Document:

<PAGE>

                                                                 Exhibit 10.11

                          SECOND AMENDMENT TO LEASE

The SECOND AMENDMENT TO LEASE ("Agreement") is made and entered into as of
June 19, 2000 by and between Optical Networks, Incorporated ("ONI") ("Tenant")
and Cilker Revocable Trust of October 9, 1990 ("Landlord").

RECITALS
--------

A.    The Landlord and JT Storage, Inc. ("JTS"), as tenant, executed a lease
      dated June 15, 1995 ("Lease"), pursuant to which Landlord leased to JTS,
      and JTS leased from Landlord certain properties identified in Paragraph
      2 of the Lease and other provisions cross-referenced in such Paragraph 2
      ("Premises").

B.    By means of a certain ASSIGNMENT OF LEASE ("Lease Assignment"), JTS
      assigned to Tenant (ONI) the portion of the premises identified in the
      Lease Assignment Exhibit "B" without any cross or diagonal hatching
      ("Original First Level Space").

C.    By means of a certain AMENDMENT TO LEASE ("First Amendment"), the Lease
      Assignment was amended to include that portion of the first level of the
      Premises not previously occupied by Tenant as well as the second level,
      for a total occupied area of 53,012 square feet.

D.    By means of a certain RENEWAL EXERCISE NOTICE dated February 25, 2000,
      the Tenant exercised its option to extend the lease for an additional
      term.

E.    The Landlord and Tenant desire to renew said lease, under the modified
      terms described below.

MODIFIED TERMS
--------------

A.    Term.  The Lease Renewal will commence August 17, 2000 and terminated
      December 31, 2001.
B.    Rent.  The Rent will be set at $1.85 per square foot NNN plus the
      Additional Rent.
C.    Premises area.  The area occupied by ONI shall be 53,012 square feet
      which is the area measured to the outside of the outer walls as per BOMA
      standards and adopted by the AIA.
D.    New Lease. The Landlord and Tenant will negotiate a new lease commencing
      January 1, 2002, with all the terms and conditions to remain the same,
      except the rent will be 95% of Fair Market Rent.

LANDLORD:                                       TENANT:

Clinker Revocable Trust of October 9, 1990      Optical Networks, Incorporated

By: /s/ William H. Cilker                       By: /s/ Chris Davis
    ---------------------                           ---------------

Printed: William H. Cilker                      Printed: Chris Davis
         -----------------                               -----------

Its: Trustee                                    Its: CFO
     -------                                         ---

Date: July 10, 2000                             Date: July 6, 2000<PAGE>

                                                                   EXHIBIT 10.15

STATE OF NORTH CAROLINA
                                                                 LEASE AGREEMENT
                                                                 ---------------
COUNTY OF DURHAM

     THIS LEASE AGREEMENT (the "Lease") made and entered into as of the 7th
day of December, 2000, by and between PETULA ASSOCIATES, LTD., an Iowa
corporation, hereinafter called "Landlord"; and ONI SYSTEMS, INC., a Delaware
corporation, hereinafter called "Tenant":

                             W I T N E S S E T H:
                             - - - - - - - - - -

     In consideration of the mutual covenants and agreements contained herein,
the parties hereto agree for themselves, their successors and assigns, as
follows:

     1.   BASIC LEASE TERMS.
          -----------------

     The following terms shall have the following meanings in this Lease:

     (a)  Premises: 27,062 rentable square feet on the third (3rd) floor of the
          --------
     Building and 26,978 rentable square feet on the fourth (4th) floor of the
     Building, totaling 54,040 rentable square feet, as more particularly
     described on the floor plan attached hereto as Exhibit "A".
                                                    -----------

     (b)  Building: Nottingham Hall, located at 4505 Emperor Boulevard, Durham,
          --------
     North Carolina in the Business Park.

     (c)  Business Park:  Imperial Center Business Park in Durham, North
          -------------
     Carolina.

     (d)  Common Areas:  All areas of the Building or the Business Park
          ------------
     available for the common use or benefit of all tenants primarily or to the
     public generally, including without limitation, parking areas, driveways,
     sidewalks, loading docks, the lobby, corridors, elevators, stairwells,
     entrances, public restrooms, mechanical rooms, janitorial closets,
     telephone rooms, mail rooms, electrical rooms, and other similar areas of
     the Building providing for building systems, and any other common
     facilities furnished by Landlord from time to time.

     (e)  Commencement Date: April 1, 2001 (subject to adjustment pursuant to
          -----------------
     Section 3 of this Lease).

     (f)  Term; Expiration Date:  The "Term" of this Lease shall be five (5)
          ---------------------
     years, subject to Tenant's right to extend the term in accordance with
     Exhibit E attached hereto, commencing as of the Commencement Date and
     ---------
     expiring at midnight on the date immediately preceding the fifth (5th)
     anniversary of the Commencement Date or the Adjustment Date, as the case
     may be  (the "Expiration Date").

     (g)  Minimum Rental:
          --------------

<TABLE>
<CAPTION>
          -----------------------------------------------------------------------------------
          Lease Year                Rental Rate (Per       Monthly             Per Annum
                                  Rentable Square Foot)
          -----------------------------------------------------------------------------------
          <S>                     <C>                      <C>                 <C>
          1                        $20.00                   $ 90,066.67         $1,080,800.04
          -----------------------------------------------------------------------------------
          2                        $20.60                   $ 92,768.67         $1,113,224.04
          -----------------------------------------------------------------------------------
          3                        $21.22                   $ 95,560.73         $1,146,728.76
          -----------------------------------------------------------------------------------
          4                        $21.86                   $ 98,442.87         $1,181,314.44
          -----------------------------------------------------------------------------------
          5                        $22.52                   $101,415.07         $1,216,980.84
          -----------------------------------------------------------------------------------
</TABLE>

     (h)  Operating Expense Stop: Five and 15/100 Dollars ($5.15) per rentable
         ----------------------
     square foot.
<PAGE>

     (i)  Tenant's Proportionate Share:  A fraction, the numerator of which
          ----------------------------
     shall be the number of rentable square feet within the Premises and the
     denominator of which shall be the number of rentable square feet within the
     Building, currently estimated to be 51.32% (54,040105,297).

     (j)  [Intentionally Deleted].

     (k)  Notice Addresses:
          ----------------

               Landlord:            Petula Associates, Ltd.
                                    c/o Tri Properties, Inc.
                                    4309 Emperor Boulevard, Suite 110
                                    Durham, North Carolina 27703

               Tenant:              ONI Systems, Inc.
                                    166 Baypointe Parkway
                                    San Jose, CA 95134
                                    Attention: Director of Real Estate &

               Facilities

               copy to:             ONI Systems, Inc.
                                    166 Baypointe Parkway
                                    San Jose, CA 95134
                                    Attention: Real Estate Legal Counsel

     (l)  Security Deposit:  Ninety Thousand Sixty-Six and No/100
          ----------------
     Dollars ($90,066.00)

     (m)  Broker(s):  Tri Properties, Inc. and The Staubach Company.
          ---------

     (n)  Guarantor:  None.
          ---------

     (o)  Parking.   Tenant shall have the non-exclusive right to use, without
          -------
separate charge, 4.5 unreserved parking spaces per 1,000 rentable square feet of
the Premises in the surface parking areas adjacent to the Building which
constitutes a portion of the Common Areas. If Landlord elects to designate any
parking area as being reserved, Tenant will be entitled to its proportionate
share of such reserved parking area.

     2.   DESCRIPTION OF PREMISES.
          -----------------------

     Landlord hereby leases to Tenant, and Tenant hereby accepts and rents from
Landlord, the Premises within the Building located in the Business Park;
together with the nonexclusive right to use the Common Areas. The useable area
of the Premises shall be determined in accordance with the standards set forth
in ANSI Z65.1-1996, as promulgated by the Building Owners and Managers
Association ("BOMA Standard").  The rentable area of the Premises shall be
determined by multiplying the useable area of the Premises by a "core factor"
equal to 7.74% with respect to the third floor of the Building and 7.72% with
respect to the fourth floor of the Building.  Landlord and Tenant hereby agree
that for purposes of this Lease, the rentable square footage of the Premises
initially shall be as set forth in Section 1(a) herein. Landlord or Tenant may,
within sixty (60) days after the Commencement Date, have its architect or
engineer measure the actual useable square footage of the Premises and
corresponding rentable area of the Premises, taking into account the applicable
core factor.  In the event the Premises shall contain an amount of square
footage different than the amount of square feet referenced in Section 1(a)
above, the Premises shall be redefined to reflect the actual rentable square
footage and the Annual Rental (as hereinafter defined) shall be proportionately
adjusted based on the recalculated rentable square footage (and such adjustment
shall relate back to the Commencement Date if there is a variance).  The
reasonable cost of such measurement shall be borne by the party conducting such
remeasurement.  Any dispute with respect to the actual square footage within the
Premises which cannot be resolved by the parties using good faith, reasonable
efforts, shall be resolved by an independent third party architect mutually
acceptable to Landlord and Tenant, whose final measurement of the rentable
square

                                       2
<PAGE>

footage within the Premises shall be binding on the parties hereto.  The cost of
the remeasurement of the Premises by said independent architect shall be shared
equally by Landlord and Tenant. Notwithstanding the foregoing, in no event shall
Landlord have any obligation to adjust the square footage of the Premises unless
the Tenant's remeasurement of the rentable square footage of the Premises
evidences an error in excess of two percent (2%) of the amount of square feet
referenced in Section 1(a) above.

     3.   TERM; COMMENCEMENT DATE; DELIVERY OF PREMISES.
          ---------------------------------------------

     (a)  Term.  Unless otherwise adjusted as hereinbelow provided, the Term
          ----
shall commence on the Commencement Date and expire on the Expiration Date. In
the event the Commencement Date is a day other than the first day of a calendar
month, the Term shall be extended and shall expire on that date which is five
(5) full years from the first day of the first full calendar month immediately
following the Commencement Date (the "Adjustment Date").  As used herein, the
term "Lease Year" shall mean each consecutive twelve-month period of the Term,
beginning with the Commencement Date (as same may be adjusted as hereinbelow
provided) or any anniversary thereof; provided, however, in the event the
Commencement Date is a day other than the first day of a calendar month, the
first Lease Year shall be that period commencing on the Commencement Date and
continuing until the first anniversary of the Adjustment Date and each
succeeding Lease Year shall be a twelve-month period beginning with each
subsequent anniversary of the Adjustment Date.

     (b)  Commencement Date.  Notwithstanding anything contained herein to the
          -----------------
contrary, the Commencement Date shall be deemed to be the earlier of: (a) the
date Tenant, or any person occupying any portion of the Premises with Tenant's
permission, commences business operations from the Premises, or (b) the first
(1st) business day following the date of Landlord's delivery of the Premises to
Tenant upfitted in accordance with the Plans (as hereinafter defined) or the
date upon which Landlord would have delivered the Premises to Tenant upfitted in
accordance with the Plans but for Tenant Delays (as hereinafter defined).
Landlord shall act in good faith and use diligent efforts to (i) commence the
Tenant Improvements (as hereinafter defined) as soon as reasonably practical
under the circumstances following the completion of the Plans), and (ii) deliver
exclusive possession of the Premises to Tenant with Landlord's Work and the
Tenant Improvements all Substantially Completed in accordance with the Plans to
Tenant on or before that date (the "Target Date") which is twelve (12) full
weeks following the issuance of a building permit by the applicable governmental
authority for the Tenant Improvements (Landlord agreeing to use diligent efforts
to obtain a building permit).  Prior to Tenant's occupancy of the Premises, the
parties shall agree on certain "punchlist" items to be completed after Tenant's
occupancy, and Landlord agrees to complete such punchlist items promptly after
occupancy but in no event more than sixty (60) days after the date Tenant takes
possession of the Premises except for delays beyond Landlord's reasonable
control.

     (c)  Delivery of Premises.  Landlord has completed the construction of the
          --------------------
building shell and the "Landlord's Work" as more particularly described in
Exhibit "C" attached hereto (hereinafter referred to as the "Landlord's Work").
-----------
Landlord shall supervise the design, construction and installation of the
initial improvements in the Premises (the "Tenant Improvements") in accordance
with the Plans and the following terms and conditions.  Landlord's engineer
and/or architect shall, at Tenant's sole cost and expense (as part of the Tenant
Improvement Allowance (as hereinafter defined)), prepare the plans for the
design, construction and installation of the Tenant Improvements (the "Plans")
which shall be materially consistent with the preliminary space plans prepared
by Tenant and approved by Landlord, such preliminary space plans to be delivered
by Tenant to Landlord by November 13, 2000.  Tenant will advise Landlord within
ten (10) business days after Tenant's receipt of the Plans of Tenant's approval
or disapproval thereof. If Tenant disapproves any of the Plans, Landlord will
deliver, or cause its architect to deliver to Tenant, revised Plans
incorporating Tenant's proposed revisions to the extent such revisions are
reasonably acceptable to Landlord. If the revised Plans are still unacceptable
to Tenant, Landlord will make further changes incorporating Tenant's proposed
revisions to the extent such additional revisions are reasonably acceptable to
Landlord, until the Plans have been approved by Tenant and are suitable for
bidding and construction. Tenant shall approve or disapprove in whole or in part
all revised Plans received from Landlord within five (5) business days following
receipt thereof from Landlord. This iterative process (the "Approval Process")
will continue, with each side having five (5) business days to respond (except
as otherwise provided above regarding Tenant's initial review of the Plans),
until the parties agree upon mutually acceptable Plans. The final Plans, as
reviewed and approved by Landlord and Tenant, such approval not to be
unreasonably withheld, shall be attached

                                       3
<PAGE>

hereto as Exhibit "C-1."  If Landlord shall be unavoidably delayed Substantially
          ------------
Completing the Tenant Improvements as a result of any act, neglect, failure or
omission of Tenant, its employees or agents, including any of the following,
such delay shall be deemed a "Tenant Delay": (1) Tenant's failure to timely
furnish to Landlord the preliminary space plans; (2) Tenant's delay in timely
submitting or approving any other drawings, plans or specifications; (3)
Tenant's failure to provide, or delay in providing, Landlord with any other
information reasonably requested by Landlord for the purpose of completing the
Plans or the ordering of materials or the letting of bids for the Tenant
Improvements; (4) any change orders by Tenant (to the extent such change is
approved by Landlord) in the Plans or in any other plan, specification or finish
information furnished by Tenant, after Landlord has approved the same; (5) delay
in the completion of work by any person (other than Landlord or the Contractor),
or any sub-contractor or design or engineering consultant retained by either of
them, including Landlord' architect preparing the Plans) performing work for
Tenant; or (6) Long Lead Items (hereinafter defined). In any such event, such
Tenant Delay shall not postpone or defer the Commencement Date, or Tenant's
obligation to pay Rent as of the Commencement Date, but the Commencement Date
shall occur on the day when it would otherwise have occurred if such Tenant
Delay had not occurred, and the Target Date shall be extended for a period of
time equal to the number of days of such Tenant Delay. In addition, Tenant shall
pay to Landlord, and shall indemnify and hold Landlord harmless from and
against, all actual and direct costs, expenses, damages and claims incurred by
Landlord resulting from any Tenant Delay, including without limitation any delay
damages which become due to the contractor under the contract for the
construction of the Tenant Improvements (the "TI Construction Contract");
provided, however, in no event shall Tenant be liable for any indirect or
consequential damages suffered by Landlord as a result of any Tenant Delay. Any
costs payable by Tenant to Landlord hereunder shall be deemed to be Additional
Rent under the Lease. In order to claim that a delay constitutes a Tenant Delay,
Landlord must notify Tenant of the cause of the delay within five (5) business
days following the commencement of the delay. If such notice is not delivered
within said five (5) business day period, the days between the expiration of
said five day period and the delivery of the notice shall not count toward the
Tenant Delay.

     Promptly following approval of the Plans, Landlord shall use diligent
efforts to obtain a building permit from the applicable governmental authority.
Tenant acknowledges and agrees that Clancy & Theys shall serve as Landlord's
general contractor for purposes of constructing Landlord's Work and the Tenant
Improvement.  With respect to any subcontractors' work in excess of $5,000.00,
Landlord shall obtain estimates for the cost of such work from at least two (2)
subcontractors.  A contract for the construction of such improvements shall be
issued to the subcontractor which submits the lowest qualified bid; provided,
however, and notwithstanding anything contained herein to the contrary, the
Landlord may elect to contract for the construction of such improvements with a
subcontractor other than the subcontractor which submits the lowest bid if:  (i)
Landlord pays the difference between the cost of the selected subcontractor and
the lowest qualified bid, or (ii) Landlord provides a commercially reasonable
explanation for not selecting the subcontractor with the lowest qualified bid.
Notwithstanding anything contained herein to the contrary, the foregoing
provisions relative to competitive bidding shall not apply to any mechanical,
plumbing or electrical contract for improvements to the Premises and Tenant
agrees that the base building contractors will serve as the mechanical, plumbing
and electrical subcontractors.

     Upon completion of the Tenant Improvements, Landlord shall assign to
Tenant, to the extent assignable at no material cost to Landlord, all warranties
applicable to the construction of the Tenant Improvements to the extent Tenant
is responsible for the repair or replacement of such items.

