

                                      LEASE

                                     BETWEEN

                      RIVERFRONT OFFICE PARK JOINT VENTURE

                                    Landlord



                                       AND



                                PEGASYSTEMS INC.

                                     Tenant

                                101 MAIN STREET,
                            CAMBRIDGE, MASSACHUSETTS
















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<PAGE>



                                                       INDEX
                                                       -----


<TABLE>
<S>               <C>                                                                                             <C>
ARTICLE      1.   REFERENCE DATA ................................................................................ 1

ARTICLE      2.   DESCRIPTION OF DEMISED PREMISES ................................................................3
             2.1  Demised Premises .............................................................................. 3
             2.2  Appurtenant Rights ............................................................................ 3
             2.3  Reservations .................................................................................. 3

ARTICLE      3.   TERM OF LEASE; OPTION TO EXTEND TERM .......................................................... 3
             3.1  Habendum .......................................................................................3
             3.2  Term Commencement Date ........................................................................ 4
             3.3  Option To Extend .............................................................................. 4
             3.4  Right of First Offer .......................................................................... 4

ARTICLE      4.   WORK BY LANDLORD; TENANT'S ACCESS ..............................................................5
             4.1  Completion Date - Delays ...................................................................... 5
             4.2  Conclusiveness of Tenant's Performance ........................................................ 6
             4.3  Entry by Tenant; Interference with
                            Construction ........................................................................ 7

ARTICLE      5.   USE OF PREMISES ............................................................................... 7
             5.1  Permitted Use ................................................................................. 7
             5.2  Prohibited Uses ............................................................................... 7
             5.3  Licenses and Permits .......................................................................... 8

ARTICLE      6.   RENT .......................................................................................... 8
             6.1  Yearly Fixed Rent ............................................................................. 8
             6.2  Payment to Mortgagee .......................................................................... 8
             6.3  Operating Expenses ............................................................................ 9
             6.4  Tenant's Proportionate Share .................................................................. 9
             6.5  Payment to Mortgagee ..........................................................................10

ARTICLE      7.   UTILITIES AND LANDLORD'S SERVICES .............................................................10
             7.1  Electricity ...................................................................................10
             7.2  Water Charges .................................................................................11
             7.3  Heat and Air Conditioning......................................................................11
             7.4  Additional Heat, Cleaning and
                            Air Conditioning Services ...........................................................12
             7.5  Repairs and Other Services ....................................................................12
             7.6  Interruption or Curtailment of Services .......................................................12

ARTICLE      8.   CHANGES OR ALTERATIONS BY LANDLORD ............................................................13

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ARTICLE      9.   FIXTURES, EQUIPMENT AND IMPROVEMENTS -
                            REMOVAL BY TENANT ...................................................................13

ARTICLE     10.   ALTERATIONS AND IMPROVEMENTS BY TENANT ........................................................14

ARTICLE     11.   TENANT'S CONTRACTORS - MECHANICS' AND
                            OTHER LIENS - STANDARD OF TENANT'S
                            PERFORMANCE - COMPLIANCE WITH LAWS ..................................................14

 ARTICLE    12.   REPAIRS AND SECURITY BY TENANT ................................................................15

ARTICLE     13.   INSURANCE, INDEMNIFICATION, EXONERATION
                            AND EXCULPATION .....................................................................15
            13.1  Insurance .....................................................................................15
            13.2  Certificates of Insurance .....................................................................16
            13.3  General .......................................................................................16
            13.4  Landlord's Indemnity ..........................................................................17
            13.5  Property of Tenant ............................................................................17
            13.6  Bursting of Pipes, etc. .......................................................................18
            13.7  Repairs and Alterations .......................................................................18

ARTICLE     14.   ASSIGNMENT, MORTGAGING, SUBLETTING, ETC. ......................................................18
            14.1  Restrictions ..................................................................................18
            14.2  Requests to Assign or Sublet ..................................................................19
            14.3  Exceptions ....................................................................................19
            14.4  Excess Rent ...................................................................................20
            14.5  Recapture .....................................................................................20
            14.6  Further Documentation .........................................................................21
            14.7  General .......................................................................................21

ARTICLE     15.   MISCELLANEOUS COVENANTS .......................................................................22
            15.1  Rules and Regulations .........................................................................22
            15.2  Access to Premises - Shoring ..................................................................23
            15.3  Accidents to Sanitary and Other Systems .......................................................24
            15.4  Signs, Blinds and Drapes ......................................................................24
            15.5  Estoppel Certificate ..........................................................................24
            15.6  Prohibited Items ..............................................................................25
            15.7  Requirements of Law; Fines and Penalties ......................................................25
            15.8  Tenant's Acts - Effect on Insurance ...........................................................25
            15.9  Miscellaneous .................................................................................26

ARTICLE     16.   DAMAGE BY FIRE, ETC. ..........................................................................26

ARTICLE     17.   WAIVER OF SUBROGATION .........................................................................27

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ARTICLE     18.   CONDEMNATION - EMINENT DOMAIN .................................................................28

ARTICLE     19.   DEFAULT .......................................................................................30
            19.1  Conditions of Limitation - Re-entry -
                            Termination .........................................................................30
            19.2  Damages - Assignment for Benefit
                            of Creditors ........................................................................30
            19.3  Damages - Termination .........................................................................31
            19.4  Fees and Expenses .............................................................................32
            19.5  Landlord's Remedies Not Exclusive .............................................................32
            19.6  Grace Period ..................................................................................33

ARTICLE     20.   END OF TERM - ABANDONED PROPERTY ..............................................................33

ARTICLE     21.   RIGHTS OF MORTGAGEES ..........................................................................34
            21.1  Superiority of Lease ..........................................................................34
            21.2  Entry and Possession ..........................................................................34
            21.3  Right to Cure .................................................................................35
            21.4  Duty to Construct .............................................................................35
            21.5  Prepaid Rent ..................................................................................35
            21.6  Continuing Offer ..............................................................................35
            21.7  Subordination .................................................................................35
            21.8  Limitations on Liability ......................................................................36

ARTICLE     22.   QUIET ENJOYMENT ...............................................................................36

ARTICLE     23.   ENTIRE AGREEMENT - WAIVER - SURRENDER .........................................................37
            23.1  Entire Agreement ..............................................................................37
            23.2  Waiver by landlord ............................................................................37
            23.3  Surrender .....................................................................................37

ARTICLE     24.   INABILITY TO PERFORM - EXCULPATORY CLAUSE .....................................................38

ARTICLE     25.   BILLS AND NOTICES .............................................................................39

ARTICLE     26.   PARTIES BOUND - SEISIN OF TITLE ...............................................................39

ARTICLE     27.   MISCELLANEOUS .................................................................................40
            27.1  Separability ..................................................................................40
            27.2  Captions ......................................................................................40
            27.3  Broker ........................................................................................40
            27.4  Governing Law .................................................................................40
            27.5  Assignment of Rents ...........................................................................40
            27.6  Parking .......................................................................................41

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            27.7  Notice of Lease ...............................................................................41
            27.8  Financial Statements ..........................................................................41
            27.9  Letter of Credit ..............................................................................42

</TABLE>


EXHIBIT A         Description of Demised Premises
EXHIBIT B         Description of Land
EXHIBIT C         Tenant Improvements
EXHIBIT D         Cleaning Specifications
EXHIBIT E         Tenant Trade Fixtures
EXHIBIT F         Rules and Regulations
EXHIBIT G         Form of Agreement of Subordination,
                  Non-Disturbance and Attornment
EXHIBIT H         Form of Letter of Credit



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<PAGE>



                               AGREEMENT OF LEASE


                  AGREEMENT OF LEASE made as of the 26th day of February, 1993,
by and between RIVERFRONT OFFICE PARK JOINT VENTURE, a Massachusetts joint
venture (hereinafter referred to as "Landlord") and PEGASYSTEMS INC., a
Massachusetts corporation (hereinafter referred to as "Tenant").

                              W I T N E S S E T H:

                  Landlord hereby leases to Tenant and Tenant hereby hires from
Landlord that portion of the seventh (7th) floor, as shown on the plan attached
hereto as Exhibit A and made a part hereof (hereinafter referred to as the
"Premises" or the "Demised Premises") contained in the building known and
numbered as 101 Main Street, Cambridge, Massachusetts (hereinafter referred to
as the "Building").

1.       REFERENCE DATA

         Each reference in this Lease to any of the terms and titles contained
in this Article shall be deemed and construed to incorporate the data stated
following that term or title in this Article.


<TABLE>
<S>      <C>                                <C>                 
(1)      Additional Rent:                   Sums or other charges payable by Tenant to Landlord
                                            under this Lease, other than Yearly Fixed Rent.

(2)      Approved Final
         Plans Date:                        December 16, 1992.

(3)      Broker:                            Lynch Murphy Walsh & Partners

(4)      Business Day:                      All days except Saturdays, Sundays, and days defined as
                                            "Legal Holidays" for the entire state under the laws of the
                                            Commonwealth of Massachusetts.

(5)      Land:                              The parcel of land described. on Exhibit B attached hereto
                                            and made a part hereof.

(6)      Landlord's Address:                c/o Codman Management Company, Inc.,
                                            One Main Street,
                                            Cambridge, Massachusetts 02142.

(7)      Landlord's Architect:              Bryer Associates.


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 (8)     Mortgage:                          A mortgage, deed of trust, trust indenture, or other security
                                            instrument of record creating an interest in or affecting title
                                            to the Land or Building or any part thereof, including the
                                            leasehold mortgage, and any and all renewals,
                                            modifications, consolidations or extensions of any such
                                            instrument.  For such time as Teachers Insurance and
                                            Annuity Association ("TIAA") is the holder of a first
                                            mortgage on the Property, the term "Mortgage" shall mean
                                            only said first mortgage, and such other mortgages, if any,
                                            which TIAA shall approve.

(9)      Mortgagee:                         The holder of any Mortgage.

(10)     Parking Spaces:                    Seventy (70), provided, however, that Tenant at its option
                                            may elect to increase such number upon not less than thirty
                                            (30) days prior written notice thereof to Landlord to a
                                            maximum aggregate number of ninety-three (93).

(11)     Property:                          The Land and Building.

(12)     Rent:                              Yearly Fixed Rent and Additional Rent.

(13)     Rentable Area of
         the Demised Premises:              23,350 square feet.

(14)     Tenant's Address:                  Until the Term Commencement Date, 840 Memorial Drive,
                                            Cambridge, MA 02138, and thereafter 101 Main Street,
                                            Cambridge, MA 02142.

(15)     Term Commencement
         Date:                              As defined in Section 3.2.

(16)     Term of This Lease:                As defined in Section 3.1.

(17)     Termination Date:                  As defined in Section 3.1.

(18)     Use of Demised
          Premises:                         General office purposes including, but not limited, to
                                            software development.


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(19)     Yearly Fixed Rent:                 (a)      Year one (1) of the Term of this Lease:
                                                     --------------------------------------
                                                     $364,260

                                            (b)      Year two (2) of the Term of this Lease:

                                                     $409,792.50

                                            (c)      Each of years three (3) through six (6) of the Term
                                                     of this Lease:
                                              
                                                     $455,325

</TABLE>


2.       DESCRIPTION OF DEMISED PREMISES

         2.1 Demised Premises. The Demised Premises are that portion of the
Building as described above (as the same may from time to time be constituted
after changes therein, additions thereto and eliminations therefrom pursuant
hereto).

         2.2 Appurtenant Rights. Tenant shall have, as appurtenant to the
Demised Premises, rights to use in common, subject to reasonable rules from time
to time made by Landlord of which Tenant is given notice, those common roadways,
walkways, elevators, hallways and stairways necessary for access to that portion
of the Building occupied by the Demised Premises.

         2.3 Reservations. All the perimeter walls of the Demised Premises
except the inner surfaces thereof, any balconies, terraces or roofs adjacent to
the Demised Premises, and any space in or adjacent to the Demised Premises used
for shafts, stacks, pipes, conduits, wires and appurtenant fixtures, fan rooms,
ducts, electric or other utilities, sinks or other building facilities, and the
use thereof, as well as the right of access through the Demised Premises for the
purpose of operation, maintenance, decoration and repair as hereinafter
provided, are expressly reserved to Landlord.

3.       TERM OF LEASE; OPTIONS TO EXTEND TERM

         3.1 Habendum. TO HAVE AND TO HOLD the Demised Premises for a term of
six (6) years commencing on the Term Commencement Date and ending on the day
immediately prior to the sixth (6th) anniversary thereof (the "Term of This
Lease"), or on such earlier date upon which said Term may expire or be
terminated pursuant to any of the conditions of limitation or other provisions
of this Lease or pursuant to law (which date for the termination of the term
hereof shall hereafter be called the "Termination Date"). The Term of this Lease
may be extended by Tenant in accordance with the provisions of Section 3.3.



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<PAGE>

         3.2 Term Commencement Date. The Term Commencement Date shall be the
earlier of (a) the date on which, pursuant to permission therefor duly given by
Landlord, Tenant undertakes Use of the Demised Premises for the purpose set
forth in Article 1, or (b) the date on which the Tenant Improvements are
substantially completed in accordance with the provisions of Section 4.1 or (c)
as otherwise provided in Section 4.1.

         3.3 Option to Extend. On the conditions (which conditions Landlord may
at its election waive) (i) that Tenant is not then in default of its covenants
and obligations under this Lease, and (ii) that Tenant is then itself occupying
the entirety of the Demised Premises, Tenant may extend the Term of this Lease
for up to two (2) successive additional periods of four (4) years each by giving
notice to Landlord of its election to extend at least twelve (12) months prior
to the end of the original Term or the initial extension period, as the case may
be. The Yearly Fixed Rent payable by Tenant with respect to each such extension
period shall be equal to ninety (90%) percent of the then fair market rental
value of the Demised Premises (taking into account comparable first-class office
space in the East Cambridge area) (1) as the same may be mutually agreed by
Landlord and Tenant; provided, however that (2) if they have not so agreed in
writing within two (2) months following the exercise of the option then said
fair market value shall be determined by appraisers, one to be chosen by
Landlord, one to be chosen by Tenant, and a third to be selected by the two
first chosen. The unanimous written decision of the two first chosen, without
selection and participation of a third appraiser, or otherwise the written
decision of a majority of three appraisers chosen and selected as aforesaid,
shall be conclusive and binding upon Landlord and Tenant. Landlord and Tenant
shall each notify the other of its chosen appraiser within thirty (30) days
following expiration of the aforesaid two (2) month period and, unless such two
appraisers shall have reached a unanimous decision within thirty (30) days from
said expiration, they shall within a further fifteen (15) days elect a third
appraiser and notify Landlord and Tenant thereof. Landlord and Tenant shall
instruct the appraiser to make their decisions in thirty (30) days. Landlord and
Tenant shall each bear the expense of the appraiser chosen by it and shall
equally bear the expense of the third appraiser (if any). Notwithstanding the
foregoing, in the event the fair market value is so determined by appraisers,
Tenant, at its option, may revoke its election to extend the Term of this Lease
by written notice thereof to Landlord given within ten (10) Business Days of
Tenant's receipt of notification of said determination of the appraisers.

         3.4 Right of First Offer. In the event that, at any time during the
Term of this Lease, any rentable office space on the sixth (6th) or eighth (8th)
floors of in the Building becomes available for rental and Landlord wishes to
lease such space to any person other than the then current occupant thereof (if
any), Landlord shall first offer to Tenant the option to add such space 

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<PAGE>

to the Demised Premises on the following terms and conditions. Tenant
shall have the right to add all or any portion of such space to the Demised
Premises by giving notice to Landlord to such effect within thirty (30) days
after receipt by Tenant of written notice from Landlord of such offer. If such
notice of acceptance by Tenant is not so given, then Landlord shall be free to
enter into a lease for such space with any third party or parties within one
year after Landlord's said notice to Tenant. As to any such space that Tenant
shall so elect to add to the Demised Premises during the first year of the Term
of this Lease, the Yearly Fixed Rent with respect to such additional space so
added to the Demised Premises shall be $19.50 per square foot per annum. As to
any such space that Tenant shall so elect to add to the Demised Premises during
any year subsequent to the first year of the Term of this Lease, the Yearly
Fixed Rent with respect to such additional space so added to the Demised
Premises shall be ninety percent (90%) of the then fair market value of such
space determined in accordance with the procedures set forth in Section 3.3. As
to any such space that Tenant shall so elect to add to the Demised Premises,
Landlord will provide to Tenant the following allowance for fit-up of such
additional space:


   Space to be Added During Year            Fit-up Allowance per
       of Term of this Lease            Square Foot of Added Space
       --------------------             ---------------------------

                  First                              $25
                  Second                              21
                  Third                               17
                  Fourth                              13
                  Fifth                                9
                  Sixth                                5

For the purposes of determining the applicable fit-up allowance pursuant to this
Section 3.4, the year in which Tenant makes its election to add additional space
shall be deemed the year of the Term of this Lease in which such space is added.
In each instance where Tenant shall so elect to add such additional space to the
Demised Premises, Landlord and Tenant shall promptly execute an amendment to
this Lease to reflect the changes occasioned thereby.

