superior Lease, or any
holder of any Mortgage may request, and Tenant hereby, after five (5) days
notice and Tenant's failure to so execute and deliver any such certificate or
other instrument, irrevocably constitutes and appoints Owner and all such
lessors and holders, acting jointly or severally, as Tenant's agent and
attorney-in-fact to execute any such certificate or other instrument for or on
behalf of Tenant.  If, in connection with obtaining financing with respect to
the Building, the Real Property, or the interest of the lessee under any
Superior Lease, any recognized lending institution shall request reasonable
modifications of this Lease as a condition of such financing, Tenant covenants
not unreasonably to withhold or delay its agreement to such modifications,
provided that such modifications do not materially increase the obligations, or
materially and adversely affect the rights, of Tenant under this Lease.  No act
or failure to act on the part of Owner which would entitle Tenant under the
terms of this Lease, or by law, to be relieved 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 Owner's act or failure to act to the holder or holders
of any Mortgage and/or the lessor under any Superior Lease of whom Tenant has
been given written notice, specifying the act or failure to act on the part of
Owner which could or would give basis to Tenant's rights; and (ii) the holder or
holders of such Mortgage and/or the lessors under any Superior Lease, 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
sentence shall be deemed to impose any obligation on any such holder or lessor
to correct or cure any such condition.  "Reasonable time" as used above means
                                         ---------------
and includes a reasonable time to obtain possession of the Building if any such
holder or lessor elects to do so (provided such holder or lessor institutes
proceedings to obtain possession within a reasonable time after notice from
Tenant pursuant to the foregoing provisions and conducts such proceedings with
reasonable diligence) and a reasonable time after so obtaining possession to
correct or cure the condition if such condition is determined to exist (provided
such holder or lessor commences said cure within ten (10) days after obtaining
possession and prosecutes the work required to cure with reasonable diligence).

          Section 7.02.  Tenant Attornment:  If, at any time prior to the
                         -----------------
expiration of the Demised Term, any Superior Lease under which Owner then shall
be the lessee shall terminate or be terminated for any reason, or the holder of
any Mortgage comes into possession of the Real Property or the Building or the
estate created by any Superior Lease by a receiver or otherwise, Tenant agrees,
at the election and upon demand of any owner of the Real Property, or of the
holder of any Mortgage so in possession, or of any lessee under any Superior
Lease covering the premises which include the Demised Premises, to attorn, from
time to time, to any such owner, holder, or lessee, upon the then executory
terms and conditions of this Lease, for the remainder of the term originally
demised in this Lease, provided that such owner, holder or lessee, as the case
may be, shall then be entitled to possession of the Demised Premises.  The
provisions of this Section shall enure to the benefit of any such owner, holder,
or lessee, shall apply notwithstanding that, as a matter of law, this Lease may
terminate upon the termination of any Superior Lease, shall be self-operative
upon any such demand, and no further instrument shall be required to give effect
to said provisions.  Tenant, however, upon demand of any such owner, holder, or
lessee, agrees to execute, from time to time, instruments in confirmation

                                       11
<PAGE>

of the foregoing provisions of this Section, satisfactory to any such owner,
holder, or lessee, acknowledging such attornment and setting forth the terms and
conditions of its tenancy. Nothing contained in this Section shall be construed
to impair any right otherwise exercisable by any such owner, holder, or lessee.
Notwithstanding anything to the contrary set forth in this Article no such
owner, holder or lessee shall be bound by (i) any payment of any instalment of
Fixed Rent or increases therein or any additional rent which may have been made
more than thirty (30) days before the due date of such instalment (except
prepayments in the nature of security for the performance of Tenant's
obligations under this Lease), or (ii) any amendment or modification to this
Lease which is made without its consent.

          Section 7.03.  Tenant Estoppel Certificate:  From time to time, within
                         ---------------------------
seven (7) days next following Owner's request, Tenant shall deliver to Owner a
written statement executed and acknowledged by Tenant, in form and substance
reasonably satisfactory to Owner, (i) stating that this Lease is then in full
force and effect and has not been modified, if this is the case, (or if
modified, setting forth the specific nature of all modifications), and (ii)
setting forth the date to which the Fixed Rent has been paid, and (iii) stating
whether or not, to the best knowledge of Tenant, Owner is in default under this
Lease, and, if Owner is in default, setting forth the specific nature of all
such defaults and (iv) stating that Tenant has accepted and occupied the Demised
Premises and all improvements required to be made by Owner pursuant to the
provisions of this Lease, have been made, if such be the case.  Tenant
acknowledges that any statement delivered pursuant to this Section may be relied
upon by any purchaser or owner of the Building, or of the Real Property, or any
part thereof, or of Owner's interest in the Building or the Real Property or any
Superior Lease, or by the holder of any Mortgage, or by any assignee of the
holder of any Mortgage, or by any lessor under any Superior Lease.

          Section 7.04.  Owner Assignment of Lease and Rents:  If Owner assigns
                         -----------------------------------
its interest in this Lease, or the rents payable hereunder, to the holder of any
Mortgage or the lessor under any Superior Lease, whether the assignment shall be
conditional in nature or otherwise,  Tenant agrees that (a) the execution
thereof by Owner and the acceptance by such holder or lessor shall not be deemed
an assumption by such holder or lessor of any of the obligations of the Owner
under this Lease unless such holder or lessor shall, by written notice sent to
Tenant, specifically otherwise elect; and (b) except as aforesaid, such holder
or lessor shall be treated as having assumed Owner's obligations hereunder only
upon the foreclosure of such holder's Mortgage or the termination of such
lessor's Superior Lease and the taking of possession of the Demised Premises by
such holder or lessor, as the case may be.

                                   ARTICLE 8

                              PROPERTY LOSS, ETC.
                              -------------------

          Section 8.01.  Any Building employee to whom any property shall be
entrusted by or on behalf of Tenant shall be deemed to be acting as Tenant's
agent with respect to such property and neither Owner nor Owner's agents shall
be liable for any loss of or damage to any such property by theft or otherwise.
Except as otherwise expressly set forth in this Lease, neither (i) the
performance by Owner, Tenant or others of any decorations, repairs, alterations,
additions or improvements in or to the Building or the Demised Premises, nor
(ii) the failure of Owner or others to make any such decorations, repairs,
alterations, additions or improvements, nor (iii) any damage to the Demised
Premises or to the property of Tenant, nor any injury to any persons, caused by
other tenants or persons in the Building, or by operations in the construction
of any private, public or quasi-public work, or by any other cause, nor (iv) any
latent defect in the Building or in the Demised Premises, nor (v) any temporary
(i.e., six [6] months or less) or permanent closing, darkening or bricking up of
any windows of the Demised Premises for any reason whatsoever beyond Owner's
reasonable control, nor any permanent closing, darkening or bricking up of any
such windows if required by law or in connection with any construction upon
adjacent property, nor (vi) any inconvenience or annoyance to Tenant or injury
to or interruption of Tenant's business by reason of any of the events or
occurrences referred to in the foregoing subdivisions (i) through (v), shall
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Owner, or its agents,
or any lessor under any Superior Lease, other than such liability as may be
imposed upon Owner by law for Owner's negligence or the negligence of Owner's
agents, servants or employees

                                       12
<PAGE>

in the operation or maintenance of the Building or for the breach by Owner of
any express covenant of this Lease on Owner's part to be performed. Tenant's
taking possession of the Demised Premises shall be conclusive evidence, as
against Tenant, that, at the time such possession was so taken, the Demised
Premises and the Building were in good and satisfactory condition.

                                   ARTICLE 9

                      DESTRUCTION-FIRE OR OTHER CASUALTY
                      ----------------------------------

          Section 9.01.  Owner's Repair Obligations:  If the Demised Premises or
                         --------------------------
Building shall be damaged by fire or other casualty, Tenant shall give prompt
notice to Owner of such damage, and Owner, at Owner's expense, shall thereafter
repair such damage.  However, Owner shall have no obligation to repair any
damage to, or to replace, Tenant's Personal Property or any other property or
effects of Tenant.  Except as otherwise provided in Section 9.03, if the entire
or a material portion of the Demised Premises shall be rendered untenantable or
if the Building is damaged to the extent that  reasonable access to the Demised
Premises is not available by reason of any such damage, the Fixed Rent shall
abate for the period from the date of such damage to the date when such damage
shall have been repaired, and if only a part of the Demised Premises shall be so
rendered untenantable, the Fixed Rent shall abate for such period in the
proportion which the area of the part of the Demised Premises so rendered
untenantable bears to the total area of the Demised Premises.  However, if,
prior to the date when all of such damage shall have been repaired, any part of
the Demised Premises so damaged shall be rendered tenantable and shall be used
or occupied by Tenant or any person or persons claiming through or under Tenant,
then the amount by which the Fixed Rent shall abate shall be equitably
apportioned for the period from the date of any such use or occupancy to the
date when all such damage shall have been repaired.  Tenant hereby expressly
waives the provisions of Section 227 of the New York Real Property Law, and of
any successor law of like import then in force, and Tenant agrees that the
provisions of this Article shall govern and control in lieu thereof.
Notwithstanding the foregoing provisions of this Section, if, prior to or during
the Demised Term, (i) the Demised Premises shall be totally damaged or rendered
wholly untenantable by fire or other casualty, and if Owner shall decide not to
restore the Demised Premises, or (ii) the Building shall be so damaged by fire
or other casualty that, in Owner's opinion, substantial alteration, demolition,
or reconstruction of the Building shall be required (whether or not the Demised
Premises shall have been damaged or rendered untenantable), then, in any of such
events, Owner, at Owner's option, may give to Tenant, within ninety (90) days
after such fire or other casualty, a five (5) days' notice of termination of
this Lease and, in the event such notice is given, this Lease and the Demised
Term shall come to an end and expire (whether or not said term shall have
commenced) upon the expiration of said five (5) days with the same effect as if
the date of expiration of said five (5) days were the Expiration Date, the Fixed
Rent shall be apportioned as of such date and any prepaid portion of Fixed Rent
for any period after such date shall be refunded by Owner to Tenant.

          Section 9.02.  Owner's Subrogation Waiver Provisions:  Owner now has
                         -------------------------------------
and shall continue to maintain so long as same is available using commercially
sound business practices, throughout the Demised Term, in Owner's fire insurance
and "all-risk" policies covering the Building, provisions to the effect that
such policies shall not be invalidated should the insured waive, in writing,
prior to a loss, any or all right of recovery against any party for loss
occurring to the Building.  In the event that at any time Owner's fire insurance
carriers shall exact an additional premium for the inclusion of such or similar
provisions, Owner shall give Tenant notice thereof.  In such event, if Tenant
agrees, in writing, to reimburse Owner for such additional premium for the
remainder of the Demised Term, Owner shall require the inclusion of such or
similar provisions by Owner's fire insurance carriers.  As long as such or
similar provisions are included in Owner's fire insurance and "all-risk"
policies then in force, or if substantially all fire insurance companies
licensed to do business in New York State (referred to as "New York State
                                                           --------------
Insurance Companies") include such provisions as a matter of course and Owner
-------------------
fails to carry fire insurance containing such provisions, Owner hereby waives
(i) any obligation on the part of Tenant to make repairs to the Demised Premises
and the Building necessitated or occasioned by fire or other casualty that is an
insured risk under such policies, and (ii) any right of recovery or claim
against Tenant, any other permitted occupant of the Demised Premises, and any of
their servants, employees, agents or

                                       13
<PAGE>

contractors, for any loss occasioned by fire or other casualty which is an
insured risk under such policies and Owner shall look solely to such policies to
compensate Owner for any such loss. In the event that at any time Owner's fire
insurance carriers shall not include such or similar provisions in Owner's fire
insurance policies, and substantially all New York State Insurance Companies no
longer include such provisions as a matter of course, the waivers set forth in
the foregoing sentence shall, upon notice given by Owner to Tenant, be deemed of
no further force or effect and Owner shall have Tenant named in said policies as
an assured party, but not as a loss payee, provided that if at any time Owner's
fire insurance carriers shall exact an additional premium for naming Tenant as
an assured party, Tenant shall agree, in writing, to reimburse Owner for such
additional premium for the remainder of the Demised Term for so long as Tenant
shall elect to be an assured party. In the event Tenant shall be named in such
policies as an assured party in accordance with the foregoing provisions of this
Section, Tenant agrees to endorse promptly, without recourse, any check, draft
or order for the payment of money representing the proceeds of any such policies
or representing any other payment growing out of or in connection with any such
policies, and in the event Tenant does not promptly endorse such check, draft or
order, then Owner shall have the right as Tenant's attorney-in-fact, to make
such endorsement on behalf of Tenant, and Tenant does hereby irrevocably waive
any rights to participate in any settlement proceedings and further hereby
waives any and all rights in and to any such proceeds and payments.

          Section 9.03.  Tenant Negligence:  Except to the extent expressly
                         -----------------
provided in Section 9.02, nothing contained in this Lease shall relieve Tenant
of any liability to Owner or to its insurance carriers which Tenant may have
under law or the provisions of this Lease in connection with any damage to the
Demised Premises or the Building caused by fire or other casualty.
Notwithstanding the provisions of Section 9.01, if any such damage, occurring
after any date when the waivers set forth in Section 9.02 are no longer in force
and effect, is due to the fault or neglect of Tenant, any person claiming
through or under Tenant, or any of their servants, employees, agents,
contractors, visitors or licensees, then there shall be no abatement of Fixed
Rent by reason of such damage.

          Section 9.04.  Tenant Subrogation Waiver Provisions:  Tenant
                         ------------------------------------
acknowledges that it has been advised that Owner's insurance policies do not
cover Tenant's Personal Property or any other property of Tenant in the Demised
Premises; accordingly, it shall be Tenant's obligation to obtain and maintain
insurance covering its property in the Demised Premises and loss of profits
including, but not limited to, water damage coverage and business interruption
insurance.  Tenant shall attempt to obtain and maintain, throughout the Demised
Term, in Tenant's fire and other insurance policies covering Tenant's Personal
Property and other property of Tenant in the Demised Premises, and Tenant's use
and occupancy of the Demised Premises, and/or Tenant's profits (and shall cause
any other permitted occupants of the Demised Premises to attempt to obtain and
maintain, in similar policies), provisions to the effect that such policies
shall not be invalidated should the insured waive, in writing, prior to a loss,
any or all right of recovery against any party for loss occasioned by fire or
other casualty which is an insured risk under such policies.  In the event that
at any time the fire insurance carriers issuing such policies shall exact an
additional premium for the inclusion of such or similar provisions, Tenant shall
give Owner notice thereof.  In such event, if Owner agrees, in writing, to
reimburse Tenant or any person claiming through or under Tenant, as the case may
be, for such additional premium for the remainder of the Demised Term, Tenant
shall require the inclusion of such or similar provisions by such insurance
carriers.  As long as such or similar provisions are included in such insurance
policies then in force, Tenant hereby waives (and agrees to cause any other
permitted occupants of the Demised Premises to execute and deliver to Owner
written instruments waiving) any right of recovery against Owner, any lessors
under any Superior Leases, the holders of any Mortgage, and all other tenants or
occupants of the Building, and any servants, employees, agents or contractors of
Owner, or of any such lessor, or holder or any such other tenants or occupants,
for any loss occasioned by fire or other casualty which is an insured risk under
such policies.  In the event that at any time such insurance carriers shall not
include such or similar provisions in any such insurance policy, the waiver set
forth in the foregoing sentence (or in any written instrument executed by any
other permitted occupant of the Demised Premises) shall, upon notice given by
Tenant to Owner, be deemed of no further force or effect with respect to any
insured risks under such policy from and after the giving of such notice. During
any period while any such waiver of right of recovery is in effect, Tenant, or
any other permitted occupant of the Demised Premises, as the case may be, shall
look solely to the proceeds of such policies to compensate Tenant or such other
permitted occupant for any loss occasioned by fire or other casualty which is an
insured risk under such policies.

                                       14
<PAGE>

          Section 9.05.  Owner agrees, during the Demised Term, to obtain and
keep in full force and effect insurance against loss or damage by fire or other
casualty to the Building and to all of Owner's property referred to in Article 4
as may be insurable under then obtainable standard forms of "all-risk" insurance
policies in an amount equal to not less than (i) the amount sufficient to avoid
coinsurance or (ii) eighty (80%) percent of the replacement value of the
Building and such property exclusive of footings and foundations, whichever is
greater.

                                  ARTICLE 10

                                EMINENT DOMAIN
                                --------------

          Section 10.01. Taking of the Demised Premises:  If the whole or any
                         ------------------------------
material and substantial portion of the Demised Premises shall be acquired for
any public or quasi-public use or purpose, whether by condemnation or by deed in
lieu of condemnation, this Lease and the Demised 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 Demised Premises shall be so acquired or condemned
then, except as otherwise provided in this Section, this Lease and the Demised
Term shall continue in force and effect but, from and after the date of the
vesting of title, the Fixed Rent shall be reduced in the proportion which the
area of the part of the Demised Premises so acquired or condemned bears to the
total area of the Demised Premises immediately prior to such acquisition or
condemnation.  If only a part of the Real Property shall be so acquired or
condemned, then (i) whether or not the Demised Premises shall be affected
thereby, Owner, at Owner's option, may give to Tenant, within sixty (60) days
next following the date upon which Owner shall have received notice of vesting
of title, a five (5) days' notice of termination of this Lease, and (ii) if the
part of the Real Property so acquired or condemned shall contain more than ten
(10%) percent of the total area of the Demised Premises immediately prior to
such acquisition or condemnation, or if, by reason of such acquisition or
condemnation, Tenant no longer has reasonable means of access to the Demised
Premises, Tenant, at Tenant's option, may give to Owner, within sixty (60) days
next following the date upon which Tenant shall have received notice of vesting
of title, a five (5) days' notice of termination of this Lease.  In the event
any such five (5) days' notice of termination is given, by Owner or Tenant, this
Lease and the Demised Term shall come to an end and expire upon the expiration
of said five (5) days with the same effect as if the date of expiration of said
five (5) days were the Expiration Date.  If a part of the Demised Premises shall
be so acquired or condemned and this Lease and the Demised Term shall not be
terminated pursuant to the foregoing provisions of this Section, Owner, at
Owner's expense, shall restore that part of the Demised Premises not so acquired
or condemned to a self-contained rental unit.  In the event of any termination
of this Lease and the Demised Term pursuant to the provisions of this Section,
the Fixed Rent shall be apportioned as of the date of such termination and any
prepaid portion of Fixed Rent for any period after such date shall be refunded
by Owner to Tenant.

          Section 10.02. Condemnation Award or Claims:  In the event of any such
                         ----------------------------
acquisition or condemnation of all or any part of the Real Property, Owner shall
be entitled to receive the entire award for any such acquisition or
condemnation, Tenant shall have no claim against Owner or the condemning
authority for the value of any unexpired portion of the Demised Term and Tenant
hereby expressly assigns to Owner all of its right in and to any such award.
Nothing contained in this Section shall be deemed to prevent Tenant from making
a claim in any condemnation proceedings for the value of any items of Tenant's
Personal Property which are compensable, in law, as trade fixtures, or provided
that such claim is authorized by law and will not in any way diminish the award
to which Owner would be entitled if no such claim were made, for Tenant's moving
and/or re-location expenses.

                                       15
<PAGE>

                                  ARTICLE 11

                           ASSIGNMENT AND SUBLETTING
                           -------------------------

          Section 11.01. General Covenant:  Except as expressly set forth in
                         ----------------
this Article 11, Tenant, for itself, its heirs, distributees, executors,
administrators, legal representatives, successors and assigns, covenants that,
without the prior consent of Owner in each instance, it shall not (i) assign
whether by merger, consolidation or otherwise, mortgage or encumber its interest
in this Lease, in whole or in part, or (ii) sublet, or permit the subletting of,
the Demised Premises or any part thereof, or (iii) permit the Demised Premises
or any part thereof to be occupied, or used for desk space, mailing privileges
or otherwise, by any person other than Tenant. The sale, pledge, transfer or
other alienation of (a) a controlling interest in the issued and outstanding
capital stock of any corporate Tenant (unless such stock is publicly traded on a
recognized security exchange or over-the counter market) or (b) a controlling
interest in any partnership, limited liability company or joint venture or other
business entity comprising Tenant, however accomplished, and whether in a single
transaction or in a series of related and/or unrelated transactions, shall be
deemed for the purposes of this Section as an assignment of this Lease which
shall require the prior consent of Owner in each instance.  For the purposes of
this Section and Section 11.03, the word "controlling" shall have the same
meaning as the word "control" set forth in Section 11.05.  Notwithstanding
anything to the contrary contained in this Lease, a public offering of the stock
of Tenant named herein on a recognized security exchange or over-the-counter
market shall not be considered an assignment of this Lease requiring the prior
approval of Owner.

          Section 11.02. Owner's Rights Upon Assignment: If Tenant's interest
                         ------------------------------
in this Lease is assigned, whether or not in violation of the provisions of this
Article, Owner may collect rent from the assignee; if the Demised Premises or
any part thereof are sublet to, or occupied by, or used by, any person other
than Tenant, whether or not in violation of this Article, Owner, after default
by Tenant under this Lease, may collect rent from the subtenant, user or
occupant.  In either case, Owner shall apply the net amount collected to the
rents reserved in this Lease, but neither any such assignment, subletting,
occupancy, or use, whether with or without Owner's prior consent, nor any such
collection or application, shall be deemed a waiver of any term, covenant or
condition of this Lease or the acceptance by Owner of such assignee, subtenant,
occupant or user as tenant.  The consent by Owner to any assignment, subletting,
occupancy or use shall not relieve Tenant from its obligation to obtain the
express prior consent of Owner to any further assignment, subletting, occupancy
or use.  If this Lease is assigned to any person or entity pursuant to any
proceeding of the type referred to in Subsections 16.01(c) and 16.01(d), any and
all monies or other consideration payable or otherwise to be delivered in
connection with such assignment shall be paid or delivered to Owner, shall be
and remain the exclusive property of Owner and shall not constitute property of
Tenant or of the estate of Tenant within the meaning of any proceeding of the
type referred to in Subsections 16.01(c) and 16.01(d). Any and all monies or
other considerations constituting Owner's property under the preceding sentence
not paid or delivered to Owner shall be held in trust for the benefit of Owner
and shall be promptly paid to or turned over to Owner. Any person or entity to
which this Lease is assigned pursuant to any proceeding of the type referred to
in Subsections 16.01(c) and 16.01(d) 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 Owner
upon demand an instrument confirming such assumption.   The listing of any name
other than that of Tenant on any door of the Demised Premises or on any
directory or in any elevator in the Building, or otherwise, shall not operate to
vest in the person so named any right or interest in this Lease or in the
Demised Premises, or the Building, or be deemed to constitute, or serve as a
substitute for, any prior consent of Owner required under this Article, and it
is understood that any such listing shall constitute a privilege extended by
Owner which shall be revocable at Owner's will by notice to Tenant.  Tenant
agrees to pay to Owner reasonable counsel fees not to exceed THREE THOUSAND and
00/100 ($3,000.00) DOLLARS in any single instance incurred by Owner in
connection with any proposed assignment of Tenant's interest in this Lease or
any proposed subletting of the Demised Premises or any part thereof.  Neither
any assignment of Tenant's interest in this Lease nor any subletting, occupancy
or use of the Demised Premises or any part thereof by any person other than
Tenant, nor any collection of rent by Owner from any person other than Tenant as
provided in this Section, nor any application of any such rent as provided in
this Section shall, in any circumstances, relieve Tenant of its obligation fully
to observe and perform the terms, covenants and conditions of this Lease on
Tenant's part to be observed or performed.

                                       16
<PAGE>

          Section 11.03. Sublet Rights:  A. (1) As long as Tenant is not in
                         -------------
default under any of the terms, covenants or conditions of this Lease on
Tenant's part to be observed or performed, Owner agrees not to unreasonably
withhold Owner's prior consent to a subletting by Tenant of all or a portion of
the Demised Premises to one (1) subtenant for undivided occupancy by such
subtenant, for the use expressly permitted in this Lease.

                    (2)  Without Owner's prior consent, Tenant shall not (a)
negotiate or enter into a proposed subletting with any tenant, subtenant or
occupant of any space in the Building or (b) list or otherwise publicly
advertise the Demised Premises or any part thereof for subletting at a rental
lower than the rental at which the Owner is then offering to rent comparable
space in the Building.

                    (3)  At least thirty (30) days prior to any proposed
subletting, Tenant shall submit to Owner a statement (the "Proposed Sublet
                                                           ---------------
Statement") containing the name and address of the proposed subtenant, the
---------
nature of the proposed subtenant's business and its current financial status, if
such status is obtained by Tenant, and all of the principal terms and conditions
of the proposed subletting including, but not limited to, the proposed
commencement and expiration dates of the term thereof.

                    (4)  Owner may withhold consent to a proposed subletting if,
(a) in Owner's reasonable judgment, the occupancy of the proposed subtenant will
tend to impair the character or dignity of the Building or impose any additional
burden upon Owner in the operation of the Building, or (b) in Owner's reasonable
judgment, the occupancy of the proposed subtenant will tend to impair the
reputation of (i) the Building as an information technology center or (ii) the
floor on which the Demised Premises are located as a floor devoted to
information technology tenants or (c) the proposed subtenant shall be a person
or entity with whom Owner is then negotiating or discussing to lease space in
the Building or (d) if Owner shall have any other reasonable objections to such
subletting.

                    (5)  In the event of any dispute between Owner and Tenant as
to the reasonableness of Owner's failure or refusal to consent to any
subletting, such dispute shall be submitted to arbitration in accordance with
the provisions of Article 36.

                    (6)  Tenant shall reimburse Owner on demand for any
reasonable costs or expense that may be incurred by Owner's review of any
Proposed Sublet Statement or in connection with any sublease consented to by
Owner, including, without limitation, any reasonable processing fee, reasonable
attorneys' fees and disbursements and the reasonable costs of making
investigations as to the acceptability of the proposed subtenant.

               B.   Notwithstanding the foregoing provisions of this Section
11.03, Owner shall have the following rights with respect to each proposed
subletting by Tenant:

                    (1)  in the event Tenant proposes to sublet the Demised
Premises, whether or not such subletting is for all or substantially all of the
remainder of the Demised Term, Owner, at Owner's option, may give to Tenant,
within thirty (30) days after the submission by Tenant to Owner of the Proposed
Sublet Statement, a notice terminating this Lease on the date (referred to as
the "Earlier Termination Date") immediately prior to the proposed commencement
     ------------------------
date of the term of the proposed subletting, as set forth in the Proposed Sublet
Statement, and, in the event such notice is given, this Lease and the Demised
Term shall come to an end and expire on the Earlier Termination Date with the
same effect as if it were the Expiration Date, the Fixed Rent shall be
apportioned as of said Earlier Termination Date and any prepaid portion of Fixed
Rent for any period after such date shall be refunded by Owner to Tenant; or

                    (2)  In the event Tenant proposes to sublet the Demised
Premises for less than substantially all of the remainder of the Demised Term,
Owner, at Owner's option, may give to Tenant, within thirty (30) days after the
submission by Tenant to Owner, of the Proposed Sublet Statement required to be
submitted in connection with such proposed subletting, a notice electing to
recapture the Demised Premises during the period (referred to as the "Recapture
                                                                      ---------
Period") commencing on the date (referred to as "Recapture Date") immediately
------                                           --------------
prior to

                                       17
<PAGE>

the proposed commencement date of the term of the proposed subletting, as set
forth in the Proposed Sublet Statement, and ending on the proposed expiration
date of the term of the proposed subletting, as set forth in the Proposed Sublet
Statement, and in the event such notice is given the following shall apply:

               (a)  The Demised Premises shall be recaptured by Owner during the
               Recapture Period;

               (b)  Tenant shall surrender the Demised Premises to Owner on or
               prior to the Recapture Date in the same manner as if said Date
               were the Expiration Date;

               (c)  During the Recapture Period Tenant shall have no rights with
               respect to the Demised Premises nor any obligations with respect
               to the Demised Premises, including, but not limited to, any
               obligations to pay Fixed Rent or any increases therein or any
               additional rent, and any prepaid portion of Fixed Rent allocable
               to the Recapture Period shall be refunded by Owner to Tenant;

               (d)  There shall be an equitable apportionment of any increase in
               the Fixed Rent pursuant to Article 23 for the Escalation Year and
               Tax Escalation Year (as defined in Article 23) in which said
               Recapture Date shall occur;

               (e)  Upon the expiration of the Recapture Period, the Demised
               Premises, in its then existing condition, shall be deemed
               restored to Tenant and Tenant shall have all rights with respect
               to the Demised Premises which are set forth in this Lease and all
               obligations with respect to the Demised Premises which are set
               forth in this Lease, including, but not limited to, the
               obligations for the payment of Fixed Rent and any increases
               therein and any additional rent (as they would have been adjusted
               if Tenant occupied the Demised Premises during the Recapture
               Period) during the period (referred to as the "Recapture
                                                              ---------
               Restoration Period") commencing on the date next following the
               ------------------
               expiration of the Recapture Period and ending on the Expiration
               Date, except in the event that Owner is unable to give Tenant
               possession of the Demised Premises at the expiration of the
               Recapture Period by reason of the holding over or retention of
               possession of any tenant or other occupant, in which event (x)
               the Recapture Restoration Period shall not commence and the
               Demised Premises shall not be deemed available for Tenant's
               occupancy and Tenant shall not be required to comply with the
               obligations of Tenant under this Lease until the date upon which
               Owner shall give Tenant possession of the Demised Premises free
               of occupancies, (y) neither the Expiration Date nor the validity
               of this Lease nor the obligations of Tenant under this Lease
               shall be affected thereby, and (z) Tenant waives any rights to
               rescind this Lease and to recover any damages which may result
               from the failure by Owner to deliver possession of the Demised
               Premises at the end of the Recapture Period; Owner agrees to
               institute, within thirty (30) days after the expiration of the
               Recapture Period, possession proceedings against any tenants and
               occupants who have not so vacated and surrendered all or any
               portions of the Demised Premises and agrees to prosecute such
               proceedings with reasonable diligence; and

               (f)  There shall be an equitable apportionment of any increase in
               the Fixed Rent pursuant to Article 23 for the Escalation Year and
               Tax Escalation Year in which the Recapture Restoration Period
               shall commence.

At the request of Owner, Tenant shall execute and deliver an instrument or
instruments, in form satisfactory to Owner, setting forth any modifications to
this Lease contemplated in or resulting from the operation of the foregoing
provisions of this Subsection 11.03; however, neither Owner's failure to request
any such instrument nor Tenant's failure to execute or deliver any such
instrument shall vitiate the effect of the foregoing provisions of this Section.
The failure by Owner to exercise any option under this Section 11.03 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

                                       18
<PAGE>

or any other portion of the Demised Premises. Tenant shall indemnify Owner from
all loss, cost, liability, damage and expense, including, but not limited to,
reasonable counsel fees and disbursements, arising from any claims against Owner
by any broker or other person, for a brokerage commission or other similar
compensation in connection with any such proposed subletting, in the event (a)
Owner shall (i) fail or refuse to consent to any proposed subletting, or (ii)
exercise any of its options under this Section 11.03, or (b) any proposed
subletting shall fail to be consummated for any reason whatsoever.

                    C.   Tenant agrees that (1) seventy-five (75%) percent of
any increase in the rental value of the Demised Premises over and above the
Fixed Rent payable pursuant to the provisions of this Lease, as such Fixed Rent
may be increased from time to time pursuant to the provisions of this Lease, and
(2) any consideration paid to Tenant or any subtenant or other person claiming
through or under Tenant in connection with an assignment of Tenant's interest in
this Lease or the interest of any subtenant or other person claiming through or
under Tenant under any sublease whether or not such assignment shall be effected
with court approval in a proceeding of the types described in Subsection
16.01(c) or (d), or in any similar proceeding, or otherwise, shall accrue to the
benefit of Owner and not to the benefit of Tenant, or of any subtenant or other
person claiming through or under Tenant, or of the creditors of Tenant or of any
such subtenant or other person claiming through or under Tenant. Accordingly,
Tenant agrees that if Owner shall fail to exercise its option to sooner
terminate this Lease or its option to recapture the Demised Premises in
connection with any proposed subletting by Tenant, or if any subtenant or other
person claiming through or under Tenant shall sublet all or any portion of the
Demised Premises, Tenant shall pay to Owner a sum equal to seventy-five (75%)
percent of any Subletting Profit, as such term is hereinafter defined. All
rentals and other sums (including, but not limited to, sums payable for the sale
or rental of any fixtures, leasehold improvements, equipment, furniture or other
personal property, less, in the case of the sale thereof, the then net
unamortized [on a straight-line basis over the term of this Lease or, in the
event of a further subletting, over the term of the initial sublease, as the
case may be] cost thereof, which were provided and installed in the sublet
premises at the sole cost and expense of Tenant or such subtenant or other
person claiming through or under Tenant and for which no allowance or other
credit has been given by Owner) payable by any subtenant to Tenant or to any
subtenant or other person claiming through or under Tenant in connection with
any subletting in excess of the Fixed Rent then payable by Tenant to Owner under
this Lease are referred to, in the aggregate, as "Subletting Profit"; in
                                                  -----------------
computing any Subletting Profit it shall be deemed that the rental reserved
under any such subletting shall commence to accrue as of the commencement of the
term of such subletting even if such rental actually commences to accrue as of a
date subsequent to such commencement and there shall be first deducted
reasonable alteration expenses and reasonable legal fees with respect to such
subletting and a reasonable single brokerage commission, if any such commission
shall be paid by Tenant or any such subtenant or other person claiming through
or under Tenant in connection with such subletting. Owner and Tenant agree that
if Tenant, or any subtenant or other person claiming through or under Tenant,
shall assign or have assigned its interest as Tenant under this Lease or its
interest as subtenant under any sublease as the case may be, whether or not such
assignment shall be effected with court approval in a proceeding of the types
described in Subsections 16.01(c) or (d), or in any similar proceeding, or
otherwise, Tenant shall pay to Owner a sum equal to any consideration paid to
Tenant or any subtenant or other person claiming through or under Tenant for
such assignment. All sums payable hereunder to Tenant shall be paid to Owner as
additional rent immediately upon such sums becoming payable to Tenant or to any
subtenant or other person claiming through or under Tenant and, if requested by
Owner, Tenant shall promptly enter into a written agreement with Owner setting
forth the amount of such sums to be paid to Owner, however, neither Owner's
failure to request the execution of such agreement nor Tenant's failure to
execute such agreement shall vitiate the provisions of this Section. For the
purposes of this Section, a trustee, receiver or other representative of the
Tenant's or any subtenant's estate under any federal or state bankruptcy act
shall be deemed a person claiming through or under Tenant.

                    D.   Neither Owner's consent to any subletting nor anything
contained in this Section shall be deemed to grant to any subtenant or other
person claiming through or under Tenant the right to sublet all or any portion
of the Demised Premises or to permit the occupancy of all or any portion of the
Demised Premises by others. Neither any subtenant referred to in this Section
nor its heirs, distributees, executors, administrators, legal representatives,
successors nor assigns, without the prior consent of Owner in each instance,
shall (i) assign, whether by merger, consolidation or otherwise, mortgage or
encumber its interest in any sublease, in whole or in part, or (ii) sublet, or
permit the subletting of, that part of the Demised Premises affected by such
subletting or any portion thereof,

                                       19
<PAGE>

or (iii) permit such part of the Demised Premises affected by such subletting or
any part thereof to be occupied or used for desk space, mailing privileges or
otherwise, by any person other than such subtenant and any sublease shall
provide that any violation of the foregoing provisions of this sentence shall be
an event of default thereunder. The sale, pledge, transfer or other alienation
of (a) a controlling interest in the issued and outstanding capital stock of any
corporate subtenant (unless such stock is publicly traded on any recognized
security exchange or over-the-counter market) or (b) a controlling interest in
any partnership or joint venture subtenant, however accomplished, and whether in
a single transaction or in a series of related or unrelated transactions, shall
be deemed for the purposes of this Section to be an assignment of such sublease
which shall require the prior consent of Owner in each instance and any sublease
shall so provide.

          Section 11.04. Owner's Rights Upon Lease Disaffirmance:  A. In the
                         ---------------------------------------
event that, at any time after Tenant may have assigned Tenant's interest in this
Lease, this Lease shall be disaffirmed or rejected in any proceeding of the
types described in Subsections 16.01(c) and (d), or in any similar proceeding,
or in the event of termination of this Lease by reason of any such proceeding or
by reason of lapse of time following notice of termination given pursuant to
Section 16.01 based upon any of the Events of Default set forth in said
Subsections, Tenant, upon request of Owner given within thirty (30) days next
following any such disaffirmance, rejection or termination (and actual notice
thereof to Owner in the event of a disaffirmance or rejection or in the event of
termination other than by act of Owner), shall (i) pay to Owner all Fixed Rent,
additional rent and other charges due and owing by the assignee to Owner under
this Lease to and including the date of such disaffirmance, rejection or
termination, and (ii) as "tenant", enter into a new lease with Owner of the
Demised Premises for a term commencing on the effective date of such
disaffirmance, rejection or termination and ending on the Expiration Date unless
sooner terminated as in such lease provided, at the same Fixed Rent and then
executory terms, covenants and conditions as are contained in this Lease, except
that (a) Tenant's rights under the new lease shall be subject to the possessory
rights of the assignee under this Lease and the possessory rights of any person
claiming through or under such assignee or by virtue of any statute or of any
order of any court, and (b) such new lease shall require all defaults existing
under this Lease to be cured by Tenant with due diligence, and (c) such new
lease shall require Tenant to pay all increases in the Fixed Rent reserved in
this Lease which, had this Lease not been so disaffirmed, rejected or
terminated, would have accrued under the provisions of Article 23 of this Lease
after the date of such disaffirmance, rejection or termination with respect to
any period prior thereto.  In the event Tenant shall default in its obligation
to enter into said new lease for a period of ten (10) days next following
Owner's request therefor, then, in addition to all other rights and remedies by
reason of such default, either at law or in equity, Owner shall have the same
rights and remedies against Tenant as if Tenant had entered into such new lease
and such new lease had thereafter been terminated as at the commencement date
thereof by reason of Tenant's default thereunder.  Nothing contained in this
Section shall be deemed to grant to Tenant any right to assign Tenant's interest
in this Lease.