     Landlord shall deliver the Premises to Tenant upon Substantial Completion
of the Tenant Improvements in accordance with the Plans and applicable laws and
in a good and workmanlike manner, such Substantial Completion to be certified by
Landlord's engineer or architect inspecting the work and applying accepted
industry standards.  "Substantial Completion" (as well as "Substantially
Completed and other like phrases) shall require the completion of all items of
work that cannot be completed while Tenant is in possession of the Premises
without materially inconveniencing Tenant, and the issuance of a Certificate of
Occupancy or such equivalent authorization as is required for lawful occupancy
of the entire Premises.  If Landlord for any reason whatsoever cannot deliver
possession of the Premises to Tenant in accordance with the terms hereof on or
before the Target Date, this Lease shall not be void or voidable nor shall
Landlord be liable to Tenant for any loss or damages resulting therefrom (other
than as hereinbelow provided); but in that event, except to the extent that any
such delay is attributable to Tenant Delay, the Commencement Date shall be
adjusted to be the date when Landlord does in fact deliver possession of the
Premises to Tenant in accordance with the terms hereof.  In no event shall
Landlord's completion of the Tenant Improvements be dependent upon, or the
Commencement Date delayed because of, the installation of

                                       4
<PAGE>

any special equipment or improvements to the Premises to be supplied and
installed by Tenant. In the event that any particular item or items of Tenant
Improvements (i) is unique to Tenant's operations within the Building, or (ii)
is not readily available in reasonable quantities in, or for delivery to, the
Raleigh/Durham market or requires a long term lead time to procure, obtain or
install, Landlord's contractor shall notify Tenant or Landlord (who will notify
Tenant) of this fact promptly after ascertaining same. In the event a comparable
replacement item is readily available as a substitute for the items described
above, and Tenant refuses to accept such substitution after receipt of such
notice, such unique or unavailable item(s) shall be deemed "Long Lead Items." If
Landlord has Substantially Completed all of the Tenant Improvements, except for
Tenant Improvements which constitute Long Lead Items, then the Tenant
Improvements shall be deemed to be Substantially Completed and the Commencement
Date shall not be delayed. After the installation or delivery of such Long Lead
Items, as the case may be, Landlord shall proceed with due diligence to install
such materials and to complete all other portions of the Tenant Improvements
that could not be completed until after the installation of such Long Lead
Items. Notwithstanding the foregoing, Landlord shall use reasonable efforts to
provide Tenant and Tenant's licensed contractors with access to the Premises at
least thirty (30) days prior to Landlord's anticipated delivery date, provided
(i) Tenant has obtained all insurance required hereunder to be maintained by
Tenant, (ii) such early access by Tenant and its contractors does not in any way
interfere with Landlord's completion of the Tenant Improvements, and (iii)
Tenant's access to the Premise is coordinated in advance with Landlord's
contractor. Notwithstanding anything contained herein to the contrary, in the
event Landlord is unable to deliver possession of the Premises to Tenant as
required under this Lease due to delays within the control of Landlord (and
expressly excluding any failure to deliver the Premises in a timely manner due
to force majeure delays and Tenant Delays) on or before the date which is forty-
five (45) days following the Target Date (the "Outside Delivery Date"), Tenant
shall receive one (1) day free of Minimum Rental for each 24 hours beyond the
Outside Delivery Date that such delivery of Premises has not been made. In the
event Landlord is unable to deliver possession of the Premises to Tenant as
required under this Lease on or before the date which is one hundred twenty
(120) following the Outside Delivery Date, subject to Tenant Delays (the
"Termination Date"), Tenant may elect to terminate this Lease upon five (5) days
advance written notice to Landlord provided such election to terminate is made
within thirty (30) days after the Termination Date.

     Landlord shall contribute up to a maximum of Twenty and No/100 Dollars
($20.00) per rentable square foot of the Premises (the "Tenant Improvement
Allowance") toward only the following costs: (i) any cost of installing the
Tenant Improvements on an "as completed" basis which is performed in accordance
with the Plans (including any change orders approved by Landlord) and related to
the work to be done for the purpose of preparing the Premises for Tenant's
occupancy and use, (ii) the cost of preparing the Plans, (iii) design costs for
architectural, mechanical, plumbing and electrical design, (iv) construction
documents and permits, and (v) a construction management fee equal to four
percent (4%) of the total hard cost of constructing the Tenant Improvements to
the extent such hard costs exceed the Tenant Improvement Allowance; provided,
however, in no event shall the Tenant Improvement Allowance be used for any
costs associated with Tenant's personal property, equipment, trade fixtures or
other items of a non-permanent nature installed in the Premises, including
without limitation, telephone and data cable lines.  Notwithstanding the
foregoing, in no event shall the portion of the Tenant Improvement Allowance
allocable to items (ii), (iii) and (iv) above (collectively, the "Soft Costs")
exceed Three and No/100 Dollars ($3.00) per rentable square foot of the
Premises.  The "hard" construction costs refer to those costs not designated
above as Soft Costs.

     In the event that either prior to the commencement of the installation of
the Tenant Improvements or at any time during or following the installation of
the Tenant Improvements, the cost of the Tenant Improvements exceeds the Tenant
Improvement Allowance or Tenant requests any change to the aforementioned Plans
which has resulted or might result in an increase in the cost of the
installation of such Tenant Improvements so that the cost exceeds the Tenant
Improvement Allowance (the "Excess Costs"), then Tenant shall either: (i) obtain
a letter of credit (in addition to the Letter of Credit required in Section
34(h) herein but otherwise in conformance with the requirements thereof) in
favor of Landlord in the amount of the Excess Costs (the "Additional Letter of
Credit"), or (ii) promptly increase the amount of the Letter of Credit (as
described in Section 34(h) herein) by the amount of the Excess Cost and provide
Landlord with evidence of such increase (together with reasonably detailed
supporting documentation evidencing such Excess Costs).  Upon completion of the
Tenant Improvements, the payment in full of all Excess Costs and Landlord's
receipt of all appropriate lien waivers evidencing the payment of such costs,
Tenant may either cancel the Additional Letter of Credit or reduce the amount of
the Letter of Credit to the amount required  by Section 34(h) herein, as
appropriate.  Notwithstanding the foregoing, any change order(s) requested by
Tenant which will result in an increase in the cost of the construction and
installation of the Tenant Improvements shall be

                                       5
<PAGE>

agreed to in advance by Landlord and Tenant, and Tenant shall be obligated to
pay Landlord an additional construction management fee relative to such change
order(s) equal to four percent (4%) of any increase in the hard cost of the
construction or installation of the Tenant Improvements. Any savings or unused
portion of the Tenant Improvement Allowance (after payment of any additional
soft costs as hereinabove described) shall be retained by Landlord.

     4.   RENTAL.
          ------

     During the Term, Tenant shall pay to Landlord, in care of Landlord's agent,
Tri Properties, Inc. at the notice address set forth in Section 1(k) herein,
without notice, demand, reduction (except as may be applicable pursuant to the
paragraphs of this Lease entitled "Damage or Destruction of Premises" and
"Eminent Domain"), setoff or any defense, a total rental (the "Annual Rental")
consisting of the sum total of the following:

     (a)  Minimum Rental.
          --------------

     Beginning with the Commencement Date and continuing through the Expiration
Date or earlier termination of this Lease, Tenant shall pay Minimum Rental in
accordance with the schedule set forth in Section 1(g) in equal monthly
installments each in advance on or before the first day of each month.  If the
Commencement Date is a date other than the first day of a calendar month, the
Minimum Rental shall be prorated daily from such date to the first day of the
next calendar month and paid on or before the Commencement Date.

     (b)  Additional Rental. [Intentionally Deleted]
          -----------------

     (c)  Operating and Maintenance Expenses.
          ----------------------------------

     Tenant shall pay Tenant's Proportionate Share (as set forth in Section
1(i)) of the reasonable costs and expenses paid or incurred by Landlord each
calendar year in the operation, repair and maintenance of the Building, the
Common Areas and the Business Park (the "Operating Expenses") to the extent such
costs exceed the Operating Expense Stop set forth in Section 1(h).  For purposes
hereof, Operating Expenses shall include without limitation, all: (i) ad valorem
taxes (or any tax hereafter imposed in lieu thereof) levied on the Premises, the
Building, the Common Areas or any improvements thereon, (ii) insurance premiums
and reasonable policy deductibles paid with respect to the Building, including
fire and extended coverage insurance and liability insurance, (iii) Landlord's
personal property taxes applicable to the Building or the Premises, (iv) any
reasonable fees or costs incurred in connection with protesting any tax
assessment, (v) Standard Building Services (as hereinafter defined) including
utilities, heat and air conditioning, standard janitorial service and window
cleaning, (vi) building management (including reasonable management fees), (vii)
the cost of grass mowing, shrub care and general landscaping, irrigation
systems, maintenance and repair to parking and loading areas, driveways,
sidewalks, exterior lighting, garbage collection and disposal, water and sewer,
plumbing, signs and other facilities serving or benefiting the Premises or the
Building, (viii) the cost of all services rendered by third parties with respect
to the Building and all costs paid or incurred by Landlord in providing any of
the services to be provided by Landlord pursuant to the terms of this Lease;
(ix) costs of all capital improvements, repairs or equipment to the Building
which are either required under any governmental law or regulation which was not
applicable to the Building as of the Commencement Date or which reduce Operating
Expenses; provided that the cost of any such capital improvements, repairs or
equipment shall be amortized on a straight line basis over a reasonable period
of time (as determined in accordance with generally accepted accounting
principles as reasonably interpreted by Landlord) and in the case of capital
improvements to achieve savings in Operating Expenses, the amortized amount will
not exceed the anticipated savings in Operating Expenses, and (x) Common Area
operating and maintenance costs, and (xi) the Building's proportionate share of
the reasonable costs and expenses paid or incurred by Landlord in the operation,
repair and maintenance of the Business Park.  Landlord shall use good faith
efforts to keep the Operating Expenses in line with costs for other similarly
situated and constructed first-class buildings in the Raleigh/Durham market,
taking into account rent and other relevant factors.

The term Operating Expenses shall not include the following:  (1) repairs,
restoration or other work occasioned by fire, wind, the elements or other
casualty, except to the extent of reasonable deductible amounts under insurance
policies maintained by Landlord; (2) income and franchise taxes of Landlord; (3)
expenses incurred in leasing to or procuring of tenants, leasing commissions,
advertising expenses and expenses for the renovating of space leased to

                                       6
<PAGE>

tenants; (4) interest or principal payments on any mortgage or other
indebtedness of Landlord; (5) operating expenses that are the individual
responsibility of Tenant or of other tenants; (6) cost of any item for which
Landlord is entitled to receive or receives reimbursement (other than by virtue
of a tenant paying its pro rata share of Operating Expenses) by way of insurance
proceeds, condemnation awards, warranty payments, or otherwise; (7) cost of
correcting any defects in the original design or construction of the Building;
(8) cost of any work performed for or service provided to any tenant which is in
excess of the work available to Tenant under this Lease; (9) costs of
installing, operating or maintaining any specialty service that is not provided
to Tenant at no charge, such as a dry cleaning facility, sundry shop, newsstand,
car wash facility or the like; (10) legal expenses, accounting expenses or other
professional fees arising out of any matter whatsoever other than directly in
connection with the Operating Expenses; (11) capital expenses of any kind
whatsoever except as expressly permitted above; (12) costs paid to any
affiliates or other parties related to Landlord for services or materials to the
extent such costs are in excess of the amount that would be paid to an unrelated
third party at market prices for such materials or services; (13) any amounts
payable by Landlord as a result of Landlord's failure to perform its obligations
on a timely basis including fines, penalties, late fees and overtime expenses;
(14) rent or any other payments due pursuant to a ground or underlying lease;
(15) cost of removal, abatement or treatment of asbestos or any other Hazardous
Substances (as hereinafter defined) on or from the Business Park or in or from
the Building; (16) repairs, construction or any other costs necessary to remedy
violations of laws in effect as of the date of this Lease and requiring
compliance at any time during the Term of the Lease; (17) costs necessary to
bring the Building or any other portion of the Business Park into compliance
with the requirements of ADA, as such requirements exist on the date of this
Lease and as such requirements should be reasonably interpreted by Landlord
based upon currently existing case law and regulations; (18) any wages and
fringe benefits payable to any employees above the level of building manager and
any wages and fringe benefits paid to any employee whose time is split between
the operation of the Building and other buildings in excess of the proportionate
share of such wages and fringe benefits appropriate for the time spent in
connection with operating the Project; (19) any indirect costs or overhead of
Landlord or the managing agent of Landlord in excess of the management fee and
rent and other costs of operating the Building's management office specifically
includable in Operating Expenses pursuant to the foregoing provisions; (20) any
rent payable with respect to the Building's management office which is computed
at rental rates in excess of fair market rents or payable with respect to space
in excess of a reasonably sized management office taking into account the needs
of the Building; (21) any insurance premiums paid by Landlord in excess of
commercially reasonable amounts applicable to first class office buildings in
the Raleigh/Durham market which are similar to the Building; and (22) rental
payment for any Building equipment to the extent such expenses would be deemed
capital expenses if the equipment in question were purchased rather than leased;
provided, however, in the event Landlord leases equipment, the cost of which
constitutes both an operating expense and a capital expense (i.e. parking lot
lights with related electricity illuminating said parking areas and combined
electrical/HVAC packages), Landlord shall, in its sole discretion, make a
reasonable allocation of such costs between Operating Expenses and capital
expenses, and Tenant shall be responsible for its proportionate share of such
Operating Expenses as determined by Landlord; provided, further, Landlord shall
be entitled to include such capital leasing expenses within Operating Expenses
to the extent such capital items are required under any governmental law or
regulation which was not applicable to the Building as of the Commencement Date
or which otherwise reduce Operating Expenses.

     Notwithstanding the foregoing, if in any year the Building is less than one
hundred percent (100%) occupied, the variable portion of Operating Expenses
shall be adjusted to reflect the level of such Operating Expenses which would
reasonably be expected to be incurred by Landlord if the Building was one
hundred percent (100%) occupied.  Notwithstanding the foregoing, in no event
shall the adjustments in Operating Expenses as hereinabove described result in a
profit to Landlord.

     Tenant may audit Landlord's records and all information pertaining to
Operating Expenses in order to verify the accuracy of Landlord's determination
of the Tenant Contribution provided that:

     (i)    Tenant must give notice to Landlord of its election to undertake
said audit within one hundred fifty (150) days after receipt of the statement of
the actual amount of Tenant's Contribution for the preceding calendar year from
Landlord;

     (ii)   Such audit will be conducted only during regular business hours at
the office where Landlord maintains records of Operating Expenses and only after
Tenant gives Landlord fourteen (14) days' advance written notice;

                                       7
<PAGE>

     (iii)  Tenant shall deliver to Landlord a copy of the results of such audit
within fifteen (15) days of its receipt by Tenant and Landlord shall deliver to
Tenant within fifteen (15) days after receipt of written notice from Tenant
requesting such information, a copy of any audit prepared by Landlord or another
tenant which results in any adjustment to Operating Expenses.  No such audit
shall be conducted by Tenant if any other tenant of the Building has conducted
an independent audit for the time period Tenant intends to audit and Landlord
furnishes to Tenant a copy of such audit as long as such audit was conducted by
an independent auditor reasonably satisfactory to Tenant;

     (iv)   No audit shall be conducted at any time that Tenant is in monetary
default of any of the terms of this Lease or at any time that a non-monetary
Event of Default exists;

     (v)    No subtenant shall have any right to conduct an audit and no
assignee (other than a Tenant Affiliate) shall conduct an audit for any period
during which such assignee was not in possession of the Premises;

     (vi)   Such audit review by Tenant shall not postpone or alter the
liability and obligation of Tenant to pay any amounts due under the terms of
this Lease pending resolution of any contest arising from the audit; and

     (vii)  Such audit shall be conducted by an independent, licensed accountant
who is not compensated on a contingency fee basis.

     Within thirty (30) days after Tenant's receipt of such audit, Tenant must
give notice to Landlord of any disputed amounts and identify all items being
contested in Landlord's statement of the Tenant Contribution.  If Landlord and
Tenant cannot agree upon any such item as to which Tenant shall have given such
notice, the dispute shall be resolved by an audit by a major accounting firm
mutually acceptable to Landlord and Tenant and the cost of said audit shall be
paid by the non-prevailing party; provided however, Tenant will not be
considered the "prevailing party" for purposes of this paragraph unless the
accounting firm's audit reveals an overcharge by Landlord in excess of five
percent (5%) of the Tenant Contribution for the particular calendar year in
question.

     Any adjustment required as a result of any audit shall be made by
adjustment to the Tenant Contribution so that said adjustment is fully made (or
recovered) in equal installments over the twelve (12) month period immediately
following the final resolution of said audit.