4.       WORK BY LANDLORD; TENANT'S ACCESS

         4.1 Completion Date; Delivery of Possession. (a) Subject to delay by
causes beyond the reasonable control of Landlord or caused by the action or
inaction by Tenant, Landlord shall, on or before April 1, 1993 (the "Original
Term Commencement Date") substantially complete the Tenant's Improvements (as
defined in Exhibit C, which Exhibit is attached hereto and incorporated by
reference), insofar as is practicable in view of Tenant's Acts (as hereinafter
defined) or Tenant defaults, if any. For purposes hereof, the terms substantial
completion or substantially complete shall mean (i) that the said Tenant's
Improvements have been completed in compliance with the Approved 


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<PAGE>


Final Plans (as defined in Exhibit C) with the exception of minor punch
list items so that the Demised Premises may be used for their intended purpose,
excluding, however, any special items or long-lead items designated in the
Approved Final Plans and identified as such by Landlord, and (ii) that a
certificate of occupancy or other permission for Tenant to occupy the Demised
Premises for their permitted use hereunder shall have been obtained; and (iii)
that the date of substantial completion shall have been established and
confirmed by a Certificate of Substantial Completion signed by Landlord's
Architect, subject to Tenant's Architect's reasonable concurrence. In the event
that any delay in delivery of possession of the Demised Premises to Tenant past
the date set forth in this Section 4.1(a) as the "Original Term Commencement
Date" is caused by or is attributable to the act or neglect of Tenant, its
servants, agents, employees or independent contractors, including without
limitation, as a consequence of any change orders to the Approved Final Plans
requested by Tenant and consented to by Landlord (provided that notice of such
anticipated delay shall be given by Landlord to Tenant) (collectively "Tenant's
Acts"), the Term Commencement Date shall be the later of the Original Term
Commencement Date or the date on which possession of the Demised Premises would
have been delivered to Tenant but for the delay caused by Tenant's Acts and
Tenant shall be liable for Rent and other obligations under this Lease from said
Term Commencement Date. Landlord shall notify Tenant as soon as reasonably
practical following Landlord's awareness of the occurrence of any Tenant's Act
which Landlord believes is likely to cause a delay in the delivery of possession
of the Demised Premises to Tenant. Each day of delay caused by Tenant's Acts
shall postpone by one (1) day the Original Term Commencement Date.

                  (b) On or before three (3) weeks prior to the Term
Commencement Date, Landlord shall notify Tenant that Tenant and its contractor
may have access to the Demised Premises for the purpose of preparing the same
for Tenant's occupancy. Such access shall be deemed to be pursuant to a license
pursuant to Section 4.3 and shall not be deemed to advance the Term Commencement
Date. Notwithstanding the fact that the Term Commencement Date shall not have
occurred, it is understood and agreed that the provisions of Article 13 of this
Lease shall become effective immediately upon the commencement of such access to
Tenant, and, Tenant on or before the commencement date of such access shall
furnish to Landlord a certificate of insurance pursuant to Section 13.2.

         4.2 Conclusiveness of Landlord's Performance. Tenant shall be
conclusively deemed to have agreed that Landlord has performed all of its
obligations under this Article 4 unless not later than sixty (60) days after the
Term Commencement Date Tenant shall give Landlord written notice specifying the
respects in which Landlord has not performed such obligations.


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<PAGE>


         4.3 Entry by Tenant; Interference with Construction. In the event that
Tenant is permitted by Landlord to enter the Demised Premises prior to the Term
Commencement Date to undertake such work as is to be performed by Tenant
pursuant to this Lease in order to prepare the Demised Premises for Tenant's
occupancy, such entry shall be deemed to be pursuant to a license from Landlord
to Tenant and shall be at the risk of Tenant. In no event shall Tenant interfere
with any construction work being performed by or on behalf of Landlord in or
around the Building; without limiting the generality of the foregoing, Tenant
shall comply with all instructions issued by Landlord's contractors relative to
the moving of Tenant's equipment and other property into the Demised Premises
and shall pay any reasonable fees or costs imposed in connection therewith.

5.       USE OF PREMISES

         5.1 Permitted Use. Except as otherwise agreed by Landlord, Tenant,
during the Term of this Lease, shall occupy and use the Demised Premises for the
Permitted Use set forth in Article 1 and for no other purpose. Service and
utility areas (whether or not a part of the Premises) shall be used only for the
particular purpose for which they are designated.

         5.2 Prohibited Uses. Tenant shall not use, or suffer or permit the use
of, or suffer or permit anything to be done in or anything to be brought into or
kept in, the Demised Premises or any part thereof (i) which would violate any of
the covenants, agreements, terms, provisions and conditions of this Lease, (ii)
for any unlawful purposes or in any unlawful manner, or (iii) which, in the
reasonable judgment of Landlord shall in any way (a) impair or tend to impair
the appearance or reputation of the Building, (b) impair or interfere with or
tend to impair or interfere with any of the Building services or the proper and
economic heating, cleaning, air conditioning or other servicing of the Building
or Demised Premises, or with the use of any of the other areas of the Building,
or (c) occasion discomfort, inconvenience or annoyance to any of the other
tenants or occupants of the Building, whether through the transmission of noise
or odors or otherwise. Without limiting the generality of the foregoing, no food
or beverages shall be prepared or served for consumption on or about the Demised
Premises, excepting only for consumption on the Demised Premises by Tenant's
employees and invitees; no intoxicating liquors or alcoholic beverages shall be
sold on or about the Demised Premises; no lottery tickets (even where the sale
of such tickets is not illegal) shall be sold and no gambling, betting or
wagering shall otherwise be permitted on or about the Demised Premises; no
loitering shall be permitted in or about the Demised Premises; and no loading or
unloading of supplies or other material to or from the Demised Premises shall be
permitted on the Land except at times and in locations to be designated by
Landlord. The Demised Premises shall be maintained in a sanitary condition, and
all kept free of rodents and vermin. All trash and rubbish shall be suitably
stored in the Demised 




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                                        7

<PAGE>


Premises or other locations designated by Landlord from time to time.

         5.3 Licenses and Permits. If any governmental license or permit shall
be required for the proper and lawful conduct of Tenant's business, and if the
failure to secure such license or permit would in any way affect Landlord,
Tenant, at Tenant's expense, shall duly procure and thereafter maintain such
license or permit and submit the same to inspection by Landlord. Tenant, at
Tenant's expense, shall at all times comply with the terms and conditions of
each such license or permit. This Section 5.3 shall not be construed as limiting
Landlord's obligation(s), if any, to obtain and maintain licenses and permits to
operate the Building.

6.       RENT

         6.1 Yearly Fixed Rent. Tenant shall pay to Landlord, without any
set-off or deduction, at Landlord's office, or to such other person or at such
other place as Landlord may designate by notice to Tenant, the Yearly Fixed Rent
set forth in Article 1. All Yearly Fixed Rent shall be paid in equal monthly
installments in advance on or before the first business day of each calendar
month during the Term of this Lease and shall be apportioned for any fraction of
a month in which the Term Commencement Date or the last day of the Term of this
Lease may fall.

         6.2 Taxes. Tenant shall pay to Landlord as Additional Rent a
proportionate share (as defined in Section 6.4) of all real estate taxes
(including without limitation all betterment assessments and charges in lieu of
such taxes and any tax on any fixture (other than a Tenant fixture) installed in
the Building, even if taxed as personal property) imposed against the Building
and the Land, in excess of the amount of said real estate taxes imposed against
the Building and the Land for the fiscal tax year ending June 30, 1993, prorated
with respect to any portion of a fiscal year in which the term of this Lease
begins or ends. Such payments shall be due and payable within thirty (30) days
after Tenant shall have received a copy of the relevant tax bills. If Landlord
shall receive any refund of real estate taxes of which Tenant has paid a portion
pursuant to this Section, then, out of any balance remaining after deducting
Landlord's expenses incurred in obtaining such refund, Landlord shall pay to
Tenant the same proportionate share of said balance, prorated as set forth
above. Tenant shall, if, as and when demanded by Landlord and with each monthly
installment of Fixed Rent, make tax fund payments to Landlord. "Tax Fund
Payments" refer to such payments as Landlord shall determine to be sufficient to
provide in the aggregate a fund adequate to pay, when they become due and
payable, all payments required from Tenant under this Section. In the event that
said tax fund payments are not adequate to pay Tenant's share of such taxes,
Tenant shall pay to Landlord the amount by which such aggregate is less than the
amount of said 


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                                        8

<PAGE>


share, such payment to be due and payable at the time set forth
above. Any surplus tax fund payments shall be accounted for to Tenant after
payment by Landlord of the taxes on account of which they were made, and shall
be promptly refunded to Tenant.

         6.3 Operating Expenses. Tenant shall pay to Landlord as Additional Rent
a proportionate share (as defined in Section 6.4) of all costs and expenses
incurred by Landlord in the operation and maintenance of the Building and the
Land in accordance with generally accepted operational and maintenance
procedures, in excess of the amount of said costs and expenses incurred by
Landlord in the operation and maintenance of the Building and the land during
the calendar year ending December 31, 1993, including, without limiting the
generality of the foregoing, all such costs and expenses in connection with (1)
insurance, license fees, janitorial service, landscaping, and snow removal, (2)
wages, salaries, management fees, employee benefits, payroll taxes, on-site
office expenses, administrative and auditing expenses, and equipment and
materials for the operation, management, and maintenance of said Property, (3)
any capital expenditure (amortized, with interest, on such reasonable basis as
Landlord shall determine) made by Landlord primarily for the purpose of reducing
other operating expenses (4) the furnishing of heat, air conditioning,
utilities, and any other service to the common areas of the Building (i.e.,
areas not constituting a part of the demised premises of any tenant in the
Building), (5) the operation and servicing of any computer system installed to
regulate Building equipment, and (6) the furnishing of the repairs and services
referred to in Section 7.5 (the foregoing being hereinafter referred to as
"operating expenses"). As soon as Tenant's share of operating expenses with
respect to any calendar year can be determined, the same will be certified by
Landlord to Tenant and will become payable to Landlord within thirty (30) days
following such certification, subject to proration with respect to any portion
of a calendar year in which the Term of this Lease begins or ends. Tenant shall,
if, as and when demanded by Landlord and with each monthly installment of Yearly
Fixed Rent, make operating fund payments to Landlord. "Operating Fund Payments"
refer to such payments as Landlord shall reasonably determine to be sufficient
to provide in the aggregate a fund adequate to pay, when they become due and
payable, all payments required from Tenant under this Section. In the event that
operating fund payments are so demanded, and if the aggregate of said operating
fund payments is not adequate to pay Tenant's share of operating expenses,
Tenant shall pay to Landlord the amount by which such aggregate is less than the
amount of said share, such payment to be due and payable at the time set forth
above. Any surplus operating fund payments shall be accounted for to Tenant
after such surplus has been determined, and shall be refunded to Tenant
promptly.

         6.4 Tenant's Proportionate Share.  Tenant's proportionate share of 
taxes pursuant to Section 6.2 and operating expenses pursuant to Section 6.3, 
respectively, shall be computed


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<PAGE>

according to the ratio, as of the last day of the relevant fiscal year, between
the Rentable Area of the Demised Premises (as defined in Article 1) and the
total rentable area of all space in the Building. Computations of rentable area
other than in the Demised Premises shall be made by Landlord's Architect whose
good faith determination shall be conclusive and binding on Tenant.

         6.5 Payment to Mortgagee. Landlord reserves the right to provide in any
Mortgage given by it of the Property that some or all rents, issues, and profits
and all other amounts of every kind payable to the Landlord under this Lease
shall be paid directly to the Mortgagee for Landlord's account and Tenant
covenants and agrees that it will, after receipt by it of notice from Landlord
or Mortgagee designating such Mortgagee to whom payments are to be made by
Tenant, pay such amounts thereafter becoming due directly to such Mortgagee
until excused therefrom by notice from such Mortgagee.

7.       UTILITIES AND LANDLORD'S SERVICES

         7.1 Electricity. Tenant shall purchase the electrical energy that
Tenant requires for operation of the lighting fixtures, appliances and equipment
in the Demised Premises. The costs of initially installing any required meter
shall be paid by Landlord, but Tenant shall keep said meter and installation
equipment in good working order and repair. Landlord shall not be liable in any
way to Tenant for any failure or defect in the supply or character of electrical
energy furnished to the Demised Premises by reason of any requirement, act or
omission of the public utility serving the Building with electricity unless due
to the act or omission of Landlord. Tenant's use of electrical energy in the
Demised Premises shall not at any time exceed the capacity of any of the
electrical conductors and equipment in or otherwise serving the Demised Premises
(Electrical capacity: (i) lighting equal to 2 watts per square foot with an
allowance of 1/2 watts for additional lights; (ii) power equal to 9 watts per
square foot, plus 5 watts per square foot for computer loads; and (iii) both
277/480 volts and 120/208 volts are available). In order to insure that such
capacity is not exceeded and to avert possible adverse affect upon the Building
electrical services, Tenant shall give notice to Landlord and obtain Landlord's
prior written consent whenever Tenant shall connect to the Building electrical
distribution system any fixtures, appliances or equipment other than office
electronic equipment and small appliances customarily used generally in
commercial offices. Any additional feeders or risers to supply Tenant's
electrical requirements in addition to those originally installed and all other
equipment proper and necessary in connection with such feeders or risers, shall
be installed by Landlord upon Tenant's request, at the sole cost and expense of
Tenant, provided that such additional feeders and risers are permissible under
applicable laws and insurance regulations and the installation of such feeders
or risers will not cause permanent damage or injury to the Building or cause or
create a dangerous condition or 


2/12/93
                                       10

<PAGE>


unreasonably interfere with other tenants of the Building. Tenant
agrees that it will not make any alteration or material addition to the existing
electrical equipment and/or appliances in the Demised Premises without the prior
written consent of Landlord in each instance first obtained, which consent will
not be unreasonably withheld. Landlord, at Landlord's expense, shall purchase,
install and replace all light fixtures, bulbs, tubes, lamps, lenses, globes,
ballasts and switches reasonably required for ordinary use in the Demised
Premises (including, without limitation, any such items specified in the
Approved Final Plans), provided, however, that Tenant, at Tenant's expense,
shall purchase, install and replace all light fixtures, bulbs, tubes, lamps,
lenses, globes, ballasts and switches which are not required to be provided for
by Landlord hereunder and which Tenant is permited to and does install in the
Demised Premises.

         7.2 Water Charges. Landlord shall furnish commercially reasonable
quantities of hot and cold water for ordinary cleaning, toilet, lavatory and
drinking purposes to the extent required to service facilities shown on the
Approved Final Plans. If Tenant requires, uses or consumes water for any purpose
other than for such purposes, Landlord may (i) assess a reasonable charge for
the additional water so used or consumed by Tenant or (ii) install a water meter
and thereby measure Tenant's water consumption for all purposes. In the latter
event, Landlord shall pay the cost of the meter and the cost of installing any
equipment required in connection therewith, and Tenant shall keep said meter and
installation equipment in good working order and repair, and shall pay for water
consumed, as shown on said meter, together with the sewer charge based on said
meter charges, as and when bills are rendered; provided, however, that Landlord
shall remain liable to pay for commercially reasonable quantities of hot and
cold water as provided above. On Tenant's default in making such payment
Landlord may pay such charges and collect the same from Tenant.

         7.3. Heat and Air Conditioning. Landlord shall, through the equipment
of the Building furnish to and distribute in the Demised Premises heat and air
conditioning as normal seasonal changes may require on Business Days from 8:00
a.m. to 6:00 p.m. and on Saturdays (other than legal or recognized holidays as
defined in Article 1) from 8:00 a.m. to 12:00 noon when reasonably required for
the comfortable occupancy of the Demised Premises by Tenant. Tenant agrees to
lower and close the blinds or drapes when necessary because of the sun's
position, whenever the air conditioning system is in operation, and to cooperate
fully with Landlord with regard to, and to abide by all the regulations and
requirements which Landlord may prescribe for the proper functioning and
protection of the heating and air conditioning system.