          Section 11.05. Subsidiary/Affiliate:  A. As long as Tenant is not in
                         --------------------
default under any of the terms, covenants or conditions of this Lease on
Tenant's part to be observed and performed, Tenant named herein shall have the
right, without the prior consent of Owner, to assign its interest in this Lease,
for the use permitted in this Lease, to any subsidiary or affiliate of Tenant
named herein, which is in the same general line of business as Tenant named
herein and only for such period as it shall remain such subsidiary or affiliate.
For the purposes of this Article: (a) a "subsidiary" of Tenant named herein
shall mean any corporation not less than fifty-one (51%) percent of whose
outstanding voting stock at the time shall be owned or controlled by Tenant
named herein, and (b) an "affiliate" of Tenant named herein shall mean Tenant's
parent and any corporation, partnership or other business entity which controls
or is controlled by, or is under common control with Tenant.  For the purpose of
the definition of "affiliate" the word "control" (including, "controlled by" and
"under common control with") as used with respect to any corporation,
partnership or other business entity, shall mean the possession of the power to
direct or cause the direction of the management and policies of such
corporation, partnership or other business entity, whether through the ownership
of voting securities or contract.  No such assignment shall be valid or
effective unless, within ten (10) days after the execution thereof, Tenant shall
deliver to Owner all of the following: (I) a duplicate original instrument of
assignment, in form and substance reasonably satisfactory to Owner and Tenant,
duly executed by Tenant, in  which Tenant shall (a) waive all notices of default
given to the assignee, and all other notices of every kind or description now or
hereafter provided in this Lease, by statute or rule of law, and (b) acknowledge
that Tenant's obligations with respect to this Lease

                                       20
<PAGE>

shall not be discharged, released or impaired by (i) such assignment, (ii) any
amendment or modification of this Lease, whether or not the obligations of
Tenant are increased thereby, (iii) any further assignment or transfer of
Tenant's interest in this Lease, (iv) any exercise, non-exercise or waiver by
Owner of any right, remedy, power or privilege under or with respect to this
Lease, (v) any waiver, consent, extension, indulgence or other act or omission
with respect to any other obligations of Tenant under this Lease, (vi) any act
or thing which, but for the provisions of such assignment, might be deemed a
legal or equitable discharge of a surety or assignor, to all of which Tenant
shall consent in advance, it being the purpose and intent of Owner and Tenant
that the obligations of Tenant hereunder as assignor shall be absolute and
unconditional under any and all circumstances, and (II) an instrument, in form
and substance reasonably satisfactory to Owner and such assignee, duly executed
by the assignee, in which such assignee shall assume the observance and
performance of, and agree to be bound by, all of the terms, covenants and
conditions of this Lease on Tenant's part to be observed and performed.

                  B.     As long as Tenant is not in default under any of the
terms, covenants or conditions of this Lease on Tenant's part to be observed and
performed, Tenant named herein shall have the right without the prior consent of
Owner, to sublet to, or permit the use or occupancy of, all or any part of the
Demised Premises by any subsidiary or affiliate (as said terms are defined in
Section 11.05A.) of Tenant named herein for the use permitted in this Lease
provided that such subsidiary or affiliate is in the same general line of
business as the Tenant named herein and only for such period as it shall remain
such subsidiary or affiliate and in the same general line of business as the
Tenant named herein. However, no such subletting shall be valid unless, prior to
the execution thereof, Tenant shall give notice to Owner of the proposed
subletting, and within ten (10) days prior to the commencement of said
subletting, Tenant shall deliver to Owner an agreement, in form and substance
reasonably satisfactory to Owner and Tenant, duly executed by Tenant and said
subtenant, in which said subtenant shall assume performance of and agree to be
bound by, all of the terms, covenants and conditions of this Lease which are
applicable to said subtenant and such subletting. Tenant shall give prompt
notice to Owner of any such use or occupancy of all or any part of the Demised
Premises and such use or occupancy shall be subject and subordinate to all of
the terms, covenants and conditions of this Lease. No such use or occupancy
shall operate to vest in the user or occupant any right or interest in this
Lease or the Demised Premises. For the purposes of determining the number of
subtenants or occupants in the Demised Premises, the occupancy of any such
permitted subsidiary or affiliate of Tenant shall be deemed the occupancy of
Tenant and such subsidiary or affiliate shall not be counted as a subtenant or
occupant for the purposes of Section 11.03 and the provisions of Section 11.03
relating to Owner's option to terminate this Lease and recapture any portions of
the Demised Premises and the provisions of Section 11.03 relating to Subletting
Profits shall not be applicable to any proposed subletting to any such
subsidiary or affiliate of Tenant pursuant to the provisions of this Section.

          Section 11.06.  Merger/Consolidation:  As long as Tenant is not then
                          --------------------
in default under any of the terms, covenants or conditions of this Lease on
Tenant's part to be observed or performed, Owner's consent shall not be required
for an assignment of Tenant's interest in this Lease to any person, corporation,
partnership, or other business entity which is a successor of Tenant, either by
merger or consolidation or the purchase of all or substantially all of the
stock, assets, business and goodwill of Tenant named herein, provided that said
person, corporation, partnership or other business entity shall have a net
worth, as determined in accordance with generally accepted accounting principles
consistently applied, at least equal to that of Tenant named herein as of the
date of this Lease, and provided further that such successor, person,
corporation, partnership or other business entity shall continue to operate
Tenant's present business in the Demised Premises and the interest of Tenant
named herein in this Lease is not the sole or principal asset of Tenant named
herein and such assignment is made for a good business purpose.  At or about the
time of said proposed assignment, Tenant shall deliver to Owner a reasonably
detailed statement of the financial condition of the aforesaid proposed
assignee, prepared in accordance with generally accepted accounting principles
applied on a consistent basis, sworn to by an executive officer or principal or
partner of Tenant and the proposed Assignee, or certified without qualification
by a firm of reputable independent certified public accountants which statement
shall reflect the financial condition of the aforesaid proposed assignee at that
time.  Notwithstanding anything contained in this Section to the contrary, such
assignment shall not be valid if the aforesaid proposed assignee shall not have
a net worth at least equal to that of Tenant as of the date of this Lease or the
interest of Tenant named herein in this Lease is the sole or principal asset of
Tenant named herein or such assignment is not made for a good business purpose.
In the event of any dispute between Owner and Tenant as to the validity of any
such assignment such dispute shall be determined by arbitration

                                       21
<PAGE>

in the City of New York in accordance with the provisions of Section 36.01. Any
such determination shall be final and binding upon the parties whether or not a
judgment shall be entered in any court. If the determination of any such
arbitration shall be adverse to Owner, Owner, nevertheless, shall not be liable
to Tenant and Tenant's sole remedy in such event shall be to have the proposed
assignment deemed valid. Other than with respect to any instance where Tenant
named herein, Bottomline Technologies, Inc., is merged into another entity, no
such assignment shall be valid, unless, within ten (10) days after the execution
thereof, Tenant shall deliver to Owner (I) a duplicate original instrument of
assignment in form and substance reasonably satisfactory to Owner duly executed
by Tenant, acknowledged before a notary public, in customary and reasonable form
and substance in which Tenant shall (a) waive all notices of default given to
the assignee and all other notices of every kind or description, now or
hereafter provided in this Lease, by statute or by rule of law; (b) acknowledge
that Tenant's obligations with respect to this Lease shall not be discharged,
released or impaired by (i) such assignment; (ii) any amendment or modification
of this Lease (whether or not the obligations of Tenant are increased thereby);
(iii) any further assignment or transfer of Tenant's interest in this Lease;
(iv) any exercise, non- exercise or waiver by Owner of any right, remedy, power
or privilege under or with respect to this Lease; (v) any waiver, consent,
extension, indulgence or other act or omission with respect to any of the
obligations of Tenant under this Lease; (vi) any act or thing which, but for the
provisions of such assignment, might be deemed a legal or equitable discharge of
a surety or assignor, to all of which Tenant shall consent in advance; it being
the purpose and intent of Owner and Tenant that the obligations of Tenant
hereunder as assignor shall be absolute and unconditional under any and all
circumstances; and (II) an instrument in form and substance reasonably
satisfactory to Owner, duly executed by the proposed assignee, acknowledged
before a notary public, in which such proposed assignee shall assume observance
and performance of, and agree to be bound by, all of the terms, covenants and
conditions of this Lease on Tenant's part to be performed.

                                  ARTICLE 12

                              EXISTING CONDITIONS
                              -------------------

          Section 12.01.  Existing Conditions:  Tenant acknowledges that, except
                          -------------------
as otherwise expressly set forth herein, Owner has made no representations to
Tenant with respect to the condition of the Demised Premises and Tenant agrees
to accept possession of the Demised Premises in the condition which shall exist
on the Commencement Date "as is" and further agrees that Owner shall have no
obligation to perform any work or make any installations in order to prepare the
Demised Premises for Tenant's occupancy, other than deliver the Demised Premises
in broom clean order and condition and free of all tenancies and occupancies and
personalty.

                                       22
<PAGE>

                                  ARTICLE 13

                          ACCESS TO DEMISED PREMISES
                          --------------------------

          Section 13.01.  Owner's Right to Enter:  Owner and its agents shall
                          ----------------------
have the following rights in and about the Demised Premises: (i) to enter the
Demised Premises without notice in cases of emergency and upon reasonable
advance notice (which may be delivered personally at the Demised Premises) in
other cases, in each case at all times to examine the Demised Premises or for
any of the purposes set forth in this Article or for the purpose of performing
any obligation of Owner under this Lease or exercising any right or remedy
reserved to Owner in this Lease, or complying with any Legal Requirement which
Owner is obligated to comply with hereunder, and if Tenant, its officers,
partners, agents or employees shall not be personally present or shall not open
and permit an entry into the Demised Premises at any time when such entry shall
be necessary or permissible, to use a master key or to forcibly enter the
Demised Premises; (ii) to erect, install, use and maintain pipes, ducts and
conduits in and through the Demised Premises; (iii) to exhibit the Demised
Premises to others; (iv) to make such decorations, repairs, alterations,
improvements or additions, or to perform such maintenance, including, but not
limited to, the maintenance of all heating, air conditioning, ventilating,
elevator, plumbing, electrical, telecommunication and other mechanical
facilities, as Owner may deem necessary or desirable; (v) to take all materials
into and upon the Demised Premises that may be required in connection with any
such decorations, repairs, alterations, improvements, additions or maintenance;
and (vi) to alter, renovate and decorate the Demised Premises at any time during
the Demised Term if Tenant shall have removed all or substantially all of
Tenant's property from the Demised Premises.  The lessors under any Superior
Lease and the holders of any Mortgage shall have the right to enter the Demised
Premises from time to time through their respective employees, agents,
representatives and architects to inspect the same or to cure any default of
Owner or Tenant relating thereto. Owner shall have the right, from time to time,
to change the name, number or designation by which the Building is commonly
known which right shall include, without limitation, the right to name the
Building after any tenant of the Building.

          Section 13.02.  Owner's Reservation of Rights to Portions of the
                          ------------------------------------------------
Building:  All parts (except surfaces facing the interior of the Demised
--------
Premises) of all walls, windows and doors bounding the Demised Premises
(including exterior Building walls, core corridor walls, doors and entrances),
all balconies, terraces and roofs adjacent to the Demised Premises, all space in
or adjacent to the Demised Premises used for shafts, stacks, stairways, chutes,
pipes, conduits, ducts, fan rooms, heating, air conditioning, ventilating,
plumbing, electrical, telecommunication and other mechanical facilities,
closets, service closets and other Building facilities, and the use thereof, as
well as access thereto through the Demised Premises for the purposes of
operation, maintenance, alteration and repair, are hereby reserved to Owner.
Owner also reserves the right at any time to change the arrangement or location
of entrances, passageways, doors, doorways, corridors, elevators, stairs,
toilets and other public parts of the Building, provided any such change does
not permanently and unreasonably obstruct Tenant's access to or use of the
Demised Premises.  Nothing contained in this Article shall impose any obligation
upon Owner with respect to the operation, maintenance, alteration or repair of
the Demised Premises or the Building.

          Section 13.03.  Access to Third Parties:  Owner and its agents shall
                          -----------------------
have the right to permit access to the Demised Premises, whether or not Tenant
shall be present, to any receiver, trustee, assignee for the benefit of
creditors, sheriff, marshal or court officer entitled to, or reasonably
purporting to be entitled to, such access for the purpose of taking possession
of, or removing, any property of Tenant or any other occupant of the Demised
Premises, or for any other lawful purpose, or by any representative of the fire,
police, building, sanitation or other department of the City, State or Federal
Governments. Neither anything contained in this Section, nor any action taken by
Owner under this Section, shall be deemed to constitute recognition by Owner
that any person other than Tenant has any right or interest in this Lease or the
Demised Premises.

          Section 13.04.  No Actual or Constructive Eviction:  The exercise by
                          ----------------------------------
Owner or its agents or by the lessor under any Superior Lease or by the holder
of any Mortgage of any right reserved to Owner in this Article shall not
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Owner, or its agents,

                                       23
<PAGE>

or upon any lessor under any Superior Lease or upon the holder of any Mortgage,
by reason of inconvenience or annoyance to Tenant, or injury to or interruption
of Tenant's business, or otherwise.

          Section 13.05.  Supplementing the provisions of Sections 13.01, 13.02
and 13.03, Owner agrees that except in cases of emergency, any entry upon the
Demised Premises pursuant to the provisions of said Sections shall be made at
reasonable times, and only after reasonable advance notice (which may be mailed,
delivered or left at the Demised Premises, notwithstanding any contrary
provisions of Article 27), and any work performed or installation made pursuant
to said Section shall be made with reasonable diligence and any such entry, work
or installations shall be made in a manner designed to minimize interference
with Tenant's normal business operations (however, nothing contained in this
Section shall be deemed to impose upon Owner any obligation to employ
contractors or labor at so-called overtime or other premium pay rates).

          Section 13.06.  Further supplementing the provisions of Sections 13.01
and 13.03, Owner's right to exhibit the Demised Premises to others shall be
limited to insurance carriers and representatives thereof, prospective
purchasers of the Real Property or the Building, holders or prospective holders
of any mortgage affecting the Real Property or the Building or any ground or
underlying lease, and other legitimate business visitors, and, during the last
eighteen (18) months of the Demised Term, any prospective tenant of the Demised
Premises.

          Section 13.07.  Further supplementing the provisions of Section 13.01,
Owner agrees that any pipes, ducts or conduits installed in or through the
Demised Premises during the Demised Term pursuant to the provisions of Section
13.01, shall either be concealed behind, beneath or within partitioning,
columns, ceilings or floors, or completely furred at points immediately adjacent
to partitioning, columns or ceilings, and that when the installation of such
pipes, ducts or conduits shall be completed, such pipes, ducts or conduits shall
not materially reduce the usable area of the Demised Premises.

          Section 13.08.  Further supplementing the provisions of Section 13.01,
in the event that, at any time during the Demised Term, if Tenant shall give a
notice to Owner designating an area or areas used by Tenant for the storage of
monies, securities and other valuable documents or proprietary materials, as the
"Security Area", then thereafter, except in cases of emergency only, Owner and
 -------------
its agents shall have no right to enter the Security Area.

                                  ARTICLE 14

                                  VAULT SPACE
                                  -----------

          Section 14.01.  The Demised Premises do not contain any vaults, vault
space or other space outside the boundaries of the Real Property,
notwithstanding anything contained in this Lease or indicated on any sketch,
blueprint or plan.  Owner makes no representation as to the location of the
boundaries of the Real Property.  All vaults and vault space and all other space
outside the boundaries of the Real Property which Tenant may be permitted to use
or occupy are to be used or occupied under a revocable license, and if any such
license shall be revoked, or if the amount of such space shall be diminished or
required by any Federal, State or Municipal Authority or by any public utility
company, such revocation, diminution or requisition shall not constitute an
actual or constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent, or relieve Tenant from any of its obligations
under this Lease, or impose any liability upon Owner.  Any fee, tax or charge
imposed by any governmental authority for any such vault, vault space or other
space shall be paid by Tenant.

                                       24
<PAGE>

                                  ARTICLE 15

                           CERTIFICATE OF OCCUPANCY
                           ------------------------

          Section 15.01.  Tenant will not at any time use or occupy, or permit
the use or occupancy of, the Demised Premises in violation of any Certificate(s)
of Occupancy covering the Demised Premises.  Owner agrees that a temporary or
permanent Certificate(s) of Occupancy covering the Demised Premises will be in
force on the Commencement Date permitting the Demised Premises to be used as
"offices".  However, neither such agreement, nor any other provision of this
Lease, nor any act or omission of Owner, its agents or contractors, shall be
deemed to constitute a representation or warranty that the Demised Premises, or
any part thereof, may be lawfully used or occupied for any particular purpose or
in any particular manner, in contradistinction to mere "office" use.

                                  ARTICLE 16

                                    DEFAULT
                                    -------

          Section 16.01.  Events of Default:  Upon the occurrence, at any time
                          -----------------
prior to or during the Demised Term, of any one or more of the following events
(referred to herein, singly, as an "Event of Default" and collectively as
                                    ----------------
"Events of Default"):
------------------

                  (a)     if Tenant shall default in the payment when due of any
          installment of Fixed Rent or any increase in the Fixed Rent or in the
          payment when due of any additional rent and such default shall
          continue for a period of five (5) days after notice by Owner to Tenant
          of such default; or

                  (b)     if Tenant shall default in the observance or
          performance of any term, covenant or condition of this Lease on
          Tenant's part to be observed or performed (other than the covenants
          for the payment of Fixed Rent, any increase in the Fixed Rent and
          additional rent) and Tenant shall fail to remedy such default within
          thirty (30) days after notice by Owner to Tenant of such default, or
          if such default is of such a nature that it cannot be completely
          remedied within said period of thirty (30) days and Tenant shall not
          commence, promptly after receipt of such notice, or shall not
          thereafter diligently prosecute to completion, all steps necessary to
          remedy such default; or

                  (c)     if Tenant shall file a voluntary petition in
          bankruptcy or insolvency, or shall be adjudicated a bankrupt or
          insolvent, or shall file any petition or answer seeking any
          reorganization, arrangement, composition, readjustment, liquidation,
          dissolution or similar relief under the present or any future federal
          bankruptcy act or any other present or future applicable federal,
          state or other statute or law, or shall make an assignment for the
          benefit of creditors, or shall seek or consent to or acquiesce in the
          appointment of any trustee, receiver or liquidator of Tenant or of all
          or any part of Tenant's property; or

                  (d)     if, within sixty (60) days after the commencement of
          any proceeding against Tenant, whether by the filing of a petition or
          otherwise, seeking any reorganization, arrangement, composition,
          readjustment, liquidation, dissolution or similar relief under the
          present or any future federal bankruptcy act or any other present or
          future applicable federal, state or other statute or law, such
          proceeding shall not have been dismissed, or if, within sixty (60)
          days after the appointment of any trustee, receiver or liquidator of
          Tenant, or of all or any part of Tenant's property, without the
          consent or acquiescence of Tenant, such appointment shall not have
          been vacated or otherwise discharged, or if any execution or
          attachment shall be issued against Tenant or any of Tenant's property
          pursuant to which the Demised Premises shall be taken or occupied or
          attempted to be taken or occupied; or

                                       25
<PAGE>

                  (e)     if Tenant shall default in the observance or
          performance of any term, covenant or condition on Tenant's part to be
          observed or performed under any other lease with Owner of space in the
          Building and such default shall continue beyond any grace period set
          forth in such other lease for the remedying of such default; or

                  (f)    if the Demised Premises shall become deserted or
          abandoned; or

                  (g)    if (i) Tenant's interest in this Lease shall devolve
          upon or pass to any person, whether by operation of law or otherwise,
          or (ii) there shall be any sale, pledge, transfer or other alienation
          described in Section 11.01 of this Lease which is deemed an assignment
          of this Lease for purposes of said Section 11.01, except as expressly
          permitted under Article 11;

then, during such time as such Event(s) of Default is/are continuing, Owner may
at any time, at Owner's option, give to Tenant a five (5) days' notice of
termination of this Lease and, in the event such notice is given, this Lease and
the Demised Term shall come to an end and expire (whether or not said term shall
have commenced) upon the expiration of said five (5) days with the same effect
as if the date of expiration of said five (5) days were the Expiration Date, but
Tenant shall remain liable for damages and all other sums payable pursuant to
the provisions of Article 18.

          Section 16.02.  "Tenant"/Moneys Received:  If, at any time (i) Tenant
                           ------------------------
shall be comprised of 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 Subsections (c) and (d) of Section 16.01, 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 Owner from or on
behalf of Tenant during the pendency of any proceeding  of the types referred to
in said Subsections (c) and (d) shall be deemed paid as compensation for the use
and occupation of the Demised Premises and the acceptance of any such
compensation by Owner shall not be deemed an acceptance of rent or a waiver on
the part of Owner of any rights under Section 16.01.

                                  ARTICLE 17

                                   REMEDIES
                                   --------

          Section 17.01.  Owner's Right of Re-Entry and Right to Relet:  If
                          --------------------------------------------
Tenant shall default in the payment when due of any installment of Fixed Rent or
in the payment when due of any increase in the Fixed Rent or any additional
rent, or if this Lease and the Demised Term shall expire and come to an end as
provided in Article 16:

                  (a)     Owner and its agents and servants may immediately, or
          at any time after such default or after the date upon which this Lease
          and the Demised Term shall expire and come to an end, re-enter the
          Demised Premises 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 Demised
          Premises and dispossess Tenant and any other persons from the Demised
          Premises and remove any and all of their property and effects from the
          Demised Premises; and

                  (b)     Owner, at Owner's option, may relet the whole or any
          part or parts of the Demised Premises, from time to time, either in
          the name of Owner 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 Owner, in its sole discretion,
          may determine. Owner shall have no obligation to relet the Demised
          Premises or any part thereof and shall in no event be liable for
          refusal or failure to relet the Demised Premises or any part thereof,
          or, in the event of any such reletting, for refusal or failure to
          collect any rent due upon any such reletting, and no such refusal or
          failure shall operate to relieve Tenant of any liability under this
          Lease or otherwise to affect any such liability; Owner, at Owner's
          option, may make such repairs,

                                       26
<PAGE>

          replacements, alterations, additions, improvements, decorations and
          other physical changes in and to the Demised Premises as Owner, 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.

          Section 17.02.  Waiver of Right to Redeem, etc.:  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 further hereby
waive any and all rights which Tenant and all such persons might otherwise have
under any present or future law to redeem the Demised Premises, or to re-enter
or repossess the Demised Premises, or to restore the operation of this Lease,
after (i) Tenant shall have been dispossessed by a judgment or by warrant of any
court or judge, or (ii) any re-entry by Owner, or (iii) any expiration or
termination of this Lease and the Demised 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 on Tenant's part to be observed or performed, Owner 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 in this Lease is cumulative and shall not
preclude Owner from invoking any other remedy allowed by law or in equity.
Owner agrees that the first sentence of this Section 17.02 shall not be deemed a
waiver of Tenant's right to be served with any notice of petition and petition
in any summary proceedings under the provisions of the Real Property Actions and
Proceedings Law of the State of New York and any successor law of like import
then in force.

                                  ARTICLE 18

                                    DAMAGES
                                    -------

          Section 18.01.  Amount of Owner's Damages:  If this Lease and the
                          -------------------------
Demised Term shall expire and come to an end as provided  in Article 16, or by
or under any summary proceeding or any other action or proceeding, or if Owner
shall re-enter the Demised Premises as provided in Article 17, or by or under
any summary proceeding or any other action or proceeding, then, in any of said
events:

                  (a)    Tenant shall pay to Owner all Fixed Rent, additional
          rent and other charges payable under this Lease by Tenant to Owner to
          the date upon which this Lease and the Demised Term shall have expired
          and come to an end or to the date of re-entry upon the Demised
          Premises by Owner, as the case may be; and

                  (b)    Tenant shall also be liable for and shall pay to Owner,
          as damages, any deficiency (referred to as a "Deficiency") between the
                                                        ----------
          Fixed Rent reserved in this Lease for the period which otherwise would
          have constituted the unexpired portion of the Demised Term and the net
          amount, if any, of rents collected under any reletting effected
          pursuant to the provisions of Section 17.01 for any part of such
          period (first deducting from the rents collected under any such
          reletting all of Owner's expenses in connection with the termination
          of this Lease or Owner's re-entry upon the Demised Premises and with
          such reletting including, but not limited to, all repossession costs,
          brokerage commissions, legal expenses, attorneys' fees, alteration
          costs and other expenses of preparing the Demised 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, Owner 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
          Owner's right to collect the Deficiency for any subsequent month by a
          similar proceeding.  Solely for the purposes of this Subsection (b),
          the

                                       27
<PAGE>

          term "Fixed Rent" shall mean the Fixed Rent in effect immediately
          prior to the date upon which this Lease and the Demised Term shall
          have expired and come to an end, or the date of re-entry upon the
          Demised Premises by Owner, as the case may be, adjusted, from time to
          time, to reflect any increases which would have been payable pursuant
          to any of the provisions of this Lease including, but not limited to,
          the provisions of Article 23 of this Lease if the term hereof had not
          been terminated; and

                  (c)    At any time after the Demised Term shall have expired
          and come to an end or Owner shall have re-entered upon the Demised
          Premises, as the case may be, as a result of any Event of Default as
          set forth in subsection (c) or (d) of Section 16.01 whether or not
          Owner shall have collected any monthly Deficiencies as aforesaid,
          Owner shall be entitled to recover from Tenant, and Tenant shall pay
          to Owner, on demand, as and for liquidated and agreed final damages, a
          sum equal to the amount by which the Fixed Rent reserved in this Lease
          for the period which otherwise would have constituted the unexpired
          portion of the Demised Term exceeds the then fair and reasonable
          rental value of the Demised Premises for the same period, both
          discounted to present worth at the rate of eight (8%) percent per
          annum less the aggregate amount of Deficiencies theretofore collected
          by Owner pursuant to the provisions of subsection (b) of this Section
          for the same period. If, before presentation of proof of such
          liquidated damages to any court, commission or tribunal, the Demised
          Premises, or any part thereof, shall have been relet by Owner for the
          period which otherwise would have constituted the unexpired portion of
          the Demised 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 Demised
          Premises so relet during the term of the reletting. Solely for the
          purposes of this Subsection (c), the term "Fixed Rent" shall mean the
          Fixed Rent in effect immediately prior to the date upon which this
          Lease and the Demised Term shall have expired and come to an end, or
          the date of re-entry upon the Demised Premises by Owner, as the case
          may be, adjusted to reflect any increases pursuant to the provisions
          of Article 23 for the Escalation Year and Tax Escalation Year
          immediately preceding such event.

          Section 18.02.  Rents Under Reletting:  If the Demised 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 Article
18.  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.  Nothing contained in Articles 16, 17 or this Article
shall be deemed to limit or preclude the recovery by Owner 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 Owner may be entitled in addition to the
damages set forth in Section 18.01.

                                  ARTICLE 19

                         FEES AND EXPENSES; INDEMNITY
                         ----------------------------

          Section 19.01.  Owner's Right to Cure Tenant's Default:  If Tenant
                          --------------------------------------
shall default in the observance or performance of any term, covenant or
condition of this Lease on Tenant's part to be observed or performed, Owner, at
any time thereafter and without notice in cases of emergency, and in other cases
after the expiration of the applicable grace period set forth in this Lease, may
remedy such default for Tenant's account and at Tenant's expense, without
thereby waiving any other rights or remedies of Owner with respect to such
default.

          Section 19.02.  Tenant's Indemnity and Liability Insurance
                          ------------------------------------------
Obligations:  A.  Tenant agrees to indemnify and save Owner and "Owner's
Indemnitees" (as hereinafter defined) harmless of and from all loss, cost,
liability, damage and expense including, but not limited to, reasonable counsel
fees, penalties and fines, incurred in connection with or arising from (i) any
default by Tenant in the observance or performance of any of the terms,
covenants or conditions of this Lease on Tenant's part to be observed or
performed after notice and the expiration of any applicable grace or cure period
in this Lease specifically with respect thereto, or (ii) the breach or failure
of any representation or warranty made by Tenant in this Lease, or (iii) the
manner of use or occupancy of the Demised

                                       28
<PAGE>

Premises by Tenant or any person claiming through or under Tenant (in
contradistinction to the mere use or occupancy of the Demised Premises for the
purposes set forth in Section 2.01), or (iv) any acts, omissions or negligence
of Tenant or any such person, or the contractors, agents, servants, employees,
visitors or licensees of Tenant or any such person, in or about the Demised
Premises or the Building either prior to, during, or after the expiration of,
the Demised Term, including, but not limited to, any acts omissions or
negligence in the making or performing of any Alterations. Tenant further agrees
to indemnify and save harmless Owner and Owner's Indemnitees of and from all
loss, cost, liability, damage and expense, including, but not limited to,
reasonable counsel fees and disbursements incurred in connection with or arising
from any claims by any persons by reason of injury to persons or damage to
property occasioned by any use, occupancy, act, omission or negligence referred
to in the preceding sentence. "Owner's Indemnitees" shall mean the Owner, the
                               -------------------
shareholders or the partners comprising Owner and its and their partners and
shareholders, officers, directors, employees, agents (including without
limitation, any leasing and managing agents) and contractors together with the
lessor under any Superior Lease and the holder of any Mortgage. If any action or
proceeding shall be brought against Owner or Owner's Indemnitees based upon any
such claim and if Tenant, upon notice from Owner, shall cause such action or
proceeding to be defended at Tenant's expense by counsel acting for Tenant's
insurance carriers in connection with such defense or by other counsel
reasonably satisfactory to Owner, without any disclaimer of liability by Tenant
or such insurance carriers in connection with such claim, Tenant shall not be
required to indemnify Owner and Owner's Indemnitees for counsel fees in
connection with such action or proceeding.

                          B.  Throughout the Demised Term Tenant shall maintain
comprehensive public liability and water legal liability insurance against any
claims by reason of personal injury, death and property damage occurring in or
about the Demised Premises covering, without limitation, the operation of any
private air conditioning equipment and any private elevators, escalators or
conveyors in or serving the Demised Premises or any part thereof, whether
installed by Owner, Tenant or others, and shall furnish to Owner duplicate
original policies of such insurance at least ten (10) days prior to the
Commencement Date and at least ten (10) days prior to the expiration of the term
of any such policy previously furnished by Tenant, in which policies Owner, and
Owner's Indemnitees shall be named as parties insured, which policies shall be
issued by companies, and shall be in form and amounts, reasonably satisfactory
to Owner.

          Section 19.03.  Payments:  Tenant shall pay to Owner, within five (5)
                          --------
days next following rendition by Owner to Tenant of bills or statements
therefor: (i) sums equal to all expenditures made and monetary obligations
incurred by Owner including, but not limited to, expenditures made and
obligations incurred for reasonable counsel fees and disbursements, in
connection with the remedying by Owner, for Tenant's account pursuant to the
provisions of Section 19.01, of any default of Tenant, and (ii) sums equal to
all losses, costs, liabilities, damages and expenses referred to in Section
19.02, and (iii) sums equal to all expenditures made and monetary obligations
incurred by Owner including, but not limited to, expenditures made and
obligations incurred for reasonable counsel fees and disbursements, in
collecting or attempting to collect the Fixed Rent, any additional rent or any
other sum of money accruing under this Lease or in enforcing or attempting to
enforce any rights of Owner under this Lease or pursuant to law, whether by the
institution and prosecution of summary proceedings or otherwise; and (iv) all
other sums of money (other than Fixed Rent) accruing from Tenant to Owner under
the provisions of this Lease. Any sum of money (other than Fixed Rent) accruing
from Tenant to Owner pursuant to any provision of this Lease whether prior to or
after the Commencement Date, may, at Owner's option, be deemed additional rent,
and Owner shall have the same remedies for Tenant's failure to pay any item of
additional rent when due as for Tenant's failure to pay any installment of Fixed
Rent when due. Tenant's obligations under this Article shall survive the
expiration or sooner termination of the Demised Term.

          Section 19.04.  Tenant's Late Payments - Late Charges:  If Tenant
                          -------------------------------------
shall fail to make payment of any installment of Fixed Rent or any increase in
the Fixed Rent or any additional rent within ten (10) days after the date when
such payment is due, Tenant shall pay to Owner, in addition to such installment
of Fixed Rent or such increase in the Fixed Rent or such additional rent, as the
case may be, as a late charge and as additional rent, a sum equal to three (3%)
percent per annum above the then current prime rate (as the term "prime rate" is
defined in Section 31.03) charged by Chemical Bank or its successor of the
amount unpaid computed from the date such payment was due to and including the
date of payment.

                                       29
<PAGE>

          Section 19.05.  Owner agrees to indemnify and save Tenant harmless of
and from all loss, cost, liability, damage and expense, including, but not
limited to, reasonable counsel fees, penalties and fines incurred in connection
with or arising from (i) any default by Owner in the performance or observance
of any of the terms, covenants or conditions of this Lease on Owner's part to be
observed or performed, or (ii) any acts, omissions or negligence of Owner or its
employees, agents, contractors or servants in or about the Demised Premises or
the Building either prior to, during, or after, the expiration of the Demised
Term.  Owner further agrees to indemnify and save harmless Tenant and its agents
of and from all loss, cost, liability, damage, and expense, including, but not
limited to, reasonable counsel fees incurred in connection with or arising from
any claims by any persons or damage to property occasioned by any act, omission
or negligence referred to in the preceding sentence.  If any action or
proceeding shall be brought against Tenant or Tenant's agents based upon any
such claim and if Owner, upon notice from Tenant, shall cause such action or
proceeding to be defended at Owner's expense by counsel acting for Owner's
insurance carriers in connection with such defense or by other counsel
reasonably satisfactory to Tenant, without any disclaimer of liability by Owner
in connection with such claim, Owner shall not be required to indemnify Tenant
or Tenant's agents for counsel fees in connection with such action or
proceeding.

                                  ARTICLE 20

                               ENTIRE AGREEMENT
                               ----------------

          Section 20.01.  Entire Agreement:  This Lease contains the entire
                          ----------------
agreement between the parties and all prior negotiations and agreements are
merged in this Lease.  Neither Owner nor Owner's agents have made any
representations or warranties with respect to the Demised Premises, the
Building, the Real Property or this Lease except as expressly set forth in this
Lease and no rights, easements or licenses are or shall be acquired by Tenant by
implication or otherwise unless expressly set forth in this Lease.  This Lease
may not be changed, modified or discharged, in whole or in part, orally and no
executory agreement shall be effective to change, modify or discharge, in whole
or in part, this Lease or any provisions of this Lease, unless such agreement is
set forth in a written instrument executed by the party against whom enforcement
of the change, modification or discharge is sought.  All references in this
Lease to the consent or approval of Owner shall be deemed to mean the written
consent of Owner, or the written approval of Owner, as the case may be, and no
consent or approval of Owner shall be effective for any purpose unless such
consent or approval is set forth in a written instrument executed by Owner.

                                       30
<PAGE>

                                 ARTICLE 21

                                 END OF TERM
                                 -----------

          Section 21.01.  End of Term: On the date upon which the Demised Term
                          -----------
shall expire and come to an end, whether pursuant to any of the provisions of
this Lease or by operation of law, and whether on or prior to the Expiration
Date, Tenant, at Tenant's sole cost and expense, (i) shall quit and surrender
the Demised Premises to Owner, broom clean and in good order and condition,
ordinary wear and tear and damage or destruction by fire or any other casualty
and repairs for which Tenant is not responsible under the provisions of this
Lease excepted, and (ii) shall remove all of Tenant's Personal Property and all
other property and effects of Tenant and all persons claiming through or under
Tenant (including, but not limited to, all telecommunications facilities) from
the Demised Premises and the Building, and (iii) shall repair all damage to the
Demised Premises and the Building occasioned by such removal and (iv) shall, at
Owner's election, exercisable within six (6) months following the expiration or
earlier termination of the Demised Term, remove any private interior staircases
in the Demised Premises or connecting the Demised Premises or any part thereof
with any other space (referred to herein as the "Other Space") in the Building
                                                 -----------
occupied by Tenant, and restore those portions of the Demised Premises, the
Other Space and the Building affected by any such staircases (including, but not
limited to, the slabbing over of any openings) to the condition of each which
existed prior to the installation of any such staircases, and repair any damage
to the Demised Premises, Other Space and the Building occasioned by such
removal. Notwithstanding the provisions of subdivision (iv) of the foregoing
sentence, in the event Owner does not elect to have removed any such staircase
referred to therein, any such staircase shall be and remain the property of
Owner at no cost or expense to Owner. Owner shall have the right to retain any
property and effects which shall remain in the Demised Premises after the
expiration or sooner termination of the Demised Term, and any net proceeds from
the sale thereof, without waiving Owner's rights with respect to any default by
Tenant under the foregoing provisions of this Section. 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 summary proceedings which Owner
may institute to enforce the foregoing provisions of this Article. If said date
upon which the Demised Term shall expire and come to an end shall fall on a
Sunday or holiday, then Tenant's obligations under the first sentence of this
Section shall be performed on or prior to the Saturday or business day
immediately preceding such Sunday or holiday. Tenant's obligations under this
Section shall survive the expiration or sooner termination of the Demised Term.

                                 ARTICLE 22

                                QUIET ENJOYMENT
                                ---------------

          Section 22.01.  Quiet Enjoyment:  Owner covenants and agrees with
                          ---------------
Tenant that upon Tenant paying the Fixed Rent and additional rent reserved in
this Lease and observing and performing all of the terms, covenants and
conditions of this Lease on Tenant's part to be observed and performed, Tenant
may peaceably and quietly enjoy the Demised Premises during the Demised Term,
subject, however, to the terms, covenants and conditions of this Lease
including, but not limited to, the provisions of Section 37.01, and subject to
the Superior Lease and the Mortgage referred to in Section 7.01.

                                 ARTICLE 23

                     TAX PAYMENTS AND OPERATING ESCALATION
                     -------------------------------------

          Section 23.01.  Definitions:  In the determination of any increase in
                          -----------
the Fixed Rent under the provisions of this Article, Owner and Tenant agree that
the following terms shall have the following meanings:

                                       31
<PAGE>

                    A.  The term "Tax Escalation Year" shall mean each fiscal
                                  -------------------
year commencing July 1st and ending on the following June 30th which shall
include any part of the Demised Term.

                    B.  The term "Escalation Year" shall mean each calendar year
                                  ---------------
which shall include any part of the Demised Term.