     (d)  Payment of Operating Expenses.
          -----------------------------

     Tenant shall pay to Landlord in advance each month, along with Tenant's
installments of Minimum Rental (and Additional Rental, if applicable) an amount
(the "Tenant Contribution") equal to one-twelfth (1/12) of Tenant's
Proportionate Share of the Operating Expenses as hereinabove described for any
calendar year (including any applicable partial calendar year) to the extent
such costs exceed the Operating Expense Stop, as estimated by Landlord (in its
reasonable discretion).  Landlord will make reasonable efforts to provide Tenant
with Landlord's estimate of Tenant's Contribution for the upcoming calendar year
on or before December 15 of each calendar year during the Term hereof.  Not more
than once during any calendar year, Landlord may in good faith revise Tenant's
Proportionate Share of the Tenant Expenses and upon Tenant's receipt of a
revised statement, Tenant shall pay Operating Expenses on the basis of such
statement.  If Landlord fails to notify Tenant of the revised amount of Tenant's
Contribution by such date, Tenant shall continue to pay the monthly installments
of Tenant's Contribution, if any, last payable by Tenant until notified by
Landlord of such new estimated amount.  No later than May l of each calendar
year of the Term, Landlord shall deliver to Tenant a written statement setting
forth the actual amount of Tenant's Contribution for the preceding calendar
year.  Tenant shall pay the total amount of any balance due shown on such
statement within thirty (30) days after its delivery.  In the event such annual
costs decrease for any such year or are less than the estimated amount
theretofore collected by Landlord, Landlord shall reimburse Tenant within thirty
(30) days for any overage paid and the monthly rental installments for the next
period shall be reduced accordingly, but not below the Minimum Rental.  For the
calendar year in which this Lease commences, Tenant's Contribution shall be
prorated from the Commencement Date through December 31 of such year.  Further,
Tenant shall be responsible for the payment of Tenant's Contribution for the
calendar year in which this Lease expires, prorated from January 1 thereof
through the Expiration Date. Upon the Expiration Date, Landlord may require
Tenant to pay any unpaid estimated amount within thirty (30) days after the
Expiration Date, which estimate shall be made by Landlord based upon actual and
estimated costs for such year until the exact amount payable by Tenant is

                                       8
<PAGE>

determinable, at which time Tenant shall promptly pay to Landlord any
deficiencies or Landlord shall return any excess payment to Tenant.

     (e)  Documentary Tax.
          ---------------

     In the event that any documentary stamp tax, sales tax or any other tax or
similar charge (exclusive of any income tax payable by Landlord as a result
hereof) becomes applicable to the rental, leasing or letting of the Premises,
whether local, state or federal, and is required to be paid due to the execution
hereof or otherwise with respect to this Lease or the payments due hereunder,
the cost thereof shall be borne by Tenant and shall be paid promptly and prior
to same becoming past due.  Tenant shall provide Landlord with copies of all
paid receipts respecting such tax or charge promptly after payment of same.

     (f)  Late Payment.
          ------------

     If any monthly installment of Minimum Rental, Additional Rental (if any) or
any other sum due and payable pursuant to this Lease remains due and unpaid five
(5) business days after said amount becomes due, Tenant shall pay as additional
rent hereunder a late payment charge equal to the greater of (i) Five Hundred
and No/100 Dollars ($500.00) or (ii) five percent (5.0%) of the unpaid rent or
other payment.  Notwithstanding the foregoing, once every Lease Year Landlord
shall provide Tenant with notice of delinquency and a three (3) business day
cure period before any such late charge is assessed.  All unpaid rent and other
sums of whatever nature owed by Tenant to Landlord under this Lease shall bear
interest from the tenth (10th) day after the due date thereof until paid at the
lesser of two percent (2%) per annum above the "prime rate" as published in The
                                                                            ---
Wall Street Journal from time to time (the "Prime Rate") or the maximum interest
-------------------
rate per annum allowed by law.  Acceptance by Landlord of any payment from
Tenant hereunder in an amount less than that which is currently due shall in no
way affect Landlord's rights under this Lease and shall in no way constitute an
accord and satisfaction.

     5.   ALTERATIONS AND IMPROVEMENTS BY TENANT.
          --------------------------------------

     Tenant shall make no structural changes to the Premises or the Building (or
to the mechanical or building systems of the Building) and shall make no changes
of any kind respecting the Premises or the Building which are visible from the
exterior of the Premises without Landlord's prior written consent, to be granted
or withheld in Landlord's sole discretion.  Any other nonstructural changes or
other alterations, additions, or improvements to the Premises, except for
cosmetic, non-structural alterations, such as painting, carpeting and
wallpapering, costing less than $55,000.00 per alteration or series of related
alterations, which shall require advance written notice to Landlord (but shall
not require Landlord's prior consent), shall be made by or on behalf of Tenant
only with the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed.  All alterations, additions or improvements,
including without limitation all partitions, walls, railings, carpeting, floor
and wall coverings and other fixtures (excluding, however, Tenant's trade
fixtures as described in the paragraph entitled "Trade Fixtures and Equipment"
below) made by, for, or at the direction of Tenant shall, when made, become the
property of Landlord, at Landlord's sole election and shall, unless otherwise
specified by Landlord at the time Landlord gives its consent thereto, remain
upon the Premises at the expiration or earlier termination of this Lease.

     Notwithstanding anything contained herein to the contrary, all alterations
and improvements undertaken by Tenant shall be consistent with the then-existing
quality and color scheme (where appropriate), of the balance of the Building
and, in any event, Landlord may withhold its consent to any proposed alteration
or improvement by Tenant unless Tenant agrees to remove said improvement at the
end of the Term and/or restore the Premises to the condition in which it existed
prior to the undertaking of the proposed alteration or improvement.  Further,
all alterations and improvements to the Premises, other than the Tenant
Improvements (which shall be governed by the terms of Section 3(c) herein),
whether undertaken by Tenant or Landlord shall be subject to a fee (the
"Construction Management Fee").  Landlord agrees to provide all such services as
are customary and appropriate for a construction manager and Tenant agrees to
pay Landlord the Construction Management Fee as follows:

          (a)  Five percent (5%) of the total cost of planning and constructing
any alterations and improvements if such construction costs exceed Ten Thousand
and No/100 Dollars ($10,000.00); and

                                       9
<PAGE>

          (b)  Ten percent (10%) of the total cost of planning and constructing
any alterations and improvements if such construction costs are less than Ten
Thousand and No/100 Dollars ($10,000.00).

          Except as otherwise provided herein, Tenant agrees to pay Landlord the
Construction Management Fee within thirty (30) days after receipt of Landlord's
invoice therefor.  If Landlord does not provide construction management services
there shall be no Construction Management Fee and Tenant will only be
responsible for reimbursing Landlord for reasonable out-of-pocket costs incurred
by Landlord in connection with Landlord's construction manager's review of
Tenant's plans for alterations and improvements.

     6.   USE OF PREMISES.
          ---------------

     (a)  Tenant shall use the Premises only for general office purposes (which
may include research and development and customer training and support) and for
no other purposes.  Tenant shall comply with all laws, ordinances, orders,
regulations or zoning classifications of any lawful governmental authority,
agency or other public or private regulatory authority (including insurance
underwriters or rating bureaus) having jurisdiction over the Premises; provided,
however, that Tenant shall not be required in connection therewith to make any
structural changes to the Building or any modification or addition to the
Building's systems unless the making of such structural changes or modifications
or additions to the Building's systems are required as a result of Tenant's
alterations or additions or Tenant's manner of use of the Premises (as
distinguished from customary office use).  Tenant shall not do any act or follow
any practice relating to the Premises, the Building or the Common Areas which
shall constitute a nuisance or detract in any way from the reputation of the
Building as a first-class real estate development comparable to other comparable
buildings in the Raleigh/Durham market taking into account rent and other
relevant factors.  Tenant's duties in this regard shall include allowing no
noxious or offensive odors, fumes, gases, smoke, dust, steam or vapors, or any
loud or disturbing noise or vibrations to originate in or emit from the
Premises.  In addition, Tenant shall not conduct a sale of any personal property
on or about the Premises, the Building or in the Common Areas without the prior
written consent of Landlord.  Notwithstanding anything contained herein to the
contrary, in no event shall any portion of the Premises be used as, or for, an
executive suite subleasing business.

     (b)  Without limiting the generality of (a) above, and excepting only
office supplies and cleaning materials used by Tenant in its ordinary day to day
business operations (but not held for sale, storage or distribution) and then
only to the extent used, stored, transported and disposed of strictly in
accordance with all applicable laws, regulations and manufacturer's
recommendations, the Premises shall not be used for the treatment, storage,
transportation to or from, use or disposal of toxic or hazardous wastes,
materials, or substances, or any other substance that is prohibited, limited or
regulated by any governmental or quasi-governmental authority or that, even if
not so regulated, could or does pose a hazard to health and safety of the
occupants of the Building or surrounding property (collectively "Hazardous
Substances"). In addition, Tenant shall be liable for, and shall indemnify and
hold Landlord harmless from, all costs, damages and expenses (including
reasonable attorneys' fees) incurred in connection with the use, storage,
discharge or disposal of any Hazardous Substances by Tenant or its agents,
employees, contractors, subcontractors, licensees, invitees or sub-tenants
(hereinafter collectively referred to as "Tenant's Invitees").

     (c)  Tenant shall exercise due care in its use and occupancy of the
Premises and shall not commit or allow waste to be committed on any portion of
the Premises; and at the expiration or earlier termination of this Lease, Tenant
shall deliver the Premises to Landlord in the same condition in which it existed
as of the Commencement Date, ordinary wear and tear, latent defects, fire or
other casualty and acts of God and repair and maintenance obligations of
Landlord alone excepted.

     (d)  Tenant's use and occupancy of the Premises shall include the use in
common with others entitled thereto of the Common Areas and all other
improvements provided by Landlord for the common use of the Building tenants,
and any other common facility as may be designated from time to time by the
Landlord, subject, however, to the terms and conditions of this Lease and to the
reasonable rules and regulations for use therefor as prescribed from time to
time by the Landlord.  Subject to the terms hereof, Tenant, its employees,
agents, customers and invitees shall have the nonexclusive use (in common with
other benefiting tenants) to use the Common Areas for purposes intended and the
non-exclusive use of the adjacent surface parking areas in accordance with
Section 1(o) herein.  Tenant shall not at any time interfere with the use of the
Common Areas by Landlord, another tenant or any

                                       10
<PAGE>

other person entitled to use the same. Landlord reserves the right, from
time to time, to alter any of the Common Areas, to exercise control and
management of the same, and to establish, modify, change and enforce such
reasonable rules and regulations as Landlord in its discretion may deem
desirable for the management of the Building or the Common Areas. In Landlord's
exercise of the foregoing rights, Landlord shall not materially interfere with
Tenant's use and occupancy of the Premises and the Common Areas.

     (e)  Tenant shall save Landlord harmless from any claims, liabilities,
penalties, fines, costs, expenses or damages resulting from the failure of
Tenant to comply with the provisions of this paragraph 6.  This indemnification
shall survive the termination or expiration of this Lease.

     7.   SERVICES BY LANDLORD
          --------------------

     Provided that no Event of Default has occurred and is continuing hereunder,
Landlord shall cause to be furnished to the Premises (subject to reimbursement
as part of the Operating Expenses) in common with other tenants during "Standard
Hours of Operation" (as defined below), Monday through Friday and Saturday
(excluding holidays), the following services: janitorial services (once per
working day after normal weekday working hours); water for drinking, lavatory
and toilet purposes; operatorless elevator service; electricity for general
office space use (including fluorescent lighting replacements to building
standard fixtures only) with capacities as set forth in Exhibit C attached
                                                        ---------
hereto; trash removal in accordance with city schedules; and heating and air
conditioning for reasonably comfortable use and occupancy of the Premises at a
temperature which is consistent with comparable first class office buildings in
the Raleigh/Durham market.  All additional costs resulting from Tenant's
extraordinary usage of heating, air conditioning or electricity shall be paid by
Tenant, but Tenant shall not install equipment with unusual demands for any of
the foregoing without Landlord's prior written consent, which Landlord may
withhold if it determines that in its reasonable opinion such equipment may not
be safely used in the Premises or that electrical service is not adequate
therefor.  Notwithstanding anything contained herein to the contrary, Landlord
reserves the right to contract with any third party provider of such utilities
to provide such services to the Premises, the Building and the Business Park in
the most economical manner, and Tenant shall not contract with any other third
party provider to supply such utilities to the Premises without Landlord's prior
written consent; provided, however, any utility service provider selected by
Landlord shall be comparable (in cost and quality) to the utility service
providers for comparable office space in the Raleigh/Durham office market, and
(ii) in no event shall Landlord be permitted to restrict Tenant's use of
telecommunications service providers.  So long as Landlord acts reasonably and
in good faith, there shall be no abatement or reduction of rent by reason of any
of the foregoing services not being continuously provided to Tenant.

     Landlord agrees to provide heating and air conditioning after-hours (i.e.,
hours before or after the Standard Hours of Operation) at Tenant's request after
reasonable notice and if the area to be served is zoned for this purpose.  The
cost of after-hours service of heating or air conditioning shall be additional
rent payable monthly by Tenant at $25.00 per hour.

     As used herein, "Standard Hours of Operation" shall mean and refer to those
hours of operation at the Building which are 8:00 a.m. to 6:30 p.m. Monday
through Friday and 8:00 a.m. through 1:00 p.m. on Saturday, except holidays.
Holidays shall mean and refer to each of the following days (on the day set
aside for observance): New Year's Day, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, Christmas Day and any other holiday(s) generally
recognized as such by landlords of office space in the Raleigh/Durham office
market, as reasonably determined by Landlord.

     Landlord shall not be liable to Tenant for any damage caused to Tenant and
its property due to the Building or any part or appurtenance thereof being
improperly constructed or being or becoming out of repair, or arising from the
leaking of a pipe, facility or system for any utility except to the extent (i)
Landlord has received advance written notice from Tenant of such defective item
or the need for such repair, and (ii) such damage to Tenant or its property is
caused directly by the negligence or willful misconduct of Landlord or Landlord
Parties and is not otherwise covered by any insurance maintained, or required
hereunder to be maintained, by Tenant.  Tenant shall immediately report to
Landlord any defective condition in or about the Premises to the extent such
defective condition is within the actual knowledge of regular employees of
Tenant (or should reasonably be known to such employee), and if such defect is
known to Tenant or should be known to Tenant (as hereinabove described) and is
not so reported and

                                       11
<PAGE>

such failure results in other damage, Tenant shall, subject to the mutual waiver
of subrogation set forth in Section 15 herein, be liable for the same.

     8.   TAXES ON LEASE AND TENANT'S PROPERTY
          ------------------------------------

     (a)  Tenant shall pay any taxes, documentary stamps or assessments of any
nature which may be imposed or assessed upon this Lease, Tenant's occupancy of
the Premises or Tenant's trade fixtures, equipment, machinery, inventory,
merchandise or other personal property located on the Premises and owned by or
in the custody of Tenant as promptly as all such taxes or assessments may become
due and payable without any delinquency.

     (b)  Landlord shall pay, subject to reimbursement from Tenant as provided
in the paragraph entitled "Rental" of this Lease, all ad valorem property taxes
which are now or hereafter assessed upon the Building, the Premises and the
Common Areas, except as otherwise expressly provided in this Lease.

     9.   INSURANCE AND INDEMNITY
          -----------------------

     (a)  Fire and Extended Coverage Insurance.  Landlord shall maintain and
          ------------------------------------
pay, subject to reimbursement by Tenant as provided in Section 4 hereof, for
fire and casualty special form "all risk" insurance, with extended coverage
(including boiler and machinery coverage), covering the structural components of
the Building (i.e. these items identified as Landlord's Work on Exhibit C
                                                                ---------
attached hereto) and the Common Areas equal to at least eighty percent (80%) of
the replacement cost thereof. Tenant shall not do or cause to be done or permit
on the Premises or in the Building anything deemed extrahazardous on account of
fire and Tenant shall not use the Premises, the Common Areas or the Building in
any manner which will cause an increase in the premium rate for any insurance in
effect on the Building or a part thereof. If, because of anything done, caused
to be done, permitted or omitted by Tenant or Tenant's Invitees, the premium
rate for any kind of insurance in effect on the Building or any part thereof
shall be raised, Tenant shall pay Landlord on demand the amount of any such
increase in premium which Landlord shall pay for such insurance and if Landlord
shall demand that Tenant remedy the condition which caused any such increase in
an insurance premium rate, Tenant shall remedy or commence to remedy such
condition within five (5) days after receipt of such demand and diligently
proceed to cure same if such condition cannot reasonably be remedied within five
(5) days. Tenant shall maintain and pay for all fire and extended coverage
insurance on its contents in the Premises, including trade fixtures, equipment,
machinery, merchandise or other personal property belonging to or in the custody
of Tenant. In addition, at all times during the Term, Tenant shall procure and
maintain business income and extra expense coverage in such amounts as will
reimburse Tenant for direct or indirect loss or earnings attributable to any
loss caused by fire or other casualty or cause including, but not limited to,
vandalism, theft and water damage. Tenant shall first furnish to Landlord
certificates of insurance evidencing the required coverage prior to the
Commencement Date and thereafter prior to each policy renewal date.

     Notwithstanding anything herein to the contrary, Landlord reserves the
right for itself, successors and assigns to self-insure against any risk
required hereunder to be insured or otherwise assumed by Landlord so long as any
such program of self-insurance affords the same coverage of risks and benefits
which would be afforded in the event Landlord procured insurance from a third-
party insurer.

     (b)  Liability Insurance.  At all times during the term of this Lease,
          -------------------
Tenant shall, at its sole cost and expense, keep in force adequate commercial
general liability insurance under the terms of a commercial general liability
policy (occurrence coverage) in the amount of not less than Three Million and
No/100 Dollars ($3,000,000.00) single limit with such company(ies) licensed to
do business in North Carolina and as shall from time to time be reasonably
acceptable to Landlord (and to any lender having a mortgage interest in the
Premises) and naming Landlord and Landlord's agent as an additional insured
(and, if requested by Landlord from time to time, naming Landlord's mortgagee as
an additional insured).  In the event Tenant employs any contractor to perform
any work in the Premises, Tenant shall cause such contractor to provide Landlord
with insurance certificates naming Landlord and such other parties as Landlord
may designate as additional insureds under policies of builders risk and general
liability insurance and shall also provide Landlord with evidence of
satisfactory workers compensation coverage in accordance with applicable
statutory requirements.  All policies of insurance required to be maintained by
Tenant shall be with companies rated A-VIII or better in the most current issue
of Best's Insurance Reports.  Tenant shall be deemed to have self-insured
against any such risk to the extent of any deductible maintained under

                                       12
<PAGE>

such commercial general liability insurance policy. Tenant shall first furnish
to Landlord copies of policies or certificates of insurance evidencing the
required coverage prior to the Commencement Date and thereafter prior to each
policy renewal date. All policies required of Tenant hereunder shall contain a
provision whereby the insurer is not allowed to cancel or change materially the
coverage without first giving thirty (30) days' written notice to Landlord.