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<PAGE>

         7.4  Additional Heat, Cleaning and Air Conditioning Services.

                  (a) The heating and air conditioning equipment serving the
Demised Premises shall be designed so as to permit Tenant to obtain heat and air
conditioning on days and at times other than as set forth in Section 7.3.
Tenant's use of such additional heat and air conditioning shall be determined by
a separate energy management meter or device installed by Landlord and all
charges in connection therewith shall be payable directly by Tenant; provided,
however, that Landlord shall provide such additional heat and air conditioning
to Tenant at no charge to Tenant during the first three (3) years of the Term of
this Lease.

                  (b) Tenant will pay to Landlord a reasonable charge for any
extra cleaning of the Premises required because of the carelessness or
indifference of Tenant or because of the nature of Tenant's business, or
furnished by Landlord at Tenant's request. Landlord will endeavor to furnish
such requested extra cleaning service upon reasonable advance written notice
from Tenant of its requirements in that regard.


         7.5 Repairs and Other Services. Except as otherwise provided in
Articles 16 and 18, subject to Tenant's obligations in Article 12 and elsewhere
in this Lease, Landlord shall (a) keep and maintain the roof, exterior walls,
structural floor slabs and columns, windows (exclusive of glass components), and
common areas of the Building in good operating condition and repair, (b) keep
and maintain in workable condition the Building's sanitary, electrical, heating,
air conditioning and other systems, (c) provide cleaning services to the Demised
Premises and the common areas of the Building on Business Days according to the
cleaning standards generally prevailing in first class office buildings in the
City of Cambridge, in accordance with Exhibit D, attached hereto, (d) provide
maintenance and snow removal for all roadways, walkways and parking areas on the
Property, (e) provide grounds maintenance to all landscaped areas, and (f)
employ a uniformed guard to be stationed at the main entrance of the Building on
an around-the-clock basis. All expenses (excluding capital expenditures other
than those made primarily for the purpose of reducing operating expenses)
incurred by Landlord in connection with the foregoing repairs and other services
shall be included as part of operating expenses pursuant to Section 6.3.

         7.6 Interruption or Curtailment of Services. Landlord reserves the
right to interrupt, curtail, stop or suspend the furnishing of services and the
operation of any Building system, when necessary by reason of accident or
emergency, or of repairs, alterations, replacements or improvements in the
reasonable judgment of Landlord desirable or necessary to be made, or of
difficulty or inability in securing supplies or labor, or of strikes, or of any
other cause beyond the reasonable control of 



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                                       12

<PAGE>

Landlord, whether such other cause be similar or dissimilar to those
hereinabove specifically mentioned, until said cause has been removed. Landlord
shall have no responsibility or liability for any such interruption,
curtailment, stoppage, or suspension of services or systems, except that
Landlord shall exercise reasonable diligence to minimize inconvenience to Tenant
and to eliminate the cause of same and except that Landlord shall give
reasonable notice of such interruption, curtailment, stoppage or suspension
except when due to accident or emergency.

8.       CHANGES OR ALTERATIONS BY LANDLORD

         Landlord reserves the right, exercisable by itself or its nominee, at
any time and from time to time without the same constituting an actual or
constructive eviction and without incurring any liability to Tenant therefor or
otherwise affecting Tenant's obligations under this Lease, to make such changes,
alterations, additions, improvements, repairs or replacements in or to the
Building (including the Demised Premises) and the fixtures and equipment
thereof, as well as in or to the street entrances, halls, passages, elevators,
and stairways thereof, as it may deem necessary or desirable, and to change the
arrangement and/or location of entrances or passageways, doors and doorways, and
corridors, elevators, stairs, toilets, or other public parts of the Building,
provided, however, that there be no unreasonable obstruction of the right of
access to, or unreasonable interference with the use and enjoyment of, the
Demised Premises by Tenant, except that Landlord shall not be obligated to
employ labor at so-called "overtime" or other premium pay rates. Nothing
contained in this Article shall be deemed to relieve Tenant of any duty,
obligation or liability of Tenant with respect to making or causing to be made
any repair, replacement or improvement or complying with any law, order or
requirement of any governmental or other authority. Landlord reserves the right
to from time to time change the address of the Building. Neither this Lease nor
any use by Tenant shall give Tenant any right or easement or the use of any door
or any passage or any concourse connecting with any other building or to any
public convenience, and the use of such doors, passages and concourses and of
such conveniences may be regulated or discontinued at any time and from time to
time by Landlord and without affecting the obligation of Tenant hereunder or
incurring any liability to Tenant therefor.

9.       FIXTURES, EQUIPMENT AND IMPROVEMENTS - REMOVAL BY TENANT

         All fixtures, equipment, improvements and appurtenances attached to or
built into the Demised Premises prior to or during the term, whether by Landlord
at its expense or at the expense of Tenant (either or both) or by Tenant shall
be and remain part of the Demised Premises and shall not be removed by Tenant at
the end of the Term unless otherwise expressly provided in this Lease or
identified in Exhibit E, hereto. Where not built into the Demised Premise and if
furnished and installed by and at the sole 


2/12/93
                                       13

<PAGE>

expense of Tenant, all removable electric fixtures, signs, furniture, or trade
fixtures or business equipment shall not be deemed to be included in such
fixtures, equipment, improvements and appurtenances and may be, and upon the
request of Landlord will be, removed by Tenant upon the condition that such
removal shall not materially damage the Demised Premises or the Building and
that the cost of repairing any damage to the Demised Premises or the Building
arising from such removal shall be paid by Tenant.

10.      ALTERATIONS AND IMPROVEMENTS BY TENANT

         Tenant shall make no alterations, installations, removals, additions or
improvements in or to the Demised Premises without Landlord's prior written
consent and then only by contractors or mechanics approved by Landlord. No
installations or other such work shall be undertaken or begun by Tenant until
Landlord has approved written plans and specifications therefor; and no
amendments or additions to such plans and specifications shall be made without
prior written consent of Landlord. Any such work, alterations, decorations,
installations, removals, additions and improvements shall be done at the sole
expense of Tenant and at such times and in such manner as Landlord may from time
to time designate. If Tenant shall make any alterations, decorations,
installations, additions or improvements, then Landlord may elect at the time of
its consent to such alterations or other work to require Tenant at the
expiration of this Lease to restore the Demised Premises to substantially the
same condition as existed at the Term Commencement Date.

11.      TENANT'S CONTRACTORS - MECHANICS' AND OTHER LIENS - STANDARD
         OF TENANT'S PERFORMANCE - COMPLIANCE WITH LAWS


         Whenever Tenant shall make any alterations, decoration, installations,
removals, additions or improvements or do any other work in or to the Demised
Premises, Tenant will strictly observe the following covenants and agreements:

                  (a) In no event shall any material or equipment be
incorporated in or added to the Demised Premises in connection with any such
alteration, decoration, installation, addition or improvement which is subject
to any lien, charge, mortgage or other encumbrance of any kind whatsoever or is
subject to any security interest or any form of title retention agreement. Any
mechanic's lien filed against the Demised Premises or the Building for work
claimed to have been done for, or materials claimed to have been furnished to
Tenant shall be discharged by Tenant within thirty (30) days thereafter, at the
expense of Tenant, by filing the bond required by law or otherwise. If Tenant
fails so to discharge any lien, Landlord may do so at Tenant's expense and
Tenant shall reimburse Landlord for any expense or cost incurred by Landlord in
so doing within fifteen (15) days after rendition of a bill therefor.


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<PAGE>

                  (b) All installations or work done by Tenant under this or any
other Article of this Lease shall be at its own expense (unless expressly
otherwise provided) and shall at all times comply with (i) laws, rules, orders
and regulations of governmental authorities having jurisdiction thereof; (ii)
orders, rules and regulations of any Board of Fire Underwriters, or any other
body hereafter constituted exercising similar functions, and governing insurance
rating bureaus; (iii) plans and specifications prepared by and at the expense of
Tenant theretofore submitted to Landlord for its prior written approval.

         (c) Tenant shall procure all necessary permits before undertaking any
work in the Demised Premises; do all such work in a good and workmanlike manner,
employing materials of good quality and complying with all governmental
requirements and defend, save harmless, exonerate and indemnify Landlord from
all injury, loss or damage to any person or property occasioned by or growing
out of such work.

12.      REPAIRS AND SECURITY BY TENANT

         Tenant shall keep or cause to be kept all and singular the Demised
Premises neat and clean and in such repair, order and condition as the same are
in on the Term Commencement Date or may be put in during the term hereof,
reasonable use and wear thereof, damage by fire or by other insured casualty and
repairs required to be made hereunder by Landlord excepted. Without limiting the
generality of the foregoing, Tenant shall keep all windows and other glass
whole, and shall replace the same whenever broken with glass of the same
quality.

         Tenant shall make, as and when needed as a result of misuse by, or
neglect or improper conduct (including without limitation the placement of any
weight exceeding the floor load) of Tenant or Tenant's servants, employees,
agents, invitees or licensees or otherwise, all repairs in and about the Demised
Premises necessary to preserve them in such repair, order and condition, which
repairs shall be in quality and class equal to the original work. Landlord may
elect, at the expense of Tenant, either pursuant to Section 15.3 or otherwise,
to make any such repairs or to repair any damage or injury to the Building or
the Demised Premises caused by moving property of Tenant in or out of the
Building, or by installation or removal of furniture or other property, or by
misuse by, or neglect or improper conduct of, Tenant or Tenant's servants,
employees, agents or licensees.

13.      INSURANCE, INDEMNIFICATION, EXONERATION AND EXCULPATION

         13.1 Insurance. Tenant shall procure, keep in force and pay for (a)
Comprehensive Commercial Liability Insurance indemnifying Landlord, Landlord's
managing agent, Tenant and (whenever Landlord shall so request) any Mortgagee
against all claims and demands for injury to or death of persons or damage to
property (subject to customary exclusions contained in standard form 


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<PAGE>

insurance policies customarily procured by other responsible office tenants in
the Greater Boston area), which may be claimed to have occurred upon the Demised
Premises in the amounts which shall at the time Tenant and/or contractors enter
the Premises in accordance with Article 4 of this Lease be not less than Two
Hundred Thousand Dollars ($200,000) for property damage, One Million Dollars
($1,000,000) for injury or death of one person, and Two Million Dollars
($2,000,000) for injury or death of more than one person in a single accident,
and from time to time thereafter shall be not less than such higher amounts, if
procurable, as may be reasonably required by Landlord (each such change to be
effective on the next annual renewal date of such insurance) and are then
customarily carried by responsible office tenants in the Greater Boston area,
(b) insurance covering any damage to the plate glass windows in or immediately
about the Demised Premises, in reasonable amounts to be established from time to
time by Landlord, and (c) so-called contents and improvements insurance
adequately insuring all property belonging to or removable by Tenant and
situated in the Demised Premises.

         13.2 Certificates of Insurance. Such insurance shall be effected with
insurers authorized to do business in Massachusetts under valid and enforceable
policies, and such policies shall name Landlord, each Mortgagee, Tenant and the
parties specified in Section 13.1 as the insureds, as their respective interests
appear. Such insurance shall provide that it shall not be cancelled without at
least ten (10) days' prior written notice to each insured named therein. On or
before the Term Commencement Date and thereafter not less than fifteen (15) days
prior to the expiration date of each expiring policy, certificates of the
policies provided for in Section 13.1 issued by the respective insurers, setting
forth in full the provisions thereof and issued by such insurers together with
evidence satisfactory to Landlord of the payment of all premiums for such
policies, shall be delivered by Tenant to Landlord and certificates as aforesaid
of such policies shall, upon request of Landlord, be delivered by Tenant to the
holder of any mortgage affecting the Demised Premises.

         13.3 General. Tenant will save Landlord harmless, and will exonerate
and indemnify Landlord, from and against any and all claims, liabilities or
penalties asserted by or on behalf of any person, firm, corporation or public
authority:

                  (a) On account of or based upon any injury to person, or loss
of or damage to property sustained or occurring on the Demised Premises on
account of or based upon the act, omission, fault, negligence or misconduct of 
any person whomsoever (other than Landlord or its agents, contractors or 
employees);

                  (b) On account of or based upon any injury to person or loss
of or damage to property, sustained or occurring elsewhere (other than on the
Demised Premises) in or about the Building (and, in particular, without limiting
the generality of the 


2/12/93
                                       16

<PAGE>

foregoing on or about the elevators, stairways, public corridors, sidewalks,
concourses, arcades, malls, galleries, vehicular tunnels, approaches, areaways,
roof, or other appurtenances and facilities used in connection with the Building
or Demised Premises) arising out of the negligent act or omission of Tenant, its
agents or employees;

                  (c) On account of or based upon (including monies due on
account of) any work or thing whatsoever done (other than by Landlord or its
contractors, or agents or employees of either) in the Demised Premises during
the Term of this Lease and during the period of time, if any, prior to the Term
Commencement Date that Tenant may have been given access to the Demised
Premises, excepting as a consequence of the negligent act or omission of
Landlord, its agents or employees; and

                  (d) On account of or resulting from the failure of Tenant to 
perform and discharge any of its covenants and obligations under this Lease;

and, in respect of any of the foregoing items (a) - (d), from and against all
costs, expenses (including reasonable attorneys' fees), and liabilities incurred
in or in connection with any such claim, or any action or proceeding brought
thereon; and in case any action or proceeding be brought against Landlord by
reason of any such claim, Tenant upon notice from Landlord shall at Tenant's
expense resist or defend such action or proceeding and employ counsel therefor
reasonably satisfactory to Landlord, it being agreed that such counsel as may
act for insurance underwriters of Tenant engaged in such defense shall be deemed
satisfactory.

         13.4 Landlord's Indemnity. Landlord will save Tenant harmless, and will
exonerate and indemnify Tenant, from and against any and all claims, liabilities
or penalties asserted by or on behalf of any person, firm, corporation or public
authority:

                  (a) On account of or based upon any injury to person, or loss
of or damage to property sustained or occurring on the Property on account of or
based upon the act, omission, fault, negligence or misconduct of Landlord, its
agents or employees; and

                  (b) On account of or resulting from the failure of Landlord to
perform and discharge any of its covenants and obligations under this Lease.

         13.5 Property of Tenant. In addition to and not in limitation of the
foregoing, Tenant covenants and agrees that all merchandise, furniture, fixtures
and property of every kind, nature and description which may be in or upon the
Demised Premises or Building, in the public corridors, or on the sidewalks,
areaways and approaches adjacent thereto, during the 


2/12/93
                                       17

<PAGE>

term hereof, shall be at the sole risk and hazard of Tenant, and that
if the whole or any part thereof shall be damaged, destroyed, stolen or removed
from any cause or reason whatsoever no part of said damage or loss shall be
charged to, or borne by Landlord.

         13.6 Bursting of Pipes, etc. Landlord shall not be liable for any
injury or damage to persons or property resulting from fire, explosion, falling
plaster, steam, gas, electricity, electrical disturbance, water, rain or snow or
leaks from any part of the Building or from the pipes, appliances or plumbing
works or from the roof, street or sub-surface or from any other place or caused
by dampness or by any other cause of whatever nature, unless caused by or due to
the negligence of Landlord, its agents, servants or employees, and then only
after (i) notice to Landlord of the condition claimed to constitute negligence
an (ii) the expiration of a reasonable time after such notice has been received
by Landlord without such condition having been cured or corrected; and in no
event shall Landlord be liable for any loss, the risk of which is compensated by
Tenant's insurance; nor shall Landlord or its agents be liable for any such
damage caused by other tenants or persons in the Building or caused by
operations in construction of any private, public or quasi-public work.