                    C.  The term "Taxes" shall be deemed to mean a sum equal to
                                  -----
the aggregate of: (i) the product determined by multiplying (a) the then
applicable full New York City real estate tax rate in effect with respect to the
Borough of Manhattan by (b) the then applicable assessed valuation of the Real
Property plus (ii) amounts assessed by any business improvement district in
which the Real Property is located plus (iii) any other assessments, special or
otherwise, upon or with respect to the Real Property imposed by the City or
County of New York or any other taxing authority. If, due to any change in the
method of taxation, any franchise, income, profit, sales, rental, use and
occupancy or other tax or payments in lieu of any such taxes shall be
substituted for, or levied against Owner or any owner of the Building or the
Real Property, in lieu of any real estate taxes or assessments upon or with
respect to the Real Property, such tax or payments in lieu of any such taxes
shall be included in the term Taxes for the purposes of this Article. Subject to
the foregoing provisions hereof, "Taxes" shall not include (i) any income,
capital levy, franchise, capital stock, gift, estate or inheritance tax and
(iii) interest or penalties incurred by Owner as a result of Owner's late
payment of Taxes.

                    D.  The term "Demised Premises Area" shall mean 3,324 square
                                  ---------------------
feet.

                    E.  The term "Building Area" shall mean 398,537 square feet.
                                  -------------

                    F.  The term "Tenant's Proportionate Share" shall mean the
                                  ----------------------------
fraction, the denominator of which is the Building Area and the numerator of
which is the Demised Premises Area.

                    G.  (1)  The term "Operating Expenses" shall, subject to the
                                       ------------------
provisions of Paragraph (2) of this Subsection 23.01.G, mean the aggregate cost
and expense incurred by Owner in the operation, maintenance, management and
security of the Real Property and any plazas, sidewalks and curbs adjacent
thereto including, without limitation, the cost and expense of the following:

                    (a) salaries, wages, medical, surgical and general welfare
               and other so-called "fringe" benefits (including group insurance
               and retirement benefits) for employees (including, but not
               limited to, employees who provide twenty four (24) hour services,
               seven (7) days per week throughout the year) of Owner or any
               contractor of Owner engaged in the cleaning, operation,
               maintenance or management of the Real Property, or engaged for
               security purposes and/or for receiving or transmitting deliveries
               to and from the Building, and payroll taxes and workmen's
               compensation insurance premiums relating thereto,

                    (b) gas, steam, water and sewer rental,

                    (c) thirty five (35%) percent of all electrical costs
               incurred in the operation of the Building, provided, however, in
               the event that Owner discontinues the redistribution or
               furnishing of electrical energy to the tenants and occupants of
               the Building, then the cost and expense incurred by Owner for
               electricity shall thereafter be deemed to be one hundred (100%)
               percent of (i) the total cost and expense to Owner of purchasing
               electricity for the Building less (ii) any reimbursement to Owner
               by the tenants in the Building for the payment for the Floor HVAC
               Units and the Floor Public Light and Power (as said terms are
               defined in Section 29.05).

                    (d)  utility taxes,

                                       32
<PAGE>

                    (e)  rubbish removal,

                    (f)  fire, casualty, liability, rent and other insurance
               carried by Owner,

                    (g)  repairs, repainting, replacement, maintenance of
               grounds, and Included Improvements (as provided in Paragraph (2)
               of this Subsection 23.01.G),

                    (h)  Building supplies,

                    (i)  uniforms and cleaning thereof,

                    (j)  snow removal,

                    (k)  window cleaning,

                    (l)  service contracts with independent contractors for any
               of the foregoing (including, but not limited to, elevator,
               heating, air conditioning, ventilating, sprinkler system, fire
               alarm and telecommunication equipment maintenance),

                    (m)  management fees (whether or not paid to any person,
               firm or corporation having an interest in or under common
               ownership with Owner or any of the persons, firms or corporations
               comprising Owner) in the amount of one ($1.00) dollar per
               rentable square foot of the Building Area in the first Escalation
               Year which amount for management fees shall increase in each
               Escalation Year subsequent to the first Escalation Year by the
               same percentage of increase as the percentage of increase in the
               aggregate of all other Operating Expenses,

                    (n)  legal fees and disbursements and other expenses
               (excluding, however, legal fees and expenses incurred in
               connection with any (i) application or proceeding brought for
               reduction of the assessed valuation of the Real Property or any
               part thereof, or (ii) the negotiation of leases or any
               proceedings brought for collection of rent or additional rents),

                    (o)  auditing fees,

                    (p)  deleted,

                    (q)  all costs of compliance under the provisions of any
               present or future Superior Lease other than the payment of rental
               and impositions thereunder and increases in the basic rent under
               such leases as a result of adjustments in such basic rent, and

                    (r)  all other costs and expenses incurred in connection
               with the operation, maintenance, management and security of the
               Real Property, and any plazas, sidewalks and curbs adjacent
               thereto.

               (2)  The cost and expense of the following shall be excluded from
               the calculation of operating expenses:

                    (a)  leasing commissions;
                    (b)  executives' salaries above the grade of building
                    manager and superintendent;

                                       33
<PAGE>

                    (c)  capital improvements and replacements which under
               generally accepted accounting principles and practice would be
               classified as capital expenditures, except the cost and expense
               of any improvement, alteration, replacement or installation which
               is either (i) required by any Legal Requirement, or (ii)
               designed, in Owner's judgment, to result in savings or reductions
               in Operating Expenses or (iii) designed, in Owner's judgment, to
               benefit the tenants of the Building (such improvements,
               alterations, replacements and installations are referred to as
               "Included Improvements"); the cost and expense of Included
                ---------------------
               Improvements whenever made shall be included in Operating
               Expenses for any Escalation Year subsequent to the Base
               Escalation Year to the extent of (x) the annual amortization or
               depreciation of the cost and expense to Owner of such Included
               Improvements, as amortized or depreciated on a straight line
               basis over ten (10) years allocable to such Escalation Year plus
               (y) an annual charge for interest upon the unamortized or
               undepreciated portions of such cost and expense at the average
               prime rate (as defined in Section 31.03) during the Escalation
               Year in question;

                    (d)   any other item which under generally accepted
               accounting principles and practice would not be regarded as an
               operating, maintenance or management expense;

                    (e)   any item for which Owner is compensated through
               proceeds of insurance;

                    (f)   any specific compensation which Owner receives from
               any tenant for services rendered to such tenant by Owner above
               and beyond those services generally rendered by Owner to tenants
               in the Building without specific compensation therefor;

                    (g)   sixty-five (65%) percent of all electrical costs
               incurred in the operation of the Building, provided however, in
               the event that Owner discontinues the redistribution or
               furnishing of electrical energy to the tenants and occupants of
               the Building, then the aforesaid exclusion of sixty-five (65%)
               percent of such electrical costs shall not apply;

               (h)  interest and principal payments for mortgages;

               (i)  any ground or underlying lease rental;

               (j)  bad debt expenses, and interest, principal, points and fees
               on debts or amortization on any mortgage or other debt instrument
               encumbering the Building or the Real Property;

               (k)  cost incurred by Owner to the extent that Owner is
               reimbursed by insurance proceeds or is otherwise reimbursed;

               (l)  advertising and promotional expenditures, and costs or
               acquisition and maintenance of signs in or on the Building
               identifying the Owner of the Building or other tenants;

               (m)  marketing costs, including leasing commissions, attorneys'
               fees (in connection with the negotiation and preparation of
               letters, deal memos, letters of intent, leases, subleases and /or
               assignments), space planning costs, and other costs and expenses
               incurred in connection with lease, sublease and/or assignment
               negotiations and transactions with present or prospective tenants
               or other occupants of the Building;

               (n)  costs, including permit, license and inspection costs,
               incurred with respect to the installation of tenants' or other
               occupants' improvements or incurred in renovating or otherwise
               improving, decorating, painting or redecorating vacant space for
               tenants or other occupants of the Building;

                                       34
<PAGE>

               (o)  expenses in connection with services or other benefits which
               are not offered to Tenant or for which Tenant is charged for
               directly;

               (p)  Costs incurred by Owner due to the violation by Owner or any
               tenant of the terms and conditions of any lease of space in the
               Building;

               (q)  amounts paid to Owner or to subsidiaries or affiliates of
               Owner for goods and/or services in the Building to the extent the
               same exceeds the costs of such goods and/or services rendered by
               unaffiliated third parties on a competitive basis;

               (r)  any compensation paid to clerks, attendants or other persons
               in commercial concessions operated by Owner;

               (s)  services provided, taxes, attributable to, and costs
               incurred in connection with the operation of any retail,
               restaurant and garage operations for the Building, and any
               replacement garages or parking facilities and any shuttle
               services;

               (t)  costs arising from the negligence or willful misconduct of
               Owner or other tenants or occupants of the Building or their
               respective agents, employees, licensees, vendors, contractors or
               providers of materials or services;

               (u)  costs arising from Owner's charitable or political
               contributions;

               (v)  costs for sculpture, paintings or other objects of art;

               (w)  costs incurred in connection with the original construction
               of the Building or in connection with any major change in the
               Building, such as adding or deleting floors which under generally
               accepted accounting principles consistently applied, are properly
               classified as capital expenditure;

               (x)  costs associated with the operation of the business of the
               partnership or entity which constitutes the Owner, as the same
               are distinguished from the costs of operation of the Building,
               including partnership accounting and legal matters, costs of
               defending any lawsuits with any mortgagee (except as the actions
               of Tenant may be in issue), costs of selling, syndicating,
               financing, mortgaging or hypothecating any of Owner's interest in
               the Building, costs (including attorney's fees and costs of
               settlement judgments and payments in lieu thereof) arising from
               the claims, disputes or potential disputes in connection with
               potential or actual claims, litigation or arbitrations pertaining
               to Owner and/or the Building and/or the site upon which the
               Building is situated;

               (y)  the wages and benefits of any executive or administrative
               employee above building manager or supervisor or any non-
               executive employee to the extent it does not devote substantially
               all of his or her time to the Building; and

               (z)  Owner's general corporate overhead and general and
               administrative expenses;

                    H.  The term "Base Operating Expenses" shall mean the sum
                                  -----------------------
equal to Operating Expenses in effect for the calendar year 2000 (which is
referred to herein as the "Base Escalation Year").
                           --------------------

                    I.  The term "Owner's Tax Statement" shall mean an
                                  ---------------------
instrument containing a computation of any increase in the Fixed Rent pursuant
to the provisions of Section 23.02 A. of this Article.

                                       35
<PAGE>

                    J.  The term "Owner's Operating Expense Statement" shall
                                  -----------------------------------
mean an instrument containing a computation of any increase in the Fixed Rent
pursuant to the provisions of Section 23.04 of this Article.

                    K.  The term "Monthly Escalation Installment" shall mean a
                                  ------------------------------
sum equal to one-twelfth (1/12th) of the increase in the Fixed Rent payable
pursuant to the provisions of Subsection 23.04 A for the Escalation Year with
respect to which Owner has most recently rendered an Owner's Operating Expense
Statement, appropriately adjusted to reflect (i) in the event such Escalation
Year is a partial calendar year, the increase in the Fixed Rent which would have
been payable for such Escalation Year if it had been a full calendar year, and
(ii) the amount by which current Operating Expenses as reasonably estimated by
Owner exceed Operating Expenses as reflected in such Owner's Operating Expense
Statement; and (iii) any net credit balance to which Tenant may be entitled
pursuant to the provisions of Subsection 23.05 C.

                    L.  The term "Monthly Escalation Installment Notice" shall
                                  -------------------------------------
mean a notice given by Owner to Tenant which sets forth the current Monthly
Escalation Installment; such Notice may be contained in a regular monthly rent
bill, in an Owner's Operating Expense Statement, or otherwise, and may be given
from time to time, at Owner's election.

                    M.  Owner and Tenant acknowledge that Owner may apply for a
certificate of eligibility from the Department of Finance of the City of New
York determining that Owner is eligible to apply for exemption from tax payments
for the Real Property pursuant to the provisions of Section 11-256 through 11-
267 (the "ICIP Program") of the Administrative Code of the City of New York and
          ------------
the regulations promulgated pursuant to the ICIP Program. Any such tax exemption
for the Real Property is referred to as "Tax Exemption" and the period of such
                                         -------------
Tax Exemption is referred to as the "Tax Exemption Period". Owner agrees that
                                     --------------------
Tenant shall not be required to (a) pay Taxes or charges which become due
because of the willful neglect or fraud by Owner in connection with the ICIP
Program or (b) otherwise relieve or indemnify Owner from any personal liability
arising under the ICIP Program, except where imposition of such Taxes, charges
or liability is occasioned by actions of Tenant in violation of this Lease.
Tenant agrees to report to Owner, as often as is necessary under such
regulations, the number of workers engaged in employment in the Demised
Premises, the nature of each worker's employment and the residency of each
worker and to provide access to the Demised Premises by employees and agents of
the Department of Finance of the City of New York at all reasonable times at the
request of Owner. Tenant represents to the Owner that, within the seven (7)
years immediately preceding the date of this Lease, Tenant has not been adjudged
by a court of competent jurisdiction to have been guilty of (x) an act, with
respect to a building, which is made a crime under the provisions of Article 150
of the Penal Law of the State of New York or any similar law of another state,
or (y) any act made a crime or violation by the provisions of Section 235 of the
Real Property Law of the State of New York, nor is any charge for a violation of
such laws presently pending against Tenant. Upon request of Owner, from time to
time, Tenant agrees to update said representation when required because of the
ICIP Program and regulations thereunder. Tenant further agrees to cooperate with
Owner in compliance with such ICIP Program and regulations to aid Owner in
obtaining and maintaining the Tax Exemption and, if requested by Owner, to post
a notice in a conspicuous place in the Demised Premises and to publish a notice
in a newspaper of general circulation in the City of New York, in such form as
shall be prescribed by the Department of Finance stating that persons having
information concerning any violation by Tenant of Section 235 of the Real
Property Law or any Section of Article 150 of the Penal Law or any similar law
of another jurisdiction may submit such information to the Department of Finance
to be considered in determining Owner's eligibility for benefits. Tenant
acknowledges that its obligations under the provisions of Subsection 23.02A may
be greater if Owner fails to obtain a Tax Exemption, and agrees that Owner shall
have no liability to Tenant nor shall Tenant be entitled to any abatement or
diminution of rent if Owner fails to obtain a Tax Exemption.

                    N.  Owner and Tenant acknowledge that Tenant may apply for a
certificate of abatement from the Department of Finance of the City of New York
pursuant to the provisions of Title 4 of the Real Property Law of the State of
New York (the "Tax Abatement Program"). Owner agrees, at no cost or expense to
Owner, to cooperate with Tenant in its efforts to procure a certificate of
abatement including, if necessary, and if Owner

                                       36
<PAGE>

approves of its contents, co-signing Tenant's application for a certificate of
abatement. Pursuant to the Tax Abatement Program, Owner hereby informs Tenant
that:

                    "(1)  an application for abatement of real property taxes
pursuant to this title will be made for the premises;

                     (2)  the rent, including amounts payable by the tenant for
real property taxes, will accurately reflect any abatement of real property
taxes granted pursuant to this title for the premises;

                     (3)  at least ten dollars per square foot or thirty-five
dollars per square foot must be spent on improvements to the premises and the
common areas, the amount being dependent upon the length of the lease and
whether it is a new or a renewal lease, provided, however, that with respect to
a lease commencing on or after April 1, 1997, if, by the sixtieth (60th) day
following the rent commencement date, the tenant employs one hundred twenty-five
(125) or fewer employees in the relevant premises, at least five dollars per
square foot must be spent on improvements to the premises and the common areas;
and

                     (4)  all abatements granted with respect to a building
pursuant to this title will be revoked if, during the benefit period, real
estate taxes or water or sewer charges or other lienable charges are unpaid for
more than one year, unless such delinquent amounts are paid as provided in
subdivision four of section four hundred ninety-nine-f of this title."

          Tenant agrees that Owner shall have no liability to Tenant nor shall
Tenant be entitled to any abatement or diminution of rent if Tenant fails to
obtain a certificate of abatement under the Tax Abatement Program.

          Section 23.02.  Taxes:  A.  The Fixed Rent for each Tax Escalation
                          -----
Year shall be increased by a sum equal to Tenant's Proportionate Share of Taxes
for such Tax Escalation Year.

                     B.   Unless the Commencement Date shall occur on a July
1st, any increase in the Fixed Rent pursuant to the provisions of Subsection A
of this Section 23.02 for the Tax Escalation Year in which the Commencement Date
shall occur shall be apportioned in that percentage which the number of days in
the period from the Commencement Date to June 30th of such Tax Escalation Year,
both inclusive, bears to the total number of days in such Tax Escalation Year.
Unless the Demised Term shall expire on a June 30th, any increase in the Fixed
Rent pursuant to the provisions of said Subsection A for the Tax Escalation Year
in which the date of the expiration of the Demised Term shall occur shall be
apportioned in that percentage which the number of days in the period from July
1st of such Tax Escalation Year to such date of expiration, both inclusive,
bears to the total number of days in such Tax Escalation Year.

      Section 23.03. Calculation and Payment of Taxes: A. Owner shall render to
                     --------------------------------
Tenant, either in accordance with the provisions of Article 27 or by personal
delivery at the Demised Premises, an Owner's Tax Statement or Statements with
respect to each Tax Escalation Year, either prior to or during such Tax
Escalation Year. Owner's failure to render an Owner's Tax Statement with respect
to any Tax Escalation Year shall not prejudice Owner's right to recover any sums
due to Owner hereunder with respect to such Tax Escalation Year nor shall it
deprive Tenant of any credit to which it otherwise might be entitled to for any
Tax Escalation Year pursuant to the provisions of subsection B of this Section
23.03. Tenant acknowledges that under present law, Taxes are payable by Owner
(i) with respect to a fiscal year commencing July 1st and ending on the
following June 30th, and (ii) in two (2) installments, in advance, the first of
which is payable on July 1st, and the second and final payment of which is
payable on the following January 1st. Within ten (10) days next following
rendition of the first Owner's Tax Statement which shows an increase in the
Fixed Rent for any Tax Escalation Year, Tenant shall pay to Owner one-half of
the amount of the increase shown upon such Owner's Tax Statement for such Tax
Escalation Year (including any apportionment pursuant to the provisions of
subsection B of Section 23.02); and, subsequently, provided Owner shall have
rendered to Tenant an Owner's Tax Statement, Tenant shall pay to Owner not later
than thirty (30) days prior to the date on which the installment of Taxes is
required to be paid by Owner a sum equal to one half (1/2) of Tenant's
Proportionate Share of Taxes payable with

                                       37
<PAGE>

respect to such Tax Escalation Year as shown on such Owner's Tax Statement.
Tenant further acknowledges that it is the purpose and intent of this Section
23.03 to provide Owner with Tenant's Proportionate Share of Taxes thirty (30)
days prior to the time such installment of Taxes is required to be paid by Owner
without penalty or interest. Accordingly, Tenant agrees if the number of such
installments and/or the date of payment thereof and/or the fiscal year used for
the purpose of Taxes shall change then (a) at the time that any such revised
installment is payable by Owner, Tenant shall pay to Owner the amount which
shall provide Owner with Tenant's Proportionate Share of Taxes applicable to the
revised installment of Taxes then required to be paid by Owner, and (b) this
Article shall be appropriately adjusted to reflect such change and the time for
payment to Owner of Tenant's Proportionate Share of Taxes as provided in this
Article shall be appropriately revised so that Owner shall always be provided
with Tenant's Proportionate Share of Taxes thirty (30) days prior to the
installment of Taxes required to be paid by Owner. Notwithstanding the foregoing
provisions of this subsection A to the contrary, in the event the holder of any
mortgage affecting the Real Property shall require Owner to make monthly
deposits on account of real estate taxes, then this Article shall be
appropriately adjusted to reflect the requirement that Owner make monthly
deposits on account of real estate taxes so that Owner shall always be provided
with one-twelfth (1/12th) of Tenant's Proportionate Share of Taxes with respect
to any Tax Escalation Year thirty (30) days prior to the payment by Owner of
such monthly deposits on account of real estate taxes.

                    B.   If, as a result of any application or proceeding
brought by or on behalf of Owner for reduction of the assessed valuation of the
Real Property there shall be a decrease in Taxes for any Tax Escalation Year
with respect to which Owner shall have previously rendered an Owner's Tax
Statement, the next monthly installment or installments of Fixed Rent following
such decrease shall include an adjustment of the Fixed Rent for such Tax
Escalation Year reflecting a credit to Tenant equal to the amount by which (i)
the Fixed Rent actually paid by Tenant with respect to such Tax Escalation Year
(as increased pursuant to the operation of the provisions of subsection A of
Section 23.02), shall exceed (ii) the Fixed Rent payable with respect to such
Tax Escalation Year (as increased pursuant to the operation of the provisions of
subsection A of Section 23.02) based upon such reduction of the assessed
valuation. Tenant shall pay to Owner within thirty (30) days after demand, as
additional rent under this Lease, a sum equal to Tenant's Proportionate Share of
all costs and expenses, including, without limitation, counsel fees, paid or
incurred by Owner in connection with any application or proceeding brought for
reduction of the assessed valuation of the Real Property or any other contest of
Taxes upon the Real Property for any Tax Escalation Year, whether or not such
application, proceeding or other contest was commenced and/or settled and/or
determined prior to the Tax Escalation Year in question. Any outstanding credit
as of the Expiration Date as a result of the operation of the foregoing
provisions hereof shall be paid as cash to Tenant.

    Section 23.04.  Operating Expenses:  A. If Operating Expenses in any
                    ------------------
Escalation Year shall be in such an amount as shall constitute an increase above
Base Operating Expenses, the Fixed Rent for such Escalation Year shall be
increased by a sum equal to Tenant's Proportionate Share of any such increase.
In the event that Base Operating Expenses shall be in excess of Operating
Expenses in any Escalation Year, in no event shall Tenant be entitled to any
such excess and the Fixed Rent shall not be reduced in any way.

                    B.  Unless the Commencement Date shall occur on a January
1st, any increase in the Fixed Rent pursuant to the provisions of Subsection A
of this Section 23.04 for the Escalation Year in which the Commencement Date
shall occur shall be apportioned in that percentage which the number of days in
the period from the Commencement Date to December 31st of such Escalation Year,
both dates inclusive, bears to the total number of days in such Escalation Year.
Unless the Demised Term shall expire on December 31st any increase in the Fixed
Rent pursuant to the provisions of Subsection A of this Section 23.04 for the
Escalation Year in which the date of the expiration of the Demised Term shall
occur shall be apportioned in that percentage which the number of days in the
period from January 1st of such Escalation Year to such date of expiration, both
dates inclusive, bears to the total number of days in such Escalation Year.

                    C.  In the determination of any increase in the Fixed Rent
pursuant to the foregoing provisions of this Section 23.04, if the Building
shall not have been fully occupied during any Escalation Year, Operating
Expenses for such Escalation Year shall be equitably adjusted (by including such
additional expenses as Owner would have incurred) to the extent, if any,
required to reflect full occupancy.

                                       38
<PAGE>

          Section 23.05.  Calculation and Payment of Operating Expenses:  A.
                          ---------------------------------------------
Owner shall render to Tenant, either in accordance with the provisions of
Article 27 or by personal delivery at the Demised Premises, an Owner's Operating
Expense Statement with respect to each Escalation Year on or before the next
succeeding October 1st.  Owner's failure to render an Owner's Operating Expense
Statement with respect to any Escalation Year shall not prejudice Owner's right
to recover any sums due to Owner hereunder with respect to such Escalation Year.

                          B.   Within fifteen (15) days next following rendition
of the first Owner's Operating Expense Statement which shows an increase in the
Fixed Rent for any Escalation Year, Tenant shall pay to Owner the entire amount
of such increase. In order to provide for current payments on account of future
potential increases in the Fixed Rent which may be payable by Tenant pursuant to
the provisions of Subsection 23.04.A, Tenant shall also pay to Owner at such
time, provided Owner has given to Tenant a Monthly Escalation Installment
Notice, a sum equal to the product of (i) the Monthly Escalation Installment set
forth in such Notice multiplied by (ii) the number of months or partial months
which shall have elapsed between January 1st of the Escalation Year in which
such payment is made and the date of such payment, less any amounts theretofore
paid by Tenant to Owner on account of increases in the Fixed Rent for such
Escalation Year pursuant to the provisions of the penultimate sentence of this
Subsection 23.05.B; thereafter Tenant shall make payment of a Monthly Escalation
Installment throughout each month of the Demised Term. Monthly Escalation
Installments shall be added to and payable as part of each monthly installment
of Fixed Rent. Notwithstanding anything to the contrary contained in the
foregoing provisions of this Article, prior to the rendition of the first
Owner's Operating Expense Statement which shows an increase in the Fixed Rent
for any Escalation Year, Owner may render to Tenant a pro-forma Owner's
Operating Expense Statement containing a bona fide estimate of the increase in
the Fixed Rent for the Escalation Year in which the Commencement Date shall
occur and/or the subsequent Escalation Year. Following the rendition of such
pro-forma Owner's Operating Expense Statement, Tenant shall pay to Owner a sum
equal to one twelfth (1/12th) of the estimated increase in the Fixed Rent shown
thereon for such Escalation Year or Years multiplied by the number of months
which may have elapsed between the Commencement Date and the month in which such
payment is made and thereafter pay to Owner, on the first day of each month of
the Demised Term (until the rendition by Owner of the first Owner's Operating
Expense Statement) a sum equal to one twelfth (1/12th) of the increase in the
Fixed Rent shown on such pro-forma Owner's Operating Expense Statement. Any sums
paid pursuant to the provisions of the immediately preceding sentence shall be
credited against the sums required to be paid by Tenant to Owner pursuant to the
Owner's Operating Expense Statement for the first Escalation Year for which
there is an increase in the Fixed Rent pursuant to the provisions of Subsection
A.

                          C.   Following rendition of the first Owner's
Operating Expense Statement and each subsequent Owner's Operating Expense
Statement a reconciliation shall be made as follows: Tenant shall be debited
with any increase in the Fixed Rent shown on such Owner's Operating Expense
Statement and credited with the aggregate amount, if any, paid by Tenant in
accordance with the provisions of Subsection B of this Section on account of
future increases in the Fixed Rent pursuant to Subsection 23.04 A. which has not
previously been credited against increases in the Fixed Rent shown on Owner's
Operating Expense Statements. Tenant shall pay any net debit balance to Owner
within fifteen (15) days next following rendition by Owner, either in accordance
with the provisions of Article 27 or by personal delivery at the Demised
Premises of an invoice for such net debit balance; any net credit balance shall
be applied as an adjustment against the next accruing Monthly Escalation
Installment as provided in Subsection L of Section 23.01 or paid promptly, to
Tenant, on or about the Expiration Date.

          Section 23.06.  Dispute Resolution:  A.  In the event of any dispute
                          ------------------
between Owner and Tenant arising out of the application of the Operating Expense
provisions of this Article, such dispute shall be determined by arbitration in
New York City in accordance with the provisions of Article 36. Notwithstanding
any such dispute and submission to arbitration, or any dispute with respect to
the Tax Escalation provisions of this Article (which dispute shall not be
subject to arbitration but which can only be prosecuted by the institution of
legal proceedings by Tenant), any increase in the Fixed Rent shown upon any
Owner's Operating Expense Statement or any Monthly Escalation Installment Notice
or any Owner's Tax Statement shall be payable by Tenant within the time
limitation set forth in this Article. If the determination in such arbitration
or legal proceedings shall be adverse to Owner, any amount paid by Tenant to
Owner in excess of the amount determined to be properly payable shall be
credited against the next

                                       39
<PAGE>

accruing installments of Fixed Rent due under this Lease. However, if there are
no such installments, such amounts shall be paid by Owner to Tenant within ten
(10) days following such determination.

                 B.  In the event Tenant disagrees with any computation or other
matter contained in any Owner's Operating Expense Statement or any Monthly
Escalation Installment Notice, Tenant shall have the right to give notice to
Owner within ninety (90) days next following rendition of such Statement or
Notice setting forth the particulars of such disagreement. If the matter is not
resolved within thirty (30) days next following the giving of such notice by
Tenant, it shall be deemed a dispute which either party may submit to
arbitration pursuant to the provisions of Subsection A of this Section. If (i)
Tenant does not give a timely notice to Owner in accordance with the foregoing
provisions of this Subsection disagreeing with any computation or other matter
contained in any Owner's Operating Expense Statement or any Monthly Escalation
Installment Notice and setting forth the particulars of such disagreement, or
(ii) if any such timely notice shall have been given by Tenant, the matter shall
not have been resolved and neither party shall have submitted the dispute to
arbitration within thirty (30) days next following the giving of such notice by
Tenant, Tenant shall be deemed conclusively to have accepted such Owner's
Operating Expense Statement or Monthly Escalation Installment Notice, as the
case may be, and shall have no further right to dispute the same.

                 C.  (1)  Tenant or its usual auditors of its normal books and
records (provided same are certified public accountants) in each case at
Tenant's expense, shall have the right to examine those portions of Owner's
records which are reasonably required to verify the accuracy of any amounts
shown on any Owner's Operating Expense Statement provided Tenant shall notify
Owner of its desire to so examine such records within sixty (60) days next
following rendition of such Owner's Operating Expense Statement. Owner shall
maintain such records for a period of three (3) years following the expiration
of the Escalation Year to which they relate. Upon Tenant's timely request, Owner
shall make such records available and any such examination shall be conducted at
the office of Owner's accountants or at such other reasonable place designated
by Owner during normal office hours.

                     (2)  Tenant acknowledges and agrees that not more than
three (3) of its employees or three (3) persons employed by such auditors shall
be entitled to entry to the offices of Owner at any one time for the purposes of
such review and inspection. Tenant hereby recognizes the confidential,
privileged and proprietary nature of such records and the information and data
contained therein, as well as any compromise, settlement or adjustment reached
between Owner and Tenant relating to the results of such examination, and Tenant
covenants and agrees for itself, and its employees, agents and representatives
(including, but not limited to, such auditors, and any attorneys or consultants
retained by Tenant as hereinafter provided), that such books, records,
information, data, compromise, settlement and adjustment will be held in the
strictest confidence and not be divulged, disclosed or revealed to any other
person except (x) to the extent required by law, court order or directive of any
Governmental Authority or (y) to such auditors or any attorneys retained by
Tenant or consultants retained by Tenant in connection with any action or
proceeding between Owner and Tenant as to Operating Expenses or Owner's
Operating Expense Statement and no examination of any such records shall be
permitted unless and until such auditors, attorneys and consultants
affirmatively agree and consent to be bound by the provisions of this Section
23.06C.

                     (3)  Tenant agrees that this Section 23.06C is of material
importance to Owner and that any violation thereof shall result in immediate
harm to Owner and Owner shall have all rights allowed by law or equity if
Tenant, its employees, agents, and representatives (including, but not limited
to, such auditors, attorneys or consultants) violate the terms of this Section
23.06C, including, but not limited to, the right to terminate Tenant's right to
audit Owner's records in the future pursuant to this Section 23.06C, and Tenant
shall indemnify and hold Owner harmless of and from all loss, cost, damage,
liability and expense (including, but not limited to counsel fees and
disbursements) arising from a breach of the foregoing obligations of Tenant or
any of its employees, agents and representatives, (including but not limited to,
such auditors, attorneys or consultants). This obligation of Tenant and its
employees, agents and representatives (including, but not limited to, any such
auditors, attorneys or consultants) shall survive the expiration or sooner term
of the Demised Term.

     Section 23.07.  Collection of Increases in Fixed Rent: The obligations of
                     -------------------------------------
Owner and Tenant under the provisions of this Article with respect to any
increase in the Fixed Rent, or any credit to which Tenant may

                                       40
<PAGE>

be entitled, shall survive the expiration or any sooner termination of the
Demised Term. All sums payable by Tenant under this Article shall be collectible
by Owner in the same manner as Fixed Rent.

                                  ARTICLE 24

                                   NO WAIVER
                                   ---------

          Section 24.01.  Owner's Termination Not Prevented:  Neither any option
                          ---------------------------------
granted to Tenant in this Lease or in any collateral instrument to renew or
extend the Demised Term, nor the exercise of any such option by Tenant, shall
prevent Owner from exercising any option or right granted or reserved to Owner
in this Lease or in any collateral instrument or which Owner may have by virtue
of any law, to terminate this Lease and the Demised Term or any renewal or
extension of the Demised Term either during the original Demised Term or during
the renewed or extended term.  Any termination of this Lease and the Demised
Term shall serve to terminate any such renewal or extension of the Demised Term
and any right of Tenant to any such renewal or extension, whether or not Tenant
shall have exercised any such option to renew or extend the Demised Term.  Any
such option or right on the part of Owner to terminate this Lease shall continue
during any extension or renewal of the Demised Term.  No option granted to
Tenant to renew or extend the Demised Term shall be deemed to give Tenant any
further option to renew or extend.

          Section 24.02.  No Termination by Tenant/No Waiver:  No act or thing
                          ----------------------------------
done by Owner or Owner's agents during the Demised Term shall constitute a valid
acceptance of a surrender of the Demised Premises or any remaining portion of
the Demised Term except a written instrument accepting such surrender, executed
by Owner.  No employee of Owner or of Owner's agents shall have any authority to
accept the keys of the Demised Premises prior to the termination of this Lease
and the Demised Term, and the delivery of such keys to any such employee shall
not operate as a termination of this Lease or a surrender of the Demised
Premises; however, if Tenant desires to have Owner sublet the Demised Premises
for Tenant's account, Owner or Owner's agents are authorized to receive said
keys for such purposes without releasing Tenant from any of its obligations
under this Lease, and Tenant hereby relieves Owner of any liability for loss of,
or damage to, any of Tenant's property or other effects in connection with such
subletting.  The failure by Owner to seek redress for breach or violation of, or
to insist upon the strict performance of, any term, covenant or condition of
this Lease on Tenant's part to be observed or performed, shall not prevent a
subsequent act or omission which would have originally constituted a breach or
violation of any such term, covenant or condition from having all the force and
effect of an original breach or violation.  The receipt by Owner of rent with
knowledge of the breach or violation by Tenant of any term, covenant or
condition of this Lease on Tenant's part to be observed or performed shall not
be deemed a waiver of such breach or violation.  Owner's failure to enforce any
Building Rule against Tenant or against any other tenant or occupant of the
Building shall not be deemed a waiver of any such Building Rule.  Owner agrees
to enforce such Building Rules in a uniform manner.  No provision of this Lease
shall be deemed to have been waived by Owner unless such waiver shall be set
forth in a written instrument executed by Owner.  No payment by Tenant or
receipt by Owner of a lesser amount than the aggregate of all Fixed Rent and
additional rent then due under this Lease shall be deemed to be other than on
account of the first accruing of all such items of Fixed Rent and additional
rent then due, no endorsement or statement on any check and no letter
accompanying any check or other rent payment in any such lesser amount and no
acceptance of any such check or other such payment by Owner shall constitute an
accord and satisfaction, and Owner may accept any such check or payment without
prejudice to Owner's right to recover the balance of such rent or to pursue any
other legal remedy.

                                       41
<PAGE>

                                  ARTICLE 25

                        MUTUAL WAIVER OF TRIAL BY JURY
                        ------------------------------

          Section 25.01.  Owner and Tenant hereby waive trial by jury in any
action, proceeding or counterclaim brought by Owner or Tenant against the other
on any matter whatsoever arising out of or in any way connected with this Lease,
the relationship of landlord and tenant, the use or occupancy of the Demised
Premises by Tenant or any person claiming through or under Tenant, any claim of
injury or damage, and any emergency or other statutory remedy; however, the
foregoing waiver shall not apply to any action for personal injury or property
damage.  The provisions of the foregoing sentence shall survive the expiration
or any sooner termination of the Demised Term.  If Owner commences any summary
proceeding, or any other proceeding of like import, Tenant agrees: (i) not to
interpose any counterclaim of whatever nature or description in any such summary
proceeding, or any other proceeding of like import, unless failure to interpose
such counterclaim would preclude Tenant from asserting such claim in a separate
action or proceeding; and (ii) not to seek to remove to another court or
jurisdiction or consolidate any such summary proceeding, or other proceeding of
like import, with any action or proceeding which may have been, or will be,
brought by Tenant.  In the event that Tenant shall breach any of its obligations
set forth in the immediately preceding sentence, Tenant agrees (a) to pay all of
Owner's attorneys' fees and disbursements in connection with Owner's enforcement
of such obligations of Tenant and (b) in all events, to pay all accrued, present
and future Fixed Rent and increases therein and additional rent payable pursuant
to the provisions of this Lease.

                                  ARTICLE 26

                             INABILITY TO PERFORM
                             --------------------

          Section 26.01.  If, by reason of strikes or other labor disputes, fire
or other casualty (or reasonable delays in adjustment of insurance), accidents,
any Legal Requirements, any orders of any Governmental Authority or any other
cause beyond Owner's reasonable control, whether or not such other cause shall
be similar in nature to those hereinbefore enumerated, Owner is unable to
furnish or is delayed in furnishing any utility or service required to be
furnished by Owner under the provisions of Article 29 or any other Article of
this Lease or any collateral instrument, or is unable to perform or make or is
delayed in performing or making any installations, decorations, repairs,
alterations, additions or improvements, whether or not required to be performed
or made under this Lease or under any collateral instrument, or is unable to
fulfill or is delayed in fulfilling any of Owner's other obligations under this
Lease or any collateral instrument, no such inability or delay shall constitute
an actual or constructive eviction, in whole or in part, or entitle Tenant to
any abatement or diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Owner or its agents
by reason of inconvenience or annoyance to Tenant, or injury to or interruption
of Tenant's business, or otherwise.  Owner shall employ reasonable diligence to
attempt to eliminate the cause of such inability referred to in this Section
(however, the foregoing provisions of this sentence shall not apply in the event
of any strike or labor dispute and Owner shall not be required to employ labor
at overtime or other premium pay rates).