     (c)  Indemnity.  Tenant shall indemnify and save Landlord harmless against
          ---------
any and all actual and direct claims, suits, demands, actions, fines, damages,
and liabilities, and all costs and expenses thereof (including without
limitation reasonable attorneys' fees) attributable to Tenant's use or occupancy
of the Premises, or otherwise arising out of injury to persons (including death)
or tangible property occurring in, on or about, or arising out of the Premises
or other areas in the Building or Business Park if caused or occasioned wholly
or in part by any act or omission of Tenant or Tenant's Invitees, except to the
extent caused by the negligence or willful misconduct of Landlord, its agents,
employees or contractors.  The non-prevailing party shall also pay all costs,
expenses and reasonable attorneys' fees that may be incurred by the prevailing
party in enforcing the agreements of this Lease, whether incurred as a result of
litigation or otherwise.  Tenant shall give Landlord immediate notice of any
such happening causing injury to persons or property.

          (d)  Landlord Insurance.  In addition to the insurance coverage
               ------------------
described in Section 9(a), Landlord shall keep in force during the term of this
Lease insurance in such amounts and coverages as is usual and customary for
other similarly situated first-class office buildings in the Raleigh/Durham
market or is otherwise required of Landlord by third parties, such as its
lender.

     10.  LANDLORD'S COVENANT TO REPAIR AND REPLACE
          -----------------------------------------

     (a)  During the Term, Landlord shall be responsible for necessary repairs
or replacements to the base building structural components of the Building which
are designated as Landlord's Work on Exhibit "C" attached hereto, including
                                     -----------
without limitation, the central plumbing and electrical systems serving the
Building, except for repairs or replacements to any Tenant Improvements or any
trade fixtures or equipment required or requested by Tenant, or otherwise
necessitated by the negligence, misconduct, or acts or omissions of Tenant or
Tenant's Invitees, which shall be made at Tenant's sole cost and expense, unless
such amounts are paid to Landlord pursuant to an insurance policy.  Other than
the Tenant Improvements or any trade fixtures, equipment or alterations
required, requested or installed by Tenant (which shall be Tenant's sole
responsibility), Landlord shall maintain the Building and Common Areas
associated with the Building in a first-class manner comparable with other
similarly situated first-class office buildings in the Raleigh/Durham market,
taking into account rent and other relevant factors, and in substantial
compliance with applicable laws, regulations, ordinances and codes; however, in
the event any non-compliance exists, such non-compliance shall not be deemed to
violate this Section 10(a) so long as the non-compliant item does not materially
impair Tenant's use and enjoyment of the Premises and the Common Areas or
constitute a threat or danger to the health or safety of Tenant or Tenant's
Invitees, or pose a material threat of liability being imposed upon Tenant.
Without limiting the generality of the previous sentence, except to the extent
such maintenance is necessitated by the negligence or willful misconduct of
Tenant, Tenant's agents, employees, contractors or invitees, Landlord shall
maintain, repair and replace, as necessary, (i) all structural components of the
base Building shell, including the exterior walls and roof of the Building
including repair of any roof leaks (but specifically excluding any Tenant
Improvements or Tenant alterations), (ii) all base Building mechanical and
electrical systems and utilities to keep the same in good working order, and
(iii) all Common Areas including the parking areas, sidewalks, curbs and exits
and entrances to the Building, including marking and striping of the parking
areas and maintaining customary lighting facilities for the parking areas and
sidewalks associated with the Building (including approaches, exits and
entrances to the Building).  Landlord's repairs and replacements shall be made
as soon as reasonably possible using due diligence and reasonable efforts,
taking into account in each instance all circumstances surrounding the repair or
replacement including without limitation, the materiality of the repair or
replacement to Tenant's use and operation of its business within the Premises
and the relation thereof to the enjoyment of same, after receiving written
notice from Tenant of the need for repairs.  If Landlord does not, using due
diligence, complete its repairs within a reasonable period of time and such
failure to repair has a material adverse impact on Tenant's use or occupancy of
the Premises, then Tenant shall provide Landlord and Landlord's lender (if any)
with additional written notice specifically identifying the required repair.  If
Landlord does not, within five (5) days after receipt of such notice commence
such repair and thereafter diligently pursue the

                                       13
<PAGE>

completion of same, Tenant may perform such repair or maintenance on Landlord's
behalf in which event Landlord shall reimburse Tenant within forty-five (45)
days after demand (accompanied by reasonably detailed supporting documentation)
for all costs incurred by Tenant to perform such repair or maintenance. If the
need for such repairs or replacements is the result of the negligence,
misconduct or acts or omissions of Tenant or Tenant's Invitees, and the expense
of such repairs or replacements are not fully covered and paid by Landlord's
insurance, then Tenant shall pay Landlord the full amount of expenses not
covered. Except as otherwise expressly set forth herein, Landlord's duty to
repair or replace as prescribed in this paragraph shall be Tenant's sole remedy
and shall be in lieu of all other warranties or guaranties of Landlord, express
or implied.

     (b)  Landlord shall not be liable for any failure to make any repairs or to
perform any maintenance required of Landlord hereunder unless such failure shall
persist for an unreasonable period of time after written notice from Tenant
setting forth the need for such repair(s) or replacement(s) in reasonable detail
has been received by Landlord.  Except as set forth in the paragraph of this
Lease, entitled "Damage or Destruction of Premises", there shall be no abatement
of rent.  There shall be no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of any repairs,
replacements, alterations or improvements to any portion of the Building or the
Premises, or to fixtures, appurtenances and equipment therein except to the
extent caused directly by Landlord's negligence or willful misconduct.

     11.  PROPERTY OF TENANT
          ------------------

     All property placed on the Premises by, at the direction of, or with the
consent of Tenant or Tenant's Invitees, shall be at the risk of Tenant or the
owner thereof and Landlord shall not be liable for any loss of or damage to said
property resulting from any cause whatsoever except to the extent of any loss or
damage caused by the negligence or willful misconduct of Landlord or its agents,
and then only insofar as the same is not covered by the insurance Tenant is
required to maintain under the terms of this Lease.

     12.  TRADE FIXTURES AND EQUIPMENT
          ----------------------------

     Prior to installation, Tenant shall furnish to Landlord notice of all trade
fixtures and equipment (other than Tenant's Property (as hereinafter defined))
which it intends to install within the Premises if such trade fixtures or
equipment will be permanently attached to the Premises and the installation of
same shall be subject to Landlord's consent, which shall not be unreasonably
withheld or delayed.  So long as no Event of Default has occurred and is
continuing hereunder, Tenant's lighting fixtures affixed to Tenant's modular
units within the Premises, Tenant's test equipment racks which are affixed to
the floor of the Premises, and any furniture, unattached equipment and personal
property of Tenant installed in the Premises at Tenant's expense and not
otherwise affixed to the Premises (the "Tenant's Property"), shall remain
Tenant's personal property and Tenant shall have the right at any time during
the Term to remove such items.  Upon removal of any of the Tenant's Property,
Tenant shall immediately restore the Premises to substantially the same
condition in which it existed when the Premises was delivered to Tenant by
Landlord, ordinary wear and tear and latent defects, fire or other casualty,
acts of God and repair and maintenance obligations of Landlord alone excepted.
Any of the Tenant's Property not removed by Tenant at the expiration or earlier
termination of the Lease shall, at Landlord's sole election, either (i) become
the property of Landlord, in which event Landlord shall be entitled to handle
and dispose of same in any manner Landlord deems fit without any liability or
obligation to Tenant or any other third party with respect thereto, or (ii) be
subject to Landlord's removing such property from the Premises and storing same,
all at Tenant's expense and without any recourse against Landlord with respect
thereto.  Without limiting the generality of the foregoing, the following
property shall in no event be deemed to be Tenant's Property unless otherwise
agreed to in writing by Landlord and Tenant (in such parties' sole discretion)
and Tenant shall not remove any such property from the Premises unless otherwise
agreed to in writing by Landlord and Tenant (in such parties' sole discretion),
regardless of whether installed by Landlord or Tenant:  (a) any air
conditioning, air ventilating or heating fixtures or equipment; (b) any lighting
fixtures or equipment attached or permanently affixed to the structural
components of the Building (i.e. floor, roof, walls); (c) any carpeting or other
permanent floor coverings; (d) any paneling or other wall coverings; (e)
plumbing fixtures and equipment; or (f) permanent shelving.  Notwithstanding the
foregoing, provided no Event of Default has occurred and is continuing hereunder
and Tenant has not assigned this Lease nor sublet more than 30,000 rentable
square feet of the Premises, Tenant may elect, at its sole cost and expense and
subject to Landlord's prior written consent, such consent not to be unreasonably
withheld or delayed, to install an additional emergency generator near the
Building to serve the Premises; provided, however, the location of the
additional generator shall

                                       14
<PAGE>

be subject to Landlord's prior approval, to be granted or withheld in Landlord's
sole discretion. Tenant shall, at its sole cost and expense, obtain all
necessary approvals, permits and licenses with respect to said generator and
shall be solely responsible for the maintenance of such generator, including
without limitation, the installation of any screening and landscaping required
by Landlord in its sole discretion. The use and maintenance of such additional
generator shall in no way interfere with the rights of any other tenant in the
Building.

     13.  DAMAGE OR DESTRUCTION OF PREMISES
          ---------------------------------

     If the Premises are damaged by fire or other casualty, but are not rendered
untenantable for Tenant's business, either in whole or in part, Landlord shall
cause such damage to be repaired without unreasonable delay and the Annual
Rental shall not abate.  If by reason of such casualty the Premises are rendered
untenantable for Tenant's business, either in whole or in part, Landlord shall
cause the damage to the structural components of the Building and Landlord's
Work (excluding any tenant improvements or alterations therein) and the Common
Areas to be repaired or replaced without unreasonable delay, and, in the
interim, the Annual Rental shall be proportionately reduced as to such portion
of the Premises as is rendered untenantable.  Any such abatement of rent shall
not, however, create an extension of the Term.  Provided, however, if by reason
                                                --------  -------
of such casualty, the Premises are rendered untenantable in some material
portion, and Landlord, in its reasonable estimation, determines that the amount
of time required to repair the damage using due diligence is in excess of one
hundred eighty (180) days (as measured from the date of casualty), then Landlord
shall provide notice to Tenant within thirty (30) days after the date of
casualty of Landlord's estimate of the time to complete repairs and either party
shall have the right to terminate this Lease by giving written notice of
termination within sixty (60) days after the date of casualty.  In such event
the Annual Rental shall (i) abate as of the date of such casualty in proportion
to the part of the Premises rendered untenantable and (ii) abate entirely as of
the effective date of the termination of this Lease.  Notwithstanding the
foregoing, in the event the casualty giving rise to an election to terminate is
caused by the negligence, misconduct or acts or omissions of Tenant or Tenant's
Invitees, Tenant shall have no right to terminate this Lease.  Notwithstanding
the other provisions of this paragraph, in the event there should be a casualty
loss to the Premises during the last Lease Year of the Term, Landlord or Tenant
may, at its option, terminate this Lease by giving written notice to the other
party within thirty (30) days after the date of the casualty and the Annual
Rental shall abate as of the date of such notice; provided, however, in the
event Landlord exercises its right to terminate this Lease and all or a material
portion of the Premises continues to be tenantable, Tenant may elect upon
written notice to Landlord within five (5) business days after Tenant's receipt
of Landlord's termination notice, to extend the effective date of such
termination by up to sixty (60) days, during which time Tenant may continue to
occupy the tenantable portion of the Premises and shall pay all rent accruing
hereunder on the portion of the Premises which remains tenantable following such
casualty.  Except as provided herein, Landlord shall have no obligation to
rebuild or repair in case of fire or other casualty, and no termination under
this paragraph shall affect any rights of Landlord or Tenant hereunder arising
from the prior defaults of the other party.  Tenant shall give Landlord
immediate notice of any fire or other casualty in the Premises.  Notwithstanding
anything contained in this Section to the contrary, Landlord shall only be
obligated to restore the Landlord's Work (as herein described) unless Tenant
makes available to Landlord proceeds from Tenant's insurance sufficient to
repair and restore the Premises to the condition in which it existed immediately
prior to such casualty, including those items in excess of Landlord's Work.  In
any event, Landlord shall not be required to expend more funds than the amount
received by Landlord from the proceeds of any insurance and any amounts received
from Tenant.

     14.  GOVERNMENTAL ORDERS
          -------------------

     Except as hereinbelow set forth regarding compliance of the physical
structure of the Building and the Common Areas with applicable governmental
regulations, including without limitation, compliance with the applicable
requirements of the Americans with Disabilities Act and the implementing
regulations (the "ADA") as of the Commencement Date, Tenant agrees, at its own
expense, to comply promptly with all requirements of any legally constituted
public authority that may be in effect from time to time made necessary by
reason of Tenant's use or occupancy of the Premises; provided, however, that
Tenant shall not be required in connection therewith to make any structural
changes to the Building or any modification or addition to the Building's
systems unless the making of such structural changes or modifications or
additions to the Building's systems are required solely as a result of Tenant's
alterations or additions or Tenant's manner of use of the Premises (as
distinguished from general office use).  Landlord agrees to comply promptly with
any such requirements if not made necessary by reason of Tenant's use or
occupancy.  With regard to the physical structure of the Building, Landlord
agrees to use good faith and due

                                       15
<PAGE>

diligence to undertake those actions that are "readily achievable" (as such term
is defined in the ADA) in order to attempt to bring the physical structure of
the Building in compliance with the applicable requirements of the ADA in effect
as of the Commencement Date. If it is determined that for any reason Landlord
shall have failed to cause the physical structure of the Building to be brought
into compliance with the ADA as of the Commencement Date (to at least the
minimum extent required under applicable regulations then in effect), then
Landlord, as its sole obligation and at its sole cost (and not as part of
Operating Expenses), will take the action(s) necessary to cause the physical
structure of the Building (excluding any tenant improvements or alterations) and
the Common Areas to so comply, and Tenant acknowledges and agrees that Landlord
has and shall have no other obligation or liability whatsoever to Tenant, or to
anyone claiming by or through Tenant, regarding any failure of the Building or
the activities therein to comply with the applicable requirements of the ADA.
Notwithstanding anything contained herein to the contrary, it is agreed that:
(a) Tenant is exclusively responsible for all compliance with all requirements
of any legally constituted public authority in the event non-compliance relates
to the design of the interior of the Premises pursuant to the Plans or Tenant's
use of Premises and (b) in the event of any non-compliance for which Landlord is
responsible, Landlord shall not be deemed in breach of this Lease if such non-
compliance does not materially impair Tenant's use of, or operations from, the
Premises or threaten or endanger the health or safety of Tenant or Tenant's
Invitees, or expose Tenant to any material risk of liability to third persons.

     15.  MUTUAL WAIVER OF SUBROGATION
          ----------------------------

     For the purpose of waiver of subrogation, the parties mutually release and
waive unto the other all rights to claim damages, costs or expenses for any
injury to property caused by a casualty or any other matter whatsoever in, on or
about the Premises if the amount of such damage, cost or expense has been paid
to such damaged party under the terms of any policy of insurance or would have
been paid if the injured party had carried the insurance required of it
hereunder.  All insurance policies carried with respect to this Lease, if
permitted under applicable law, shall contain a provision whereby the insurer
waives, prior to loss, all rights of subrogation against either Landlord or
Tenant.

     16.  SIGNS AND ADVERTISING
          ---------------------

     (a)  Landlord shall install, at Tenant's sole cost and expense, tenant
identification signage in accordance with building standards at or near the
suite entrance to the Premises and in the directory located in the lobby of the
Building.