         13.7 Repairs and Alterations - No Diminution of Rental Value. Except as
otherwise provided in Articles 16 or 18, there shall be no allowance to Tenant
for diminution of rental value and no liability on the part of Landlord by
reason of inconvenience, annoyance or injury to Tenant arising from any repairs,
alterations, additions, replacements or improvements made by Landlord, Tenant or
others in or to any portion of the Building or Demised Premises, or in or to
fixtures, appurtenances, or equipment thereof, or for failure by Landlord or
others to make any repairs, alterations, additions or improvements in or to any
portion of the Building or of the Demised Premises, or in or to the fixtures,
appurtenances or equipment thereof, provided, however, that any such work
performed by or on behalf of Landlord shall be subject to the provisions of
Section 15.2

14.      ASSIGNMENT, MORTGAGING, SUBLETTING, ETC.

         14.1 Restrictions. Tenant covenants and agrees that neither this Lease
nor the term and estate hereby granted nor any interest herein or therein, will
be assigned, sublet, mortgaged, pledged, encumbered or otherwise transferred
(whether voluntarily or by operation of law) and that neither the Demised
Premises, nor any part thereof, will be encumbered in any manner by reason of
any act or omission on the part of Tenant, or used or occupied, or permitted to
be used or occupied, or utilized for any reason whatsoever, by anyone other than
Tenant, or for any use or purpose other than a stated in Article 1 without the
prior 



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                                       18

<PAGE>

written consent of Landlord in every case, which written consent shall not
be unreasonably withheld or delayed.

         14.2 Requests to Assign or Sublet. In connection with any request by
Tenant for such consent to assign or sublet, Tenant shall submit to Landlord, in
writing, a statement containing the name of the proposed assignee or subtenant,
such information as to its financial responsibility and standing as Landlord may
reasonably require, and all of the terms and provisions upon which the proposed
assignment or subletting is to be made, and, unless the proposed area to be
assigned or sublet shall constitute an entire floor or floors, such statement
shall be accompanied by a floor plan delineating the proposed area to be
assigned or sublet. As long as Tenant is not in material default under any of
the terms, covenants and conditions of this Lease on Tenant's part to be
observed and performed, Landlord shall not unreasonably withhold, condition or
delay Landlord's prior consent to the assignment or subletting(s) by Tenant of
all or parts of the Demised Premises. Each such subletting shall be for
undivided occupancy by the subtenant of that part of the Demised Premises
affected thereby for the use permitted under this Lease and at no time shall
there be more than three (3) occupants, including Tenant, within the Demised
Premises. Landlord may, however, withhold such consent if, in Landlord's
reasonable judgment, the proposed assignee or subtenant is not engaged in a
business consistent with the character and dignity of the Building, or will
impose any additional material burden upon Landlord in the operation of the
Building (to an extent greater than the burden to which Landlord would have been
put if Tenant continued to use, or used, such part of the Demised Premises for
its own purposes), or if Landlord has any other reasonable objections to the
proposed assignment or subletting.

         14.3 Exceptions. Notwithstanding the foregoing, Tenant may, without the
requirement of obtaining Landlord's consent, assign this Lease or sublease any
portion of the Demised Premises to any entity which is the parent, a
majority-owned subsidiary of Tenant, an entity under common control with Tenant
or to any entity with which Tenant may merge or consolidate or to which Tenant
may sell all or substantially all of its assets as a going concern (such entity
with which Tenant may merge, consolidate or to which Tenant may sell all or
substantially all of its assets as aforesaid being hereinafter referred to as a
"Successor"), provided that, simultaneously with any such assignment, Tenant
shall deliver to Landlord an agreement in form and substance reasonably
satisfactory to Landlord which contains an appropriate covenant of assumption by
such assignee; and provided further that in the case of any such assignment or
sublease to a Successor, Tenant shall have submitted to Landlord prior thereto
financial statements or other materials reasonably satisfactory to Landlord
evidencing that such Successor has financial resources comparable to that of
Tenant as of the time of such assignment or sublease.



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<PAGE>

         14.4 Excess Rent. If the rent received by Tenant on account of a
sublease of all or any portion of the Demised Premises exceeds the Yearly Fixed
Rent and Additional Rent, allocated to the space subject to the sublease in the
proportion of the area of such space to the area of the entire Demised Premises,
Tenant shall pay to Landlord fifty percent (50%) of such excess, monthly as
received by Tenant.

         14.5 Recapture. Notwithstanding the foregoing provisions of this
Article: (1) in the event Tenant proposes to assign or sublet all of the Demised
Premises, other than to a Successor, Landlord, at Landlord's option, may give to
Tenant, within thirty (30) days after the submission by Tenant to Landlord of
the statement required to be submitted in connection with such assignment or
subletting, or, if Tenant so requests, within thirty (30) days after Tenant
notifies Landlord that Tenant wishes to undertake such assignment or subletting,
but has not yet procured a proposed assignee or subtenant, a notice terminating
this Lease on the date (referred to as the "Earlier Termination Date")
immediately prior to the proposed commencement date of the term of the proposed
assignment or subletting, as set forth in such statement, and, in the event such
notice is given, this Lease and the Term shall come to an end and expire on the
Earlier Termination Date with the same effect as if it were the date originally
fixed in this Lease for the end of the Term of this Lease, and the Rent shall be
apportioned as of said Earlier Termination Date and any prepaid portion of Rent
for any period after such date shall be refunded by Landlord to Tenant,
provided, however, that in the event Landlord shall so elect to terminate this
Lease, Tenant, upon written notice to Landlord given within ten (10) days of
receipt by Tenant of Landlord's notice of termination, may elect to negate such
termination by declaring its intent not to proceed with such assignment or
subletting; or (2) in the event Tenant proposes to assign or sublet in excess of
fifty percent (50%) of the Demised Premises, other than to a Successor,
Landlord, at Landlord's option, may give to Tenant, within thirty (30) days
after the submission by Tenant to Landlord of the statement required to be
submitted in connection with such proposed assignment or subletting, a notice
electing to eliminate such portion of the Demised Premises (said portion is
referred to as the "Eliminated Space") from the Demised Premises effective on
the date (referred to as the "Elimination Date") immediately prior to the
proposed commencement date of the term of the proposed assignment or subletting,
as set forth in such statement, and in the event such notice is given, unless
Tenant, upon written notice to Landlord given within ten (10) days of receipt by
Tenant of Landlord's notice to eliminate such space shall elect to negate such
elimination by declaring Tenant's intent not to proceed with such assignment or
subletting, (i) the Eliminated Space shall be eliminated from the Demised
Premises effective on the Elimination Date; (ii) Tenant shall surrender the
Eliminated Space to Landlord on or prior to the Elimination Date in the same
manner as if said Date were the date originally fixed in this Lease for 


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<PAGE>

the end of the Term of this Lease; (iii) if the Eliminated Space shall
constitute less than an entire floor, Landlord, at Landlord's expense, shall
have the right to make any alterations and installations in the Demised Premises
required, in Landlord's judgment, reasonably exercised, to make the Eliminated
Space a self-contained rental unit with access through corridors to the
elevators and core toilets serving the Eliminated Space, and if the Demised
Premises shall contain any core toilets or any corridors (including any
corridors proposed to be constructed by Landlord pursuant to this subdivision
(iii) providing access from the Eliminated Space to the core area), Landlord and
any tenant or other occupant of the Eliminated Space shall have the right to use
such toilets and corridors in common with Tenant and any other permitted
occupants of the Demised Premises, and the right to install signs and
directional indicators in or about such corridors indicating the name and
location of such tenant or other occupant; (iv) the Yearly Fixed Rent shall be
reduced in the proportion which the area of the Eliminated Space bears to the
total area of the Demised Premises immediately prior to the Elimination Date
(including an equitable portion of the area of any corridors referred to in
subdivision (iii) of this sentence as part of the area of the Eliminated Space
for the purpose of computing such reduction), and any prepaid Rent for any
period after the Elimination Date allocable to the Eliminated Space shall be
refunded by Landlord to Tenant; and (v) there shall be an equitable
apportionment of any Additional Rent Payable pursuant to Article 6 for the
relevant fiscal and calendar years in which said Elimination Date shall occur.


         14.6 Further Documentation. At the request of Landlord, Tenant shall
execute and deliver an instrument or instruments, in form satisfactory to
Landlord, setting forth any modifications to this Lease contemplated in or
resulting from the operation of the foregoing provisions of this paragraph;
however, neither Landlord's failure to request any such instrument nor Tenant's
failure to execute or deliver any such instrument shall vitiate the effect of
the foregoing provisions of this Article.

         14.7 General.

                  (a) The failure by Landlord to exercise its option under this
paragraph with respect to any subletting shall not be deemed a waiver of such
option with respect to any extension or any subsequent subletting of the
premises affected thereby. Tenant shall reimburse Landlord promptly, as
Additional Rent, for reasonable legal and other expense incurred by Landlord in
connection with any request by Tenant for any consent required under the
provisions of this Article.

                  (b) It is specifically understood and agreed that neither
Tenant nor any other person having an interest in the possession, use, occupancy
or utilization of the Demised Premises shall enter into any sublease, license,
concession or other agreement (or renewals of any of the foregoing) for use,



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<PAGE>

occupancy or utilization of space in the Demised Premises which provides for
rental or other payment for such use, occupancy or utilization based, in whole
or in part, on the net income or profits derived by any person or entity from
the space leased, used, occupied or utilized (other than an amount based on a
fixed percentage or percentages of receipts or sales). Any such purported
sublease or other agreement shall be absolutely void and ineffective as a
conveyance of any right or interest in the possession, use, occupancy, or
utilization of any part of the Demised Premises,

                  (c) The listing of any name other than that of Tenant, whether
on the doors of the Demised Premises or on the Building directory, or otherwise,
shall not operate to vest any right or interest in this Lease or in the Demised
Premises or be deemed to be the written consent of Landlord mentioned in this
Article, it being expressly understood that any such listing is a privilege
extended by Landlord revocable at will by written notice to Tenant.

                  (d) If this Lease be assigned, or if the Demised Premises or
any part thereof shall be sublet or occupied by anybody other than Tenant,
Landlord may at any time and from time to time, collect rent and other charges
from the assignee, subtenant or occupant and apply the aggregate amount
collected to the Rent and other charges herein reserved, but no such assignment
or collection shall be deemed a waiver of this covenant, or the acceptance of
the assignee, subtenant or occupant as a tenant, or a release of Tenant from the
further performance by Tenant of covenants on the part of Tenant herein
contained. Landlord shall notify Tenant of any amounts so collected by Landlord
directly from such subtenant or assignee. The consent by Landlord to an
assignment or subletting or occupancy shall not in any way be construed to
relieve Tenant from obtaining the express consent in writing of Landlord to any
further assignment or subletting or occupancy.


15.      MISCELLANEOUS COVENANTS

         15.1 Rules and Regulations. Tenant and Tenant's servants, employees,
and agents will faithfully observe such Rules and Regulations as are attached
hereto as Exhibit F and made a part hereof or as Landlord hereafter at any time
or from time to time may make and may communicate in writing to Tenant and which
in the reasonable judgment of Landlord shall be necessary for the reputation,
safety, care or appearance of the Property, or the preservation of good order
therein, or the operation or maintenance of the Property, or the equipment
thereof, or the comfort of tenants or others in the Building, provided, however,
that in the case of any conflict between the provisions of this Lease and any
such Rules and Regulations, the provisions of this Lease shall control, and
provided further that nothing contained in this Lease shall be construed to
impose upon Landlord any duty or obligation to enforce such Rules and
Regulations or the terms, 



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<PAGE>

covenants or conditions in any other lease as against any other tenant and
Landlord shall not be liable to Tenant for violation of the same by any other
tenant, its servants, employees, agents, visitors, invitees or licensees.
Notwithstanding the foregoing, (i) to the extent Landlord elects to enforce such
Rules and Regulations they shall be applied and enforced uniformly among all
tenants and (ii) Landlord shall enforce such Rules and Regulations to the extent
the failure to do so would materially interfere with Tenant's quiet enjoyment of
the Demised Premises.

         15.2 Access to Premises - Shoring. Tenant shall: (i) permit Landlord to
erect, use and maintain pipes, ducts and conduits in and through the Demised
Premises, provided the same do not materially reduce the floor area or
materially adversely affect the appearance thereof; (ii) permit the Landlord and
any Mortgagee of the Building or the Building and Land or of the interest of
Landlord therein, and any lessor under any ground or underlying lease, and their
representatives, to have free and unrestricted access to and to enter upon the
Demised Premises at all reasonable hours for the purposes of inspection or of
making repairs, replacements or improvements in or to the Demised Premises or
the Building or equipment (including, without limitation, sanitary, electrical,
heating, air conditioning or other systems) or of complying with all laws,
orders and requirements of governmental or other authority or of exercising any
right reserved to Landlord by this Lease (including the right during the
progress of any such repairs, replacements or improvements or while performing
work and furnishing materials in connection with compliance with any such laws,
orders or requirements to take upon or through, or to keep and store within, the
Demised Premises all necessary materials, tools and equipment); and (iii) permit
Landlord, at reasonable times, to show the Demised Premises during ordinary
business hours to any Mortgagee, ground lessor, prospective purchaser,
prospective mortgagee, or prospective assignee of any mortgage, of the Building
or of the Building and the Land or of the interest of Landlord therein, and
during the period of twelve months next preceding the Termination Date to any
person contemplating the leasing of the Demised Premises or any part thereof. If
Tenant shall not be personally present to open and permit any entry into the
Demised Premises at any time when for any reason an entry therein shall be
necessary or permissible, Landlord or Landlord's agents must nevertheless be
able to gain such entry by contacting a responsible representative of Tenant,
whose name, address and telephone number shall be furnished by Tenant. Provided
that Landlord shall incur no unreasonable additional expense
thereby, Landlord shall exercise its rights of access to the Demised Premises
permitted under any of the terms and provisions of this Lease in such manner as
to minimize to the extent practicable interference with Tenant's use and
occupation of the Demised Premises, and upon reasonable prior notice, except in
the case of an emergency or where such notice is not reasonably practical. If an
excavation shall be made upon land adjacent to the Demised Premises or shall be
authorized to be made, Tenant shall afford, 


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<PAGE>

to the party causing or party authorized to cause such excavation,
license to enter upon the Demised Premises for the purpose of doing such work as
said person shall deem necessary to preserve the Building from injury or damage
and to support the same by proper foundations without any claim for damage or
indemnity against Landlord, or diminution or abatement of Rent.

         15.3 Accidents to Sanitary and other Systems. Tenant shall give to
Landlord prompt notice of any fire or accident in the Demised Premises or in the
Building and of any damage to, or defective condition in, any part or
appurtenance of the Building's sanitary, electrical, heating and air
conditioning or other systems located in, or passing through, the Demised
Premises, and the damage or defective condition shall be remedied by Landlord
with reasonable diligence, but if such damage or defective condition was caused
by Tenant or by the employees, licensees, or invitees of Tenant, the cost to
remedy the same shall be paid by Tenant. Tenant shall not be entitled to claim
any eviction from the Demised Premises or any damages arising from any such
damage or defect unless the same (i) shall have been occasioned by the
negligence of Landlord, its agents, servants or employees and (ii) shall not,
after notice to Landlord of the condition claimed to constitute negligence, have
been cured or corrected within a reasonable time after such notice has been
received by Landlord; and in case of a claim of eviction unless such damage or
defective condition shall have rendered the Demised Premises untenantable and
they shall not have been made tenantable by Landlord within a reasonable time
not to exceed sixty (60) days unless the circumstances reasonably warrant a
longer period of time. Landlord agrees to diligently work to correct such damage
or defect, except as otherwise provided herein.

         15.4 Signs, Blinds and Drapes. Tenant shall not place any signs on the
exterior of the Building or on or in any window, public corridor or door visible
from the exterior of the Demised Premises. No blinds may be put on or in any
window nor may any Building drapes or blinds be removed by Tenant. Tenant may
hang its own drapes, provided that they shall not, without the prior written
approval of Landlord, in any way interfere with any Building drapery or blinds
or be visible from the exterior of the Building.

         15.5 Estoppel Certificate. Either party shall at any time and from time
to time upon not less than twenty (20) days' prior notice by Landlord to Tenant
or by a Mortgagee to Tenant, or by Tenant to Landlord, as the case may be,
execute, acknowledge and deliver to the party making such request a statement in
writing certifying that this Lease is unmodified and in full force and effect
(or if there have been modifications, that the same is in full force and effect
as modified and stating the modifications) and the dates to which Rent has been
paid in advance, if any, an stating whether or not to the best knowledge of the
signer of such certificate Landlord is in default in performance of any



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<PAGE>

covenant, agreement, term, provisions or condition contained in this Lease and,
if so, specifying each such default of which the signer may have
knowledge, it being intended that any such statement delivered pursuant hereto
may be relied upon by any prospective purchaser of the Building or of the
Building and the Land or of the interest of Landlord therein, any Mortgagee or
prospective Mortgagee thereof, any lessor or prospective lessor thereof, any
lessee or prospective lessee thereof, or any prospective assignee of any
Mortgage. The form of any such estoppel certificate requested by a Mortgagee
shall be satisfactory to such Mortgagee. Notwithstanding anything contained in
this Lease to the contrary, the provisions of this Section 15.5 shall be
inapplicable to Teachers Insurance and Annuity Association in the event said
entity shall succeed to the rights of Landlord hereunder.