                                  ARTICLE 27

                                    NOTICES
                                    -------

          Section 27.01.  Except as otherwise expressly provided in this Lease,
any bills, statements, notices, demands, requests or other communications given
or required to be given under this Lease shall be effective only if rendered or
given in writing, sent by registered or certified mail (return receipt requested
optional), addressed as follows:

                          (a) To Tenant (i) at Tenant's address set forth in
                              ---------
this Lease if mailed prior to Tenant's taking possession of the Demised
Premises, or (ii) at the Building if mailed subsequent to Tenant's taking

                                       42
<PAGE>

possession of the Demised Premises, or (iii) at any place where Tenant or any
agent or employee of Tenant may be found if mailed subsequent to Tenant's
vacating, deserting, abandoning or surrendering the Demised Premises, with
copies to Bottomline Technologies, Inc., 155 Fleet Street, Portsmouth, NH 03801-
4050, Attention: Controller and Hale and Dorr, LLP, 60 State Street, Boston, MA
02109, Attention Joel H. Sirkin, Esq., or

                          (b) To Owner at Owner's address set forth in this
                              --------
Lease, with a copy to Goldfarb & Fleece, 345 Park Avenue, New York, New York
10154, Attention: Partner-in-Charge, Rudin Management, or

                          (c) addressed to such other address as either Owner or
Tenant may designate as its new address for such purpose by notice given to the
other in accordance with the provisions of this Section. Any such bill,
statement, notice, demand, request or other communication shall be deemed to
have been rendered or given on the date when it shall have been mailed as
provided in this Section.

Nothing contained in this Section 27.01 shall preclude, limit or modify Owner's
service of any notice, statement, demand or other communication in the manner
required by law, including, but not limited to, any demand for rent under
Article 7 of the New York Real Property Actions and Proceedings Law or any
successor law of like import.

                                  ARTICLE 28

                              PARTNERSHIP TENANT
                              ------------------

                                       43
<PAGE>

          Section 28.01.  If Tenant is a partnership or professional corporation
or limited liability company (or is comprised of two (2) or more persons,
individually and as co-partners of a partnership or shareholders of a
professional corporation or members of a limited liability company) or if
Tenant's interest in this Lease shall be assigned to a partnership or
professional corporation or limited liability company (or to two (2) or more
persons, individually and as co-partners of a partnership or shareholders of a
professional corporation or members of a limited liability company) pursuant to
Article 11 (any such partnership, professional corporation, limited liability
company and such persons are referred to in this Section as "Partnership
                                                             -----------
Tenant"), the following provisions of this Section shall apply to such
Partnership Tenant: (i) the liability of each of the persons comprising
Partnership Tenant shall be joint and several, individually and as a partner or
shareholder or member, with respect to all obligations of the Tenant under this
Lease whether or not such obligations arose prior to, during, or after any
period when any party comprising Partnership Tenant was a member or shareholder
of Partnership Tenant, and (ii) each of the persons comprising Partnership
Tenant, whether or not such person shall be one of the persons comprising Tenant
at the time in question, hereby consents in advance to, and agrees to be bound
by, any written instrument which may hereafter be executed, changing, modifying
or discharging this Lease, in whole or in part, or surrendering all or any part
of the Demised Premises to Owner, and by any notices, demands, requests or other
communications which may hereafter be given by Partnership Tenant or by any of
the persons comprising Partnership Tenant, and (iii) any bills, statements,
notices, demands, requests or other communications given or rendered to
Partnership Tenant or to any of the persons comprising Partnership Tenant shall
be deemed given or rendered to Partnership Tenant and to all such persons and
shall be binding upon Partnership Tenant and all such persons, and (iv) if
Partnership Tenant shall admit new partners or shareholders or members, all of
such new partners or shareholders or members, as the case may be, shall, by
their admission to Partnership Tenant, be deemed to have assumed performance of
all of the terms, covenants and conditions of this Lease on Tenant's part to be
observed and performed, and shall be liable for such performance, together with
all other parties, jointly or severally, individually and as a partner or
shareholder or member, whether or not the obligation to comply with such terms,
covenants or conditions arose prior to, during or after any period when any
party comprising Partnership Tenant was a member or shareholder of Partnership
Tenant and (v) Partnership Tenant shall give prompt notice to Owner of the
admission of any such new partners, or shareholders, or members, as the case may
be, and, upon demand of Owner, shall cause each such new partner or shareholder
or member to execute and deliver to Owner an agreement, in form satisfactory to
Owner, wherein each such new partner or shareholder or member shall so assume
performance of all of the terms, covenants and conditions of this Lease on
Tenant's part to be observed and performed whether or not the obligation to
comply with such terms, covenants or conditions arose prior to, during or after
any period when any party comprising Partnership Tenant was a member or
shareholder of Partnership Tenant (but neither Owner's failure to request any
such agreement nor the failure of any such new partner, shareholder or member to
execute or deliver any such agreement to Owner shall vitiate the provisions of
subdivision (iv) or any other provision of this Section).

                                  ARTICLE 29

                            UTILITIES AND SERVICES
                            ----------------------

          Section 29.01.  Elevators:  As long as Tenant is not in default under
                          ---------
any of the terms, covenants or conditions of this Lease on Tenant's part to be
observed or performed, Owner, at Owner's expense, shall furnish necessary
passenger elevator facilities twenty-four (24) hours per day on business days
(as defined in Section 31.01) and on Saturdays from 8:00 A.M. to 6:00 P.M. and
shall have a passenger elevator subject to call at all other times.  Tenant
shall be entitled to the non-exclusive use of the freight elevator in common
with  other tenants and occupants of the Building from 8:00 A.M. to 6:00 P.M. on
business days, subject to such reasonable rules as Owner may adopt for the use
of the freight elevator.  At any time or times all or any of the elevators in
the Building may, at Owner's option, be automatic elevators, and Owner shall not
be required to furnish any operator service for automatic elevators.  If Owner
shall, at any time, elect to furnish operator service for any automatic
elevators, Owner shall have the right to discontinue furnishing such service
with the same effect as if Owner had never elected to furnish such service.

                                       44
<PAGE>

          Section 29.02.  Heat:  As long as Tenant is not in default under any
                          ----
of the terms, covenants or conditions of this Lease on Tenant's part to be
observed or performed, Owner, at Owner's expense, shall furnish heat to the
Demised Premises, as and when required by law, twenty-four (24) hours per day.

          Section 29.03.  Air Conditioning and Ventilation:  As long as Tenant
                          --------------------------------
is not in default under any of the terms, covenants or conditions of this Lease
on Tenant's part to be observed or performed, Owner, at Owner's expense, shall
furnish and distribute to the Demised Premises (i) conditioned air at reasonable
temperatures, pressures and degrees of humidity and in reasonable volumes and
velocities, twenty-four (24) hours per day during the months of May, June, July,
August, September and October when required for the comfortable occupancy of the
Demised Premises; and (ii) mechanical ventilation through the Building air
conditioning system twenty-four (24) hours per day throughout the year, except
when conditioned air or heat is being furnished.  Notwithstanding the foregoing
provisions of this Section, Owner shall not be responsible if the normal
operation of the Building air conditioning system shall fail to provide
conditioned air at reasonable temperatures, pressures or degrees of humidity or
in reasonable volumes or velocities in any portions of the Demised Premises (a)
which, by reason of any machinery or equipment installed by or on behalf of
Tenant or any person claiming through or under Tenant, shall have an electrical
load in excess of four (4) watts per square foot of usable area for all purposes
(including lighting and power), or which shall have a human occupancy factor in
excess of one person per 100 square feet of usable area (the average electrical
load and human occupancy factors for which the Building air conditioning system
is designed) or (b) because of any rearrangement of partitioning or other
Alterations made or performed by or on behalf of Tenant or any person claiming
through or under Tenant.  Whenever said air conditioning system is in operation,
Tenant agrees to cause all the windows in the Demised Premises to be kept closed
and to cause the venetian blinds in the Demised Premises to be kept closed if
necessary because of the position of the sun.  Tenant agrees to cause all the
windows in the Demised Premises to be closed whenever the Demised Premises are
not occupied.  Tenant shall cooperate fully with Owner at all times and abide by
all regulations and requirements which Owner may reasonably prescribe for the
proper functioning and protection of the air conditioning and ventilating
system.  Tenant agrees that if its violation or breach of any of the foregoing
provisions of this Section, shall adversely affect the operation of the
Building's heating, ventilation and air conditioning system, no such adverse
affects shall constitute an actual or constructive eviction, in whole or in
part, or entitle Tenant to any abatement or diminution of rent, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Owner, or its agents, by reason of inconvenience or annoyance to Tenant, or
injury to or interruption of Tenant's business, or otherwise.  The Building
heating, ventilating and air conditioning system unit serving the floor of the
Building on which the Demised Premises are located shall contain the following
specifications: (1) said unit shall be a water cooled variable air volume (VAV)
unit via a plug fan; (2) said unit shall have a high energy efficiency rating
(EER); (3) said unit shall have a factory mounted economizer coil with controls
which allow water cooling without compressor operation; (4) said unit shall have
factory mounted internal variable frequency drive (VFD); (5) said unit shall
have factory mounted direct digital control (DDC) microprocessor controls; and
(6) said unit shall have internally isolated fans on spring isolators.

          Section 29.04.  Cleaning:  A.  Tenant, at Tenant's expense, shall keep
                          --------
the Demised Premises in order, shall cause the Demised Premises to be cleaned
and shall cause Tenant's refuse and rubbish to be removed, all at regular
intervals in accordance with standards and practices adopted by Owner for the
Building.  Tenant shall cooperate with any waste and garbage recycling program
of the Building and shall comply with all reasonable rules and regulations of
Owner with respect thereto.  Tenant, at Tenant's expense, shall cause all
portions of the Demised Premises used for the storage, preparation, service or
consumption of food or beverages to be cleaned daily in a manner satisfactory to
Owner, and to be exterminated against infestation by vermin, roaches or rodents
regularly and, in addition, whenever there shall be evidence of any infestation.

                          B.  Owner, at Owner's expense, shall clean the public
portions of the Building at regular intervals in accordance with practices and
standards adopted by Owner for the Building.

                          C.  The removal of refuse and rubbish and the
furnishing of office cleaning services to Tenant by persons other than Owner and
its contractors shall be performed in accordance with such regulations and
requirements as, in Owner's judgment, are necessary for the proper operation of
the Building, and Tenant

                                       45
<PAGE>

agrees that Tenant will not permit any person to enter the Demised Premises or
the Building for such purposes, or for the purpose of providing extermination
services required to be performed by Tenant pursuant to Subsection A of this
Section, other than persons first approved by Owner, such approval not
unreasonably to be withheld.

          Section 29.05.  Electricity:  A.  As long as Tenant is not in default
                          -----------
under any of the terms, covenants or conditions of this Lease on Tenant's part
to be observed or performed, Owner shall redistribute or furnish electrical
energy to or for the use of Tenant in the Demised Premises for the operation of
the lighting fixtures and the electrical receptacles installed in the Demised
Premises on the Commencement Date and the operation of the Building heating,
ventilating and air conditioning system unit serving the floor of the Building
on which the Demised Premises are located.  If either the quantity or character
of electrical service is changed by the corporation(s) and/or other entity(ies)
selected by Owner to supply electrical service to the Building or is no longer
available or suitable for Tenant's requirements, or if any equipment
supplementing or ancillary to such electrical service which is installed in the
Building by or on behalf of said corporation(s) and/or other entity(ies)
malfunctions or fails to operate for any reason while Tenant has made any
connections to said equipment, no such change, unavailability, unsuitability,
malfunction or failure to operate shall constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or diminution
of rent, or relieve Tenant from any of its obligations under this Lease, or
impose any liability upon Owner, or its agents, by reason of inconvenience or
annoyance to Tenant, or injury to or interruption of Tenant's business or
otherwise.

                          B.  Owner represents that the electrical feeder or
riser capacity serving the Demised Premises on the Commencement Date shall be
adequate to serve the lighting fixtures and electrical receptacles installed in
the Demised Premises on the Commencement Date. Any additional feeders or risers
to supply Tenant's additional electrical requirements, and all other equipment
proper and necessary in connection with such feeders or risers shall be
installed by Owner upon Tenant's request, at the sole cost and expense of
Tenant, provided, that, in Owner's reasonable judgment, such additional feeders
or risers are necessary and are permissible under applicable laws and insurance
regulations and the installation of such feeders or risers will not cause
permanent damage or injury to the Building or the Demised Premises or cause or
create a dangerous or hazardous condition or entail excessive or unreasonable
alterations or repairs to or interfere with or disturb other tenants or
occupants of the Building. Tenant covenants that at no time shall the use of
electrical energy in the Demised Premises exceed the capacity of the existing
feeders or risers or wiring installations then serving the Demised Premises.

                          C.  Prior to the Commencement Date Owner, at Owner's
expense, shall have installed a submeter or submeters in the Demised Premises to
measure Tenant's actual consumption of electricity in the entire Demised
Premises. Tenant shall pay to Owner, from time to time, upon demand, for the
electricity consumed in the Demised Premises, as determined by such submeter or
submeters, the actual cost to Owner of purchasing electricity for the Demised
Premises (as such actual cost is hereinafter defined) plus all applicable taxes
thereon. Owner's actual cost for Tenant's KW and KWH shall be determined by the
application of the Building's electric rate schedule per month from the
corporation(s) and/or other entity(ies) selected by Owner to supply electrical
service to the Building to Tenant's usage. With respect to any period when any
such submeter is not in good working order, Tenant shall pay Owner for
electricity consumed in the portion of the Demised Premises served by such
submeter at the rate paid by Tenant to Owner during the most recent comparable
period when such submeter was in good working order. Tenant shall take good care
of any such submeter and all submetering installation equipment, at Tenant's
sole cost and expense, and make all repairs thereto occasioned by any acts,
omissions or negligence of Tenant or any person claiming through or under Tenant
as and when necessary to insure that any such submeter is, at all times during
the Demised Term, in good working order. With respect to the period (referred to
as the "Interim Period"), if any, from the Commencement Date through the date
        --------------
immediately prior to the date upon which the submeter or submeters shall be
operable, Tenant shall pay to Owner monthly on demand of Owner, for the
electricity consumed in the Demised Premises, a sum equal to one-twelfth
(1/12th) of the product of (x) $1.50 multiplied by (y) the Demised Premises
Area. With respect to any period during the Interim Period constituting less
than a full calendar month, the monthly payment referred to in the preceding
sentence shall be appropriately prorated.

                                       46
<PAGE>

                          D.  Owner may, at any time, elect to discontinue the
redistribution or furnishing of electrical energy. In the event of any such
election by Owner, (i) Owner agrees to give reasonable advance notice of any
such discontinuance to Tenant, (ii) Owner agrees to permit Tenant to receive
electrical service directly from the corporation(s) and/or other entity(ies)
selected by Owner to supply electrical service to the Building and to permit the
existing feeders, risers, wiring and other electrical facilities serving the
Demised Premises to be used by Tenant for such purpose to the extent they are
suitable and safely capable, (iii) Owner agrees to pay such charges and costs,
if any, as such corporation(s) and/or other entity(ies) may impose in connection
with the installation of Tenant's meters, (iv) the provisions of Subsection C of
this Section 29.05 shall be deemed deleted from this Lease, and (v) this Lease
shall remain in full force and effect and such discontinuance shall not
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Owner or its agents
by reason of inconvenience or annoyance to Tenant, or injury to or interruption
of Tenant's business, or otherwise.

                          E.  Notwithstanding anything to the contrary set forth
in this Lease, any sums payable or granted in any way by the corporation(s)
and/or other entity(ies) selected by Owner to supply electricity to the Building
resulting from the installation in the Demised Premises of energy efficient
lighting fixtures, lamps, special supplemental heating, ventilation and air
conditioning systems or any other Alterations, which sums are paid or given by
way of rebate, direct payment, credit or otherwise, shall be and remain the
property of Owner, and Tenant shall not be entitled to any portion thereof,
unless such lighting fixtures, lamps, supplemental heating, ventilation and air
conditioning systems or other Alterations were installed by Tenant, solely at
Tenant's expense, without any contribution, credit or allowance by Owner, in
accordance with all of the provisions of this Lease. Nothing contained in the
foregoing sentence, however, shall be deemed to obligate Owner to supply or
install in the Demised Premises any such lighting fixtures, lamps, supplemental
heating, ventilation and air conditioning systems or other Alterations.

                          F.  Tenant acknowledges that the Building heating,
ventilating and air conditioning system unit serving the floor of the Building
on which the Demised Premises are located (referred to herein as the "Floor HVAC
Unit") shall not be connected to the submeter(s) serving the Demised Premises,
but, instead, shall be connected to a separate meter(s) measuring the electrical
energy consumed by such Floor HVAC Unit. Accordingly, Tenant agrees that during
the Demised Term, Tenant shall pay to Owner, from time to time upon demand of
Owner and submission by Owner to Tenant of invoices or bills therefor, thirty-
three and 24/100 (33.24%) percent (hereinafter "Tenant's Electrical Share") of
all amounts shown on said separate meter(s) for such Floor HVAC Unit.

                          G.  Tenant acknowledges that the light and power
systems serving the public areas of the floor of the Building on which the
Demised Premises are located (referred to herein as the "Floor Public Light and
Power") shall not be connected to the submeter(s) serving the Demised Premises
but, instead, shall be connected to a separate meter(s) measuring the electrical
energy consumed by such Floor Public Light and Power. Accordingly, Tenant agrees
that during the Demised Term, Tenant shall pay to Owner, from time to time upon
demand of Owner and submission by Owner to Tenant of invoices or bills therefor,
Tenant's Electrical Share of all amounts shown on said separate meter(s) for
such Floor Public Light and Power.

          Section 29.06.  Water:  If Tenant requires, uses or consumes water for
                          -----
any purpose in addition to ordinary lavatory and drinking purposes, Owner may
install a hot water meter and a cold water meter and thereby measure Tenant's
consumption of water for all purposes.  Tenant shall pay to Owner the cost of
any such meters and their installation, and Tenant shall keep any such meters
and any such installation equipment in good working order and repair, at
Tenant's cost and expense.  Tenant agrees to pay for water consumed as shown on
said meters, and sewer charges, taxes and any other governmental charges
thereon, as and when bills are rendered.  In addition to any sums required to be
paid by Tenant for hot water consumed and sewer charges, taxes and any other
governmental charges thereon under the foregoing provisions of this Section,
Tenant agrees to pay to Owner, for the heating of said hot water, an amount
equal to three (3X) times the total of said sums required to be paid by Tenant
for hot water and sewer charges thereon.  For the purposes of determining the
amount of any sums required to be paid by Tenant under this Section, all hot and
cold water consumed during any period when said meters are not in good working
order shall be deemed to have

                                       47
<PAGE>

been consumed at the rate of consumption of such water during the most
comparable period when such meters were in good working order.

          Section 29.07.  Overtime Periods:  The Fixed Rent does not reflect or
                          ----------------
include any charge to Tenant for the furnishing or distributing of any necessary
elevator facilities (other than an elevator subject to call) to the Demised
Premises during periods (referred to as "Overtime Periods") other than the hours
                                         ----------------
and days set forth above in this Article for the furnishing and distributing of
such services.  Accordingly, if Owner shall furnish any such elevator facilities
to the Demised Premises at the request of Tenant during Overtime Periods, Tenant
shall pay Owner for such services at the following rates as of the date of this
Lease: $65.00 Dollars per hour for freight elevator service.  Any increases
above such rates shall be in an amount equal to the actual increases after the
date of this Lease in the cost to Owner of furnishing such services.  Owner
shall not be required to furnish any such services during Overtime Periods,
unless Owner has received reasonable advance notice from Tenant requesting such
services.  If Tenant fails to give Owner reasonable advance notice requesting
such services during any Overtime Periods, then, failure by Owner to furnish 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 rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Owner or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business or otherwise.

          Section 29.08.  Owner's Right to Stop Service:  Owner reserves the
                          -----------------------------
right to stop the service of the heating, air conditioning, ventilating,
elevator, plumbing, electrical, communications or other mechanical systems or
facilities in the Building when necessary by reason of accident or emergency, or
for repairs, alterations, replacements or improvements, which, in the judgment
of Owner are desirable or necessary, until said repairs, alterations,
replacements or improvements shall have been completed.  The exercise of such
right by Owner shall not constitute an actual or constructive eviction, in whole
or in part, or entitle Tenant to any abatement or diminution of rent, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Owner or its agents by reason of inconvenience or annoyance to Tenant, or
injury to or interruption of Tenant's business, or otherwise.  Owner shall
employ reasonable diligence in attempting to restore the operation of any such
systems or facilities without any obligation, however, to employ labor at
overtime or other premium pay rates.

          Section 29.09.  A.  Tenant's Supplemental A/C Unit/Cooling Tower:
                              --------------------------------------------
Supplementing the provisions of Section 29.06, in the event (a) a separate air
conditioning system to serve the Demised Premises is installed by or on behalf
of Tenant in accordance with the provisions of this Lease (referred to herein as
"Tenant's Supplemental A/C Unit"), (b) Tenant requests that such Unit be hooked
 ------------------------------
up to any Building cooling tower and associated piping (referred to herein as
the "Cooling Tower") and (c) Owner consents to such hookup, then, in those
     -------------
events, Owner agrees, subject to the provisions of Article 26 and Section 29.08,
to supply condenser water to Tenant's Supplemental A/C Unit and Tenant agrees
that (i) Tenant shall pay to Owner, upon demand, all costs and expenses incurred
by Owner in connection with the hookup of such Unit to the Cooling Tower,
including, but not limited to, the Building standard hookup fee then charged by
Owner, and (ii) from and after the date the hookup is completed, the Fixed Rent
reserved in this Lease shall be increased by a sum (referred to herein as the
"Tenant's Cooling Tower Use Charge") equal to (x) the standard per ton charge
----------------------------------
then in effect in the Building, multiplied by (xx) the number of tons of
Tenant's Supplemental A/C Unit.

                          B.  If the regular hourly wage rate of operating
engineers employed in the Building shall be increased in any Escalation Year (as
defined in Article 23) over the rate in effect on the January 1/st/ immediately
preceding such hookup, the Fixed Rent for such Escalation Year shall be
increased by a sum equal to that proportion of Tenant's Cooling Tower Use Charge
which such increase in said hourly wage rate bears to the hourly wage rate in
effect on the January 1/st/ immediately preceding such hookup. The increase in
Fixed Rent for any Escalation Year pursuant to the provisions of the immediately
preceding sentence shall be shown on the Owner's Operating Expense Statement
with respect to such Escalation Year rendered by Owner pursuant to the
provisions of said Article 23, and shall be payable by Tenant as if it were an
increase in the Fixed Rent pursuant to the provisions of said Article 23.

                                       48
<PAGE>

                          C.  Any increase in Fixed Rent for Tenant's Cooling
Tower Use Charge shall be effective as of the date Tenant's Supplemental A/C
Unit is hooked up to the Cooling Tower and shall be retroactive to such date if
necessary.

                          D.  Tenant's Supplemental A/C Unit shall be repaired
and maintained by Tenant at Tenant's cost and expense, pursuant to a service
contract.

                                  ARTICLE 30

                            TABLE OF CONTENTS, ETC.
                            -----------------------

          Section 30.01.  Table of Contents/Captions:  The Table of Contents and
                          --------------------------
the captions following the Articles and Sections of this Lease have been
inserted solely as a matter of convenience and in no way define or limit the
scope or intent of any provision of this Lease.

                                  ARTICLE 31

     MISCELLANEOUS DEFINITIONS, SEVERABILITY AND INTERPRETATION PROVISIONS
     ---------------------------------------------------------------------

          Section 31.01.  The term "business days" as used in this Lease shall
                                    -------------
exclude Saturdays, Sundays and holidays, the term "Saturdays" as used in this
                                                   ---------
Lease shall exclude holidays and the term "holidays" as used in this Lease shall
                                           --------
mean all days observed as legal holidays by either the New York State Government
or the Federal Government.

          Section 31.02.  The terms "person" and "persons" as used in this Lease
                                     ------       -------
shall be deemed to include natural persons, firms, corporations, associations
and any other private or public entities, whether any of the foregoing are
acting on their own behalf or in a representative capacity.

          Section 31.03.  The term "prime rate" shall mean the rate of interest
                                    ----------
announced publicly by Chemical Bank, or its successor, from time to time, as
Chemical Bank's or such successor's base rate, or if there is no such base rate,
then the rate of interest charged by Chemical Bank or its successor to its most
credit worthy customers on commercial loans having a ninety (90) day duration.

          Section 31.04.  If any term, covenant or condition of this Lease or
any application thereof shall be invalid or unenforceable, the remainder of this
Lease and any other application of such term, covenant or condition shall not be
affected thereby.

          Section 31.05.  This Lease shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Lease to be drafted.  In the event of any action, suit, dispute or proceeding
affecting the terms of this Lease, no weight shall be given to any deletions or
striking out of any of the terms of this Lease contained in any draft of this
Lease and no such deletion or strike out shall be entered into evidence in any
such action, suit or dispute or proceeding given any weight therein.

          Section 31.06.  Subject to the provisions of this Lease including, but
not limited to, Article 3 hereof Owner shall make available reasonably
sufficient telecommunication riser access at a riser terminating at the
telecommunications closets located on the floor of which the Demised Premises
are a part.  The riser shall provide reasonably sufficient access to allow
Tenant to bring T3 lines to the Demised Premises.  Tenant shall be responsible,
at its sole cost and expense (including the cost of installing any required
conduits) of installing such T3 lines.

                                       49
<PAGE>

                                  ARTICLE 32

                              ADJACENT EXCAVATION
                              -------------------

          Section 32.01.  If an excavation shall be made upon land adjacent to
the Real Property, or shall be authorized to be made, Tenant shall afford to the
person causing or authorized to cause such excavation license to enter upon the
Demised Premises for the purpose of doing such work as said person shall deem
necessary to preserve the walls and other portions of the Building from injury
or damage and to support the same by proper foundations and no such entry shall
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Owner or said person.

                                  ARTICLE 33

                                BUILDING RULES
                                --------------

          Section 33.01.  Tenant shall observe faithfully, and comply with, and
shall not permit the violation of, the Building Rules set forth in Schedule A
annexed to and made a part of this Lease and such additional reasonable Building
Rules as Owner may, from time to time, adopt. All of the terms, covenants and
conditions of Schedule A are incorporated in this Lease by reference and shall
be deemed part of this Lease as though fully set forth in the body of this
Lease.  The term "Building Rules" as used in this Lease shall include those set
                  --------------
forth in Schedule A and those hereafter made or adopted as provided in this
Section.  In case Tenant disputes the reasonableness of any additional Building
Rule hereafter adopted by Owner, the parties hereto agree to submit the question
of the reasonableness of such Building Rule for decision to the Chairman of the
Board of Directors of the Management Division of the Real Estate Board of New
York, Inc., or its successor (the "Chairman"), or to such impartial person or
                                   --------
persons as the Chairman may designate, whose determination shall be final and
conclusive upon Owner and Tenant.  Tenant's right to dispute the reasonableness
of any additional Building Rule shall be deemed waived unless asserted by
service of a notice upon Owner within ten (10) days after the date upon which
Owner shall give notice to Tenant of the adoption of any such additional
Building Rule.  Owner shall have no duty or obligation to enforce any Building
Rule, or any term, covenant or condition of any other lease, against any other
tenant or occupant of the Building, and Owner's failure or refusal to enforce
any Building Rule or any term, covenant or condition of any other lease against
any other tenant or occupant of the Building shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Owner or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business, or otherwise.  Any Building Rule not enforced generally against other
tenants of the Building shall not be enforced against Tenant.

          Section 33.02.  Any Building Rule not enforced generally against other
tenants of the Building shall not be enforced against Tenant.  Wherever the
Building Rules provide for a matter to be determined by Owner or its agents,
Owner or its agents shall exercise their reasonable judgment with respect
thereto and any determination to be made by Owner or its agents thereunder shall
not be unreasonably withheld or delayed.

                                  ARTICLE 34

                                    BROKER
                                    ------

          Section 34.01.  Tenant represents and warrants to Owner that this
Lease was negotiated directly between Owner and Tenant and that no broker was
responsible for bringing about this Lease.  Tenant shall indemnify

                                       50
<PAGE>

Owner from all loss, cost, liability, damage and expenses, including, but not
limited to, reasonable counsel fees and disbursements, arising from any breach
of the foregoing representation and warranty.

                                  ARTICLE 35

          Section 35.01.  The sum of NINETEEN THOUSAND NINE HUNDRED FORTY-FOUR
and 00/100 ($19,944.00) DOLLARS representing security (referred to as
"Security") for the faithful performance and observance by Tenant of the terms,
 --------
covenants and conditions of this Lease on Tenant's part to be observed and
performed is due and payable at the time of the execution and delivery of this
Lease.  In the event of any default by Tenant in the observance or performance
of any of the terms, covenants or conditions of this Lease on the part of Tenant
to be observed or performed including, but not limited to, any default in the
payment when due of any monthly installment of the Fixed Rent or increase in the
Fixed Rent payable pursuant to the provisions of Articles 23 or 29 or of any
additional rent, Owner may use or apply all or any part of the Security for the
payment to Owner for Tenant's account of any sum or sums due under this Lease,
without thereby waiving any other rights or remedies of Owner with respect to
such default.  Tenant agrees to replenish all or any part of the Security so
used or applied during the Demised Term.  After (i) the Expiration Date or any
other date upon which the Demised Term shall expire and come to an end, and (ii)
the full observance and performance by Tenant of all of the terms, covenants and
conditions of this Lease on Tenant's part to be observed and performed,
including, but not limited to, the provisions of Article 21, Owner shall return
to Tenant the balance of the Security then held or retained by Owner.  Owner
agrees that, unless prohibited by law  or by the general policies of lending
institutions in New York City, Owner shall deposit the Security in an interest-
bearing savings account with a bank selected by Owner, in which event all
interest accruing thereon shall be added to and become part of the Security and
shall be retained by Owner under the same conditions as the sum originally
deposited as Security.  Tenant agrees that Tenant shall not assign or encumber
any part of the Security, and no assignment or encumbrance by Tenant of all or
any part of the Security shall be binding upon Owner, whether made prior to,
during, or after the Demised Term.  Owner shall not be required to exhaust its
remedies against Tenant or against the Security before having recourse to any
other form of security held by Owner and recourse by Owner to any form of
security shall not affect any remedies of Owner which are provided in this Lease
or which are available to Owner in law or equity.  In the event of any sale,
assignment or transfer by Owner named herein (or by any subsequent Owner) of its
interest in the Building as owner or lessee, Owner (or such subsequent owner)
shall have the right to assign or transfer the Security to its grantee, assignee
or transferee and, in the event of such assignment or transfer, Owner named
herein, (or such subsequent Owner) shall have no liability to Tenant for the
return of the Security and Tenant shall look solely to the grantee, assignee or
transferee for such return.  A lease of the entire Building shall be deemed a
transfer within the meaning of the foregoing sentence.  Notwithstanding anything
to the contrary set forth in the foregoing provisions of this Article, Owner
shall be entitled to retain the one (1%) percent administrative fee permitted by
law to be retained by landlords with respect to security deposits.

                                  ARTICLE 36

                               ARBITRATION, ETC.
                               -----------------

          Section 36.01.  Any dispute (i) with respect to the reasonability of
any failure or refusal of Owner to grant its consent or approval to any request
for such consent or approval pursuant to the provisions of Sections 3.01 or
11.03 with respect to which request Owner has agreed, in such Sections, not
unreasonably to withhold such consent or approval, or (ii) arising out of the
application of the Operating Expenses provisions of Article 23, (iii) as to the
validity of any assignment in accordance with the provisions of Section 11.06
which is submitted to arbitration shall be finally 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 determi-

                                       51
<PAGE>

nation shall be final and binding upon the parties, whether or not a judgment
shall be entered in any court. In making their determination, the arbitrators
shall not subtract from, add to, or otherwise modify any of the provisions of
this Lease. Owner and Tenant may, at their own expense, be represented by
counsel and employ expert witnesses in any such arbitration. Any dispute with
respect to the reasonability of any failure or refusal of Owner to grant its
consent or approval to any request for such consent or approval pursuant to any
of the provisions of this Lease (other than Sections 3.01 and 11.03) with
respect to which Owner has covenanted not unreasonably to withhold such consent
or approval, and any dispute arising with respect to the increases in Fixed Rent
due to the provisions of Section 23.02 shall be determined by applicable legal
proceedings. If the determination of any such legal proceedings, or of any
arbitration held pursuant to the provisions of this Section with respect to
disputes arising under Sections 3.01, 11.03 and 11.06 or the Operating Expense
provisions of Article 23, shall be adverse to Owner, Owner shall be deemed to
have granted the requested consent or approval, or be bound by any determination
as to Taxes and Operating Expenses and the increases in Fixed Rent relating
thereto, or the validity of any assignment, but that shall be Tenant's sole
remedy in such event and Owner shall not be liable to Tenant for a breach of
Owner's covenant not unreasonably to withhold such consent or approval, or
otherwise. Each party shall pay its own counsel and expert witness fees and
expenses, if any, in connection with any arbitration held pursuant to the
provisions of this Section and the parties will share all other expenses and
fees of any such arbitration.

                                  ARTICLE 37

                                 PARTIES BOUND
                                 -------------

          Section 37.01.  The terms, covenants and conditions contained in this
Lease shall bind and inure to the benefit of Owner and Tenant and, except as
otherwise provided in this Lease, their respective heirs, distributees,
executors, administrators, successors and assigns.  However, the obligations of
Owner under this Lease shall no longer be binding upon Owner named herein after
the sale, assignment or transfer by Owner named herein (or upon any subsequent
Owner after the sale, assignment or transfer by such subsequent Owner) of its
interest in the Building as owner or lessee, and in the event of any such sale,
assignment or transfer, such obligations shall thereafter be binding upon the
grantee, assignee or other transferee of such interest, and any such grantee,
assignee or transferee, by accepting such interest, shall be deemed to have
assumed such obligations.  A lease of the entire Building shall be deemed a
transfer within the meaning of the foregoing sentence.  Neither the partners
(direct or indirect) comprising Owner, nor the shareholders (nor any of the
partners comprising same), partners, directors or officers of any of the
foregoing (collectively, the "Owner's Parties") shall be liable for the
                              ---------------
performance of Owner's obligations under this Lease.  Tenant shall look solely
to Owner to enforce Owner's obligations hereunder and shall not seek any damages
against any of the Owner's Parties.  Notwithstanding anything contained in this
Lease to the contrary, Tenant shall look solely to the estate and interest of
Owner, its successors and assigns, in the Real Property and Building for the
collection or satisfaction of any judgment recovered against Owner based upon
the breach by Owner of any of the terms, conditions or covenants of this Lease
on the part of Owner to be performed, and no other property or assets of Owner
or any of Owner's Parties shall be subject to levy, execution or other
enforcement procedure for the satisfaction of Tenant's remedies under or with
respect to either this Lease, the relationship of landlord and tenant hereunder,
or Tenant's use and occupancy of the Demised Premises.

                                       52
<PAGE>

          IN WITNESS WHEREOF, Owner and Tenant have respectively signed and
sealed this Lease as of the day and year first above written.

                                 55 BROAD STREET L.P.

                                 By:  55 Broad Street LLC, its general partner
Witness:

_____________________________    By:_____________________________
                                                         Owner

                                         Name:
                                         Title: Managing Member

                                    BOTTOMLINE TECHNOLOGIES, INC.
Witness:

_____________________________    By:_____________________________
                                                         Tenant
                                         Name:
                                         Title:

                                       53
<PAGE>

                  UNIFORM FORM CERTIFICATE OF ACKNOWLEDGMENT
                            (Within New York State)

State of New York  )
                   :ss.:
County of _______  )

          On the ____________ day of _________________, in the year ___________,
before me, the undersigned, personally appeared _________________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.

                      ________________________________________
                      (Signature and Office of individual taking acknowledgment)

                  UNIFORM FORM CERTIFICATE OF ACKNOWLEDGMENT
                          (Outside of New York State)

State, District of Columbia, Territory,
Possession or Foreign Country
_______________________________):ss.:

          On the ______ day of _________________ in the year _________, before
me, the undersigned, personally appeared _______________________, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument, and that such individual made such appearance before
the undersigned in the _____________________.  (Insert the city or other
political subdivision and the state or country or other place the acknowledgment
was taken.)

                                     ______________________________________
                    (Signature and office of individual taking acknowledgment)

                                       54
<PAGE>

                                  SCHEDULE A

                                BUILDING RULES

     1.  The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls of the Building shall not be obstructed or
encumbered or used for any purpose other than ingress and egress to and from the
premises demised to any tenant or occupant.  Any tenant whose premises are
situate on the ground floor of the Building shall, at said tenant's own expense,
keep the sidewalks and curb directly in front of said premises clean and free
from ice and snow.

     2.  No awnings or other projections shall be attached to the outside walls
or windows of the Building without the prior consent of Owner. No curtains,
blinds, shades, or screens shall be attached to or hung in, or used in
connection with, any window or door of the premises demised to any tenant or
occupant, without the prior consent of Owner.  Such awnings, projections,
curtains, blinds, shades, screens or other fixtures must be of a quality, type,
design and color, and attached in a manner, approved by Owner.

     3.  No sign, advertisement, object, notice or other lettering shall be
exhibited, inscribed, painted or affixed on any part of the outside or inside of
the premises demised to any tenant or occupant or of the Building without the
prior consent of Owner.  Interior signs on doors and directory tablets, if any,
shall be of a size, color and style approved by Owner.

     4.  The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed, nor shall any bottles, parcels, or
other articles be placed on any window sills.

     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,
vestibules or other public parts of the Building.

     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, or other substances shall be thrown therein. No tenant
shall bring or keep, or permit to be brought or kept, any inflammable,
combustible or explosive fluid, material, chemical or substance in or about the
premises demised to such tenant.

     7.  No tenant or occupant shall mark, paint, drill into, or in any way
deface any part of the Building or the premises demised to such tenant or
occupant.  No boring, cutting or stringing of wires shall be permitted, except
with the prior consent of Owner, and as Owner may direct.  No tenant or occupant
shall install any resilient tile or similar floor covering in the premises
demised to such tenant or occupant except in a manner approved by Owner.

     8.  No bicycles, vehicles or animals of any kind shall be brought into or
kept in or about the premises demised to any tenant.  No cooking shall be done
or permitted in the Building by any tenant without the approval of Owner.  No
tenant shall cause or permit any unusual or objectionable odors to emanate from
the premises demised to such tenant.

     9.  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.

                                       1
<PAGE>

     10.  No tenant shall make, or permit to be made, any unseemly or disturbing
noises or disturb or interfere with other tenants or occupants of the Building
or neighboring buildings or premises whether by the use of any musical
instrument, radio, television set or other audio device, unmusical noise,
whistling, singing, or in any other way. Nothing shall be thrown out of any
doors or windows.