     (b)  In order to provide architectural control for the Building and the
Business Park, Tenant shall not install any exterior signs, marquees,
billboards, outside lighting fixtures and/or other decorations on the Building,
the Premises or the Common Areas.  Landlord shall have the right to remove any
such sign or other decoration and restore fully the Building, the Premises or
the Common Areas at the cost and the expense of Tenant if any such exterior work
is done without Landlord's prior written approval, which approval Landlord shall
be entitled to withhold or deny in its sole discretion.  Tenant shall not
permit, allow or cause to be used in, on or about the Premises any sound
production devices, mechanical or moving display devices, bright lights, or
other advertising media, the effect of which would be visible or audible from
the exterior of the Premises.  Notwithstanding the foregoing, provided no Event
of Default has occurred and is continuing hereunder, Tenant shall have the
exclusive, right, at its sole cost and expense and subject to the terms and
conditions herein, to install one (1) Tenant identification signage on the
exterior of the Building; provided, however, any Tenant signage visible from the
exterior of the Building shall be subject to Landlord's prior written approval
of specific Tenant plans identifying the design, size, color, lighting and
location of such signage (such approval to be granted or withheld in Landlord's
sole discretion) and shall comply in all respects with applicable zoning
ordinances and other applicable laws, rules and regulations.  Landlord hereby
approves the proposed location and maximum signage area of Tenant's exterior
signage attached hereto as Exhibit "D".  In the event that at any time during
                           -----------
the Term, (i) Tenant assigns this Lease or subleases (in the aggregate) either
more than one (1) full floor of the Building or sixty percent (60%) or more of
the total rentable square footage of the Premises (other than an assignment or
sublease to a Tenant Affiliate (as hereinafter defined)), or (ii) Tenant
discontinues its business operations from all or any portion of the Premises in
excess of 30,000 rentable square feet and such business operations are not
resumed within one (1) year after the date such operations are discontinued,
Landlord shall have the right, in its sole discretion, to be exercised within
sixty (60) days after the happening of an event described in clause (i) or (ii)
above, to revoke any Tenant signage rights granted by this Section 16(b) and,
upon receipt of Landlord's written notice, Tenant shall, at its sole cost and

                                       16
<PAGE>

expense, remove all exterior Building signage and restore the exterior area of
the Building formerly occupied by such signage to the condition in which it
existed immediately prior to the installation of such signage, normal wear and
tear and casualty damage excepted.  At such time as Tenant's exterior signage
rights are revoked (as hereinabove described), Landlord may elect to grant
exterior signage rights for the Building to any other occupant of the Building.
In addition, upon the expiration or earlier termination of this Lease, Tenant,
at its sole cost and expense, shall remove all exterior Building signage and
restore the exterior area of the Building formerly occupied by such signage to
the condition to which it existed immediately prior to the installation of such
signage, normal wear and tear and casualty damage excepted.  Tenant's rights to
exterior monument signage shall be non-exclusive, although Tenant shall be
entitled to a top line position on the monument sign; provided, however,
provided Tenant continues to occupy at least one (1) full floor within the
Building, Landlord shall not grant any exterior Building signage rights to any
other company which has as its primary use, a use which is substantially similar
to Tenant's primary use.

     17.  LANDLORD'S RIGHT OF ENTRY
          -------------------------

     Landlord, and those persons authorized by it, shall have the right to enter
the Premises at all reasonable times and upon reasonable notice (at least 24
hours' notice except in the event of an emergency) for the purposes of making
repairs, making connections, installing utilities, providing services to the
Premises or for any other tenant, making inspections or showing the same to
prospective purchasers, lenders or, during the last six (6) months of the Term,
prospective tenants, as well as at any time without notice in the event of
emergency involving possible injury to property or persons in or around the
Premises or the Building.  Landlord further agrees, except in the event of an
emergency, not to enter upon or permit entrance to specified limited portions of
the Premises in which Tenant's machinery and equipment is located except in the
presence of an employee of Tenant (Tenant agreeing to make an employee available
to Landlord at all reasonable hours to facilitate such entry).

     18.  LANDLORD'S LIEN.  [Intentionally Deleted]
          ---------------

     19.  EMINENT DOMAIN
          --------------

     If any substantial portion of the Premises is taken under the power of
eminent domain (including any conveyance made in lieu thereof) or if any taking
of a substantial portion of the Building or primary access to the Building shall
materially impair the normal operation of Tenant's business, then either party
shall have the right to terminate this Lease by giving written notice of such
termination within thirty (30) days after such taking.  Landlord will deliver to
Tenant detailed information (to the extent in Landlord's possession or
reasonably available to Landlord) to facilitate Tenant's decision to terminate
(or not terminate) this Lease.  Such information will include (to the extent
available) an identification of the portion of the Premises, Building or Common
Areas to be taken, the amount of condemnation proceeds to be applied to
restoration if Landlord elects to restore, and Landlord's proposed
reconfiguration of the Premises if any portion of the Premises will be taken.
If neither party elects to terminate this Lease, Landlord shall repair and
restore the physical structure of the Premises (excluding any tenant
improvements or alterations therein) to the best possible tenantable condition
(but only to the extent of any condemnation proceeds made available to Landlord)
and the Annual Rental shall permanently abate as to the portion of the Premises
which is taken and thereafter be proportionately and equitably reduced as of the
date of the taking based on the square footage of the Premises that is so taken.
If all or any portion of the reduced Premises is not tenantable during said
restoration, the rent payable hereunder shall abate in proportion to the portion
of the Premises which is not tenantable during said restoration.  All
compensation awarded for any taking (or the proceeds of a private sale in lieu
thereof) shall be the property of Landlord whether such award is for
compensation for damages to the Landlord's or Tenant's interest in the Premises,
and Tenant hereby assigns all of its interest in any such award to Landlord;
provided, however, Landlord shall not have any interest in any separate award
made to Tenant for loss of business, moving expense or the taking of Tenant's
trade fixtures equipment or Tenant Improvements paid for by Tenant (other than
the unamortized cost of the Tenant Improvements paid for by Landlord as part of
the Tenant Improvement Allowance) if a separate award for such items is made to
Tenant and such separate award does not reduce the award to Landlord.
Notwithstanding the foregoing, in no event shall Tenant be entitled to any
compensation for the loss of its leasehold estate.

                                       17
<PAGE>

     20.  EVENTS OF DEFAULT AND REMEDIES
          ------------------------------

     (a)  Upon the occurrence of any one or more of the following events (the
"Events of Default," any one an "Event of Default"), Landlord shall have the
right to exercise any rights or remedies available in this Lease, at law or in
equity.  Events of Default shall be:

          (i)   Tenant's failure to pay any rental or other sum of money
     payable hereunder within five (5) business days after same becomes due;
     provided, however, Tenant shall be entitled to written notice from Landlord
     that such amounts are past due not more than twice in any Lease Year and it
     shall not be deemed an Event of Default hereunder so long as Tenant makes
     any such payment to Landlord within five (5) business days after receipt of
     said written notice from Landlord;

          (ii)  Tenant's failure to perform any other of the terms, covenants or
     conditions contained in this Lease if not remedied within thirty (30) days
     after receipt of written notice thereof, or if such default cannot be
     remedied within such period, Tenant does not within thirty (30) days after
     written notice thereof commence such act or acts as shall be necessary to
     remedy the default and shall not thereafter diligently prosecute such cure
     and complete such act or acts within ninety (90) days after written notice
     thereof:

          (iii) Tenant shall become bankrupt or insolvent, or file any debtor
     proceedings, or file pursuant to any statute a petition in bankruptcy or
     insolvency or for reorganization, or file a petition for the appointment of
     a receiver or trustee for all or substantially all of Tenant's assets and
     such petition or appointment shall not have been set aside within sixty
     (60) days from the date of such petition or appointment, or if Tenant makes
     an assignment for the benefit of creditors, or petitions for or enters into
     an arrangement; or

          (iv)  An Event of Default by Tenant under any other lease heretofore
     or hereafter made by Tenant with Landlord for any other space in excess of
     7,500 rentable square feet within the Business Park.

     (b)  In addition to its other remedies, Landlord, upon an Event of Default
by Tenant, shall have the immediate right, after any applicable grace period
expressed herein, to terminate and cancel this Lease and/or terminate Tenant's
right of possession and reenter and remove all persons and properties from the
Premises and dispose of such property as it deems fit, all without being guilty
of trespass or being liable for any damages caused thereby.  If Landlord
reenters the Premises, it may either terminate this Lease or, from time to time
without terminating this Lease, terminate Tenant's right of possession and make
such alterations and repairs as may be necessary or appropriate to relet the
Premises and relet the Premises upon such terms and conditions as Landlord deems
advisable without any responsibility on Landlord whatsoever to account to Tenant
for any surplus rents collected.  No retaking of possession of the Premises by
Landlord shall be deemed as an election to terminate this Lease unless a written
notice of such intention is given by Landlord to Tenant at the time of reentry;
but, notwithstanding any such reentry or reletting without termination, Landlord
may at any time thereafter elect to terminate for such previous default.  If
Landlord elects to reenter the Premises and take possession, Landlord shall use
reasonable efforts to relet the Premises; provided that Landlord shall have no
obligation to relet the Premises in preference to other space Landlord has
available for lease in the same market.  In the event of an elected termination
by Landlord, whether before or after reentry, Landlord may recover from Tenant
damages, including the costs of recovering the Premises and any costs incurred
in reletting the Premises, and Tenant shall remain liable to Landlord for the
total Annual Rental as would have been payable by Tenant hereunder for the
remainder of the Term (due and payable in full as of the Event of Default and
recoverable as damages in a lump sum) less the rentals actually received from
any reletting (or, if greater, the rentals Landlord could have obtained through
the exercise of reasonable mitigation efforts) or, if the Premises has not been
re-leased, less the reasonable rental value of the Premises for the remainder of
the Term, such amounts to be discounted to their present value at an assumed
interest rate equal to the then-current yield on U.S. Treasury obligations
having a maturity closest to the remainder of the Term.  In determining the
Annual Rental which would be payable by Tenant subsequent to default, except
with respect to Minimum Rental (which shall be calculated in accordance with
Section 1(g) hereof), the Annual Rental

                                       18
<PAGE>

for each Lease Year of the unexpired term shall be equal to the Annual Rental
payable by Tenant for the last Lease Year prior to the default. If any rent
owing under this Lease is collected by or through an attorney, Tenant agrees to
pay Landlord's reasonable attorneys' fees to the extent allowed by applicable
law.

     21.  SUBORDINATION
          -------------

     This Lease is subject and subordinate to any and all mortgages or deeds of
trust currently existing on the property of which the Premises is a part, and
this clause shall be self-operative without any further instrument necessary to
effect such subordination; however, if requested by Landlord, Tenant shall
promptly execute and deliver to Landlord any such certificate(s) in a
commercially reasonable form as Landlord may reasonably request evidencing the
subordination of this Lease to, or the assignment of this Lease as additional
security for, such mortgages or deeds of trust; provided, further, Tenant's
obligations hereunder are conditioned upon Landlord obtaining a non-disturbance
agreement in a commercially reasonable form from any such mortgagee, trustee or
beneficiary currently having an interest in all or any portion of the Premises
(if any).  Subject to the condition precedent that Landlord provide Tenant with
a non-disturbance agreement in a commercially reasonable form in favor of Tenant
from any mortgagee, trustee or beneficiary, this Lease shall be subject and
subordinate to any mortgage or deed of trust which may hereafter encumber the
property of which the Premises is a part.  Tenant's obligations under this Lease
shall continue in full force and effect notwithstanding any such default
proceedings under a mortgage or deed of trust and Tenant shall attorn to the
mortgagee, trustee or beneficiary of such mortgage or deed of trust, and their
successors or assigns, and to the transferee under any foreclosure or default
proceedings, provided such mortgagee, beneficiary, successor, assign or
transferee is bound by an agreement not to disturb Tenant's rights under this
Lease.  Tenant will, upon request by Landlord, execute and deliver to Landlord
or to any other person designated by Landlord, any instrument or instruments in
a commercially reasonable form required to give effect to the provisions of this
paragraph.

     22.  ASSIGNMENT AND SUBLETTING
          -------------------------

     Except as otherwise expressly provided herein, Tenant shall not assign,
sublet, mortgage, pledge or encumber this Lease, the Premises, or any interest
in the whole or in any portion thereof, directly or indirectly, without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed.  Notwithstanding the foregoing, Tenant shall have the right
to assign the Lease or sublet all or any portion of the Premises (without
Landlord's consent) to any of the following: (i) any parent, subsidiary or any
company that through one or more intermediaries controls, is controlled by, or
is under common control with Tenant, (ii) any corporation resulting from the
consolidation or merger of Tenant into or within any other entity, or (iii) any
person, firm, corporation, partnership, joint venture, limited liability company
or other legal entity (company) acquiring a majority of Tenant's issued stock
and purchasing the business which Tenant conducts at the Premises (collectively
hereinafter referred to as a "Tenant Affiliate"); provided, however, Tenant
shall provide Landlord with written notice of any such assignment or sublease to
a Tenant Affiliate prior to the effective date of such assignment or sublease.
For purposes hereof, "control" shall be deemed to mean ownership or fifty-
percent (50%) or more of such entity.  In the event of any assignment, sublease,
mortgage, pledge or encumbrance to any person that is not a Tenant Affiliate,
Tenant shall: (i) remain primarily liable for the performance of all terms of
this Lease, (ii) pay all reasonable costs incurred by Landlord in connection
with such assignment, sublease or mortgage, including without limitation,
reasonable attorneys' fees and a $500.00 processing fee, and (iii) pay to
Landlord one half (1/2) of any rental or any fees or charges received by Tenant
on account of such assignment or sublease in excess of the Annual Rental payable
to Landlord hereunder as further rental under this Lease.  In calculating the
excess rent payable to Landlord under the preceding sentence, Tenant may credit
against the first payment due (and to the extent that the first payment is less
than the credit, to any subsequent payment due) the actual reasonable costs paid
by Tenant for legal fees and processing fees paid to Landlord, brokerage fees
and alteration expenses in connection with such subletting or assignment (which
alteration expenses shall include, in the case of Tenant's initial subletting of
a portion of the Premises (not to exceed 20,000 rentable square feet) which
Tenant does not initially occupy (the "Initial Sublease Space"), the unamortized
cost of all Tenant Improvements initially constructed within the Initial
Sublease Space to the extent not paid for by the Tenant Improvement Allowance).
Landlord's consent to one assignment or sublease will not waive the requirement
of its consent to any subsequent assignment or sublease as required herein.
Except with respect to a proposed sublease or assignment to a Tenant Affiliate,
upon notice to Landlord of (i) a proposed assignment of all or any portion of
the Premises, or (ii) a proposed sublease of all or a portion of the Premises
for the balance of the Term or for substantially all of the balance of the Term
(the portion of

                                       19
<PAGE>

the Premises being assigned or subleased being deemed the "Proposed Space"),
Landlord shall have the option, within sixty (60) days after its receipt of such
notice, to terminate this Lease with respect to the Proposed Space, whereupon
the parties hereto shall have no further rights or liabilities with respect to
the Proposed Space except as otherwise expressly set forth herein. Tenant may
notify Landlord of its intention to assign or sublease prior to identifying a
specific assignee or subtenant and Landlord shall have sixty (60) days to elect
to terminate this Lease as to the Proposed Space identified by Tenant in
Tenant's notice. If Landlord does not so exercise its right to terminate this
Lease with respect to the Proposed Space, Tenant shall then be free to propose a
specific assignment or sublease transaction for the Proposed Space and
Landlord's right of termination shall not apply with respect to the proposed
transaction provided such transaction for the Proposed Space is presented for
Landlord's consent within three (3) months after the earlier of (i) the
expiration of said sixty (60) day period, or (ii) Tenant's receipt of written
notice from Landlord evidencing Landlord's election not to terminate this Lease
as hereinabove described.

     In the event of a proposed assignment of this Lease or subletting of all or
a part of the Premises, Tenant shall submit to Landlord, in writing, (i) the
name of the proposed assignee or sublessee, (ii) current financial statements
available to Tenant disclosing the financial condition of the proposed assignee
or subtenant, (iii) the nature of the business of the proposed assignee or
sublessee, and its proposed use of the Premises (any assignment or subletting
being subject to restrictions on use contained in this Lease, the violation of
which by the proposed assignee or sublessee shall constitute absolute grounds
for Landlord's denial of the requested assignment or subletting, such grounds
not being the exclusive grounds for denial under clause (iii)), and (iv) the
proposed commencement date of the assignment or subletting, together with a copy
of the proposed assignment or sublease.  Within thirty (30) days after its
receipt of such notice, Landlord shall either approve or disapprove such
proposed assignment or sublease in writing.  Tenant shall promptly deliver a
copy of the fully executed assignment or sublease to Landlord upon its receipt
of same.  Notwithstanding the foregoing, with respect to an assignment or
sublease to a Tenant Affiliate, the above-described information may be submitted
by Tenant to Landlord contemporaneously with Tenant's delivery of the above-
described written notice to Landlord identifying the assignment or sublease.

     Notwithstanding anything in this Lease to the contrary, Tenant further
agrees that any assignment or sublease (other than an assignment or sublease to
a Tenant Affiliate) shall be subject to the following additional limitations:
(i) in no event may Tenant assign this Lease or sublet all or any portion of the
Premises to an existing tenant of the Business Park or its subtenant or assignee
(unless Landlord consents to such assignment or sublease which consent shall not
be unreasonably withheld unless Landlord has comparable space in the Business
Park which Landlord is offering for lease in which event Landlord's consent may
be granted or withheld in Landlord's sole discretion); (ii) in no event shall
the proposed subtenant or assignee be a person or entity with whom Landlord or
its agent is then currently negotiating for a lease of comparable space in the
Business Park; and (iii) all public advertisements of the assignment of the
Lease or sublet of the Premises, or any portion thereof, shall be subject to
prior written approval by Landlord, such approval not to be unreasonably
withheld or delayed.  Said public advertisement shall include, but not be
limited to, the placement or display of any signs or lettering on the exterior
of the Premises or on the glass or any window or door of the Premises or in the
interior of the Premises if it is visible from the exterior.