         15.6 Prohibited Items. Tenant shall not bring or permit to be brought
or kept in or on the Demised Premises or elsewhere in the Building any
hazardous, inflammable, combustible or explosive fluid, material, chemical or
substance (except such as are related to Tenant's use of the Demised Premises,
provided that the same are stored and handled in a proper fashion consistent
with all applicable legal standards).

         15.7 Requirements of Law Fines and Penalties. Tenant at its sole
expense shall comply with all laws, rules, orders and regulations of Federal,
State, County and Municipal Authorities and with any direction of any public
officer or officers, pursuant to law, which shall impose any duty upon Landlord
or Tenant with respect to and arising out of Tenant's use or occupancy of the
Demised Premises. Tenant shall reimburse and compensate Landlord for all
expenditures made by, or damages or fines sustained or incurred by, Landlord due
to nonperformance or noncompliance with or breach or failure to observe any
term, covenant or condition of this Lease upon Tenant's part to be kept,
observed, performed or complied with. If Tenant receives notice of any violation
of law, ordinance, order or regulation applicable to the Demised Premises, it
shall give prompt notice thereof to Landlord.

         15.8 Tenant's Acts - Effect on Insurance. Except for permitted uses,
Tenant shall not do or authorize or cause to be done any act or thing upon the
Demised Premises or elsewhere in the Building which will invalidate or be in
conflict with any insurance policies covering the Building and the fixtures and
property therein and shall not do, or authorize or cause to be done, any act or
thing upon the Demised Premises which shall subject Landlord to any liability or
responsibility for injury to any person or persons or to property by reason of
any business or operation being conducted on said Demised Premises or for any
other reason. Tenant at its own expense shall comply with all rules, orders,
regulations or requirements of the Board of Fire Underwriters or any other
similar body having jurisdiction, and shall not (i) do, or permit anything to be
done, in or upon the 

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<PAGE>

Demised Premises, or bring or keep anything therein, except as now or hereafter
permitted by the Fire Department, Board of Underwriters, Fire Insurance Rating
Organization, or other authority having jurisdiction, and then only in such
quantity and manner of storage as will not increase the rate for any insurance
applicable to the Building, or (ii) use the Demised Premises in manner which
shall increase such insurance rates on the Building or on property located
therein, over that applicable when Tenant first took occupancy of the Demised
Premises hereunder. If by reason of failure of Tenant to comply with the
provisions hereof the insurance rate applicable to any policy of insurance shall
at any time thereafter be higher than it otherwise would be, then Tenant shall
reimburse Landlord for that part of any insurance premiums thereafter paid by
Landlord, which shall have been charged because of such failure by Tenant.

         15.9 Miscellaneous. Tenant shall not suffer or permit the Demised
Premises or any fixtures, equipment or utilities therein or serving the same, to
be overloaded, damaged or defaced, nor permit any hole to be drilled or made in
any part thereof.

16.      DAMAGE BY FIRE, ETC.

         In the event of loss of, or damage to, the Demised Premises or the
Building by fire or other casualty, the rights and obligations of the parties
hereto shall be as follows:

                  (a) If the Demised Premises, or any part thereof, shall be
damaged by fire or other casualty, Tenant shall give prompt notice thereof to
Landlord, and Landlord, upon receiving such notice, shall proceed promptly and
with due diligence, subject to unavoidable delays, to repair, or cause to be
repaired, such damage. If the Demised Premises or any part thereof shall be
rendered untenantable by reason of such damage, whether to the Demised Premises
or to the Building, the Yearly Fixed Rent and Additional Rent shall
proportionately abate for the period from the date of such damage to the date
when such damage shall have been repaired.

                  (b) If, as a result of fire or other casualty, the whole or a
substantial portion of the Building, Demised Premises or necessary access
thereto is rendered untenantable, Landlord, within forty-five (45) days from the
date of such fire or other casualty, may terminate this Lease by notice to
Tenant, specifying a date not less than twenty (20) nor more than forty (40)
days after the giving of such notice on which the Term of this Lease shall
terminate. If Landlord does not so elect to terminate this Lease, then Landlord
shall proceed with diligence to repair the damage to the Demised Premises and
all facilities serving the same, if any, which shall have occurred, and the
Yearly Fixed Rent and Additional Rent shall meanwhile proportionately abate, all
as provided in Paragraph (a) of this Section. However, if, in the event of any
damage by fire or other casualty, such damage is not repaired and the Demised

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<PAGE>

Premises and all facilities serving the same restored to substantially the same
condition as they were prior to such damage within three (3) months from the
date of such damage, Tenant within thirty (30) days from the expiration of such
three (3) month period, may terminate this Lease by notice to Landlord,
specifying a date not more than sixty (60) days after the giving of such notice
on which the term of this Lease shall terminate.

                  (c) If the Demised Premises shall be rendered untenantable by
fire or other casualty during the last two (2) years of the Term of this Lease,
either party may terminate this Lease effective as of the date of such fire or
other casualty upon notice to the other given within thirty (30) days after such
fire or other casualty.

                  (d) Landlord shall not be required to repair or replace any of
Tenant's business machinery, equipment, cabinet work, furniture, personal
property or other installations, and no damages, compensation or claim shall be 
payable by Landlord for inconvenience, loss of business or annoyance arising 
from any repair or restoration of any portion of the Demised Premises or of 
the Building.

                  (e) The provisions of this Article shall be considered an
express agreement governing any instance of damage or destruction of the
Building or the Demised Premises by fire or other casualty, and any law now or
hereafter in force providing for such a contingency in the absence of express
agreement shall have no application.

                  (f) In the event of any termination of this Lease pursuant to
this Article, the Term of this Lease shall expire as of the effective
termination date as fully and completely as if such date were the date herein
originally scheduled as the Termination Date. Tenant shall have access to the
Demised Premises for a period of thirty (30) days after the date of termination
in order to remove Tenant's personal property.

                  (g) Landlord's Architect's certificate, given in good faith,
shall be deemed conclusive of the statements therein contained and binding upon
Tenant with respect to the performance and completion of any repair or
restoration work undertaken by Landlord pursuant to this Article or Article 18.
Any minor or insubstantial details of construction or mechanical adjustments
which remain to be done after the delivery of said certificate shall be handled
on a punch list basis and thereafter promptly completed by Landlord.

17.      WAIVER OF SUBROGATION

         In any case in which Tenant shall be obligated under any provision of
this Lease to pay to Landlord any loss, cost, damage, liability, or expense
suffered or incurred by Landlord, Landlord shall allow to Tenant as an offset
against the amount 

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<PAGE>

thereof the net proceeds of any insurance collected by Landlord for or on
account of such loss, cost, damage, liability or expense, provided that the
allowance of such offset does not invalidate or prejudice the policy or policies
under which such proceeds were payable.

         In any case in which Landlord shall be obligated under any provision of
this Lease to pay to Tenant any loss, cost, damage, liability or expense
suffered or incurred by Tenant, Tenant shall allow to Landlord as an offset
against the amount thereof (i) the net proceeds of any insurance collected by
Tenant for or on account of such loss, cost, damage, liability, or expense,
provided that the allowance of such offset does not invalidate the policy or
policies under which such proceeds were payable and (ii) if such loss, cost,
damage, liability or expense shall have been caused by a peril against which
Tenant has agreed to procure insurance coverage under the terms of this Lease,
the amount of such insurance coverage, whether or not actually procured by
Tenant.

         The parties hereto shall each endeavor to procure an appropriate clause
in, or endorsement on, any fire or extended coverage insurance policy covering
the Demised Premises and the Building and personal property, fixtures and
equipment located thereon or therein, pursuant to which the insurance companies
waive subrogation or consent to a waiver of right of recovery, and having
obtained such clauses and/or endorsements of waiver of subrogation or consent to
a waiver of right of recovery each party hereby agrees that it will not make any
claim against or seek to recover from the other for any loss or damage to its
property or the property of others resulting from fire or other perils covered
by such fire and extended coverage insurance; provided, however, that the
release, discharge, exoneration and covenant not to sue herein contained shall
be limited by the terms and provisions of the waiver of subrogation clauses
and/or endorsements or clauses and/or endorsements consenting to a waiver of
right of recovery and shall be co-extensive therewith. If either party may
obtain such clause or endorsement only upon payment of an additional premium,
such party shall promptly so advise the other party and shall be under no
obligation to obtain such clause or endorsement unless such other party pays the
premium.

18.      CONDEMNATION - EMINENT DOMAIN

         In the event that the whole or any material part of the Building shall
be taken or appropriated by eminent domain or shall be condemned for any public
or quasi-public use, or (by virtue of any such taking, appropriation or
condemnation) shall suffer any damage (direct, indirect or consequential) for
which Landlord or Tenant shall be entitled to compensation then (and in any such
event) this Lease and the Term hereof may be terminated at the election of
Landlord by a notice in writing of its election so to terminate which shall be
given by the Landlord to 

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<PAGE>

Tenant within sixty (60) days following the date on which Landlord shall have
received notice of such taking, appropriation or condemnation. In the event that
more than twenty-five percent (25%) of the floor area of the Demised Premises
shall be so taken, appropriated or condemned, then (and in any such event) this
Lease and the Term hereof may be terminated at the election of Tenant by a
notice in writing of its election so to terminate which shall be given by Tenant
to Landlord within sixty (60) days following the date on which Tenant shall have
received notice of such taking, appropriation or condemnation.

         Upon the giving of any such notice of termination (either by Landlord
or Tenant) this Lease and the Term hereof shall terminate on or retroactively as
of the date on which Tenant shall be required to vacate any part of the Demised
Premises or shall be deprived of a substantial part of the means of access
thereto, provided, however, that Landlord may in Landlord's notice elect to
terminate this Lease and the Term hereof retroactively as of the date on which
such taking, appropriation or condemnation became legally effective. In the
event of any such termination, this Lease and the Term hereof shall expire as of
the effective termination date as fully and completely as if such date were the
date herein originally scheduled as the Termination Date. If neither party
(having the right so to do) elects to terminate Landlord will, with reasonable
diligence and at Landlord's expense, restore the remainder of the Demised
Premises, or the remainder of the means of access, as nearly as practicably may
be to the same condition as obtained prior to such taking, appropriation or
condemnation in which event (i) a just proportion of the Yearly Fixed Rent and
Additional Rent, according to the nature and extent of the taking, appropriation
or condemnation and the resulting permanent injury to the Demised Premises and
the means of access thereto, shall be permanently abated, and (ii) a just
proportion of the remainder of the Yearly Fixed Rent and Additional Rent,
according to the nature and extent of the taking, appropriation or condemnation
and the resultant injury sustained by the Premises and the means of access
thereto, shall be abated until what remains of the Premises and the means of
access thereto shall have been restored as fully as may be for permanent use and
occupation by Tenant hereunder. Except for any award specifically reimbursing
Tenant for moving or relocation expenses and Tenant's removable fixtures and
equipment, there are expressly reserved to Landlord all rights to compensation
and damages created, accrued or accruing by reason of any such taking,
appropriation or condemnation, in implementation and in confirmation of which
Tenant does hereby acknowledge that Landlord shall be entitled to receive and
retain all such compensation and damages, grants to Landlord all and whatever
rights (if any) Tenant may have to such compensation and damages, and agrees to
execute and deliver all and whatever further instruments of assignment as
Landlord may from time to time request. In the event of any taking of the
Demised Premises or any part thereof for temporary use, (i) this Lease shall be
and remain unaffected thereby, and (ii) Tenant shall be entitled 

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<PAGE>

to receive for itself any award made for such use, provided, that if any taking
is for a period extending beyond the Term of this Lease, such award shall be
apportioned between Landlord and Tenant as of the Termination Date.

19.      DEFAULT

         19.1 Conditions of Limitation - Re-entry - Termination. This Lease and
the herein term and estate are upon the condition that if (a) Tenant shall
neglect or fail to perform or observe any of the Tenant's covenants herein,
including (without limitation) the covenants with regard to the payment of Rent
on or before ten (10) days of its due date; or (b) Tenant shall make an
assignment or trust mortgage, or other conveyance or transfer of like nature, of
all or a substantial part of its property for the benefit of its creditors, or
(c) the leasehold hereby created shall be taken on execution or by other process
of law and shall not be revested in Tenant within sixty (60) days thereafter; or
(d) a receiver, sequester, trustee or similar officer shall be appointed by a
court of competent jurisdiction to take charge of all or a substantial part of
Tenant's property and such appointment shall not be vacated within sixty (60)
days or (e) any proceeding shall be instituted by or against Tenant pursuant to
any of the provisions of any Act of Congress or State law relating to
bankruptcy, reorganization, arrangements, compositions or other relief from
creditors, and, in the case of any such proceeding instituted against it, if
Tenant shall fail to have such proceeding dismissed within thirty (30) days or
Tenant shall default in the timely payment of Rent or if Tenant is adjudged
bankrupt or insolvent as a result of any such proceeding; or (f) any event shall
occur or any contingency shall arise whereby this Lease, or the term and estate
thereby created would (by operation of law or otherwise) devolve upon or pass to
any person, firm or corporation other than Tenant, except as expressly permitted
under Article 14 hereof; then, and in any such event (except as hereinafter in
Article 19.2 otherwise provided) Landlord may, in a manner consistent with
applicable law, immediately or at any time thereafter declare this Lease
terminated by notice to Tenant or, without further demand or notice, enter into
and upon the Demised Premises (or any part thereof in the name of the whole),
and in either such case (and without prejudice to any remedies which might
otherwise be available for arrears of rent or other charges due hereunder or
preceding breach of covenant and without prejudice to Tenant's liability for
damages as hereinafter stated), this Lease shall terminate. The words "re-entry"
and "re-enter" as used in this Lease are not restricted to their technical legal
meaning.

         19.2 Damages - Assignment for Benefit of Creditors. For the more
effectual securing by Landlord of the rent and other charge and payments
reserved hereunder, it is agreed as a further condition of this Lease that if at
any time Tenant shall make an assignment of its property for the benefit of its
creditors under the terms of which the debts provable by its creditors shall be

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<PAGE>

debts provable against the estate of insolvent debtors either under the laws of
the Commonwealth of Massachusetts or under some law or laws other than the
Bankruptcy Code as now or hereafter enacted, then and in any such case the same
shall constitute a breach of this Lease, and the term and estate hereby created
shall terminate ipso facto, without entry or other action by Landlord; and
notwithstanding any other provisions of this Lease Landlord shall forthwith upon
such termination, without prejudice to any remedies which might otherwise be
available for arrears of rent or other charges due hereunder or preceding breach
of this Lease, be ipso facto entitled to recover as liquidated damages the sum
of (a) the amount by which, at the time of such termination of this Lease, (i)
the aggregate of the Rent projected over the period commencing with such
termination and ending with the Termination Date stated in Article 1 exceeds
(ii) the aggregate projected rental value of the Demised Premises for such
period and (b) (in view of the uncertainty of prompt re-letting and the expense
entailed in re-letting the Demised Premises) an amount equal to the Rent payable
for and in respect of the calendar year next preceding the date of termination,
as aforesaid. Upon such termination Landlord, may immediately or at any time
thereafter, without demand or notice, enter into or upon the Demised Premises
(or any part thereof in the name of the whole), and (without being taken or
deemed to be guilty of any manner of trespass or conversion, and without being
liable to indictment, prosecution or damages thereof) may, forcibly if
necessary, expel Tenant and those claiming under Tenant from the Demised
Premises and remove therefrom the effects of Tenant and those claiming under
Tenant.