     11.  No additional locks or bolts of any kind shall be placed upon any of
the doors or windows, nor shall any changes be made in locks or the mechanism
thereof.  Each tenant must, upon the termination of its tenancy, restore to
Owner all keys of stores, offices and toilet rooms, either furnished to, or
otherwise procured by, such tenant.

     12.  All removals from the Building, or the carrying in or out of the
Building or the premises demised to any tenant, of any safes, freight, furniture
or bulky matter of any description must take place at such time and in such
manner as Owner or its agents may determine, from time to time.  Owner reserves
the right to inspect all freight to be brought into the Building and to exclude
from the Building all freight which violates any of the Building Rules or the
provisions of such tenant's lease.

     13.  No tenant shall use or occupy, or permit any portion of the premises
demised to such tenant to be used or occupied, as an office for a public
stenographer or typist, or as a barber or manicure shop, or as an employment
bureau.  No tenant or occupant shall engage or pay any employees in the
Building, except those actually working for such tenant or occupant in the
Building, nor advertise for laborers, giving an address at the Building.

     14.  No tenant or occupant shall purchase spring water, ice, food,
beverage, lighting maintenance, cleaning, towels, or other like service, from
any company or persons not approved by Owner, such approval not unreasonably to
be withheld.

     15.  Owner shall have the right to prohibit any advertising mentioning the
Building or Owner by any tenant or occupant which, in Owner's opinion, tends to
impair the reputation of the Building or its desirability as a building for
offices, and upon notice from Owner, such tenant or occupant shall refrain from
or discontinue such advertising.

     16.  Owner reserves the right to exclude from the Building, between the
hours of 6 P.M. and 8 A.M. on business days and at all hours on Saturdays,
Sundays and holidays, all persons who do not present a pass to the Building
signed by Owner.  Owner will furnish passes to persons for whom any tenant
requests such passes.  Each tenant shall be responsible for all persons for whom
it requests such passes and shall be liable to Owner for all acts of such
persons.

     17.  Each tenant, before closing and leaving the premises demised to such
tenant at any time, shall see that all entrance doors are locked and all windows
closed.

     18.  Each tenant shall, at its expense, provide artificial light in the
premises demised to such tenant for Owner's agents, contractors and employees
while performing janitorial or other cleaning services and making repairs or
alterations in said premises.

     19.  No premises shall be used, or permitted to be used, for lodging or
sleeping or for any immoral or illegal purpose.

                                       2
<PAGE>

     20.  The requirements of tenants will be attended to only upon application
at the office of Owner.  Building employees shall not be required to perform,
and shall not be requested by any tenant or occupant to perform, any work
outside of their regular duties, unless under specific instructions from the
office of Owner.

     21.  Canvassing, soliciting and peddling in the Building are prohibited and
each tenant and occupant shall cooperate in seeking their prevention.

     22.  There shall not be used in the Building, either by any tenant or
occupant or by their agents or contractors, in the delivery or receipt of
merchandise, freight or other matter, any hand trucks or other means of
conveyance except those equipped with rubber tires, rubber side guards and such
other safeguards as Owner may require.

     23.  If the premises demised to any tenant become infested with vermin,
such tenant, at its sole cost and expense, shall cause its premises to be
exterminated, from time to time, to the satisfaction of Owner, and shall employ
such exterminators therefor as shall be approved by Owner.

     24.  No premises shall be used, or permitted to be used, at any time, as a
store for the sale or display of goods, wares or merchandise of any kind, or as
a restaurant, shop, booth, bootblack or other stand, or for the conduct of any
business or occupation which predominantly involves direct patronage of the
general public in the premises demised to such tenant, or for manufacturing or
for other similar purposes.

     25.  No tenant shall clean, or permit to be cleaned, any window of the
Building from the outside in violation of Section 202 of the New York Labor Law
or any successor law or statute, or of the rules of the Board of Standards and
Appeals or of any board or body having or asserting jurisdiction.

     26.  No tenant shall move, or permit to be moved, into or out of the
Building or the premises demised to such tenant, any heavy or bulky matter,
without the specific approval of Owner.  If any such matter requires special
handling, only a person holding a Master Rigger's license shall be employed to
perform such special handling.  No tenant shall place, or permit to be placed,
on any part of the floor or floors of the premises demised to such tenant, a
load exceeding the floor load per square foot which such floor was designed to
carry and which is allowed by law.  Owner reserves the right to prescribe the
weight and position of safes and other heavy matter, which must be placed so as
to distribute the weight.

                                       3<PAGE>

                                                                   Exhibit 10.35

                                    SUBLEASE

                                    BETWEEN

                          325 CORPORATE DRIVE II, LLC

                                       AS
                                  "SUBLESSOR"

                                      AND

                         BOTTOMLINE TECHNOLOGIES, INC.

                                       AS
                                  "SUBLESSEE"

                            OFFICE BUILDING FACILITY
                         PEASE INTERNATIONAL TRADEPORT

                        PORTSMOUTH, NEW HAMPSHIRE 03801

                       DATED AS OF ________________, 2000

                                       1
<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE                                                                          PAGE
-------                                                                          ----
<S>                                                                              <C>

SUBLEASE......................................................................    5
--------
RECITALS......................................................................    6
--------
ARTICLE 1. PREMISES...........................................................    7
-------------------
ARTICLE 2. CONDITION OF SUBLEASED PREMISES - SUBLESSEE'S IMPROVEMENTS........     8
           ----------------------------------------------------------
[ARTICLE 2A. SUBLESSOR'S IMPROVEMENTS........................................    11
             ------------------------
ARTICLE 3. TERM..............................................................    11
           ----
ARTICLE 4. BASIC RENT........................................................    12
           ----------
ARTICLE 5. IMPOSITIONS.......................................................    17
           -----------
ARTICLE 6. SURRENDER OF SUBLEASED PREMISES...................................    18
           -------------------------------
ARTICLE 7. INSURANCE.........................................................    19
--------------------
ARTICLE 8. USE OF SUBLEASED PREMISES.........................................    22
           -------------------------
ARTICLE 9. LIENS.............................................................    25
           -----
ARTICLE 10. ALTERATIONS - SIGNS..............................................    26
-------------------------------
ARTICLE 11. RIGHT OF SUBLESSOR TO INSPECT AND REPAIR.........................    28
            ----------------------------------------
ARTICLE 12. GENERAL INDEMNIFICATION BY SUBLESSEE.............................    29
            ------------------------------------
ARTICLE 13. UTILITIES........................................................    30
            ---------
ARTICLE 14. SERVICES TO BE FURNISHED BY SUBLESSOR AND SUBLESEE'S AGREEMENTS..    31
---------------------------------------------------------------------------
ARTICLE 15. INTENTIONALLY LEFT BLANK..................... ...................    34

ARTICLE 16. DAMAGE OR DESTRUCTION............................................    34

ARTICLE 17. EMINENT DOMAIN...................................................    35

</TABLE>

                                       2
<PAGE>

<TABLE>
<S>                                                                               <C>
ARTICLE 18. DEFAULT...........................................................   36
-------------------
ARTICLE 19. SUBORDINATION TO MORTGAGES........................................   37
-------------------------------------
ARTICLE 20. CERTIFICATE......................................................    38
----------------------
ARTICLE 21. ASSIGNMENT,SUBLEASES, MORTGAGE, RIGHT OF FIRST OFFER.............    38
---------------------------------------------------------------
ARTICLE 22. ENVIRONMENTAL PROTECTION.........................................    42
            ------------------------
ARTICLE 23. HOLDING OVER.....................................................    48
------------------------
ARTICLE 24. WAIVERS..........................................................    48
-------------------
ARTICLE 25. QUIET ENJOYMENT..................................................    49
---------------------------
ARTICLE 26. INTENTIONALLY LEFT BLANK.........................................    49
------------------------------------
ARTICLE 27. INTERPRETATIONS..................................................    49
---------------------------
ARTICLE 28. NOTICES..........................................................    50
-------------------
ARTICLE 29. DISPUTES AND LITIGATION..........................................    50
-----------------------------------
ARTICLE 30. MISCELLANEOUS....................................................    51
-------------------------
 45
</TABLE>

                                       3
<PAGE>

                             EXHIBITS TO SUBLEASE
                             -------- -- --------

Exhibit
-------

1.   PRIMARY SUBLEASE

2.   A.  PLANS DESIGNATING THE SUBLEASED PREMISES -

     LEASEHOLD WORK AND BASE BUILDING PLANS LABELED AS:

     325 CORPORATE DRIVE, LLC
     New Office Building at:
     325 Corporate Drive
     Portsmouth, NH
     Project #300042
     Design Document
     Dated: 8/9/00
     By: PCI Architecture

     B.  BASE BUILDING SPECIFICATIONS AND PLANS LABELLED AS:

     Preliminary Specifications with Addendum #1
     New Office Building
     325 Corporate Drive, LLC
     Dated: 8/9/00
     By: PCI Architecture
     Project #300042

3.   AMENITIES

4.   LIST OF ENVIRONMENTAL LAWS AND REGULATIONS

5.   SUBLEASE PROVISIONS REQUIRED BY FEDERAL AVIATION
     ADMINISTRATION

6.   RULES AND REGULATIONS

7.   LANDLORD SERVICES
8.   LIST OF APPROVALS AND MILESTONES

                                       4
<PAGE>

                                   SUBLEASE
                                   --------

   THIS SUBLEASE ("Sublease") is made by and between 325 CORPORATE DRIVE II,
LLC, ("Sublessor") and BOTTOMLINE TECHNOLOGIES, INC. ("Sublessee"); (Sublessor
and Sublessee may be referred to jointly as the "Parties.")

                SUMMARY OF BASIC LEASE PROVISIONS AND RECITALS
                ----------------------------------------------

SUMMARY
-------

BASIC DATA.
-----------

     Sublessor: 325 Corporate Drive II, LLC
     ---------- 170 Commerce Way, Suite 202
                Portsmouth, NH 03801

     Sublessee: Bottomline Technologies, Inc.
     ---------- Fleet Street
                Portsmouth, NH 03801

     Guarantor: N/A
     ----------

     Base Rent:
     ----------

          See 4.1

     Base Taxes:  Taxes for tax year April 1/st/ to March 31/st/, beginning with
     -----------
     first year of tax assessment as established by the City of Portsmouth and
     estimated annually.

     Premises Subleased:   83,342 square feet minimum.
     -------------------

     Permitted Uses:  Class A Office Use and ancillary uses, including shipping
     ---------------
     and receiving in the areas designated for such ancillary uses at the
     commencement of this lease.

     Initial Term:  Ten (10) years.
     -------------

     Business Days:  All days except Sunday, Federal and State Holidays.
     --------------

     Default:  See Article 18.
     --------

     Initial Public Liability Insurance:  $3,000,000 minimum Commercial General
     -----------------------------------
     Liability coverage - $1,500,000 in Automobile coverage and Worker's
     Compensation coverage at statutory minimum levels.

                                       5
<PAGE>

     Sublessee's Removable Property:   As defined in Section 6.1.
     --------------------------------

     Parking:   Sublessee shall have a prorated share of the parking spaces
     --------
     shown on the Site Plan.

                                   RECITALS
                                   --------

     A.   325 Corporate Drive II, LLC has entered into a Sublease dated
________________, 2000, with the Pease Development Authority ("PDA"), an agency
of the State of New Hampshire established pursuant to RSA Chapter 12-G for
premises located at the Pease International Tradeport in Portsmouth, New
Hampshire described as follows: The premises shown on a Plan entitled
_____________________________________ to be recorded in the Rockingham Count
Registry of Deeds. A copy of which Sublease is attached hereto as Exhibit 2 (the
                                                                  ---------
"Primary Sublease"). The Primary Sublease is subject and subordinate to all
agreements made between PDA and the United States of America or the United
States Air Force including, but not limited to, the Master Lease, the
Application, the Acceptance and the FFA, all as hereinafter defined.

     B.   PDA anticipates acquiring fee title to the portion of the former Pease
Air Force Base hereinafter designate Premises I and Premises II from the United
States of America ("Government or Air Force") by public benefit transfer (i.e.
transfer without consideration) pursuant to the general authority contained in
49 U.S.C. Sections 47151-47153 and other applicable provisions of law.
(Together, Premises I and Premises II constitute the entirety of the Airport
(the "Airport" or "Pease"). The terms of such acquisition are set forth in an
Amended Application for Public Benefit Transfer executed by PDA ("Application")
and accepted by the Air Force on April 14, 1992 (the "Acceptance"), as the same
has been subsequently amended by Amendment No. 1 dated March 24, 1994 and
executed June 27, 1997 ("Amendment No. 1"). The Amended Application was approved
December 12, 1995 and confirmed March 18, 1997, and the Air Force executed an
acceptance of the Amended Application on June 26, 1997 ("Acceptance II"). The
Acceptance and Acceptance II may be referred to collectively as the
"Acceptances". Pending final disposition of the Airport in accordance with the
terms of the Amended Application and Acceptances, PDA and Air Force have entered
into a Lease as of April 14, 1992 for the Airport District, a Supplement No. 1
thereto dated August 4, 1992, a Supplement No. 2 thereto dated July 15, 1993 and
a Supplement No. 3 thereto dated June 27, 1997 (collectively the "Master
Lease"). The Subleased Premises are located within the Airport District and are
located in Premises II. The Parties acknowledge that the Application, Acceptance
and Master Lease impose certain requirements on Sublessor with respect to
subleases which are attached to the Primary Sublease. The terms Application,
Acceptance and Master Lease shall include any amendments to said documents. The
Parties acknowledge that a Federal Facilities Agreement ("FFA") required under
Section 120 of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. (S) 9601 et seg, was entered into
                                                      ------
by the Air Force,

                                       6
<PAGE>

the New Hampshire Department of Environmental Services ("NHDES") and the United
States Environmental Protection Agency ("EPA") regarding certain contamination
at Pease and that FFA also imposes certain requirements upon Sublessor and
Sublessee which are addressed in the terms and conditions of this Sublease. A
copy of the FFA is attached to the Primary Sublease. The term FFA shall include
any amendments to said document.

     C.   Sublessor is 325 Corporate Drive II, LLC and is duly organized and
existing under the laws of the State of New Hampshire with a principal place of
business at 170 Commerce Way, Suite 101, Portsmouth, New Hampshire, and is
qualified to do business in the State of New Hampshire.

     D.   Sublessee BOTTOMLINE TECHNOLOGIES, INC. is duly organized and existing
under the laws of the State of New Hampshire with a principal place of business
at Fleet Street, Portsmouth, NH and is qualified to do business in the State of
New Hampshire.

     NOW, THEREFORE, in consideration of the covenants herein contained and
other valuable consideration, the receipt of which is hereby acknowledged,
Sublessor and Sublessee hereby agree as follows:

ARTICLE 1.

PREMISES
--------

1.1.   Description of Subleased Premises
----   ---------------------------------

       Sublessor, for and in consideration of the rents and covenants herein
specified to be paid and performed by Sublessee, hereby leases to Sublessee, and
Sublessee hereby hires from Sublessor, the premises described generally below
and more particularly on the plans attached as Exhibits 2 (the "Subleased
                                               ----------
Premises" or the "Premises"): consisting of a minimum of approximately 83,342
square feet of the approximately 105,000 square foot total building as adjusted
by the final as built of square footage of the leased premises and located at
Corporate Drive, Portsmouth, New Hampshire. The Sublessor shall provide a
certification that the building conforms to the plans listed on Exhibits #2

       Appurtenant Rights and Reservations. (a) Sublessee shall have, as
       -----------------------------------
appurtenant to the Premises, the non-exclusive right to use, and permit its
invitees to use the parking lot and areas appurtenance to the building as
designated by the Sublessor, subject to reasonable rules and regulations from
time to time established by Sublessor pursuant to Section 14.7.

1.2.   Easements - Rights-of-Way
----   -------------------------

       This Sublease is subject to existing easement and rights of way of record
and to (i) the Utility Sublease and License Agreement dated July 31, 1992 by and

                                       7
<PAGE>

between PDA and Public Service Company of New Hampshire ("PSNH"); (ii) the
Utility Sublease and License Agreement dated May 10, 1995 by and between PDA and
New England Telephone and Telegraph Company ("NETEL"); (iii) the Wastewater
Disposal and Water Service Facilities Sublease and License Agreement dated as of
January 1, 1993 and amended July 1, 1998 by and between PDA and the City of
Portsmouth ("COP") and (iv) and to the Pipeline Easement and Transfer Agreement
dated August 12, 1998 by and between PDA< Portland Natural Gas Transmission
System and Maritimes & Northeast Pipeline, LLC. The Government reserves for the
use and benefit of the public, an avigation easement and a right of way for the
free and unobstructed passage of aircraft in the airspace above the surface of
the Airport, together with the right to cause in such airspace such sound,
vibrations, fumes, dust, fuel particles, and all other effects as may be caused
by the operation of aircraft, now known or hereafter used, for the navigation
through or flight in the said airspace, and for use of said airspace for landing
on, taking off from, or operating on the Airport.

1.3.   Access
----   ------

     Sublessee shall have in common with other Airport tenants and authorized
Airport users the right to use the entrances, exits and roadways designated by
PDA for common use at the Airport, subordinate, however, to PDA's rights to
manage the common areas and roadways, which rights of PDA shall include, without
limitation, the right to impose reasonable rules and regulations, and to add,
delete, alter, or otherwise modify the designation and use of all parking areas,
entrances, exits, roadways and other areas of the Airport.

     The rights of Sublessee under this Section 1.3 shall be subordinate to
PDA's rights, to manage the common areas and roadways which rights shall
include, without limitation, the right to impose reasonable rules and
regulations relating to use of the common areas and roadways and the right to
add, delete, alter or otherwise modify the designation and use of all parking
areas, entrances, exits, roadways and other areas of the Airport, provided,
however, that during the term of this Sublease, Sublessee shall have reasonable
access the Premises.

     Sublessor shall at Sublessor's request exercise any and all rights and
remedies available to it under the primary Sublease to ensure that Sublessee's
use and enjoyment of the Premises and access thereto are protected.

ARTICLE 2.
CONDITION OF SUBLEASED PREMISES
--------------------------------

2.1  Attached hereto as Exhibit 2 is a description of work (the "Base Building
                                                                 -------------
Work"), including a list of plans and specifications for such Base Building
----
Work, necessary to improve the premises leased under the Primary Sublease with a
four-story office building (the "Building") and related improvements. Attached
                                 --------
hereto as Exhibit 2 is a description of work (the "Leasehold Improvement Work"),
          ---------                                --------------------------
including a list of plans and specifications for such Leasehold Improvement

                                       8
<PAGE>

Work, necessary to build out the interior of the Premises. The Base Building
Work and the Leasehold Improvement Work are referred to hereinafter together as
the "Work").
     ----

2.2  Attached hereto as Exhibit 8 is a list of all permits, approvals, consents
                        ---------
and licenses (collectively, the "Approvals") required for construction of the
                                 ---------
Work, including the dates upon which such Approvals are to be obtained.
Sublessor represents and warrants to Sublessee that the Approvals constitute all
of the permits, approvals, consents and licenses required for performance of the
Work and operation of the Building and related improvements.

2.3  Sublessor shall perform all of the Work diligently and continuously to
completion, in accordance with all plans and specifications therefor and first-
class construction and engineering practice, the requirements of all Documents
and all Approvals, and pursuant to all applicable laws, codes and regulations,
including without limitation the requirements of the Americans with Disabilities
Act.

2.4  Sublessor shall use diligent efforts to obtain all Approvals by the dates
therefor set forth in Exhibit 8, and to commence and perform the Work so as to
achieve the construction milestones set forth in Exhibit 8 by the dates therefor
set forth in such Exhibit. In the event Sublessor fails to obtain an Approval by
the "drop dead date" therefor set forth in Exhibit 8, or, except for the "Tenant
Floorplan Finalized" and the "Bottomline Approval of (TI) Pricing" matters and
excepting any delays in Tenant Floorplan Finalized which shall cause delay in
the "Tenant Improvement Construction Document Completed", the Sublessor fails to
achieve a construction milestone by the date set forth in Exhibit 8, then
Sublessee shall have the right, exercisable by notice of Sublessor given at any
time while such failure persists, to terminate this Sublease. The construction
milestone dates set forth in Exhibit 8 shall be extended one day up to a maximum
of 180 days for each day of delay caused by the occurrence of an event of "Force
Majeure" defined as follows:

     Force Majeure. Except for the performance of any monetary payment
     obligations hereunder, the duties of Sublessor or Sublessee to observe or
     perform any of the provisions of this Sublease on its part to be performed
     or observed shall be excused for a period equal to the period of
     prevention, delay or stoppage due to causes beyond the control of the
     affected party, by reason of strikes, civil riots, shortages of materials
     (except in the event materials of like kind or quality are available), war,
     invasion, fire or other casualty, labor unrest (unless such labor unrest
     solely affects the Premises and is not a result of Sublessee's acts,
     omission or negligence but is caused by the acts, omissions or negligence
     of Sublessor), actions of public utilities, Acts of God, unforeseen or
     unknown conditions in, on or under the Premises, adverse environmental
     conditions or contamination, adverse seasonal or weather conditions beyond
     those normally experienced in the Portsmouth area, or other events beyond
     the reasonable control of the affected party, provided that

                                       9
<PAGE>

     (a) the affected party has taken steps that are reasonable under the
     circumstances to mitigate the effects of such Force Majeure situation, and
     (b) the affected party notifies the other party in writing of the event of
     Force Majeure within five (5) days after the occurrence thereof.

2.5  "Substantial completion" as used in this Article 2 and Exhibit 8 shall mean
that (a) the Base Building Work or Leasehold Improvement Work, as applicable, is
complete except for so-called "punchlist items" which do not interfere with
Sublessee's use and enjoyment of the Premises, and which Sublessor shall
complete within the time agreed upon by the Sublessor and Sublessee after the
Term Commencement Date, (b) Sublessor's architect has certified to Sublessee
that the Base Building Work or Leasehold Improvement Work, as applicable, has
been substantially completed in accordance with the plans and specifications
therefor and all applicable law, and all requirements of the Sublease and (c) a
final Unconditional Certificate of Occupancy has been issued for the base
building or Premises, as applicable, which shall allow use of the Premises by
Sublessee for its business. Sublessor shall notify Sublessee at least (15) days
prior to Substantial Completion of the date upon which Substantial Completion is
expected to be achieved. All warranties shall be deemed to commence as of the
Substantial Completion date, except those as specified on the "punch list".

2.6  Sublessor shall provide a warranty to Sublessee with respect to all work
performed by or on behalf of Sublessor for a period of one year after the Term
Commencement Date, and shall, at Sublessor's sole cost and expense, promptly
correct any defect of which it is notified within such one-year period.
Thereafter, Sublessor agrees that it shall assign to Sublessee or exercise on
Sublessee's behalf any and all warranties available to it from contractors,
subcontractors or suppliers. Notwithstanding the foregoing, latent defects in
the Base Building Work shall be repaired by Sublessor at Sublessor's sole cost
and expense whenever the same are discovered, whether or not within the one-year
warranty period and the cost of such repairs shall not be included within
Operating Expenses.

2.7  Provided that Sublessee and its employees, agents and contractors do not
unreasonably interfere with Sublessor's work in the Premises, Sublessor shall
allow Sublessee access to the Premises to install cabling, furniture and
equipment during construction of the Leasehold Improvement Work.

2.8  Sublessor shall pay the entire cost of the Base Building Work. Sublessor
shall pay the following with respect to the Leasehold Improvement Work.

     If the actual fit up cost is greater than $2,436,496, then the difference
shall be paid by the Sublessee on a pro rata basis, monthly as construction of
the Leasehold Improvement Work progresses, provided however, that if such
increases shall have accumulated from the commencement of construction and not
have been billed by Sublessor, upon the discovery of any such unbilled
increases, the Sublessee shall make payment thereof within 10 days of
Sublessor's notice. Any unused allowance amount shall be applied against rent

                                       10
<PAGE>

first becoming due.

2.9  The amenities to be provided by the Sublessee are listed or described on
Exhibit 4.

ARTICLE 3.

TERM
----

3.1.   This Sublease shall be for a base term of ten (10) year(s) ("Base Term")
----
which term shall commence upon "Substantial Completion" of all Work under
Section 2 (the "Term Commencement Date"), and shall expire at midnight on the
day which is ten (10) year(s) from the Term Commencement Date, unless terminated
earlier or extended in accordance with the provisions of this Sublease.
Sublessee shall have up to two (2) five (5) year option(s) exercisable by it at
its sole discretion, which options, if exercised, shall extend the Base Term for
two additional five (5) year(s) periods, except as otherwise provided in Section
3.2.

3.2.   As a condition precedent to the exercise by Sublessee of any of its
----
options to extend the term of this Sublease, Sublessee shall give a written
notice ("Option Notice") to Sublessor of its exercise of each such option at
least twelve (12) months prior to the end of the Base Term or any applicable
Extension Period.

3.3.   The options to extend the term hereby granted may not be exercised at any
----
time during which Sublessee is in default under any of the terms of this
Sublease, after expiration of all applicable grace periods.

3.4.   Unless the context clearly indicates otherwise when used in this Sublease
----
the phrase "term of this Sublease" shall mean the Base Term plus any duly
exercised allowable extensions thereof.

3.5.   In the event the Primary Sublease is terminated for any reason
----
whatsoever, this Sublease will automatically terminate on that same date.

                                       11
<PAGE>

ARTICLE 4.

BASE RENT
---------

4.1.   The Base Rent shall be as follows:
----

Year        Annual Amount         Per Sq. Ft.          Monthly Payment
1           $1,312,636.50         $15.75/RSF           $109,386.37
2           $1,354,307.50         $16.25/RSF           $112,858.95
3           $1,395,978.50         $16.75/RSF           $116,331.54
4           $1,437,649.50         $17.25/RSF           $119,804.08
5           $1,480,987.34         $17.77/RSF           $123,415.60
6           $1,525,158.60         $18.30/RSF           $127,096.55
7           $1,570,996.70         $18.85/RSF           $130,916.39
8           $1,618,501.64         $19.42/RSF           $134,875.13
9           $1,666,840.00         $20.00/RSF           $138,903.33
10          $1,706,845.20         $20.60/RSF           $143,070.41

4.2.  Base Rent due under Section 4.1 shall commence upon the Term Commencement
----                                                          -----------------
Date.  The annual Base Rent shall be payable in each case in equal monthly
-----
installments of one twelfth thereof in advance on the first day of each month
without offset (except in the event of Sublessee cost or expense resulting from
Sublessee's proper exercise of its self help remedies under Section 30.14) in
lawful money of the United States at the office of Sublessor or at such other
address as Sublessor may hereafter designate.  In addition, Sublessee agrees to
pay when due, such other amounts that may be required to be paid as additional
rent.  Sublessee's rent obligation for any fractional portion of a calendar
month at the beginning or end of the term of this Sublease shall be a similar
fraction of the rental due for an entire month.

4.3. OPERATING EXPENSES
     ------------------

4.3.1. Definitions. For the purposes of this Article, the following terms
------ -----------
shall have the following respective meanings:

(i) Operating Year: Each calendar year in which any part of the Term of this
Sublease shall fall.

(ii) Operating Expenses: The aggregate costs or expenses reasonably incurred by
Sublessor with respect to the operation, administration, insuring, repair,
maintenance, janitorial and management of the Property (but specifically
excluding Sublessee's Utility Expenses).   The estimated annual operating
expense cost is $3.20 per square foot, for the 12 month period beginning with
the commencement of this Lease.

                                       12
<PAGE>

Notwithstanding anything to the contrary set forth in the Sublease, Operating
Expenses shall not include the following:

     (a)  Any ground or underlying lease rental;

     (b)  Bad debt expenses and interest, principal, points and fees on debts or
          amortization on any mortgage or other debt instrument encumbering the
          Building or the Lot;

     (c)  Costs which may be considered capital improvements, capital repairs,
          capital changes or any other capital costs as determined under
          generally accepted accounting principles except for capital
          improvements required by any laws not in existence and not in effect
          as of the Term Commencement Date and capital expenditures occasioned
          by ordinary wear and tear or resulting from excess use by Sublessor,
          in which case such costs shall be capitalized and amortized over their
          useful life determined in accordance with generally accepted
          accounting principles, and the Sublessee shall be responsible for the
          pro rata share of those costs based on the remaining length of the
          term of this Lease.

     (d)  Rental for items which if purchased, rather than rented, would
          constitute a capital cost;

     (e)  Costs incurred by Sublessor to the extent that Sublessor is reimbursed
          by insurance proceeds or is otherwise reimbursed.

     (f)  Depreciation, amortization and interest payments, except on equipment,
          materials, tools, supplies and vendor-type equipment purchased by
          Sublessor to enable Sublessor to supply services Sublessor might
          otherwise contract for with a third party where such depreciation,
          amortization and interest payments would otherwise have been included
          in the charge for such third party's services, all as determined in
          accordance with generally accepted accounting principles, consistently
          applied, and when depreciation or amortization is permitted or
          required, the item shall be amortized over its reasonably anticipated
          useful life;

     (g)  Advertising and promotional expenditures, and costs of acquisition and
          maintenance of signs in or on the Building identifying the owner of
          the Building or other Sublessees;

     (h)  Marketing costs, including leasing commissions, attorneys' fees (in
          connection with the negotiation and preparation of letters, deal
          memos, letters of intent, leases, subleases and/or assignments), space
          planning costs, and other costs and expenses incurred in connection
          with lease, sublease and/or assignment negotiations and transactions

                                       13
<PAGE>

          with present or prospective Sublessees or other occupants of the
          Building;

     (i)  Costs, including permit, license and inspection costs, incurred with
          respect to the installation of Sublessees' or other occupants'
          improvements or incurred in renovating or otherwise improving,
          decorating, painting or redecorating vacant space for Sublessees or
          other occupants of the Building;

     (j)  Expenses in connection with services or other benefits which are not
          offered to sublessee or for which Sublessee is charged for directly;

     (k)  Costs incurred by Sublessor due to the violation by Sublessor or any
          sublessee of the terms and conditions of any sublease of space in the
          Building;

     (l)  Management fees paid or charged by Sublessor in connection with the
          management of the building to the extent such management fee is in
          excess of the management fee customarily paid or charged by sublessors
          of the comparable buildings in the vicinity of the Building;

     (m)  Salaries and other benefits paid to the employees of Sublessor to the
          extent customarily included in or covered by a management fee,
          provided that in no event shall Operating Expenses include salaries
          and/or benefits attributable to personnel above the level of Building
          manager;

     (n)  Rent for any office space occupied by Building management personnel

     (o)  Amounts paid to Sublessor or to subsidiaries or affiliates of
          Sublessor for goods and/or services in the Building to the extent the
          same exceeds the costs of such goods and/or services rendered by
          unaffiliated third parties on a competitive basis;

     (p)Sublessor's general corporate overhead and general and administrative
     expenses;

     (q)Any compensation paid to clerks, attendants or other persons in
     commercial concessions operated by Sublessor'

     (r)Costs incurred in connection with upgrading the Building to comply with
     laws, rules, regulations and codes in effect prior to the Term Commencement
     Date;

     (s)Costs arising from the negligence or willful misconduct of Sublessor or
     other Sublessees or occupants of the building or their respective agents,
     employees, licensees, vendors, contractors or providers of materials or
     services;

                                       14
<PAGE>

     (t)Costs arising from Sublessor's charitable or political contributions;

     (u)Costs arising from latent defects or repair thereof;

     (v)Costs for sculpture, paintings or other objects of art;

     (w)Costs associated with the operation of the business of the entity which
     constitutes Sublessor as the same are distinguished from the costs of
     operation of the Building, including accounting and legal matters, costs of
     defending any lawsuits with any mortgagee (except as the actions of
     Sublessee may be in issue), costs of selling, syndicating, financing,
     mortgaging or hypothecating any of Sublessor's interest in the Building.

     (x) Costs incurred in connection with any disputes between Sublessor and
     its employees, between Sublessor and Building management, or between
     Sublessor and other Sublessees or occupants

(iii) Utility Expenses: The aggregate costs or expenses reasonably incurred by
Sublessor with respect to supplying electricity, oil, steam, gas, water and
sewer and other utilities supplied to the Property and not paid for directly by
the Sublessee.  Where possible, separate meters shall be installed for each
Sublessor of the building.  Common utility expenses shall be shared pro rata by
the sublessees.

4.3.2.  Sublessee's Payments. (a) The Sublessee shall be responsible for
----------------------------
        Sublessee's Proportionate Share of Operating Expenses.

(b) At the commencement of this Lease, the Sublessor shall estimate the
Operating Expenses, and utility expenses. As of each anniversary date the
Sublessor shall reconcile the estimated expenses with the actual expenses, and
determine the estimated payments for the next 12 month period. Estimated
payments by Sublessee on account of Sublessee's Proportionate Share of Operating
Expenses shall be made monthly and at the time and in the fashion herein
provided for the payment of Base Rent. After the end of each Operating Year,
Sublessor shall submit to Sublessee a reasonably detailed accounting of
Operating Expenses for such Year, and Sublessor shall certify to the accuracy
thereof. If estimated payments theretofore made for such Year by Sublessee
exceed Sublessee's required payment on account thereof for such Year, according
to such statement, Sublessor shall credit the amount of overpayment against
subsequent obligations of Sublessee with respect to Operating Expenses (or
refund such overpayment if the Term of this Sublease has ended and Sublessee has
no further obligation to Sublessor), but, if the required payments on account
thereof for such Year are greater than the estimated payments (if any)
theretofore made on account thereof for such Year, Sublessee shall make payment
to Sublessor within thirty (30) days after being so advised by Sublessor.
Sublessor shall have the same rights and remedies for the nonpayment by

                                       15
<PAGE>

Sublessee of any payments due on account of Operating Expenses as Sublessor has
hereunder for the failure of Sublessee to pay Base Rent.

(c) "Sublessee's Proportionate Share" shall mean a fraction, the numerator of
which is the number of rentable feet in the Premises, and the denominator of
which is the number of rentable square feet in the Building as determined in
accordance with BOMA Methodology

4.3.3 Sublessee's Audit Right.  Sublessor shall keep, in the Building manager's
office, complete books and records regarding Operating Expenses and real estate
taxes (collectively, "Charges").  All such records shall be retained for at
least three (3) years.  Sublessee shall have the right to audit such records at
any time upon reasonable written notice to Sublessor.  If such audit reveals
that Sublessee's pro rata share of any Charges has been overstated, then
Sublessor shall immediately refund the overpayment plus interest at the Lease
Interest Rate and if overstated by more than five percent (5%) cumulatively,
Sublessor shall promptly upon demand reimburse Sublessee for the costs of such
audit.

4.4. RENT DURING OPTION PERIOD
------------------------------

     In the event that the Sublessee shall exercise its option to renew for
either additional five (5) year period, the annual rent during that period shall
be 95% of the then Current Market Rent Rate for the premises but in no case
shall the rent be less than the previous years Base Rent. The term "Current
Market Rent Rate" for purposes of this Sublease shall mean the annual amount per
rentable square foot that a willing, comparable, new, non-renewal, non-equity,
nonexpansion Sublessee of credit quality similar to Sublessee would pay, and a
willing comparable Sublessor of the Building or a comparable office building in
the immediate vicinity of the Building would accept, at arms length, giving
appropriate consideration to annual rental rates per rentable square foot,
escalation clauses (including type, gross or net, and if gross, whether base
year or expense stop), and abatement provisions reflecting free rent, tenant
improvement allowances, length of lease term, size, condition and location of
premises being leased.

     If Sublessee exercises the extension option, Sublessor and Sublessee shall
attempt to agree upon the Current Market rental Rate using their best good-faith
efforts.  If Sublessor and Sublessee fail to reach an agreement within thirty
(30) days following Sublessee's exercise of such extension option (the "Outside
Agreement Date"), then each party shall make a separate determination of the
current Market Rental Rate which shall be submitted to each other and to
arbitration in accordance with the following items (i) through (vii):

     (i)  Sublessor and Sublessee shall each appoint, within ten (10)
business days of the Outside Agreement Date, one arbitrator who shall by
profession be a licensed, qualified MAI appraiser of comparable properties in
the immediate vicinity of the Building, and who has been active in such field
over the last five (5) years.  The determination of the arbitrators shall be
limited solely to

                                       16
<PAGE>

the issue of whether Sublessor's or Sublessee's submitted Current Market Rental
Rate is the closes to the actual Current Market Rental Rate as determined by the
arbitrators.

     (ii)   The two arbitrators so appointed shall within five (5) business days
of the date of the appointment of the last appointed arbitrator agree upon and
appoint a third arbitrator who shall be qualified under the same criteria set
forth hereinabove for qualification of the initial tow arbitrators.

     (iii)  The third arbitrator shall within fifteen (15) days of the
appointment reach a decision as to whether the parties shall use Sublessor's or
Sublessee's submitted current Market Rent Rate, or such other Rent Rate as
determined by the third appraiser and shall notify Sublessor and Sublessee
thereof.

     (iv)   If either Sublessor or Sublessee fails to appoint an arbitrator
within ten (10) business days after the applicable outside Agreement Date, the
arbitrator appointed by one of them shall reach a decision, notify Sublessor and
Sublessee thereof, and such arbitrator's decision shall be binding upon
Sublessor and Sublessee.

     (v)    If the two arbitrators fail to agree upon and appoint a third
arbitrator, parties fail to appoint an arbitrator, then the appointment of the
third arbitrator or any arbitrator shall be dismissed and the matter to be
decided shall be forthwith submitted to arbitration under the provisions of the
American Arbitration Association, but subject to the instruction set forth in
this Section 3.3.

     (vi)   The cost of arbitration shall be paid by Sublessor and Sublessee
equally.

     The exercise of the first five (5) year prior by the Sublessee shall
entitle the Sublessee up to a $10.00 per square foot allowance to improve or
renovate the leased premises.  The exercise of the second five (5) year option
shall entitle the Sublessee up to a $2.00 per square foot carpeting allowance.

     All other additional rent shall also be paid, as provided in Section 4.5
above.