     23.  LANDLORD DEFAULT
          ----------------

     Subject to the terms and conditions of Section 10 herein, in the event of
any default by Landlord under this Lease, Tenant will give Landlord written
notice specifying such default with particularity, and Landlord shall thereupon
have thirty (30) days (or such longer period as may be required in the exercise
of due diligence) in which to cure any such default.  Unless and until Landlord
fails to so cure any default after such notice, Tenant shall not have any remedy
or cause of action by reason thereof.  All obligations of Landlord hereunder
will be construed as covenants, not conditions.  Notwithstanding any other
provisions of this Lease to the contrary (except as otherwise expressly set
forth in Section 10 herein), Tenant shall look solely to Landlord's equity in
the Building (or to the proceeds of any sale of the Building by Landlord while
Landlord is in default of its obligations under this Lease), and not to any
other or separate business or non-business assets of Landlord, or any partner,
shareholder, officers or representative of Landlord, for the satisfaction of any
claim brought by Tenant against Landlord, and if Landlord shall fail to perform
any covenant, term or condition of this Lease upon Landlord's part to be
performed, and as a consequence of such default, Tenant shall recover a money
judgment against Landlord, such judgment shall be satisfied only: (i) out of the
proceeds of sale received upon levy against Landlord's equity in the Building,
and/or (ii)

                                       20
<PAGE>

to the extent not encumbered by a secured creditor, out of the rents or other
incomes receivable by Landlord from the Building from and after the date of such
judgmentFinancial Printing GroupFinancial Printing Groupto the extent not
encumbered by a secured creditor, out of the rents or other incomes receivable
by Landlord from the Building from and after the date of such judgment.
Further, in the event the owner of Landlord's interest in this Lease is at any
time a partnership, joint venture or unincorporated association, Tenant agrees
that the members or partners of such partnership, joint venture or
unincorporated association shall not be personally or individually liable or
responsible for the performance of any of Landlord's obligations hereunder.

     24.  TRANSFER OF LANDLORD'S INTEREST.
          -------------------------------

     If Landlord shall sell, assign or transfer all or any part of its interest
in the Premises or in this Lease to a successor in interest which expressly
assumes the obligations of Landlord hereunder, then Landlord shall thereupon be
released or discharged from all covenants and obligations accruing hereunder
after the date of such transfer, and Tenant shall look solely to such successor
in interest for performance of all of Landlord's obligations and such successor
shall be obligated to perform all of Landlord's obligations under this Lease
which accrue after the date of such transfer.  Tenant's rights and obligations
under this Lease shall in no manner be affected by Landlord's sale, assignment,
or transfer of all or any part of such interest(s) of Landlord, and Tenant shall
thereafter attorn and look solely to such successor in interest as the Landlord
hereunder.

     25.  COVENANT OF QUIET ENJOYMENT.
          ---------------------------

     Landlord represents that it has full right and authority to lease the
Premises and Tenant shall peacefully and quietly hold and enjoy the Premises for
the full Term hereof so long as no Event of Default exists hereunder.

     26.  ESTOPPEL CERTIFICATES.
          ---------------------

     Within thirty (30) days after a request by Landlord, Tenant shall deliver a
written estoppel certificate, in form supplied by or acceptable to Landlord,
certifying the term of this Lease, that this Lease is in full force and effect,
that to Tenant's knowledge, no Event of Default exists on the part of Landlord
or Tenant (to the extent accurate), that Tenant is in possession, that Tenant
has commenced the payment of rent, that Tenant has not prepaid rent more than
one (1) month in advance, that this Lease has not been modified or amended (to
the extent accurate), and that Tenant claims no defenses or offsets with respect
to payment of rentals under this Lease.  Within thirty (30) days after a request
by Tenant, Landlord shall deliver to Tenant a similar estoppel certificate
covering such matters as are reasonably required by Tenant.

     27.  PROTECTION AGAINST LIENS.
          ------------------------

     Tenant shall do all things necessary to prevent the filing of any
mechanics', materialmen's or other types of liens whatsoever, against all or any
part of the Premises by reason of any claims made by, against, through or under
Tenant.  If any such lien is filed against the Premises, Tenant shall either
cause the same to be discharged of record within twenty (20) days after filing
or, if Tenant in its discretion and in good faith determines that such lien
should be contested, it shall furnish such security as may be necessary to
prevent any foreclosure proceedings against the Premises during the pendency of
such contest.  If Tenant shall fail to discharge such lien within said time
period or fail to furnish such security, then Landlord may at its election, in
addition to any other right or remedy available to it, discharge the lien by
paying the amount claimed to be due or by procuring the discharge by giving
security or in such other manner as may be allowed by law.  If Landlord acts to
discharge or secure the lien then Tenant shall immediately reimburse Landlord
for all sums paid and all costs and expenses (including reasonable attorneys'
fees) incurred by Landlord involving such lien together with interest on the
total expenses and costs at an interest rate equal to the Prime Rate plus two
percent (2%).

     28.  MEMORANDUM OF LEASE.
          -------------------

     If requested by Tenant, Landlord shall execute a recordable Memorandum or
Short Form Lease, prepared at Tenant's expense, specifying the exact term of
this Lease and such other terms as the parties shall mutually determine.

                                       21
<PAGE>

     29.  FORCE MAJEURE.
          -------------

     In the event Landlord or Tenant shall be delayed, hindered or prevented
from the performance of any act required hereunder, by reason of governmental
restrictions, scarcity of labor or materials, strikes, fire, or any other
reasons beyond its reasonable control, the performance of such act shall be
excused for the period of delay, and the period for performance of any such act
shall be extended as necessary to complete performance after the delay period.
However, the provisions of this paragraph shall in no way be applicable to
Tenant's obligations to pay Annual Rental or any other sums, monies, costs,
charges or expenses required by this Lease.

     30.  REMEDIES CUMULATIVE -- NONWAIVER.
          --------------------------------

     Unless otherwise specified in this Lease, no remedy of Landlord or Tenant
shall be considered exclusive of any other remedy, but each shall be distinct,
separate and cumulative with other available remedies.  Each remedy available
under this Lease or at law or in equity may be exercised by Landlord or Tenant
from time to time as often as the need may arise.  No course of dealing between
Landlord and Tenant or any delay or omission of Landlord or Tenant in exercising
any right arising from the other party's default shall impair such right or be
construed to be a waiver of a default.

     31.  HOLDING OVER.
          ------------

     If Tenant remains in possession of the Premises or any part thereof after
the expiration of the Term, whether with or without Landlord's acquiescence,
Tenant shall be deemed only a tenant at will and there shall be no renewal of
this Lease without a written agreement signed by both parties specifying such
renewal.  The "monthly" rental payable by Tenant during any such tenancy at will
period shall be one hundred fifty percent (150%) of the monthly installments of
Annual Rental payable during the final Lease Year immediately preceding such
expiration.  Tenant shall also remain liable for any and all damages, direct and
consequential, suffered by Landlord as a result of any holdover without
Landlord's unequivocal written acquiescence.

     32.  NOTICES.
          -------

     Any notice allowed or required by this Lease shall be deemed to have been
sufficiently served if the same shall be in writing and placed in the United
States mail, via certified mail or registered mail, return receipt requested,
with proper postage prepaid or delivered by a nationally recognized overnight
courier and addressed to the appropriate party at the address set forth in
Section 1(k) hereof.  In the case of notice by mail, service shall be deemed
effective on this third business day after such notice is deposited in the mail,
and in the case of notice by overnight courier, service shall be deemed
effective on the business day next following the date on which the courier
service accepts the notice for delivery.

     The addresses of Landlord and Tenant and the party, if any, to whose
attention a notice or copy of same shall be directed may be changed or added
from time to time by either party giving notice to the other in the prescribed
manner.

     33.  LEASING COMMISSION.
          ------------------

     Landlord and Tenant represent and warrant each to the other that they have
not dealt with any broker(s) or any other person claiming any entitlement to any
commission in connection with this transaction except the Broker(s) set forth in
Section 1(m) hereof.  Tenant agrees to indemnify and save Landlord and
Landlord's agent, Tri Properties Inc., harmless from and against any and all
claims, suits, liabilities, costs, judgments and expenses, including reasonable
attorneys' fees, for any leasing commissions or other commissions, fees, charges
or payments resulting from or arising out of its actions in connection with this
Lease.  Landlord agrees to indemnify and save Tenant harmless from and against
any and all claims, suits, liabilities, costs, judgments and expenses, including
reasonable attorneys' fees, for any leasing commissions or other commissions,
fees, charges or payments resulting from or arising out of its actions in
connection with this Lease.  Landlord agrees to be responsible for the leasing
commission due Broker pursuant to a separate written agreement between Landlord
and Broker, and to hold Tenant harmless respecting same.

                                       22
<PAGE>

     34.  MISCELLANEOUS.
          -------------

     (a)  Rules and Regulations.
          ---------------------

     Landlord shall have the right from time to time to prescribe reasonable
rules and regulations (the "Rules and Regulations") for Tenant's use of the
Premises and the Building.  A copy of Landlord's current Rules and Regulations
respecting the Premises and the Building is attached hereto as Exhibit "B".
                                                               -----------
Tenant shall abide by and actively enforce on all Tenant's Invitees such
regulations including without limitation rules governing parking of vehicles in
designated areas.  In the case of any conflict or inconsistency between the
provisions of this lease and any of such Rules and Regulations, the provisions
of this Lease shall control.  Landlord shall (i) not discriminate against Tenant
in enforcing the Rules and Regulations; and (ii) exercise its judgment in good
faith in any instance providing for the exercise of its judgment in the Rules
and Regulations.

     (b)  Evidence of Authority.
          ---------------------

     If requested by Landlord, Tenant shall furnish appropriate legal
documentation evidencing the valid existence and good standing of Tenant and the
authority of any parties signing this Lease to act for Tenant.

     (c)  Nature and Extent of Agreement.
          ------------------------------

     This Lease, together with all exhibits hereto, contains the complete
agreement of the parties concerning the subject matter, and there are no oral or
written understandings, representations, or agreements pertaining thereto which
have not been incorporated herein.  This Lease creates only the relationship of
landlord and tenant between the parties, and nothing herein shall impose upon
either party any powers, obligations or restrictions not expressed herein.  This
Lease shall be construed and governed by the laws of the state in which the
Premises are located.

     (d)  Binding Effect.
          --------------

     This Lease shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, successors and assigns.  This Lease
shall not be binding on Landlord until executed by an authorized signatory of
Landlord and delivered to Tenant.  No amendment or modification to this Lease
shall be binding upon Landlord unless same is in writing and executed by an
authorized signatory of Landlord.

     (e)  Captions and Headings.
          ---------------------

     The captions and headings in this Lease are for convenience and reference
only, and they shall in no way be held to explain, modify, or construe the
meaning of the terms of this Lease.

     (f)  Lease Review.
          ------------

     The submission of this Lease to Tenant for review does not constitute a
reservation of or option for the Premises, and this Lease shall become effective
as a contract only upon execution and delivery by Landlord and Tenant.

     (g)  Prevailing Party.
          ----------------

     If either Landlord or Tenant places in the hands of an attorney the
enforcement of this Lease or any portion thereof, for the collection of any rent
due or to become due hereunder, or recovery of the possession of the Premises,
or file suit upon same, the non-prevailing (or defaulting) party shall pay the
other party reasonable attorney's fees and court costs.

     (h)  Security Deposit/Letter of Credit.  Tenant has paid to Landlord upon
          ---------------------------------
signing this Lease the Security Deposit as described in Section 1(l) as security
for Tenant's performance of all obligations hereunder.  The Deposit may be held
by Landlord in such manner as it shall elect and Landlord shall be entitled to
any interest which

                                       23
<PAGE>

accrues on the Deposit.  Following an Event of Default by Tenant, Landlord may,
at its option, require Tenant to increase its Security Deposit (such required
increase not to exceed an amount equal to the then-current monthly rent payable
by Tenant hereunder) and to fund such increase within ten (10) days of
Landlord's notice to Tenant to increase the Security Deposit. Further, in the
event of a default by Tenant, Landlord may, at its option, apply all or any part
of the Deposit to cure the default, and thereupon Tenant shall immediately
redeposit with Landlord the amount so applied in order that Landlord will always
have the full Deposit on hand during the term of this Lease. Upon the
termination of this Lease, provided that Tenant is not in default hereunder,
Landlord shall refund to Tenant any of the remaining balance of the Deposit
subject to final adjustments for payment of any rental required by this Lease.
If the Building is sold, Landlord shall have the right to transfer the Deposit
to the new owner, and upon the new owner's express assumption of the obligations
for the Deposit required by this Lease, Landlord shall thereupon be released
from all liability for such Deposit, and Tenant thereafter shall look only to
the new owner for such Deposit. The terms hereof shall apply to every transfer
of the Deposit.

     Upon Tenant's execution of this Lease, Tenant shall deliver to Landlord
additional security in the form of an irrevocable, unconditional letter of
credit (the "Letter of Credit") in the amount set forth below for Landlord's
consideration in entering into this Lease.  In the event of an Event of Default
by Tenant, the Letter of Credit shall be drawn upon to satisfy Tenant's
obligations under this Lease.  The Letter of Credit must be reasonably
acceptable to Landlord as to form, content, and issuing bank, (it being agreed
that the form attached hereto as Exhibit "G" is acceptable to Landlord), must
                                 ----------
not require any documentation other than a sight draft in order to be
drawn/valued upon and must contain an explicit waiver by the issuing bank of any
statutory, UCP or other rights to delay or defer payment upon demand including,
but not limited to, a waiver of such rights as are set forth in Article 5,
Section 5-112(1)(a) and (b) of the Uniform Commercial Code and in Article 13-B
of the Uniform Customs and Practice for Documentary Credits, 1993 Revision, ICC
Publication Number 500, including any amendments and revisions thereto.  The
Letter of Credit shall be for a period of five (5) years, or alternatively shall
be for five (5) successive periods of one (1) year each with a provision that if
a renewal Letter of Credit is not delivered to Landlord within sixty (60) days
of the date of expiry on the Letter of Credit, Landlord may draw it down.  The
Letter of Credit must also provide that the issuing bank, upon any presentation
of a draft (at sight) for valuation thereon, shall honor such draft by promptly
delivering the amount of the draft, by official bank or cashier's check to
Landlord or, at Landlord's sole option, by promptly wiring federal funds in the
amount of the draft into such account(s) as Landlord may specifically direct in
writing.  The Letter of Credit must name Landlord, its successors and assigns,
as the beneficiary of said Letter of Credit.  All costs for the issuance (or
reissuance as required by Landlord in the event of Landlord's sale of the
Building) of said Letter of Credit shall be paid by Tenant.  In the event of
Landlord's sale of the Building, Tenant shall cooperate with Landlord in having
the Letter of Credit reissued to the new property owner.

Required Amounts of the Letter of Credit:

     Lease Year     1:   $359,933.33
                    2:   $287,946.66
                    3:   $215,960.00
                    4:   $143,973.33
                    5:   $ 71,986.66

Notwithstanding the foregoing, in the event of a Tenant default hereunder, the
required amount of the Letter of Credit shall remain at its then-existing face
amount and shall not be reduced as hereinabove described from and after the date
of such Tenant default unless and until such default is cured by Tenant within
the applicable cure period.  Upon the occurrence of an Event of Default by
Tenant hereunder, the required amount of the Letter of Credit shall remain at
its then-existing face amount and shall not be reduced as hereinabove described
unless and until Tenant cures such Event of Default and thereafter resumes and
maintains the full and complete performance of all of its obligations under this
Lease (without a subsequent Event of Default) for a period of one (1) year
following the date of the initial Event of Default, at which time, the required
amount of the Letter of Credit shall be reduced as hereinabove described.

     (i)  Right to Relocate.  [Intentionally Deleted]
          -----------------

     (j)  Representations and Warranties.
          ------------------------------

                                       24
<PAGE>

     The person or persons executing this Lease on behalf of Tenant represent,
covenant and warrant to Landlord as of the date Tenant executes and delivers
this Lease that: (a) Tenant is duly constituted, in good standing and qualified
to do business in the State of North Carolina, (b) Tenant has paid all corporate
taxes (if applicable), (c) Tenant will file when due all forms, reports, fees
and other documents necessary to comply with applicable laws concerning Tenant's
conduct of business in North Carolina, and (d) the signatories signing on behalf
of Tenant have the requisite authority to bind Tenant pursuant to Tenant's
organizational documents (i.e. partnership agreement, operating agreement or
bylaws) or a certified copy of a resolution from Tenant authorizing same.

     (k)  Building Access.
          ---------------

     There shall be open access to the Building during Standard Hours of
Operation (as herein defined).  At all other times, access to the Building may
be restricted, at Landlord's election, by use of a card access system at an
entrance to the Building.  Within thirty (30) days after Landlord's receipt of
written request from Tenant identifying the cardholders, together with
appropriate information regarding the individual cardholders (as reasonably
requested by Landlord), Landlord shall furnish Tenant, at no cost to Tenant,
four (4) access cards or keys per 1,000 rentable square feet of the Premises (as
of the Commencement Date) as requested by Tenant for entering the Building.
Thereafter, additional cards and replacement cards (for lost access cards) shall
be made available to Tenant at a charge equal to $25.00 per card upon Landlord's
receipt of an order signed by Tenant.  Tenant shall promptly provide Landlord
with written notice of any lost or stolen access cards for the Building.
Landlord shall replace all defective or worn access cards without charge.  All
cards shall remain the property of Landlord.  No additional locks shall be
allowed on any exterior door of the Premises without Landlord's written
permission (such permission not to be unreasonably withheld) and locks on any
interior door shall be permitted only to the extent such locks are permissible
under applicable laws and relevant insurance requirements.  Notwithstanding the
foregoing, provided no Event of Default has occurred and is continuing hereunder
and Tenant has not assigned this Lease nor sublet all or substantially all of
the Premises other than to a Tenant Affiliate, Tenant shall be permitted to
install a security system within the interior of the Premises to control access
to the interior of the Premises which may include card readers on interior fire
stairs, provided (i) such security system is compatible in all respects with
Landlord's base building systems and Landlord's card access system for the
Building, (ii) Landlord is provided an access key or code to enter upon the
Premises such that Tenant's security system does not otherwise impede Landlord's
access to the Premises as may be required from time to time hereunder, and (iii)
at Landlord's election, Tenant agrees to remove such security system from the
Premises upon the expiration or earlier termination of this Lease and restore
the Premises to the condition in which it existed immediately prior to the
installation of such security system.  Upon termination of this Lease, Tenant
shall surrender to Landlord all access cards and keys related to the Premises,
and give to Landlord the combination of all locks for sages, safe cabinets and
vault doors, if any, to remain in the Premises and in the event Tenant fails to
return all such access cards to Landlord at the end of the Term, Tenant shall
pay Landlord $25.00 for each such access card not returned to Landlord.