         19.3 Damages - Termination. Upon the termination of this Lease under
the provisions of this Article, then except as hereinabove in Section 19.2
otherwise provided, Tenant shall pay to Landlord the Rent payable by Tenant to
Landlord up to the time of such termination, shall continue to be liable for any
preceding breach of covenant, and in addition, shall pay to Landlord as damages,
at the election of Landlord,

                  either:

                  (x) the amount by which, at the time of the termination of
this Lease (or at any time thereafter if Landlord shall have initially elected
damages under Subparagraph (y), below), (i) the aggregate of the Rent projected
over the period commencing with such time and ending on the originally scheduled
Termination Date as stated in Article 1 exceeds (ii) the aggregate projected
rental value of the Demised Premises for such period,

                  or,

                  (y) amounts equal to the Rent which would have been payable by
Tenant had this Lease not been so terminated, payable upon the due dates
therefor specified herein following such termination and until the originally
scheduled Termination Date 

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<PAGE>

as specified in Article l, provided, however, if Landlord shall re-let
the Demised Premises during such period, that Landlord shall credit Tenant with
the net rents received by Landlord from such re-letting, such net rents to be
determined by first deducting from the gross rents as and when received by
Landlord from such re-letting the expenses incurred or paid by Landlord
terminating this Lease, as well as the expenses of re-letting, including
altering and preparing the Demised Premises for new tenants, brokers'
commissions, and all other similar and dissimilar expenses properly chargeable
against the Demised Premises and the rental therefrom, it being understood that
any such re-letting may be for a period equal to or shorter or longer than the
remaining term of this Lease; and provided, further, that (i) in no event shall
Tenant be entitled to receive any excess of such net rents over the sums payable
by Tenant to Landlord hereunder and (ii) in no event shall Tenant be entitled in
any suit for the collection of damages pursuant to this Subparagraph (y) to a
credit in respect of any net rents from a re-letting except to the extent that
such net rents are actually received by Landlord prior to such determination. If
the Demised Premises or any part thereof should be re-let in combination with
other space, then proper apportionment on a square foot area basis shall be made
of the rent received from such re-letting and of the expenses of re-letting.
Landlord agrees to use reasonable efforts under the circumstances to attempt to
re-let the Demised Premises.

         Suit or suits for the recovery of such damages, or any installments
thereof, may be brought by Landlord from time to time at its election, and
nothing contained herein shall be deemed to require Landlord to postpone suit
until the date when the term of this Lease would have expired if it had not been
terminated hereunder.

         Nothing herein contained shall be construed as limiting or precluding
the recovery by Landlord against Tenant of any sums or damages to which, in
addition to the damages particularly provided above, Landlord may lawfully be
entitled by reason of any default hereunder on the part of Tenant.

         19.4 Fees and Expenses. If Tenant shall default in the performance of
any covenant on Tenant's part to be performed as in this Lease contained,
Landlord may immediately, or at any time thereafter, following written notice
thereof to Tenant, perform the same for the account of Tenant. If Landlord at
any time is compelled to pay or elects to pay any sum of money, or do any act
which will require the payment of any sum of money, by reason of the failure of
Tenant to comply with any provision hereof, or if Landlord is compelled to or
does incur any expense, including reasonable attorneys' fees, in instituting,
prosecuting and/or defending any action or proceeding instituted by reason of
any default of Tenant hereunder, Tenant shall on demand pay to Landlord by way
of reimbursement the sum or sums so paid by Landlord with all interest, costs
and damages. Without limiting 

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the generality of the foregoing, in the event that any Rent is in
arrears by more than ten (10) days after written notice thereof by Landlord to
Tenant, Tenant shall pay, as Additional Rent, a delinquency charge equal to one
percent (1%) of the arrearage for each calendar month (or fraction thereof)
during which it remains unpaid.

         19.5 Landlord's Remedies Not Exclusive. The specified remedies to which
Landlord may resort hereunder are cumulative and are not intended to be
exclusive of any remedies or means of redress to which Landlord may at any time
be lawfully entitled, and Landlord may invoke any remedy (including the remedy
of specific performance) allowed at law or in equity as if specific remedies
were not herein provided for.

         19.6 Grace Period. Notwithstanding anything to the contrary in this
Article contained, Landlord agrees not to take any action to terminate this
Lease (a) for default by Tenant in the payment when due of Rent, if Tenant shall
cure such default within five (5) days after written notice thereof given by
Landlord to Tenant, or (b) for default by Tenant in the performance of any other
covenant, if Tenant shall cure such default within a period of thirty (30) days
after written notice thereof given by Landlord to Tenant (except where the
nature of the default is such that remedial action should appropriately take
place sooner as indicated in such written notice), or with respect to covenants
other than to pay a sum of money within such additional period as may reasonably
be required to cure such default if (because of governmental restrictions or any
other cause beyond the reasonable control of Tenant) the default is of such a
nature that it cannot be cured within such thirty (30)-day period, provided,
however, (1) that there shall be no extension of time beyond such thirty
(30)-day period for curing of any such default unless, not more than ten (10)
days after the receipt of the notice of default, Tenant in writing (i) shall
specify the cause on account of which the default cannot be cured during such
period and shall advise Landlord of its intention duly to institute all steps
necessary to cure the default and (ii) shall as soon as may be reasonable, duly
institute and thereafter diligently prosecute to completion all steps necessary
to cure such default and, (2) that no notice of the opportunity to cure default
need be given, and no grace period whatsoever shall be allowed to Tenant, if the
default is incurable.

20.      END OF TERM - ABANDONED PROPERTY

         Upon the expiration or other termination of the Term of this Lease,
Tenant shall peaceably quit and surrender to Landlord the Demised Premises and
all alterations and additions thereto which Tenant is not entitled or required
to remove under the provisions of this Lease, broom clean in good order, repair
and condition excepting only reasonable use and wear and damage by fire or other
casualty for which, under other provisions of this Lease, Tenant has no
responsibility of repair or restoration. Tenant's 

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<PAGE>


obligation to observe or perform this covenant shall survive the
expiration or other termination of the term of this Lease.

         Any personal property in which Tenant has an interest which shall
remain in the Building or on the Demised Premises after the expiration or
termination of the Term of this Lease shall be conclusively deemed to have been
abandoned, and may be disposed of in such manner as Landlord may see fit;
provided, however, notwithstanding the foregoing, that Tenant will, upon request
of Landlord made not later than thirty (30) days after the expiration or
termination of the term hereof, promptly remove from the Building any such
personal property or, if any part thereof shall be sold, that Landlord may
receive and retain the proceeds of such sale and apply the same, at its option,
against the expenses of the sale, the cost of moving and storage, any
arrears of Rent payable hereunder by Tenant to Landlord and any damages to which
Landlord may be entitled under Article 19 hereof or pursuant to law, with the
balance if any, to be paid to Tenant.

21.      RIGHTS OF MORTGAGEES

         21.1 Superiority of Lease. Except as provided in Section 21.7 hereof
and to the extent that it may be provided otherwise by written agreement between
Tenant and a Mortgagee, this Lease shall be superior, and shall not be
subordinated, to a Mortgage or to any other voluntary lien or encumbrance
affecting the Land or Building or any part thereof, provided, however, that such
Mortgage shall be superior, and shall not be subordinated, to this Lease with
respect to the following:

                  (a) the prior right and claim under and the prior lien of said
Mortgage in, to and upon any award or other compensation heretofore or hereafter
to be made for any taking by eminent domain of any part of the Demised Premises,
and as to the right of disposition thereof in accordance with the provisions of
the said Mortgage; or

                  (b) the prior right and claim under the prior lien of the said
Mortgage, in, to and upon any proceeds payable under all policies of fire and
rent insurance upon the Demised Premises and as to the right of disposition
thereof in accordance with the terms of said Mortgage; and

                  (c) any lien, right, power or interest, if any, which may have
arisen or intervened in the period between the recording of the said Mortgage
and the execution of this Lease.

         21.2 Entry and Possession. Upon entry and taking possession of the
Property by a Mortgagee, for the purpose of foreclosure or otherwise, such
Mortgagee shall have all the rights of Landlord, and shall be liable to perform
all the obligations of Landlord arising and accruing during the period of such
possession by such Mortgagee.

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<PAGE>

         21.3 Right to Cure. No act or failure to act on the part of Landlord
which would entitle Tenant under the terms of this Lease, or by law, to be
relieved of Tenant's obligations hereunder or to terminate this Lease, shall
result in a release or termination of such obligations or a termination of this
Lease unless (i) Tenant shall have first given written notice of Landlord's act
or failure to act to first Mortgagees of record, if any, and to any other
Mortgagees of record on the Term Commencement Date of the Lease or whom Tenant
has been given written notice, specifying the act or failure to act on the part
of Landlord which could or would give basis to Tenant's rights; and (ii) such
Mortgagees, after receipt of such notice, have failed or refused to correct or
cure the condition complained of within a reasonable time thereafter, but
nothing contained in this paragraph shall be deemed to impose any obligation on
any such Mortgagees to correct or cure any such condition. "Reasonable time" as
used above means and includes a reasonable time to obtain possession of the Land
and Building if any such Mortgagee elects to do so and a reasonable time to
correct or cure the condition if such condition is determined to exist.

         21.4 Duty to Construct. Notwithstanding any other provision to the
contrary contained in this Lease, if prior to substantial completion of
Landlord's obligations under Article 4 any holder of a Mortgage enters and takes
possession of the Property for the purpose of foreclosing such Mortgage, such
holder may elect, by written notice given to Tenant and Landlord at any time
within 90 days after such entry and taking possession, not to perform Landlord's
obligations under Article 4, and in such event such holder and all persons
claiming under it shall be relieved of all obligations to perform, and all
liability for failure to perform said Landlord's obligations under Article 4 and
Tenant may, without waiver of any rights which Tenant may have against Landlord,
terminate this Lease and all its obligations hereunder by written notice to
Landlord and such holder given within 30 days after the day on which such holder
shall have given its notice as aforesaid.

         21.5 Prepaid Rent. No Rent shall be paid more than thirty (30) days
prior to the due dates thereof and, as to a first Mortgagee of record and any
other Mortgagees of whom Tenant has been given written notice, payments made in
violation of this provision shall (except to the extent that such rents are
actually received by such Mortgagee) be a nullity as against such Mortgagee and
Tenant shall be liable for the amount of such payments to such Mortgagee.

         21.6 Continuing Offer. The covenants and agreements contained in this
Lease with respect to the rights, powers and benefits of a Mortgagee
(particularly, without limitation thereby, the covenants and agreements
contained in this Article) constitute a continuing offer to any person,
corporation or other entity, which by accepting or requiring an assignment of
this Lease or by entry or foreclosure assumes the obligations herein 

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<PAGE>

set forth with respect to such Mortgagee; every such Mortgagee is
hereby constituted a party to this Lease as an obligee hereunder to the same
extent as though its name was written hereon as such and such Mortgagee shall be
entitled to enforce such provisions in its own name.

         21.7 Subordination. Notwithstanding the foregoing provisions of this
Article, Tenant agrees, at the request of Landlord or any Mortgagee, to execute
and deliver promptly any certificate or other instrument which Landlord or such
Mortgagee may request subordinating the Lease and all rights of Tenant under the
Lease to any Mortgage, and to all advances made under such mortgage, provided
that (i) the holder of any such Mortgage shall execute and deliver to Tenant a
nondisturbance agreement to the effect that, in the event of any foreclosure of
such Mortgage, such holder will not name Tenant as a party defendant to such
foreclosure nor disturb its possession under the Lease, or (ii) any such
Mortgage shall contain provisions substantially to the same effect as those
contained in such a nondisturbance agreement. In the event Landlord shall fail
to deliver to Tenant within thirty (30) days of the execution of this Lease an
Agreement of Subordination, Non-Disturbance and Attornment in the form or
substantially in the form of Exhibit G attached hereto, Tenant at its option by
written notice thereof to Landlord within ten (10) Business Days of the
expiration of said 30 day period may terminate this Lease.

         21.8 Limitations on Liability. Nothing contained in the foregoing
Section 21.7 or in any such nondisturbance agreement or nondisturbance provision
shall, however, affect the prior rights of the holder of any Mortgage with
respect to the proceeds of any award in condemnation or of any fire insurance
policies affecting the Building, or impose upon any such holder any liability
(i) for the erection or completion of the Building, or (ii) in the event of
damage or destruction to the Building or the Demised Premises by fire or other
casualty, for any repairs, replacements, rebuilding or restoration except such
repairs, replacements, rebuilding or restoration as can reasonably be
accomplished from the net proceeds of insurance actually receive by, or made
available to, such holder, or (iii) for any default by Landlord under the Lease
occurring prior to any date upon which such holder shall become Tenant's
Landlord, or (iv) for any credits, offsets or claims against the rent under the
Lease as a result of any acts or omissions of Landlord committed or omitted
prior to such date, or (v) for return of any security deposit or other funds
unless the same shall have been received by such holder, and any such agreement
or provision may so state.

22.      QUIET ENJOYMENT

         Landlord covenants that if, and so long as, Tenant keeps and performs
each and every covenant, agreement, term, provision and condition herein
contained on the part and on behalf of Tenant to be kept and performed, Tenant
shall quietly enjoy the Demised 

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<PAGE>

Premises from and against the claims of all persons claiming by,
through or under Landlord subject, nevertheless, to the covenants, agreements,
terms, provisions and conditions of this Lease and to the mortgages, ground
leases and/or underlying leases to which this Lease is subject and subordinate.

23.      ENTIRE AGREEMENT - WAIVER - SURRENDER

         23.1 Entire Agreement. This Lease and the Exhibits made a part hereof
contain the entire and only agreement between the parties and any and all
statements and representations, written and oral, including previous
correspondence and agreements between the parties hereto, are merged herein.
Tenant acknowledges that all representations and statements upon which it relied
in executing this Lease are contained herein and that Tenant in no way relied
upon any other statements or representations, written or oral. Any executory
agreement hereafter made shall be ineffective to change, modify, discharge or
effect an abandonment of this Lease in whole or in part unless such executory
agreement is in writing and signed by the party against whom enforcement of the
change, modification, discharge or abandonment is sought. Nothing herein shall
prevent the parties from agreeing to amend this Lease and the Exhibits made part
hereof as long as such amendment shall be in writing and shall be duly signed by
both parties.

         23.2 Waiver by Landlord. The failure of Landlord to seek redress for
violation, or to insist upon the strict performance, of any covenant or
condition of this Lease, or any of the Rules and Regulations promulgated
hereunder, shall not prevent a subsequent act, which would have originally
constituted a violation, from having all the force and effect of an original
violation. The receipt by Landlord of rent with knowledge of the breach of any
covenant of this Lease shall not be deemed a waiver of such breach. The failure
of Landlord to enforce any of such Rules and Regulations against Tenant and/or
any other tenant or subtenant in the Building shall not be deemed a waiver of
any such Rules and Regulations. No provisions of this Lease shall be deemed to
have been waived by Landlord unless such waiver be in writing signed by
Landlord. No payment by Tenant or receipt by Landlord of a lesser amount than
the monthly rent herein stipulated shall be deemed to be other than on account
of the stipulated rent, nor shall any endorsement or statement on any check or
any letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice of
Landlord's right to recover the balance of such rent or pursue any other remedy
in this Lease provided.

                  23.3 Surrender. No act or thing done by Landlord during the
term hereby demised shall be deemed an acceptance of a surrender of the Demised
Premises, and no agreement to accept such surrender shall be valid, unless in
writing signed by Landlord. No employee of Landlord or of Landlord's agents
shall 

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<PAGE>

have any power to accept the keys of the Demised Premises prior to the
termination of this Lease. The delivery of keys to any employee of Landlord or
of Landlord's agents shall not operate as a termination of the Lease or a
surrender of the Demised Premises. In the event that Tenant at any time desires
to have Landlord underlet the Demised Premises for Tenant's account, Landlord or
Landlord's agents are authorized to receive the keys for such purposes without
releasing Tenant from any of the obligations under this Lease, and Tenant hereby
relieves Landlord of any liability for loss of or damage to any of Tenant's
effects in connection with such underletting.

24.      INABILITY TO PERFORM - EXCULPATORY CLAUSE

         Except as otherwise expressly provided in this Lease, this Lease and
the obligations of Tenant to pay rent hereunder and perform all other covenants,
agreements, terms, provisions and conditions hereunder on the part of Tenant to
be performed shall in no way be affected, impaired or excused because Landlord
is unable to fulfill any of its obligations under this Lease or is unable to
supply or is delayed in supplying any service expressly or impliedly to be
supplied or is unable to make or is delayed in making any repairs, replacements,
additions, alterations, improvements or decorations or is unable to supply or is
delayed in supplying any equipment or fixtures if Landlord is prevented or
delayed from doing so by reason of strikes or labor troubles or any other
similar or dissimilar cause whatsoever beyond Landlord's reasonable control,
including but not limited to, governmental preemption in connection with a
national emergency or by reason of any rule, order or regulation of any
department or subdivision thereof of any governmental agency or by reason of the
conditions of supply and demand which have been or are affected by war,
hostilities or other similar or dissimilar emergency. In each such instance of
inability of Landlord to perform, Landlord shall exercise reasonable diligence
to eliminate the cause of such inability to perform.