ARTICLE 5

TAXES AND UTILITIES
-------------------

5.1.   Sublessee shall be responsible for Sublessee's Proportionate Share of
----
real estate taxes on the building.   At the time when the City of Portsmouth
shall make its initial assessment of real estate taxes, the Sublessor shall
notify the Sublessee of  the amount due hereunder which shall be paid by the
Sublessee within 10 days of such notification.  At the commencement of this
Lease, and until such taxes are assessed, estimated taxes at $1.75 per square
foot shall be paid by the Sublessee.  The Sublessor shall also estimate the
taxes for each

                                       17
<PAGE>

subsequent year of the Lease using the previous assessment as a base for such
estimations. All estimated taxes shall be paid monthly. Within 60 days after
issuance of the final tax bill,the Sublessor shall reconcile all estimated tax
payment with the actual assessed taxes. Notwithstanding anything to the contrary
contained in the Lease, the following shall be excluded from taxes, and shall be
                                                        ------------------------
paid solely by Sublessor: inheritance, estate, succession, transfer, gift,
--------------------------------------------------------------------------
franchise, or capital stock tax, or any income taxes arising out of or related
------------------------------------------------------------------------------
to ownership and operation of income-producing real estate; any increase in
---------------------------------------------------------------------------
taxes and assessments resulting from Sublessor's sale of, or other transfer of
------------------------------------------------------------------------------
its interest in, the building; and assessments, charges, taxes, rents, fees,
----------------------------------------------------------------------------
rates, levies, excises, license fees, permit fees, inspection fees, or other
----------------------------------------------------------------------------
authorization fees, or except for the offsite sewer improvement charges under
-----------------------------------------------------------------------------
13.1 charges to the extent allocable to or caused by the develoment or
----------------------------------------------------------------------
installation of on or off-site improvements or utilities (including without
---------------------------------------------------------------------------
limitation street and intersection improvements, roads, rights of way, lighting,
--------------------------------------------------------------------------------
and signalization) necessary for the initial development or construction of the
-------------------------------------------------------------------------------
Building, or any past, present or future system development reimbursement
-------------------------------------------------------------------------
schedule or sinking fund related to any of the foregoing.
--------------------------------------------------------

5.2  Abatements.

     Sublessor reserves the right to make partial payments and/or file tax
abatement proceedings in which case the Sublessor shall be responsible for any
costs, interest or penalties associated therewith, and the Sublessee shall not
be responsible for any amounts beyond the tax payment obligation under Paragraph
5.1 above.  Sublessee shall have the right at its sole cost and expenses to file
tax abatement proceedings after providing a 10 day notice of such action with
the Sublessor and after a consultation discussion with the Sublessor which shall
occur not later than 10 days after the Sublessee's notice.  Sublessee's rights
hereunder shall not alter the Sublessee's obligation under Paragraph 5.1 above.

ARTICLE 6.

SURRENDER OF SUBLEASED PREMISES
-------------------------------

6.1.   On the expiration or termination of this Sublease, Sublessee shall
----
surrender to Sublessor the Subleased Premises, including all improvements and
fixtures therein whether leased to or otherwise owned by Sublessee, broom clean
and in good order, condition and repair, reasonable wear and tear excepted,
together with all alterations, decorations, additions and improvements that may
have been made in, to or on the Subleased Premises, except that Sublessee shall
be allowed to remove its personal property or any removable improvements made by
Sublessee at its sole expense that can be removed without damage to any
buildings, facilities or other improvements to the Subleased Premises.  The
Subleased Premises, including the improvements and fixtures therein, shall be
delivered free and clear of all subtenancies, liens and encumbrances, other than
those, if any, permitted hereby or otherwise created or consented to by
Sublessor, and, if requested to do so, Sublessee shall execute,

                                       18
<PAGE>

acknowledge and deliver to Sublessor such instruments of further assurance as in
the opinion of Sublessor are necessary or desirable to confirm or perfect
Sublessor's right, title and interest in and to the Subleased Premises including
said improvements and fixtures. On or before the end of the Sublease term,
Sublessee shall remove all of Sublessee's personal and other property allowed to
be removed hereunder, and all such property not removed shall be deemed
abandoned by Sublessee and may be utilized or disposed of by Sublessor without
any liability to Sublessee. Sublessee's obligation under this Article 6 shall
survive the expiration or termination of this Sublease.

ARTICLE 7.

INSURANCE
---------

7.1.Public Liability Insurance.  Sublessee agrees to maintain in full force from
------------------------------
the date upon which Sublessee first enters the Premises for any reason,
throughout the Term of this Sublease, and thereafter so long as Sublessee is in
occupancy of any part of the Premises, a policy of general liability and
property damage insurance (including broad form contractual liability,
independent contractor's hazard and completed operations coverage) under which
Sublessor, Manager (and such other persons as are in privy of estate with
Sublessor as may be set out in notice from time to time) and Sublessee are named
as additional insureds, and under which the insurer agrees to defend, indemnify
and hold Sublessor, Manager, and those in privity of estate with Sublessor,
harmless from and against all cost, expense and/or liability arising out of or
based upon any and all claims, accidents, injuries and damages set forth in
Article 12. Each such policy shall be non-cancelable and non-amendable with
respect to Sublessor, Manager and Sublessor's said designees without sixty (60)
days' prior notice to Sublessor and shall be as follows:

          (1)    Comprehensive general liability insurance to a limit of not
              less than three million ($3,000,000) dollars, endorsed for
              products and completed operations liability insurance, on an
              "occurrence basis" against claims for "personal injury", including
              without limitation, bodily injury, death or property damages,
              occurring upon, in or about the land and buildings of which the
              Subleased Premises are a part as required pursuant to the Primary
              Sublease.

          (2) Worker's compensation and employer's liability insurance in an
              amount and form which meets all applicable requirements of the
              labor laws of the State of New Hampshire, as amended from time to
              time, and which specifically covers the persons and risks involved
              in this Sublease.

          (3) Automobile liability insurance in amounts approved from time to
              time by Sublessor, but not less than one million ($1,500,000)
              dollars combined single limit for owned, hired and non-owned
              automobiles.

                                       19
<PAGE>

7.2.   All policies of insurance required to be carried under this Article shall
----
be effected under valid and enforceable policies, in such forms and amounts as
may, from time to time, be required under this Sublease, issued by insurers of
recognized responsibility which are authorized to transact such insurance
coverage in the State of New Hampshire, and which have been approved in writing
by Sublessor, which approval shall not be withheld unreasonably.  Except for
workman's compensation coverage, all such policies of insurance shall be for the
mutual benefit of Sublessor, PDA, the United States of America and Sublessee as
named additional insureds.  Upon the execution of this Sublease (and thereafter
not less than fifteen (15) days prior to the expiration date of each policy
furnished pursuant to this Article) the original of each policy required to be
furnished pursuant to this Article (or, with the consent of Sublessor, which
consent shall not be unreasonably withheld, in the case of comprehensive general
liability insurance and products liability insurance, a certificate of the
insurer reasonably satisfactory to Sublessor) bearing a notation evidencing the
payment of the premium or accompanied by other evidence reasonably satisfactory
to Sublessor of such payment, shall be delivered by Sublessee to Sublessor.

7.3.   All policies of insurance shall provide for loss thereunder to be
----
adjusted and payable to Sublessor or Sublessee in accordance with the terms of
this Sublease.

7.4.   Each such policy or certificate therefor issued by the insurer shall to
----
the extent obtainable contain (i) a provision that no act or omission of
Sublessee, or any employee, officer or agent of Sublessee, which would otherwise
result in forfeiture or reduction of the insurance therein provided shall affect
or limit the obligation of the insurance company to pay the amount of any loss
sustained, and (ii) an agreement by the insurer that such policy shall not be
canceled without at least sixty (60) days prior written notice by registered
mail to Sublessor and PDA and (iii) provide that the insurer shall have no right
of subrogation against the United States of America or PDA.

7.5.   All policies of insurance required to be maintained by Sublessee shall
----
have attached thereto the Lender's Loss Payable Endorsement, or its equivalent,
or a loss payable clause acceptable to Sublessor, for the benefit of any
Mortgagee, but the right of any Mortgagee to the payment of insurance proceeds
shall at all times be subject to the provisions of this Sublease with respect to
the application of the proceeds of such insurance.

7.6.   Sublessee shall observe and comply with the requirements of all policies
----
of insurance at any time in force with respect to the Subleased Premises and
Sublessee shall also perform and satisfy the requirements of the companies
writing such policies so that at all times companies of good standing reasonably
satisfactory to Sublessor shall be willing to write or to continue such
insurance.  Sublessee shall, in the event of any violations or attempted
violations of the provisions of this Section 7.6 by a subtenant, take steps,
immediately upon

                                       20
<PAGE>

knowledge of such violation or attempted violation, to remedy or prevent the
same as the case may be.

7.7.   Any insurance provided for in this Sublease may be effected by a policy
----
or policies of blanket insurance or may be continued in such form until
otherwise required by Sublessor; provided, however, that the amount of the total
insurance allocated to the Subleased Premises shall be such as to furnish in
protection the equivalent of separate policies in the amounts herein required,
and provided further that in all other respects, any such policy or policies
shall comply with the other provisions of this Sublease.  In any such case it
shall not be necessary to deliver the original of any such blanket policy to
Sublessor, but Sublessee shall deliver to Sublessor and to any Mortgagee a
certificate or duplicate of such policy in form and content acceptable to
Sublessor.

7.8.   Sublessee's  Risk. To the maximum extent this agreement may be made
----   -------------------
effective according to law, Sublessee agrees to use and occupy the Premises and
to use such other portions of the Property as Sublessee is herein given the
right to use at Sublessee's own risk; and Sublessor shall have no responsibility
or liability for any loss of or damage to Sublessee's Removable Property or for
any inconvenience, annoyance, interruption or injury to business arising from
Sublessor's making any repairs or changes which Sublessor is permitted by this
Sublease or required by law to make in or to any portion of the Premises or
other sections of the Property, or in or to the fixtures, equipment or
appurtenances thereof, except where the Sublessor is grossly negligent in making
such repairs. Sublessee shall carry "all-risk" property insurance on a
"replacement cost" basis (including so-called improvements and betterments), or
be self insured (with respect to the Sublessee's removal property), and provide
a mutual waiver of subrogation for both parties. The provisions of this Section
shall be applicable from and after the execution of this Sublease and until the
end of the Term of this Sublease, and during such further period as Sublessee
may use or be in occupancy of any part of the Premises or of the Building.

7.9.   Injury Caused By Third Parties. To the maximum extent this agreement may
----   -------------------------------
be made effective according to law, Sublessee agrees that Sublessor shall not be
responsible or liable to Sublessee, or to those claiming by, through or under
Sublessee, for any loss or damage that may be occasioned by or through the acts
or omissions of persons occupying adjoining premises or any part of the premises
adjacent to or connecting with the Premises or any part of the Property or
otherwise. The provisions of this Section shall survive the expiration or any
earlier termination of this Sublease.

7.10.  Sublessor's Insurance.  Sublessor shall maintain in full force from the
       ---------------------
date upon which Sublessee first enters the Premises for any reason, throughout
the Term, a policy of insurance upon the Building insuring against all risks of
physical loss or damage under an All Risk coverage endorsement in an amount at
least equal to the full replacement value of the property insured, with an
Agreed Amount endorsement to satisfy co-insurance requirements, as well as
insurance against breakdown of boilers and other machinery as customarily
insured

                                       21
<PAGE>

against. Sublessor shall supply to Sublessee from time to time upon request of
Sublessee certificates of all such insurance issued by or on behalf of the
insurers named therein by a duly authorized agent. All policies of insurance
maintained by Sublessor shall contain the same waiver of subrogation provisions
for the benefit of Sublessee as Sublessee is required to obtain in its insurance
policies for the benefit of Sublessor.

ARTICLE 8.

USE OF SUBLEASED PREMISES
-------------------------

8.1.   The sole purpose for which Sublessee may use the Subleased Premises is
----
for Class A office use and ancillary uses, including shipping and receiving and
for no other uses without Sublessor's and PDA's prior written consent.
Sublessee shall not use, or permit to be used, the Subleased Premises for any
other purpose  without the prior express written consent of Sublessor and PDA.
Sublessor's and PDA's consent shall be subject to the execution of an
appropriate agreement which shall include a provision requiring the payment of
established fees and charges that may be applicable to any such additional uses
consented to by Sublessor and PDA.  Sublessee is prohibited from any use of the
Subleased Premises not specifically granted in this Section 8.1.

8.2.   Sublessee recognizes that the uses authorized in Section 8.1 are not
----
granted on an exclusive basis and that Sublessor and PDA may enter into
subleases or other agreements with other tenants or users at areas of the
building in which the Subleased Premises are a part or other areas of the
Airport for similar, identical, or competing uses.  No provision of this
Sublease shall be construed as granting or authorizing the granting of an
exclusive right within the meaning of Section 308 of the Federal Aviation Act as
the same may be amended from time to time.

8.3.   Except to the extent the maintenance obligation is the responsibility of
----
the Sublessor hereunder, Sublessee agrees that it will keep the Premises in a
neat, clean and orderly condition in accordance the provisions of Chapters 300
through 500 of the Pease Development Authority Zoning Requirements, Site Plan
Review Regulations and Subdivision Regulations (collectively the "Land Use
Controls") and such other rules and regulations from time to time promulgated,
provided that Sublessee shall not be bound by any such rules and regulations
until such time as it receives a copy thereof.  Sublessor agrees to cause trash
receptacles to be emptied and trash removed at Sublessor's sole cost and
expense.

8.4.   Sublessee warrants that it shall obtain all certificates, permits,
----
licenses or other entitlements required by federal, state or local laws in order
to allow Sublessee to conduct the permitted uses hereunder (other than the
Approvals all of which are  to be obtained by the Sublessor ), and that the same
are and will be kept current, valid and complete.  Sublessee further warrants
that it shall at all times abide by and conform with all terms of the same and
that it shall give immediate notice to Sublessor of any additions, renewals,
amendments,

                                       22
<PAGE>

suspensions or revocations. In the use and occupation of the Subleased Premises
and the conduct of such business thereon, Sublessee, at its sole cost and
expense, shall promptly comply with all present and future laws, ordinances,
orders, rules, regulations and requirements of all federal, state and municipal
governments, courts, departments, commissions and boards, any national, state or
local Board of Fire Underwriters, or any other body exercising functions similar
to those of any of the foregoing. Notwithstanding the foregoing or any other
provision of this Lease, however, Sublessee shall not be responsible for
compliance with any such laws, regulations, or the like requiring (I) structural
repairs or modifications or (ii) repairs or modifications to the utility or
building service equipment or (iii) installation of new building service
equipment, such as fire detection or suppression equipment, unless such repairs,
modifications, or installations shall (a) be due to Sublessee's particular
manner of use of the Premises (as opposed to office use generally), or (b) be
due to the negligence or willful misconduct of Sublessee or any agent, employee,
or contractor of Sublessee.

8.5.   Sublessee shall have the right to contest by appropriate proceedings
----
diligently conducted in good faith, without cost or expense to Sublessor, the
validity or application of any law, ordinance, order, rule, regulation or
requirement of the nature referred to in this Article.  If compliance with any
such law, ordinance, order, rule, regulation or requirement may be delayed on
the basis of an order from a court of competent jurisdiction pending the
prosecution of any such proceeding without the incurrence of any lien, charge or
liability of any kind against the Subleased Premises or Sublessee's interest
therein and without subjecting Sublessor to any liability, civil or criminal,
for failure so to comply therewith, Sublessee may delay compliance therewith
consistent with such court order.  Even if such lien, charge or civil liability
would be incurred by reason of any such delay, Sublessee may, with the prior
written consent of Sublessor, contest as aforesaid and delay as aforesaid,
provided that such contest or delay does not subject Sublessor to criminal
liability, damages or expense and provided that Sublessee: (i) furnishes to
Sublessor security, reasonably satisfactory to Sublessor, against any loss or
injury by reason of such contest or delay; and (ii) prosecutes the contest with
due diligence.

       Sublessor and PDA shall not be required to join in any proceedings
referred to in this Section unless the provisions of any applicable laws, rules
or regulations at the time in effect shall require that such proceedings be
brought by and/or in the name of Sublessor and/or PDA and Sublessor and/or PDA
determines that such action is in its best interests, in which event Sublessor
and/or PDA shall join in the proceedings, or permit the same to be brought in
its name, if Sublessee shall pay all expenses in connection therewith.

8.6. After the Sublessee's occupancy of the Subleased Premises, responsibility
---------------------------------------------------------------
for compliance with all Federal, State and local laws for the Sublessee's
activities rests exclusively with the Sublessee.  Sublessor assumes no
enforcement or supervisory responsibility. Notwithstanding the foregoing or any
other provision of this Lease, however, Sublessee shall not be responsible for
compliance with any

                                       23
<PAGE>

such laws, regulations, or the like requiring (I) structural repairs or
modifications or (ii) repairs or modifications to the utility or building
service equipment or (iii) installation of new building service equipment, such
as fire detection or suppression equipment, unless such repairs, modifications,
or installations shall (a) be due to Sublessee's particular manner of use of the
Premises (as opposed to office use generally), or (b) be due to the negligence
or willful misconduct of Sublessee or any agent, employee, or contractor of
Sublessee.

8.7.   Sublessee's use of the Subleased Premises shall be orderly and efficient
----
and shall not cause any disruptions to other Airport activities or unreasonable
disruption to other tenants in the building in which the Subleased Premises are
a part.  Sublessee shall not cause or maintain any nuisance on the Subleased
Premises.  Sublessee shall conduct all of its activities hereunder in an
environmentally responsible manner.

8.8.   Sublessee shall have the right to obtain supplies or services from
----
suppliers, vendors or contractors of its own choice at the Subleased Premises,
provided that PDA in the Primary Sublease reserved the right to prohibit persons
from engaging in "aeronautical activities" (as defined in Advisory Circular AC
150/5190-2A of the Federal Aviation Administration) or the provision of ground
transportation services at the Airport except in accordance with concession
contracts or operating agreements entered into between PDA and said persons.
The foregoing shall not restrict Sublessee from using taxicabs and other forms
of ground transportation for its employees and invitees.

8.9.   Sublessee acknowledges that PDA is subject to certain restrictions on the
----
use of the Airport Property in accordance with Conditions 6, 10, 17, 23 and 25A
of the Master Sublease.  Notwithstanding any other provision of this Sublease or
the Primary Sublease, the Sublessee shall also comply with and be subject to the
restrictions in Conditions 6,10  25 of the Master Lease to the extent applicable
to the Subleased Premises or any rights granted to Sublessee under Sublease in
the same manner and to the same extent as PDA is obligated in its capacity as
Lessee under the Master Lease. Sublessor represents and warrants to Sublessee
that (a) the use of the Subleased Premises for the uses permitted hereunder
constitutes a "public airport purpose" as set forth in Condition 6 of the Master
Lease, (b) Sublessor has obtained, or will obtain prior to the date set forth in
Exhibit #8 for obtaining a building permit, all consents and approvals required
under Conditions 17 and 23 of the Master Lease to construct the Building and (c)
the use of the Subleased Premises for the uses permitted hereunder will not
cause a violation of any provision of any of the Master Sublease (including
without limitation the provisions of Conditions 6, 10, 17, 22, 23, 25 and 25A
thereof), Application, Acceptances or FFA.

8.10.  Sublessee agrees to conform to the following provisions  during the Term
-----
of this Sublease:  (i) Sublessee shall cause all freight to be  delivered to or
removed from the Building and the Premises in accordance with reasonable rules
and regulations established by Sublessor therefor; (ii) Sublessee shall not
perform any act or carry on any practice which may injure the Premises, or any
other part of the

                                       24
<PAGE>

Building, or cause offensive odors or loud noise or constitute a nuisance or
menace to any other sublessee or sublessees or other persons in the Building;
(iii) sublessee shall, at its sole cost and expense: (x) in its use of the
Premises, the Building or the Land, comply with the requirements of all
applicable governmental laws, rules and regulations including, without
limitation, the Americans with Disabilities Act of 1990, as amended (the "ADA")
and (y) in the event of any Sublessee's work or improvements, pay for and
perform any work necessary to bring the Premises, the Building or the Land into
compliance with the ADA which work is required due to the Sublessee's use of the
Premises, the Building or the Land for retail purpose.The Sublessor hereby
certifies that the initial construction of the building and Sublessor's fit up
of the leased premises conform to all ADA requirements.

ARTICLE 9

LIENS
-----

9.1.   During the term of this Sublease, Sublessee shall not permit to remain,
----
and shall promptly discharge, at its cost and expense, all liens, encumbrances
and charges upon the Subleased Premises or any part thereof; provided, that the
existence of any mechanics', laborers', materialmen's, suppliers' or vendors'
liens or rights thereto shall not constitute a violation of this Article if
payment is not yet due under the applicable contract.  Sublessee shall, however,
have the right to contest with due diligence the validity or amount of any lien
or claimed lien, if Sublessee shall give to Sublessor such security as Sublessor
may reasonably require to insure payment thereof and prevent any sale,
foreclosure or forfeiture of Sublessee's interest in the Subleased Premises or
any portion thereof by reason of such nonpayment.  On final determination of the
lien or claim for lien, Sublessee shall immediately pay any judgment rendered
with all proper costs and charges and shall have the lien released or judgment
satisfied at Sublessee's own expense, and if Sublessee shall fail to do so,
Sublessor may at its option pay any such final judgment and clear the Subleased
Premises therefrom.  If Sublessee shall fail to contest with due diligence the
validity or amount of any such lien or claimed lien, or to give Sublessor
security as hereinabove provided, Sublessor may, but shall not be required to,
contest the validity or amount of any such lien or claimed lien or settle or
compromise the same without inquiring into the validity of the claim or the
reasonableness of the amount thereof.

9.2.   Should any lien be filed against the Subleased Premises or the building
----
in which the Subleased Premises are a part, or should any action of any
character affecting the title thereto be commenced, Sublessee shall give to
Sublessor written notice thereof as soon as notice of such lien or action comes
to the knowledge of Sublessee.

                                       25
<PAGE>

ARTICLE 10

ALTERATIONS - SIGNS

10.1. Sublessee shall not place or construct any improvements, changes,
-----
structures, alterations or additions (cumulatively referred to in this Article
as "Alterations") in, to, or upon the Subleased Premises without Sublessor's
written consent and if applicable the consent of the PDA, which shall not be
unreasonably withheld, conditioned or delayed.  Except for cosmetic improvements
that do not materially affect the condition of the premises, any request for
Sublessor's  consent shall be  accompanied by preliminary engineering or
architectural plans or, if consented to by the Sublessor and PDA working drawing
with respect to all Alterations. If that consent is not issued within 10 days,
the Sublessee shall forward a second 10 day notice and if such consent is not
withheld by the end of that 10 day period such consent shall be deemed granted.
If such consents are granted or deemed granted, all such work shall be done at
Sublessee's sole cost, and subject to the following covenants.

          (1)  All work and Alterations shall be done in compliance with all
               applicable governmental regulations, codes, standards or other
               requirements, including fire, safety and building codes and Land
               Use Regulations promulgated by PDA and with the provisions of
               Article 22 of this Sublease. This obligation shall include
               compliance with all applicable provisions of the FFA (as defined
               in Article 22), including obligations imposed upon Sublessor in
               respect to construction and construction related work.

          (2)  All Alterations shall be of such a character as not to materially
               reduce the value and usefulness of any of the buildings or other
               improvements below their value and usefulness immediately before
               such Alteration. All work performed hereunder shall be performed
               in a good and workmanlike manner, shall conform to drawings and
               specifications approved by Sublessor and shall not be disruptive
               of the overall operation of the Airport. All contractors engaged
               by Sublessee to perform such work shall employ labor that can
               work in harmony with all elements of labor at the Airport.

          (3)  During the period of construction of any alteration, Sublessee or
               any contractor, subcontractor or Sublessee of Sublessee shall
               maintain or cause to be maintained the following insurance:

                    (i)   The comprehensive general liability and automobile
                          insurance provided for in Article 7 and shall be
                          maintained for the limits specified

                                       26
<PAGE>

                          thereunder and shall provide coverage for the mutual
                          benefit of Sublessor, PDA, the United States of
                          America and Sublessee as named or additional insured
                          (as is appropriate) in connection with any Alteration
                          permitted pursuant to this Article 10.

                    (ii)  Fire and any other applicable insurance provided for
                          in Article 7 which if not then covered under the
                          provisions of existing policies shall be covered by
                          special endorsement thereto in respect to any
                          Alteration, including all materials and equipment
                          therefor incorporated in, on, or about the Subleased
                          Premises (including excavations, foundations, and
                          footings) under broad form all risk builder's risk
                          completed value form or equivalent thereof; and

                    (iii) Worker's compensation insurance covering all persons
                          employed in connections with the work and with respect
                          to whom death or bodily injury claims could be
                          asserted against PDA, Sublessor, Sublessee or the
                          Subleased Premises, with statutory limits as then
                          required under the laws of the State of New Hampshire.

          (4)  Sublessee shall provide Sublessor and PDA with MYLAR as-built
               drawings when any Alteration authorized hereunder is completed.

10.2.  Sublessee may erect and maintain suitable signs only with the Subleased
-----
Premises and upon receiving the prior written approval of Sublessor not to be
unreasonably withheld and PDA.  Sublessee shall submit drawings of proposed
signs and information on the number, size, type, and location, all of which
Sublessor and PDA may review for harmony and conformity with the overall
structure and architectural and aesthetic setting of the building in which the
Subleased Premises are a part and the Airport as well as with PDA's own land use
control regulations and may approve or disapprove accordingly.  Sublessor shall
have the right to maintain a lobby directory, directional signs and other signs
relating to the operation of the Building.  Except for the foregoing, Sublessee
shall have the exclusive right to maintain signs identifying tenants on or at
the Subleased Premises or the Building.

10.3.  Notwithstanding any other provision of this Sublease, the right of
-----
Sublessee to place or construct Alterations in, to, or upon the Subleased
Premises shall be subject to Condition 17 of the Master Lease.

                                       27
<PAGE>

10.4.  In addition to the requirements to provide notice to Sublessor and PDA
-----
under this Article 10 in respect to any Alteration, Sublessee shall also provide
notice to Air Force, EPA and NHDES in the same manner and to the extent required
of PDA under Condition 10.16 of the Master Lease.  In undertaking any Alteration
Sublessee shall comply with Condition 10.17 of the Master Lease to the same
extent required of Sublessor and PDA.

ARTICLE 11

RIGHT OF SUBLESSOR TO INSPECT AND REPAIR
----------------------------------------

11.1.  Sublessee will permit Sublessor and/or PDA and their authorized agents
-----
and representatives to enter the Subleased Premises at all reasonable times and
upon reasonable notice for the purpose of:  (i) inspecting the same; (ii)
showing the Premises to prospective purchasers, or tenants; and (iii) making any
necessary repairs and performing any other work that may be necessary by reason
of Sublessee's failure to comply with the terms of this Sublease within ten (10)
days after written notice from Sublessor, unless an emergency situation (as
determined in Sublessor's and/or PDA's sole discretion) requires earlier action
by Sublessor.  Nothing herein shall imply any duty upon the part of Sublessor
and/or PDA to do any such work and performance thereof by Sublessor and/or PDA
shall not constitute a waiver of Sublessee's default in failing to perform the
same.  Sublessor and/or PDA may during the progress of such work keep and store
in or on the Subleased Premises all necessary materials, tools, supplies and
equipment.  Sublessor and/or PDA shall not be liable for inconvenience,
annoyance, disturbance, loss of business or other damage of Sublessee by reason
of making such repairs or the performance of any such work, on or account of
bringing materials, tools, supplies or equipment into or through the Subleased
Premises during the course thereof and the obligations of Sublessee under this
Sublease shall not be affected thereby.  Nothing herein shall limit the
provisions of Article 8.  In exercising its rights under this Section 11.1,
Sublessor shall use diligent efforts to prevent or minimize interference with
Sublessee's use and enjoyment of the Premises.

11.2.  Sublessee acknowledges that from time to time PDA may undertake
-----
construction, repair or other activities related to the operation, maintenance
and repair of the Airport which will require temporary accommodation by
Sublessee.  Sublessee agrees to accommodate PDA in such matters, even though
Sublessee's own activities may be inconvenienced or partially impaired, and
Sublessee agrees that no liability shall attach to PDA, its members, employees
or agents by reason of such inconvenience or impairment, unless such activities
of PDA hereunder are performed in a negligent manner.

11.3.  Sublessee shall allow PDA and any agency of the United States, its
-----
officers, agents, employees and contractors to enter upon the Subleased Premises
for any purposes not inconsistent with Sublessee's quiet use and enjoyment,
including but not limited to the purpose of inspection.  Notwithstanding the
preceding sentence, in the event the Air Force as Lessor

                                       28
<PAGE>

under the Master Lease (or any other agency having a right of entry under the
Federal Facilities Agreement (FFA) as defined in Section 22.8) or PDA as
Sublessor under the Primary Lease determines that immediate entry is required
for safety, environmental, operations or security purposes they may effect such
entry without prior notice. The Sublessee shall have no claim against PDA or
against the United States or any officer, agent, employee or contractor thereof
on account of any such entries.

ARTICLE 12

GENERAL INDEMNIFICATION BY SUBLESSEE-SUBLESSOR
----------------------------------------------

12.1.  In addition to any other obligation of Sublessee under this Sublease to
-----
indemnify, defend and hold harmless Sublessor, it principals, agents and
employees, etc., Sublessee agrees to indemnify, defend and hold harmless
Sublessor against and from any and all claims, judgments, damages, penalties,
fines, assessments, costs and expenses, liabilities and losses (including,
without limitation, diminution in value of the Premises, damages for the loss or
restriction on the use of the Premises, sums paid in settlement of claims,
attorneys' fees, consultants' fees and experts' fees) resulting or arising
during the term of this Sublease:

          (1)  from any condition of the Premises resulting from the negligent
       use of the Premises by the Sublessee;

          (2)  from any breach or default on the part of Sublessee in the
       performance of any covenant or agreement on the part of Sublessee to be
       performed pursuant to the terms of this Sublease, or from any act or
       omission of Sublessee, or any of its agents, contractors, servants,
       employees, sublessees, licensees or invitees; or

          (3)  from any accident, injury, loss or damage whatsoever caused by
       any act or omissions of Sublessee, or any of its agents, contractors,
       servants, employees, Sublessees, licensees or invitees, to any person or
       property occurring during the term of this Sublease, on or about the
       Subleased Premises (including ramp and parking areas), or upon the land,
       streets, curbs or parking areas adjacent thereto.

       In the event that any action or proceeding is brought against Sublessor
by reason of any matter for which Sublessee has hereby agreed to indemnify,
defend, or hold harmless Sublessor, Sublessee, upon notice from Sublessor,
covenants to resist or defend such action or proceeding with counsel acceptable
to Sublessor.

12.2.  The term "Person" as used in this Article shall include individuals,
-----
corporations, partnerships, governmental units and any other legal entity
entitled to bring a claim, action or other demand or proceeding on its own
behalf or on behalf of any other entity.

                                       29
<PAGE>

12.3.  The Sublessee also expressly waives any claims against the United States
-----
of America, including the Air Force, and further agrees to indemnify, save, hold
harmless and defend the Air Force to the same extent required of PDA under the
Master Lease.

12.4.  The Sublessee also expressly waives any claims against PDA and the State
-----
of New Hampshire and further agrees to indemnify, save, hold harmless and defend
PDA and the State of New Hampshire to the same extent required of the Sublessor
under the Primary Sublease.

12.5.  Sublessor Indemnification - Sublessor shall indemnify, defend, and hold
-----  -------------------------
harmless and defend sublessee, its principals, agents and employees, etc from
any and all claims, judgment, damages, penalties, fines, assessments, costs and
expenses, liabilities and losses resulting from the negligence of the Sublessor,
its agents, contractors or employees,  or breach by Sublessor or its agents,
contractors or employees of any of the Sublessor's duties or undertakings under
this Sublease.

ARTICLE 13

UTILITIES
---------

13.1.  Sublessor shall bring or shall cause utility lines to be brought to the
-----
Subleased Premises at the points existing as of the Term Commencement Date or
such other points as may be designated by Sublessor (in consultation with
Sublessee). The utility lines shall have the capacities existing as of the Term
Commencement Date which Sublessee acknowledges are sufficient to enable
Sublessee to obtain for the Subleased Premises, as of the date of commencement
of Sublessee's activities, sufficient water, electricity, telephone, gas and
sewer service. Sublessee shall not at any time overburden or exceed the capacity
of the mains, feeders, ducts, conduits, or other facilities by which such
utilities are supplied to, distributed in or serve the Subleased Premises. If
Sublessee desires to install any equipment which shall require additional
utility facilities or utility facilities of a greater capacity than the
facilities provided by Sublessor, such installation shall be subject to
Sublessor's and, if necessary, PDA's prior written approval of Sublessee's plans
and specifications therefor, which approval shall not be unreasonably withheld.
Such approval shall be deemed granted if the Sublessor shall not respond within
15 days of receipt of Sublessee's written request therefor and shall fail again
to respond 10 days after receipt of Sublessee's second written request therefor.
If such installation is approved by Sublessor and PDA and if Sublessor and PDA
agrees to provide any additional facilities to accommodate Sublessee's
installation, Sublessee agrees to pay Sublessor and/or PDA, in advance and on
demand, the cost for providing such additional utility facilities or utility
facilities of greater capacity, including but not limited to offsite sewer
improvement charges allocable to the Subleased Premises to be charged by the
City of Portsmouth under the Primary Lease including but not limited to
Sublessee's share of the costs described in the

                                       30
<PAGE>

last sentence of Section 14.5 of the Primary Sublease.

        PDA under the Primary Sublease also reserves the right to run such
utility lines as it deems necessary in connection with the development of the
Airport to, from, or through the Subleased Premises, provided, however, that PDA
in exercising such reserved right shall provide reasonable prior notice and the
opportunity to confer with PDA and shall exercise reasonable efforts to avoid or
minimize interference with use of the Subleased Premises.

        PDA under the Primary Sublease, at its sole discretion, shall have the
right from time to time, to alter the method and source of supply of the above
enumerated utilities to the Subleased Premises and Sublessee agrees to execute
and deliver to PDA such documentation as may be required to effect such
alteration. Sublessee agrees to pay all charges for the above enumerated
utilities supplied by Sublessor, public utility or public authority, or any
other person, firm or corporation which are separately metered to the Subleased
Premises.

        PDA under the Primary Sublease, shall have the option to supply any of
the above-enumerated utilities to the Subleased Premises. If PDA shall elect to
supply any of such utilities to the Subleased Premises, Sublessee will purchase
its requirements for such services tendered by PDA, and Sublessee will pay PDA,
within ten (10) days after mailing by PDA to Sublessee of statements therefor,
at the applicable rates determined by PDA from time to time which PDA agrees
shall not be in excess of the public utility rates for the same service, if
applicable, to other aviation tenants at the Airport. If PDA so elects to supply
any of such utilities, Sublessee shall execute and deliver to PDA, within ten
(10) days after request therefor, any documentation reasonably required by PDA
to effect such change in the method of furnishing of such utilities.

13.2.   Sublessor shall be responsible for providing any meters or other devices
-----
for the measurement of utilities supplied to the Subleased Premises. Sublessee
shall be solely responsible for and promptly pay, as and when the same become
due and payable, all charges for water, sewer, electricity, gas, telephone and
any other utility used or consumed in the Subleased Premises and supplied by
PDA, any public utility or authority or any other person, firm or corporation
which are separately metered to the Subleased Premises.

13.3.   All work and construction under this Article shall comply with the
-----
provisions of Article 10 of this Sublease applicable to construction work.

ARTICLE 14

SERVICES TO BE FURNISHED BY SUBLESSOR AND SUBLESSEE'S AGREEMENTS.
-----------------------------------------------------------------

                                       31
<PAGE>

14.1.   Sublessor Repairs. (a) Except as otherwise provided in this Sublease,
-----   -----------------
Sublessor agrees to keep in good order, condition and repair the roof, public
areas, exterior walls (including exterior glass) and structure of the Building
(including plumbing, mechanical and electrical systems installed by Sublessor
but excluding any systems installed specifically for Sublessee's benefit or used
exclusively by Sublessee) and the HVAC system serving the Premises, all insofar
as they affect the Premises, except that Sublessor shall in no event be
responsible to Sublessee for the condition of glass in the Premises or for the
doors (or related glass and finish work) leading to the Premises, (excluding the
building entrances) or for any condition in the Premises or the Building caused
by any act or neglect of Sublessee, its agents, employees, invitees or
contractors. Sublessor shall not be responsible to make any improvements or
repairs to the Building other than as expressly in this Section, unless
expressly provided otherwise in this Sublease. Except to the extent set forth in
Section 4.3.1(ii), all costs and expenses incurred by Sublessor in performing
its obligations under this Section shall be included in Operating Expenses.

14.2.   Any services which Sublessor is required to furnish pursuant to the
-----
provisions of this Sublease may, at Sublessor's option be furnished from time to
time, in whole or in part, by employees of Sublessor or by the Manager of the
Property or by one or more third persons and Sublessor further reserves the
right to require Sublessee to enter into agreements with such persons in form
and content approved by Sublessor for the furnishing of such services. Sublessor
shall cause the paved portions of the Property to be kept reasonably free and
clear of snow, ice and refuse and shall cause the landscaped areas of the
Property to be maintained in a reasonably attractive appearance.

14.3.   Sublessee's Agreement (a) Sublessee will keep neat and clean and
-----   ---------------------
maintain in good order, condition and repair the Premises and every part
thereof, excepting only those repairs for which Sublessor is responsible under
the terms of this Sublease, and reasonable wear and tear of the Premises, and
damage by fire or other casualty and as a consequence of the exercise of the
power of eminent domain; (b) If repairs are required to be made by Sublessee
pursuant to the terms hereof, Sublessor may demand that Sublessee make the same
forthwith, and if Sublessee refuses or neglects to commence such repairs and
complete the same with reasonable dispatch after such demand, Sublessor may (but
shall not be required to do so) after 30 days prior written notice to Sublessee
stating Sublessor's intentions to exercise self help remedies make or cause such
repairs to be made (the provisions of Section 14.18 being applicable to the
costs thereof) and shall not be responsible to Sublessee for any loss or damage
that may accrue to Sublessee's stock or business by reason thereof.
Notwithstanding the foregoing, Sublessor may elect to take action hereunder
immediately without notice to Sublessee if Sublessor reasonably believes an
emergency to exist, and Sublessor shall provide notice of its action to
Sublessee as soon as practicable..