     (l)  Principal Life Approval.  [Intentionally Deleted]
          -----------------------

     35.  SEVERABILITY.
          ------------

     If any term or provision of this Lease or the application thereof to any
person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term or provision to persons
or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and enforced to the fullest extent permitted by law
notwithstanding the invalidity of any other term or provision hereof.

     36.  REVIEW OF DOCUMENTS.
          -------------------

     If, following the execution of this Lease, either party hereto requests
that the other party execute any document or instrument that is other than (i) a
document or instrument the form of which is attached hereto as an exhibit, or
(ii) a document that solely sets forth facts or circumstances that are then
                     ------
existing and reasonably ascertainable by the requested party with respect to the
Lease, then the party making such request shall be responsible for paying the
out-of-pocket costs and expenses, including without limitation, the attorneys'
fees, incurred by the requested party in connection with the review (and, if
applicable, the negotiations) related to such document(s) or instrument(s),
regardless of whether such document(s) or instrument(s) is (are) ever executed
by the

                                       25
<PAGE>

requested party.  In the event the requesting party is Tenant, all such costs
and expenses incurred by Landlord in connection with its review and negotiation
of any such document(s) or instrument(s) shall be deemed to be additional rental
due hereunder and shall be payable by Tenant within thirty (30) days after
demand accompanied by reasonably detailed supporting documentation of the
charges.

     37.  ROOF RIGHTS.
          -----------

     Subject to the conditions set forth herein and provided no Event of Default
has occurred and is continuing hereunder, Landlord hereby grants to Tenant, as
an appurtenance to the Premises, the non-exclusive right to install, maintain
and operate, at Tenant's sole cost and expense, a mast-mounted satellite antenna
(the "Antenna") on the roof of the Building and related equipment reasonably
necessary for the operation of the Antenna, all in accordance with the Roof
License Agreement attached hereto as Exhibit "H" and incorporated herein by
                                     -----------
reference (the "Roof License Agreement").  The size, location and method of
installation of the Antenna shall be at Landlord's sole discretion and Tenant
hereby agrees to install the Antenna at Tenant's sole cost and expense, under
the direct supervision of Landlord's roofing contractor, and in such a manner as
will not affect Landlord's insurance or roof warranty.  The use of the Antenna
shall be limited solely to Tenant, and Landlord reserves the right, in its sole
discretion, to withhold consent to any proposed subletting or assignment of the
rights to use the Antenna.  Tenant shall install all equipment at the sole cost
and expense and risk of Tenant and shall do so in a good, workmanlike manner and
in compliance with all federal, state and local building, zoning, electric,
telecommunications, and safety codes and ordinances, standards, regulations,
laws and requirements, including, without limitation, those of the Federal
Communications Commission.  Nothing contained herein shall impose any liability
or repair obligations upon Landlord relative to the Antenna.  Upon the
expiration or earlier termination of this Lease, Tenant agrees, while under the
direct supervision of Landlord's roofing contractor, to remove the Antenna and
return the roof of the Building to the condition in which it existed as of the
Commencement Date.  Prior to the installation of the Antenna, Tenant shall
execute the Roof License Agreement.

     38.  RIGHT OF FIRST OFFER.
          --------------------

     Provided (i) no Event of Default has occurred and is continuing hereunder,
and (ii) Tenant has not assigned this Lease (other than an assignment to a
Tenant Affiliate), Tenant shall have a continuing right of first offer during
the initial Term of this Lease to lease the balance of the Building (the "ROFO
Space") at such time as any portion of the ROFO Space becomes available for
lease to the general public (or is otherwise subject to Landlord's recapture
right under the express terms of such tenant's lease) after such space is
initially occupied as part of the initial leasing of the Building (and is
surrendered to Landlord by any existing tenant of such space). At such time as
Landlord reasonably anticipates the availability of all or a portion of the ROFO
Space, Landlord shall promptly provide Tenant with written notice of the
availability of such space; provided, however, in no event shall Landlord be
obligated to exercise its right to recapture the ROFO Space under the terms of
another tenant's lease until such time as Tenant shall have affirmatively
elected to exercise its right of first offer with respect to such ROFO Space and
Landlord and Tenant shall have executed an amendment to this Lease incorporating
such ROFO Space into this Lease as hereinbelow provided. Notwithstanding the
foregoing, Tenant shall have no right of first offer to lease all or any portion
of the ROFO Space (i) during the first two (2) Lease Years if, at the time such
ROFO Space becomes available for Lease, Tenant is then subleasing all or any
portion of the Premises in excess of 20,000 rentable square feet (other than a
sublease to a Tenant Affiliate), or (ii) from and after the expiration of the
second Lease Year if, at the time such ROFO Space becomes available for Lease,
Tenant is then subleasing all or any portion of the Premises in excess of 10,000
rentable square feet (other than a sublease to a Tenant Affiliate).

     Tenant shall have a period of ten (10) days following receipt of written
notice from Landlord of the availability of ROFO Space to indicate (by written
notice to Landlord) whether Tenant shall lease all (but not a portion) of the
available ROFO Space on the same terms and conditions as are applicable to the
Premises initially demised by this Lease, except that Tenant shall not be
entitled to any applicable upfit allowance in connection with the ROFO Space and
the base rent for the ROFO Space shall be the then current fair market base
rental rate applicable to comparable space in the Building or the Business Park.
If, at the time of Tenant's exercise of its right of first offer, the remainder
of the Term of the initial Premises is three (3) years or more, the term of
Tenant's lease of the ROFO Space shall coincide with the balance of the Term so
as to be coterminous with Tenant's lease of the Premises.  If, at the time of
Tenant's exercise of its right of first offer, the remainder of the Term of the
initial Premises is less then three (3) years, the term of Tenant's lease of the
ROFO Space shall be five (5) years, and, in

                                       26
<PAGE>

connection with Tenant's lease of the ROFO Space, the Term of this Lease shall
automatically be extended (effective as of the expiration of the Term of this
Lease) on market terms mutually acceptable to Landlord and Tenant, so as to make
this Lease coterminous with the termination date of Tenant's lease of the ROFO
Space. For example, if at the end of the fourth (4th) Lease Year, Tenant
exercises its right to lease the ROFO Space for a term of 5 years at then-
current market rates, the term of Tenant's lease of the Premises under this
Lease shall be deemed to be extended by a period of four (4) years so as to be
coterminous with Tenant's lease of the ROFO Space; however, during the fifth
(5th) Lease Year, Tenant shall continue to occupy and pay rent applicable to the
Premises in accordance with the terms of this Lease, and thereafter Tenant shall
occupy the Premises on the same terms and conditions as are applicable to the
ROFO Space.

     If Landlord and Tenant cannot, using good faith, diligent efforts agree
upon the then current fair market base rental rate for the ROFO Space within
thirty (30) days following Landlord's receipt of Tenant's written notice
evidencing its intent to exercise its right of first offer, the same shall be
determined in the manner specified in Section 2 of Exhibit E to this Lease. In
                                                   ---------
the event Tenant fails to respond to Landlord's notice of the availability of
such space within said ten (10) day period, Tenant shall be deemed to have
waived its right of first offer with respect to the then-available ROFO Space
until such time as said space subsequently becomes available for lease to the
general public.

     39.  TELECOMMUNICATIONS EQUIPMENT.
          ----------------------------

     Provided no Event of Default has occurred and is continuing hereunder and
Tenant has not assigned this Lease nor sublet all or any portion of the Premises
other than to a Tenant Affiliate, Tenant shall have reasonable access, in common
with the other occupants of the Building, to a proportionate share of the
existing conduit lines and risers within the Building so as to establish a
continuous path between Tenant's telecommunications room and the base building
systems; provided, however, in no event shall Tenant have access to any portion
of the Building occupied or subject to occupancy by another tenant of the
Building, nor shall Tenant's use of said conduit lines or risers or
establishment of a continuous path between the telecommunications room and the
base building systems adversely impact any other tenants of the Building or
Business Park nor impact any base building systems serving the Building or other
buildings within the Business Park.  Tenant's usage of such conduit lines and
risers shall not exceed Tenant's equitable share of such telecommunications
lines and equipment.

                                       27
<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
and sealed pursuant to authority duly given as of the day and year first above
written.

                                       "LANDLORD"

                                       PETULA ASSOCIATES, LTD., an Iowa
                                       corporation

ATTEST:
                                       By: /s/ John N. Urban
                                           -----------------
                                       Its: John N. Urban
                                            Vice President

/s/ Timothy E. Minton
---------------------
Timothy E. Minton
Vice President & Secretary

                                       By: /s/ Donald J. Koehler II
                                           ------------------------
                                       Its: Donald J. Koehler II
                                            Counsel

                                       Date: 12/7/00
                                             -------

                                       "TENANT"

                                       ONI SYSTEMS, INC., a Delaware corporation

ATTEST:                                By: /s/ Chris A. Davis
                                          --------------------
                                          CFO
                                          ---

/s/ Michael A. Dillon
---------------------
Michael A. Dillon
Vice President, General Counsel
and Secretary

                                       Date:  11/28/00
                                              --------
<PAGE>

                                  EXHIBIT "A"
                                  -----------

                                  FLOOR PLAN

A-1
<PAGE>

                                  EXHIBIT "B"
                                  -----------

                             RULES AND REGULATIONS

     The following rules and regulations have been adopted by the Landlord for
the care, protection and benefit of the Building and for the general comfort and
welfare of the tenants:

     1.   The sidewalks, entrances, halls, passages, elevators and stairways
shall not be obstructed by the Tenant or used by him for any other purpose than
for ingress and egress.

     2.   Toilet rooms and other water apparatus shall not be used for any
purpose other than those for which they are constructed.

     3.   The Tenant shall not do anything in the Premises, or bring or keep
anything therein, which shall in any way conflict with any law, ordinance, rule
or regulation affecting the occupancy and use of the Premises, which are or may
hereafter be enacted or promulgated by any public authority or by the Board of
Fire Underwriters.

     4.   In order to insure proper use and care of the Premises, neither the
Tenant nor agent nor employee of the Tenant shall:

     (a)  Allow any furniture, packages or articles of any kind to remain in
corridors except for short periods incidental to moving same in or out of
Building or to cleaning or rearranging occupancy of leased space.

     (b)  Maintain or utilize bicycles or other vehicles within the Building,
and Tenant shall instead cause its employees to use the areas in the Business
Park designated for such purpose.

     (c)  Mark or defile elevators, toilet rooms, walls, windows, doors or any
part of the Building.

     (d)  Keep animals or birds on the Premises.

     (e)  Deposit waste paper, dirt or other substances in corridors, stairways,
elevators, toilets, restrooms, or any other part of the Building not leased to
him.

     (f)  Fasten any article, drill holes, drive nails or screws into walls,
floors, doors, or partitions or otherwise mar or deface any of them by paint,
papers or otherwise, unless written consent is first obtained from the Landlord
except for customary office decorations which do not damage the Premises.

     (g)  Operate any machinery within the Building except customary office
equipment, such as dictaphones, calculators, electric typewriters, desktop
computers, servers, routers, test benches and the like.  Special equipment or
machinery used in the trade or profession of the Tenant may be operated only
with the prior written consent of the Landlord.

     (h)  Tamper or interfere in any way with windows, doors, locks, air
conditioning controls, heating, lighting, electric or plumbing fixtures.

     (i)  Leave Premises unoccupied without locking all doors, extinguishing
lights and turning off all water outlets.

     (j)  Install or operate vending machines of any kind in the Premises
without written consent of Landlord; provided that Landlord's consent shall not
be required for the installation of vending machines in Tenant's employee break
room(s) or lounge(s) so long as such machines are primarily available for use by
Tenant's employees.

                                      B-1
<PAGE>

     5.   The Landlord shall have the right to prohibit any advertising by the
Tenant which, in its opinion, tends to damage the reputation of the Building or
its desirability, and upon written notice from Landlord, the Tenant shall
discontinue any such advertising.

     6.   The Landlord reserves the right to designate the time when and method
whereby freight, furniture, safes, goods, merchandise and other articles may be
brought into, moved or taken from the Building and the Premises leased by the
Tenant; and workmen employed, designated or approved by the Landlord must be
employed by Tenant for repairs, painting, material moving and other similar work
that may be done on the Premises.

     7.   The Tenant will reimburse the Landlord for the cost of repairing any
damage to the Premises or other parts of the Building caused by the Tenant or
the agents or employees of the Tenant, including replacing any glass broken.

     8.   The Landlord shall furnish a reasonable number of door keys for the
needs of the Tenant, which shall be surrendered on expiration of the Lease, and
reserves the right to require a deposit to insure their return at expiration of
Lease.  The Tenant shall obtain keys only from the Landlord, shall not obtain
duplicate keys from any outside source, and shall not alter the locks or effect
any substitution.

     9.   The Tenant shall not install in the Premises any metal safes or permit
any concentration of excessive weight in any portion thereof without first
having obtained the written permission of Landlord.

     10.  The Landlord reserves the right at all times to exclude newsboys,
loiterers, vendors, solicitors and peddlers, from the Building and to require
registration, satisfactory identification and credentials from all persons
seeking access to any part of the Building outside of ordinary business hours.
Ordinary business hours shall mean Monday through Friday, 7:30 a.m. to 6:30 p.m.
except on legal holidays.  The Landlord will exercise its best judgment in the
execution of such control but shall not be held liable for the granting or
refusal of such access.  The Landlord reserves the right to exclude the general
public from the Building after ordinary business hours and on weekends and
holidays.

     11.  The attaching of wires to the outside of the Building is absolutely
prohibited, and no wires shall be run or installed in any part of the Building
without the Landlord's permission and direction.

     12.  Requests for services of janitors or other Building employees must be
made to the Landlord.  Agents or employees of Landlord shall not perform any
work or do anything outside of their regular duties unless under special
instructions from Landlord.

     13.  Signs or any other tenant identification shall be in accordance with
building standard signage.  No signs of any nature shall be placed in the
windows so as to be visible from the exterior of the Building.  All signs not
approved in writing by the Landlord shall be subject to removal without notice.

     14.  Any improvements or alterations to the Premises by Tenant shall be
approved in advance by the Landlord and all such work, if approved, shall be
done at the Tenant's sole expense under the supervision of the Landlord.

     15.  Tenant shall have a non-exclusive right to use all driveways and
parking areas designated for Tenant and Tenant's employees.

     16.  If additional drapes or window decorations are desired by Tenant, they
shall be approved by Landlord (such approval not to be unreasonably withheld
provided such drapes or window decorations are consistent with comparable
materials in the Building) and installed at the Tenant's expense under the
direction of the Landlord.  Lining on drapes visible from the exterior shall be
of a color approved by Landlord.

     17.  The possession of weapons, including concealed handguns, is strictly
forbidden on the Premises.

     18.  No smoking shall be permitted within any portion of the Building.

                                      B-2
<PAGE>

     19.  The Landlord shall have the right to make such other and further
reasonable rules and regulations as, in the judgment of the Landlord, may from
time to time be necessary for the safety, care and cleanliness of the Premises,
the Building or adjacent areas, and for the preservation of good order therein
effective five (5) days after all tenants have been given written notice
thereof.

                                      B-3
<PAGE>

                                  EXHIBIT "C"
                                  -----------

                                LANDLORD'S WORK
                                Nottingham Hall

A.   SERVICE CORE

     1.   Stairways as required by code, painted, and in acceptable condition to
          serve as a connecting stairway.

     2.   Electrical, telephone, janitor rooms on each floor.

     3.   Core walls, perimeter walls, and columns all clad with dry wall,
          taped, and sanded.

     4.   Men's and ladies' washrooms on each floor.  Complete to building
          specifications.  Fixtures per code.

     5.   Water

          a.   One (1) wet column per floor

          b.   Drinking fountains, with chilled water installed per code

     6.   Core doors.  Doors for stairwells, electrical, mechanical, janitor,
          telephone, toilet rooms, etc., all installed.

     7.   Landlord reasonably assures that finished ceiling can be achieved
          (10'4" on first floor, 9'0" on second, third, and fourth floors).

B.   EXTERIOR WALLS

     1.   Curtain walls installed, sealed, and insulation finished with drywall,
          taped, and sanded, ready to receive tenant finishes.

     2.   Window treatments installed.

C.   FLOORS

     1.   Concrete floors with troweled finish leveled to tolerance of 1/2 inch
          of a 10' radius noncumulative.

     2.   Design to support a live load of eighty (80) pounds per square foot.
D.   HVAC

     1.   HVAC systems to service cores on floors of Premises.

     2.   Landlord to provide eighty-five (85) fan-powered boxes based upon the
          following ratio.

          a.   Fan powered perimeter boxes with electric heat - twelve (12) per
               floor installed.

          b.   Constant volume boxes with electric heat, two (2) for first
               floor, one (1) for each additional floor installed.

          c.   VAV boxes without electric heat - eight (8) per floor stacked on
               floor.

          d.   4' slot diffusers - seventy (70) per floor.