         Tenant shall neither assert nor seek to enforce any claim for breach of
this Lease against any of Landlord's assets other than Landlord's interest in
the Building of which the Premises are a part and in the rents, issues and
profits thereof, and Tenant agrees to look solely to such interest for the
satisfaction of any liability of Landlord under this Lease, it being
specifically agreed that in no event shall Landlord (which term shall include
without limitation any of the officers, trustees, directors, partners,
beneficiaries, joint venturers, members, stockholders or other principals or
representatives, disclosed or undisclosed of Landlord or any managing agent)
ever be personally liable for any such liability. This paragraph shall not limit
any right that Tenant might otherwise have to obtain injunctive relief against
Landlord or to take any other action which shall not involve the personal
liability of Landlord to respond in monetary damages from Landlord's assets
other than the Landlord's interest in said real estate, as aforesaid. In no

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<PAGE>

event shall Landlord or Tenant ever be liable for consequential damages.

25.      BILLS AND NOTICES

         Any notice, consent, request, bill, demand or statement hereunder by
either party to the other party shall be in writing and, if received at
Landlord's or Tenant's address, shall be deemed to have been duly given when
either delivered or served personally or mailed in a postpaid envelope,
deposited in the United States mails addressed to the respective party at its
address as stated in Article 1, or if any address for notices shall have been
duly changed as hereinafter provided, if mailed as aforesaid to the party at
such changed address. Either party may at any time change the address for such
notices, consents, requests, bills, demands or statements by delivering or
mailing, as aforesaid, to the other party a notice stating the change and
setting forth the changed address, provided such changed address is within the
United States.

         All bills and statements for reimbursement or other payments or charges
due from Tenant to Landlord or from Landlord to Tenant hereunder shall set forth
in reasonable detail the particulars relating thereto and shall be due and
payable in full thirty (30) days, unless herein otherwise provided, after
submission thereof by Landlord to Tenant or by Tenant to Landlord, as the case
may be. Landlord shall, at Tenant's reasonable request, promptly furnish Tenant
with such additional reasonable details relating thereto as Tenant shall
reasonably request. Tenant's failure to make timely payment of any amounts
indicated by such bills and statements, whether for work done by Landlord at
Tenant's request, reimbursement provided for by this Lease or for any other sums
properly owing by Tenant to Landlord, shall be treated as a default in the
payment of Rent, in which event Landlord shall have all rights and remedies
provided in this Lease for the nonpayment of Rent.

26.      PARTIES BOUND - SEISIN OF TITLE

         The covenants, agreements, terms, provisions and conditions of this
Lease shall bind and benefit the successors and assigns of the parties hereto
with the same effect as if mentioned in each instance where a party hereto is
named or referred to, except that no violation of the provisions of Article 14
hereof shall operate to vest any rights in any successor or assignee of Tenant
and that the provisions of this Article shall not be construed as modifying the
conditions of limitation contained in Article 19 hereof.

         If in connection with or as a consequence of the sale, transfer or
other disposition of the real estate (Land and/or Building either or both, as
the case may be) of which the Demised Premises are a part Landlord ceases to be
the owner of the reversionary interest in the Premises, Landlord shall so notify

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<PAGE>

Tenant and Landlord shall be entirely freed and relieved from the performance
and observance thereafter of all covenants and obligations hereunder accruing
thereafter on the part of Landlord to be performed and observed, it being
understood and agreed in such event (and it shall be deemed and construed as a
covenant running with the land) that the person succeeding to Landlord's
ownership of said reversionary interest shall thereupon and thereafter assume,
and perform and observe, any and all of such covenants and obligations of
Landlord.

27.      MISCELLANEOUS

         27.1 Separability. If any provision of this Lease or portion of such
provision or the application thereof to any person or circumstance is for any
reason held invalid or unenforceable, the remainder of the Lease (or the
remainder of such provision) and the application thereof to other persons or
circumstances shall not be affected thereby.

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

         27.3 Broker. Each party represents and warrants that it has not
directly or indirectly dealt, with respect to the leasing of office space in the
Building, with any broker or had its attention called to the Premises or other
space to let in the Building, by any broker other than the Broker(s) (if any)
listed in Article 1 whose commission shall be the responsibility of Landlord.
Each party agrees to exonerate and save harmless and indemnify the other against
any claims for a commission by any other broker, person or firm with whom such
party has dealt in connection with the execution and delivery of this Lease or
out of negotiations between Landlord and Tenant with respect to the leasing of
other space in the Building.

         27.4 Governing Law. This lease is made pursuant to, and shall be
governed by, and construed in accordance with, the laws of the Commonwealth of
Massachusetts.

         27.5 Assignment of Rents. With reference to any assignment by Landlord
of its interest in this Lease, or the Rent payable hereunder, conditional in
nature or otherwise, which assignment is made to or held by a bank, trust
company, insurance company or other institutional lender holding a Mortgage on
the Building, Landlord and Tenant agree:

                  (a) that the execution thereof by Landlord and acceptance
thereof by such Mortgagee shall never be deemed an assumption by such Mortgagee
of any of the obligations of the Landlord thereunder, unless such Mortgagee
shall, by written notice sent to the Tenant, specifically otherwise elect; and


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<PAGE>



                  (b) that, except as aforesaid, such Mortgagee shall be treated
as having assumed the Landlord's obligations thereunder only upon foreclosure of
such Mortgagee's Mortgage and the taking of possession of the Demised Premises
after having given notice of its exercise of the option stated in Article 21
hereof to succeed to the interest of the Landlord under this Lease.

         27.6 Parking. Landlord shall allocate to Tenant the number of
non-exclusive Parking Spaces indicated in Article 1. Landlord may, pursuant to
Section 15.1, establish Rules and Regulations relative to all parking areas
serving Building tenants and may further engage the services of an independent
contractor to administer and control access to said parking areas. Landlord or
said independent contractor shall impose separate charges for use of said
parking areas, and such charges shall be payable by Tenant as Additional Rent
with respect to Tenant's Parking Spaces. For the initial three (3) years of the
Term of this Lease, the monthly charge for each Parking Space situated in the
garage facility serving the Building shall be One Hundred Twenty-five Dollars
($125). Thereafter, the monthly charge shall be as from time to time established
by Landlord or said independent contractor as the then prevailing monthly
parking charge for the Building. Notwithstanding the foregoing, forty-seven (47)
of the initial seventy (70) Parking Spaces shall be at no cost to Tenant during
the Term of this Lease. In addition, Tenant shall have an option, to rent an
additional one (1) Parking Space per 1,000 square feet of rentable area so added
to the Demised Premises at a cost of $125.00 per month per Parking Space for the
first three years of the Term of this Lease, and thereafter at the then
prevailing monthly charge for the Building as may be from time to time
established by the Landlord or said independant contractor. In addition, it is
understood and agreed that in the event additional space shall be added to the
Demised Premises in accordance with Article 3 hereof during the Term of this
Lease, the number of Parking Spaces which shall be at no cost to Tenant shall be
increased by two (2) for each additional 1,000 square feet of rentable area so
added to the Demised Premises. Tenant acknowledges that Landlord has informed
Tenant that Landlord intends to allocate in its tenant leases up to one hundred
twenty-five percent (125%) of the actual parking spaces servicing the Building.
It is further acknowledged and agreed that as a consequence of such
over-allocation of parking spaces there may occasionally occur instances in
which the number of parking spaces actually available to Tenant shall be less
than the Parking Spaces to which Tenant is entitled under this Lease. Landlord
shall incur no liability to Tenant as a consequence of such over-allocation of
parking spaces.

         27.7 Notice of Lease.  Neither party shall record this Lease in any 
Registry of Deeds or Registry District.

         27.8 Financial Statements. If requested by Landlord, Tenant shall
furnish to Landlord promptly after they are available to 


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<PAGE>

Tenant copies of Tenant's annual financial statements (audited, if
available) and unaudited monthly financial statements and such other financial
statements as Tenant shall furnish from time to time to any lender and/or equity
holder of Tenant. It is understood and agreed that Landlord may furnish copies
of any and all of such financial statements to TIAA and any other Mortgagee and
to the principals of Riverfront Office Park Joint Venture, but that Landlord
will not disclose such information to any other party without the prior written
consent of Tenant, provided, in each case, that the recipient of such
information agrees in writing to use such information solely to evaluate
Tenant's credit worthiness.

         27.9 Letter of Credit. Landlord acknowledges that it has received from
Tenant an irrevocable letter of credit in favor of Landlord issued by Shawmut
Bank, a copy of which is annexed hereto as Exhibit H to this Lease for an amount
not to exceed $300,000 (the "Letter of Credit"). In the event of any default or
defaults by Tenant in the payment of Rent or the performance or observance of
the agreements and conditions in this Lease contained on the part of Tenant to
be performed and observed continuing beyond any applicable notice and cure
periods, Landlord may present the Letter of Credit for payment, in each
instance, of an amount not greater than the amount ncecessary to cure such
default or defaults and to compensate Landlord for any loss or damage arising
from such default or defaults. One or more drawings shall be permitted under the
Letter of Credit, provided, that the aggregate of all such drawings shall not
exceed $300,000. It is understood and agreed that Landlord shall always have the
right to apply said sum, as aforesaid in the event of any such default or
defaults, without prejudice to any other remedy or remedies which Landlord may
have, or Landlord may pursue any other such remedy or remedies in lieu of
applying said sum. No interest shall be payable on said sum. The holder of any
mortgage on the Property shall never be responsible to Tenant for said sum or
its application or return unless said sum shall actually have been received in
hand by such holder.


                                       42
<PAGE>


         IN WITNESS WHEREOF, Landlord and Tenant have caused this instrument to
be executed under seal, all as of the day and year first above written.


                                    RIVERFRONT OFFICE PARK JOINT VENTURE

                                    By: RIVERFRONT OFFICE PARK ASSOCIATES

                                    By: DARVEL REALTY TRUST
                                        Managing General Partner


                                   By: [Signature of Michael P. Sullivan]
                                       ---------------------------------------
                                        Michael P. Sullivan, Vice President


                                    PEGASYSTEMS INC.

                                    By: [Signature of Ira Vishner]
                                       ----------------------------------------
                                        Ira Vishner, Vice President




2/12/93
                                       43


<PAGE>

                          [Graphic showing floorplan]

                                    EXHIBIT A
                                    7TH FLOOR
                                   23,350 RSF

BRYER ARCHITECTS

1208 MASSACHUSETTS AVE
P.O. BOX 1545
CAMBRIDGE, MA 02238

617-864-8019


101 MAIN STREET
CAMBRIDGE, MA 02142

TENANT: PEGASYSTEMS, INC.
DATE:   12/03/92


FLOOR KEY PLAN

NOTE: THIS DRAWING IS FOR
      DESCRIPTIVE PURPOSES
      ONLY. IT HAS BEEN 
      REDUCED FROM ITS 
      ORIGINAL SCALE.




<PAGE>



                                                                      EXHIBIT B
                                                                      ---------


                               DESCRIPTION OF LAND
                               -------------------

                  A certain parcel of land in the City of Cambridge, Middlesex
County, Massachusetts, bounded and described as follows:

         Beginning at a point on the northerly line of Main Street at land now
or formerly of Technology Realty Trust, and thence running;

         N 05(degree) 59'48"E for 105.66 feet along said Trust land to a point;
thence running

         N 85(degree) 08'23"W for 90.03 feet along said Trust land to land now
or formerly of The Badger Company, Inc., thence running

         N 05(degree) 59'19"E for 120.64 feet long said Badger land to a point, 
and continuing

         N 16' 13'43"E for 46.32 feet along said Badger land to a point; thence
running

         N 72(degree) 07'10"W for 365.41 feet along said Badger land to a point
in the southeasterly line of Third Street; thence running

         N 30(degree) 00'44"E for 40.91 feet along Third Street to a point at
land of Commonwealth Gas Company; thence running

         S 71(degree) 46'10"E for 467.40 feet along said Commonwealth Gas
Company land to a point, thence continuing

         S 73(degree) 39'44"E for 31.42 feet along said Commonwealth Gas Company
land to a corner; thence running

         S 16' 20'16"W for 82.21 feet on a line across the Broad Canal to the
southerly side thereof; thence running

         SOUTHEASTERLY along the Broad Canal by the following courses and
distances: S 71(degree) 26'21"E for 97.75 feet; S 72(degree) 53'13"E for 74.12
feet; and S 76(degree) 18'57"E for 50.44 feet to a point; thence running

         S 05(degree)59'48"W for 154.28 feet to a point in the northerly line 
of Main Street; thence running

         N 84(degree) 07'40"W for 268.33 feet along Main Street to the point of
beginning.



         Said parcel is shown as Lot 1 on a "Subdivision Plan of Land in
Cambridge, Mass. (Middlesex County)", dated April 24, 1981, and revised
September 4, 1981, drawn by Boston Survey Consultants, and prepared for Darvel
Realty Trust, recorded with Middlesex Southern District Registry of Deeds in
Book 14412, Page 199.


2/12/93

<PAGE>



                                                                      EXHIBIT C
                                                                      ---------

                               TENANT IMPROVEMENTS
                               -------------------

A.       IMPROVEMENTS
         ------------

         1. Landlord's Work.  Landlord shall cause the fit-up work and 
tenant improvements specified in the Approved Final Plans (as hereinafter 
defined) (all such work being referred to as "Tenant's Improvements) to be 
substantially completed as provided herein.

         2. Tenant's Cash Allowance. Landlord shall provide to Tenant allowance
(the "Fit- up Allowance") equal to the product of Twenty-five Dollars ($25.00)
multiplied by the Rentable Area of the Demised Premises to pay for the cost of
Tenant's Improvements. For purposes hereof, the cost of Tenant's Improvements
shall be deemed to be the actual cost and expense charged to Landlord by
Landlord's contractor for said Tenant's Improvements. In the event that the cost
of Tenant's Improvements exceeds the Fit-up Allowance, the excess cost shall be
promptly paid by Tenant, upon written request by Landlord, accompanied by
reasonable supporting documentation establishing the amount then due and
payable. In the event that the cost of Tenant's Improvements shall be less than
the Fit-up Allowance (the difference between the cost of Tenant's Improvements
and the maximum Fit-up Allowance being referred to as the "Fit-up Allowance
Difference"), Landlord shall, credit the Fit-up Allowance Difference to Rent
payable by Tenant under this Lease.

B.       PLANS AND SPECIFICATIONS
         ------------------------

         1. Preparation of Plans and Specifications. Tenant's Architect has
prepared architectural working drawings and specifications for the build out of
the fit-up work to be done to the Demised Premises. The final architectural
working drawings and specifications, as approved by Landlord and Tenant,
together with the electrical, mechanical and plumbing working drawings and
specifications, constitute the "Approved Final Plans". Landlord shall reimburse
to Tenant the sum of $33,736.50 to pay for the architectural and engineering
costs and expenses of Tenant's Architect, Kodis Associates, in connection with
the preparation of the Approved Final Plans and Specification, within thirty
(30) days following receipt by Landlord of invoices and supporting documentation
therefor. Landlord shall be solely responsible for the fees of Landlord's
Architect.

        2. Time Requirements.  The parties agree to the following time schedule:

By: Date                                   Activity
- --------                                   --------
January 4, 1993                     General Contractor Choosen

<PAGE>

January 8, 1993                     Construction Package Released

January 18, 1993                    Demolition Begins

January 29, 1993                    Construction Drawings Completed

February 1, 1993                    Construcion Begins

March 26, 1993                      Substantial Construction Completed

March 27, 1993                      Occupancy

C.       INSPECTION
         ----------

         Tenant is authorized by Landlord to make periodic inspections of the
Demised Premises during construction provided that such inspections are made
during normal business hours and that Tenant is accompanied by a representative
of the Landlord or Landlord's contractor. Notwithstanding the foregoing,
Tenant's Architect shall be permitted access to the Demised Premises at all
reasonable times for the purpose of viewing construction of Tenant's
Improvements during such construction.

D.       FINAL INSPECTION OF PREMISES
         ----------------------------

         Prior to the Term Commencement Date, Tenant together with the Tenant's
Architect and contractor shall make a final inspection of the Demised Premises
to ascertain whether substantial completion has occurred. A punchlist of items
to be completed or corrected shall be prepared.