14.4.   Floor Load - Heavy Machinery. (a) Sublessee shall not place a load upon
-----   -----------------------------
any floor in the Premises exceeding 100 lbs per square foot. Sublessor reserves
the right to prescribe the weight and position of all business machines and

                                       32
<PAGE>

mechanical equipment, including safes, which shall be placed so as to distribute
the weight. Business machines and mechanical equipment shall be placed and
maintained by Sublessee at Sublessee's expense in settings sufficient, in
Sublessor's judgment, to absorb and prevent vibration, noise and annoyance.
Sublessee shall not move any safe, heavy machinery, heavy equipment, freight,
bulky matter or fixtures into or out of the Building without Sublessor's prior
consent, which consent may include a requirement to provide insurance, naming
Sublessor as an insured, in such amounts as Sublessor may deem reasonable.

(b) If such safe, machinery, equipment, freight, bulky matter or fixtures
requires special handling, Sublessee agrees to employ only persons holding a
Master Rigger's License to do such work, and that all work in connection
therewith shall comply with applicable laws and regulations. Any such moving
shall be at the sole risk and hazard of Sublessee, and Sublessee will exonerate,
indemnity and save Sublessor harmless against and from any liability, loss,
injury, claim or suit resulting directly or indirectly from such moving.

14.5 Building Services.   Sublessor shall furnish cleaning of exterior common
----------------------
areas, and cleaning of the premises in accordance with the provisions of Exhibit
____ and hot and cold water to the building management services and exterior
grounds maintenance, and exterior repairs. The Sublessor shall install
underground conduits for the Sublessee's telecommunication requirements.

14.6 Electricity. (a) Sublessor shall permit Sublessor's existing wires, pipes,
---- ------------
risers, conduits and other electrical equipment of Sublessor to be used for the
purpose of providing electrical service to the Premises. All electrical service
to the premises will be separately metered and paid directly by the Sublessee.
Sublessor, at Sublessor's sole cost and expense, shall cause all electricity
service to the Subleased Premises (other than electricity for HVAC) to be
separately metered. Sublessee covenants and agrees that its electrical usage
will not exceed the maximum load from time to time permitted by applicable
governmental regulations nor the design criteria of the existing Building
electrical capacity. Sublessor shall not in any way be liable or responsible to
Sublessee for any loss or damage or expense which Sublessee may sustain or incur
if, during the Term of this Sublease, either the quantity or character of
electric current is changed or electric current is no longer available or
suitable for Sublessee's requirements due to a factor or cause beyond
Sublessor's control. Sublessee shall purchase and install all lamps, tubes,
bulbs, starters and ballasts in the Premises. Sublessee shall pay all charges
for electricity, HVAC, gas and other utilities used or consumed in the Premises.
After hours HVAC charges to Sublessee shall be at Sublessor's cost, without
markup."After hours" shall mean periods other than 7:00 a.m. to 7:00 p.m.
weekdays, and 8:00 a.m. to 1:00 p.m. Saturdays.

(b) In order to insure that the foregoing requirements are not exceeded and to
avert possible adverse affect on the Building's electrical system, Sublessee
shall not, without Sublessor's prior consent, connect any fixtures, appliances
or equipment to the Building's electrical distribution system which operates on
a

                                       33
<PAGE>

voltage in excess of 120 volts nominal. If Sublessor shall consent to the
connection of any such fixtures, appliances or equipment, all additional risers
or other electrical facilities or equipment required therefor shall be provided
by Sublessor and the cost thereof shall be paid by Sublessee upon Sublessor's
demand as Additional Rent. From time to time during the Term of this Sublease,
Sublessor shall have the right to have an electrical consultant selected by
Sublessor make a survey of Sublessee's electric usage, the result of which shall
be conclusive and binding upon Sublessor and Sublessee. In the event that such
survey shows that Sublessee has exceeded the requirements set forth in paragraph
(a), in addition to any other rights Sublessor may have hereunder, Sublessee
shall, upon demand, reimburse Sublessor for the costs of such survey.

14.7.  All work, repairs, alterations or modifications undertaken pursuant to
----
this Article 14 shall be subject to the provisions of Article 10 of this
Sublease

                                   ARTICLE 15
                                   ----------
               -     INTENTIONALLY LEFT BLANK

ARTICLE 16
----------

DAMAGE OR DESTRUCTION
---------------------

16.1.  Sublessor's Right of Termination. If the Premises or the building are
---------------------------------------
substantially damaged by fire or casualty (the term "substantially damaged"
meaning damage of such a character that the same cannot, in ordinary course
reasonably be expected to be repaired within 6 months from the time the repair
work would commence), then either the Sublessor or the Sublessee may terminate
this Lease by giving notice to the other. in which case this Sublease shall be
deemed terminated 30 days thereafter as if such date were the date originally
established as the expiration date hereof.

16.2.   Restoration. If this Sublease shall not be terminated pursuant to
----    ------------
Section 16.1, Sublessor shall thereafter use due diligence to restore the
Premises (including all alterations, additions or improvements made pursuant to
Article 2) to proper condition for Sublessee's use and occupation, provided that
Sublessor's obligation shall be limited to the amount of insurance proceeds
available therefor. If, for any reason, such restoration shall not be
substantially completed within six months after the expiration of the 45 day
period referred to in Section 16.1 (which six-month period may be extended for
such periods of time as Sublessor is prevented from proceeding with or
completing such restoration for any Force Majeure cause as defined under Article
#2 but in no event for more than an additional 45 days), Sublessee shall have
the right to terminate this Sublease by giving notice to Sublessor thereof
within thirty (30) days after the expiration of such period (as so extended).
Upon the giving of such notice, this Sublease shall cease and come to an end
without further liability or obligation on the part of either party unless,
within such 30-day period, Sublessor substantially completes such restoration.
Such right of termination shall be Sublessee's sole and exclusive remedy at law
or in equity for Sublessor's failure so to complete such restoration.

                                       34
<PAGE>

During the period of such restoration, if the Sublessee shall not have
reasonable use and occupancy of the premises, the rent shall be equitably abated
during that period or portion thereof.

ARTICLE 17

EMINENT DOMAIN
--------------

17.1.  If after the execution of the Sublease and prior to the expiration of the
-----
term of this Sublease, the whole of the Subleased Premises shall be taken under
the power of eminent domain, then the term of this Sublease shall cease as of
the time when Sublessor shall be divested of its title in the Subleased
Premises, and all rent shall be apportioned and adjusted as of the time of
termination.

17.2.  If only a part of the Subleased Premises shall be taken under the power
-----
of eminent domain, then if as a result thereof the Subleased Premises shall not
be reasonably adequate for the operation of the business conducted in the
Subleased Premises prior to the taking, Sublessor or Sublessee may, at its
election, terminate the term of this Sublease by giving the other notice of the
exercise of its election within thirty (30) days after it shall receive notice
of such taking, and the termination shall be effective as of the time that
Sublessee is dispossessed, and all rent shall be apportioned and adjusted as of
the time of termination. If only a part of the Subleased Premises shall be taken
under the power of eminent domain, and if the term of this Sublease shall not be
terminated as aforesaid, then the term of this Sublease shall continue in full
force and effect, and Sublessor shall, within a reasonable time after possession
is required for public use, repair and rebuild what may remain of the leased
Premises so as to put the same into condition for use and occupancy by
Sublessee, and a just proportion of all rent according to the nature and extent
of the injury to the Subleased Premises shall be abated for the balance of the
term of this Sublease. All awards attributable to the Sublessee's loss of
leasehold improvements or trade fixtures or other awards directly related to the
Sublessee's business shall be the property of the Sublessee.

17.3.  Sublessor reserves to itself, and Sublessee assigns to Sublessor, all
-----
rights to damages accruing on account of any taking under the power of eminent
domain or by reason of any act of any public or quasi public authority for which
damages are payable. Sublessee agrees to execute such instruments of assignment
as may be reasonably required by Sublessor in any proceeding for the recovery of
damages that may be recovered in such proceeding. It is agreed and understood,
however, the Sublessor does not reserve to itself, and Sublessee does not assign
to Sublessor, any damages payable for movable trade fixtures installed by
Sublessee or anybody claiming under Sublessee at its own cost and expense, or
any awards attributable to the Sublessee's loss of leasehold improvements or
trade fixtures or other awards directly related to the Sublessee's business
which shall be the property of the Sublessee.

                                       35
<PAGE>

ARTICLE 18

DEFAULT
-------

18.1.  If Sublessee shall default in the payment of rent or other payments
-----
required of Sublessee, and if Sublessee shall fail to cure said default within
seven (7) business days after receipt of written notice of said default from
Sublessor; or if Sublessee shall default in the performance or observance of any
other agreement or condition on its part to be performed or observed, and if
Sublessee shall fail to cure said default within ninety (90) days or such longer
period as shall be reasonably required so long as the Sublessee shall be
diligently pursuing such cure after receipt of written notice of said default
from Sublessor; or  if any person shall levy upon, or take this leasehold
interest or any part hereof, upon execution, attachment, or their process of
law; or if Sublessee shall make an assignment of its property for the benefit of
creditors; or if Sublessee shall file voluntary bankruptcy; or if any bankruptcy
or insolvency proceedings shall be commenced by Sublessee or an involuntary
bankruptcy shall be filed against the Sublessee which remains undischarged for a
period of 60 days, or if a receiver, trustee, or assignee shall be appointed for
the whole or any part of the Sublessee's property, then in any of said cases,
Sublessor lawfully may upon seven days notice or if such notice shall adversely
affect the rights of the Sublessor in any bankruptcy or receivership, then
immediately, or at any time thereafter, and without further notice of demand,
enter into and upon the Subleased Premises, or any part hereof in the name of
the whole, and hold the Subleased Premises as if this Sublease had not been
made, and expel Sublessee 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 Sublessor may send written notice to Sublessee of the termination of this
Sublease, and upon entry as aforesaid (or in the event that Sublessor shall sent
to Sublessee notice of termination as above provided, on the fifth (5/th/) day
next following the date of the sending of the notice),  the term of this
Sublease shall terminate.  Sublessee hereby expressly waives any and all rights
of redemption granted by or under any present or future laws in the event of
Sublessee being evicted or dispossessed for any cause, or in the event Sublessor
terminates this Sublease as provided in this Article.  The Sublessee shall be
liable for a 5% interest default rate  applicable to any amounts due under this
Sublease, from the due date of such payment.

18.2.  In case of such termination, Sublessee shall be responsible and liable
-----
for all rents and payment obligations including those specified below due during
the remaining terms of the Lease which shall be deemed accelerated into a single
payment obligation.  Upon Sublessor's demand for such payment, the Sublessee
shall forward that payment not later than five (5) days after the demand.  Upon
receipt of that payment the Sublessor shall establish an account and deposit the
amount paid into that account.  In the event that the Sublessor shall be able to
re-let the premises, the monthly rental and other payments made by the new

                                       36
<PAGE>

Sublessee shall be credited towards the rents and payment obligations that would
have been due from the original Sublessee on a monthly pro-rata basis. At the
end of the original Sublessee's term the Sublessor shall render an accounting of
all rents and other obligation payments made by the new Sublessee against the
account fund and the Sublessor shall render an accounting and make such
adjustments with the original Sublessee as shall be appropriate.

     In addition to the rents and other obligations of the Sublessee under this
Sublease, the Sublessee shall be liable for any expenses incurred by the
Sublessor in connection with obtaining the premises, or with removing the
property of the Sublessee, with putting the Subleased Premises into a condition
similar to the condition at the commencement of the Sublease, reasonable wear
and tear excepted, and with any reletting, including without limitation any
reasonable attorneys fees and brokers fees.

ARTICLE 19

SUBORDINATION TO MORTGAGES
--------------------------

     Provided that Sublessor delivers a commercially reasonable Non-Disturbance
Agreement, Sublessee agrees that upon the request of Sublessor it will
subordinate this Sublease and the lien hereof to the lien of any present or
future mortgage or mortgages upon the Subleased Premises, any property of which
the Subleased Premises are a part, or upon any ground lease of such property or
upon any part thereof, irrespective of the time of execution or time of
recording of any sub mortgage or mortgages. Sublessee agrees that it will, upon
the request of Sublessor, execute, acknowledge and deliver any and all
instruments deemed by Sublessor necessary or desirable to give effect or notice
of such subordination. The word "mortgage" as used herein includes mortgages,
deeds of trust, or other similar instruments and modifications, consolidations,
extensions, renewals, replacements and substitutes thereof. At the request of
the holder of any mortgage upon the Subleased Premises or any property of which
the Subleased Premises is a part may subordinate the lien of such mortgage to
this Sublease, thereby making this Sublease superior to such mortgage, by
recording in the Rockingham County Registry of Deeds, a Notice of Subordination
or other document of like effect, executed unilaterally by such mortgage.
Whether the lien of any mortgage are a part shall be superior or subordinate to
this Sublease and the lien hereof, Sublessee agrees that , if requested by
Sublessor or the holder of such mortgage, it will 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.

                                       37
<PAGE>

ARTICLE 20

CERTIFICATE
-----------

     Within ten (10) business days after written request therefor by Sublessor,
Sublessee agrees to deliver to Sublessor or to any mortgagee a certificate
stating (if such be the case) that Sublessee has entered into occupancy of the
Subleased Premises in accordance with the provisions of this Sublease, that this
Sublease is in full force and effect (if such be the case), that Sublessor has
performed the construction required of Sublessor, and any other information
reasonably requested. Sublessor agrees to provide Sublessee with any similar
certificate upon request by the Sublessee, including a statement that no default
exists under the Primary Sublease, and that the Primary Sublease is in full
force and effect.

ARTICLE 21

ASSIGNMENT, SUBLEASES, MORTGAGE, RIGHT OF FIRST OFFER
------------------------------------------------------

21.1.  Assignment.  Sublessee shall not assign this Sublease without the written
-----  -----------
consent of the Sublessor, provided however, that Sublessee may, without
Sublessor's or the PDA's prior written consent, but upon notice to Sublessor,
sublet all or any portion of the Premises or assign Sublessee's interest in this
lease to: (i) to a subsidiary, affiliate, patent or other entity to Sublessee
which controls, is controlled by, or is under common control with Sublessee; or
(ii) to a purchaser of 80% of Sublessee's stock or assets or (iii) in connection
with the merger, consolidation or reorganization of Sublessee, provided that
with respect to (ii) and (iii) above such consent shall be given if the
Sublessor shall be provided with financial information adequate to establish
that the Sublessee or such other entity as shall result from any of the events
under ii and iii above, shall have a net worth following the transaction at
least equal to the Sublessee as existed immediately prior to the transaction.

21.2.  Subleases.  Except as provided in 21.1 above, Sublessee shall not
-----
enter into any sublease of the Subleased Premises without Sublessor's prior
written approval. Any request for Sublessor's approval shall be made at least 21
days prior to the commencement of such tenancy, and shall provide reasonably
detailed information concerning the identity and financial condition of the
proposed sublessee and the terms and conditions of the proposed sublease.
Sublessor shall not unreasonably withhold its consent to such sublease if (1)
the use of the Subleased Premises is a permitted use under this lease; (2) the
sublease is consistent with the terms and conditions of this Sublease; (3)
Sublessee remains primarily liable to Sublessor to pay rent and perform all
other obligations to be performed by Sublessee under this Sublease.

                                       38
<PAGE>

     If Sublessor shall fail to respond to the Sublessee's request within 15
days after receipt of the request, such request shall be deemed approved.

     In the event that the rent for the Subleases Premises shall exceed the per
square foot rent charged to the Sublessee under this lease, Sublessee shall
remit 50% of the excess to Sublessor upon receipt by Sublessee. In calculating
any excess rent payable by Sublessee to Sublessor pursuant to this provision,
Sublessee shall first be entitled to deduct all out of pocket direct expenses
incurred by the sublessee, including but not limited to brokerage and legal
fees, tenant allowances and tenant improvements. Excepting leases to affiliates
and subsidiaries, in no event shall the rent charged by the Sublessee be less
than the 75% of the Market Rent as defined in this Sublease.

     Sublessee shall not employ a broker to market the Subleased Premises or any
portion thereof other than Sublessor's agent The Kane Company, Inc. (or its
successor). This provision shall not apply in the event that 85% of the
ownership interest in the Sublessor shall change, in which event the Sublessor
shall so notify the Sublessee. The foregoing shall not be construed to prevent
Sublessee from procuring subtenants by itself or through non-broker
representatives. Sublessor shall cause The Kane Company, Inc. to use its best
efforts to market the Subleased Premises if called upon under this subparagraph.

21.3 Restrictions on Sublessor's Leasing Activity.
     --------------------------------------------

     (a) Sublessor agrees that it will not execute any lease, sublease or other
agreement for occupancy of all or any portion of the premises demised under the
Primary Sublease (the "Primary Premises") prior to January 15, 2001 without the
prior written consent of Sublessee, which consent may be withheld in Sublessee's
sole and absolute discretion.

     (b) Sublessor and Sublessee agree that Sublessee shall have the option and
right  to sublease additional portions of the Building by providing one or more
written notices to Sublessor designating the portion of the Building which
Sublessee desires to sublease (the "Expansion Space"), provided however that any
such notices shall be given prior to January 15, 2001 ("Option Notices").  In
the event that Sublessee timely delivers an Option Notice, Sublessor and
Sublessee shall promptly execute an amendment to this Sublease with the terms
and conditions described in paragraph (d) below.

     (c) During the period from January 15, 2001 through January 15, 2003 (the
"First Offer Period"), Sublessor shall not lease, sublease or otherwise permit
occupancy of all or any portion of the Primary Premises except in accordance
with this paragraph (c).  If, during the First Offer Period, Sublessor desires
to sublease all or any portion of the Primary Premises, Sublessor shall first
offer to sublease such portion to Sublessee by giving Sublessee written notice
identifying the space which Sublessor desires to sublease (the "Offer Space").
Sublessee shall then have the right, within fifteen (15) days after receiving
Sublessor's notice, to exercise its right to sublease such space by providing
written notice to

                                       39
<PAGE>

Sublessor. If Sublessee so exercises said right, then Sublessor and Sublessee
shall promptly execute an amendment to this Sublease with the terms and
conditions described in paragraph (d) below. If Sublessee does not timely
exercise said right, then Sublessor shall be free for a period of one hundred
eighty (180) days thereafter to sublease the Offer Space to a third party or
parties on such terms as Sublessor deems appropriate. In the event Sublessor has
not executed a sublease with a third party within such one hundred eighty (180)
day period, Sublessee's right of first offer described in this paragraph (c)
shall again apply to the Offer Space.

     (d) In the event Sublessee shall exercise its option rights under paragraph
(b) or paragraph (c) above:

         (1)   The per square foot rental rate shall be the same per square foot
charge paid by the Sublessee under Article 4.1 of this Sublease plus any other
additional charges payable by the Sublessee under this Lease.

         (2)   The Sublessor shall provide the Sublessee an allowance of $27.00
per square foot for Leasehold Improvement Work.

         (3)   Other terms and conditions of the amendment to the Sublease shall
be as negotiated between the parties provided however that the following shall
apply.

         (I)   Sublessor shall promptly prepare plans and specifications for the
work necessary to build out the interior of the Expansion Space or the Offer
Space, as the case may be (the "Expansion Improvement Work"), which plans shall
be subject to Sublessee's approval, not to be unreasonably withheld.

         (II)  After the plans and specifications for the Expansion Improvement
Work have been approved by Sublessee, Sublessor shall prepare a list of all
permits, approvals, consents and licenses (collectively, the "Expansion
Approvals") required for construction of the Expansion Improvement Work, and
shall represent and warrant that the list of Expansion Approvals is complete and
accurate. Thereafter, Sublessor and Sublessee shall promptly and in good faith
agree upon a schedule for the construction of the Expansion Improvement Work
(the "Expansion Schedule"), which schedule shall be substantially in the form of
Exhibit 8 , provided however that a reasonable allowance shall be made for (i)
any delay between the date of this Sublease and the date Sublessee approves the
plans and specifications for the Expansion Improvement Work and (ii) any
difference in scope or nature between the Leasehold Improvement Work and the
Expansion Improvement Work.

         (III) The provisions of Sections 2.3 through 2.7 shall apply to the
construction of the Expansion Improvement Work, provided that (A) all references
in such sections to the "Work" "Base Building Work" or "Leasehold Improvement
Work" shall be deemed to refer to the "Expansion Improvement

                                       40
<PAGE>

Work"; and (B) all references in such sections to the "Term Commencement Date"
shall be deemed to refer to the "Expansion Date" (as hereafter defined).

          (IV) Effective as of the date ("The Expansion Date") which is the
later of the Term Commencement Date or the date on which the Expansion
Improvement Work is Substantially Complete, the Premises shall be amended to
include the Expansion Space or the Offer Space, as the case may be, and the Base
Rent and Sublessee's Proportionate Share shall be amended proportionately.

     (e)  From and after January 15, 2003 through the remainder of the Term of
this Sublease (as the same may be extended) (the "Second Option Period"), Tenant
shall have a continuing right of first offer as follows:

     (f)  Right of First Offer.  Sublessee shall have a continuing right of
          --------------------
first offer to lease all space in the building, (the "Offer Space"), on the
following terms and conditions:

          (1). Prior to offering the Offer Space for lease to third parties,
Sublessor shall first advise Sublessee in writing (the "Offer Notice") of the
terms and conditions upon which Sublessors prepared to lease the Offer Space
(the "Offered Terms").

          (2). Sublessee shall accept or reject the offer made in the Offer
Notice within thirty (30) days after the date of delivery of the Offer Notice
(Sublessee's failure to accept such offer in writing within such thirty (30) day
period shall be deemed an election to reject such offer).

          (3). In the event Sublessee timely accepts the offer set forth in the
Offer Notice, Sublessor and Sublessee shall within fifteen (15) days after the
date of acceptance enter into an amendment to this Lease incorporating the Offer
Space into the Premises on the Offered Terms.

          (4). In the event Sublessee rejects or is deemed to have rejected the
offer set forth in the Offer Notice, Sublessor shall be free for a period of 90
days after the date of rejection or deemed rejections (the "Marketing Period")
to lease the Offer space to a third party or parties on terms not materially
more favorable to such party or parties than the Offered Terms (with respect to
rental rate, "materially" as used herein shall mean a rental rate that is more
than five percent (5%) lower than the rental rate set forth in the Offer
Notice).

     In the event Sublessor has not by expiration of the Marketing Period
executed a lease with a third party complying with the provisions of clause (e)
above, then Sublessee's right of first offer shall again apply to the Offer
Space.  In the event Sublessor executes such a Lease prior to the expiration of
the Marketing Period, Sublessee's right of offer shall not apply to the
applicable Offer Space, until the expiration or earlier termination of such
Lease.

                                       41
<PAGE>

21.4   Continuing Liability of Sublessee.  No subletting, assignment or
----   ---------------------------------
transfer, whether Sublessor's consent is required or otherwise given hereunder,
shall release Sublessee's obligations or alter the primary liability of
Sublessee to pay the rent and to perform all other obligations to be performed
by Sublessee hereunder.  The acceptance of rent by Sublessor from any other
person shall not be deemed to be a waiver by Sublessor of any provision hereof.
Consent to one assignment or subletting shall not be deemed consent to any
subsequent assignment or subletting.  If any assignee of Sublessee or any
successor of Sublessee defaults in the performance of any of the terms hereof,
Sublessor may proceed directly against Sublessee without the necessity of
exhausting remedies against such assignee or successor.  If Sublessee assigns
this Sublease, or sublets all or a portion of the Subleased Premises, or
requests the consent of Sublessor to any assignment or subletting, or if
Sublessee requests the consent of Sublessor for any act that Sublessee proposes
to do, then Sublessee shall pay Sublessor's reasonable processing fee and
reimburse Sublessor for all reasonable attorneys' fees incurred in connection
therewith.  Any assignment or subletting of the Subleased Premises that is not
in compliance with the provisions of this Article XXI shall be void.

21.5   Notwithstanding any other provision of this Sublease, any assignment or
----
sublease shall comply with the provision of Article XXII including the notice
requirements of Condition 10.8 of the FFA (as that term is defined in Section
22.8) and the terms and conditions of the Primary Sublease.

21.6.  Mortgages.  Except as otherwise expressly agreed to by PDA in writing,
----   ----------
Sublessee shall not have the right to engage in any financing or other
transaction creating any mortgage upon the Subleased Premises.  Any approval of
PDA shall be expressly subject to Condition 21 of the Master Lease and the
provisions of the Primary Sublease.  Sublessee further agrees that in the event
of any authorized sublease or assignment of the Subleased Premises, it shall
provide to the Air Force, EPA and NHDES by certified mail a copy of the
agreement of sublease or assignment of the Subleased Premises within fourteen
(14) days after the effective date of such transaction.  Sublessee may delete
the financial terms and any other proprietary information from any sublease or
assignment submitted to the above mentioned entities.

ARTICLE 22

ENVIRONMENTAL PROTECTION
------------------------

22.1.  Sublessee and any sublessee or assignee of Sublessee shall use the
-----
Premises so as to comply with all federal, state, and local laws, regulations,
and standards that are or may become applicable to Sublessee's or Sublessee's or
assignee's activities at the Subleased Premises, including but not limited to,
the applicable environmental laws and regulations identified in Exhibit 5, as
                                                                ---------
amended from time to time, but Sublessee shall have no responsibility for
contamination

                                       42
<PAGE>

not caused by Sublessee or its agents.

22.2.     Sublessee and any  assignee of Sublessee shall be solely responsible
-----
for obtaining at their cost and expense any environmental permits required for
their operations under this Sublease or any sublease or assignment, independent
of any existing Airport permits except that Sublessor shall be solely
responsible for obtaining the Certificate of Occupancy and all other Approvals.

22.3.     Sublessee shall indemnify, defend and hold harmless Sublessor, PDA and
-----
the Air Force against and from all claims, judgments, damages, penalties, fines,
costs and expenses, liabilities and losses (including, without limitation,
diminution in value of the Premises, damages for the loss or restriction on the
use of the Premises, and sums paid in settlement of claims, attorneys' fees,
consultants' fees and experts' fees), resulting or arising from discharges,
emissions, spills, releases, storage, or disposal of any Hazardous Substances,
or any other action by the Sublessee, or any Sublessee or assignee of the
sublessee, giving rise to Sublessor or PDA or Air Force liability, civil or
criminal, or responsibility under federal, state or local environmental laws.

          This indemnification of Sublessor and PDA and Air Force by Sublessee
includes, without limitation, any and all claims, judgment, damages, penalties,
fines, costs and expenses, liabilities and losses incurred by Sublessor or PDA
or Air Force in connection with any investigation of site conditions, or any
remedial or removal action or other site restoration work required by any
federal, state or local governmental unit or other person for or pertaining to
any discharges, emissions, spills, releases, storage or disposal of Hazardous
Substances arising or resulting from any act or omission of the Sublessee or any
sublessee or assignee of the Sublessee at the Subleased Premises after the
Occupancy Date.  "Occupancy Date" as used herein shall mean the earlier of the
first day of Sublessee's occupancy or use of the Subleased Premises or the date
of execution of this Sublease.  "Occupancy" or "Use" shall mean any activity or
presence including preparation and construction in or upon the Subleased
Premises.

          The provisions of this Section shall survive the expiration or
termination of the Sublease, and the Sublessee's obligations hereunder shall
apply whenever the Sublessor or the Air Force incurs costs or liabilities for
the Sublessee's actions of the types described in this Article.

22.4.     Notwithstanding any other provision of this Sublease, Sublessee and
-----
its sublessees and assignees do not assume any liability or responsibility for
environmental impacts and damage caused by the use by the Air Force or any other
party of Hazardous Substances on any portion of the Airport, including the
Subleased Premises.  The Sublessee and its sublessees and assignees have no
obligation to undertake the defense, remediation and cleanup, including the
liability and responsibility for the costs of damages, penalties, legal and
investigative services solely arising out of any claim or action in existence
now, or which may be brought in the future by any person, including governmental

                                       43
<PAGE>

units against the Air Force, because of any use of, or release from, any portion
of the Airport (including the Subleased Premises) of any Hazardous Substances
prior to the Occupancy Date, Sublessee's liability being limited to matters
relating to its own activities.

22.5.     As used in this Sublease, the term "Hazardous Substances" means any
-----
hazardous or toxic substance, material or waste, oil or petroleum product, which
is or becomes regulated by any local governmental authority, the State of New
Hampshire or the United States Government.  The term "Hazardous Substances"
includes, without limitation, any material or substance which is (i) defined as
a "hazardous waste," under New Hampshire RSA ch.147-A, (ii) defined as a
"hazardous substance" under New Hampshire RSA ch.147-B, (iii) oil, gasoline or
other petroleum product, (iv) asbestos, (v) listed under or defined as hazardous
substance pursuant to Part Hc. P 1905 ("Hazardous Waste Rules") of the New
Hampshire Code of Administrative Rules, (vi) designated as a "hazardous
substance" pursuant to Section 311 of the Federal Water Pollution Control Act
(33 U.S.C. (S)1317, (vii) defined as a "hazardous waste" pursuant to Section
1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. (S)6901 et
seq. (42 U.S.C. (S)6903), or (viii) defined as a "hazardous substance" pursuant
to Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. (S)9601 et seq. (42 U.S.C. (S)9601) and (ix) so defined
in the regulations adopted and publications promulgated pursuant to any of such
laws, or as such laws or regulations may be further amended, modified or
supplemented (collectively "Hazardous Substance Laws").

          As used in this Sublease, the terms "release" and "storage" shall have
the meanings provided in RSA 147-B:2, as amended, and the term "disposal" shall
have the meaning provided in RSA 147-A:2.

22.6.     Sublessor's rights under this Sublease and PDA's rights under the
-----
Primary Sublease specifically include the right for Sublessor and PDA to inspect
the Subleased Premises and any buildings or other facilities thereon for
compliance with environmental, safety, and occupational health laws and
regulations, whether or not the Sublessor or PDA is responsible for enforcing
them.  Such inspections are without prejudice to the right of duly constituted
enforcement officials to make such inspections. In exercising such rights,
Sublessor shall use diligent efforts to prevent or minimize and to use
reasonable efforts to cause PDA to prevent or minimize interference with
Sublessee's use and enjoyment of the Premises.

22.7.     Notwithstanding any other provision of this Sublease and pursuant to
-----
the Primary Lease,  PDA is not responsible for any removal or containment of
asbestos.  If Sublessee and any Sublessee or assignee intend to make any
improvements or repairs that require the removal of asbestos, an appropriate
asbestos disposal plan must be incorporated in the plans and specifications.
The asbestos disposal plan shall identify the proposed disposal site for the
asbestos.  In addition, non-friable asbestos which becomes friable through or as
a consequence of the activities of Sublessee will be abated by Sublessee at its

                                       44
<PAGE>

sole cost and expense.  The Sublessor hereby certifies that the leased premises
and the building containing the leased premises are free of any asbestos
materials.

22.8.     Sublessor and Sublessee acknowledge that the Airport has been
-----
identified as a National Priority List (NPL) Site under the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA) of 1980, as
amended.  Sublessee acknowledges that Sublessor has provided it with a copy of
the Pease Federal Facility Agreement ("FFA") entered into by EPA, and the Air
Force on April 24, 1991, and Modification No. 1 thereto, effective March 18,
1993, agrees that it will comply with the terms of the FFA to the extent the
same may be applicable to the Subleased Premises and that should any conflict
arise between the terms of the FFA and the provisions of this Sublease, the
terms of the FFA will take precedence.  The Sublessee further agrees that the
Sublessor and PDA assume no liability to the Sublessee or any Sublessee or
assignee of Sublessee should implementation of the FFA interfere with their use
of the Subleased Premises.  The Sublessee and its Sublessee(s) and assignee(s)
shall have no claim on account of any such interference against the Sublessor,
or PDA or any officer, agent, employee or contractor thereof, other than a claim
to Sublessor for abatement of rent.

22.9.     The Air Force, EPA, and NHDES and their officers, agents, employees,
-----
contractors, and subcontractors have the right, upon reasonable notice to the
Sublessee and any Sublessee or assignee, to enter upon the Subleased Premises
for the purposes enumerated in this subparagraph and for such other purposes
consistent with the FFA:

               (1)  to conduct investigations and surveys, including, where
     necessary, drilling, testpitting, borings and other activities related to
     the Pease Installation Restoration Program ("IRP") or the FFA;

               (2)  to inspect field activities of the Air Force and its
     contractors and subcontractors in implementing the IRP or the FFA;

               (3)  to conduct any test or survey required by the EPA or NHDES
     relating to the implementation of the FFA or environmental conditions at
     the Subleased Premises or to verify any data submitted to the EPA or NHDES
     by the Air Force relating to such conditions;

               (4)  to construct, operate, maintain or undertake any other
     response or remedial action as required or necessary under the IRP or the
     FFA, including, but not limited to monitoring wells, pumping wells and
     treatment facilities.

22.10.    Sublessee and its sublessees and assignees agree at no cost to them to
------
comply with the provisions of any health or safety plan in effect under the IRP
or the FFA during the course of any of the above described response or remedial
actions. Any inspection, survey, investigation, or other response or

                                       45
<PAGE>

remedial action will, to the extent practicable, be coordinated with
representatives designated by the Sublessee and any sublessee or assignee.
Sublessee and any sublessee or assignee shall have no claim on account of such
entries against the State as defined in FFA or any officer, agent, employee,
contractor, or subcontractor thereof.

22.11.    The Airport air emissions offsets and Air Force accumulation points
------
for hazardous and other wastes will not be made available to Sublessee.
Sublessee shall be responsible for obtaining from some other source(s) any air
pollution credits that may be required to offset emissions resulting from its
activities under the Sublease.

22.12.    Any permit required under Hazardous Substance Laws for the management
------
of Hazardous Substances stored or generated by Sublessee or any sublessee or
assignee of Sublessee shall be obtained by Sublessee or its sublessees or
assignee and shall be limited to generation and transportation.  Any violation
of this requirement shall be deemed a material breach of this Sublease.
Sublessee shall provide at its own expense such hazardous waste storage
facilities, complying with all laws and regulations, as it needs for management
of its hazardous waste.

22.13.    Sublessee, and any Sublessee or assignee of Sublessee whose operations
------
utilize Hazardous Substances,  shall have a completed and approved plan for
responding to Hazardous Substances spills prior to commencement of operations on
the Subleased Premises.  Such plan shall be independent of, but not inconsistent
with, any plan or other standard of PDA applicable to the Airport and except for
initial fire response and/or spill containment, shall not rely on use of the
Airport or Sublessor personnel or equipment. Except as permitted in the Primary
Sublease, Sublessor agrees that no such plan will be required as long as the
Subleased Premises are used for office and ancillary purposes not utilizing
Hazardous Substances, except in the amounts, and in the manner customarily used
for office and ancillary purposes, Should the Sublessor provide any personnel or
equipment, whether for initial fire response and/or spill containment or
otherwise, on request of the Sublessee, or because the Sublessee was not, in the
reasonable opinion of Sublessor, conducting timely cleanup actions, the
Sublessee agrees to reimburse the Sublessor for its costs.

22.14.    Sublessee, and any Sublessee or assignee of Sublessee, must maintain
------
and make available to PDA, the Air Force, EPA and NHDES all records, inspections
logs, and manifests that tract the generation, handling, storage, treatment and
disposal of Hazardous Waste, as well as all other records required by applicable
laws and requirements. PDA and the Air Force reserve the right to inspect the
Subleased Premises and Sublessee's, its sublessee's or assignee's records for
compliance with Federal, State, local laws, regulations, and other requirements
relating to the generation, handling, storage, treatment and disposal of
hazardous waste, as well as the discharge or release of hazardous substances.
Violations may be reported by PDA and the Air Force to appropriate

                                       46
<PAGE>

regulatory agencies, as required by applicable law. The Sublessee, its
Sublessees or assignees shall be liable for the payment of any fines and
penalties or costs which may accrue to the United States of America or PDA as a
result of the actions of Sublessee, its Sublessees or assignees, respectively.

22.15     Sublessor hereby represents and warrants to Sublessee that to the best
of its knowledge and belief the property is free from contamination by Hazardous
Materials or Hazardous Substances and complies with all environmental laws.
Sublessor represents and warrants to Sublessee that Sublessor has delivered to
Sublessee all environmental site assessments and similar reports known to
Sublessor affecting the Property.  Sublessor agrees to indemnify, defend and
hold Sublessee harmless from all loss, cost, damage, claims or expenses incurred
by Sublessor as result of the inaccuracy of the above representations.

22.16     Notwithstanding any provisions of this Sublease to the contrary,
Sublessor shall be solely responsible for maintaining and operating the
emergency generator to be installed as part  of the Base Building Work (the
costs of such maintenance and operation to be reimbursed by Sublessee) and,
accordingly, all risk and responsibility for handling, storing and disposing of
fuel for the generator, and all other environmental risks associated with the
generator, shall be borne by the Sublessor.

                                       47
<PAGE>

ARTICLE 23

HOLDING OVER
------------

     Holding Over. Any holding over by Sublessee after the expiration of the
     -------------
Term of this Sublease shall be treated as a daily tenancy at sufferance at a
rate equal to the then fair rental value of the Subleased Premises but in no
event less than 150% the sum of (i) Base Rent and (ii) Operating Expenses and
real estate taxes in effect on the expiration date provided that during the
first 6 months of such holdover the rate shall be at 120% of the then Base Rent
and Operating Expenses and taxes. Otherwise, such holding over shall be on the
terms and conditions set forth in this Sublease as far as applicable. The
Sublessor may, but shall not be required to, and only on written notice to
Sublessee after the expiration of the Term hereof, elect to treat such holding
over as an extension of the Term of this Sublease for a period of up to the
first 6 months, at 120% of the then current rent rate, such extension to be on
the terms and conditions set forth in this Section.

ARTICLE 24

WAIVERS
-------

     Failure of Sublessor to complain of any act or omission on the part of
Sublessee, no matter how long the same may continue, shall not be deemed to be a
waiver by Sublessor of any of its rights hereunder.  No waiver by Sublessor at
any time, express or implied, or any breach of any provision of this Sublease
shall be deemed a waiver of a breach of any other provision of this Sublease or
a consent of any subsequent breach of the same or any other provision.  If any
action by Sublessee shall require Sublessor's consent or approval, Sublessor's
consent to or approval of such action on any one occasion shall not be deemed a
consent to or approval of said action on any subsequent occasion or a consent to
or approval of any other action on the same or any subsequent occasion.  No
payment by Sublessee or acceptance by Sublessor of a lesser amount than shall be
due from Sublessee to Sublessor shall be deemed to be anything but payment on
account, and the acceptance by Sublessor of a check for a lesser amount with an
endorsement or statement thereon, or upon letter accompanying said check that
said lesser amount is payment in full, shall not be deemed an accord and
satisfaction, and Sublessor may accept said check without prejudice to recover
the balance due or pursue any other remedy.  Any and all rights and remedies
which Sublessor may have under this Sublease or by operation of law, either at
law or in equity, upon any breach, shall be distinct, separate and cumulative,
and shall not be deemed inconsistent with each other; and no one of them,
whether exercised by Sublessor or not, shall be deemed to be in exclusion of any
other; and any two or more of all such rights and remedies may be exercised at
the same time.