                                      C-1
<PAGE>

          e.   2' slot diffusers - fifty (50) per floor.

          f.   2' x 2' perforated return air panels - sixty (60) per floor.

     3.   Indoor temperatures to be controlled at no higher than 75 degrees
          Fahrenheit in summer (for outdoor temperatures 93 degrees F and below)
          and no lower than 72 degrees Fahrenheit (for outdoor temperatures 16
          degrees F and above).

     4.   HVAC criteria based on the following.

               .    Lighting load           2.0 watts per square foot
               .    Internal gains          2.0 watts per square foot
               .    People                  150 usable square feet per person

E.   ACOUSTICS.  Landlord to provide sound insulation in building core areas,
     i.e., restrooms, mechanical room, etc.

F.   LIGHTING/CEILING

     1.   Installed and operating in main lobby, all stairwells, elevator,
          lobbies, mechanical rooms, utility rooms, other lighting as required
          by code.

     2.   In Tenant spaces, building standard fixtures with 18-cell (277 volt, 3
          lamp) parabolic lenses at one (1) per seventy-five (75) usable square
          feet shall be stocked on floor.

     3.   Stack ceiling grid track on each floor.

     4.   Stack ceiling tiles on each floor.

G.   ELECTRICAL/POWER

     1.   Electrical closet on each floor equipped with one (1) circuit for
          every 200 rentable square feet with 20 amps per circuit.

     2.   System provides minimum of 2.5 watts per usable square foot for
          lighting and 5.0 watts per usable square foot for receptacles.

H.   LIFE SAFETY.  Per building code.

I.   COMMUNICATION SYSTEM.  Access to main telephone service on the first floor.

J.   FIRST FLOOR BUILDING LOBBY.  The following is a description of the single
story, 1816 square foot lobby included in the shell building:

     1.   Studs, drywall, and insulation in walls, taped, mudded, and sanded.

     2.   Ceiling framing and drywall, taped, mudded, and sanded.

     3.   Access via three (3) pair of wood-veneer tenant doors in painted
          hollow metal frames.

     4.   Fire alarms as required by code.

                                      C-2
<PAGE>

                                 EXHIBIT "C-1"
                                 -------------

                                     PLANS

                               [to be attached]
<PAGE>

                                  EXHIBIT "D"
                                  -----------

                               APPROVED SIGNAGE

                                      C-2
<PAGE>

                                  EXHIBIT "E"
                                  -----------

                               OPTION TO EXTEND

     1.   Notice and Exercise.      Provided no Event of Default is continuing
          -------------------
under this Lease and Tenant has not assigned this Lease nor is Tenant then-
currently subleasing all or any portion of the Premises in excess of 10,000
rentable square feet (other than to a Tenant Affiliate), Tenant is hereby
granted the option to extend the Term once for an additional period of five (5)
years (the "Renewal Term") commencing upon the expiration of the initial lease
term, on the same terms and conditions as contained in the other provisions of
this Lease other than any upfitting allowance (Tenant agreeing to occupy the
Premises in its "as is" condition but without limiting Landlord's maintenance
and repair obligation), additional renewal options and as otherwise provided in
this Section.  Each option shall be exercised only by delivery of written notice
(the "Renewal Notice") to Landlord no later than nine (9) months prior to the
scheduled expiration of the initial lease term.  The Minimum Rent for the
Premises during the first Renewal Term shall be the then fair market rental
("Market Rate") times the rentable square footage of the Premises, and the
Operating Expense Stop shall be adjusted to the extent reflected in the Market
Rate.  Tenant's occupancy of the Premises during any Renewal Term shall be
subject to all other terms and conditions of this Lease, expressly including
without limitation, the obligation to pay additional rent and Tenant's
Contribution.

     2.   Determination of Market Rate.  For purposes of this Exhibit "E", the
          ----------------------------                        -----------
term "Market Rate" shall mean the annual amount per rentable square foot that
comparable landlords of comparable buildings have accepted in then-current
transactions between non-affiliated parties from new, non-expansion, non-renewal
(unless the lease involved a procedure invoked by landlord and tenant for a 100%
determination of "fair market rental") and non-equity tenants of comparable
credit-worthiness, for comparable space, for a comparable use, for a comparable
period of time ("Comparable Transactions").  In any determination of Comparable
Transactions appropriate consideration shall be given to the annual rental rates
per rentable square foot, the standard of measurement by which the rentable
square footage is measured, the ratio of rentable square feet to usable square
feet, the type of escalation clause implemented, the extent of tenant's
liability under the lease, abatement provisions reflecting free rent and/or no
rent during the period of construction or subsequent to the commencement date as
to the space in question, parking considerations, length of the lease term, size
and location of premises being leased, building standard work letter and/or
tenant improvement allowances, if any, or any other tenant concessions and other
generally applicable conditions of tenancy for such Comparable Transactions.
The intent is that Tenant will obtain the same rent and other economic benefits
that Landlord would otherwise give in Comparable Transactions and that Landlord
will make, and receive the same economic payments and concessions that Landlord
would otherwise make, and receive in Comparable Transactions.

          Landlord shall determine the Market Rate by using its good faith
judgment.  Landlord shall provide written notice of such amount within thirty
(30) days (but in no event later than forty-five (45) days) after Tenant
provides the notice to Landlord exercising Tenant's option rights which require
a calculation of the Market Rate.  Tenant shall have thirty (30) days ("Tenant's
Review Period") after receipt of Landlord's notice of the new rental within
which to accept such rental or to object thereto in writing.  In the event
Tenant objects, Landlord and Tenant shall attempt to agree upon such Market Rate
using their best good faith efforts.  If Landlord and Tenant fail to reach
agreement within thirty (30) days following Tenant's Review Period ("Outside
Agreement Date"), then each party shall place in a separate sealed envelope its
final proposal as to Market Rate and such determination shall be submitted to
arbitration in accordance with subsections (a) through (e) below.  Failure of
Tenant to so accept in writing such rental within Tenant's Review Period shall
conclusively be deemed its disapproval of the Market Rate determined by
Landlord.

          (a)  Landlord and Tenant shall meet with each other within five (5)
business days of the Outside Agreement Date and exchange the sealed envelopes
and then open such envelopes in each other's presence.  If Landlord and Tenant
do not mutually agree upon the Market Rate within one (1) business day of the
exchange and opening of envelopes, then, within ten (10) business days of the
exchange and opening of envelopes Landlord and Tenant shall agree upon and
jointly appoint a single arbitrator who shall by profession be a real estate
appraiser, lawyer or broker who shall have been active over the five (5) year
period ending on the date of such appointment in the leasing of comparable
commercial properties in the vicinity of the Building.  Neither Landlord nor
Tenant shall consult with such arbitrator as to his or her opinion as to Market
Rate prior to or after the appointment.  The determination of the arbitrator
shall be limited solely to the issue of whether Landlord's or Tenant's submitted

                                      C-3
<PAGE>

Market Rate for the Premises is the closer to the actual Market Rate for the
Premises as determined by the arbitrator, taking into account the requirements
of this Section 2.  Such arbitrator may hold such hearings and require such
briefs as the arbitrator, in his or her sole discretion, determines is
necessary.  In addition, Landlord or Tenant may submit to the arbitrator with a
copy to the other party within five (5) business days after the appointment of
the arbitrator any market data and additional information that such party deems
relevant to the determination of Market Rate ("MR Data") and the other party may
submit a reply in writing within five (5) business days after receipt of such MR
Data.

     (b)  The arbitrator shall, within thirty (30) days of his or her
appointment, reach a decision as to whether the parties shall use Landlord's or
Tenant's submitted Market Rate, and shall notify Landlord and Tenant of such
determination.

     (c)  The decision of the arbitrator shall be binding upon Landlord and
     Tenant.

     (d)  If Landlord and Tenant fail to agree upon and appoint an arbitrator,
then the appointment of the arbitrator shall be made by the Presiding Judge of
the Superior Court in Durham County, or, if he or she refuses to act, by any
judge having jurisdiction over the parties.

     (e)  The cost of arbitration shall be paid by Landlord and Tenant equally.

          Immediately after the Annual Rental for the applicable Renewal Term is
determined pursuant to this Exhibit, Landlord and Tenant shall execute an
amendment to the Lease stating the new Annual Rental in effect.

                                      C-4
<PAGE>

                                  EXHIBIT "F"
                                  -----------

                                   SITE PLAN

                                      C-5
<PAGE>

                                  EXHIBIT "G"
                                  -----------

                             FORM OF UNCONDITIONAL
                               LETTER OF CREDIT

                                      C-6
<PAGE>

                                  EXHIBIT "H"
                                  -----------

                            ROOF LICENSE AGREEMENT

     THIS ROOF LICENSE AGREEMENT (this "Agreement") is executed as of this ___
day of _________________, 2000, by and between
__________________________________, a _______________________ corporation
("Licensor"), and ________________________________, a
_____________________________ ("Licensee").

                                  WITNESSETH:

1.   Grant of License.  Licensor, in consideration of the covenants and
     ----------------
     agreements to be performed by Licensee and upon the terms and conditions
     herein stated, grants Licensee a revocable license to install, maintain,
     and operate, during the term of this Agreement, a mast-mounted satellite
     antenna ("Equipment"), of a size, weight, design and shape reasonably
     approved by Licensor, on the roof of the building known as Nottingham Hall
     (the "Building") solely for the purpose of [describe nature of
     communications; e.g., transmitting and/or receiving microwave or radio
                     ----
     signals], and for no other purpose.  Licensee shall neither transmit nor
     receive any communications via the Equipment that are pornographic, obscene
     or offensive or that otherwise tend to harm the reputation of Licensor or
     the Building, all as determined by Licensor in its sole discretion.

2.   Location.  The location of the Equipment on the roof of the Building shall
     --------
     be at Licensor's sole discretion and such location shall be subject to
     relocation at the option of the Licensor at any time upon thirty (30) days
     prior notice, at Licensor's sole cost and expense.

3.   Term.  The term of this Agreement shall commence on the date first written
     ----
     above and shall continue for the remaining term of the Lease.

4.   Payment. Licensee agrees to pay Licensor a monthly fee of $300.00 on the
     -------
     first day of each calendar month during the, term of this Agreement.  The
     fee will be prorated for any partial calendar month in which this Agreement
     is in effect.

5.   Installation of Equipment.  As set forth in paragraph 1, the size, weight,
     -------------------------
     design and shape of the equipment is subject to Licensor's approval. In
     this regard, Licensee shall submit all specifications of the Equipment to
     Licensor for its approval. Prior to installation of the Equipment, Licensee
     shall be solely responsible for obtaining all local, state or governmental
     permits or approvals, including any approvals from the Federal
     Communications Commission.  Additionally, such installation shall comply
     with all zoning laws and building insurance requirements which are
     currently in effect.

     Licensee's installation contractor for the Equipment shall be subject to
     Licensor's prior review and approval (such approval not to be unreasonably
     withheld), and such contractor must provide evidence of insurance
     reasonably satisfactory to Licensor prior to installation. Licensee's
     contractors and subcontractors must comply with all building rules in
     effect, including but not limited to rules relating to the use of freight
     elevators and removal of debris.

     Upon installation of the Equipment, Licensor has the right to inspect such
     Equipment in order to verify that such installation and Equipment complies
     with the approvals previously given by Licensor.  If such inspection
     reveals any deviation from Licensor's prior approvals, such deviation shall
     constitute a breach of this Agreement and Licensor may either require that
     Licensee immediately conform the Equipment to the approved specifications,
     or terminate this Agreement pursuant to paragraph 14 herein.

     Upon completion of the installation of the Equipment, Licensee agrees to
     provide Licensor lien waivers from all of Licensee's contractors and
     subcontractors.

6.   Access to Roof.  Licensee may only access the roof of the Building through
     --------------
     common areas of the Building and Licensee agrees that it will not pass
     through other tenants' spaces, nor will it interfere with any other

                                      C-7
<PAGE>

     tenants' businesses.  Additionally, Licensee agrees to give Licensor
     reasonable notice prior to accessing the roof and agrees only to access
     said roof during normal business hours and upon Licensor's consent, not to
     be unreasonably withheld.

7.   Use of Building Electricity.  Licensor agrees to allow Licensee, at
     ---------------------------
     Licensee's sole cost and expense, to utilize electricity in the Building.
     However, the proposed connection of electricity and location of the
     electric cables on the roof shall be subject to Licensor's prior review and
     approval, such approval not to be unreasonably withheld.

8.   Changes in Equipment.  Any future installations or changes in the Equipment
     --------------------
     or any cables shall be subject to all of the conditions and restrictions
     for original installation of the Equipment as set forth herein, and shall
     be subject to Licensor's prior approval, such approval not to be
     unreasonably withheld.

9.   Not Exclusive License.  By granting this license, Licensor reserves the
     ---------------------
     right to install any other equipment or grant additional licenses to
     install, maintain and operate other equipment on the roof of the Building.
     Additionally, Licensor shall have the right to maintain and repair the roof
     at any time without Licensee's prior approval.  Operation of the Equipment
     by Licensee shall not interfere with the use or operation of any existing
     communications equipment on, in or about the Building, by Licensor or any
     third party.

10.  Installation and Maintenance of Cable in the Building.  In the event that
     -----------------------------------------------------
     Licensee desires to run any cable through the Building in connection with
     the installation and maintenance of the Equipment, Licensee agrees to
     submit working drawings to Licensor specifying the following:

     a.   The locations throughout the Building where the cable will be located.
     b.   The manner in which the cabling will be run through the Building.
     c.   The communications closets, if any, which will be utilized in
          installing and maintaining such cabling.
     d.   The amount of cable which will be required to be utilized.
     e.   The type of cable which will be utilized.

     Said working drawings are subject to Licensor's approval and Licensee shall
     not install any cabling or perform any work until such working drawings
     have been approved by the Licensor.

     Additionally, Licensee agrees that all cable shall be shielded cable and
     that the cable coating shall comply with all applicable fire codes.

     Licensee further agrees to provide Licensor reasonable notice prior to
     installing any cable, and such notice shall set forth the times at which
     Licensee expects to be installing or working on such cables.  Licensee
     agrees that it will not pass through other tenants' spaces, nor interfere
     with any other tenants' businesses when installing or maintaining such
     cables.

11.  Zoning.  Licensee acknowledges that Licensor has made no representations or
     ------
     warranties to Licensee that the Equipment is permitted under applicable
     zoning ordinances.  Licensee represents and warrants to Licensor that it
     has ascertained that the Equipment and installation thereof is so permitted
     under applicable zoning laws, including but not limited to any zoning laws
     relating to height restrictions.

12.  Compliance with Law.  Licensee warrants that it will comply with all
     -------------------
     applicable laws and  regulations of the United States, the state of, or any
     political subdivision thereof in connection with the installation and
     operation of the Equipment.  Licensee further warrants that Licensee shall,
     at its sole cost and expense, obtain any and all governmental licenses and
     permits necessary, not only to install said Equipment, but also to operate
     said Equipment as herein contemplated.

13.  Insurance.  Licensee agrees to procure and maintain (and provide Licensor
     ---------
     with written evidence thereof), while this Agreement is in effect, such
     policies of liability and property damage insurance in amounts not

                                      C-8
<PAGE>

     less than $1,000,000, naming Licensor as an additional insured thereunder
     and written by insurance companies satisfactory to Licensor as Licensor
     deems necessary or appropriate.

14.  Termination.  Either party may terminate this Agreement without cause upon
     -----------
     30 days prior written notice to the other at the address set forth opposite
     its signature below.  In the event of a breach of any provision thereof by
     Licensee, Licensor may terminate this Agreement upon 10 days written notice
     to Licensee at the address set forth opposite its signature below.

15.  Indemnity.  Licensee shall indemnify and hold harmless Licensor from all
     ---------
     claims, suits, losses and liabilities arising from Licensee's installation,
     maintenance, or operation of the Equipment or any cabling, from any breach
     or default by Licensee hereunder, or from any injuries or damages
     (including but not limited to foreseeable or unforeseeable consequential
     damages) occurring in connection therewith except to the extent caused by
     the negligence of the Licensor or its agents, employees or contractors.

16.  Subordination.  Licensee's rights under this Agreement shall be subject to
     -------------
     the provisions of the Lease concerning subordination and non-disturbance.

17.  Repair and Removal.  Licensee shall not in any manner deface, injure, or
     ------------------
damage, the roof of the Building, or any portion of the Building and will pay
the cost of repairing any damage or injury done to the roof, the Building, or
any part thereof by Licensee, its agents or employees.  Upon expiration of the
Lease Term or earlier termination of this Agreement: (i) Licensee shall promptly
remove the Equipment and repair any damage caused by such removal and restore,
the roof to the condition it was in prior to the installation of the Equipment.
Additionally, at the option of Licensor, Licensor shall either (i) retain
ownership of all cables running through the Building, or (ii) require Licensee,
at Licensee's sole cost and expense, to remove such cables, repair any damage
caused by such removal, and restore those portions of the Building utilized to
the condition they were in prior to the installation of the cable. In the event
Licensee does not remove such equipment and/or cables within 30 days after the
termination date, Licensor shall have the right to remove same.  Licensee agrees
to reimburse Licensor for all such removal and restoration costs in addition to
a penalty of  $1,000.

18.  Independent Contractor.  Licensee is an independent contractor and not an
     ----------------------
     employee, partner, or joint venture with Licensor with respect to the
     subject matter of this Agreement.

     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
     first written above.

LICENSOR                                    LICENSEE
--------                                    --------

By___________________________               By__________________________________

                                      C-9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}]]