E.       PAYMENT OF TENANT COSTS
         -----------------------

         In the event of a default by Tenant in payment of any amount payable by
Tenant under this Exhibit C, Landlord shall (in addition to all other remedies)
have the same rights as in case of default in Rent under this Lease.



2/12/93
                                       2

<PAGE>



                                                                      EXHIBIT D
                                                                      ---------

                             CLEANING SPECIFICATIONS
                             -----------------------

OFFICE AREA:
- ------------

DAILY - Monday through Friday inclusive, Massachusetts legal holidays excluded.

1.       Empty all waste receptacles and remove trash to designated area, wash 
         receptacles as necessary.  Replace with new bag when soiled.

2.       Empty and wipe all ashtrays.

3.       Vacuum all rugs and carpets.

4.       Hand dust and wipe clean with treated cloths all horizontal surfaces,
         including furniture, office equipment, window wills, door ledges, chair
         rails and convertor tops, within normal reach.

5.       Wash and clean all water fountains.

6.       Remove and dust under all desk equipment and telephones and replace 
         same, with no oily residue left behind.

7.       Wipe clean all brass and other bright work, including conference table
         pedestals.

8.       Sweep and dust mop all uncarpeted areas using a dust treated mop.

9.       Hand dust all grill work within normal reach.

10.      Wash clean kitchen counter, sink, exterior cabinetry and wet mop floor
         in kitchen. Empty coffee pots and wash.  Wipe down coffee makers.  
         Clean underneath any appliances in the kitchen that are moveable 
         (i.e. on the counter).

11.      Clean the glass on the display cabinets.  Also clean the glass door in
         the reception area.

12.      Clean the conference tables and pass through surfaces.

13.      Empty recycling boxes when full and put in the supply room near freight
         elevator. Put new bag inside.

14.      Clean marble in the elevator lobby.


2/12/93
       
<PAGE>


Lavatories:
- -----------


1.       Sweep and damp mop floor.

2.       Clean all mirrors, powder shelves, dispensers and receptacles, bright 
         work, flushometers, piping and toilet seat hinges.

3.       Wash and disinfect both sides of toilet seats.

4.       Wash all basins, inside and outside of bowls, and urinals.

5.       Dust clean all powder room fixtures.

6.       Empty and clean paper towel and sanitary receptacles.

7.       Remove waste paper and refuse to designated area.

8.       Refill tissue holders, soap dispensers, towel dispensers, vending 
         sanitary dispensers -  materials to be supplied by landlord.

9.       A sanitizing solution will be used in all lavatory cleaning.

Main Lobby, Elevators, Building Exterior and Corridors:
- -------------------------------------------------------

1.       Sweep and wash all floors.

2.       Wash all rubber mats.

3.       Clean all elevators, wash or vacuum floor, wipe down walls and doors.

Stairwells:
- -----------

1.       Sweep all stairwells.

WEEKLY
- ------

1.       Dust all coat racks.

2.       Remove all finger marks from private entrance doors, light switches and
         doorways, cubicle entrances and glass in cubicles.

3.       Vacuum conference room chairs and clean up any crumbs.

4.       Wash refrigerator shelves.


2/12/93
                                       2

<PAGE>


MONTHLY
- -------


Lavatories:

1.       Machine scrub lavatory floor.

2.      Wash all partitions and tile walls in lavatories.

3.       Dust exhaust vents and ceiling diffusers.

Main Lobby, Elevators, Building Exterior and Corridors:
- -------------------------------------------------------

1.       All resilient tile floors in public area to be treated equivalent to 
         spray buffing.

2.       Shampoo carpeting in elevators.

QUARTERLY - Render high dusting not reached in daily cleaning to include:

1.       Dusting all pictures frames, charts, graphs and similar wall hangings.

2.       Dusting all vertical surfaces such as walls, partitions and doors, 
         interior glass surfaces,  and both sides of sidelights.  
         (More frequently if needed).

3.       Dusting of all venetian blinds.

4.       Machine clean kitchen and other tile floors and clean molding.

5.       Clean behind recycling bins and under refrigerator.

Main Lobby, Elevators, Building Exterior and Corridors:
- -------------------------------------------------------

1.       Spot clean any metal work in lobby.

2.       Spot clean any metal work surrounding building entrance doors.

3.       Spot clean and polish guard desk.

4.       Vacuum all corridor carpets.

TWO TIMES PER YEAR:  Wash interior and exterior of perimeter windows.



2/12/93
                                       3

<PAGE>



                                                                      EXHIBIT E
                                                                      ---------

                              TENANT TRADE FIXTURES
                              ---------------------


         All surface mounted wall sconces located in the boardroom, interview
room and elevator lobby, respectively, of the Demised Premises.



2/12/93

<PAGE>



                                                                      EXHIBIT F
                                                                      ---------


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

         1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls of the Building shall not be obstructed or
encumbered or used for any purpose other than ingress and egress to and from the
premises demised to any tenant or occupant.

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

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

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

         5. No show cases or other articles of any kind shall be put in front of
or affixed to any part of the exterior of the Building, nor placed in the halls,
corridors, vestibules or other parts of the Building.

         6. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown therein.

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

2/12/93


<PAGE>

         8. No bicycles, vehicles or animals of any kind shall be brought into
or kept in or about the premises demised to any tenant. Bicycles may be stored
in racks, if any, furnished for such purpose by Landlord in a common area of the
Building. No cooking shall be done or permitted in the Building by any tenant
without the approval of Landlord. No tenant shall cause or permit any unusual or
objectionable odors to emanate from the premises demised to such tenant.

         9. Without the prior consent of Landlord, no space in the Building
shall be used for manufacturing, or for the sale of merchandise, goods or
property of any kind at auction.

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

         11. Each tenant must, upon the termination of its tenancy, restore to
Landlord all keys, either furnished to, or otherwise procured by, such tenant,
including without limitation, all parking pass keys, Building keys, office keys
and keys to storage areas and toilet rooms.

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

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

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

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

2/12/93

                                       2
<PAGE>

Landlord, such tenant or occupant shall refrain from or discontinue such
advertising.

         16. Landlord reserves the right to exclude from the Building, between
the hours of 6:00 p.m. and 8:00 a.m. on Business Days and otherwise at all
hours, all persons who do not present a pass to the building signed by the
Landlord. Landlord will furnish passes to persons for whom any tenant requests
such passes. Each tenant shall be responsible for all persons for whom it
requests such passes and shall be liable to Landlord for all wrongful acts of
such persons.

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

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

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

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

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

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

         23. No premises shall be used, or permitted to be used, at any time,
without the prior approval of Landlord, as a store for the sale or display of
goods, wares or merchandise of any kind, or as a restaurant, shop, booth,
bootblack or other stand, or for the conduct of any business or occupation which
predominantly involves direct patronage of the general public in the premises
demised to such tenant, or for manufacturing or for other similar purposes.

         24. No tenant shall move, or permit to be moved, into or out of the
Building or the premises demised to such tenant, any heavy or bulky matter,
without the specific prior written 

2/12/93

                                       3
<PAGE>

approval of Landlord. If any such matter requires special handing, only
a person holding a Master Rigger's License shall be employed to perform such
special handling. No tenant shall place, or permit to be placed on any part of
the floor or floors of the premises demised to such tenant, a load exceeding the
floor load per square foot which such floor was designed to carry and which is
allowed by law. Landlord reserves the right to prescribe the weight and position
of safes and other heavy matter, which must be placed so as to distribute the
weight.

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


2/12/93
                                       4

<PAGE>



                                                                      EXHIBIT G
                                                                      ---------

                           AGREEMENT OF SUBORDINATION,
                         NON-DISTURBANCE AND ATTORNMENT
                         ------------------------------


         THIS AGREEMENT made the ____ day of February, 1993, by and among DARVEL
REALTY TRUST, a Massachusetts realty trust having a principal place of business
at One Main Street, Cambridge, Massachusetts (hereinafter called "Ground
Lessor"), PEGASYSTEMS, INC., a Massachusetts corporation (hereinafter called
"Tenant") and TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, a New York
corporation, having its principal office and post office address at 730 Third
Avenue, New York, New York 10017 (hereinafter called "Teachers");

                              W I T N E S S E T H:

         WHEREAS, Ground Lessor is the owner in fee simple of those certain
premises situate, lying and being in the City of Cambridge, Middlesex County,
Massachusetts, as more particularly described in Exhibit A attached hereto; and

         WHEREAS, under the terms of a certain lease dated September 23, 1981,
as amended (hereinafter called "Ground Lease"), notice of which has been
recorded with Middlesex Southern District Registry of Deeds at Book 14451, Page
245 and filed with the Middlesex Southern Registry District of the Land Court as
Document No. 617399, Ground Lessor did lease, let and demise the demised
premises (the "Demised Premises") to RIVERFRONT OFFICE PARK JOINT VENTURE, a
Massachusetts joint venture partnership (hereinafter called "Landlord"), upon
the terms and conditions therein more particularly set forth;

         WHEREAS, Teachers is the owner and holder of a certain promissory note
secured by a Mortgage (as defined in Article I of the Sublease) constituting a
first lien upon the leasehold estate created by said Ground Lease;

         WHEREAS, under the terms of a certain Agreement of Lease dated February
__, 1993 (the "Sublease"), Landlord did lease, let and demise to Tenant a
portion of the Demised Premises as therein more particularly described (the
"Subleased Premises");

         WHEREAS, the parties hereto desire to establish additional rights of
quiet and peaceful possession for the benefit of Tenant under the said Sublease
and further to define the terms, covenants and conditions precedent for such
additional rights.

         NOW, THEREFORE, in consideration of the respective demises and of the
sum of One ($1.00) Dollar and other good and valuable consideration, each to the
other in hand paid, it is hereby mutually agreed as follows:


2/12/93

<PAGE>



         1.       Ground Lessor consents to and approves the Sublease.

         2. In the event of the cancellation or termination of the Ground Lease
or of the surrender thereof, whether voluntary, involuntary or by operation of
law, prior to the expiration date of the Sublease, including any extensions and
renewals of the Sublease now provided thereunder, and subject to the observance
and performance by Tenant of all of the terms, covenants and conditions of the
Sublease on the part of Tenant to be observed and performed, Ground Lessor does
hereby covenant and warrant as follows:

           (a)      That Tenant shall have quiet peaceful possession of the 
                    Subleased  Premises under the Sublease;

            (b)      That the Sublease shall continue in full force and effect 
                     and Ground Lessor shall recognize the Sublease and the 
                     Tenant's rights thereunder and will thereby establish 
                     direct privity of estate and contract as between Ground 
                     Lessor and Tenant, with the same force and effect and with
                     the same relative priority in time and right as though the
                     Sublease were originally made directly from Ground Lessor 
                     in favor of Tenant, but not in respect of any amendment to
                     such Sublease not previously approved in writing by Ground
                     Lessor.

         3. In the event of the cancellation or termination of the Ground Lease
or of the surrender thereof, whether voluntary, involuntary or by operation of
law, prior to the expiration date of the Sublease, including any extensions and
renewals of the Sublease now provided thereunder, Tenant hereby covenants and
agrees to make full and complete attornment to Ground Lessor, for the balance of
the term of the Sublease, including any extensions and renewals thereof, now
provided thereunder, upon the same terms, covenants and conditions as therein
provided, subject, however, in all events to the terms, conditions and
provisions of this Agreement, so as to establish direct privity of estate and
contract as between Ground Lessor and Tenant and with the same force and effect
and relative priority in time and right as though the Sublease were originally
made directly from Ground Lessor to Tenant, and Tenant will thereafter make all
Rent payments thereunder directly to Ground Lessor.

         4. Teachers and Tenant do hereby covenant and agree that the Mortgage
shall be and the same is hereby made SUBORDINATE to the Sublease and to the
recognition and attornment agreements provided for in Paragraphs 2 and 3 hereof
with the same force and effect as if the Sublease had been executed, delivered
and recorded and the said recognition and attornment agreements aforesaid had
been effected in each case prior to the execution, delivery and recording of the
Mortgage,

         EXCEPT, HOWEVER, that this Subordination shall not affect nor be
applicable to and does hereby expressly exclude:


2/12/93
                                       2

<PAGE>



                  (a)      The prior right and claim under and the prior lien of
                           the Mortgage in, to and upon any award or other
                           compensation heretofore or hereafter to be made for
                           any taking by eminent domain of any part of the
                           Demised Premises, and as to the right of disposition
                           thereof in accordance with the provisions of the
                           Mortgage;

                  (b)      The prior right and claim under and the prior lien of
                           the Mortgage in, to and upon any proceeds payable
                           under all policies of fire and rent insurance upon
                           the Demised Premises and as to the right of
                           disposition thereof in accordance with the terms of
                           the Mortgage; and

                  (c)      Any lien, right, power or interest, if any which may
                           have arisen or intervened in the period between the
                           recording of the Mortgage and the execution of the
                           Sublease or the effective date of the recognition and
                           attornment agreements aforesaid, whichever is later.

         5. The terms, covenants and conditions hereof shall inure to the
benefit of and be binding upon the respective parties hereto, their respective
heirs, executors, administrators, successors and assigns.

         IN WITNESS WHEREOF, the parties hereto have caused this writing to be
signed, sealed and delivered in their respective names and behalf, and, if a
corporation, by its officers duly authorized, the day and year first above
written.

                                    TEACHERS INSURANCE AND ANNUITY
                                    ASSOCIATION OF AMERICA


                                    By:
                                       ----------------------------------------
                                       Vice President

                                    DARVEL REALTY TRUST


                                    By: [Signature of Michael P. Sullivan]
                                       ----------------------------------------
                                       Michael P. Sullivan,
                                       Vice President


                                    PEGASYSTEMS, INC.


                                    By: [Signature of Ira Vishner]
                                        ---------------------------------------
                                        Ira Vishner, Vice President

2/12/93
                                       3

<PAGE>



                                    EXHIBIT H
                                    ---------

                            LETTER OF CREDIT-PEGASYSTEMS



<PAGE>

                      IRREVOCABLE STANDBY LETTER OF CREDIT

RIVERFRONT OFFICE PARK JOINT VENTURE
101 Main Street
Cambridge, MA  02142

Gentlemen:

         We hereby establish our Irrevocable Letter of Credit, No. S049087W, in
favor of Riverfront Office Park Joint Venture, a Massachusetts joint venture
("Landlord"), of which Darvel Realty Trust, a Massachusetts Trust ("Darvel"),
c/o Codman Management Company, One Main Street, Cambridge, MA 02142 is the
Managing General Partner (together with all successors and assigns, the
"Beneficiary") for the account of Pegasystems, Inc., 840 Memorial Drive,
Cambridge, MA 02139 a Massachusetts Corporation, ("Tenant"), for a sum or sums
not exceeding in all Three Hundred Thousand Dollars ($300,000) available by your
draft(s) drawn on us accompanied by:

         1.       (a)      A statement executed by an officer of Darvel 
                           certifying that (i) the amount of the draft
                           represents an amount due and owing pursuant to the
                           terms of the Agreement of Lease between Landlord and
                           Tenant (the "Lease"), (ii) all applicable written
                           notice(s) of such default have been given to Tenant
                           pursuant to the provisions of the Lease, (iii) any
                           applicable grace period has expired and (iv) the
                           amount of this draft does not exceed the difference
                           between (A) $300,000.00, and (B) the sum of (1) the
                           aggregate of all Rent received by Landlord under the
                           Lease, and (2) the sum of all previous drawings made
                           under this Letter of Credit; and,

                  (b)      a copy of any applicable notice of default given to 
                           Tenant.

         This Letter of Credit shall be the absolute irrevocable and
unconditional obligation of [Bank].

         Partial drawings are permitted.


2/12/93
                           
<PAGE>


         This Credit may be transferred in its entirety upon written notice to
[Bank]. Said notice shall include the name and address of the transferee.

         We hereby agree that all drafts drawn under and in compliance with the
terms of this Credit will be duly honored upon presentation to [Bank] if
presented to [Bank] at its office at _____________________, Massachusetts on or
before April 30, 1994.

         This Credit is subject to the Uniform Customs and Practice published by
the International Chamber of Commerce, 1983 Revision, ICC Publication No. 400.
This Letter of Credit shall be governed by Article 5 of the Uniform Commercial
Code of Massachusetts, as from time to time amended.

                           
                                                [BANK]


                                                By:
                                                   ----------------------------


2/12/93