                                       48
<PAGE>

ARTICLE 25

QUIET ENJOYMENT
---------------

          Sublessor agrees that upon Sublessee's paying the rent and performing
and observing the agreements, conditions and other provisions on its part to be
performed and observed, Sublessee shall and may peaceably and quietly have,
hold, and enjoy the Subleased Premises during the term of this Sublease without
any manner of hindrance or molestation from Sublessor or anyone claiming under
Sublessor, subject, however, to the terms of this Sublease and any instruments
having a prior lien.

                                  ARTICLE 26 -
INTENTIONALLY LEFT BLANK

ARTICLE 27

INTERPRETATIONS
---------------

27.1.     This instrument contains the entire and only agreement between the
-----
parties, and no oral statements or representations or prior written  matter not
contained in this instrument shall have any force or effect.  This Sublease
shall not be modified in any way except by a writing subscribed by both parties.

27.2.     In the event of a breach of this Sublease by either party, the
prevailing party shall be entitled to reasonable attorneys fees and costs.

          This Sublease shall be governed by the laws of the State of New
Hampshire.

27.3      Reasonableness.  Regardless of any reference to the words "sole" or
          --------------
"absolute" (but except for matters which will have an adverse effect on the (a)
structural integrity of the Building (b) the Building's plumbing, heating, life
safety, ventilating, air conditioning, mechanical or electrical systems, or (c)
the exterior appearance of the Building, whereupon in each such case Sublessor's
duty is to act in good faith and in compliance with the Sublease), any time the
consent of Sublessor or Sublessee is required, such consent shall not be
unreasonably withheld, conditioned or delayed.  Whenever the Sublease grants
Sublessor or Sublessee the right to take action, exercise discretion, establish
rules and regulations or make allocations or other determinations, Sublessor and
Sublessee shall act reasonably and in good faith.

                                       49
<PAGE>

ARTICLE 28

NOTICES
-------

          All notices and other communications authorized or required hereunder
shall be in writing and shall be given by mailing the same certified or
registered mail, return receipt requested, postage prepaid, or first class mail,
postage prepaid or by mailing the same by Express Mail or by having the same
delivered by a commercial delivery service to the following address:

          If to Sublessor:    325 Corporate Drive II, LLC
                              170 Commerce Way, Suite 202
                              Portsmouth, NH  03801
                              with copy to:
                              John J. Ryan, Esq.
                              Casassa and Ryan
                              459 Lafayette Road
                              Hampton, NH  03842

          If to Sublessee:    Prior to Term Commencement Date
                              Bottomline Technologies, Inc.
                              Fleet Street
                              Portsmouth, NH  03801
                              with copy to:

                              Paul Jakubowski, Esq.
                              Hale and Dorr
                              60 State Street
                              Boston, MA  02109

                              After Term Commencement Date
                              Bottomline Technologies, Inc.
                              325 Corporate Drive
                              Portsmouth, NH  03801
ARTICLE 29

DISPUTES AND LITIGATION
-----------------------

29.1.     Except as provided below: In the event of a dispute between the
-----
parties, it shall be a condition precedent to the initiation of any formal
litigation in a court of competent jurisdiction that the parties shall have met
face to face in a good faith effort to resolve the dispute directly between
them. In the event that they are unsuccessful, each party agrees to submit the
dispute to alternative dispute resolution, initially by mediation, and the
parties shall equally share the expense of such mediation.

                                       50
<PAGE>

          In the event that mediation is unsuccessful, the parties shall then
submit the dispute to arbitration (binding if the parties agree) in accordance
with the Rules of the American Arbitration Association. In the event that
arbitration fails, and provided that the parties have participated in the
alternative dispute resolution, provisions hereof in good faith, the aggrieved
party may then commence litigation.

29.2.     The foregoing alternative dispute resolution provisions shall not
-----
apply in the event that either party reasonably requires immediate ex parte
and/or injunctive relief from a Court of competent jurisdiction.

ARTICLE 30

MISCELLANEOUS
--------------

30.1.     Any actions or proceedings with respect to any matters arising under
-----
or growing out of this Sublease shall be instituted and prosecuted only in the
courts located in the State of New Hampshire. Nothing contained in this Article
or any other provision of this Sublease shall be deemed to constitute a waiver
of the sovereign immunity of the State of New Hampshire, which immunity is
hereby reserved to PDA and to the State of New Hampshire.

30.2.     Sublessee shall faithfully observe and comply with such rules and
-----
regulations as the PDA may adopt for the operation of the Airport and such rules
and regulations as Sublessor may adopt for the operation of the building and lot
of which the Subleased Premises are a part, which rules and regulations are
reasonable and nondiscriminatory as well as all modifications thereof and
additions thereto.  PDA shall not be responsible to Sublessee for the violation
or nonperformance by any other Sublessee of the PDA of such airport rules and
regulations, and Sublessor shall not be responsible to Sublessee for the
violation or nonperformance by any other Sublessee of Sublessor of any of such
rules and regulations pertaining to the building and the lot of which the
Subleased Premises are a part.

30.3.     Sublessee agrees to conform to such additional provisions required of
-----
tenants of office buildings at Pease as, from time to time, by the FAA ("FAA
Requirements") or its successor with respect to the operation of the Airport, or
a portion thereof.  The current FAA Requirements are attached hereto as Exhibit
                                                                        -------
6 and incorporated herein by reference.
---

30.4.     This Sublease is subject and subordinate to any agreements heretofore
-----
or hereafter made between PDA and the United States or the Air Force, the
execution of which is required to enable or permit transfer of rights or
property to PDA for airport purposes or expenditure of federal grant funds for
airport improvement, maintenance or development, including, without limitation,
the Application and Acceptance, Master Lease and FFA. Sublessee shall abide by

                                       51
<PAGE>

requirements of any agreement between PDA and the United States or the Air Force
applicable to the Subleased Premises or Sublessee's activities at the Airport
and shall consent to amendments and modifications of this Sublease if required
by such agreements or as a condition of Sublessor's entry into such agreements.

          This Sublease is further subject and subordinate to the Primary
Sublease between PDA and Sublessor, and Sublessee shall abide by the provisions
of the Primary Sublease applicable to the Subleased Premises or Sublessee's
activities at the Airport and shall consent to amendments and modifications of
this Sublease if required by the Primary Sublease.

30.5.     Sublessee acknowledges that PDA, in its sole discretion, shall
-----
determine and may from time to time change the routes of surface ingress and
egress connecting the Subleased Premises. PDA also reserves the right to further
develop the Airport, or such portion of the Airport as is owned or controlled by
PDA, as it sees fit, regardless of the desires or views of Sublessee and without
interference or hindrance. Sublessor has delivered to Sublessee a copy of the
Primary Sublease, which Sublessor represents to be complete and in effect.
Sublessor agrees that it will not enter into any amendment of the Primary
Sublease which would adversely affect the rights of the Sublessee hereunder nor
shall Sublessor agree to or permit termination of the Primary Sublease.

30.6.     The Sublessee herein covenants by and for itself, its heirs,
-----
executors, administrators, and assigns, and all persons claiming under or
through it, that this Sublease is made and accepted upon and subject to the
following conditions:

          That there shall be no discrimination against or segregation of any
person or group of persons, on account of race, color, creed, national origin,
or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure,
or enjoyment of the Premises herein leased nor shall the Sublessee, or any
person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection,
location, number, use, or occupancy, of tenants, lessees, Sublessees,
subtenants, or vendees in the Subleased Premises herein leased.

30.7.     All obligations of Sublessee to indemnify, defend and hold harmless
-----
Sublessor, PDA and the Air Force and to make any monetary payment to Sublessor,
PDA and the Air Force shall survive the termination or expiration of this
Sublease.

30.8.     Sublessor's Liability.  (a)  With respect to any services or utilities
-----     ----------------------
to be furnished by Sublessor to Sublessee, Sublessor shall in no event be liable
for failure to furnish the same when prevented from doing so by force, major
strike, lockout, breakdown, accident, order or regulation of or by any
governmental authority, or failure of supply, or inability by the exercise of
reasonable diligence to obtain supplies, parts or employees necessary to furnish
such services, or because of war or other emergency, or for any cause beyond
Sublessor's

                                       52
<PAGE>

reasonable control, or for any cause due to any act or neglect of Sublessee or
Sublessee's servants, agents, employees, licensees or any person claiming by,
through or under Sublessee; nor shall any such failure give rise to any claim in
Sublessee's favor that Sublessee has been evicted, either constructively or
actually, partially or wholly.

(b)  In no event shall Sublessor ever be liable to Sublessee for any loss of
business or any other indirect or consequential damages suffered by Sublessee
from whatever cause.

(c)  With respect to any repairs or restoration which are required or permitted
to be made by Sublessor, the same may be made during normal business hours and
Sublessor shall have no liability for damages to Sublessee for inconvenience,
annoyance or interruption of business arising therefrom.

(d)   An "Abatement Event" shall be defined as an event or circumstance (other
than those addressed in Articles 16 and 17 or by reason of some other event or
circumstance beyond the control of the Sublessor, that prevents Sublessee from
using the Premises or any portion thereof, as a result of any failure to provide
services or access to the Premises.  Sublessee shall give Sublessor notice
("Abatement Notice") of any such Abatement Event, and if such Abatement Event
continues beyond the "eligibility Period" as that term is defined below), then
the Base Rent and Sublessee's other monetary obligations to Sublessor shall be
abated entirely or reduced, as the case may be, after expiration of the
Eligibility Period for such time that Sublessee continues to be so prevented
from using, and does not use, the Premises or a portion thereof, in the
proportion that the rentable area of the portion of the Premises that Sublessee
is prevented from using, and does not use, bears to the total rentable area of
the Premises; provided, however, in the event that Sublessee is prevented from
using, and does not use, a portion of the premises for a period of time in
excess of the Eligibility Period and the remaining portion of the Premises is no
sufficient to allow Sublessee to effectively conduct its business therein, and
if Sublessee does not conduct its business from such remaining portion, then for
such time after expiration of the Eligibility Period during which Sublessee is
so prevented from effectively conducting its business therein, Base Rent and
Sublessee's other monetary obligations to Sublessor shall be abated entirely for
such time as Sublessee continues to be so prevented from using, and does not
use, the Premises.  The term "Eligibility period" shall mean a period of three
(3) consecutive days after Sublessor's receipt of any Abatement Notice(s).  In
addition, if an Abatement Event continues for thirty (30) consecutive days after
any Abatement Notice, Sublessee may terminate this sublease by written notice to
Sublessor at any time prior to the date such Abatement Event is cured by
Sublessor.

30.9.     Additional Charges. If Sublessee shall fail to pay when due any sums
-----     -------------------
under this Sublease designated or payable as an additional charge, Sublessor
shall have the same rights and remedies as Sublessor has hereunder for failure
to pay Base Rent.

                                       53
<PAGE>

30.10.    Brokerage. The parties agree that the Kane Company and CRF Partners,
------    ----------
Inc. have acted as brokers in this lease transaction.  The Sublessor shall be
responsible for all brokerage fees.

30.11.    Management.  The Sublessor shall assess commercially reasonable
------    -----------
management fees which are estimated at $.40 per square foot for the first year
of the Lease.  Such fees shall be payable monthly.

30.12     Primary Sublease, Master Lease, Application, Acceptance and FFA.
          -----------------------------------------------------------------

Sublessor shall perform the Base Building Work and Leasehold Improvement Work in
accordance with all provisions of the Primary Sublease, Master Lease,
Application, Acceptance and FFA (collectively, the "Documents") and all other
applicable laws, and requirements, and shall during the Term operate the
premises leased under the Primary Sublease in accordance with the Documents and
all other applicable laws, codes and requirements.  Sublessor shall deliver to
Sublessee copies of all correspondence sent or received by Sublessor to or from
any party to any of the Documents alleging a default by any party thereto or
otherwise setting forth matters which might reasonably be expected to have an
adverse impact on the leasehold interest created by this Sublease or on
Sublessee's use and enjoyment of the Subleased Premises.

30.13     Notice of Lease.  The parties shall executed and record a Notice of
-----                       -------------------------------------------------
Lease in the form required under New Hampshire law.
---------------------------------------------------

39.14     Sublessor Default and Sublessee Self-Help.   Sublessor shall be deemed
-----     --------------------------------------------
to be in default of this Lease if Sublessor fails to make any payments to
Sublessee required under this Sublease and such failure continues for ten (10)
days after written notice from Sublessee to Sublessor, or if Sublessor shall be
in default in the prompt and full performance of any other of its promises,
covenants, or agreements contained in this Sublease and such default in
performance continues for more than thirty (30) days after written notice
thereof from Sublessee to Sublessor specifying the particulars of such default
or breach of performance; provided, however, that if the default complained of,
other than for the payment of monies, is of such a nature that the same cannot
be rectified or cured within such thirty (30) day period, then such default
shall be deemed to be rectified or cured if Sublessor, within such thirty (30)
day period, shall have commenced such cure and shall continue thereafter with
due diligence to cause such cure to be completed.  Upon any default of this
Sublease by Sublessor, Sublessee shall be entitled to pursue any and all
remedies available to Sublessee at law or in equity, including, without
limitation, the right of self-help, to be exercised as follows:  following the
occurrence of a Sublessor default not cured within the cure period provided
above, Sublessee may notify Sublessor in writing of sublessee's intent to
exercise its self-help remedy set forth in this Section 30.14; in the event
Sublessor fails to cure the default within ten (10) days after delivery of such
notice, Subtenant shall have the right, but not the

                                       54
<PAGE>

obligation, to cure such default itself, and the costs incurred by Sublessee in
curing such default shall be offset against the Base Rent next coming due until
satisfied in full.

                                   EXECUTION
                                   ---------
     IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Sublease
effective as of the ______ day of _______________________, 2000.

                              325 CORPORATE DRIVE, LLC

                              By:___________________________
                              Its:__________________________
                                         "Sublessor"

                              BOTTOMLINE TECHNOLOGIES, INC.

                              By:___________________________
                              Name: Daniel M. McGurl
                              ----------------------
Its:President & Chief Executive Officer ________
     "Sublessee" STATE OF NEW HAMPSHIRE
COUNTY OF ROCKINGHAM

On this _____ day of _________________, 2000, personally appeared
________________________________, known to me (or proved to me on the basis of
satisfactory evidence) to be the ____________________ of  325 CORPORATE DRIVE,
LLC, and on oath stated that he was authorized to execute this instrument and
acknowledged it to be his free and voluntary act for the uses and purposes set
forth herein.

     Before me,
                              ________________________________
                              Notary Public/Justice of the Peace
                              Name:
                              My Commission Expires:

STATE OF NEW HAMPSHIRE
COUNTY OF ROCKINGHAM

On this ____ day of _____, 2000, personally appeared _________________________,
known to me (or proved to me on the basis of satisfactory evidence) to be
the_____________________________ of BOTTOMLINE TECHNOLOGIES, INC. and on oath
stated that he was authorized to execute this instrument and acknowledged it to
be his free and voluntary act for the uses and purposes set forth herein.

     Before me,
                              ______________________________________
                              Notary Public/Justice of the Peace

                                       55
<PAGE>

                              Name:
                              My Commission Expires:

                                       56
<PAGE>

                                   EXHIBIT 1

                               PRIMARY SUBLEASE
                               ----------------

                                       57
<PAGE>

                                   EXHIBIT 2

                   PLANS DESIGNATING THE SUBLEASED PREMISES,
                   -----------------------------------------
                       LEASEHOLD WORK AND BASE BUILDING
                       --------------------------------
                           PLANS AND SPECIFICATIONS
                           ------------------------

                                       58
<PAGE>

                                   EXHIBIT 3

                       LIST AND DESCRIPTION OF AMENITIES
                       ---------------------------------

1.   1,000 square foot fitness facility to be provided by the Sublessor to
include cardio equipment, stretching machines, weights and two televisions.  In
addition, Sublessee employees shall have a corporate membership at the new
Planet Fitness/PF Gym in Portsmouth, NH for a monthly fee of $10.00 per employee
with a nominal initiation charge.

2.   Building is adjacent to a 171 acre resource conservation preserve where the
employees of Sublessee shall have the right to run, bike and recreate. (See
aerial and side plan).

3.   Sublessor shall on or before the Term Commencement date construct a
basketball court and volleyball area as well as an outdoor seating arena on the
site (see site plan).

4.   Sublessor shall on or before the Term Commencement date construct an onsite
pond.

                                       59
<PAGE>

                                   EXHIBIT 4

                  LIST OF ENVIRONMENTAL LAWS AND REGULATIONS
                  ------------------------------------------

Air Quality:          (a)  Clean Air Act & Amendments, 42 U.S.C. 7401-7642
                      (b)  40 CFR Parts 50-52, 61, 62, 65-67, 81
                      (c)  RSA ch. 125-C, Air Pollution Control, and rules
                           adopted thereunder
                      (d)  RSA ch. 125-H, Air Toxic Control Act, and rules
                           adopted thereunder

Hazardous Materials:  (a)  Hazardous Materials Transportation Act', 49 U.S.C.
                           1801-1813, and Department of Transportation
                           Regulations thereunder
                      (b)  Emergency Planning and Community Right-To-Know Act,
                           42 U.S.C. 11001-11050
                      (c)  49 CFR Parts 100-179
                      (d)  40 CFR Part 302
                      (e)  RSA ch. 277-A, Toxic Substances in the Workplace, and
                           rules adopted thereunder

Hazardous Waste:      (a)  Resource Conservation and Recovery Act (RCRA) of 1976
                           and RCRA Amendments of 1984, 42 U.S.C. 6901-6991i
                      (b)  Comprehensive Environmental Response, Compensation,
                           and Liability Act (CERCLA) of 1980, as amended, 42
                           U.S.C. 9601-9675
                      (c)  40 CFR Parts 260-271, 300, 302
                      (d)  RSA ch. 147-A, Hazardous Waste
                           Management and rules adopted thereunder

Water Quality:        (a)  Federal Water Pollution Control Act (Clean Water Act)
                           and Amendments, 33 U.S.C. 1251-1387
                      (b)  Safe Drinking Water Act, as amended, 42 U.S.C. 300f-
                           300j-26 40 CFR Title 100-143, 401 and 403
                      (c)  RSA ch. 146-A, Oil Spillage in Public Waters, and
                           rules adopted thereunder
                      (d)  RSA ch. 485, New Hampshire Safe Drinking Water Act,
                           and rules adopted thereunder
                      (e)  RSA ch. 485-A, Pollution and Waste Disposal, and
                           rules adopted thereunder

                                       60
<PAGE>

                                   EXHIBIT 5

                        SUBLEASE PROVISIONS REQUIRED BY
                        -------------------------------
                      THE FEDERAL AVIATION ADMINISTRATION
                      -----------------------------------

1.   To the extent applicable to Sublessee under the terms of this Sublease, and
the Primary Sublease, Sublessee, for himself, his heirs, personal
representatives, successors in interest, and assigns, as a part of the
consideration hereof, does hereby agree that in the event facilities are
constructed, maintained, or otherwise operated on the Subleased Premises, for a
purpose for which a United States Department of Transportation ("DOT") program
or activity is extended or for another purpose involving the provision of
similar services or benefits, Sublessee shall maintain and operate such
facilities and services in compliance with all other requirements imposed
pursuant to Title 49, Code of Federal Regulations, DOT, Subtitle A, Office of
the Secretary, Part 21, Nondiscrimination in Federally Assisted Programs of the
Department of Transportation Effectuation of Title VI of the Civil Rights Act of
1964, and as said Regulations may be amended.

2.   To the extent applicable to Sublessee under the terms of this Sublease and
the Primary Sublease, Sublessee, for himself, his personal representative,
successors in interest, and assigns, as a part of the consideration hereof, does
hereby agree that: (I) no person on the grounds of race, color, or national
origin shall be excluded from participation in, denied the benefits of, or
otherwise be subjected to discrimination in the use of said facilities; (ii)
that in the construction of any improvements on, over, or under such land and
the furnishing of services thereon, no person on the grounds of race, color, or
national origin shall be excluded from participation in, denied the benefits of,
or otherwise be excluded from participation in, denied the benefits of, or
otherwise be subject to discrimination; and (iii) that the Sublessee shall use
the premises in compliance with all other requirements imposed by or pursuant to
Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A,
Office of the Secretary, Part 21, Nondiscrimination in Federally-Assisted
Programs of the Department of Transportation Effectuation of Title VI of the
Civil Rights Act of 1964, and as said Regulation may be amended.

3.   That in the event of breach of any of the above nondiscrimination
covenants, Sublessor shall have the right to terminate the Sublease, and to
reenter and repossess said land and the facilities thereon, and hold the same as
if said lease, had never been made or issued. This provision does not become
effective until the procedures of 49 CFR Part 21 are allowed and completed
including expiration of appeal rights.

4.   To the extent applicable to Sublessee under the terms of this Sublease, and
the Primary Sublease, Sublessee shall furnish its accommodations and/or services
on a fair, equal and not unjustly discriminatory basis to all users thereof and
it shall charge fair, reasonable and not unjustly discriminatory prices for each
unit or service; PROVIDED THAT the Sublessee may be allowed to make reasonable
and nondiscriminatory discounts, rebates or other similar type of price
reductions to volume purchasers.

                                       61
<PAGE>

5.   Non-compliance with Provision 4 above shall constitute a material breach
thereof and in the event of such noncompliance Sublessor shall have the right to
terminate this Sublease, and the estate hereby created without liability
therefore or at the election of the Sublessor or the United States either or
both of Sublessor or the United States shall have the right to judicially
enforce provisions.

6.   Sublessee agrees that it shall insert the above five provisions in any
lease agreement, by which said Sublessee grants a right or privilege to any
person, firm or corporation to render accommodations and/or services to the
public on the Subleased Premises.

7.   To the extent applicable to Sublessee under the terms of this Sublease and
the Primary Sublease, Sublessee assures that it will undertake an affirmative
action program as required by 14 CFR Part 152, Subpart E, to insure that no
person shall on the grounds of race, creed, color, national origin, or sex be
excluded from participating in any employment activities covered in 14 CFR Part
152, Subpart E. Sublessee assures that no person shall be excluded on these
grounds from participating in or receiving the services or benefits of any
program or activity covered by this subpart. Sublessee assures that it will
require that its covered suborganizations provide assurance to the Sublessor,
that they similarly will undertake affirmative action programs and that they
will require assurances from their suborganizations, as required by 14 CFR Part
152, Subpart E, to the same effect.

8.   To the extent applicable to Sublessee under the terms of this Sublease and
the Primary Sublease, Sublessor reserves the right to further develop or improve
the landing area of the airport as it sees fit, regardless of the desires or
view of the Sublessee and without interference or hindrance.

9.   To the extent applicable to Sublessee under the terms of this Sublease and
the Primary Sublease, Sublessor reserves the right, but shall not be obligated
to the Sublessee to maintain and keep in repair the landing area of the airport
and all publicly-owned facilities of the airport, together with the right to
direct and control all activities of the Sublessee in this regard.

10.  To the extent applicable to Sublessee under the terms of this Sublease and
the Primary Sublease, this Sublease shall be subordinate to the provisions and
requirements of any existing or future agreement between the Sublessor and the
United States, relative to the development, operation or maintenance of the
airport.

11.  To the extent applicable to Sublessee under the terms of this Sublease and
the Primary Sublease, there is hereby reserved to Sublessor, its successors and
assigns, for the use and benefit of the public, a right of flight for the
passage of aircraft in the airspace above the surface of the Subleased Premises.
This public right of flight shall include the right to cause in said airspace
any noise inherent in the operation of any aircraft used for navigation or
flight through the said airspace or landing at, taking off from or operation on
the airport.

                                       62
<PAGE>

12.  To the extent applicable to Sublessee under the terms of this Sublease and
the Primary Sublease, Sublessee agrees to comply with the notification and
review requirements covered in Part 77 of the Federal Aviation Regulations in
the event future construction of building is planned for the Subleased Premises,
or in the event of any planned modification or alteration of any present or
future building or structure situated on Subleased Premises.

                                       63
<PAGE>

13.  To the extent applicable to Sublessee under the terms of this Sublease and
the Primary Sublease, Sublessee, by accepting this Sublease expressly agrees for
itself, its successors and assigns that it shall not erect nor permit the
erection of any structure or object nor permit the growth of any tree on the
land leased hereunder above the mean sea level elevation of 251feet. In the
event the aforesaid covenants are breached, Sublessor reserves the right to
enter upon the Premises and to remove the offending structure or object and cut
the offending tree, all of which shall be at the expense of the Sublessee.

14.  To the extent applicable to Sublessee under the terms of this Sublease and
the Primary Sublease, Sublessee, by accepting this Sublease, agrees for itself,
its successors and assigns that it will not make use of the Subleased Premises
in any manner which might interfere with the landing and taking off of aircraft
from the airport or otherwise constitute a hazard. In the event the aforesaid
covenant is breached, Sublessor reserves the right to enter upon the Subleased
Premises, and cause the abatement of such interference at the expense of the
Sublessee.

15.  To the extent applicable to Sublessee under the terms of this Sublease and
the Primary Sublease, it is understood and agreed that nothing herein contained
shall be construed to grant or authorize the granting of an exclusive right
within the meaning of Section 308a of the Federal Aviation Act of 1958 (49 U.S
C. 1349a).

16.  To the extent applicable to Sublessee under the terms of this Sublease and
the Primary Sublease, this Sublease and all the provisions hereof shall be
subject to whatever right the United States Government now has or in the future
may have or acquire, affecting the control, operation, regulation and taking
over of said airport or the exclusive or non-exclusive use of the airport by the
United States during the time of war or national emergency.

                                       64
<PAGE>

                                   EXHIBIT 6

                             RULES AND REGULATIONS
                             ---------------------

1.  Except as specifically provided in the Sublease to which these Rules and
    Regulations are attached, no sign, placard, picture, advertisement, name or
    notice shall be installed or displayed on any part of the outside or inside
    of the building or Project without the prior written consent of Sublessor,
    which shall not be unreasonably withheld. Sublessor shall have the right to
    remove, at Sublessee's expense and without notice, any sign installed or
    displayed in violation of this rule. All approved signs or lettering on
    doors and walls shall be printed, painted, affixed or inscribed at the
    expense of Sublessee by a person approved by Sublessor.

2.  If Sublessor reasonably objects in writing to any curtains, blinds, shades,
    screens or hanging plants or other similar objects attached to or used in
    connection with any window or door of the Premises, or placed on any
    windowsill, which is visible from the exterior of the Premises, Sublessee
    shall immediately discontinue such use. Sublessee shall not place anything
    against or near glass partitions or doors or windows, which may appear
    unsightly from outside the Premises.

3.  Sublessee shall not obstruct any sidewalks, halls, passages, exits,
    entrances, elevators, escalators or stairways of the Project. The halls,
    passages, exits, entrances, shopping malls, elevators, escalators and
    stairways are not open to the general public, but are open, subject to
    reasonable regulations, to Sublessee's business invitees. Sublessor shall in
    all cases retain the right to control and prevent access thereto of all
    persons whose presence in the judgment of Sublessor would be prejudicial to
    the safety, character, reputation and interest of the Project and its
    Sublessees: provided that nothing herein contained shall be construed to
    prevent such access to persons with whom any Sublessee normally deals in the
    ordinary course of its business, unless such persons are engaged in illegal
    or unlawful activities.

4.  The directory of the building or Project will be provided exclusively for
    the display of the name and location of Sublessees only and Sublessor
    reserves the right to exclude any other names therefrom.

5.  All cleaning and janitorial services for the Project and the Premises shall
    be provided exclusively through Sublessor, and except with the written
    consent of Sublessor, no person or persons other than those approved by
    Sublessor shall be employed by Sublessee or permitted to enter the Project
    for the purpose of cleaning the same. Sublessee shall not cause any
    unnecessary labor by carelessness or indifference to the good order and
    cleanliness of the Premises.

                                       65
<PAGE>

6.   Sublessor will furnish Sublessee, free of charge, with two keys to each
     door lock in the Premises. Sublessor may make reasonable charge for any
     additional keys. Sublessee shall not make or have made additional keys, and
     Sublessee shall not alter any lock or install a new additional lock or bolt
     on any door of its Premises without Sublessor's consent not to be
     unreasonably withheld. Sublessee, upon the termination of its tenancy,
     shall deliver to Sublessor the keys of all doors which have been furnished
     to Sublessee, and in the event of loss of any keys so furnished, shall pay
     Sublessor therefor.

7.   If Sublessee requires telegraphic, telephonic, burglar alarm or similar
     services, it shall first obtain, and comply with, Sublessor's instructions
     in their installation, which shall not be unreasonable.

8.   Freight elevator(s) shall be available for use by all Sublessees in the
     building, subject to such reasonable scheduling as Sublessor, in its
     discretion, shall deem appropriate. No equipment, materials, furniture,
     packages, supplies, merchandise or other property will be received in the
     building or carried in the elevators except between such hours and in such
     elevators as may be designated by Sublessor. Sublessee initial move in and
     subsequent deliveries of bulky items, such as furniture, safes and similar
     items shall, unless otherwise agreed in writing by Sublessor, be made
     during the hours of 8:00 p.m. to 6:00 a.m. or on Saturday or Sunday. No
     deliveries shall be made which impede or interfere with other Sublessees or
     the operation of the building.

9.   Sublessee shall not place a load upon any floor of the Premises, which
     exceeds the load per square foot, which such floor was designed to carry
     and which is allowed by law. Sublessor shall have the right to prescribe
     the weight, size and position of all equipment; materials, furniture or
     other property brought into the building. Heavy objects shall, if necessary
     by Sublessor, stand on such platforms as determined by Sublessor to be
     necessary to properly distribute the weight, which platforms shall be
     provided at Sublessee's expense. Business machines and mechanical equipment
     belonging to Sublessee, which cause noise or vibration that may be
     transmitted to the structure of the building or to any space therein to
     such a degree as to be objectionable to Sublessor or to any Sublessees in
     the building, shall be placed and maintained by Sublessee, at Sublessee's
     expense, on vibration eliminators or other devices sufficient to eliminate
     noise or vibration. The persons employed to move such equipment in or out
     of the building must be acceptable to Sublessor. Sublessor will not be
     responsible for loss of, or damage to, any such equipment or other property
     from any cause, and all damage done to the building by maintaining or
     moving such equipment or other property shall be repaired at the expense of
     Sublessee.

10.  Sublessee shall not use or keep in the Premises any kerosene, gasoline or
     inflammable or combustible fluid or material other than those limited

                                       66
<PAGE>

     quantities necessary for the operation or maintenance of office equipment.
     Sublessee shall not use or permit to be used in the Premises any foul or
     noxious gas or substance, or permit or allow the Premises to be occupied or
     used in a manner offensive or objectionable to Sublessor or other occupants
     of the building by reason of noise, odors or vibrations, nor shall
     Sublessee bring into or keep in or about the Premises any birds or animals.

11.  Sublessee shall not use any method of heating or air conditioning other
     than that supplied by Sublessor.

12.  Sublessee shall not waste electricity, water or air conditioning and shall
     not tape any ducts and agrees to cooperate fully with Sublessor to assure
     the most effective operation of the building's heating and air conditioning
     and to comply with any governmental energy-saving rules, laws or
     regulations of which Sublessee has actual notice, and shall refrain from
     attempting to adjust controls. Sublessee shall keep corridor doors closed,
     and shall close window coverings at the end of each business day. Sublessee
     shall have the control over the thermostat in the Subleased Premises.

13.  Sublessor reserves the right, exercisable without notice and without
     liability to Sublessee, to change the name and street address of the
     building.

14.  Sublessor reserves the right to exclude from the building between the hours
     of 8:00 p.m. and 7:00 a.m. the following day, or such other hours as may be
     established from time to time by Sublessor, and on Sundays and legal
     holidays, any person unless that person is known to the person or employee
     in charge of the building and has a pass or is properly identified.
     Sublessee shall be responsible for all persons for whom it requests passes
     and shall be liable to Sublessor for all acts of such persons. Sublessor
     shall not be liable for damages for any error with regard to the admission
     to or exclusion from the building of any person. Sublessor reserves the
     right to prevent access to the building in case of invasion, mob, riot,
     public excitement or other commotion by closing the doors or by other
     appropriate action.

15.  Sublessee shall close and lock the doors of its Premises and entirely shut
     off all water faucets or other apparatus, and electricity, gas or air
     outlets before Sublessee and its employees leave the Premises. Sublessee
     shall be responsible for any damage or injuries sustained by other
     Sublessees or occupants of the building or by Sublessor for noncompliance
     with this rule.

16.  The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
     not be used for any purpose other than that for which they were constructed
     and no foreign substance of any kind whatsoever shall be thrown therein.

                                       67
<PAGE>

     The expense of any breakage, stoppage or damage resulting from the
     violation of this rule shall be borne by the Sublessee who, or whose
     employees or invitees shall have caused it.

17.  Sublessee shall not sell, or permit the sale at retail of newspapers,
     magazines, periodicals, theater tickets or any other goods or merchandise
     to the general public in or on the Premises. Sublessee shall not make any
     room-to-room solicitation of business from other Sublessees in the Project.
     Sublessee shall not use the Premises for any business or activity other
     than that specifically provided for in Sublessee's Sublease.

18.  Sublessee shall not install any radio or television antenna, loudspeaker or
     other devices on the roof(s) or exterior walls of the building or Project,
     except in accordance with the provisions of Section 1.1 of the Sublease.
     Sublessee shall not interfere with radio or television broadcasting or
     reception from or in the Project or elsewhere, without Sublessor's prior
     consent, not to be unreasonably withheld.

19.  Sublessee shall not mark, drive nails, screw or drill into the partitions,
     woodwork or plaster or in any way deface the Premises or any part thereof,
     except in accordance with the provisions of the Sublease pertaining to
     alterations. Pictures, artwork and bulletin boards may be hung provided
     proper materials are used. Sublessor reserves the right to direct
     electricians as to where and how telephones and telegraph wires are to be
     introduced to the Premises. Sublessee shall not affix any floor covering to
     the floor of the Premises in any manner except as approved by Sublessor.
     Sublessee shall repair any damage resulting from noncompliance with this
     rule.

20.  Canvassing, soliciting and distribution of handbills or any other written
     material and peddling in the Project are prohibited, and Sublessee shall
     cooperate to prevent such activities.

21.  Sublessor reserves the right to exclude or expel from the Project any
     person whom, in Sublessor's judgement, is intoxicated or under the
     influence of liquor or drugs or who is in violation of any of the Rules and
     Regulations of the Building.

22.  Sublessee shall store all its trash and garbage within its premises or in
     other facilities provided by Sublessor. Sublessee shall not place in any
     trash box or receptacle any material, which cannot be disposed of in the
     ordinary and customary manner of trash and garbage disposal. All garbage
     and refuse disposal shall be made in accordance with directions issued from
     time to time by Sublessor.

23.  The Premises shall not be used for the storage of merchandise held for sale
     to the general public, or for lodging or for manufacturing of any kind,

                                       68
<PAGE>

     nor shall the Premises be used for any improper, immoral or objectionable
     purpose. All cooking on the Premises shall be done in accordance with all
     applicable, federal, state, county and city laws, codes, ordinances, rules
     and regulations.

24.  Sublessee shall not use in any space or in the public halls of the Project
     any hand truck except those equipped with rubber tires and side guards or
     such other material-handling equipment as Sublessor may approve. Sublessee
     shall not bring any other vehicles of any kind into the building or
     Project.

25.  Sublessee shall comply with all safety, fire protection and evacuation
     procedures and regulations established by Sublessor or any governmental
     agency.

26.  Sublessee assumes any and all responsibility for protecting its Premises
     from theft, robbery and pilferage, which includes keeping doors locked and
     other means of entry to the Premises closed.

27.  Sublessee's requirements will be attended to only upon appropriate
     application to the Project management office by an authorized individual.
     Employees of Sublessor shall not perform any work or do anything outside of
     their regular duties unless under special instructions from Sublessor, and
     no employee of Sublessor will admit any person (Sublessee or otherwise) to
     any office without specific instructions from Sublessor.

28.  Sublessor may waive any one or more of these Rules and Regulations for the
     benefit of Sublessee or any other Sublessee, but no such waiver by
     Sublessor shall be construed as a waiver of such Rules and Regulations in
     favor of Sublessee or any other Sublessee, nor prevent Sublessor from
     thereafter enforcing any such Rules and Regulations against any or all of
     the Sublessees of the Project.

29.  These Rules and Regulations are in addition to, and shall not be construed
     to in any way modify or amend in whole or in part, the terms, covenants,
     agreements and conditions of the Sublease.

30.  Sublessor reserves the right to make such other and reasonable Rules and
     Regulations as, in its reasonable judgment, may from time to time be needed
     for safety and security, for care and cleanliness of the Project and for
     the preservation of good order therein. Sublessee agrees to abide by all
     such Rules and Regulations herein above stated and any additional rules and
     regulations which are adopted.

31.  Sublessee shall be responsible for the observance of all the foregoing
     rules by Sublessee's employees, agents, clients, customers, invitees and
     guests.

                                       69
<PAGE>

32.  Sublessor shall furnish, free of charge, a reasonable number of access
     cards to Sublessee for the purpose of accessing exterior doors to the
     Building. Sublessee, upon termination of its tenancy, shall return all
     access cards, which have been furnished, to the Sublessor and in the event
     of loss of any cards so furnished, Sublessee shall pay Sublessor therefore.

33.  Sublessee shall have the right to install roof top telecommunications
     facilities provided that such facilities shall be used only in connection
     with the Sublessee's business at the Subleased Premises and for no other
     commercial purposes.

                                       70
<PAGE>

                                   EXHIBIT 7

                               LANDLORD SERVICES

                                       71
<PAGE>

                                   EXHIBIT 8

                       LIST OF APPROVALS AND MILESTONES

                                       72

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}]]